Caribbean Trade Law and Development

Category: Current Affairs

  • Trans-Pacific Partnership Agreement Text Finally Online!

    Alicia Nicholls

    At long last, the full text of the Trans-Pacific Partnership Agreement has finally been revealed. The TPP creates a free trade area encompassing 12 Pacific-rim countries. It has been mired in controversy due to the secrecy of the negotiations and concerns by civil society groups about its intellectual property and investment provisions, as well as their potential impact on the environment, labour, access to medicines etc. In spite of this, several countries, including Indonesia, the Philippines and Colombia have expressed interest in acceding to the TPP. The agreement includes rules on new and emerging trade issues like e-commerce, the environment, telecommunications, financial services, investment, government procurement, state-owned enterprises,small and medium sized enterprises, and competition law.

    A full month after the agreement’s completion on October 5th, the full text of the Agreement may now be accessed on the official website of the US Trade Representative.

    For more in this TPP Article series, click here.

  • Barbados hosts 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes

    Alicia Nicholls

    On October 29-30th, Barbados hosted the 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes. Present at the meeting were 250 delegates from 88 jurisdictions and 11 international organisations and regional groups. Barbados is the second Caribbean country (after Bermuda) to have hosted a meeting of the Global Forum and is a Vice Chair of the Global Forum’s Steering Group.

    The Global Forum is the leading multilateral forum on international cooperation on transparency and the exchange of tax and financial information. Comprising both OECD and non-OECD countries, the Global Forum undertakes peer reviews as well as provides technical assistance to members. A noted initiative is the recently launched Automatic Exchange of Information (AEOI) Portal.

    The international business sector is an important sector and development strategy for Caribbean offshore financial jurisdictions (OFCs). In an impassioned opening address, Prime Minister of Barbados, the Hon Freundel Stuart, stressed the significance of this plenary to Caribbean offshore financial centres in helping to shape the future of the world’s tax agenda. He highlighted Barbados’ competitive advantage in international business and the country’s continuous efforts at seeking to comply with internationally agreed standards on tax transparency and the exchange of tax information. Among several actions undertaken in an effort to move from ‘partially compliant’ to ‘largely compliant’ status, this week Barbados signed the Multilateral Convention on Mutual Administrative Assistance on Tax Matters and the Multilateral Competent Authority Agreement. According to the Statement of Outcomes, there are now 89 jurisdictions covered by the MAC and 74 by the MCAA.

    Prime Minister Stuart reiterated Barbados’ commitment to the work of the Global Forum. He spoke critically about Caribbean OFCs’ inclusion on arbitrary blacklists by some OECD member countries, including the recent EU and District of Columbia lists, which were published without regard to Caribbean countries’ compliance on tax matters and the reputational and development implications of such blacklists. In this vein, he reiterated the need for a clear position by the Global Forum on blacklists. Happily, one of the stated outcomes of the Global Forum was the acknowledgement that the Global Forum is currently the key global body competent to assess jurisdictions on their cooperation on matters of transparency and exchange of information for tax purposes, and that the findings in the Global Forum peer reviews should be taken into account as appropriate in any lists pertaining to non-cooperative jurisdictions in this area.

    Prime Minister Stuart also condemned financial institutions’ use of the Global Forum’s ratings of countries without communicating with the Global Forum to ascertain those countries’ actual progress on the implementation of measures. He noted that this practice has penalised some countries which are ranked as “partially compliant” or lower. Noting that this could compromise countries’ development goals, he emphasised the need for such financial institutions to communicate with the Global Forum on those countries’ progress on implementation so they are not unfairly penalised. Additionally, he also mentioned the need for consideration of the possible role of the Global Forum on tax matters of importance to small vulnerable states.

    In regards to the Exchange of Tax Information, the Global Forum published its 2015 Annual Report “Tax Transparency 2015: Report on Progress”, which includes details on the progress of the peer reviews and ratings.

    Outcomes

    Among the key outcomes of the 8th Global Forum meeting were:

    • Reiteration of the resolve to meet the commitments to implement automatic exchange of information within the agreed timelines of first exchanges in 2017 or 2018.
    • Recognition of changes made by several Global Forum members to their legal framework or practices on exchange of information on request to address Global Forum recommendations which led to the adoption of several supplementary peer reviews.
    • Acknowledgement that the Global Forum is currently the key global body competent to assess jurisdictions as regards their cooperation on matters of transparency and exchange of information for tax purposes, and that the findings in the Global Forum peer reviews should be taken into account as appropriate in any lists pertaining to non-cooperative jurisdictions in this area.
    • Agreement on the detailed framework for a second Round of peer reviews of the standard of exchange of information on request to be launched in the second half of 2016.
    • Intensification of efforts to ensure developing countries benefit from the recent gains made in international tax transparency.

    The full Statement of Outcomes may be accessed here, while the press release on the conclusion of the meeting is available here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade.

  • Jamaica tops Anglophone Caribbean on ease of doing business in Doing Business Report 2016

    Alicia Nicholls

    Jamaica can boast of being ranked as the easiest place to do business among countries of the English-speaking Caribbean, according to the World Bank’s Doing Business Report 2016. Jamaica has an overall rank of 64 out of 189 economies surveyed in the report, improving seven places from a ranking of 71 last year. Jamaica was not only the highest ranked of the English speaking Caribbean countries but was second only to Puerto Rico (57) out of all Caribbean countries. Jamaica was also the only Caribbean economy ranked among the ‘top 10 improvers’ in terms of performance on the Doing Business indicators in 2014/2015.

    Now in its 13th year of publication, the 2016 edition of the Report entitled ‘Measuring Regulatory Quality and Efficiency’ ranked 189 economies globally on the ease of doing business based on 10 indicators which measure and benchmark regulations which pertain to local small to medium-size enterprises throughout their life cycle. The indicators were: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Although presented in the economy profiles, labor market regulation indicators are not included in the aggregate ease of doing business ranking this year.

    On two of the indicators Jamaica ranked among the top 10 economies globally, namely ‘ease of starting a business’ (9) and ‘getting credit’ (7, tied with Puerto Rico). Its lowest rankings were in regards to ‘trading across borders’ (146), ‘paying taxes’ (146) and ‘registering a property’ (122).

    Several reforms introduced by Jamaica during the 2014/2015 period were deemed to have made business easier including, streamlining internal procedures for starting a business,  implementing a new workflow for processing building permit applications, by encouraging taxpayers to pay their taxes online, introducing an employment tax credit, just to name a few. However, the introduction of a minimum business tax, the raising of the contribution rate for the national insurance scheme paid by employers and increased rates for stamp duty, the property tax, the property transfer tax and the education tax were viewed less favourably.

    The average ranking of Caribbean economies on the ease of doing business was 104. After Jamaica (9), the next three top regional performers were St. Lucia (77), Trinidad & Tobago (88) and Dominica (91). Haiti had the lowest rank among CARICOM countries (182), followed by Grenada (135) and St. Kitts & Nevis (124). Of note is Barbados which slipped 3 places from 116 in last year’s ranking to 119 in the 2016 ranking, making it the fourth lowest ranked CARICOM economy by ease of doing business. In regards to the region as a whole, the Report commended the region’s continued “remarkable progress” on reforms to resolve insolvency, including the new insolvency laws adopted by Jamaica and St. Vincent & the Grenadines.

    It should be noted that although no Caribbean country made it into the top 50 economies on the list, the region did well compared to most SIDS globally, with the notable exception of Mauritius which ranked a laudable 32. On average the Caribbean region ranked highest on ‘getting electricity’ (74), ‘starting a business’ (87) and ‘enforcing contracts’ (90), while scoring lowest in ‘registering property’ (144), ‘resolving insolvency’ (114), ‘paying taxes’ (112) and ‘getting credit’ (112). However, individual countries’ performance on each of these indicators showed great variance.

    While it has its limitations, the Doing Business Report, a flagship report of the World Bank, remains one of the best comparative measures of countries’ business environments. After all, it touches on many of the indicators which companies consider when seeking to invest in a foreign market. As such these rankings are and should be used by countries across the region as a guide to measure the success of their regulatory reforms, identify strengths and weaknesses of their business environments, and compare their countries’ business environment ranking regionally, globally and over a time period as they compete which each other for global investment inflows. While Jamaica’s over all performance is praiseworthy, what these rankings demonstrate is that there still remains great room for improvement if Caribbean countries are to become globally competitive as choice destinations for doing business.

    The full Doing Business 2016: Caribbean States Regional Profile may be accessed here, while the full Doing Business Report 2016 is available here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade.

  • Access to Justice as a Linchpin of the SDGs: The Sustainable Development Implications of Barbados’ Judicial Backlog

    Alicia Nicholls

    Access to justice has been recognised as a linchpin of the sustainable development goals (SDGs) which define the post-2015 global development agenda. Much ink has been spilt on Barbados’ crippling judicial backlog but very little has been said about the implications of this status quo for meeting sustainable development goals. Access to justice, recognised in SDG 16, is both an end and prerequisite for sustainable development as it is the means by which rights and development gains are enforced and protected. As a barrier to the access to justice, Barbados’ clogged court system has not only implications for the achievement of SDG 16 but can also undermine achievement of other sustainable development goals.

    Barbados has a well-deserved and internationally renowned reputation as a constitutional democracy with strong institutions, respect for the rule of law and a high level of human development which far exceeds that of many fellow small island developing states. The endemic judicial malaise has been the subject of increasing concern and critique. The latest admonishment comes from the Caribbean Court of Justice, the country’s final court of appeal, in its judgment in Walsh v Ward et al, a dispute which originated in 1998. In what has become all too familiar, the CCJ at paragraphs 68 to 70 of the judgment criticised the length of time the case took and the hardships this delay has imposed on the litigants. The Court also noted that its frequent need to comment on Barbados’ excessive delays reveals that this is a “systemic problem”. On these points, there can be no disagreement.

    The Nature of the Problem

    In 2013 it was reported that there were over 3,000 cases awaiting trial and that there were 362 cases which were still undecided, some dating back to 1993. A plethora of reasons are usually posited for Barbados ’ backlog including late court starts and short court sessions, frequent adjournments, delays in judges’ delivery of written judgments, trial scheduling issues, misplaced files and/or incorrect filing of documents, lack of client/witness cooperation and the heavy workload of magistrates and judges. There is also no fixed time period for disposal of matters. In its 2008 judgment in Reid v Reid, the CCJ suggested “as a general rule no judgment should be outstanding for more than six months and unless a case is one of unusual difficulty or complexity, judgment should normally be delivered within three months at most”. There is no evidence that this suggestion has been adhered to.  These problems are further exacerbated by an increasingly litigious Barbadian society. In the above-mentioned report, it was estimated that between 1,700 and 2,000 new cases are filed each year.

    The Sustainable Development Impact

    Although there has been much criticism of Barbados’ judicial backlog, very little has been said about the sustainable development implications. Sustainable development, as defined in the Brundtland Report ‘Our Common Future’, is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Sustainable development depends on a tapestry of interconnected development issues, including poverty reduction, health and education and climate change. This diversity of issues is reflected in the 17 UN member agreed Sustainable Development Goals which succeeded the Millennium Development Goals (MDGs).

    Access to justice was not explicitly part of the MDGs but has been recognised by UN Member States in the post 2015 development agenda as both an end and an enabler of sustainable development. Specifically, Goal 16 of the Sustainable Development Goals (SDGs) is to “Promote Peaceful and Inclusive Societies For Sustainable Development, Provide Access to Justice for All and Build Effective, Accountable and Inclusive Institutions At All Levels”.

    Access to justice speaks to the populace’s ability to access and obtain redress through the institutions of justice in a manner that is fair, expeditious and equitable. It is fundamental to maintaining the rule of law and allows for the enforcement of rights, non- discrimination and accountability of decision makers. Judicial delays caused by a large judicial backlog limit the access to justice by ordinary citizens. Marginalised groups in society, such as the poor, elderly, disabled, children and victims of domestic violence and sexual abuse are disproportionately affected by judicial delays as they endure significant economic, social and mental hardship or in the case of the elderly, sometimes die before their matter has been satisfactorily settled. Each backlogged case therefore represents at least one victim for whom justice has been delayed and whose rights have not been protected.

    Judicial delays also deny accused persons, who often have to wait on remand for years before their case is heard, their constitutional and human right to a fair trial in a reasonable time. According to Prison Studies, about 40% of Barbados’ prison population consists of persons awaiting trial. A large prison population puts a strain on the public purse, resources which could be better used for social development programmes.

    Access to justice is also undermined where there is no public confidence in the system. If public utterances are anything to go by, the Barbadian public appears less than satisfied with the current state of the judicial system. Persons who do not have the confidence in the judicial system are more likely to take matters into their own hands.

    The current backlog not only threatens the access to justice for citizens but can hurt economic activity and thereby undermine economic development (SDG 8). Expeditious case processing and resolution are important in a commercial context where time is money. Economic and reputational costs associated with lengthy delays in the settlement of matters are problematic not just for big firms, but are even more costly for small and medium sized businesses which may lack the revenues to stay in business while awaiting a decision. Any investor seeking to do business or invest in a country wants to be assured that it has prompt access to the local courts in order to enforce contractual rights and that it will not waste resources or possibly go out of business due to inordinately long waiting times. In the Doing Business Report 2016 Barbados currently ranks poorly (164 out of 189 countries) on the efficiency of the judicial system at resolving commercial contracts before the courts. These are indicators which investors consider and have implications for Barbados’ attractiveness as a place to invest.

    What is being done?

    There have been numerous attempts over the years to unclog the judicial backlog problem with very limited success. Among the initiatives have been the new Civil Procedure Rules, the requirement of case management conferences, the creation of special purpose courts, the on-going removal from the computer system of “dead” cases, the addition of three more judges and the Chief Justice’s practice direction on backlog reduction. There are also more recent on-going regional initiatives like IMPACT Justice and the JURIST project which seek to address the justice system as a whole, including facilitating much needed digital access to all the Laws of Barbados and court decisions.

    But are the steps far enough? Alternative dispute resolution has been proposed as a possible solution, a suggestion supported by this Author in an article in 2012. The pre-action protocols provide that parties  to a dispute must engage in “genuine and reasonable negotiations with a view to settling the claim economically and without Court proceedings”. The Court Annexed Mediation Pilot project has been unrolled in the High Court and some of the magistrates courts. However, Barbados still has no Mediation Act or a mediation board. The solutions so far have not been enough to deal with the scale of the problem. Therein lies a critical issue; what is the scale of the problem?

    Official judicial data is woefully lacking on critical indicators such as time to resolution of cases before each court, the size, age and composition of the backlog in each court, the number of outstanding judgments, the average time each judge takes to render a judgment, and average stay on remand. In an effort to allow for comparative measurement of progress for countries, the UN will be developing global indicators during the next year to facilitate data gathering for each goal and target. Countries are expected to formulate their own indicators based on their own unique circumstances. Data on these indicators would provide local authorities with a comprehensive understanding of the scale, nature and causes of the backlog problem which would assist in the formulation of performance goals and the type of interventions needed. Without this any changes would simply be cosmetic.

    Additionally, we the Barbadian public have heard of many judicial reform initiatives but very little on what they have achieved thus far. Progress reports on the impact of these reform initiatives should be published to help restore public confidence in the system.

    An efficient and effective judicial system is essential for upholding the rule of law, safeguarding rights and ensuring the smooth functioning of democratic processes, all of which are needed for sustainable development. The long shadow of Barbados’ case backlog creates pressures on the courts, delays the process of justice and redress, particularly to the disadvantaged, and erodes public confidence in the system. Delays in the settlement of commercial cases can hamper business activity, potentially undermining economic development. Targeted interventions based on a data-supported understanding of the nature and causes of the problem are needed, while public reporting on gains made should inspire public confidence that change is on its way.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. The Author wishes to thank everyone who provided insight for this article but any errors or omissions are solely those of the Author’s.