The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s failure to follow statutory approvals processes is “potentially fatal” for investors, a well-known QC said yesterday, with the Blackbeard’s Cay verdict showed their projects “could be closed down when in full flight”.

Speaking after the Supreme Court delivered a crushing judgment against the Government over the controversial $8 million project, Fred Smith said the ruling would actually benefit all investors - Bahamian and foreign - because it would force all parties to follow the law.

The Callender’s & Co attorney and partner said the verdict showed it was “no longer business as usual” when it came to the investment approvals process, and the Government would now have to rely on following the law instead of policy and ministerial whim.

This, Mr Smith argued, would give investors more certainty and predictability in the investment approvals process, as all they - and their attorneys - will have to do is follow the processes laid down in law.

The Blackbeard’s Cay ruling, said Mr Smith, was akin to “the executive branch of government having their toes held to the fire by the Judiciary telling them to act in accordance with their powers and jurisdiction legislated by Parliament.”

“The rule of law in the Bahamas is beginning to reign supreme, and that augurs well for business, both local and international, in the Bahamas,” the QC added.

“It means investors don’t have to scurry around in the shadows, and the dark halls of political power, and backdoor dealings to make their applications for business.

“They simply need to rely on the advice of their lawyers, who simply need to read the legislation, on the steps to be followed in applying for permits. Make the correct applications, and don’t be in a rush.

“The implications of the ruling are that it is no longer business as usual by the old, informal policies and disregard of laws passed by Parliament,” Mr Smith told Tribune Business.

“A new day has dawned in the Bahamas for business. “Gone are the days of policy, and in are the days of legislation. Investing in the Bahamas is now ‘101’. It’s now like a freshman year in ‘101’ procedures.”

Justice Stephen Isaacs, in yesterday’s ruling, gave the reEarth environmental activist group 100 per cent of the Orders/declarations it was seeking over the Blackbeard’s Cay development.

He based his decision on finding that both the Premises Licence for the captive dolphin facility, plus Site Plan Approval, “neither have been granted not could have been granted”.

Among the highlights of Justice Isaacs’ ruling were:

• The minister of agriculture and marine resources, V Alfred Gray, failed to issue the Premises Licence before approving the dolphin import and facility’s operational licence.

The Premises Licence was applied for, by Blue Illusions, for the first time on January 6, 2014, some six months after the dolphins were imported on July 23, 2013.

The Marine Mammals Protection Act, Justice Isaacs noted, prevented the operation of a captive marine mammal facility unless the premises were fully licensesd.

As a result, the Supreme Court found that Mr Gray’s decision to issue the dolphin import licences was “clearly premature” in the absence a Premises Licence.

“In all of the circumstances, it is a reasonable conclusion that a Premises Licence could not be issued,” Justice Isaacs found.

• He also found that the Government appeared to have breached its international obligations over the Specially Protected Areas and Wildlife Protocol (SWAP), which is overseen by a United Nations body.

“The Bahamas became a party to SWAP in March 2012, and by Article II it seems the import licence ought to have been denied as its purpose is a cruise passenger attraction,” Justice Isaacs said of Blackbeard’s Cay.

“The membership in SPAW may indeed prohibit the import of marine mammals for anything other than preservation or site research.”

• This, in turn, was one reason Justice Isaacs cited for why a Site Plan Approval “could not legally be issued”.

The ‘preliminary’ site approval did not amount to full approval, which the judge found Blue Illusions had to obtain under the Planning and Subdivisions Act.

Craig Delancy, the building control officer at the Ministry of Works, had offered a building permit issued to the Blackbeard’s Cay project as being “equivalent” to Site Plan Approval, but Justice Isaacs said it was “patently clear” that the two were completely different.

• Justice Isaacs also criticised the “silence” and “deaf ears” approach adopted by the Government to reEarth’s concerns and requests for information on Blackbeard’s Cay.

“There appears no evidence that a public discourse was encouraged. It rather seems that such a discourse was avoided.”

• The initial Crown Land lease of the seabed to Blackbeard’s Cay’s initial developer, which was then sub-let to current operator Blue Illusions, was for a stingray attraction only - not a dolphin facility. And the original lease could not be “underlet” to anyone else.

Agreeing with reEarth and their attorney, Mr Smith, it seems the judge was nevertheless anticipating some Prime Ministerial wrath over his verdict.

“It follows that the Prime Minister was perhaps given faulty advice with regard to the appropriate and lawful land use by Blue Illusions.” Justice Isaacs said.

Having thus found that the Government had indeed failed to follow its own legal processes, Justice Isaacs subsequently approved Orders quashing the dolphin import licences granted to developer Blue Illusions, headed by St Maarten businessman Samir Andrawos, and requiring that the dolphins be moved to “an appropriate location”.

Justice Isaacs also granted reEarth’s request to quash the preliminary Site Approval Plan for Blackbeard’s Cay, and ordered that the Government halt Blue Illusions’ land development and require it to return the site - located on Balmoral Island off New Providence’s north coast, opposite Sandals Royal Bahamian - to its previous state.

The final batch of Orders prevents the grant of Site Plan Approvals to Blackbeard’s Cay without public consultation over the project, and quashes the Government’s decision to permit the dolphin facility’s construction on Crown Land.

It now remains to seen whether the Government will follow through in obeying the Supreme Court’s Orders and effectively shut down the Blackbeard’s Cay project.

The initial approach has been to challenge the verdict, with the Attorney General’s Office indicating it will appeal and seeking a ‘stay’ of the ruling, which Justice Isaacs refused to grant.

The Government now has six weeks to appeal, and can also apply for its stay at the Court of Appeal.

When Tribune Business attempted to contact Mr Andrawos, he initially answered his phone, but when this newspaper explained what the inquiry was about, the line went dead. All subsequent attempts to contact the Blackbeard’s Cay developer for comment proved fruitless.

However, sources close to the project yesterday told Tribune Business that Mr Andrawos and Blue Illusions had followed every process, and obtained every permit, that the Government had required of them.

“What does this mean? Are they [the Government] going to knock it down?” one source asked of Blackbeard’s Cay. “What a mess. How can the court rule against the Government? Government will have to fight it, I guess. They gave the approvals. It’s crazy.”

In an interview with Tribune Business in February 2014, Mr Andrawos warned the verdict could jeopardise “over 100 jobs” and its $8 million investment, plus send a bad message to other investors.

“This is not good. If this is how they are treating new investors, this is not good,” he told Tribune Business at the time. “For every investor coming to the Bahamas, it’s not looking good.

“The Bahamas is a beautiful place, has beautiful people, and the level of the people’s education is higher than anywhere else.”

Mr Smith, meanwhile, indicated that his clients “don’t expect” that the Government will knock down the Blackbeard’s Cay project.

He indicated that their opposition was focused on the project’s dolphin encounter facility, and if this was closed - and the developers followed the proper process for all other permits - then their concerns might be satisfied.

Mr Smith said reEarth and Save the Bays would assess any new permit applications “on their merits”, adding that captive dolphin facilities were “prohibited by legislation” in the Bahamas unless they were for scientific, education or cultural purposes.

Criticising the Government and Blue Illusions for “failing miserably” in their initial permitting process, Mr Smith added: “Investors coming to the Bahamas should be forewarned to abide by our laws, and not be seduced by the attraction of expediency from the Prime Minister’s Office with blanket ‘approvals in principle’ and Heads of Agreement.

“They do not have to wander in the wilderness ad infinitum, waiting for responses from the Prime Minister’s Office.”

This, Mr Smith said, meant investors dealing with the Government agencies entitled by law to process, and issue, the permits they needed.