The indomitable and admirable spirit of the Bahamian was on full display during the recently concluded Summer Olympics in Rio. We commend all of our athletes that represented us with distinction whether they obtained a medal or not. A grateful nation salutes all of them for their hard work and commitment to the 242. They ought to know that we appreciate them for all that they do to make us proud and the recent Olympics was no different.
Special congratulations goes out to Shaunae Miller and our 4x400 men's relay team for their remarkable feat. While on the subject of offering congratulations, happy birthday greetings are extended to Prime Minister Perry Christie as he recently celebrated his 73rd birthday.
The debate on the role of the government in private enterprise is often resurrected whenever we are confronted with challenges with employment or consumer protection. While this can be expected, it is also noted that the response of the government and the people is often not consistent but is customized on a case-by-case basis. In essence, we conveniently choose when and how to respond depending on the circumstances. Is this approach acceptable or normal? Let us take a look.
Definition of roles
The traditional role of a government is to create an environment that is safe and conducive for individuals and companies to thrive. In this sense, the state's main obligation is to foster the establishment and maintenance of a landscape that allows entities to fulfil their potential. This role is often carried out through the passing of appropriate laws and regulations as well as implementation of proper policies. Additionally, governments are also normally responsible for the provision of some public goods which could be described as non-rivalry and non-excludability goods or services provided at no profit to all members of the society by the government or private entity. These include public roads, national security and educational institutions, among others. It is the role of the private sector to create jobs and generate economic activity within an economy under a robust system of laws, rules, regulations and effective enforcement of standards.
Commerce should be facilitated by private enterprise under the watchful eyes of competent regulators. The innovation, productivity, creativity and prudence of the private sector places this sector in a unique position to determine the economic fortunes of a nation. In addition to large businesses, small and medium-sized enterprises are the engine of a thriving economy with a major role to play in the prosperity of our commonwealth.
Sandals resort
There was much discourse across the nation on the decision by the Sandals resort to make about 600 workers redundant. The discussion became somewhat convoluted as valid concerns were mixed with reckless utterances. We heard comments on the lack of proper notice or inadequate notice, potential contravention of legislation, possible breach of contract and an alleged union busting plot.
As can be expected, leaders within the trade union movement expressed their dissatisfaction and concerns on the approach taken by the resort. They should not be demonized or ostracized for their views; rather, we should foster an environment that promotes dialogue in the best interest of all parties involved and the Bahamian people in particular.
The National Tripartite Council is charged with the task of reviewing our labor laws and making recommendations as necessary.
The council's mandate in light of this situation is to determine whether changes are required to provisions within our labour legislation relating to redundancy. Their deliberations should be guided by logic, detailed assessments, appropriate benchmarking and the overall impact on the Bahamian economy. It is expected that they will also be cautious not to overreach and propose measures that could serve as impediments to commerce or worsen the ease of doing business in our country. Subsequently, the government will be called upon to act on the recommendations of the council and enact legislation or rules if appropriate.
CLICO
The case of the failed insurance company called CLICO has been well documented; not just in The Bahamas, but also across the region with much reading material on CL Financial. In the aftermath of CLICO's failure, governments across the Caribbean have found themselves unable to shake off the effects of this collapse on their countries and policyholders. This has led governments to conduct investigations and commission formal inquiries into what actually happened. It is well known that prior to the collapse of CLICO in The Bahamas the insurance industry was governed by an obsolete and deficient legislation which was enacted in 1969.
The records also show that there was an Insurance Act passed in 2005 to modernize the legislative and regulatory framework for the insurance industry in The Bahamas. However, no accompanying regulations were either drafted, issued or effected to bring our insurance sector into the 21st century. Fast forward to 2008/2009 with the unraveling of the CLICO debacle and we have a reactionary government expediting the drafting of regulations and bringing into force of the new legal and regulatory regime.
In recent times, long suffering policyholders of CLICO have received some relief due to the intervention of the government. The government has stated that the money used was derived from premium taxes paid by the insurance industry which presumably was earmarked for this exercise and did not form part of the consolidated fund. We still do not know how and why CLICO failed because there has been no commission of inquiry like the one conducted in Trinidad and Tobago to date.
What role did the government agencies, regulators, directors and officers play in this saga? Was the taxpayers' bailout an admission of the failure of the legislative and regulatory regime for which the government is responsible? Do the current laws and regulations now adequately protect policyholders? Are the insurance premium taxes and VAT on insurance now being earmarked as part of a Policyowners' Protection Scheme? The Bahamian people deserve to know and we believe this is the part of the traditional role of government.
Baha Mar
The wounds inflicted on individuals and the Bahamian psyche by the tale of Baha Mar are still fresh. For the thousands of individuals, companies and businesses impacted by the state of this development, it hardly matters who was right and who was wrong. All they know is that they are hurting and are challenged daily to meet their obligations in an economy plagued by low growth. It is often said that in hindsight, vision is 20/20 but that could hardly be said in this case as both sides have maintained their position as the right one. History will be the judge of the right or wrong approach even though the facts are the facts and the outcome speaks volume.
There are indeed much lessons to learn from the peculiar case of The Bahamian Riviera whose fate hangs in the balance. The government must now take a close look at legislation available to enable investors to protect their assets while providing adequate covering for local stakeholders. Any proposed legislation or amendments to laws on bankruptcy, winding up and liquidation must of course be guided by international best practices. We must also reconsider our approach and policy on the corporate structure, residence and domicile of entities being used as vehicles by foreign investors. This should ideally be considered as part of an assessment of the process for reviewing and concluding heads of agreements.
City Markets
Employees of the food store chain City Markets made the news after questions were raised regarding the state of the employees' pension plan and the ability of these individuals to receive their contributions following the demise of the company. While there is probably much analysis to be done and theories to promulgate on what actually happened to City Markets, one point is clear to see. The Bahamas is in urgent and desperate need of private pension reform to protect the savings and investments of workers in our country.
After years of establishing committees and working groups, a draft of the private pension legislation was circulated for feedback some time ago. However, discussion on this important law has gone silent and it is unclear what plans are underway to ensure proper oversight as well as robust regulation of the private pension sector. There have been calls to the government to intervene, but in fulfilling its main role we are looking to our political leaders to enact proper laws in this regard and enforce them.
Drawing the line
In the final analysis, the government should draw the line by resisting the temptation to always step in realms that are not within its role. It is simply unsustainable for any government to portray itself as the be-all and end-all to the populace. While the state can play a part in addressing issues affecting the people, no administration can be the panacea to all of a nation's woes. The government must muster the courage to intervene as a last resort when absolutely necessary and appropriate, but must have the wisdom to refrain from interfering when such a move will be setting a bad precedent to the detriment of our Bahamaland.
Those in government who do not draw the line and refuse to recognize the importance of defining the roles of the state in private enterprise will soon find themselves on the other side of the equation. No one will be in government forever and at some point political leaders will bow out either willingly or unwillingly. Their views and actions in inserting or removing government from commerce will then be weighed in the balance by the nation and future generations. While their interventions in the private sector will be assessed, the failure of any government to fulfil its traditional role in the protection of the Bahamian people and economy may not be forgiven or forgotten.
o Arinthia S. Komolafe is an attorney-at-law. Comments on this article can be directed to a.s.komolafe510@gmail.com.
Click here to read more at The Nassau Guardian
