VFCCC’s Position on D.S.H.

Image: DSH Project

– From last Weekend

(6) Accommodating the new citizens of St. Lucia
There was a haste to amend the CIP legislation to accommodate the Master Developer’s requirements. These amendments have, in the view of the VFCCCC, cheapened and short-circuited the due process that is so critical in ensuring our sovereignty is not just a commodity for sale to all who can afford the US$100,000 price tag. Imagine that a foreign national can now become a citizen of St. Lucia by purchasing a thoroughbred horse. This is outrageous and insulting to Saint Lucia as a sovereign nation.

The VFCCCC also wants the P.M. to give some indication of the anticipated influx of new citizens to St. Lucia and whether the island has the capacity to absorb such an influx. What if the passport holders decide to settle permanently in St. Lucia or are sent to the island as part of a grand resettlement scheme financed and executed by the Government of the People’s Republic. Will they compete with our farmers, fishermen, livestock keepers, beekeepers, transportation providers and others for the scarce resources and limited markets that these depend on to squeeze out a living? Will they vote in local and national elections? Will there be residency requirements as citizens of St. Lucia? Will these new citizens be at an advantage because of their advanced technologies in farming, fishing, construction, transportation, etc.? Will our young entrepreneurs stand a chance against these new citizens? Can they apply for government and other jobs? Will they have the rights to buy land anywhere and everywhere, thus inflating the price of land beyond the reach of ordinary hardworking, “born-here” St. Lucians?

(7) Financing the DSH project
According to the Framework Agreement, the Master Developer will provide only 10% of the Gross Development Cost (GDC) of a project estimated at US $3 billion (includes construction costs and profits for the Master Developer). In return, the Master Developer will get an unlimited number of Saint Lucian passports. The monies to be generated from the sale of the passports will be deposited in an escrow account in an overseas bank to be used by the Master Developer, without limitation, for the implementation of the project, inclusive of architectural matters, engineering and consultancy services, construction activities and marketing. Does that mean that the Master Developer will be using our money and other assets to build his Pearl of the Caribbean dream, generate millions and even billions of dollars in profits for himself and unknown associates, while St. Lucia gets nothing from this deal except a promise that “the project is intended to develop the land significantly and lead to significant job creation and retention”?

It is clear from reading the agreements that the Government of St. Lucia will bear all the risks, meet all the costs of project construction and discharge countless obligations to accommodate the Master Developer. The risks on the Master Developer appear non-existent (or minimal at best) as he can claim back at any time the money he invested in infrastructure through the buy-back clause should the DSH project fail to meet expectations after two years. This deal gives the Master Developer a level of protection that is unheard of in a free enterprise system where investors must be prepared to take risks in the hope and expectation of generating profits for themselves. But is the Master Developer, in the true sense of the word, an investor? He will own the land in Vieux-Fort but St. Lucia will pay to develop it from the sale of its passports. This is an absurdity.

(8) Exclusive and perpetual investment rights for the DSH project
The terms and conditions of this DSH project bestow exclusive rights to this Master Developer to carry out certain operations, such as a casino, horse racing facility, real estate transactions, in perpetuity. This is absurd as it will clearly deny local and foreign investors any opportunity to contribute to economic and social development in the Vieux-Fort area. Eco-tourism activities being promoted by locals e.g. tours to the mangrove, Maria Islands, horseback riding, turtle watching, kite surfing, etc. seem destined for the recycle bin.

(9) Exemptions from all forms of taxation — current and future
The agreements exclude the Master Developer from paying any type of taxation currently in force, or to be implemented by the Government of Saint Lucia, for at least the next 25 years! This level of exemption from taxation has never been offered to new Saint Lucian business enterprises or older ones which have contributed significantly to sustaining the economy of this island over many years, such as LUCELEC, commercial banks, hotels, guest houses and small businesses. This begs the question: How will St. Lucia derive revenue from this deal to support national development programmes?

(10) Lack of consultation with local residents and other citizens of St. Lucia
The VFCCCC and the wider citizenry of Saint Lucia have called on the Prime Minister several times to dialogue with the residents of Vieux Fort on the details and benefits of this DSH project. There are marginalized communities, dispossessed and poor struggling families, small and medium-sized business operations, people depending on traditional livelihoods (farmers, fishermen, livestock keepers, beekeepers, etc.) who have deep-seated concerns as to how they will be affected by the project. The P.M.’s sole response to date was to dispatch the top-brass from Invest St. Lucia, CIP and the Office of the Prime Minter to engage in some damage control. They made no reference to any official documents and answers were far from convincing, such that attendees left the meeting with more questions than answers.

The attitude of the damage control team may well have been conditioned by Clause 19 of the Framework Agreement which requires the two parties “to keep secret and not to use, disclose and divulge to any third party, any confidential information relating to the Project or information relating to the negotiation, provisions of subject matter of this Agreement or confidential information concerning any party to this agreement”.

But to quote from a recent article in The VOICE of St. Lucia, “The absence of meaningful consultation at the planning and design stages of projects leads to longer implementation periods, costlier projects and a decline in the value of those project that reach completion as their quality also suffers”.

(11) The main concerns/issues summarized
There are more aspects of this DSH project that are of grave concern to the VFCCCC, such as the absolute discretion bestowed on the Master Developer to determine if skills are available locally for the project and the options available to the Government of Saint Lucia to revoke the agreements. The main issues which give rise to the position of the VFCCCC that the terms and conditions of the Framework and Supplementary Agreements should be renegotiated to give St. Lucia a better deal are summarized as follows:
• About 900 acres of government-owned and St. Lucia’s prime, investment lands will be given away to one investor for a period of 99 years, leaving no land for the expansion and development of the town of Vieux Fort. This will lead to the disappearance of the “old” Vieux Fort as residents are forced out by the new landlord(s) or are relocated.
• The land to be given to the Master Developer could be leased at US$ 1 per acre for 99 years. Currently, commercial land in Vieux-Fort is being leased at about EC$ 14, 000 per acre per year.
• The Pointe Sable Environmental Protection Area (PSEPA), including its mangrove, coral reefs, beaches, seagrass beds and off-shore Maria Islands (habitat for endemic and endangered species), will all be negatively and significantly impacted.
• Traditional recreational areas, such as Sandy Beach, Il Pirata Beach, Dames Playing Field, Recreational Park and wider beach environments will now be off-limits to Vieux Fort residents and other citizens of St. Lucia. The clause in the agreement guaranteeing public access of local beaches was struck off.
• There will be major dislocations of persons making their living from traditional occupations – farmers, livestock keepers, fishermen, beekeepers, as well as communities and business operations. No accommodation for relocation, compensation, etc. was made for them in the two agreements.
• The two agreements do not provide a guarantee of jobs for St. Lucians during construction or operational phases of the DSH project. The GOSL signed a MOU with the China State Company and DSH the day after the sod turning ceremony for the construction of the racetrack at Beausejour. There is historical evidence to show that construction companies from that country have brought in their own workforce for projects in St. Lucia.
• The DSH deal gives exclusivity to the Master Developer and restricts future investments in the Vieux Fort Area.
• There is a buy-back clause to protect the Master Developer i.e. if the projects fails within two years to meet his expectations, the GOSL must buy back the land and pay him for all infrastructural works done on the land.
• GOSL takes all the risks and discharges most of the obligations. The Master Developer takes no risks, has only two or three minor obligations, and keeps all the profit.
• Government is to remove safeguards in CIP, lower the cost of a St. Lucian passport (from US $200,000 to US$100,000 under this programme) to accommodate the Master Developer’s demands and provide him with an unlimited number of St. Lucian passports for sale. Additionally, the requirement for an affidavit to declare financial resources of at least US$3,000,000 has been removed.
• The Prime Minister, despite many requests, has failed to meet with the residents of Vieux Fort to listen to and address their concerns regarding the DSH project.

What is the plan between government and DSH? What we see in these agreements is that our land, our passports and our nationality will be sold or given away to finance a massive project that will be owned by a foreign individual. This in our view is not an investment. The VFCCCC is yet to see the significant material benefits that it will bring to Vieux-Fort and the rest of St. Lucia. It is for this and other reasons it urges, and will continue to urge, the government to RENEGOTIATE THE DSH DEAL. WE DESERVE BETTER.

This new deal must make provisions for and encourage local entrepreneurship, give generous concessions and entertain alternative/competing proposals to DSH that do not lead to the leasing or giving away of our precious lands for 99 years with a buy-back clause that could plunge the small island into financial disaster. This shall be discussed in Part 2 of the VFCCCC’s response to the DSH Project.

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