Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697646223488.pdf (Bahamas)
CONTRIBUTION TO SENATE ON THE MID TERM BUDGET BY THE HONOURABLE SENATOR CARL W. BETHEL, QC ATTORNEY-GENERAL & MINISTER OF LEGAL AFFAIRS 8 APRIL, 2018 Madam President, I rise in order to move the following Resolution.

[Read] Madam President, the recent IMF Country Report of 2017 shows exactly the enormous and awesome economic challenges which faced our country upon our government’s election to office in 2017.
The IMF concluded firstly that: “The Bahamas has been struggling with a stagnant economy since 2012.Natural disasters, interruptions in the completion of the mega resort Baha Mar, and eroding competitiveness, have resulted in declining real GDP and income relative to other Caribbean economies.
Weak economic activity, compounded with high fiscal deficits, have led to a sharp increase in the public debt burden, and has complicated the resolution of banks’ high level of non-performing loans (NPLs).” Despite all the talk about empowering Bahamians the former government clearly was unable to stimulate any appreciable growth in GDP over the past five years.
Despite the imposition of VAT under the last government and the promise to use the extra money to reduce public debt or at the very least the rate of increase of borrowing, the former government relentlessly continued to spend like money was going out of style.
And despite the fact that the government raised each year an extra $7-800,000,000, there is no evidence of any debt reduction or slowing of borrowing under their tenure; and they left a $500,000,000 “overhang” of unpaid bills with which this government has had to contend.

The Party opposite is now making a lot of noise about the FNM government having borrowed $1.7 Billion so during this fiscal period.
However, the facts are that of that sum, approximately $750,000,000 was to re-pay, and basically, to re-write government borrowing loans which matured, meaning they had to be repaid late last year.

The cash flow situation was such that it was impossible to simply pay the $750 Million out of revenue in hand.

The money had to be repaid to the lending banks, and the only way this could occur was to borrow in order to re-write the debt.
Similarly, there remained the $500 Million in unpaid bills owed by the PLP.

The grand total was $1.25 Billion, just on these unavoidable expenses alone.

The government is exercising great financial prudence, and has imposed mandatory reductions across the board in all government entities.
The government has started to implement certain “ease of doing business” initiatives and in light of these and the generally improving global economic climate, the IMF has predicted that: Real GDP growth is projected to pick up to 1¾ percent in 2017 and 2½ percent in 2018 and to stabilize at around 1½ percent over the medium term.
Madam President, with continued financial restraint, and curbs on borrowing, coupled with economic expansion, we are certain that the financial position of the government, and indeed the entire economy, will indeed continue to improve, thus ensuring continued decreases in the unemployment levels as jobs continue to be created in a rebounding national economy.
Indeed, I am pleased to confirm that the new Commercial Enterprises Bill is already proving to be a success with several applications having been approved for high-tech projects, and another quite large project on the having been approved, which will also, if and when finalized provide employment and training opportunities to graduating UB students and will also have an element of headquartering, in other words, a large international trading conglomerate is looking to move its headquarters to The Bahamas!
Such initiatives under the Commercial Enterprises and headquartering by international traders and high tech Companies, will hopefully continue to re-position the Bahamian economy, thus creating new highly skilled and ultimately high paying jobs throughout our economy.
Madam President, notwithstanding clear evidence of a positive turnaround, these remain, indeed, turbulent times and I cannot in this place merely resort to numbers crunching and a purely budgetary analysis without also addressing some controversial issues of the day.

The Government is faced today still with a slowly growing economy which plainly requires urgent actions to set economic growth on a sharper upward trajectory.
We have this challenge, while also seeking to re-position and revitalize the Financial Services Sector of our economy, which is being attacked with forensic fury by the European Union through the Base Erosion and Profit Shifting, or BEPS project.

As part of this engagement the EU recently Blacklisted our country; we feel most unjustifiably.

We are facing a grave crisis as the scale and frequency of illegal migration seems to have increased.
Within the past two weeks there were two major incursions, one at Inagua, the other in South Eleuthera, which, thankfully were apprehended, and the migrants all successfully returned to their country of origin.

And, it must be acknowledged, the controversial Oban Energies agreement, continues to dominate the Press for a host of reasons.
Starting first with Oban Energies, there are several issues, which I will speak to, not necessarily in terms of the intensity of criticism, but to allay, where possible some unfounded fears or allegations made.

I start by reminding all that the Prime Minister himself in his remarks closing the Budget Statement debate acknowledged that mistakes were made in the whole process.

The main issues concerning ordinary Bahamians have to do with Crown land, due diligence and the environment.
The Crown Land The first is the Crown Land.

The perception that has sought to be created in some quarters is that the government has granted the land to the developer.

This is not true.

The land is being leased or rented to the developer for $1,700.00 per acre.

It is not being sold and there is no agreement to sell that land to the developer.

The sum of $1,700 per acre each year was derided by a member of the opposition in the House of Assembly.
He was not a member of the last PLP government, so he would could not be expected to know that the former government very recently leased vast areas of seabed Crown Land to a foreign developer for $1,000.00 per acre.

Due Diligence It has become clear that the practices and procedures of the Investment Authority are antiquated and have not kept up with advances made in technology and the Internet since that institution was created.
Clearly, relying only on a current Police Record and Character references, Social Security numbers and basic financial information, as required by the Permit Application form, are NOT enough to fully explore the character and antecedents of any potential investors.

Let me be very clear that I am not ascribing blame to the Bahamas Investment Authority, or any public servants, which they all are.
The responsibility to react to new sources of information and to tighten up the due diligence processes of BIA falls squarely on the Government.

Since the mid-1990s it was clearly evident that the due diligence procedures of BIA were deficient.

In one notorious case in the past, it was at least a year after a developer received his HOA and he was well underway towards the completion of his renovation and revitalization of an historic property, when very negative information emerged.
Yet from the mid-1990s until today, no changes were made to operating procedures by the political directorate.

Technology since that time has rapidly advanced, and what could have taken a year or more to discover back then, can now be discovered in less than a day; sometimes in minutes!

The Prime Minister to his credit has now promised to reform and to improve the due diligence capabilities and practices of the Bahamas Investment Authority; and those operational changes are being made even now.
The Environmental Impact Some criticism has been levelled at alleged deficiencies in the Clauses of the HOA dealing with environmental matters.

There are several criticisms: the clauses are said to offer no protection and to essentially give the developer a free hand; and the administrative fines for environmental infractions are too low, and that the costs of any clean-up that might be required is also too low, being capped at $3.5 Million.

Both of these allegations are untrue.


Clause 5.1 of the Agreement requires the developer to pay for an EIA to determine if any part of its proposed development can be done in “an environmentally safe and sustainable manner.” The developer must develop an EIA for every stage of the proposed development.

The government must be given a copy of the EIA to review.
If at ANY stage (including stage 1) the government decides that the development as proposed cannot be done in an environmentally safe and sustainable way, the government can propose additional safeguards for environmental protection.

If the developer does not feel that the government’s mandates to better protect the environment are “commercially reasonable” the developer has the option to abandon the project.
NOW, there can well be a very BIG difference between what is commercially reasonable and what is environmentally reasonable!

Hence, if any government mandate is environmentally reasonable, but commercially unreasonable, well the developer can, as some may say, pack up and go.
Since the government’s right to form a reasonable determination on what is absolutely necessary to protect the environment is specifically preserved in the HOA, clause 5.1, there can be no legal liability on the part of the government if the developer pulls up its stakes and leaves The Bahamas if it is found that such reasonable environmental mandates are not “commercially reasonable”.
Further, in Clause 5.3, in the event of any “environmental infraction” which is found to be an “urgent threat the health of persons, the environment or an urgent safety concern” the Minister for the Environment of any other government agency has power to stop the operation of any equipment or even to suspend all operations from the facility.

The “penalties in Clause 5.3 which are said to be too low, are $5,000.00 per day and up to $10,000.00 per day.

However, these are only administrative fines.


Clause 5.4 makes it clear that these payments referred to in respect a material Environmental Infraction relate only to “fines and penalties”.

Nowhere does the HOA deal with or limit the right of the Government to sue for Damages caused to the environment and for the costs of clean-up of the environment, just as the United States Government did after the Deepwater Horizon oil spill in the Gulf of Mexico.
Nowhere in the HOA is there any limitation or restriction on liability for Class- action lawsuits in respect of any un-remediated personal or environmental damage.

ECONOMIC DEVELOPMENT & THE ENVIRONMENT No matter what human beings do it is bound to have an effect on the environment.

Everything nature itself does has the same effect.


The question is how to strike the correct balance between the need for economic diversification and development and the need to protect and sustain the environment which makes it all possible.

The issue will always be, what is the correct balance.

Our second economic pillar, Financial Services, is being savagely attacked.

It is more than likely that there will be economic repercussions and loss of business due to the new mandates being imposed.
The question is, what else is there for those Bahamians who may suffer because of this need to re-position financial services to do?

How will we be able to diversify and strengthen the economy?

Where will we find future foreign currency earnings to make up for the losses being incurred in our second economic pillar?
Can Tourism alone bring in the kinds of foreign currency inflows needed in an economy which has to import the vast majority of its most basic needs, and to pay for such necessities in US Dollars?

Well, we know that we have to make a decision sometime in the near future on the Bahamas Petroleum Company and its proposal to drill for oil in the area just off the southernmost part of the Great Bahama Bank.

The hard decision may have to be taken.


With the rapid development of renewable alternative energy sources, we may have no more than a 15-25 year window in which to profitably extract any such resources.

Yet the potential foreign currency from oil production and sales could help to stabilize and strengthen our foreign exchange balances.
Through a Sovereign Wealth Fund revenue from oil production could provide financial support to the establishment of the kind of National Health Care system that we all desire for the People; it could enable completely free UB tuition, and benefit a host of social and business development initiatives throughout our country which today survive only on the bare minimum of funding which can be spared after the public debt is serviced first of all, and public servants are paid, secondly.
These are hard decisions which will always provoke controversy and, from some, implacable animosity and opposition.

Yet, governments are elected to make decisions and to follow them through.

MIGRATION ISSUES Over the past several weeks Madam President we have experienced several mass immigration attempts which have been foiled by the Royal Bahamas Defence Force with the assistance of the US Coastguard.
In each case we have followed the Supreme Court Ruling in the Jean Roney case which found that it is not possible to deport or remove migrants without the finding of the commission of an immigration offence by a court; and otherwise without a court order, under Section 25 of the Act, only in the very limited case of being refused landing by an immigration officer at a port of entry, such as an airport.
In each case the migrants were successfully deported after the Chief Magistrate, who assisted in each case at short notice, with the consent of the Acting Chief Justice, found all adults guilty of immigration offences.

But the reality is that whatever the results of the Roney case on appeal, the Immigration Act is entirely ill-suited to enable authorities to carry out mass deportations or removals of illegal migrants in mass immigration events.
The leader opposite has made the point that there could be serious overloading of the court system if everyone started to plead not guilty.

I am not sure that I entirely agree.

The reality is that there is an economic impetus to this migration.

Migrants are coming here to work, and to send money back to their families in Haiti.

If they fight court proceedings by pleading not guilty they could face a term of imprisonment.
It might seem to be the better option for a migrant to plead guilty, and get a conditional discharge; fly home, and plan a better way to get back into The Bahamas.

Our courts could be indeed be overloaded, however, if the thinking of migrants change, and they decided to plead not guilty, contrary to what has happened recently.

So, we must prepare for the worst.


Madam President, based upon a conviction that The Bahamas as a Sovereign Nation has the absolute right to control its own borders and to regulate who and how any person can enter or remain, the drafting officials in the Law Reform Commission have been instructed to draft a new Law as a supplement to the Immigration Act, which will be called something along the lines of “The Unlawful Maritime Entry Bill”.
This Bill will place a specific legal duty upon any immigration officer, meaning the Department, to apprehend and to remove from the Bahamas the occupants of any maritime vessel or boat of any kind who have entered Bahamian waters without having first landed and checked-in at a Port of Entry as required by Law, and whose purpose is to smuggle illegal migrants into The Bahamas or any other Country.
No court proceedings of any kind will be required, except in cases where political refugee status can reasonably be claimed by any particular individual.

Persons of foreign nationality who are found in the vicinity of an illegally landed sloop or vessel who cannot show any kind of documentary evidence of legal status or entitlement to be in The Bahamas will be liable to arrest and summary removal from The Bahamas.

This Law will be modelled on similar provisions of Australian Law.
It should be remembered that Section 20 of the Immigration Act already places an evidential burden on a non-Bahamian or non-permanent resident found in The Bahamas, who claims any legal status, a burden to produce some evidence in support of such claim, such as a work permit, marriage or birth certificate.
Madam President, the Immigration Act itself will be amended to make it clear (since the Court of Appeal’s ruling in the Takitota case seems to have been predicated upon a mistaken interpretation of the Minister’s powers to deport an illegal alien) that the Minister has a right to order the deportation of any illegal alien on the basis that their continued presence is undesirable without the need to first obtain a Court Order.
Similarly, the power of the Immigration Department to detain an undocumented person pending a deportation order for up to two (2) months without a court order, under Section 26 of the Act, will be strengthened by removing its present tie-in to Section 25, which speaks to a similar power in relation to persons who “land” at an air or sea port, who may be detained for up to two months for the purpose of placing them back on the same aircraft or ship in which they arrived.
The legality of any such two months’ detention of someone who is “found in The Bahamas” without any documentation will be supported by the assignment of a Magistrate to attend at the Detention Centre pro tem and whenever needed to exercise a “review jurisdiction” in the event that any individual asserts any right to be or remain in The Bahamas, under section 20 of the Act, to determine whether he or someone on his behalf can produce any evidence that he is either born in The Bahamas, married to a Bahamian, has a subsisting Work Permit, or has a visa, and so forth.
If it is found that there is some evidence of a claim to citizenship under the Constitution the Magistrate will refer the matter to the Supreme Court.

Otherwise, if there is no evidence of entitlement to be or remain in The Bahamas, the Magistrate can, without charge, order continued detention pending deportation or removal from The Bahamas.

These reforms will hopefully make it very clear that persons who unlawfully enter or remains in The Bahamas will truly find ‘swift justice’.
BLACKLISTING AND THREATS OF BLACKLISTING Since coming to office scarcely a year ago the Ministry of Finance, the Ministry of Financial Services and the OAG have been working hand-in-hand as a Task Force on many fronts against threats, and now the actuality, of Blacklisting.

This is an enormous and complex task.

Recently the European Union Blacklisted our Country, apparently because, at the end of the day, we did not use the precise words they wanted to see in the letter.
Apparently the wanted, at the very least, for us to cut and paste their exact words into our letter; words contained in certain Guidance Notes they issued.

We have rectified the “error” and are hopeful that the situation will be resolved soon.

It is clear that we must expand our diplomatic horizons to Brussels, at the very least, and to set up a Consular Office at the very least, if not a full Embassy.
There has been some public pushback from the private sector practitioners, particularly Lawyers and Accountants.

We will continue to work closely with the Sector and all participants in Financial Services.

However, it is an inescapable reality that change is not coming, it is here already, and it is insistent and relentless!

The Bahamas will, as every other financial centre around the World (except apparently certain US States), have to make necessary adjustments in order to survive.
How far we go will depend on consultations with the sector, but quite frankly, also upon the immediacy of the specific mandates being made by the international community.

All our major competitors in this region are making necessary regulatory and changes to their laws.

The Cayman Islands have recently criminalized Tax evasion and “tax crimes” in order to be fully capable of assisting foreign countries in tax crime cases on the basis of “dual criminality”.
We may not have to go as far as Cayman, since the Criminal Justice International Cooperation Act 2000 does allow Bahamian Courts to provide assistance to foreign investigations and proceedings, including investigations and proceedings into “fiscal offences”, without any need for proof that there is a corresponding criminal offence in The Bahamas.
However, Section 6(8) of that Act might have to be amended, as it provides that: “(8) Where it appears to the Attorney-General that the request relates exclusively to a fiscal offence he shall not exercise his powers under subsection (2) unless the request is made pursuant to a treaty to which The Bahamas is a party.” Thankfully, however, we have Tax Information Exchange Agreements with most countries in the European Union, and are committed to entering such agreements with all European Union members while converting existing TIEAs to comply with the EU common Reporting Standards, and have also signed the several EU Treaties for the automatic exchange of Tax information.
This is the world in which we now live, and we must do all in our power to assist the financial services sector to re-position itself and to transition to the new realities.

The development of new products and skill-sets will be critical to the ability to compete with the rest of the world on a non-tax sensitive basis.

FREEDOM OF INFORMATION ACT IMPLEMENTATION Madam President, the Government has proclaimed its commitment to the full implementation of the Freedom of Information Act.

Recently the Hon.
Recently the Hon.

Prime Minister signed the Order to bring into effect the Whistleblower provisions of the Act.
Today I am pleased to announce that, as a further step towards full implementation, my Ministry has organized a series of meetings to be held in the Capital between the 24 and 27th April, 2018, in which Mr. Damion Cox, the Director of Access to Information in the Ministry of Labour & Social Security of Jamaica, will give guidance in three (3) meetings, firstly to Cabinet Ministers, MPs, Senators, Parliamentary Secretaries and Permanent Secretaries; secondly to senior public officials from the level of Under Secretaries to First Assistant Secretaries; and thirdly to a special meeting with Civil Society groups.
We are advised by the Jamaican OPM that Mr. Cox was instrumental in the implementation of Jamaica’s Access to Information Act, and is a valuable source of practical information which will enable the fair and balanced implementation of the Act.

There may well need to be specific on-site training once individual Information Officers are identified.

However, we are taking concrete steps to obtain as much training and preparation which will allow for the full implementation of the Act in the near future.
LAND REFORM The question of land ownership and Generation Land claims has plagued our Country ever since Emancipation.

Far too many tracts of land, particularly in our Family Islands have no legal title, or are subject to ancestral claims which are unsupported by the ability to show descent to the claimants through birth in marriage, what used to be called “lawful birth”.
Sometimes, as in South Eleuthera, these ancestral claims to generation lands are being severely challenged by powerful interests who rely upon old documentary titles, which may or may not be found to have been grounded in any good root of title, but which have purported to pass the property from one documentary title owner to the next.
Further, the fact that title is recorded based not on the land itself, but based on the name of the buyer, poses great problems in proving whether or not a seller of land can prove a clear title.

There is no registry where charges or judgments which can run with the land and adversely affect the ability of the seller to pass a clear or unencumbered title, can be found.
The state of the physical Books which record all legal actions and the results and orders made by the courts, called the Cause List, remain deplorable and in many cases unreadable or unreliable.

Successive governments have tinkered with tackling the vexing problem.

Several Bills were drafted since 2010.


The government has decided to up-date these Bills, and to draft and afterwards publish a White Paper, which will be tabled in Parliament, and which will form the basis for a thorough reform of the Law of Property, the creation of a Land Registry, and the formation of a Land Commission to travel to each and every major Island to document, mark and cause all generational lands claimed.
Once the reforms are completed and all private and Crown Land is documented and registered based on a folio numbering system and markings placed on the land itself, it will eventually be possible to identify who owns or claims any right, title, charge or interest in any land anywhere in The Bahamas.
Simplified forms of conveyancing documents will be prescribed by the Law, and hopefully, the costs associated with land purchases, as well as the uncertainty which has led to so much pain and suffering caused to ordinary people in places such as Bozine Town and Lynden Pindling Estates, will come be greatly reduced.
NEW LAW REFORM COMMISSIONER IDENTIFIED Madam President, clearly the plans outlined above will require the firm and guiding hand of experienced former Judges and Senior Lawyers as well as prominent citizens inclusive of experienced land surveyors.

It will also require extensive experience in drafting, and in Law.

Additionally, revisions of all laws up to 2015 have now been prepared.

These revisions update all Acts in existence which over the years up to 2015 have been amended from time to time.
The version of Bahamian Laws available to the public at the internet address laws.bahamas.gov.bs is outdated.

In order for the Revised Laws to be Published we must appoint a Law reform & Revision Commissioner, who must be a Senior Retired Justice.

The Commissioner has to sign the Revision Order.


The Commissioner will have responsibility not only for bringing the laws further up to date, hopefully to the end of 2017, but will also be the judicial hand which, with the assistance of the excellent Draftspersons managed by the Director of the Law Reform Commission, will steer the course of law reform; inclusive of the proposed reforms of all the Laws of Property and the creation of the Land Registry.
I am pleased to announce that the government has decided to appoint Dame Anita Allen, the recently retired President of the Court of Appeal, who prior to her judicial service rose to be the Principle Parliamentary Draftsperson, on a two year contract, to serve as the new Law Reform & Revision Commissioner for The Bahamas.

BUDGETARY OPERATIONS OF OAG The Office of the Attorney General has complied with the Ministry of Finance’s mandate to cut recurrent spending wherever possible.
The one area where we have unavoidably exceeded the mandate is in the area of personal emoluments, caused largely by the fact that the new President of the Court of Appeal now has two full time courts in operation, and the need for consequential appointments or acting appointments.

There is also an ongoing exercise to implement a promotion exercise among the Lawyers, many of whose promotions were first advanced in 2012, but which were never followed through until now, a delay of more than six years.
Further, there is a need for the further advancement of a number of very hard-working and capable officers who were apparently overlooked in the earlier attempts at promotions.

Both the Departments of Legal Affairs and the Department of Public prosecutions remain quite “thin at the top” and both Directors need additional capable second and third rank support to strengthen their Departments.

This is particularly true of the soon to be created Office of an independent Director of Public Prosecutions.
Efforts are being made to recruit prosecutors of sufficient seniority to fill posts such as Deputy Director of Public Prosecutions, and several Assistant Director positions.
OTHER LEGISLATIVE INITIATIVES In short order a new Anti-Terrorism Act, which will reflect in part model Caribbean legislation commissioned by Caricom, but which will also involve measures that we have designed to criminalize trafficking in weapons of mass destruction and the proliferation of nuclear, chemical and biological weapons, will be tabled for passage in the House.
Hopefully the new Proceeds of Crime Act and the Financial Transactions Reporting Act will soon be passed in the House and eventually into Law.

The companion Bill, the Financial and Corporate Services Providers Bill, has been widely circulated to the industry and has been commented on.

In short order, this Bill also will be tabled.


As to the question of the passage of a law to criminalize Marital Rape, there has been much consultation, and it appears that, in cooperation with the Christian Council and several major Christian denominations, we are now moving in the direction of an enactment which will achieve a broad social consensus to address the evil of sexual violence within the bonds of a subsisting Marriage.
Furthermore, my draftspersons are working closely with the Ministry of Finance to complete two Bills in time for the main Budget debate in June, namely a Bill to create the Over-the- Hill special economic zone, which will grant duty exemptions and special concessions to those operating substantial businesses over the hill, and for the renovation or re-construction of residential properties; and also a Bill to allow for the Minister of Finance to designate specific Subdivisions where vacant “service Lots” will be sold to first time homeowners, among them Police, Defence Force, Customs and Immigration Officers, and of course the general public, at a price based on the cost of developing the land and installing infrastructure such electricity, roads and water.
These special zones will also receive exemption from customs duty and excise taxes on the imports of home construction materials in order to assist such first time homeowners to complete their dwelling houses within the timeframe prescribed.

CONCLUSION Madam President, the Prime Minister and the Minister of Finance should be commended on their firm management of the fiscal affairs of The Bahamas.
More, however, needs to be done to avoid any future borrowing, except perhaps only for the purposes of rolling-over any matured payment obligations for the coming year, and to continue to find reductions in public recurrent spending, so that any excess funds can be used to commence a measured programme of debt reduction.

If we are to avoid any further downgrades by the ratings agencies we must continue to pursue the rigors of disciplined public spending.