State of the Commonwealth Address - Northern Marianas

Governor Benigno R. Fitial

OFFICERS of the government, and citizens of our Commonwealth, I come before you to report on where we have been over the past year and where I see us going over the course of the next year.

But before I do that, I want to speak to you directly about what I know is troubling many of you. You are disappointed in your Governor, and you think I should have done better. I too am disappointed. I have made mistakes. I acknowledge that.

I did not see soon enough how devastating the economic forces blowing down on us would be. I was too optimistic that we would get enough help from the federal government to dig out of this economic black hole we are in.

I made errors of judgment and made decisions that turned out poorly because they were not based on enough reliable information. I trusted people who could not perform what they promised. I also have, at times, blamed people for things they could not have avoided.

I want you to know that I have thought deeply and carefully about my own mistakes, and I am determined that I will not repeat them. Very bad economic times cause heavy pressures. But there are no easy ways out. We have to fall back on our strength as a people and gradually, steadily work toward better times.

Tourism

I want to share with you a few promising signs of the beginning of economic recovery.

Just last month, the Hotel Association of the Northern Mariana Islands reported a hotel occupancy rate of 74.53 percent; a 9 percent increase over the previous year.

The E-Land Group has presented a development plan to revitalize the Coral Ocean Point Hotel and the Palms Hotel in 2013. The plan by E-Land is to focus on high value tourists, and they plan to upgrade the facilities at both locations to target this sector of the tourist market. This renovation will add significant construction jobs in 2013 and increase the number of high quality accommodations. Because of our economic situation, developers proceed slowly and cautiously. We have other developers who are considering similar activities in 2013 which would further increase the available construction jobs and tourist facilities. It takes a great deal of time and effort to arrive at development plans that are realistic and that we can support. I think we will see some progress on this front this year.

Our very important tourism market in Japan is still burdened by the after-effects of the tsunami and the long-lasting economic slowdown. I do not expect recovery in this market next year. But we have long-standing friendships in Japan, and there are reliable indications we will see a very modest improvement in the number of Japanese tourists in 2013 and better numbers a few years out.

However, we have reaped economic benefits from our Korean tourists. I am truly grateful to the Kumho Asiana Group for making major investments in our islands since acquiring the LaoLao Bay Golf Resort in 2007, investing more than $50 Million and adding much appreciated passenger air service flights to the CNMI. They expect to fly to the CNMI with 18 flights during the summer of 2013 and 18 flights during the winter season.

When I saw a promising future for our tourism industry to expand in the Korean market, I made several trips to Korea to work closely with Kumho and other Korean executives to strongly encourage them to take the chance of investing in the CNMI. Surely enough, Kumho Asiana saw opportunity where other airline carrier saw crisis, and they strategically invested when the market was down, in anticipation of the eventual turnaround that we expected to realize, in due course, by staying the course. Our annual Korean arrivals have even surpassed those of Guam and this has brought more Korean hotel investment when we needed it most.

The Marianas Visitors Authority has worked hard to gain a steady growth in Chinese tourists in the past year. The projected long-term growth of the Chinese economy bodes well for the Commonwealth. China now has the largest outbound market in the world. It is said that the Chinese economy will surpass that of the U.S. in the next decade or two and as the benefits of this economy filters into the population; we expect tourism to continue growing significantly. Our ability to offer the visa waiver program places us in a very advantageous position.

From the beginning, I saw that the Chinese tourism market was emerging exponentially. That is why I exerted all efforts to travel to key cities in China and to work closely with the owners of the Tinian Dynasty, Century Tours and Tan Holdings to make a strong push to steer Chinese tourists to the Northern Marianas.

Saipan is now second only to Australia and Phuket, Thailand in terms of popularity and increased visitor rates for Chinese travelers. Bali and the Maldives trail behind Saipan.

Today, as a result of these efforts, we have just added three wide body charter flights, with a maximum of 300 passengers per flight, for our Chinese tourism market. And as result of this anticipated growth from the China market, DFS Saipan is poised to undertake renovations at the main Galleria shopping center.

For that reason, the role of independent carriers and charters is crucial in the development of new markets. Establishment of new air services is expensive and entails significant risks so investors proceed cautiously. We will not experience growth in tourism unless we have available flights and seats at competitive prices. This will serve as our engine for growth and development of the Chinese markets. Our goal for 2013 is to establish two new daily flights to China that would provide us with the opportunity of a quarter of a million new tourists per year in coming years. Chinese tourists have the ability to travel anywhere in the world. The fact that CNMI ranks high on their list of preferred destination is certainly welcomed news and we must not lose sight of this opportunity for economic growth.

The Russian market remains small for us, and it is relatively expensive to develop. However, we have continued to make prudent investments in expanding our presence there. We had a small increase in Russian tourists this past year, and we expect this increase to be matched in the coming year.

Although I am very pleased about the growth in the number of tourists, I am reminded that we need to do more at home to clean our house and improve our tourism product. Last year, the Marianas Visitors Authority, with support from the Office of Insular Affairs took on a major survey of more than 2,300 tourists. The feedback from tourists of more than five nationalities told us that we need to find ways to ensure visitor safety, care for our environment and care for our existing tourist sites. They also told us that they want to see our destination refreshed from time to time and for this, we need to re-invest in new ways to share our ecotourism sites and our cultural heritage sites, such as our beloved, but under-interpreted latte stones. Yes, I want to do more to meet the expectations of our visitors and this is something we must partner in with the private sector. We cannot simply wait for tourists to arrive and not make continued efforts to improve what we share with them.

At the forefront, I will work closely with hotel owners to address the need of upgrading and renovating the hotels. This needs to be done in order for us to increase the quality and rates of rooms so that in turn, we can realize increased revenues.

I am delighted to report that just this holiday season, we experienced a major lack of hotel rooms for our tourists. At the peak of the season, our major hotels reported a shortage of more than 100 hotel rooms. To address this problem, we will work with interested investors to revive defunct hotels like Plumeria Resort and Riviera Resort to add more rooms to our inventory. If we can achieve these efforts, I believe we can return to the level of 650,000 visitor arrivals between 2014 and 2015.

Priorities for 2013

Now let me turn to what I would like to do in 2013 in other areas. One of the mistakes I have made in the past was not to pay enough attention to transparency in government. I tried to consult widely, but sometimes I thought I had to act quickly in order to secure a benefit for the Commonwealth. Acting without transparency decreases confidence in the government. I want you to know what I am planning, and I invite input from any and all of our citizens.

Government jobs

First, I want to report that we are not going to eliminate government jobs or require reductions in hours in 2013. I know that some of you view our government as too big and having unnecessary employees. I do not see it that way. We need to provide our citizens with the core government services, even in hard times, and we have made our operations much more efficient. That is not to say everything is perfect; but we have made steady progress.

I will also evaluate the members of my Cabinet in an effort to ensure that each department is adequately delivering quality services to the people. I believe that when the government is being run effectively and efficiently, this will be a key component in our efforts to turn our economy around.

Since I came to office in 2006, we have gone from an operational budget of $213 million down to $112 million today. We have cut where we had to, but in the past year, the central government has returned to a forty-hour work week. We exercised sound financial management to avoid implementing mass layoffs within our government workforce. Yes, we successfully achieved this in the face of $100 million in reduced operational expenses. Certainly, that is a feat unprecedented elsewhere and within our government.

We expect that finances will continue to be restricted in 2013, so we must continue to be vigilant in our expenditures. However, at this point in time, we do not see a need for a reduction in hours or layoffs in 2013.

Local transportation

Next I want to report on two transportation projects we have identified for 2013. Our objective is to expand the transportation connections within our economy and to expand the transportation connections between the economies of the Commonwealth and Guam. Economic analysis indicates that we can achieve additional economic activity this way.

There is significant federal support available for efficient local public transportation, and many states in the U.S. have capitalized on this to improve their economies. During 2013 we will do an initial feasibility analysis for the establishment of a government-sponsored local bus system. The establishment of a regularly scheduled bus system would provide an inexpensive transportation system that would provide regular transportation to meet everyday needs of going to work, school, shopping, and tourism. The development of a simple cost-effective government bus system would supplement car ownership and provide an alternative for those who do not own their own vehicle. It could be easily implemented on the island of Saipan where most areas can be served by a simple routing system.

We have also identified an inter-island ferry service with Guam as a way to lower the costs of goods and expand secondary tourism from Guam. We are exploring a viable ferry system that can provide a low-cost sustainable passenger and cargo system. If we could expand the transportation system connecting these two economies, we would provide a significant economic stimulus. This is a complex undertaking which must be planned carefully, but federal funds are available that could subsidize this operation. In 2013, we are taking the first step in this endeavor by carefully identifying costs, revenues and available federal resources that form the economic foundation of this system.

Health care

Now let me turn to the very important subject of our health care. The Commonwealth healthcare system will continue to face challenges in 2013, but I think we are headed in the right direction. The HealthTech study that was completed in 2012 identified important shortcomings in the current structure of our health care system. These inefficiencies have developed over a long period and have resulted in a system that is unaffordable and ineffective. Efforts are well under way for CHC to structure itself correctly to achieve maximum efficiency.

Our goal is to provide United States mainland quality care that fits within our budgetary limits, or as we refer to it – a "Long-term Sustainable Healthcare Model." This will require us to consider carefully the services to be provided and then ensure that they are provided in the most cost-effective manner. This will not be an easy task as medical care is expensive and we have limitations on the amount of available revenue.

The current arrangement with the United States Department of Health and Human Services is providing short-term assistance and is sincerely appreciated. In 2013 we need to move quickly to develop our long-term model. It is our objective to work with federal government experts to develop this model and begin to implement it during 2013.

Retirement system

I will talk next about the problems with the retirement system that continue to harm the well-being of our Commonwealth. One of the main issues confronting us is the unfunded liabilities associated with the retirement system, and this problem will continue in 2013. The Retirement Fund problem is the result of years of legislation that created unfunded liabilities, and this problem has reached a point of crisis.

There is no one solution to this problem. Resolution of this matter can be achieved in steps that narrow and clarify the liabilities. I believe that adoption of P.L. 17-82 is an important step in this process because it allows current employees to withdraw their contributed portion while at the same time reducing the overall liability of the fund. This process will allow us to reduce the total liability and clarify the amount of the unfunded liability.

For this reason, I do not accept the position of the trustee ad litem, Mr. Razzano, and I do not think that his process protects the interests of either the retirees or current employees.

We need to bring resolution to the retirement fund issue this year, and I believe that the first step is to allow for voluntary withdrawal by current employees as a means of reducing and clarifying the liability at issue.

I want to be clear that no one has proposed abandoning our commitment to the existing retirees. Instead, what is proposed is a reduction in the overall liability, quantification of the exact amount of the remaining liability and then development of a financial plan to meet our obligations to these retirees.

I realize that retirement benefits are a serious issue to the families in our community that are dependent on these benefits. However, we also must realize that the prior structure could not be sustained, and we need to develop a plan that balances the obligations, needs, and resources of our small economy. I want to reiterate that I understand the importance of these issues to the current retirees, and we will minimize the adverse effects on them in everything we do with the retirement system.

I also think it is important to press our cause in the U.S. Congress for long-term unemployment benefits and full social security benefits without requiring additional financial sacrifices by the Commonwealth. The rate and extent of our economic decline is far greater than that experienced anywhere else under the U.S. flag, and these measures would be effective in helping us recover.

Commonwealth Utilities Corporation

Next I will talk about the Commonwealth Utilities Corporation. CUC has been a continuing point of frustration over the last decade. But there have been some significant improvements. It wasn't long ago that the island of Saipan was crippled with a complete breakdown in power generation with power limited to a few hours a day. This had a devastating effect on business and households. It was only by placing CUC under emergency authority were we able to bring in temporary generators that enabled us time to rebuild the aging electrical system. Through this effort we have restored a reliable power system although it is still an antiquated structure based on outdated technologies.

One of the largest impediments to expansion of our economy is the high utility rates. Every resident is expressing frustration with the high cost of power and every single business that has closed cites utility costs as one of the principal reasons. These high power rates are reflective of the inefficiencies of the current power generation system and the high cost of diesel fuel. We do not have any ready way out of either of these limitations.

In 2013, we will continue to invest in CUC as our resources will allow, and we will continue to consider alternatives to diesel power. A recent study by the National Renewable Energy Laboratory identifies that the Commonwealth has signs of the availability of geothermal energy. If we can develop geothermal energy we could achieve significant reduction in our utility costs and this would directly benefit both households and businesses. In order clarify this potential we will complete our examination of the development of geothermal energy in 2013, and we are hopeful for positive results.

One would think that I, as Governor, can easily move resources to address Commonwealth problems. But that is not the case. My experience is that often legal restrictions, cross currents in the legislature where there are legitimate differences of opinion, and federal government considerations prevent quick action. An example of this is the effort to bring in alternative energy sources, a subject close to my heart, where we have been stymied by political and economic forces.

I readily admit that I am not without faults, and when I took this position as your Governor, I resolved myself to deal with the toughest issues of the day. The key issues all involve matters where we were striving to address long-standing problems of our community. An example of this is the power plant agreement, which I entered into in order to entice the construction of a shipyard rebuilding facility. If constructed, this facility would provide at least 1,000 highly paid jobs that would revive and expand our economy. I will admit that the realization of this opportunity to significantly expand our employment base while simultaneously providing a more efficient replacement of our aged power plant inspired me to act in an expeditious manner. In retrospect there should have been more public involvement, and for this I do sincerely apologize.

After further examination by the new Attorney General, Joey San Nicolas, it has been found that the prior position of his office that this contract was proper was in error. Therefore, the agreement is void and unenforceable. I apologize for the turmoil that this endeavor caused, but Attorney General San Nicolas’ latest position will allow for a full examination of the merits of this proposal and the need to address the long-term power needs of our community.

There are no arguments that the current power generation system is costly and reaching the end of its life expectancy. This is why we must find alternatives to this system if we wish to lower costs and attract new industries to the CNMI. These were the two objectives I was seeking to address in this endeavor.

Before leaving this area of my report, I want to point out a significant achievement of the Commonwealth Utilities Corporation over the past year in the continued expansion of water service. Through the efforts of the Water Task Force there has been a great expansion of water service and quality in the past year, and in 2013 I believe that we will achieve the goal of 24 hour service throughout the island of Saipan.

To sum up, we made some progress in 2012. Important economic factors improved a bit. We are not out of this economic recession by any means, but in 2013 we will see our economy notch up another rung. We are very focused on the basics: tourism, jobs, clarification of retirement obligations, and continued improvement in health care and utility services. The tasks we have established for 2013 are significant, and this approach contributes to the foundation for long-term sustainable growth.

Serious economic stress always causes disagreements and discord because people are hurting and discouraged. We have suffered the most serious economic harm of any place under the U.S. flag, largely due to economic forces in Japan, the U.S., and world trade conditions we had no part in shaping. As a result, our stresses have been very high. These stresses are reflected in our politics, in our connections with the federal government, and even in our dealings with one another.

The outlook for 2013 is better. Our economy can make progress in getting past this deep, deep recession. I will improve my own methods including more consultation and transparency. I know this is important to all of you, and I am determined to do better in these regards. I think we all have to realize that very divisive politics and litigation holds us back. I need to do more to accommodate my political colleagues and to make sure I communicate with our citizens. I believe we can work together very productively in 2013 despite our past differences. We live in beautiful islands, and we have a strong, generous cultural heritage. We can steady our economy and achieve progress that will benefit us all.

Thank you.

St. Thomas, Virgin Islands Celebrates Taino Heritage

The Voice of the Taino People Online

St. Thomas, USVI (UCTP Taino News) - St. Thomas, Virgin Islands residents recently experienced an exciting, full day of Taino-related activities organized by local indigenous organization Opia Taíno International, Inc. 

Activities took place adjacent to the well-known historic building, Fort Christian, and at the nearby Emancipation Garden from 10am – 5pm, Saturday, December 1, 2012. The program featured an impressive list of speakers as well as an interactive, educational exhibition entitled “A Walk in My Moccasins.” The daylong program was free to the public and supported by the Virgin Islands Humanities Council and the National Endowment for the Humanities.

"We are here to dispel the myth of Taino extinction in the Caribbean" stated Maekiaphan Phillips, President of Opia Taino. 

Some of the interactive features of the program included a Taino-inspired village with a batey (ceremonial plaza), Taíno artifacts and crafts, photographs, native foods, and results from Maekiaphan Phillips’s family genealogical exploration. 

Members of Opia Taino and other special guests were on hand throughout the day to answer questions concerning Taino and Carib heritage. Featured speakers included Phillips, Roberto Mukaro Borrero of the United Confederation of Taino People, and Senator-elect, the honorable Myron Jackson. Discussion topics ranged from family genealogy to DNA testing; Taino history past and present; the United Confederation of Taino Peoples’ Inter-Tribal Registry; and the importance of honoring the Indigenous legacies of the Virgin Islands.

Curacao Wants PDVSA To Invest $1.5 Billion In Isla Refinery

REUTERS

WILLEMSTAD – Curacao could extend or renegotiate a lease of its Isla refinery to Venezuelan state oil company PDVSA if the latter agrees to invest $1.5 billion to upgrade the World War One-era facility, one of the Caribbean island’s top politicians said.

The 335,000 barrel per day (bpd) Isla refinery, which is crucial to the Dutch island nation’s economy, has faced years of complaints from residents and environmental activists over pollution, but PDVSA has been reluctant to invest in it.

“It is important to extend PDVSA’s contract, but under certain conditions,” Helmin Wiels, leader of the Sovereign People party which won the largest block at last week’s parliamentary elections, told Reuters on Wednesday.

“But obviously if PDVSA is going to invest that amount it won’t negotiate for 2019,” he said, referring to when the current contract expires. “That level of investment would require at least 25 years to be sustainable.”

He said PDVSA could be invited to become a partner in a joint venture with the government of Curacao, which is a semi-autonomous “constituent country” that is part of the Kingdom of the Netherlands.

“As partners, PDVSA would share the responsibility,” he said, adding that the Venezuelan company could choose to pull out of the refinery project if it felt conditions were inadequate.

PDVSA executives have insisted a new contract for Isla will definitely be renegotiated before the current one ends in 2019.

Wiels’s party, which is sympathetic to Venezuelan socialist President Hugo Chavez, is in negotiations with other political parties to form a new government and choose a prime minister under parliamentary system of Curacao, which is located 40 miles off the Venezuelan coast.

This year, a Curacao court ruled against a petition by local activist group SMOC to shut down the refinery on the grounds that toxic emissions were sickening residents. SMOC has said it will continue to put pressure on the refinery to either clean up its operations or shut down.

‘SOLD FOR $1′

Some residents say closing the refinery would free up land in the heart of the capital, Willemstad, remove the distinctive smell of sulfur emissions from the plant, and get rid of an eyesore that puts off tourists.

But Wiels said shutting the refinery would constitute “economic sudden death” for the island, because Isla provides close to 10 percent of Curaco’s GDP.

Isla was originally opened in 1918 by Royal Dutch Shell (RDSa.L) on the site of a former Willemstad slave market to process Venezuela’s first crude oil, and the refinery supplied the Allies in World War Two.

In 1985 Shell sold it to Curacao for a symbolic $1, and the island quickly leased it to PDVSA – which has made few major investments to reduce emissions.

Wiels said his coalition may consider suing Shell for pollution, including indiscriminate dumping of carcinogenic heavy metals, prior to 1985.

“I’m not an expert, but I think the damage suffered by Curacao is on the order of $30 billion to $40 billion,” he said, adding such a trial would likely end up in Dutch courts.

“The deal with Shell (in 1985) did not absolve it from responsibility for the damage caused to the country.”

The economy of Curacao, 40 miles off the Venezuelan coast, has become less dependent on refining in the last decade and wants to expand its banking, shipping and tourism sectors.

But Isla remains a vital asset for PDVSA. It represents more than 10 percent of the company’s global refining capacity, while a tank depot next to the facility can store up to 16 million barrels of crude and has become an important staging point for Venezuelan oil shipments to China.

Unlike most coastal facilities in Venezuela, an OPEC member, the terminal and the neighboring island of Bullenbaai can receive large tankers, including VLCCs (very large crude carriers).

Isla has suffered several operational problems in recent years, mostly due to malfunctions at the utility plant that feeds the refinery with electricity, water and steam.

One source working at Isla told Reuters the facility’s catalytic cracker was offline undergoing maintenance and was likely to be restarted in the coming weeks.

Bouncing Back: An Address By Guam Governor Eddie Baza Calvo

The new year is starting off with good news. According to the latest reports from the Department of Labor, unemployment on Guam is at the lowest rate in three years. Better yet, average weekly earnings are up. Compared to September last year, Guam saw an increase of 550 jobs.

The folks at DOL, like its Chief Economist Gary Hiles, have been great at producing this critical information. This includes rates of unemployment and wages. These are critical tools that show how our economy is doing. And according to Mr. Hiles, Guam’s economy is doing better compared to last year. In addition to providing this information, DOL and AHRD also help Guamanians find the right job for your skills and interests.

If you, or someone you know is looking for a job, or need help finding the right one, call the One Stop Career Center at 475-7000 or the Guam Employment Service at 475-7138. These two numbers will give you all the information you need about job openings, training, and assistance to get started on a career path that’s right for you. Finding a job can be tough, but your GovGuam family at DOL and AHRD are ready and willing to help. You can help Guam grow just by picking up the phone.

Ray and I are committed to building a strong economy here, driven by a skilled workforce. Unemployment may be lower, but we will not rest on our laurels. We will keep pushing for initiatives to dramatically grow our economy, like allowing Chinese visitors to visit Guam visa-free. We will also push for more investment into Guam. We will remain aggressive on local government construction projects, and will keep facilitating the Federal projects as well. We’ll get your tax refunds out so money can keep circulating in the economy. And as military construction increases, we will be diligent in capturing all the tax revenue Guam is entitled to.

We’re on the right track, but there is a lot of hard work ahead of us. And much of that hard work involves cutting government spending. I’m confident your fellow public servants will see that a strong private sector will do more for this economy than a bloated government. I’m hopeful they will see how timely tax refund payments help your families.

Guam is bouncing back, and if we all come together, we can reach our greatest heights. Imagine a Guam where everyone has a job they care about. Imagine being able to earn a comfortable living. This is not a pipe dream – it’s the vision that Ray and I are working to fulfill.

Let’s keep imagining a greater Guam. We’re already setting new standards and higher benchmarks. Let’s stay focused on our goals.

Our island is resilient because our people are strong. This administration is here to help you.

Thank you, and may all Guamanians have a blessed and successful new year.

Les Voeux d'Oscar Temaru à la population

VŒUX 2012

PRESIDENCE

En charge des relations internationales et régionales,

du tourisme et des transports aériens internationaux

Read full text here.

Classified documents about Tahiti’s Pouvanaa destroyed: historian

Radio New Zealand International

French Polynesia’s leading historian has revealed that the French authorities have destroyed archived classified documents about the controversial late pro-independence leader Pouvanaa a Oopa.

This comes nine months after Nicolas Sarkozy gave a special televised pre-election address to Tahiti, saying the files would be opened to allow for a possible re-trial.

Walter Zweifel reports:

“After a controversial trial for allegedly leading unrest, Pouvanaa a Oopa was exiled to France in 1958, but a decade later he was pardoned and he became a Senator. 

The historian tasked by the French Polynesian assembly to research his treatment, Jean-Marc Regnault, says relevant records were destroyed in recent times. He has told a local newspaper that his preliminary findings point to two plots against Pouvanaa a Oopa. 

Mr Regnault says he found that the French state viewed Pouvanaa as a communist and the local elite feared for its privileges. Today a statue in his honour is in front of the territorial assembly and a key street in Papeete has been named after him.”

Uphill Struggle for Caribbean Financial Services Sector

INTER PRESS SERVICE

News Agency

By Peter Richards

ST. JOHN'S, Antigua,(IPS) - In the 1980′s, Caribbean countries wanted to shore up their prospects of social and economic development in the coming decades, so they looked to the financial services sector to spur employment and development. They managed to develop a robust industry, particularly in the Bahamas and the Cayman Islands.

Today, however, the region has been struggling to keep up with evolving international regulations. These challenges come at a high cost, even as proponents of the regulations argue that they are critical in dealing with the global financial and economic crisis.

For at least two years, the international community has pressured the Caribbean, where several countries are well known as tax havens, to shut down its financial centres and implement a number of measures in order to qualify for bilateral aid. Since then, little has changed, delegates at the second meeting of the Caribbean Forum (CARIFORUM) Conference on the International Financial Services Sector in the Caribbean Region, held Oct. 30-31 in Antigua, learned.

Baldwin Spencer, the Antiguan prime minister, said the international community continues to issue “repeated demands that the region should be treated on a level playing field with financial centres in the industrialised economies using the principles of natural justice”.

He said that while the Caribbean has been committed to developing financial services in a “responsible manner and investing in their good supervision and regulation”, developed countries are the ones that have dropped the “regulatory ball”, to devastating effect on the rest of the world.

The Paris-based Organisation for Economic Cooperation and Development (OECD) has pushed for restricting, and in some cases, outlawing financial services in the Caribbean, threatening on occasions to blacklist countries that have failed to comply with some of its policies.

Regulations with a purpose

Those who support such regulations say that they are necessary given the current financial climate. The newly appointed head of the delegation of the European Union to Barbados and the Eastern Caribbean, Mikael Barfod, has defended the OECD position, insisting that it is aimed at tackling tax fraud and harmful tax practises.

“In today’s environment with the international financial crisis, the international taxation cooperation between governments and between tax administrations has gained in importance,” he said, noting that since 2009, there has been “major progress” in these areas.

He acknowledged that while Caribbean countries have made an effort to sign a “sufficient amount” of Tax Information Exchange Agreements in order to be fully accepted by the OECD, “there is more to be done in many states and the governance standards defined internationally by G20 and OECD are changing”.

Avinash Persaud, an international expert on the financial services sector and chairman of the London Business School, told IPS that the financial sector “is really quite significant” in Caribbean economies, accounting for as much as 50 percent of gross domestic product (GDP) for islands like Barbados and Antigua and Barbuda.

“They represent a major part of tax revenues. Over the past 10 years they have come under tremendous pressure by the larger economies” such as those of London, Zurich, and New York, which are under fiscal pressure themselves with little or no tax revenues and which now want to compete with Caribbean financial centres.

“They are trying to establish a set of global rules which they decide themselves and then impose on us,” said Persaud. “Then they judge whether we are fitting with those rules or not. Judge and jury. It is really ad hoc and it is really designed to close down the international financial centres coming from the Caribbean. It is certainly not a level playing field.”

New standards to follow

Ivan Ogando Lora, the director general of CARIFORUM, which is comprised of the 15-member Caribbean Community (CARICOM) bloc and the Dominican Republic, said recent recommendations by the Financial Action Task Force (FATF) regarding international standards for combating money laundering and financing of terrorism, will also now pose new problems for the region.

“Compliance to international standards now seems to be the order of the day and Caribbean jurisdictions have been making strides in this regard,” he said, noting however, despite the efforts, that Caribbean countries “continue to attract negative attention”.

CARICOM countries have already developed a final draft of a Financial Services Agreement that if approved by mid-2013 would create a single financial space with common legislation, regulations, administrative procedures and practices and will also provide for cross border supervision and harmonisation of standards.

The United States, which has complained in the past of its wealthy citizens using the Caribbean to escape paying taxes, has itself introduced a range of changes to its financial regulatory environment that regional stakeholders fear could also undermine the financial services sector within CARIFORUM.

The Foreign Account Tax Compliance Act (FATCA), for example, would require U.S. tax authorities to levy a 30 percent withholding tax on both foreign and non-financial foreign institutions where new reporting requirements have not been met.

The requirements would affect traditional financial institutions such as retail and commercial banks as well as investment banks, securities and brokerage firms, private banks and wealth management firms that do business in the United States. Any institution doing business with U.S. individuals and entities would have to immediately adopt procedures, processes and systems necessary for FATCA compliance.

Persaud said that this latest strategy underscores the struggle facing the Caribbean in recent years.

“They have essentially moved land and water to try and comply with the new rules and when they do so, the rules then change again and the costs are extremely burdensome. The cost for the Caribbean financial centre complying with international rules is ten times as the per cent of GDP as the cost of the larger rich countries complying with the rules they have set.

“The problem is we can’t abandon the sector because it is an important sector,” he said, urging the Caribbean “to fight a better fight”.

Justice Dept. and Puerto Rico Agree to Overhaul the Island’s Troubled Police Force

New York Times

Police officers detained student protesters
 at the University of Puerto Rico in San Juan in 2011

       photo by Ricardo Arduengo/Associated Press

By CHARLIE SAVAGE and LIZETTE ALVAREZ

WASHINGTON — The Justice Department’s Civil Rights Division and the government of Puerto Rico agreed Friday to sweeping changes to the commonwealth’s large and troubled Police Department intended to help overcome a history of discrimination, violence and corruption.

In a 102-page consent decree filed to settle a federal civil rights lawsuit, Justice Department officials and the departing governor of Puerto Rico, Luis G. Fortuño, agreed to far-reaching changes in the way the 17,000-member force recruits, trains, promotes and oversees its officers. This includes strict new policies on the use of force, police interactions with gay and transgender Puerto Ricans, the department’s approach to domestic violence and its handling of civilian complaints. The agreement also reins in the department’s special tactical units, which have drawn much criticism over the years.

Both sides agreed to delay putting the changes in place for several months to give the administration of the incoming governor, Alejandro García Padilla, an opportunity to review and adopt it — or propose changes. The subject is also subject to judicial approval.

“The successful implementation of the reforms contained in this agreement will help to reduce crime, ensure respect for the Constitution and restore public confidence” in the Puerto Rico Police Department, said Thomas E. Perez, the assistant attorney general for civil rights.

The agreement follows a 116-page report the Civil Rights Division issued last year accusing the Police Department of systematically “using force, including deadly force, when no force or lesser force was called for,” unnecessarily injuring hundreds of people and killing “numerous others.”

Critics of the Police Department have long complained that the force is largely corrupt, often inefficient and sometimes ruthless. This year, the American Civil Liberties Unionwrote its own report on the department, highlighting widespread abuses and violations of civil rights, especially against poor people, black Puerto Ricans and Dominican immigrants.

“These abuses do not represent isolated incidents or aberrant behavior by a few rogue officers,” the report stated. “Such police brutality is pervasive and systemic, island-wide and ongoing.”

At the same time, murder is rampant on the island. Residents largely blame the police for failing to stem the killings. In 2011, Puerto Rico broke its own record, with 1,135 homicides, a rate of 30 killings per 100,000 residents.

The Justice Department report last year portrayed a police department riddled with problems. Officers routinely conducted illegal searches and seizures without warrants, attacked nonviolent protesters and journalists and discriminated against Dominicans, gays and transgender people. The department also failed to adequately handle sex assault and domestic violence cases, including spousal abuse by fellow officers.

Governor Fortuño said Friday that nothing was more important than the safety and quality of life of Puerto Ricans. The agreement, he said, establishes a clear path toward strengthening the Police Department.

“There remains a lot of ground to cover, but we have initiated a broad reform of the police that has been necessary for decades,” said Mr. Fortuño, who lost his re-election bid in November.

The Justice Department’s Civil Rights Division, under Mr. Perez, has threatened lawsuits and pushed through a series of consent decrees to overhaul troubled police departments, including a broad one with the City of New Orleans this year. The Puerto Rico agreement appears to go further.

Among other things, Puerto Rico has agreed to expel officers from heavily armed “special tactical units” who have a pattern of misbehavior and to end the practice of using them to perform ordinary police work and routine patrols, a practice linked to complaints of police brutality.

The earlier report said the units frequently relied on “intimidation, fear and extreme use of force.”

One example it cited was the killing of Cáceres Cruz in August 2007 by a tactical unit officer. Mr. Cruz was directing traffic when three officers, driving by, thought he had insulted them. They told Mr. Cruz he was under arrest and wrestled him to the ground. An officer accidentally shot himself in the leg. He then repeatedly shot Mr. Cruz, who was lying on the ground, in the head and body before leaving the scene.

An internal investigation cleared the officers of misconduct. But after a video of the confrontation surfaced in the news media, one officer was convicted of murder. It emerged that seven complaints had been filed against him, but had been largely ignored.

The agreement also called for new controls on stops, searches, and arrests, including a requirement that the department record the reason for the stop and the subject’s ethnicity.

Because of a stream of complaints involving prisoner abuse, supervisors at precincts and stations will have to “visually inspect each detainee or arrestee for injury” and interview them about any complaints of pain. A specific policy will be instituted for how the police should interact with gay and transgender people.

And to avoid the clashes seen in recent years between demonstrators and the police, crowd control rules must be improved and closely followed.

The report also tackles the longstanding problem of domestic violence and sexual assault on the island. The police will have to conduct more thorough investigations of these crimes, set up a 24-hour hot line and track the disposition of sexual assault cases.

Charlie Savage reported from Washington, and Lizette Alvarez from Miami

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Associated State signs Niue Treaty on cooperation in fisheries

Palau signs Niue Treaty

Palau has become the first nation to sign a treaty amongst all Pacific Island Forum Fisheries Agency members, aimed at strengthening cooperative surveillance and enforcement activities.

Palau has become the first nation to sign a treaty amongst all Pacific Island Forum Fisheries Agency members, aimed at strengthening cooperative surveillance and enforcement activities. Palau’s Director Bureau of Oceanic Fishery Management, Nannette Malsol, signed the Agreement on Strengthening Implementation of the Niue Treaty on Cooperation in Fisheries Surveillance and Law Enforcement in the Pacific Region (the Niue Treaty Subsidiary Agreement) at the FFA Headquarters in Honiara today. “This is a landmark achievement for our region and furthers our efforts to ensure the sustainability of our fisheries as a source of income and food for our people now and into the future,” Ms Malsol said. “As such I would like to thank the FFA and members for concluding this important Agreement within the timeframe established by our Leaders.” The Niue Treaty Subsidiary Agreement is aimed at enhancing active participation in cooperative surveillance and enforcement activities by providing a framework for the Parties to share resources and exchange information, including fisheries data and intelligence. The Agreement is a direct response to the recognition by the Pacific Islands Forum Leaders on the significance of fisheries resource as a major source of food and income for the Pacific people and the Leaders’ call in the 2007 Vava’u Declaration on Pacific Fisheries: Our Fish, Our Future of the need to strengthen the current surveillance and enforcement mechanisms to combat illegal, unregulated and unreported fishing (IUU fishing) to protect the region’s fisheries. The final text of the Subsidiary Agreement was adopted and opened for signature on Friday November 2nd and Palau becomes the first full signatory. FFA Director-General Designate, James Movick, congratulated Palau for taking the lead in being the first FFA member to sign the Agreement and looked forward to working closely with Palau on its implementation. “This Agreement further enhances our goal of providing an effective monitoring, control and surveillance which is the foundation from which we will be able to support robust fisheries management measures that will enable the maximisation of returns from our fisheries resource. “Palau’s signing of the Treaty signifies their strong commitment not only to its people but to the region as a whole in our collective effort to protect our fisheries.” he said. In 1992, the members of the Pacific Islands Forum Fisheries Agency (FFA) adopted the Niue Treaty on Cooperation in Fisheries Surveillance and Law Enforcement in the South Pacific (Niue Treaty). The objective of the Niue Treaty is to enhance regional coordination and cooperation in fisheries surveillance and law enforcement, and increase the ability of Pacific Island countries to effectively enforce their fisheries laws. The Niue Treaty Subsidiary Agreement strengthens the implementation of the Niue Treaty by providing for flexible cooperation in a broad range of activities and the sharing of fisheries data and intelligence for fisheries purposes as well as broader law enforcement purposes. All members of the FFA are Parties to the Niue Treaty being Australia, Cook Islands, Fiji, the Federated States of Micronesia, Kiribati, Nauru, New Zealand, Niue, Palau, Papua New Guinea, the Marshall Islands, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu and Vanuatu. The Niue Treaty Subsidiary Agreement shall enter into force after 4 members have ratified this Agreement.

Governor inks funding law for Puerto Rico Olympic Committee

By CB Online Staff

cbnews@caribbeanbusinesspr.com 

cb.pr@gmail.com

The Puerto Rico Olympic Committee (Copur by its Spanish acronym) will get a guaranteed $3.8 million per year in public funding under legislation signed by Gov. Luis Fortuño on Monday.

Fortuño also signed a measure extending $4 million in annual funding to the Olympic Park training facility in the south coast town of Salinas. Although Puerto Rico is a U.S. territory, the island sends its own national team delegations to international competitions including the Olympics, Pan-American Games and the Central American & Caribbean Games.

The outgoing governor inked the law at La Fortaleza with new Copur President Sara Rosario, Sports & Recreation Secretary Henry Neumann and David Bernier, the former Copur chief who has been tapped to head the State Department under the incoming administration of Gov.-elect Alejandro García Padilla.

Also on hand at the signing ceremony were the co-authors of the legislation, New Progressive Party Sen. Larry Seilhamer and Popular Democratic Party Sen. Antonio Fas Alzamora.

The legislation was passed during a special legislative session this month after not being taken up during the final regular session of the four-year term.

The $3.8 million in guaranteed public funding of Copur will extend through 2020 and represents a $500,000 hike over the current allotment. Copur is expected to seek support in the incoming PDP-controlled Legislature for another $4 million it says it needs to close a gap with other Caribbean nations in terms of support and training for national team athletes.

Shots for the film 'Tula the Revolt' film completed in Curacao

Amigoe

WILLEMSTAD — The 33 days of the shooting script for the firm ‘Tula the Revolt’ are over. In the coming months producers Jeroen Leinders and Dolph van Stapele will work on the post-production of the film.Expectations are that the film with Danny Glover, Henriëtte Tol, Jeroen Willems, Derek de Lint and Obi Abili as Tula in the leading roles can be seen in the theaters next year.

In the past six weeks more than 100 people from various nationalities on Curaçao worked on the film regarding the story based on facts of Tula, the leader of the large slave revolt on Curaçao in 1795. 

To complete their production team on Curaçao for the film the producers also had a camera crew from America, a production team from England and stuntmen from Bulgaria come to the island. Van Stapele was especially surprised by the successful cooperation and the local talent. “Also the quality and flexibility of both the local and international actors were phenomenally good. Thanks to the input and support from all actors, crew, figurants, sponsors, investors and volunteers, I believe we have all ingredients to produce a strong story. It is now proven that Curaçao is simply capable of making a film”, said the producer. 

In the coming four to five months the producers will work on the post-production of the film. Expectations are that this process will take place in England and will include many phases, among which the editing, the music composition, audio correction, special effects and color corrections. 

See Also:

Opening of Tula Museum in Amsterdam; commemoration of 1795 rebellion in Curacao

Film on Curacao's freedom fighter Tula to begin production

WU HONGBO NAMED SECRETARY-GENERAL OF 2014 THIRD INT. CONFERENCE ON SMALL ISLAND DEVELOPING STATES

Press Release DEV/2969

Department of Public Information • News and Media Division • New York

On 21 November, United Nations Secretary-General Ban Ki-moon nominated Wu Hongbo, Under-Secretary-General for Economic and Social Affairs, as the Secretary-General for the Third International Conference on Small Island Developing States.

The Conference, which will be held in Apia, Samoa, in 2014 (date to be decided), will seek a renewed political commitment to address the special needs and vulnerabilities of the small island developing States by focusing on practical and pragmatic actions.  Building on assessments of the Barbados Programme of Action and the Mauritius Strategy for Implementation, the Conference will aim to identify new and emerging challenges and opportunities for sustainable development of those States, particularly through the strengthening of partnerships between small islands and the international community.

In additions, the Conference will provide an opportunity for the elaboration of sustainable development issues of concern to small island developing States in the process of charting the post-2015 development agenda, including the sustainable development goals.

Building on the success and lessons learned from the recent Rio+20 process, Mr. Wu has offered the full support of the Department of Economic and Social Affairs.  That Department will work closely with Gyan Chandra Acharya, the United Nations High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States.  In supporting the Conference, the Department of Economic and Social Affairs will work with other United Nations departments, the regional commissions and the United Nations system as a whole, while mobilizing relevant intergovernmental organizations and major groups, to ensure that the Conference makes a concrete and meaningful contribution to the sustainable development of small island developing States.

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Puerto Rico leaders disagree with downgrade

By Caribbean Business Online Staff Moody’s downgrades PR; one notch above ‘junk’ Puerto Rico officials are voicing disagreement with Moody’s Investors Service over its downgrade of the commonwealth government’s general obligation (GO) bonds to just one notch above “junk” grade. The cut from Baa1 to Baa3 on Thursday kept the GOs above the non-investment level. Falling into that category would block Puerto Rico’s access to the bond markets and send the costs of borrowing skyrocketing. The outlook remains negative, Moody’s said. Moody’s acknowledged progress on Puerto Rico’s fiscal and economic fronts but said it wasn’t enough. The rating agency cited concerns over the government’s ability to control spending and fix the ailing pension system in the near future. Incoming Gov-elect Alejandro García Padilla said “Puerto Rico is an 'A' place,” referring to the top grade given to debt issuers by the credit rating agencies. “I want Puerto Rico to know that Puerto Rico is an A place regardless of what grade the credit raters give us,” he said The Popular Democratic Party leader pledged to present his fiscal and economic plan to credit raters at the “right time.” He said the “serious measures” would include spending controls, strategies to jumpstart the economy and some “unexpected” initiatives. The $3.7 trillion U.S. municipal bond market has been keeping a wary eye on Puerto Rico’s fiscal course after last month’s election ushered in García Padilla and ousted the incumbent Gov. Luis Fortuño, who had earned credit on Wall Street for tough decisions. “We don’t agree with Moody’s did, but they have the right to do it,” Fortuño said. The New Progressive Party governor noted that Moody’s had raised Puerto Rico’s rating in 2010, before dropping it back down to a level not seen since 2008. Moody’s, through an institutionwide recalibration in April 2010, increased its ratings to A3, a full three notches above junk territory, but had since downgraded the rating on Puerto Rico’s GO bonds to Baa1 before lowering it another two notches on Thursday. “Two of three credit rating agencies haven’t changed their classifications, which are higher than they were when we took over four years ago,” Fortuño said. S&P increased its rating on Puerto Rico to BBB, two notches above junk-bond status, from BBB-minus in 2011. It now says there is a one-in-three chance it will downgrade the rating by early mid-2013 if action isn’t taken on the pension problem. That would leave the rating at BBB-minus, a single notch above junk-bond status and exactly what the credit was rated when the current administration took office. Fitch Ratings, a unit of Fimalac SA of Paris, whose system tracks closely with S&P’s, first began to rate Puerto Rico this term, giving GOs a BBB-plus ranking. That is currently the island’s best ranking, a full three notches above noninvestment grade. Outgoing Government Development Bank President Juan Carlos Batlle ripped the Moody’s downgrade. “Obviously we aren’t pleased by Moody’s move. The incoming administration should have been given time present its fiscal team and plan to address these issues,” he said. The GDB chief noted that the downgrade came just two days after García Padilla designated his whole fiscal-economic team. “I know them and they are very competent,” Batlle said. The GDB also disagreed with Moody’s interpretation on “many aspects” of the government’s current fiscal situation. “The way this came down doesn’t sit well with me and I told them so,” Batlle said. “But the report essentially validates what we have been saying for months,” he said. “First, that we have made considerable progress over the past several years. Second, that more needs to be done. And third, that there is no time to lose.” Fortuño had assured credit-ratings agencies last week that García Padilla has a “good understanding” of the fiscal challenges facing Puerto Rico, and urged them to give him time to put together a full economic team and present a financial improvement plan. The governor talked to Standard & Poor’s (S&P), Moody’s and Fitch Ratings, the three credit-rating agencies that rate Puerto Rico bonds. The governor sat down with García Padilla about a week after the election for an “open and frank” discussion of Puerto Rico’s fiscal challenges, and he discussed the meeting with the Wall Street bond analysts. “My feeling is that García Padilla and his advisers have a good understanding of what the real challenges are,” the governor said. García Padilla had already written to credit-ratings agencies pledging his commitment to address the island’s fiscal challenges. Wall Street wants the Puerto Rico government to return to complete structurally balanced budgets in fiscal year 2014, which begins July 1, 2013, and to take additional steps to strengthen the finances of Puerto Rico’s public-worker pension funds, bond investors and credit-rating analysts have told CARIBBEAN BUSINESS.

Former Governor again requests OAS to consider case of Puerto Rico

Rosselló prods OAS on rights claim

By CB Online Staff

Former Gov. Pedro Rosselló is renewing his push for the Organization of American States (OAS) to act on his claim that the U.S. government is violating the rights of Puerto Rico residents.The statehood stalwart first went the OAS more than a decade ago arguing that the residents of Puerto Rico do not have the right to vote for U.S. president or have a full-fledged representation in Congress, and that the federal government violates the human and civil rights to the 3.7 million residents of the island.

The former two-term New Progressive Party governor wrote this week Emilio Alvarez Icazca, executive secretary of the OAS Inter-American Commission on Human Rights, urging action, noting that it has been six years since he lodged a formal petition with the international body.

“Time doesn’t stand still and the rights of the petitioners continue to be violated,” Rosselló wrote.

The letter cites the results of last month’s status plebiscite in Puerto Rico, noting it was held on the same day that islanders were again shut out from voting for president.

“The U.S. cannot continue to ignore the fundamental right to vote,” he said.

Also see: 

Rosselló: Plebiscite results were clear