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  • Water (In)Security: One of the biggest threats to Caribbean SIDS’ national security

    Alicia Nicholls

    When we think national security in the region, terrorism and drug trafficking are often the first threats which come to mind. However, if there is anything that the current drought stifling the islands of the Caribbean highlights is that water (in)security has far-reaching security and development implications. While the water (in)security problem is not new nor Caribbean-specific, the small island developing states (SIDS) which make up the majority of Caribbean states are especially vulnerable to changes in precipitation created by El Nino and more widely, climate change. What is undeniable is that water (in)security is a national and regional security problem which requires an enhanced national and regional response.

    Water is a fundamental resource, a fact recognised by the UN General Assembly on June 28, 2010 in the Resolution on the Human Right to Water and Sanitation (Resolution 64/262).The most common working definition of “water security” is that provided by UN-Water (2013). The Agency defines water security as “the capacity of a population to safeguard sustainable access to adequate quantities of acceptable quality water for sustaining livelihoods, human well-being, and socio-economic development, for ensuring protection against water-borne pollution and water-related disasters, and for preserving ecosystems in a climate of peace and political stability”.

    Water security is inextricably linked to other forms of security as well as to social and economic development. Water access is needed for domestic consumption and is a necessary input in agriculture, tourism and other productive sectors.

    Many islands of the Caribbean rank among the most water-stressed and water scarce countries in the world. According to data provided in FAO AQUASTAT, average rainfall in the islands of the Eastern Caribbean ranges from 2350mm in Grenada to as low as 1030mm in Antigua & Barbuda. Unlike in many developing countries where access to clean water is an issue, the main issue for most Caribbean countries is not so much water quality but water scarcity. Caribbean countries have two distinct seasons; dry and rainy (hurricane season), with rain from weather systems during the rainy season being important for recharging surface water and underground aquifers. Experts attribute the longer than normal dry season and relatively ‘quiet’ hurricane season currently being experienced to El Nino, a phenomenon in which above average warming of the Pacific Ocean affects weather patterns.

    There is no denying that this current drought affecting the region has been among the most severe in recent years. Some countries like Jamaica, Haiti, the Dominican Republic and Cuba have reportedly suffered crop losses and concomitant drops in agricultural production as a result of the low rainfall. Other countries have reported lower river volumes or dried stream beds. In May, the Government of St Lucia declared a water emergency in light of the drought conditions. In Barbados which depends wholly on freshwater sources, yields from freshwater aquifers are low and the lack of water for days on end in several rural communities has been a hot topic on call-in programmes. Sporadic rains from weather systems have so far not been enough to replenish the region’s diminishing reservoirs and aquifers.

    These water resources stresses are not new for Caribbean SIDS. The jury is out on how long this current iteration of El Nino, believed to be one of the most severe on record, is likely to last. Besides EL Nino, the Caribbean is already being challenged by the effects of climate change, which has seen changes in precipitation patterns resulting in longer dry spells and more catastrophic natural disasters. Freshwater aquifers in coastal areas  can be affected by saltwater intrusion if sea levels continue to rise. Aside from this, growing populations, especially in urban corridors, will place increasing demands on an already scarce potable water supply. All of this does not bode well for the region’s fragile water resources.

    What is clear is that water (in)security must be on the top of national and regional security agendas in the region not just during drought times but always. How do we in the Caribbean translate water scarcity to water security?  The short-term mitigation strategies currently being employed include water rationing, the installation of temporary standpipes, and the digging of more bore holes. In Barbados the Minister of Agriculture announced there will be community storage tanks placed in communities across the island. Some businesses  and households across the region have temporarily cut back on unnecessary water use, while public service campaigns have been encouraging households to conserve water by eliminating the use of scarce drinking water for activities like washing cars or watering lawns.

    Longer term strategies will need to be dealt with both at the national and regional level to address water availability and quality. Past droughts have compelled many Caribbean countries to construct desalination plants. There may be the need to construct more desalination plants or increase the capacity of existing plants. One of the major water governance challenges for water service providers is dealing with aging water supply systems and reducing the high incidence of unaccounted for water. The Barbados Water Authority in Barbados has reported that it has embarked on several initiatives to tackle the current water crisis affecting several parts of the island, including the introduction of metering, investment in an extensive main laying and upgrading program to deal with aging infrastructure and reduce the incidence of unaccounted for water. More sustainable water management practices on both a micro and macro level should mean less leakage.

    Contamination of water supplies through pollution also has an impact on water availability and quality. Steeper fines should be put in place for dumping in watersheds and water sources. Better waste disposal practices should be encouraged to prevent contamination by sewage and waste water run off from households and businesses.

    Industries such as agriculture, the tourism sector and industry account for a large amount of the water consumed. Farmers should be educated about the use of environmentally sustainable farming practices. Once feasible, tax incentives or credits could be given to encourage the installation of water tanks and the use of rainwater harvesting and waste water recycling.Tourism, including hotels and cruise ships, places huge demands on water resources, much more than domestic consumption. Perhaps more incentives could be put in place for hotels to use more efficient water conservation and management technologies and techniques.

    Dealing with the water supply and demand gap is a development and natural security challenge. It is a regional problem which requires the collective minds of regional leaders and civil society, not just in CARICOM but the wider Caribbean. Many of the larger macro solutions aimed at adaptation and mitigation will be challenging for cash-strapped Caribbean states. Continued funding, technical assistance and capacity-building from state and non-state development partners will be key. There is also the increased need for regional standards on sustainable water management and the sharing of water management best practices.  For all our sakes, a water secure Caribbean is a goal we all need to prioritise.

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

  • EU Releases Blacklist: Another Battle Brewing for Caribbean Offshore Jurisdictions?

    Alicia Nicholls

    Small states of the Caribbean, which leverage their competitive advantage as low tax jurisdictions to attract international business, are no strangers to the “tax haven” smear. However, the European Commission’s release of a ‘naming and shaming’ list of 30 countries, including 14 Caribbean countries, which its member states view as uncooperative in tax matters (a polite term for “tax haven”), arguably came straight out of left field as we say in our local parlance.

    The list was published in tandem with the Commission’s “Action Plan for Fair and Efficient Corporate Taxation”, part of the EU’s crackdown on companies which seek to avoid paying taxes in the EU by diverting their profits to offshore jurisdictions. The catalyst for the European Commission’s crackdown was the Luxembourg Leaks “Luxleaks” scandal in which thousands of leaked documents revealed the millions of dollars major multinational companies were able to save in taxes through tax deals with the Government of the Duchy of Luxembourg. The Commission’s first response was a Tax Transparency Package, a series of transparency measures aiming to boost tax transparency, including a proposed requirement for member states to automatically exchange information about their tax rulings.

    In his speech “Corporate Taxation Action Plan”, Commissioner with responsibility for tax, Pierre Moscovini, noted the aim was “to push non-cooperative non-EU jurisdictions to be more cooperative and to adopt international standards, agreed at G20 level for example.” He further stated it was their hope “that all of these jurisdictions will soon adopt the agreed international standards, in particular the exchange of information, to fight against tax evasion. Some have already done so.”

    This action by the EU raises several questions, least of which is why have these states been targeted? Firstly, the majority of the states listed are small states, with small populations and equally small GDPs, which pose little to no threat to European countries’ tax receipts. Some small European jurisdictions like Guernsey, Monaco and Liechtenstein are included on the list. Curiously, however, larger states such as Luxembourg, the Netherlands and Ireland which are currently the subject of investigations are conspicuously absent.

    Secondly, the criteria used to single out these states as tax havens is sketchy. Each of the states on the list has been blacklisted by at least 10 of the 28 EU countries as tax havens.According to the EC’s website, the criteria for identifying these states include “compliance with transparency and exchange of information standard, absence of harmful tax measures and “other criterion”, whatever that “other criterion” means. This issue of criteria is an important one as several of the states listed currently have signed or are in the process of ratifying tax agreements with states on whose blacklists they appear. Barbados for instance has tax agreements with Italy, Spain, Slovakia and Portugal, while Cayman Islands has agreements with all but one of its accusers. What therefore are the criteria?

    This brings us to the big question, why now? In light of the revelation of Luxleaks and the European public’s demand for answers, it behooves the Commission to call for reforms of the community’s tax policy and go after those they believe to be responsible for billions of dollars in lost revenue to member states’ coffers. In such a case, by targeting Caribbean offshore jurisdictions, the EU is off mark. The biggest tax competitors for EU countries are within the EU itself. The right to tax has long been regarded as one of the hallmarks of national sovereignty and is a right states guard jealously. The EU does not as yet have a harmonised tax policy, meaning that member states still compete with each other through tax incentives to attract large companies. The Commission itself recognises this as it seeks to relaunch its proposal for a mandatory Common Consolidated Corporate Tax Base (CCCTB), which will create a common and singular set of rules by which companies calculate their taxable profits in the EU.

    Secondly, Caribbean offshore tax jurisdictions have little incentive to be uncooperative in tax matters.  In many countries the international business sector is a major source of corporate profits and foreign exchange, as well as employment. In Barbados it accounts for approximately 60% of corporate revenues. Most Caribbean countries, including Barbados, pride themselves not solely on their low tax rates, but their high levels of transparency, regulation and integrity as offshore domiciles while at the same time offering tax efficient vehicles and a business friendly environment. Moreover, the kinds of legitimate international businesses which Caribbean islands seek to attract often do not wish to be seen as carrying on business in tax havens. Reputation means everything.

    This challenge by the EU is just one in the long line of attempts by wealthy countries to crack down on offshore jurisdictions which they blame for taking tax revenues out of their reach. In the late 1990s to the mid-2000s Caribbean countries fought hard, and successfully so, to be taken off the OECD’s blacklists in its Harmful Tax Practices reports. Many states have gone to great pains to be in compliance, including signing Tax Information Exchange Agreements and enacting and updating Anti-money laundering legislation.  Barbados’ strategy has been to go beyond TIEAs and negotiate full double taxation agreements in order to maximise the developmental benefits. By constantly speaking of stamping out “tax avoidance”, there also seems to be a further intentional blurring of the line between tax avoidance, which is perfectly legal, and tax evasion, which is illegal.

    The EU’s blacklist has little merit. Several countries, including Barbados, have made clear their intentions to challenge their blacklisting status. Besides the questionable omissions already mentioned, most of the countries which have Caribbean offshore jurisdictions on their national blacklists do little if any business with the Caribbean. In contrast, the UK, with which most Caribbean countries have a treaty, has not named a single jurisdiction as uncooperative which speaks volumes. At least, the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes has distanced itself from the list, stating categorically “[a]s the OECD and the Global Forum we would like to confirm that the only agreeable assessment of countries as regards their cooperation is made by the Global Forum and that a number of countries identified in the EU exercise are either fully or largely compliant and have committed to AEOI, sometimes even as early adopters.”

    This is but a small consolation at least.  Yet the question cannot helped be asked, when will the attacks on Caribbean offshore jurisdictions end?

    Alicia Nicholls is a trade policy specialist and researcher.

  • A step towards progress between Haiti and the Dominican Republic?

    Alicia Nicholls

    The news this week of progress in the talks at Jimani between Haiti and the Dominican Republic to address, inter alia, the long-standing migration issue between the two countries is welcomed news. The fragile diplomatic relationship between the Dominican Republic and Haiti took a sharp turn for the worse in the latter part of last year following a controversial ruling by the DR’s Constitutional Court  on September 23.

    The DR’s Constitutional Court had been called on to consider an application made by Ms. Juliana Deguis Pierre that the Electoral Office be ordered to issue her with a national ID card which she had been denied on the basis that she was the child of Haitian parents and not Dominican. Ms. Pierre was born and raised in Los Jovillos, an area in Yamasa municipality (in Monte Plata province) where many persons of Haitian origin live. Denying her request, the Court ruled that Ms. Pierre was not a Dominican citizen but a child born of ‘foreigners in transit’. Using the case as an opportunity to elaborate on Dominican nationality law, the Court applied the restriction on the jus soli principle per Article 18 of the 2010 Constitution, holding that under Dominican law birth on Dominican soil did not automatically confer citizenship on an individual and that for a person born after 1929 to be deemed a citizen of the Dominican Republic, he or she must have been born to at least one parent with legal status in the country. All other persons who did not meet this criterion would be classified as being ‘extranjeros en transito” (foreigners in transit) and therefore as never having had Dominican citizenship.  A copy of the court’s judgment can be read here (in Spanish).

    The principle in Dominican immigration law of “foreigner in transit” is not new as it was included in the Constitution of 1929 and in subsequent constitutional reforms, including as recently as in Article 18.3 of the reformed constitution of January 26, 2010. However, prior to the 2010 Constitution, citizenship in the Dominican Republic was conferred on an absolute jus soli basis as evidenced by the language used in previous constitutions, which excluded any reference to the requirement of being born of Dominican parentage. The Court’s retroactive ruling which applies the jus sanguinis principle, established in Article 18 of the 2010 Constitution, to those born after 1929 (and not just to those born after 2010) leaves several generations of Dominicans of foreign descent in a legal limbo as to their status. The retroactive application by the Court of Article 18 to this case seems especially harsh given that the 2010 constitution itself does not indicate that it is meant  to apply retroactively, evidenced by Article 18.2. which states that “Dominicans [also] include those who enjoyed nationality before the entry into force of the Constitution”. A copy of the 2010 Constitution may be found here (in Spanish).

    While persons born to parents of other nationalities will be affected, it is persons of Haitian descent who make up the overwhelming majority of persons to whom this ruling would apply.  Some human rights groups estimate that as many as 200,000 persons of Haitian descent may be affected by the ruling. Haiti and the Dominican Republic, which share the Caribbean island of Hispaniola, have always had a tense and complicated relationship which has its roots in the colonial era and in subsequent historical events. These events include the 22-year Haitian occupation of the Dominican Republic in the immediate post-colonial period before the latter attained its independence, and the slaughter of thousands of Haitians by the Trujillo dictatorship in 1937. The socioeconomic disparities between the two states and their cultural, religious, linguistic and racial differences, a legacy of colonialism, have only helped to further deepen the gulf between these two sister nations. A constant source of tension between the two states has been undocumented Haitian migration to the Dominican Republic. Ever since the 1920s when Haitian workers were actively recruited to work in the Dominican Republic’s sugar industry, the Dominican Republic has been an attractive employment market for seasonal and long-term Haitian workers searching for a better life for themselves and their families. Many of those affected by the ruling include Haitians who had been brought in to work on Dominican farms during the 1920s and their descendants born and raised in the DR.

    Haitian emigration to the Dominican Republic has helped to foment anti-Haitian sentiment among some Dominicans, a sentiment which is also boosted because of the Dominican Republic’s own racially stratified society where darker skin is still synonymous with being poor and uneducated.

    The immigration policy of states is always a touchy subject because of the importance it has for national security. Indeed, it is no doubt that inherent in being a sovereign nation is the right of the state to protect its borders. Both customary international law and the Montevideo Convention of 1933 provide that no state has the right to intervene in the internal or external affairs of another. Further, international law gives states the right to dictate their own policies in regards to conferring nationality.

    However, these rights are not absolute as they are subject, inter alia, to the various international human rights treaties which States, like the DR, have acceded to, and by which they agree to respect human rights and to be held accountable for any violation thereof. The human rights implications of the constitutional court’s ruling cannot be overlooked on the basis that the ruling is solely in the province of the DR’s internal affairs. The ruling has been condemned by CARICOM states (of which Haiti is a member) and by various human rights groups as being ‘racist’ and ‘xenophobic’ in nature and with potentially devastating human rights consequences.

    Although Dominican authorities deny that the ruling leaves anyone stateless and argue that a plan for naturalisation of affected persons would be implemented, the Court’s retroactive application of Article 18 of the 2010 Constitution does have the effect of stripping those affected of citizenship, depriving them of the rights inherent with nationality, such as the right to vote, the ability to get married and the right of access to basic services such as education, employment and health care, and bringing with it the possibility of expulsion from the land of their birth. Like Juliana Deguis Pierre, many of those three generations of Haitians who are affected were born in, and have lived in the Dominican Republic all their lives, have little or no ties to Haiti and speak no Haitian creole.  In light of the ruling, CARICOM has agreed to indefinitely defer consideration of the Dominican Republic’s longstanding application to accede to CARICOM.

    Happily, it appears tentatively that some progress is being made to address this unfortunate state of affairs. Both countries have agreed to establish a Joint Commission to discuss not just issues relating to migration, but also matters of trade, the environment, security, among others. The Dominican Republic has stated that it will as shortly as February 27th bring legislation to address the situation of those born in the Dominican Republic but who currently have no documentation. It is hoped that such legislation will undo the human rights injustice which this ruling portends, affirming the right of those affected to Dominican nationality and being a needed step towards addressing and correcting  the discrimination which many native born Dominicans of Haitian  descent continue to face.

    Alicia Nicholls is a trade policy specialist and law graduate. She can be followed on Twitter at @Licylaw. 

  • Caribbean News Digest #1

    February 5th, 2014 

    News

    1.Public sector lay-offs in Barbados continue

    Public sector lay-offs in Barbados continue in an effort to trim the island’s public sector by 3,000.This is one of the measures which the Government announced  for reducing the island’s critical fiscal deficit. Two hundred workers from the Ministry of Transport & Works, the Soil Conservation Unit and the Environmental Health Department were given termination letters yesterday.

    2. Progress made between Dominican Republic and Haiti

    The Dominican Republic and Haiti have issued a joint statement at the end of talks yesterday indicating that progress had been made on contentious issues between the two countries. The DR has also promised to implement legislation to address its court’s constitutional ruling which many argue could have an adverse effect on Dominicans of Haitian descent.

    3. US President Obama hints at deal for undocumented Caribbean immigrants

    In his state of the union speech US President Obama has hinted that under his immigration reform plan, more than 10 million undocumented migrants, including those from the Caribbean, may be allowed to apply for temporary legal status and eventually citizenship. However, he cautioned that it would still be a long process.

    4.The 10th Caribbean Customs Law Enforcement Council (CCLEC) Junior Officer Basic Training Course begins

    The Caribbean Customs Law Enforcement Council (CCLEC) has begun its 10th Junior Officer Basic Training Course in St. Kitts & Nevis. The aim of the course is to improve the competency of the region’s junior officers in all areas of customs operations.

    5. Canada introduces easier visa application process for Caribbean nationals

    Canada has opened a new visa application centre in Trinidad & Tobago to facilitate the process of applying for a Canadian visa for Caribbean nationals.

    6. Grenada to join Alba

    Grenada has announced its intentions to join hemispheric organisation ALBA – The Bolivarian Alliance for the Peoples of the Americas. St Kitts & Nevis had earlier also signaled its intention to join ALBA.

    7. Jamaica dominates skills certificate application

    Jamaicans represent the majority of persons who apply for CARICOM skills certificates.

    8. Upcoming CARICOM Heads of Government Conference to focus on private sector involvement

    The upcoming 25th Inter-sessional Meeting of the CARICOM Heads of Government Conference is to focus on the lack of private sector involvement in dialogue on trade matters.

    9. Dominica gets British approval to adopt the CCJ as its final court of appeal

    Dominica has been given approval by Britain to adopt the Caribbean Court of Justice as its final court of appeal.

    Views

    Caricom-Canada Talks shrouded in Doubt – Sir Ronald Sanders

    Mockery of CARICOM’s DR stand? – Ricky Singh

    The “new” debt crisis, and why austerity won’t work – Daryl Dujon

    For more Caribbean News Digests, click here.