The establishment of the Supervisor of Insolvency Office represents a decisive move by the National Competitiveness and Productivity Council (NCPC) and its partners, paving the way for the passage of a transformative Insolvency Bill.
The Office of Insolvency is now operational, providing essential support for businesses and individuals to negotiate proposals with lending institutions and acting as a vital arbiter in debt management. This office is dedicated to modernizing and consolidating laws related to debt management and ensuring financial stability.
Sharma Mathurin, NCPC representative, has played a pivotal role in advancing this legislative bill, offering crucial insights for the Insolvency Project.
“Every country reaches a moment when it must evaluate: Does our system effectively serve the needs of the people?” Mathurin asserted during the media launch on Wednesday.
On a national level, the NCPC has evaluated the circumstances surrounding businesses and individuals in financial distress. Mathurin highlighted a troubling trend: previously, if a business—such as a small hotel struggling to meet loan obligations or a local manufacturing firm facing an unexpected downturn—found itself in crisis, it was equipped with very few legal tools for recovery.
She elaborated that the typical outcomes were receivership or liquidation. “Once crisis strikes, a business often faces closure, leading to layoffs and creditors lining up, hoping to recover remnants of their debts,” she explained.
Mathurin noted, “The legal frameworks guiding these processes were borrowed from outdated English systems—fragmented and entirely unsuitable for a modern economy.”
In light of this reality, the government of Saint Lucia proactively engaged the World Bank group to assess the existing Insolvency and Debt Recovery framework. The goal was unmistakable: “Identify what is broken and how we can reform it to enhance our credit environment.”
Ultimately, Mathurin reported, the World Bank group, in collaboration with local stakeholders—including the Attorney General’s chambers, the Ministry of Finance, the Eastern Caribbean Supreme Court, and the Bankers Association—uncovered alarming truths about the disconnection in the system.
She asserted, “Creditors struggled to recover debts, and debtors lacked meaningful pathways for reorganization and recovery. Our personal bankruptcy laws, some dating back to when Saint Lucia was a colony, were so outdated that individuals simply avoided them.”
As a result, banks faced rising levels of “non-performing loans” (NPLs) and, out of caution, became exceedingly risk-averse, opting only to lend to those who could provide real estate as security.
The Insolvency Act has now been recognized as a crucial factor in shaping the country’s financial landscape. It empowers the Supervisor’s office to oversee processes, protect rights, and uphold ethical standards—from monitoring debt restructuring to ensuring equitable treatment for both creditors and debtors.
“The supervisor guarantees that disputes are resolved fairly, with a confidential system in place to ensure compliance with legal standards,” she emphasized.
Attorney General Leslie Mondesir, representing Prime Minister Philip J Pierre, underscored that the Insolvency Act will equip firms and individuals to effectively manage financial assets and crises, laying a solid foundation for growth and stability.
Mondesir stated, “Saint Lucia leads the Eastern Caribbean and potentially the globe with this compassionate safeguard—a clear acknowledgment that financial law must reflect human realities.”
He outlined some of the “major policy innovations” behind the Insolvency Act, declaring, “This is a law for the people, encapsulated in the Consumer Proposal.”
Moreover, he articulated, “For too long, ordinary citizens who fell behind on loans or credit cards faced only two options: pay in full or declare bankruptcy.”
He added, “Bankruptcy was steeped in stigma, resulting in the loss of essential assets and a ‘loan shadow’ that hindered an individual’s ability to rebuild. With a Consumer Proposal, individuals can now work with a qualified trustee to create a pragmatic payment plan with creditors, effectively avoiding the harsh consequences of bankruptcy.”
Nathalie Dusauzay, Supervisor at the Insolvency Office, provided an insightful presentation on the initiative. She affirmed that this development represents “a critical stride in reinforcing Saint Lucia’s financial infrastructure.”
Dusauzay emphasized, “Our previous insolvency laws were rooted in outdated perspectives, treating financial failure as a personal defeat rather than an opportunity for recovery.”
She concluded, “The Insolvency Act and the establishment of the Office of the Supervisor of Insolvency (OSBI) fundamentally change this narrative.”
Dusauzay noted: “Our mission is clear: To administer and oversee insolvency proceedings with integrity, impartiality and efficiency, ensuring that the law is implemented fairly and that both debtors and creditors are treated with respect and transparency.”