Midterm Special Report Part 2

Thursday, November 28, 2013 |

SPECIAL REPORT: MIDTERM, PART 2 OF 5

The light that comes from wisdom never goes out.

CELEBRITY CHEF

Pickering touts recent ‘simple’ steps

By JASON SMITH jsmith@bvibeacon.com It’s been a rough year for the global reputation of the Virgin Islands’ financial services industry.

In April someone leaked a decade’s worth of two VI trust companies’ confidential files to a group of journalists, which published a series of articles scru-

By JASON SMITH jsmith@bvibeacon.com The Ministry of Natural Resources and Labour may be government’s smallest ministry, but it still has a lot on its plate. Environmental protection, management of an extensive labour permit system, and the territory’s agricultural sector all fall under its remit.

Then there’s the need to fix the troubled greenhouse initiative and oversee the multimilliondollar expansion of the Terrance B. Lettsome International Airport, which is slated to be the largest capital project in the territory’s history.

But when asked about his ministry’s biggest accomplish-

‘Non-compliant’ see page 22

Developer, bank fight to control Scrub Island Lawsuit to allege ‘clandestine’ contact

By JASON SMITH jsmith@bvibeacon.com

Midterm see page 30

INSIDE Vol. 29 No. 23 • 2 sections, 64 pages Road Town, Tortola, British Virgin Islands © 2013, The BVI BEACON

Territory dubbed ‘non-compliant’ on transparency FS calls label misleading

But major works slow to advance

Beacon Business..........................12

| bvibeacon.com | 50 cents

Photo: NGOVOU GYANG United States Chef Fed Federer prepares a meal during the Taste of the BVI cooking competition at the Noel Lloyd Positive Action Movement Park on Friday. The event kicked off Restaurant Week, which is currently under way. See story on page 28.

A cross-border legal battle to control Scrub Island Resort has broken out between its developers and FirstBank Puerto Rico, which claims the developers defaulted on more than $100 million in loan payments.

The fight began in Virgin Islands Commercial Court on Nov. 1: Acting on a request from the bank, Justice Edward Bannister appointed a thirdparty receiver to manage Scrub Island, removing the management team put in place by Mainsail Development Group, the resort’s developer.

In an attempt to regain control, two Mainsailaffiliated companies that hold the resort’s assets — Scrub Island Development Group and Scrub Island Construction Limited — filed for bank-

Scrub see page 20

Page 30 | Thursday, November 28, 2013 | The BVI Beacon

Midterm

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ment since the National Democratic Party regained control of the government in November 2011, Deputy Premier Dr. Kedrick Pickering didn’t mention any of those responsibilities.

Instead, he spoke about efforts to greatly expand storage capacity at the BVI Fishing Complex and improve the complex’s payment system.

“When I came in here and discovered the critical things that needed to be done to put the fishing industry on a firm footing, it wasn’t major things that needed to be done,” said Dr. Pickering, who is the minister of natural resources and labour. “There were a lot of things, but there were a myriad of simple things.”

Throughout a recent 40minute interview, he kept returning to this theme: Though finances are tight and some major projects are taking longer than expected, the ministry has focused on improving its day-today operations, he said.

Fishing

In an April ceremony at the BVI Fishing Complex, Dr. Pickering’s enthusiasm for fishing was on full display as he described advances in the complex’s facilities that allow it to store five times as many fish as it could in the past.

More study and investment are needed to make the industry a “third pillar” of the territory’s economy, he said, but improvements to the process in which the BVIFC reimburses fishers for their catch mean that they can get paid a lot faster.

“What you’ve seen is almost a domino effect,” Dr. Pickering said. “The fishermen feel they can get their produce sold, they can get their money in a relatively short space of time, and they can go home and catch fish.”

Mark Soares, an Anegada fisherman, said he feels Dr. Pickering is “on the right track” with the recent improvements at the complex.

“It’s really made a big difference over there. It’s really cleaned up the place,” Mr. Soares said.

The resulting improvements in storage have also improved quality and led supermarkets to increase their offerings of locally

Midterm see page 31

Special Report

A MIDTERM PROGRESS REPORT FOR THE 2011 ELECTION PLEDGES: MINISTRY OF NATURAL RESOURCES AND LABOUR AIRPORT EXPANSION

LAND BANK

PLEDGE: Expand the Terrance B. Lettsome International Airport to accommodate private and regional jets that can reach the territory directly from the United States. Begin discussions with carriers to fly this route.

The bidding process to select a contractor for this multimillion-dollar project continues, and a contractor should be chosen by the end of the year, according to Deputy Premier Dr. Kedrick Pickering, the minister of natural resources and labour. Last year, Dr. Pickering said officials already had begun exploratory talks with several United States airlines that are “gung ho” about flying to the Virgin Islands.

PLEDGE: Establish a land bank to “facilitate the preservation of” home ownership for belongers.

The land bank, an initiative through which government would purchase parcels of available land at market value and later resell them to first-time homebuilders at an affordable cost, has not been formed. Dr. Pickering said insufficient funding was the issue, adding that he hopes the project will be included in a future budget cycle.

YES

NO

PARTIAL

VIRGIN GORDA AIRPORT

YES

NO

PARTIAL

LANDLORD/TENANT ACT YES

NO

PARTIAL

NO

PARTIAL

PLEDGE: “Aggressively pursue the expansion of the Virgin Gorda Airport.”

Officials unveiled two $15 million proposals in 2009 to expand the sister island’s airport, one of which would have reoriented the runway and effectively split The Valley in half. The plans, which were met with loud objections from the community, have not been pursued to date. Ronald Smith-Berkeley, the ministry’s permanent secretary, said the ministry is currently focusing on expanding the Beef Island airport to accommodate large jets from the mainland US. “Whatever would happen at Virgin Gorda would happen after,” he added.

ANEGADA MASTER PLAN

PARTIAL

PLEDGE: Create a master plan for the development of Anegada that includes environmental protections and tourism development plans.

Dr. Pickering gave a lengthy speech before the HOA in 2012 in which he envisioned the island becoming a fishing, agriculture and tourism destination with a golf course. To make those varied projects come together, he said, the island first needs to create a large solar power plant. Technical advice to build the plant is being sought from billionaire and eco-resort owner Sir Richard Branson, according to the minister. The ministry hopes to send out a request for proposals seeking bidders for the solar plant by the end of the year, Dr. Pickering said. Asked if a master plan had been drafted for the island’s development, the minister referred to his speech, calling it the “Anegada vision.” But no written development plan involving the solar facility or other major projects has been filed with the Town and Country Planning Department.

PLEDGE: Establish Anegada as an “agricultural and aqua-cultural hub” to take advantage of its open space and “abundant shallow water.”

The “master plan” for the island that Dr. Pickering unveiled in a 2012 speech called for cash crop farming, sheep raising, and aquaculture on Anegada. But those initiatives first require affordable electricity to desalinate water, an initiative being pursued though the solar farm that is planned for the island, Dr. Pickering said. “Once we start producing water in abundant quantities in Anegada we will then invest in agriculture in Anegada,” he said in 2012.

HOLDING TANKS

YES

YES

NO

PARTIAL

PLEDGE: “Secure land in The Valley for first-time homeowners.”

The ministry frequently receives applications from Virgin Gordians seeking to obtain Crown land, and it is in process of forming a committee to review those applications, Mr. Berkeley-Smith said.

GREENHOUSE REVIEW YES

NO

PARTIAL

PLEDGE: Review the greenhouse project to assess its viability.

A review of the project has been completed, Dr. Pickering said, adding that the next step to fix the troubled project is to seek bids for third parties to operate the greenhouses. A request for proposals seeking “qualified greenhouse experts”was issued Tuesday by the Ministry of Finance.

AGRICULTURAL SALES CORPORATION

YES NO PARTIAL PLEDGE: Establish an agricultural sales corporation, a statutory body similar to the BVI Fishing Complex, to provide farmers’ markets for locally raised animals and locally grown produce.

The corporation hasn’t been created. Dr. Pickering said the ministry’s efforts to improve the territory’s agriculture are currently focusing on making the greenhouses at Paraquita Bay and South Sound, Virgin Gorda operational.

YES

NO

PARTIAL

NO PARTIAL PLEDGE: Develop a “legislative and management regime” that requires yachts in the territory to use holding tanks.

Mr. Berkeley-Smith said in October that more work needs to be done in drafting the relevant legislation, which could be introduced to the HOA next year.

AGRIBUSINESS LEGISLATION YES

NO

PLEDGE: Pass legislation “to protect the rights of” landlords and tenants.

The law is still in “the embryonic stages” of being drafted, Dr. Pickering said. “It’s still a work in progress and hopefully by the end of the term we’ll have something to take to the House,” he said.

VIRGIN GORDA LAND

YES

ANEGADA AQUACULTURE

YES

NO

PARTIAL

PLEDGE: Pass “Introduction of Agribusiness Development” legislation.

The legislation hasn’t been passed. Dr. Pickering said that before any agriculture-related laws are enacted, government needs to get the greenhouses operational.

BEACH ACCESS YES

NO

PARTIAL

PLEDGE: Government will enforce Section 61 of the recently enacted Physical Planning Act 2004, which makes provision for mandatory public access to all beaches in the territory.

Dr. Pickering said that all beaches in the VI remain public. But disputes have arisen in recent months about public access to some beaches, particularly at Oil Nut Bay, where a developer installed a line of swim markers to keep out boats, reportedly for safety reasons. But a revised Beach Protection Act, which was called for in the past two speeches from the Throne, hasn’t been enacted.

YES

ENVIRONMENTAL DATA

NO PARTIAL PLEDGE: Develop “current and timely” information on the environment that can be used by government agencies and the private sector.

One effort to produce data to quantify the monetary value of the natural environment is under way, Dr. Pickering said. Earlier this year, Gala Spiros, an environmental economics graduate student studying at a Dutch university, spent three months in the VI. As part of her research, she surveyed tourists about their spending patterns, interests and what attracted them to the territory, findings that will be published shortly, Dr. Pickering said.

LABOUR RESTRUCTURING YES

NO

PARTIAL PLEDGE: Restructure the Labour Department to improve its ability to “address workforce placement” for belongers.

After gathering public input during a series of meetings in early 2012, the department has been restructured, Dr. Pickering said. Part of the changes including replacing former Labour Commissioner Oleanvine Maynard with Janice Rymer, now the acting commissioner. Other changes included relaunching an Employment Services Unit to help belongers with job placement, a programme that often works closely with the Ministry of Education and Culture’s Youth Employment Service, he said.

EMPLOYMENT-NEEDS REVIEW

YES

NO PARTIAL PLEDGE: Conduct a “thorough review” of the territory’s employment needs “into the foreseeable future” to ensure that belongers have the opportunities to develop their skills to obtain employment.

The review is “a work in progress” Dr. Pickering said. “It fits into the same issue of the Youth Unemployment Registry. Hopefully, we will have the draft labour policy by the end of this year.

We have it. We’re reviewing it.”

WORKER HEALTH AND SAFETY YES

NO

PARTIAL

PLEDGE: Introduce legislation to regulate health and safety in the workplace.

The legislation will be included in forthcoming regulations needed to accompany provisions made in the 2010 Labour Code, Dr. Pickering said. He added that Clive Pegus, the consultant who wrote the 2010 code, is willing to draft the regulations, but there has been no available funding to date to pay him.

Special Report Midterm from page 30 offerings of locally caught fish, according to the fisherman.

“Sometimes they’ll put a whole wahoo or mahi-mahi on ice from the complex,” Mr. Soares said.

Branding the territory as a place where visitors can come to eat fresh seafood — an idea Dr. Pickering has touted often — will also benefit the territory, Mr. Soares said.

“I think the tourism industry and the fishing industry, they go hand in hand,” he said.

Economic diversification

Dr. Pickering said that beyond the economic diversification benefits, improving fishing helps ensure the territory’s food security.

That was also the goal of the government’s greenhouse initiative, which was launched in 2008 by the Virgin Islands Party, which is now in the opposition.

Despite the rhetorical support voiced by both parties, however, the greenhouses aren’t yet operating and it’s unclear when they will come on stream.

In the recent interview, Dr. Pickering said the “intellectual property issues” he had previously blamed for the delays are nearly resolved.

He declined to detail the issues but said previously signed agreements would have required government to pay annual royalties far into the future.

“As far as I’m aware, the persons who were involved with that work and the Dominican [Republic] connection, if not all, we’ve severed most of those ties,” he said.

A request for proposals seeking “qualified greenhouse experts” was issued by the Ministry of Finance Tuesday, the next step to making the project productive, Dr. Pickering said.

“I think the future of agriculture in the BVI is intimately tied to getting the greenhouses to work,” he said. “The technology exists. It can work.”

Agricultural policy

Other NDP initiatives announced during the campaign that seek to improve agriculture have not occurred. A promised “agribusiness development” law has not been passed, and an agricultural sales cooperative, a government-owned statutory board

that would market local produce and livestock, hasn’t been created.

Those initiatives aside, farmers have faced a host of other challenges in recent years, including the loss of prime arable lands and lack of water, according to Khoy Smith, the president of the advocacy group Farmers on the Move.

“I don’t think we have really gone forward as far as where we left off as it relates to government involvement,” Mr. Smith said.

He added that he would like government to revisit the creation of an agricultural policy that would detail the subsidies and protections available for farmers.

The policy was proposed under the VIP government, but never completed.

Mr. Smith, who ran for office in the 2011 election, added that aside from policy changes, farmers could benefit from small projects such as rehabilitation of reservoirs at Paraquita Bay. “We don’t have to wait for a greenhouse to run to support agribusiness,” he said.

Anegada

Dr. Pickering has touted many of the efforts envisioned to bolster agriculture and fishing as crucial to the future growth of Anegada, one of the territory’s least developed islands. Standing before the House of Assembly during the 2013 budget debate, Dr. Picking gave a lengthy speech that unveiled what he has called the “Anegada vision.”

That vision includes a series of interrelated development projects, starting with a solar farm that would power a water desalination plant that would irrigate crops and provide enough water for a tourism-boosting golf course.

The plans, Dr. Pickering said, are designed to enhance the island’s tourism and agricultural capacity while protecting its environment.

“Most [golfers] will probably go, stay a day or two or just go for the day and come back, so you don’t have to have any large increase in the population on Anegada. But the people who play golf are usually at the higher end of the market,” he said. “And they’re going to eat pumpkin soup, they’re going to eat lobster, and we’ll have enough water for sustainable development and all of the other things.”

Dr. Pickering added that much of the initial research for

the Anegada projects has been completed. After receiving technical advice from Sir Richard Branson and his team of alternative energy advisers, the ministry hopes to send out a request for proposals seeking bidders to build a solar energy generation plant by the end of the year.

Some aspects of Dr. Pickering’s plan have been welcomed by Anegadians.

“The solar farm: I will welcome that tomorrow,” said island resident Jerry Vanterpool in a September interview. “As we speak right now, that’s what I’m thinking about that.”

But he had a different opinion of the golf course, an idea the NDP has also suggested for South Sound, Virgin Gorda and Beef Island.

“We don’t want that at all,” Mr. Vanterpool said.

A survey conducted by the non-profit Island Resources Foundation found that most Anegadians surveyed expressed a desire for gradual development occurring in small stages, and a minority thought that big resorts and hotels were important for the island.

Restructuring

In addition to policies aimed at diversifying the territory’s economy, Dr. Pickering said that his ministry has also restructured the Labour Department and revamped its policies in order to assist businesses and help Virgin Islanders obtain employment.

After holding a series of community meetings to discuss labour issues in early 2012, Dr. Pickering replaced then-Labour Commissioner Oleanvine Maynard with Janice Rymer, who is now acting in the position.

In addition to remodeling the department’s Road Town offices, an Employment Services Unit was created within the agency to help find suitable employment for VIslanders.

In some cases, minor alterations to the department’s policies have allowed businesses that depend on expatriate labour to obtain work permits more quickly, according to the deputy premier.

As an example, he said Cape Air previously had to wait several months to obtain temporary permits for its seasonal pilots to fly between San Juan and Beef Island during the high tourism season.

The BVI Beacon | Thursday, November 28, 2013 The department, he said, was requiring the pilots to obtain physicals from VI doctors even though they had to undergo the same testing from United States authorities.

That requirement was waived.

“We solved that,” he said.

“Now Cape Air is going to have as much as 18 flights [per day] for the upcoming season.”

Labour review

Other longstanding labour issues will require further review.

Officials are in the final stages of appointing a tribunal called for in the 2010 Labour Code to review employee-employer disputes.

In October, Dr. Pickering apologised to the HOA for the delays, which he attributed in part to the need to seek advice from the International Labour Organisation.

Other aspects of the Labour Code still aren’t fully in place nearly two and a half years after the law was passed.

Regulations considered vital to detailing how businesses have to comply with the law still need to be drafted, but there isn’t money in this year’s budget to pay a consultant to write them, Dr. Pickering said. He added that he hopes the funds will be included in next year’s budget.

A further “review of the territory’s employment needs into the foreseeable future,” a 2011 NDP manifesto promise aimed at helping VIslanders find employment, is also under way, the minister said.

“It’s a work in progress,” he added.

But it’s a task that can’t be completed fast enough for McLloyd Walters, a VIslander who lives in East End. Mr. Walters, who runs an engineering business, said he would like policymakers to take a long-term view of the territory’s employment needs and the current imbalance of VIslanders to expatriates, who currently make up about 60 percent of the workforce.

“The question is do we continue … indefinitely — any government in the BVI?” he asked.

“Does the government recognise that that situation is probably not a sustainable situation?”

Environment

Dr. Pickering added that his ministry is also making a comprehensive review of the territory’s environmental management

| Page 31

regime. A draft “biodiversity bill” imposing new regulations, however, will take some more time before it can be considered by the HOA, he said.

The idea is not new. In 2007, the Law Reform Commission recommended that government establish a central environmental protection unit and consolidate existing conservation laws. In subsequent Speeches from the Throne, the current and former governments both pledged to pass comprehensive environmental management legislation, but no such bill has been tabled.

“It’s certainly something that I’m working on,” Dr. Pickering said. “In the wider context of everything that we’re doing, it will not be something that I’m going to put on the back burner.”

Asked to name his ministry’s environmental accomplishments to date, Dr. Pickering mentioned the Caribbean Challenge Initiative, a joint effort between business groups, non-profit organisations and governments.

At a summit co-hosted by the VI government at Necker Island in May, political leaders pledged to set aside 20 percent of the region’s near-shore environment for conservation by 2020. By that date, he said, the territory could have as much as 30 percent of marine and coastal areas earmarked for conservation, an action that could require adjustments to the existing network of protected areas.

However, some areas on the north shore of Tortola, such as Cane Garden Bay and Brewers Bay, need more focused attention, according to opposition member Alvin Christopher (R-D2).

He added that he fears that erosion will damage the area’s coast, and he has brought the matter up to the Conservation and Fisheries Department.

“I took them there on several occasions, but so far nothing is being done,” Mr. Christopher said.

Mr. Walters, the engineer who considers himself a community activist, said he would like less “lip service” and more action taken to clean up trash in communities including East End, where he lives.

Environmental considerations also remain a focus of the MNRL’s biggest capital project, the multimillion-dollar runway expansion at the Beef Island airport, Dr.

Midterm see page 32

Page 32 | Thursday, November 28, 2013 | The BVI Beacon

Midterm from page 31 Pickering said.

Several residents have raised concerns that the ministry’s plan for the runway, 2,000 feet of which is to be built on reclaimed land in Trellis Bay, will irrevocably damage the bay’s natural ability to flush itself.

A previous plan to mitigate the potential environmental damage involved placing the runway on elevated piles, but this measure was shelved due to cost concerns.

Dr. Pickering said that other measures to mitigate the potential damage from the extension haven’t been fully developed, but a Portuguese engineering firm is hoping to finalise the plans soon.

Paradigm shift

During the interview, Dr. Pickering spoke repeatedly of the ministry’s effects on the wider economy.

The NDP generally takes a different approach to the economy than its predecessors, he said.

Government, he explained, should be seen as a facilitator that allows businesses and individuals to invest rather than the main provider of economic activity.

Asked if things were better in the VI now after two years of the NDP government, Dr. Pickering asked this reporter to clarify whether he was asking if things were better for “the people” or for the territory.

“On an individual level, I think that one of the critical issues is that

Special Report government for so long has been the driver of the economy,” he said.

“And the lack of free-flowing money in the economy has made it less likely that the individual person can feel that their lot is better.”

He added that he feels his government has brought more “stability,” which he said is better for the territory.

“The country is stabilising to the point where the private investment will then start to reveal itself in a different manner,” he said.

“But as it is right now, the freeflowing money that government used to have — that used to trickle down, so to speak, to the individual — that money is no longer there.”

Eric Voorhis contributed to this report.