Bahamian Labour Leaders At Odds Over the International Labour Organization - ILO Convention 87

The pros and cons of the International Labour Organization (ILO) Convention 87

Labour Leaders At Odds Over Freedom Of Association

 

By Candia Dames

Nassau, The Bahamas

21/06/2004

 

 

Two leaders of the country's trade union umbrella organizations have different views on whether proposed legislation should soon be brought to parliament to enact the much talked about ILO Convention 87.

This would allow workers to join the union of their choice, as opposed to the union of their craft.

Trade Union Congress President Obie Ferguson continues to press the government to pass the necessary laws to give employees the right to choose.

But National Congress of Trade Unions President Pat Bain believes now is not the time to take such a step because he said all parties concerned have not yet been properly educated on the Convention.

Minister of Labour Vincent Peet announced recently that officials at the Attorney General's office are drafting amendments to the relevant pieces of legislation to enact the Convention.

Former Prime Minister Hubert Ingraham sees this as an unwise move.

 

While making his budget communication last Thursday night, Mr. Ingraham said he was concerned by the inappropriate policy announcements of the Progressive Liberal Party Government.

Although the Convention was ratified under his administration, Mr. Ingraham said, "Now, when we seek to make ourselves even more attractive to good direct foreign investment, is not the time to talk about ILO 87."

He added, "I trust that this is more bark than bite and that the PLP government recognizes that legislating this Convention at this time could have a negative impact upon the investment climate and business environment."

Mr. Ferguson told the Journal Friday that he found these comments "surprising."

"It was the FNM government that put forward the ILO 87 resolution and had it ratified and registered - so I don't understand that, but no progressive country would want to think along those lines," he said.  "It is inextricably connected to the World Trade Organization."

Mr. Ferguson added, "Investors can't turn away because WTO is driven by foreign investment.  It is a multinational trading regime and that is one of their conditions."

He said he believes that freedom of association would force unions to be more efficient.

"If they're not happy with my leadership, the members have a choice, just like with the FNM and PLP," Mr. Ferguson said.  "People must have choices all over the world."

He said the right to choose is fundamental and he doubts that the government would work against that.

Mr. Ferguson also said that he wrote to Minister of Labour Vincent Peet requesting a copy of the draft amendments.  But Minister Peet said Sunday that he was still awaiting the proposed amendments from the AG's office.

Mr. Ferguson added that ILO 87 "would support democracy."

Mr. Bain, said, meanwhile, that the Convention is very confusing and education is key before any laws are passed to legislate it.

He said that is precisely why the NCTU is planning a seminar on July 24 with regional trade union experts to discuss the pros and cons of the Convention.

"While I am right now ambivalent about it, I say let's have the education process going through before we make the legislative changes," Mr. Bain told the Journal Sunday.

He noted the challenges that would be involved in negotiating industrial contracts for members of a particular union who may belong to many different professions.

"It's confusing in that for 30 years or more we were operating on the basis of craft unions," Mr. Ferguson said.  "Let's proceed with caution…Let's ensure there are discussions first."

While he is against legislating the Convention at this time, Mr. Bain disagreed with Mr. Ingraham that it could have a negative impact on the investment climate.

"Unionisation is always being used as a means against foreign investment," said the NCTU president, who added that it is not.

Prime Minister Perry Christie's Consolative News on The Budget Deficit

Prime Minister Christie's comforting words on the deficit: ...new revenue figures seem set to improve the fiscal outlook and GFS deficit for next year

Deficit Forecast Revised

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

21/06/2004

More than three weeks after his deficit projections in the budget communication sparked criticism in some quarters, Prime Minister Perry Christie has revised those numbers, providing a more positive forecast.

Mr. Christie told the Journal shortly after Members of Parliament passed the 2004/2005 budget late Friday night that new revenue figures seem set to improve the fiscal outlook and GFS deficit for next year.

The budget projects a GFS deficit of $164 million, but the prime minister said it is likely that the figure will be less.

He said the new expectation is that the deficit for 2004/2005 could be closer to 2.5 percent of GDP as opposed to the 2.9 percent he projected in the budget communication on May 26.

At the time, the prime minister said, "If the process of reviewing the national accounts data leads to substantial increases in the GDP data, the actual level of GSF deficit could be considerably lower."

While speaking to the Journal, he said his hopes have been realized.

"We were projecting an outturn for 2003/2004 of $920 million," Mr. Christie said.  "We have now been informed that the revenue of $920 million has already been registered and it is likely that we will record an amount nearer to $950 million.  We believe that this is indicative of the improved techniques and procedures in revenue collections."

The prime minister said it is important for him and his government to see this as an indicator because they have argued in the budget presentation that there will be 3 percent growth in the economy this year.

When added to improved revenue collections, this would allow the government to "attack" the GFS deficit, he said.

"What I think is to be learnt from this is that the efforts of the Ministry of Finance to introduce technology and expertise inclusive of equipment for the enhanced collection of revenue is serving to be to the advantage of the government," the prime minister said.

"We have truly predicated our budget on this basis: We believe that rather than pass additional taxes, which in part was recommended by the [International Monetary Fund], that we are able to, based on historical evidence, take advantage of the capital inflows as a result of the Kerzner development."

He told the Journal that the government has every reason to continue with its optimism.

Only days after he introduced his "no new taxes" budget, Prime Minister Christie faced opposition in and outside of parliament.

Although saying that he was not seeking to put himself at odds with Mr. Christie and his government, Central Bank Governor Julian Francis spoke of the need for Bahamians to pay more taxes to finance government services.

Mr. Francis also warned against continued borrowing to cover the deficit.

When asked to respond to the governor's suggestions, Mr. Christie said, "It shows that if he has done that, and he is able to do it independently of the process of governance of the country, that there is something that we should be doing to harmonize the efforts of those who advise me in the Ministry of Finance and those agencies that are a part of the financial governance of the country, like the Central Bank."

He added, "We ought to make every effort to ensure that we're working together."

Mr. Christie's revision to his deficit forecast came only a day after former Prime Minister Hubert Ingraham told parliament that the new budget does not provide the right tonic for the country's fiscal predicament.

"I assert that now is not the time for reliance to be placed upon unrealistic revenue increases from existing taxation," Mr. Ingraham said.

He also urged the prime minister to "rein your colleagues in."

"They are spending and committing to spending too much," Mr. Ingraham said.  "You have to tell them there are no available government jobs now; they will come when there is strong economic growth and larger investment inflows.  And tell them unless spending is restrained, there won't be any jobs for them."

But a confident prime minister said Friday that, "The growing strength of the economy in 2004 and 2005 will generate significant additional revenues."

The budget debate is scheduled to begin in the Senate today to give Senators enough time to pass the spending plan in time for the new fiscal year, which begins July 1.

Butch Kerzner, Kerzner International CEO on Possible “destructive” Competition between Paradise Island and Cable Beach

Butch Kerzner: ...any development on Cable Beach that went after the same market, as Atlantis would force Kerzner to "reassess" things

Kerzner Clears Air On Cable Beach Competition

 

Candia Dames

Nassau, The Bahamas

16/06/2004

 

 

 

Kerzner International CEO Butch Kerzner released a statement Tuesday defending his recent statements regarding possible “destructive” competition between Paradise Island and Cable Beach, which have fuelled much feed back.

And he made it clear that his project is going ahead no matter what, although he had said recently that any development on Cable Beach that went after the same market, as Atlantis would force Kerzner to “reassess things.

While accusing the media and others of trying to place Kerzner in conflict with the government’s position on Cable Beach, Mr. Kerzner reiterated that redevelopment must be done in what he has called a sensible manner.

"The point that I have been trying to make is that successful destinations such as Orlando, Las Vegas and the Dominican Republic have developed resorts to appeal to a wide range of audiences across lots of different price points,” said Mr. Kerzner, who wants the government to encourage Cable Beach to pursue the mid-market while Kerzner pursues the “very small” high-end market.

Mr. Kerzner said while a guest on the Love 97 programme “Jones and Company” which aired Sunday that the high-end market makes up less than three percent of U.S. households.

Referring to the destinations that cater to a wide audience, Mr. Kerzner said in his Tuesday release, “That is what has made them successful.  If done correctly, redevelopment will expand the size of the pie rather than us all fighting for the same slice of the pie.  It is the difference between constructive as opposed to destructive competition.  Where overbuilding has taken place in one market segment the result has been failure. 

“Just because this might sound self-serving does not make it untrue."

Mr Kerzner continued that, "The Bahamas' average room rate is already more than twice that of Las Vegas and Orlando - and we must be careful that we do not price the destination out of the market.  In any event, whatever happens on Cable Beach will happen.  We will not get distracted from our core mission of making Atlantis something that all of us working and living in The Bahamas can be proud of.  As far as we are concerned it is still full-steam ahead with the planning for Phase III.  This is a great country with great people and I am optimistic about our future."

He said Kerzner is not opposed to any major redevelopment on Cable Beach.

Talk of direct competition between Kerzner’s Atlantis resort and Cable Beach follow indications made by the prime minister that he intends to announce a $1 billion investment project for the popular New Providence strip.

Last month, Kerzner announced that it intends to carry out a $1 billion expansion of Atlantis.

Mr. Kerzner said Tuesday; “Major investment on Cable Beach is a good thing for The Bahamas, for tourism, and even for our company here on Paradise Island.  We are not afraid of competition.  Every single day of every week, of every year, we compete with the best in the world - from Orlando to Las Vegas to Hawaii.  We compete with multi-billion projects and we are successful."

He said, “Many folks have tried to make out that our position on Cable Beach is in conflict with Government's position.  The possibility of a disagreement sounds interesting to many people, particularly in the media - it sounds like news.  But, I need to make it clear, that I do not have enough information to know whether I agree or disagree with government on the proposed plans for Cable Beach.  But even if we did disagree, that would not be a major problem.

“I consider our partnership with government to be outstanding and, as in all relationships, points of difference sometimes arise.  We voice our opinions and then we go on with our business."

Mr. Kerzner’s recent remarks urging that Cable Beach be encouraged to target the mid-market has stunned many people, including some parliamentarians.  One senior government member of the House also said outside the chamber of the House of Assembly Monday that he was shocked that Kerzner would make such a request.

The official also confirmed that Kerzner officials did send a letter to the Cabinet advising of their concerns. 

Kerzner International Fears Competition In The High-end Tourism Market From Cable Beach Resorts in Nassau, The Bahamas

The Bahamian landscape has been “littered with failures” from resorts seeking to go after the same market

Kerzner Fears “Bloodbath”

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

14/06/2004

Kerzner International would have to “reassess things” if there is any development on Cable Beach that goes after the high-end tourism market, according to Butch Kerzner, the company’s CEO.

Mr. Kerzner, who was a special guest on the radio Love 97 programme “Jones and Company” Sunday, said while Kerzner welcomes healthy competition, any improvements on Cable Beach should be geared at the mid-market.

“Cable Beach has been able to go very strongly after the mid-market when they reinvested in their product, and I think that if they continue to reinvest in their product and continue to create a product that can go after the mid-market segment, that’s great for us,” he said. “That’s great for the destination.”

But Mr. Kerzner said it would be “lunacy” if Cable Beach and Paradise Island went head to head.

He added that the Bahamian landscape has been “littered with failures” from resorts seeking to go after the same market.  He pointed out that the high-end market in the United States – the main source of tourists to The Bahamas – is less than three percent.

Mr. Kerzner said there was a “fiasco” in the late 1980’s when the owners of the Crystal Palace tried to compete with Paradise Island.

“There was a bloodbath for both of them,” he said, “and we bought the property out of bankruptcy because of that…  My sense is that the history is so clear it doesn’t make sense in such a small market where you get [fewer] than one million people per year coming through the market to have a product that goes head to head.”

Mr. Kerzner also said, “I think the sensible approach to tourism generally is that you segment the market…  We’ve obviously got the over $300 room rates market and that’s a very small market…  It would seem unlikely to me that what is going to be encouraged is to have a destination go after the exact same market.”

His comments come as many people await an announcement regarding future development on Cable Beach that was promised months ago by Prime Minister Perry Christie.

In fact, Mr. Christie has said that he expects to announce a $1 billion investment project for Cable Beach, in addition to plans to revitalize the strip.  The government expects that this would complement the recent announcement regarding the $1 billion expansion of the Atlantis resort on Paradise Island.

Mr. Kerzner on Sunday made it clear that his company is not against competition.

“I don’t think we would be cautious about somebody saying they are going to come in and compete…  One thing we’re not afraid of is a little bit of competition.  It keeps people on their toes and I think that’s all very good,” he said.

But Mr. Kerzner added, “It would really depend on if you’re going to try and develop another ‘me too’ product, then we’d say ‘that doesn’t seem [to be] a very sensible approach’.   And at that point, we’d think about that.  I just don’t think we’re going to be there.”

Minister of Tourism Obie Wilchcombe, who spoke with the Journal Sunday, said The Bahamas itself is a high-end market.  The Minister added that Cable Beach hotels and other properties throughout the country are being encouraged to go high-end.

But he pointed out that there is diversity in the high-end market.

“Kerzner International has created that [high-end market] to a large degree,” Minister Wilchcombe said.  “The truth is, at the moment, Exuma is attracting high-end business.  The Four Seasons with its clientele, that’s high-end…  In Grand Bahama, there is developing there a high-end product.”

He added that The Bahamas wants to maintain high average room rates and high arrivals.

“We cannot in our country, because of our limited number of rooms, have anything other than high-end business,” said the Minister, who pointed out that The Bahamas only has about 15,000 hotel rooms.

He said he does not expect to see Cable Beach competing head-on with Paradise Island.

“I think what we’re going to see are properties that fit into the same category so far as the standards of excellence, beauty and uniqueness,” Minister Wilchcombe said.  “Based on what I’ve seen, I don’t think we’re going to have a hotel that’s going to compete against Atlantis.  I think we would wish to have in The Bahamas uniquely different properties all of which are attracting different types of visitors.”

Butch Kerzner, Kerzner International CEO Says No Dividends For Company Shareholders

Mr. Kerzner said the company will in the coming years continue to focus on growing and therefore will not be taking any capital out of the business 

Mr. Kerzner said it would be “short-sighted” to pay dividends

No Dividends For Kerzner Shareholders

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

14/06/2004

Kerzner International CEO Butch Kerzner made it clear while appearing as a guest on the radio Love 97 Sunday programme “Jones and Company” that his company will not be paying any dividends to its shareholders.

That fact has created some confusion for Atlantis employees who spoke with the Journal recently in response to last week’s announcement that the company will give its workers the first option to purchase the one million shares it is offering.

One employee thought it was a no-win situation to buy shares and not receive any dividends.

Mr. Kerzner said the company will in the coming years continue to focus on growing and therefore will not be taking any capital out of the business.

Kerzner is at this time involved in several big projects, including the $1 billion phase III expansion of the Atlantis resort on Paradise Island; the building of Atlantis, The Palm in Dubai; a One & Only luxury hotel in Cape Town, South Africa; and a casino development in the United Kingdom.

Mr. Kerzner said it would be “short-sighted” to pay dividends.

“Our profits that we’ve made, we’ve reinvested back into the company,” said Mr. Kerzner, who appeared on the show alongside Anwar Sunderji, chairman of Fidelity Merchant Bank and Trust Limited and Governor of the Central Bank Julian Francis.

“We have chosen to take a very medium term view on our business and people getting into our company should really understand…We believe that over time – and hopefully we are proved to be correct, but we can’t promise it – if we continue to build and reinvest and make this product outstanding, we would have created something of great value and that would be the appropriate time to potentially pay dividends,” Mr. Kerzner said.

Mr. Sunderji, meanwhile, explained that there is still a great opportunity to benefit from an investment in Kerzner International through capital appreciation.

He said that year-to-date, the Kerzner stock has appreciated by 12 percent. Over the last 12 months, it went up by 50 percent, he added.

“So while dividends are traditionally in The Bahamas an important part of the return,” Mr. Sunderji said, “this is the first international stock that we have that is a growth stock where dividends are not being paid and all the profits are being reinvested in the company and returns are being reflected in the appreciation of the company’s stock prices.”

The offering represents in excess of $40 million in stock and will be traded on the Bahamas International Securities Exchange. Bahamian Depository Receipts (BDR) has been created specifically to enable access to the Kerzner shares.

The BDRs will be issued by Fidelity, showing ownership in Kerzner.  Ten BDRs will represent one Kerzner share.

Governor Francis explained that exchange controls do not permit Bahamian residents to invest outside of The Bahamas unless they are willing to pay a special premium on whatever the investment might be.

The show’s host, Wendall Jones, then asked why it would not make sense for a Bahamian to buy shares in Kerzner directly on the New York Stock Exchange.

“That would be an added cost to that investor compared to the holder of those shares outside The Bahamas,” Mr. Francis said.  “Someone in New York would buy those shares for $100 and the Bahamian would have to pay $125 for them.”

Mr. Kerzner explained that there will be no difference in the value of the shares traded on the NYSE and BISX.

Mr. Sunderji added that investors who are looking to get a quick return on their investments should probably not purchase Kerzner shares.

“If you’re looking for a return over a long period of time, then you should consider investing in this security,” he said.  “Stock prices go down as well as they go up and the key is to educate Bahamian investors to look at investing in equity markets over a long period of time.

“The problem that we have in The Bahamas is that people don’t actually do that.  They buy securities and they have to sell them to pay school fees and they have to sell them because they’re going shopping.  They’re not holding securities long enough to benefit from ownership of equity in well run companies and that’s fundamentally the problem.”

Mr. Sunderji said dividend-paying stocks seem more attractive to Bahamians because most Bahamians look at equities as just another version of a deposit of some kind.

“Equities are far more risky than leaving money in the bank and you shouldn’t be expecting an interest rate or a dividend return on an equity investment and fool yourself into thinking that it’s the same,” he warned.  “It isn’t.”

Bahamian Union Workers Put on Alert for A Strike Vote Against Radisson Cable Beach Resort

Obie Ferguson, Trade Union Congress President claimed that the Hotel Corporation of The Bahamas has “undermined” an industrial agreement signed last November

Strike Threat At Radisson

 

 

By Candia Dames

Journal Staff Writer

Nassau, The Bahamas

06/11/04

 

 

 

Trade Union Congress President Obie Ferguson said Thursday he may seek permission for a strike vote at the Radisson Cable Beach Resort and claimed that the Hotel Corporation has “undermined” an industrial agreement signed last November.

But Corporation Chairman George Smith said officials are being “very faithful to the terms of the agreement.”

Mr. Ferguson, who also heads The Bahamas Hotel Managerial Association, said the BHMA agreed to cancel an arrangement made under the FNM administration to grant the more than 200 managers and supervisors at the property a 7 percent raise and a $4,000 lump sum payment.

But the new contract contained no arrangements for salary increases.

“The sale of the hotel was about to happen and they put to us that the economic position affecting the Corporation was bad,” said Mr. Ferguson, who added that he agreed to the terms because he wanted to ensure that there was an agreement in place which would guarantee the workers proper compensation when the hotel is sold.

He told the Journal that the Corporation has gone ahead and “selectively” paid $100 to $200 per week raises to certain managers and supervisors.

“If you say there is no money, you can’t go and give some of the workers money.  Either you give it to all or you give it to none because it would create a problem.  If the company selectively decides to [grant raises], what it does is undermine the whole credibility between the employer and employee,” he said.

The Corporation said in a letter to Mr. Ferguson on June 1 it was willing to pay the workers a $500 lump sum payment (no payment date specified); a four percent salary increase in January 2005; another $500 lump sum payment in 2006 and another four percent raise in 2007. This arrangement would go two years beyond the life of the present contract.

But with the hotel up for sale, Mr. Ferguson said this arrangement makes no sense.

“This is to undermine the Association and discredit and undermine the leadership of the Association,” Mr. Ferguson charged.  “I have put the workers on alert.  They are now awaiting my instructions.  They have rejected what the Corporation put to us. We totally reject it.”

Mr. Ferguson said he would like an arrangement where the Corporation would offer the workers the entire 8 percent in 2005; a $2,500 lump sum payment now and $1,500 upon the sale of the hotel.

“I think that would be a reasonable compromise,” he said.

Mr. Ferguson also said he intends to call an emergency meeting of the TUC which is not prepared to allow the Corporation to take the workers for a ride.

But Mr. Smith seemed puzzled that the matter has reached the press and appears to be escalating.  He intimated that Mr. Ferguson could very well be over-reacting.

“The Myers group which is the management company may have done some realignments or promotions that are certainly in their scope of authority,” he told the Journal.  “In any event, the Corporation has a good relationship with the Association.”

However, Mr. Ferguson said the Corporation and the government appear to be operating in a manner detrimental to Radisson employees.

He also said the Association is concerned about the future of these workers once the hotel is sold.

Prime Minister Perry Christie announced during his budget communication to parliament two weeks ago that the government is moving ahead with plans to sell the Cable Beach hotel and intends to obtain a net $10 million for the Treasury.

Mr. Ferguson found it absurd that the Corporation would make an offer that extends to 2007 when the government intends to sell the hotel any day now.

Mr. Smith said negotiations for the sale of the property are going well.

When asked how selling the hotel would impact workers, he said, “We are very mindful to protect Bahamian jobs as much as possible.  That is uppermost in the minds of the Corporation and the government.

“That is why I would have thought that any misunderstandings that now exist with the Association would have been addressed and discussed.”

He said the Corporation is not in the practice of micromanaging the hotel.

“We’re trying to focus on the bigger picture in terms of bringing about a successful conclusion to the negotiations,” Mr. Smith said.

The Bahamas Government Warned Against Borrowing to Balance the Country's National Budget

The Bahamas government may face a fiscal crisis in the coming years if it continues to borrow at the rate the country has been borrowing at over the years

Governor And Minister At Odds

BY Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

09/06/2004

Some members of the Cabinet are reportedly peeved over recent remarks made by Central Bank Governor Julian Francis, who warned the government against borrowing to balance the budget.

When asked on Tuesday what he made of Mr. Francis’ warning, Minister of State for Finance James Smith said, “I think the governor should stick to monetary policy like all former governors did.  The comments on fiscal policy are not sometimes useful, but I’ll limit my comments to that for the time being.”

Mr. Francis also recently suggested that Bahamians should be made to pay higher taxes, although he stressed that it was not his intention to put himself at odds with the government. 

The governor said that it is the role of the Central Bank to be a policeman on these kinds of issues that also impact the development of the monetary sector.

He indicated that the government may face a fiscal crisis in the coming years if it continues to borrow at the rate the country has been borrowing at over the years.

According to the Estimates of Revenue and Expenditure, the government expects proceeds from borrowings to total $260,277,287 to fund the 2004/2005-budget shortfall.

This level of borrowing represents $60,921,40 more than what was borrowed this fiscal year.  This comes as the government continues to face warnings about the increasing national debt, which presently stands at around $2.4 billion.

The funds borrowed will be used to help cover the projected GFS deficit of $164 million, according to government officials.

In 2001/2002, the government borrowed $207,085,781; in 2002/2003, it borrowed $219,195,153; and in 2003/2004, the figure is estimated to be $199,355,879.

But Minister Smith said the government expects that it will actually have to do real borrowing of $176 million.

“I should point out that $90 million of [the $260 million figure] are loans that have already been committed for projects in the pipeline,” he told the Journal Tuesday.

 “For instance, the IDB road project, which is about $40 million, is included in that.  So the actual borrowing needs for 2004/2005 is really about $176 million.

“That’s the amount that we will probably have to go to market for, either locally or abroad, but that decision will be made later on in the year as we see how the revenue performs.  I should also point out that these are all projections or estimates.  If we perform much better on revenue or if we hold the line on expenditure, then surely we would have a reduced need for borrowing on the recurrent side.”

Prime Minister Perry Christie explained last Wednesday that there is no need for alarm regarding the size of the national debt, given that most of it is held domestically.

On Sunday, Governor Francis, who was a guest on the Love 97 programme “Jones and Company” said, “We can’t continue to add to the national debt indefinitely and that’s really the fundamental point that I’m trying to make.”

When asked whether this figure of over $260 million is significant, Parliamentary Secretary in the Ministry of Finance Michael Halkitis said that, “It is not insignificant.”

He added, “We have to keep things running.  There’s a lot to do, especially capital works in the Family Islands.  But we don’t believe there is any cause for alarm.”

Mr. Halkitis said the government is banking on an economic turnaround before the end of the upcoming fiscal year.

“We expect a lower shortfall the next year,” he said, indicating that borrowing should be substantially lower in 2005/2006.