By NEIL HARTNELL
Tribune Business Editor
A well-known QC has urged the Government to follow through with “loosening the reins of control” over Freeport, thereby allowing the Bahamas’ “economic stallion to gallop towards the finish line”.
Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business he was “on cloud nine about Freeport’s future” following the Minnis administration’s numerous Speech from the Throne pledges to revive the city’s - and Grand Bahama’s - economy.
He said its promised repeal of the Grand Bahama (Port Area) Investment Incentives Act 2016 was key to Freeport’s immediate future, as the legislation had proven “the kiss of death” for the city’s economy through the extra bureaucracy and uncertainty it had unleashed.
Mr Smith added that the issue of regulatory responsibility for Freeport’s utilities and web shop gaming industries should not create disputes and tensions, provided the Government respected the Hawksbill Creek Agreement and previous Supreme Court rulings on the matter.
And he resisted suggestions that the Hawksbill Creek Agreement itself needed to be “modernised” to reflect changing times, calling it “visionary from the outset” and a treaty that should be allowed to fulfill its potential free from government interference.
“I am absolutely thrilled that the new government is Freeport-friendly, and appears committed to the renaissance of Grand Bahama,” Mr Smith said following the ‘Speech from the Throne’.
“Key to the economic, political and social future of Grand Bahama is the repeal of the Grand Bahama (Port Area) Investment Incentives Act 2016, which was the kiss of death for Freeport’s future, and did nothing but bring bureaucratic red tape that is further going to strangle Freeport.”
Based on the agenda outlined in last week’s ‘Speech from the Throne’, Freeport and Grand Bahama appear to be central to the new government’s economic revival strategy.
And among the Minnis administration’s promises was the repeal of the very Act identified by Mr Smith, together with its replacement by something that will ensure the Grand Bahama Port Authority’s (GBPA) 3,500 licensees receive the same ‘tax break’ treatment as their regulator and Hutchison Whampoa.
While the Government has yet to provide details on what it plans to replace the Grand Bahama (Port Area) Investment Incentives Act 2016 with, Mr Smith said it needed to stop meddling with Freeport and instead work with the GBPA to fulfill the city’s potential.
“I continue to urge the Government to recognise that Freeport and, by extension, Grand Bahama and the rest of the Bahamas, will only prosper if the right reins of central government control are released, so that the Port Authority can be the one-stop shop regulator and development authority that it is supposed to be,” Mr Smith told Tribune Business.
“I am not advocating that central government should take a hands-off approach to Freeport’s future. Obviously, central government and its agencies must play a key role, but if you want your stallion to gallop to the finish line then the central government jockey has to let the reins go.
“Central government should work with the Port Authority to ensure that the GBPA abides by its commitments to promote, develop infrastructure, and maintain and improve beautification, while having Immigration, the Investments Board and BEST Commission take a much more flexible and business friendly approach to licensing, the conduct of business, cultural and environmental issues, and Crown Land,” the Callenders & Co partner continued.
“The regime that will guarantee that Freeport will boom is for government to let go the reins, and hold the GBPA, DevCo and Hutchison to the task of promoting development and management. All of the ingredients are simply waiting for this banquet of expansion.”
Mr Smith’s belief that Freeport, and Grand Bahama, can solve many of the Bahamas’ economic and social challenges was last week shared by Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman.
However, Mr Bowe said that before Freeport could fulfill its economic potential, the issue of who has regulatory responsibility for key industries within the city needed to be “put to bed once and for all” to give the private sector and investors confidence.
And he suggested that the Hawksbill Creek Agreement, whose foundations were laid in the 1950s and 1960s, needed to be “modernised” some 50-60 years later to account for changed domestic and global economic circumstances.
Mr Smith, though, said utilities and web shop gaming regulation need not turn into a dispute between the GBPA and the Government.
Having fought several such cases himself, he told Tribune Business that the Supreme Court had repeatedly ruled that the GBPA had regulatory responsibility within the Port area’s limits, rather than a national regulator armed with statute law.
“This does not have to be a matter of any dispute,” Mr Smith said, “if we have a government that respects the Hawksbill Creek Agreement, and upholds the Supreme Court rulings and regulatory role of the GBPA, and does not try to undermine it, make it difficult and prevent it from flourishing.”
Stephen Bereaux, URCA’s chief executive, recently told Tribune Business that both communications and energy providers, and the regulator itself, needed “a clear and consistent position across all sectors” as to whether URCA or the GBPA holds supervisory responsibility in Freeport.
In the absence of any Supreme Court ruling on the issue, Mr Bereaux said URCA “has to assume” the authority and responsibility is its own.
He added that URCA was merely following the Communications Act, which mandated that it regulate the sector throughout the Bahamas - with no exemption or ‘carve out’ provided for Freeport.
URCA’s stance, though, conflicts with that of both Cable Bahamas and GB Power Company. They are arguing that Freeport’s founding treaty, the Hawksbill Creek Agreement, effectively usurps URCA’s statutes and makes the GBPA their primary regulator within the Port area.
Similar issues are at play in the web shop gaming industry, with Chances Games having initiated legal action to determine whether it is the GBPA - via the quasi-governmental powers bestowed by the Hawksbill Creek Agreement - or the Gaming Board that is its primary regulator.
Mr Smith, meanwhile, also refuted Mr Bowe’s suggestion that the Hawksbill Creek Agreement needs updating. “There’s nothing to modernise. The agreement was visionary from the outset,” he told Tribune Business.
“The only reason Freeport remains in the doldrums is because the PLP, in particular, and the FNM at times, have refused to allow the GBPA to fulfill the vision of the Hawksbill Creek Agreement. We don’t have to reinvent the wheel. We don’t have to modernise. We don’t have to review and re-organise. Anyone who’s a student of the Hawksbill Creek Agreement can see that the impact of its very far-reaching provisions will result in a boom town.”
Mr Smith pointed out that the Hawksbill Creek Agreement already provides for the transfer of the GBPA’s quasi-governmental powers to a local authority if four-fifths of licensees agree, and for the imposition of real property-type taxes to finance infrastructure upgrades.
“It has all the ingredients for success,” he said of Freeport’s founding treaty. “I am resistant and opposed to any further tinkering. Just look at how the PLP messed up for the last five years to see what tinkering and interference does.
“The Prime Minister in his inauguration, and the Speech from the Throne, committed his administration to respect the rule of law. That must translate into putting flesh on the bare bones construct of what is left of the Hawksbill Creek Agreement.
“If he [Dr Minnis] respects the tripartite Hawksbill Creek Agreement, and works co-operatively with the Port Group and Hutchison, the licensees and residents of Freeport, there will be no looking back. I am confident that with this administration, it’s Freeport’s time and the magic will return to the city. I say to the FNM: Release the reins, and let your stallion fly down the course.”