The snickering from the lawyers’ benches in the Anguilla House of Assembly on the afternoon of Wednesday 20 February 2019 was audible the length and breadth of the island. The Assembly was debating and passing into law the Business Licence Moratorium Act 2019. The Hon Pam Webster, the sole member of the Opposition in the House of Assembly, was absent. She was in the British Virgin Islands serving as the Head of the Election Observer Mission for the 25 February general elections. She was not able to make her contribution. So, the Bill passed without real discussion or dissent.
A little background may be useful. The Trades, Businesses, Occupations and Professions Licensing Act is the principal Act to which the moratorium applies. Section 7 creates an obligation for persons carrying on any trade, business, occupation or profession in Anguilla to pay a fee to government and obtain an annual Licence. Every rum shop, lawyers’ chambers, engineering firm, or grocery should annually pay a Licence fee into the Treasury.
This Act is not unique to Anguilla. It is found around the Leeward Islands. It was introduced in about the 1970s to ensure that every business was placed on some sort of record, and was obliged to pay a tax or fee. As there is usually in the islands no income tax law that applies to individuals, government would otherwise be unaware of what little businesses are being carried on in the island.
The Licence fee is payable for every place of business. I well remember Clement Daniels’ consternation in the early 1980s when I advised him that he had to pay for a separate Licence for each of his two Galaxy Supermarket outlets, the one in Wallblake and the other in South Valley, barely a half mile apart. Still, they were two separate places of business.
There is case law on the Trades, Businesses, Occupations and Professions Licensing Act. In or about 1997, the Antigua version of the Act said that when a person applied for his or her business to be licensed, the Minister “may” issue a Licence. In other words, the grant of a Licence was not automatic. The Antigua Act appeared to give the Minister a discretion whether to issue a Licence to persons who paid for their annual Licence.
The Antigua and Barbuda Bar Association, the medical profession and others brought legal proceedings to challenge the law. They objected, among other matters, to the discretion being given to the Minister to determine who could be licensed as a lawyer or a doctor. Ann Goodwin (now Ann Henry QC) was at the time the President of the Antigua and Barbuda Bar Association. The case was brought in her name among others.
They won in the High Court and in the Court of Appeal. These courts both ruled that the Act was unconstitutional. In its judgment in the case of A-G v Goodwin et al (Antigua CA 10/1997, unreported) the Court of Appeal upheld the judgment of Justice Redhead in the High Court. Once the applicant satisfies the requirements of the Act and pays the fee, there is no discretion to refuse. The Licence must be automatically issued. There is under the Act no power for the minister to regulate who can carry on business. The Minister had\s no discretion to refuse to grant a Licence.
The Business Licence Moratorium Act 2019 (assuming the Governor assents to it) recites that,
WHEREAS it is in the public interest that a temporary moratorium prohibiting the granting of licences under section 7 of the Act is adopted so that the Government of Anguilla may review the business licence regime in order to regulate the grant of such licences in relation to clearly defined categories of enterprise and business activities having regard to the emerging needs of the economy of Anguilla and to protect and safeguard certain Anguilla businesses; . . .
Essentially, section 2(1) imposes a moratorium for a year on the grant of all Business Licences. That is bad enough, but what is more worrying, the Bill provides for exceptions to be made. Section 2(2) provides
Notwithstanding subsection (1), the Permanent Secretary shall have the power, after consultation with the Minister of Finance, to grant or refuse a licence during the period of the moratorium to any person having regard to all relevant considerations and the overarching policy of the Government in respect of the animating purpose of the moratorium and review of the legislative regime for the grant of such licences.
This sub-section provides an exception for the Permanent Secretary, after consultation with the Minister, to grant a Licence during the moratorium. It is a general principle of common sense that any law which allows a politician to make an exception to a regulatory law is an invitation to wrongdoing.
Persons will assume that either the loophole will be taken advantage of through corrupt means, or, the real reason for introducing the loophole was to invite corrupt offers. It was not that long ago that a previous minister in Anguilla was charged by the police with assault for demanding sexual favours in return for exercising his power to instruct the issue of work permits to foreigners where such permits had previously been refused by the relevant government official.
One reason for the Bill may be to get around the Ann Goodwin case. It gives a discretion to the PS (who, of course, often does what his Minister tells him to do) to make an exception to the moratorium and to give a suitable applicant the necessary Licence to start up a new business. That is, this Act creates a power for a politician, the Minister, for the first time, to be able to decide which Anguillian entrepreneur can start up a business and which ones will be blocked by pointing at the Act and saying, “I’m sorry.” This must be a very worrying development.
A suspicious person may see other reasons for a government introducing such a measure. The first reason could be to invite an offer for high government officials to be paid off for the making of an exception. The second could be that Executive Council wishes to devise a way to stop certain types of businesses from opening up in Anguilla, or to stop certain types of persons from doing business in Anguilla.
The first theory above is doubtful. No one could seriously suggest such a thing. The second is more likely since there is a huge ground-swell against foreign-owned businesses that have been allowed into Anguilla over the past 40 years. It seems that every month a new foreign-owned mega-store is being constructed. These foreign businesses have been beating local businesses into the dirt through their access to much cheaper foreign government and foreign private investment capital. Their running costs are further reduced by importing dozens of impoverished fellow-countrymen who are willing to work for several years stocking shelves for little remuneration besides board and lodging. Few if any locals are employed. This allows foreign-owned shops to be much more competitive than local Anguillian ones.
It may not be long before ABC Supplies, Ace Hardware, Albert’s Marketplace, Anguilla Trading, Apex, Ashley & Sons, Benny’s, Best Buy, Lake’s Do It Best, JW Proctor’s and Romcan (our prominent local groceries and dry goods stores) are forced to close their doors. Indeed, if I heard a comment on radio correctly, the principal reason for the new law is to restrict the numbers of foreign business opening up in competition with Anguillian businesses.
Of course, the whole exercise may just be for show, designed as smoke and mirrors for the upcoming general elections. There must be some political pressure on government as a result of the recent failure of a locally owned business, Tropical Distributors, to challenge in court the issue by government to a foreign-owned business of a business licence, resulting in losses by the local business to its foreign competitor, International Wines and Spirits. The Court of Appeal in an oral judgment in January 2019 dismissed the appeal from the High Court, promising to deliver written reasons at a later date. At the time of writing, these had not yet been seen. In this scenario, the main reason for the Bill would be to allow government to demonstrate they are taking action to stop this situation from arising again.
Over the past decades, foreigners who apply for business licences in Anguilla soon learn that once they are prepared to give away a 10 or 20% interest in the business to a politically favoured individual (officially referred to by government officials as “partnering”), the process for receiving the licence is smoothened. Interestingly, no land development planning regulations seem to apply to these partnership enterprises any longer. While the Planning Department obliges all locally owned businesses to provide customer parking seemingly the area of a football field, few foreign-owned businesses are made to provide parking for more than three or four vehicles. This anomaly raises suspicion and distrust among the public.
In light of these two factors, one must question whether Government officials could have any interest in genuinely stopping or restricting foreign-owned businesses from out-competing local businesses. Government officials could have no interest in limiting foreign-owned businesses, only in encouraging them. In this scenario, this law could not be intended to restrict foreign-owned businesses.
In any event, as the lawyers are well aware, there are at least two reasons why the Moratorium Act will be ineffective. The law will be incapable of giving effect to the supposed policy decision of the government of Anguilla to limit the future start-up of new foreign-owned businesses.
The first reason is the principle of ‘ultra vires’. The main Act, the Trades, Businesses, Occupations and Professions Licensing Act, at section 14 enables the Governor in Council to make regulations “prescribing anything required to be prescribed by this Act and generally for the better carrying out of the provisions thereof.”
This wording does not grant a power for the government to make Regulations as the Moratorium Act proclaims, “to regulate the grant of such licences in relation to clearly defined categories of enterprise and business activities having regard to the emerging needs of the economy of Anguilla and to protect and safeguard certain Anguilla businesses.” This wording is much wider than the principal Act allows. The principal Act is purely a taxing Act. It is not one designed for regulating businesses, far less for regulating who can or cannot carry on a business.
The result is that any attempt by the government to make Regulations under the Trades, Businesses, Occupations and Professions Licensing Act to regulate the grant of Licences “in relation to clearly defined categories of enterprise and business activities (having regard to the emerging needs of the economy of Anguilla and to protect and safeguard certain Anguilla businesses)” will be illegal. In legal language the Regulations will be ultra vires, or outside the power, of the principal Act.
The second reason and real issue is the applicability of the Immigration Act. Under this Act, the government has all the powers it needs to regulate which non-Anguillians are permitted to enter Anguilla. This is the appropriate law for regulating which foreigners are allowed into Anguilla, and, in consequence, which of them can apply for a work permit or a Business Licence to be allowed to conduct business in Anguilla.
You may think it is perfectly appropriate for the government to determine that at this time in its history Anguilla has provided safe refuge to enough foreigners of a certain ethnicity, and to refuse to allow any more into the island to conduct business or otherwise. Immigration officers already issue all visiting foreign nationals with a tourist visa for a limited time. After that time is up, their continued presence on Anguilla will be illegal.
Indeed, the Immigration Department can tomorrow send its officers around to every one of these business places in Anguilla, and round up and deport all of the many persons working illegally in them. All those “family members” who have been granted work permits to be on the island for a year can be informed the permits will be rescinded when they expire. They do not have to wait for political instructions from the governor to carry out their duties. One has to wonder at the real reason for the failure to take this action.
If the Immigration Act is not strictly enforced, once the foreigner has been allowed into the island, he can easily arrange with his compatriots to pretend to be a cousin who is “helping out” in the shop. He does not need to apply for a Business Licence if he is merely a family member or an employee working in the shop. After a few years, when he has paid off his indentureship and learned some English, he can apply for his own Licence. With or without this Act, he will receive his Licence once he grants some favoured individual the usual pro bono publico 20% interest in the business. And, once he has resided here long enough to acquire local rights, he can close down his enforced partnership and start a new solely-owned business free of its enforced partnership burden.
This Bill will be completely ineffective in stemming the flood of foreign entrepreneurs flowing unrestricted into Anguilla, if indeed that is the intention. We need to apply strictly the provisions of the existing Immigration Act. No new law is needed. We need to enforce the existing ones.
The British Government has a fundamental objection to an Overseas Territory controlling immigration on the basis of race or religion. The result is that any local government which wants to protect local businesses from foreigners of a certain ethnicity will be obliged to find a way around British objections. There is no reason why they could not use the same techniques and procedures applied recently to stem the flow into Anguilla of Venezuelan and Santo Domingan businesswomen.
So, what is the reason for this legislative fiasco? It seems to me there are two explanations. First, the Bill was never previously published (other than on 13 February in the Official Gazette, which no one but a few lawyers reads) until it appeared on 18 February in the Order Paper for its second and third readings and passage into law in the House of Assembly on 20 February. When the first reading of the Bill took place on 12 February 2019, there was no live link to the draft text on the Order Paper. Nor was the text of the Bill published anywhere else. No member of the public had any idea what was being proposed. This was highly unusual, and should have raised suspicions that something fundamentally wrong was being pursued.
Normally in Anguilla, a Bill is published long before it is passed into law. It is even circulated to the Bar for comment. This gives lawyers and members of the public a chance to make an input. Errors and omissions can be avoided. In this case, the text was published on the government website (by including a live link on the Order Paper) for the first time only two days before the debate and passage into law took place. No one outside the Executive Council knew in advance what was proposed so they could helpfully comment on it. No member of the public was afforded an opportunity to make any comment before it was rushed into law. This conduct was highly unusual, and gives rise to justifiable suspicion about the motives of the promoters of this Bill.
The second reason for the fiasco was that those responsible for the Bill waited until the Hon Pam Webster, the only member of the Opposition in the House, was absent from Anguilla. Since the text of the Bill was not published for the first reading, I doubt that she ever saw a copy prior to the passage of the Bill into law. This is more egregious conduct than giving members of the public no prior notice of the Bill. She sits as the sole member of the Opposition in the Anguilla House of Assembly, and was the only member of the House qualified or likely to speak in opposition. Where is the Accountability, Transparency and Integrity we were promised?
Will this prove to be a case of a lack of transparency being the petard upon which a Bill was hung? Or is this law merely an effort to put an even greater squeeze on foreign direct investment? With this law in place, maybe it becomes possible to demand a 30% shareholder interest from now on to ensure an exception is made.