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.[1] 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.[2] 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.[3] 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.
