The Tribune

• Is to ‘attract businesses we don’t have’

• Ex-PM alleges two investors holding off

• Voices fears of ‘under the table’ dealings

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-prime minister yesterday branded the Government’s plans to repeal the Commercial Enterprises Act as “a mistake” since it is designed to improve Immigration efficiency and “attract businesses we don’t have”.

Dr Hubert Minnis told Tribune Business the current law, which was crafted by his administration before being passed by Parliament, was intended to position The Bahamas for “the future” by enticing high-growth technology-related businesses to this nation while eliminating some of the “bureaucracy” and uncertainty they faced.

Responding after Ryan Pinder KC, the attorney general, confirmed that the Davis administration plans to “repeal and replace” the existing Act’s work-permit related provisions, he argued that these were designed to “put the onus and pressure” on the Immigration Department to deal with applications in a timely manner.

The present Commercial Enterprises Act requires the Immigration director to make a decision on work permit submissions within 14 days of their receipt, otherwise they are deemed automatically approved, although this is restricted to only the few industries listed in the legislation. This does not apply to all sectors, and work permits granted under the law can be revoked if adverse information on their holders subsequently surfaces.

Dr Minnis told this newspaper that the work permit-related provisions, and other aspects of the Act, are designed to prevent companies in the designated industries being “kept in limbo” due to uncertainty over whether - and when - certain approvals would be forthcoming.

He argued that incoming businesses, especially start-ups and other fledgling operations, cannot afford to be “held up for six to eight months” waiting for management and key staff work permits to be approved. Asserting that the Act was targeted at industries and skills that The Bahamas presently does not have, the former prime minister asserted that attracting these firms would aid the country’s workforce development and lead to fewer work permits being granted in time.

And, warning the Government against a rush to repeal, Dr Minnis said he had spoken to two investors within the last three months who had been hoping to use the Commercial Enterprises Act to move to Freeport but had placed these ambitions on hold - and may now not proceed - due to uncertainty over the Davis administration’s reform plans. He also suggested the changes may create room for “under table deals” involving businesses trying to speed-up approvals.

The Progressive Liberal Party (PLP), when in Opposition, labelled the Commercial Enterprises Act as the “work permits Bill” on the grounds that it undermined ‘Bahamianisation’ and did too little to protect entrepreneurial opportunities and jobs for locals. Prime Minister Philip Davis KC promised when Opposition leader that the party would repeal the existing Act, and Mr Pinder on Tuesday confirmed it intends to make good on that pledge.

However, while the replacement legislation will follow through on the Davis administration’s “objection to the automatic grant of work permits” and remove the offending clauses, Mr Pinder said the Government plans to retain the sections that facilitate the creation of commercial enterprise zones across The Bahamas as an economic development tool.

Dr Minnis, though, argued against any substantive changes as the 14-day work permit decision deadline was included “to put the onus and pressure on government to get things done”. Explaining his administration’s thinking, he said: “When it was discussed at Cabinet, it was set up to attract businesses that weren’t here and, in time, Bahamians would hopefully learn those types of business and we would improve our skills bank.

“The whole idea was to improve the efficiency of government. There was no reason why we could not get it done in 14 days. If the bureaucracy falls behind, it’s [the work permit] approved automatically. We wanted to put pressure on to improve the efficiency of government and get it done in 14 days.”

Under the present law, key management and skilled personnel in industries targeted by the Act can enter The Bahamas without first possessing a work permit. While that may create border control issues, these persons and their employers must then apply for the necessary work permits within 30 days of arrival. The Immigration Department then has 14 days to decide whether to approve or reject the application failing which it is granted automatically.

This is now due to be changed or stripped from the Act by the Davis administration. However, Dr Minnis continued: “The whole idea is you’re bringing in businesses that you don’t have now, and for which you don’t have the skills. In time your skills bank will improve and increase, and the demand for work permits will subsequently decrease. We’re expanding our own knowledge. I don’t see where that’s a problem.

“You cannot hold businesses up, especially new businesses, six to eight months waiting for work permits. I think this is a mistake [by the Government]. A business really wants to know they have certain things in a certain timeframe. You cannot leave them out in limbo not knowing when they will get certain approvals. We were trying to put pressure on government so it would be know in a week if they were up and running, and can do all their adjustments, accounting and budgeting.

“Not knowing when they can set up puts an additional stress on a business.... We were trying to improve the efficiency of government and the business knowing within a certain timeframe that they can be up and running.” Dr Minnis then suggested that the removal of work permit approval certainty, as provided for by the Act’s current timeframe, could create room for “under the table deals” involving investors seeking to obtain and speed up approvals.

“We were trying to move away from that,” he argued. The Commercial Enterprises Act’s success to-date is difficult to judge given that many of the years since its passage were impacted by a combination of Hurricane Dorian and COVID-=19, while no current data on how many businesses it has helped to attract and jobs created has been provided by the Government.

The Commercial Enterprises Act is largely focused on industries not present in The Bahamas, but which have the potential to create high-earning jobs and be major foreign currency earners.

Financial services leads the way with reinsurance; captive insurance; investment fund administration; arbitration; wealth management; international trade and international arbitrage included in the ‘fast track’ work permit sectors. Also covered by the Commercial Enterprises Act are technology-related industries such as computer programming; software design and writing; bioninformatics and analytics; nano technology; and biomedical health facilities.

“Boutique health facilities”; data storage and warehousing; aviation registration and ‘approved’ aviation maintenance operations; ‘call centres’; and manufacturing and assembly/logistics businesses round out the sectors targeted by the former administration.

Dr Minnis acknowledged that this list was “quite broad”, but added: “A lot of those are businesses we don’t have. We want to encourage those businesses to come here with no delay, and no bureaucracy, where we can expand our economy and increase our gross domestic product (GDP). That’s the future. We are now in a technological revolution and The Bahamas has to move with that so that Bahamians are on the cutting edge of technology and don’t get left behind.”

Voicing concern that the Government’s plans are already impacting investment decisions, the former prime minister asserted: “I know there are a couple of businesses that wanted to move to Freeport, and were coming here specifically because of the Act, but have placed themselves on hold because they don’t know what the Government is doing...

“They contacted me, and said they cannot move their businesses here at this particular point in time. I would have spoken to them about three months ago, and they said they’re changing their minds because there’s too much uncertainty. They wanted to bring their businesses here and expand and everything else, but they told me it has caused uncertainty and they cannot do it.”

Dr Minnis said the Davis administration was amending, rather than completely repealing, legislation passed by his government almost as if “they’re putting their stamp of approval on it”.