The Tribune

• Tables Bill to give Bahamian people 50% of all finds

• Moves away from gaining majority share to equality

• Major explorer ‘evaluating economics’ of 50/50 split

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A multi-million underwater explorer yesterday said it is “still evaluating the economics” after the Government moved to double its share from treasure salvaging in Bahamian waters.

David Concannon, Allen Exploration Group’s spokesperson, told Tribune Business via e-mailed reply it had been engaged in “ongoing discussions” with the Davis administration about revising the present formula that splits the proceeds from underwater treasure salvaging 75/25 between the explorer and the Government.

The majority of the economic benefits thus go to the explorer, and legislation tabled in the House of Assembly yesterday aims to change this so that they are split equally - or 50/50 - with the Government. Besides now receiving 50 percent of the proceeds from all licensed treasure salvaging in Bahamian waters, the Government will also get “first preference” in selecting its share of the recovered artifacts as well as the right to retain those deemed vital to “natural patrimony”.

The Antiquities, Monuments and Museum (Amendment) Bill 2023, in its “objects and reasons” section, states: “This Bill seeks to amend the principal Act to provide for any recovered artifacts to be shared between the Government and the licensee, with each to receive 50 percent, and the Government to have first preference in selecting its share of the recovered artifacts.

“The Bill also seeks to amend the regulation making power to prescribe the maximum period for which a particular type of licence may be granted.” The changes are given effect by reforms to the existing Act’s section 13, with the Bill and its changes receiving their first reading in Parliament yesterday.

“Any artifacts recovered by a licensee under a licence to survey for, or recover, underwater cultural heritage shall be shared between the Government and the licensee with each to receive 50 percent of the total value measured by points, and the Government shall have first preference in selecting its share of the recovered artifacts,” the Bill stipulates.

It adds that, “notwithstanding” the terms set out in that clause, “the Government and the licensee shall agree in writing that government’s retention of any underwater cultural heritage artifacts, which are important to the protection of the natural patrimony, may exceed the Government’s 50 percent share in certain years with the imbalance to be corrected by future divisions”.

This means that, while in certain years the Government’s share of treasure salvaging proceeds may exceed 50 percent as it secures artifacts deemed important to Bahamian culture and history, this will be smoothed out in future years. The Bill’s reforms also allow for setting term limits on an underwater salvaging/exploration licence through providing for an unspecified “maximum period for which a particular type of licence may be granted”.

The Bill thus makes good on the pledge by Ryan Pinder KC, the attorney general, in June 2022 to upgrade the AMMC Act in relation to The Bahamas’ “underwater cultural heritage”. However, the 50/50 proceeds split contained in the new legislation is different from what he said was the Government’s intent to “reverse” the existing 75/25 split so that itself - and not the explorer - received the majority share of any proceeds.

Allen Exploration, in response, said at the time it would cease treasure salvaging in Bahamian waters immediately if the Government took such a major share as this would plunge underwater explorers into a loss-making position and make their activities economically unworkable. It added that its millionaire principal, Carl Allen, owner of Walker’s Cay in the north Abacos, was “not in the business of turning money into heat by lighting dollar bills on fire”.

It thus appears that both the Government and underwater salvage industry may have reached a compromise via the Bill’s 50/50 proceeds split. Exploration outfits incur huge daily costs to support the nature of their activities, especially those related to vessels, equipment and manpower due to the nature of their activities, while taking on all the investment and associated risks.

Tribune Business was yesterday informed by Bahamians who have worked in, and with, the underwater exploration industry that the 75/25 proceeds split in the sector’s favour is standard practice in Florida and other jurisdictions where it is present so that it can gain sufficient return on investment.

However, the Government will likely retort that itself - and the Bahamian people as tax-paying citizens - deserve a greater share of the rewards from their natural patrimony and historical assets that lie within the country’s territorial waters. It can also argue that the revised legislation creates a better, fairer deal in the Bahamian public’s interest.

Meanwhile, Allen Exploration’s Mr Concannon yesterday said the group’s principals have yet to “make money” on either the salvaging of the Nuestra Senora de la Maravillas, the sunken Spanish treasure galleon that some have described as “the most valuable shipwreck in the Western Hemisphere”, or the Grand Bahama museum opened last year to showcase their discoveries.

“I have not seen the legislation tabled today, but we have had ongoing discussions with the Government about amending the current Act and revising the split,” Mr Concannon told Tribune Business. “As I [said] last summer, reversing the split to 75/25 in favour of the Government would be unworkable and Allen Exploration would stop its activities in The Bahamas. We are still evaluating the economics of a 50/50 split.

“So far, none of the recovery activities or the museum have made money for Mr and Mrs Allen. They don’t sell anything they have recovered. The museum was opened in August and entry was free to all Bahamians and students for quite some time. Establishing the museum in its current location is as difficult as could be expected for opening any new business in this location, whether it’s an ice cream stand of a historical museum.”

Turning to the planned legal reforms, he added: “As part of our discussions with the Government, we were asked to comment on various aspects of what could be in the amended legislation. Some things, like a greatly reduced licence area, limitations on the number of licences and significantly increased licence fees, would adversely impact our operations, but we have not been able to assess the exact financial impact yet.”

None of those was included in the Bill tabled yesterday, although Mr Pinder had indicated such reforms were being considered when he addressed the Senate in June 2022 during his contribution to the Budget debate. “The Government is seeking to update The Bahamas’ legislation relative to underwater cultural heritage by amending the Antiquities, Monuments and Museums Act (AMMA) along with amendments to the associated regulations,” he said then.

“The proposed amendments specifically relate to licensing requirements, costs, timeframes, geographical areas and the current government licensing revenue split with respect to salvage licensees. Right now, the Government gets 25 percent of the assets that people dive for and dig up. We will reverse that. We will get the majority interest in cultural assets underwater in this country.”

Mr Pinder later clarified to Tribune Business that the revised split had to be determined by the Davis Cabinet. “Cabinet would decide what the actual split will be, but we anticipate that it will be the majority position,” Mr Pinder said last June. “It will be rebalanced in favour of the Government. That goes before the Cabinet. The Cabinet will decide the actual split.”

However, it appears the Government, while doubling its share by one-quarter to 50 percent (one half), has opted for equality rather than the majority. Allen Exploration’s Mr Concannon said: “We would like to continue having open and honest conversations with the Government to craft solutions that work well for everyone.

“All of the conversations we have had with the Government to-date have been very positive. We believe we have a good working relationship with the Government, and we would like to see this continue. As far as I know, there have not been any discussions about Allen Exploration being ‘grandfathered in’ if changes are made.

“Frankly, I think it is too soon to have this discussion, but it is a legitimate topic of discussion depending on how things play out. Like I said, we have a good relationship with the Government, and we would feel free to continue having open and honest conversations about any relevant topic,” he continued.

“The recovery and conservation activities are ongoing, weather permitting. I do not have information on the latest discoveries, but I know these are regularly shared on social media and at the museum. The recovery work is slow but encouraging.”

Tribune Business was yesterday told that the former Minnis administration was encouraged to push for the same 50/50 proceeds split, and enact the same reforms to the Act, now being pursued by the Davis administration. However, it signed-off on Allen Exploration’s licence before making such moves, and thus was locked in to the 75/25 arrangement.

The Bahamas, and successive administrations, have long struggled to get to grips with underwater exploration and treasure salvaging within this nation’s territorial waters, which resulted in a long-standing moratorium on new licences until the one granted to Allen Exploration.

Lacking the necessary expertise and resources to conduct proper oversight, together with the required regulatory regime, The Bahamas has allowed many of these sites to be pillaged and ransacked by unauthorized foreign salvors. This has resulted in many Bahamian artifacts appearing at overseas auctions and sales without this nation receiving a cent in benefits for them.

Yet the sector holds much-needed economic and fiscal potential for The Bahamas should it get it right. One industry source, asked about the sector’s potential value to The Bahamas, simply responded: “Billions”. They added: “The second and third most valuable wrecks in the entire western hemisphere are located off Grand Bahama.

“It would be an entire industry. It has the ability to effectively put Freeport back on the map. You’re talking about billions in artifacts, and I mean billions. You’ve got from conservation of artifacts to research to study to inventory. The question is where is the transparency and the accountability.”