Tuesday, Jan 22, 2019


Mixed messages on a very bad deal
Carl Bethel (left) and Jeffrey Lloyd. FILE

There has been more than enough confusion around the planned oil refinery and storage project for East Grand Bahama.

Now there is more. Education Minister Jeffrey Lloyd, a member of the subcommittee looking into that ill-conceived deal, has declared the government did not follow the law with respect to entering heads of agreement with Oban Energies, a company with no experience in the industry.
But Attorney General Carl Bethel is insisting that no law was broken.

All these many weeks later, the government’s messaging remains off. In the real world, not following the law amounts to breaking the law. Trying to say otherwise is a distinction without a difference.

It’s a hell of a thing for a minister of government to declare that the government did not follow the law – even if he merely misspoke.

In a society where the prime minister continues to highlight corruption as a primary issue and targeting statement sent a worrying signal to ordinary citizens who are made to suffer the consequences when they violate the law.

When asked by our colleague, Jerome Sawyer, about the Oban matter last week, Lloyd said, “First and foremost, we certainly did not follow the law.
“The Planning and Subdivision Act; it’s very clear. We didn’t follow the law, and obviously we had to retreat. The prime minister said so in the House of Assembly.”

What the prime minister said in the House in March regarding this matter is that there had been “missteps”. For the public to now hear the government “did not follow the law” is another thing entirely.

In some circles, Lloyd’s “honesty” was applauded.

But Bethel claimed on Monday that Lloyd’s statement had been “misinterpreted”. In the same breath, he said it was inaccurate. What the public now sees are two ministers of government singing from different hymn sheets. It is hard to now erase a perception created that the law was broken in regard to this highly controversial deal, which the government itself recognizes as an agreement that needs to, at the very least, be adjusted.

The obvious view formed by some people was that any deal entered into without the government following the law must be void.

The appearance of two ministers being at odds is not a good thing for an administration that has suffered multiple blunders since coming to office.

Its most significant screw-up has been this matter of the Oban project, which continues to generate discussion.

On Monday, the attorney general said, “The government has not broken any law, because nothing has happened. In order for a law to be broken, something has to happen. Nothing has happened.

“No subdivision approval has been granted by the government, nor by the heads of agreement. No environmental approval has been granted either by the government or by the heads of agreement.

“The extent to which the procedural steps outlined in the heads [of agreement] might not fully comply with any written law is what is being addressed by the Cabinet subcommittee.

“But no steps have been taken, and no law has been broken, and the government has not purported by the heads of agreement to exercise any power or lawful right vested in any member of the government under any particular statute.”

Attorney Fred Smith, who said a judicial review would be filed if the agreement is not reversed, insisted that the government acted outside the law.

He said the heads of agreement fetters the discretion of almost every minister or every regulatory authority under the relevant legislation.

“The Planning and Subdivision Act (PSA) requires a site plan approval to be issued before even many applications are made, and the PSA has very detailed provisions on what is to happen first, including consultation; likewise, the Conservation and Protection of the Physical Landscape Act and quite a number of pieces of legislation,” Smith said.

“Indeed, a project of the scale and magnitude and potential economic impact and the environmental impact of Oban requires years of consultation with local government, with various regulatory authorities and all who are affected by it.

“For many years now, I have continued to criticize both the PLP and the FNM governments for this perverse, undemocratic lack of transparency and accountability practice of signing in secret these heads of agreement that purport to bind the government and all regulatory authorities in the function of their statutory powers.

“So, as to the illegality of the Oban project, a fundamental issue is lack of prior consultation.”

The heads of agreement states at clause 17.11 that it has binding effect.

“These heads of agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns.”

The government agreed that no claim of sovereign immunity will be claimed by it or by any government authority in any arbitration or legal proceeding related to the deal, and any such immunity is hereby waived.

The heads of agreement also says, as has been widely reported in the months since the agreement was signed, that, notwithstanding the findings of an environmental impact assessment (EIA), the government has no option to kill the deal, but shall work with the developer to mitigate the concerns raised in an EIA.

Cart before the horse

According to the Planning and Subdivision Act, an environmental impact statement is required to be submitted to the Department of Physical Planning.

The act also states: “An environmental impact statement shall be circulated to relevant referral agencies for review and comment as part of the circulation of an application.

“The [Town Planning] Committee shall consider the findings of an environmental impact statement and the comments received from referral agencies with respect to an environmental impact statement in its deliberation of an application for preliminary support of application or approval.”

Smith said the law does not provide for the government to enter binding heads of agreement in the absence of consultation.

“All of the laws provide a process for planned development, and the heads of agreement fundamentally undermine every statutory provision that gives the regulatory agencies enacted by Parliament under all the different acts, power to take into account relevant considerations and not irrelevant considerations,” Smith said.

Smith said officials like the director of physical planning are placed in an extremely difficult position by the government’s decision to enter a binding agreement.

Multiple rulings handed down by the courts stipulate that the public has a legitimate expectation to be consulted ahead of these agreements, Smith noted.

In a 2010 ruling in the matter involving Responsible Development of Abaco Ltd. and the Bahamas Electricity Corporation, the Court of Appeal held that the public had a “legitimate expectation to be adequately and meaningfully consulted in the decision-making process relative to the location and construction of the power plant at Wilson City, Abaco”.

Amid the furor after the government signed the Oban agreement in February, Oban’s officials finally met with the residents to inform them of their plans and get feedback.

But Smith insisted the cart was placed before the horse – and that goes against the law.

“Although I cannot speak to what the minister meant when he said it was illegal, this entire contract of secrecy and of tying every regulatory agency’s hand with a prior agreement by Cabinet… is illegal,” he insisted.

The government forced Oban back to the table after the media and astute and concerned members of the public raised critical questions over the poorly negotiated and badly drafted agreement.

The attorney general indicated that the parties are discussing various clauses and suggested there might be changes – particularly to the environmental clauses.

We understand that the clause locking the government in, despite the findings of the EIA, will likely be changed.

But the timeline for those changes remains uncertain.

What is certain – and perhaps the government now recognizes this – is that no matter the level of its desperation for things to get moving in Grand Bahama, it must not enter agreements that go against the public interest.

The Oban agreement, as drafted, does just that.


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