Democracy and the Hawksbill Creek Agreement (HCA) in The Bahamas

The Grand Bahama Port Authority (GBPA) operates as a private regulatory and administrative corporation under a specialized statutory treaty (the HCA) - the Hawksbill Creek Agreement

POLICY ADVICE NOTE: 307-2026: THE SUBTLE JURISPRUDENCE OF THE HAWKSBILL CREEK AGREEMENT - Part 2

By Professor Gilbert Morris

PART II: 

That said…let’s consider the Royal Commission report which was precursor to the 1973 Constitution:

The Royal Commission was appointed on the recommendation of The Bahamas Government to review the Hawksbill Creek Agreement, chaired by Sir Hugh Wooding.  Its report is cited as Royal Commission on the Hawksbill Creek Agreement (1971).

(It should be kept apart from the 1967 Commission of Inquiry into casino operations in Freeport and Nassau, which sat from 13 March 1967 and reported that November and is confused often as the same thing).  The Wooding Commission began work on 19 September 1970 and reported in 1971.  It treated the Agreement as a binding obligation which the Government had breached, and it found the Agreement still in force through three constitutional iterations.

Proof.

* Dates and mandate.  Its terms asked it to weigh Freeport's arrangements against prevailing social and economic conditions, with particular reference to Government and Port Authority correspondence of August and September 1968.  That correspondence concerned the Benguet transaction.

* Members.  Wooding had been Chief Justice of Trinidad and Tobago and was a member of the Privy Council.  The reprint credits Sir Fred Phillips, R. McAllister Lloyd and Malcolm Francis Lindsay alongside him.

* Characterisation.  In paragraphs 174 to 176 (page 59), the Commission described the immigration dispute as a case in which a Government was alleged to have broken an a foundational obligation it had no power to vary in its own.  It noted the gravity of that charge against a party that had just won the struggle for democracy.  It also recorded that the Government first used executive power to direct the alleged breach, then legislative power to abrogate the Agreement's provisions and it resolved that the legislative power was void and of no effect where it failed the procedure of the Agreement itself.  It was a usurpation!

* Final assessment of validity.  On page 75 the Commission concluded that the Agreement subsists and continues to bind the Government, the Port Authority and the licensees, each entitled to expect the others to honour its terms…as set out in the Agreement.

The legislative step the Commission had in view is documented.  The Immigration Act 1967, section 2(7)(a), originally saved special immigration provisions in agreements made under any Act, and section 3 of the Immigration Act 1970 repealed that saving.  The Commission therefore saw an abrogation by statute while still holding the Agreement itself alive.

Its remedies followed from that view:

* No further attempts at amendment of the Agreement, given the difficulty of securing four-fifths of the licensees (page 74);

* Freeport integrated into the national community (page 74);

* No unilateral legislative solutions can gain validity (page 75), as Parliament is not sovereign…The Bahamas Constitution is sovereign and the Agreement is woven through it.

The verifiable characterisation is that of a Sovereign Trust, because of its grant of municipal powers and its binding.  The verdict on validity is that the Agreement survived the Government's 1970 legislation as a subsisting obligation, though its immigration clauses had been statutorily overridden.

The Commission's phrasing makes the Agreement a triangular subjunctive obligation among Government, Port Authority and licensees.  That three-party structure explains why it counselled against amendment: any revision required the consent of the licensees.

There is a deeper insight:

1.  One reason that the Agreement cannot be altered at will, is because the Grand Bahama Port Authority DOES NOT BELONG to the principals of the Port.  That is why the sale of the assets of the GBPA is open to question.

2.  The Assets are part of a Sovereign Trust and under Trust law, the Trustees cannot be direct beneficiaries from trust assets, unless as provided by the Trust instrument; in this Case, the Hawksbill Creek Agreement…which does not provide for any dissipation or alienation of assets.

3. Those assets are to be returned to a municipality or a mayoralty of Freeport in 2054.  That means the people of The Bahamas through a government entity - the municipality - ALREADY OWN the assets of the GBPA…and the Hawksbill Creek Agreements sovereign trust is a Build-Operate-Transfer (BOT) mechanism aimed at generating value from 1955 to 2054 for the sake and benefit of the Licensees.

This is a critical point to grasp because it creates and entitlement in property at 2054, and it’s why it can’t be disturbed arbitrarily…therefore it’s more profound that than the issues that caused a Royal Commission.

4.  That means - and again this is not explicit or literal, it must be drawn from the proper reading: the Licensees constitute a "Parliament of Licensees" following the textual anchor here, on page 74.

5. This means the only valid pathway for the initiative announced by government - as brother Harold Williams shows - is the Licensee Association must be established officially as it should have been since 1955.  And the four-fifths threshold also bears directly on the review the present government has announced.

The test of these propositions came in St George et al v Hayward et al (Common Law and Equity Division, FP 223A and 223B of 2006) found that the GBPA could not be wound up as an ordinary company.  In Shangrila (1982) Ltd v Grand Bahama Port Authority Ltd, BS 1984 SC 23 (Adams J).  The court called the Port Authority the sole licensing body for businesses under clause 2(23)(a).  It also held that the 1968 Government and Port Authority correspondence never became a formal agreement, BECAUSE the 4/5ths licensee consent was never obtained.

Therefore - consistent with the constitutional jurisprudence of the Hawksbill Creek Agreement and the Privy Council Cases together with the Royal Commission Report: There can be No Sovereign Dissolution via Private Courts…which is to say, legally, the GBPA operates as a private regulatory and administrative corporation under a specialized statutory treaty (the HCA).  The tribunals and concurrent court determinations have continuously upheld that the administrative status quo in Freeport remains intact and the entity itself cannot be arbitrarily liquidated or legislated out of existence.

Altogether, everything being done today and every company and institution established must be for the benefit of the licensees and both the GBPA and the Government must convince 4/5ths of the Licensees of their plans and they must accede and assent.

You know what other word describes this that does not appear in the Agreement or the Royal Commission report: DEMOCRACY!  That’s what this is: it’s the highest form of democracy read from the Agreement in process.

It is not a stop sign.

Source / Comment

- POLICY ADVICE NOTE: 307-2026: THE SUBTLE JURISPRUDENCE OF THE HAWKSBILL CREEK AGREEMENT - Part 1

The Corrupt Nature of Bahamian Politics in The Bahamas

Election Politics in The Bahamas: Who gets to eat - and who doesn't

By Craig Butler:

Bahamian elections are too often not about governance.  They are about access.

Access to contracts.  Access to appointments.  Access to the Treasury.  That is the sickness.

The winning party does not merely win office.  It gains control over how roughly $1 billion in public contracts is distributed.

And too often the real contest is not over policy; it is over who gets fed.

That is not nation-building.  That is budget politics dressed up as democracy.

Source / Comment

Anyone who believes in freedom and democracy ...should protest and oppose the horrible provision of Section 64 ...in the revised Value-Added Tax (VAT) Bill

Qc Pledges Constitutional Challenge To The Vat Bill

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known QC yesterday said he is mulling whether to challenge the Government’s plans to prevent delinquent Value-Added Tax (VAT) payers from leaving the Bahamas before the legislation even becomes law.

Fred Smith QC, the Callenders & Co attorney and partner, warned that if the Government succeeded in getting Section 64 in the revised VAT Bill on to the statute books and enforced it, it would soon seek to apply similar ‘travel bans’ to defaulters on other taxes.

Arguing that Section 64 was akin to something “totalitarian dictatorships” would seek to implement, Mr Smith backed private sector executives who had warned it violated freedom of movement provisions in the Bahamian Constitution.

“I will immediately bring an action for a declaration that it is an unconstitutional provision in the law,” Mr Smith told Tribune Business, when asked what he would do if Section 64 was ultimately included as is in any VAT Act.

“I might even sue beforehand,” he added. “I am considering suing before it comes into effect. I call on anyone who believes in freedom and democracy to protest and oppose this horrible provision.”

As revealed on Monday by Tribune Business, the new Section 64 in the revised VAT Bill would allow the VAT Comptroller to prevent delinquent taxpayers from travelling until they pay off their liabilities in full or agree a settlement/payment plan that is acceptable.

The legislation states that persons owing the Government VAT monies “may not leave, or attempt to leave, the Bahamas for an indefinite or prolonged period of time” - although it does not attempt to specify the duration that would meet this criteria.

“Where the Comptroller has reasonable grounds to believe that a person liable to pay tax outstanding under this Act may leave the Bahamas for an indefinite or prolonged period without paying such tax, [the Comptroller] may] issue a certificate in the prescribed form to the Commissioner of Police and the Immigration director, requesting the Commissioner and director respectively to take such steps as may be necessary to prevent the person from leaving the Bahamas” until due payment is made, the revised Bill states.

Those who attempt to flee the Bahamas without making due payment will face either a $100,000 fine or imprisonment for up to a year.

Section 64 appears designed to prevent foreign owners of Bahamas-based businesses, as well as Bahamians, from running away from their VAT liabilities, but it could well spark legal action of the kind promised by Mr Smith.

Analysing Section 64’s impact as is, Mr Smith said; “Every Bahamian, permanent resident, work permit holder, and their children and families, can be stopped at the border and prevented from travelling - to go on vacation or conduct business - simply because it is alleged that they owe VAT.”

This, he added, was exacerbated by the “vagueness” of the ‘indefinite or prolonged period of time’ wording, and the QC added: “There are no rules or boundaries, and excess and abuse will reign supreme.”

And Mr Smith quickly warned that, if it was successful under VAT, the Government would likely extend the ‘travel ban’ to cover defaulters on other taxes.

‘The idea of being able to stop people from travelling because of alleged arrears of taxation under VAT means the Government can extend this to arrears of real property tax, National Insurance Board contributions, Customs Duties and real property taxes,” Mr Smith told Tribune Business.

“If this legislation applies to one tax, it can apply to any tax, and this kind of dictatorial approach to government will make Bahamians prisoners in their own country. If this clause is permitted to stand, each successive government will extend it to every form of taxation.”

Mr Smith added that Section 64 would effectively make Bahamians and residents “slaves of the taxman, who will be judge, jury and executioner all in one.

“Once they stop us from travelling, does that mean they’ll take us into custody until we pay the taxes? Where will it end?”

Mr Smith added that the Bahamas appeared to be “going backwards as a democracy, instead of forwards”, and warned that freedoms were often eroded by stealth, one stage at a time, if governments were allowed to get away with the first move.

Gowon Bowe, the Tax Coalition’s co-chair, told Tribune Business earlier this week that the restriction contemplated by Section 64 would likely violate constitutional rights relating to a person’s ability to move and travel freely.

He added that it had been “a sticking point” in the initial November 2013 draft legislation, and had now been ‘broken out’ and stated more explicitly in the revised legislation tabled in the House of Assembly last week.

And Mr Bowe, a PricewaterhouseCoopers (PwC) accountant and partner, said imposing restrictions on a person’s ability to travel should be the sole preserve of the judiciary and Bahamian court system, not a tax authority such as the proposed VAT Department.

“I am not sure that will stand constitutionally. It would run against movement and free movement,” Mr Bowe told Tribune Business.

“The focus should be on prosecuting those individuals, with their ability to travel restricted only by the courts. That should be purely a court function; that shouldn’t be the ability of the tax authority to restrict a person’s movement.”

Suggesting that the focus should be on prosecuting VAT delinquents, not taking away their travel and movement freedoms, Mr Bowe said the world was “too much of global society to impose something as outdated as that”.

August 01, 2014

Tribune 242

US Ambassador criticises Bahamas

US Ambassador Nicole Avant has criticised the Bahamas for abstaining from a UN vote on human rights resolutions concerning the actions of Iran, Burma and North Korea.

She noted that formerly, the Bahamas was consistently one of the "brave souls" in the region that stood up for human rights.

Mrs Avant said it is the "fervent hope" of the United States that the Bahamas and other Caribbean countries who abstained or voted against the resolutions will reconsider.

"We cannot stand by and wait when people's lives are at stake and the principles that we all purport to share-- respect for democracy, the rule of law and human rights -- are in jeopardy," she said.


December 19, 2009

tribune242

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