Charles: Sandals MOU open for discussion

Chief Secretary Kelvin Charles says Tobago will derive optimum benefits from the proposed Sandals project in Buccoo, and that Government would comply with the laws of land.

In a media statement issued about the role of the Tobago House of Assembly (THA) in negotiations for construction of a proposed Sandals resort in Buccoo, Charles, said:

“Whilst the Sandals Resort project has the potential to significantly transform the social and economic landscape of Tobago, it is important that the population rest assured that the Government of TT intends to comply with the laws of the land and in this regard, it will ensure that due process takes place.

“I also want to assure the people of Tobago that the Tobago House of Assembly continues to respect and abide by the Environment Management Authority and its processes. As an administration, we remain committed to ensure that Tobago derives optimum benefits from this project.”

Charles said he was compelled to make a statement following last Thursday’s public meeting on the Memorandum of Understanding (MOU) between Government and Sandals Resorts International (SRI) i at the Scarborough Library, and which led by chartered surveyor and activist, Afra Raymond.

“While I appreciate the speakers’ interest in the project as citizens of TT and their desire to see that this country gets a fair and reasonable return from the Sandals project, I wish to remind the public that the MOU that was being discussed on Thursday is not a legally-binding document and leaves room for further discussions and negotiations before a final legally-binding agreement is reached.

“Every single item listed in the MOU will be open for discussion when the Government’s negotiating team meets with the Sandals team,” he said.

He noted that at last Thursday’s discourse reference was made to Clause B1 of the MoU which states that, “the Government acknowledges that Sandals intends to establish subsidiaries, affiliates and associate companies to hold the Management Agreement, operate the resorts and otherwise operate its role.”

He also noted statements that the MoU creates opportunities to allow transfer pricing to take place by using euphemisms that allow for tax avoidance mechanisms, responding that he was confident that

Government tax experts and legal advisors on Government’s negotiating team would ensure that safeguards were put in place to deal with this.

Charles also responded to comments on the likelihood of return on the investment by Government, which Raymond estimated at $3 billon, and which he said was unlikely to be recouped.

“With regard to the issue of “return on investment.” the speakers seemed to focus only on the direct cost of constructing and outfitting the resorts including the soft and grand openings of the facilities. However, no regard seemed to have been placed on the significant indirect benefits that will accrue to the people of Tobago by way of increased economic activity on the island, as a consequence of Sandal’s massive promotional machinery that will attract vastly increased visitor arrivals, and to the people of Trinidad and Tobago who will benefit from greater inflows of foreign exchange to the country,” he said.

He also responded to comments made on equity in tax concessions for the accommodation sector, that same concessions being granted to Sandals be given to local hoteliers.

“Since earlier this year, Government is on record to say that as far as it was reasonable and possible, it proposed to treat new and existing hotels equitably. In other words, the Sandals/Beaches resorts which will be owned by the Government and by extension, the people of Trinidad and Tobago, will receive tax benefits no more favourable than those enjoyed by other deserving properties in the country.”

Charles also responded to concerns about employment for TT nationals at the Tobago resort and a suggestion that quotas should be negotiated to ensure that employment at various levels.

“Initially this may not seem practicable, given the size of the resorts and the very limited numbers of trained hospitality employees currently available on the island.

“It should be noted that in 2004/2005, with hotel occupancy levels at a record high on the island, some hotels in Tobago hired several Filipino staff to augment local employees to run their properties.

“However, I confidently expect that this matter will be competently dealt with around the negotiating table and that eventually, the interests of nationals of Trinidad and Tobago will be adequately protected. In the meantime, I wish to urge Tobagonians, particularly our young people, to avail themselves of the training opportunities that are being provided by the Tobago Hospitality Institute established by the Tobago House of Assembly and accredited by the University of the West Indies, to train our citizens to become qualified in the Tourism and Hospitality Industry.

Charles also looked at local content requirements for Sandals, such as produce, contending that the agricultural sector has already begun to prepare to take up the challenge to provide food for the resorts. “Our farmers are now thinking big,” he said, noting a 50,000 chicken hatching facility in operation to provide eggs and meat, a micro-credit facility at the ADB for small farmers, which is also offering loans to fishermen, and that 70 young Tobago farmers have joined the YAPA programme to increase food production on the island.

“A coconut revitalization programme has been established to provide adequate supplies of fresh coconut water. The farming and fishing sectors are energised now that Sandals is committed to utilise all local produce required by the resorts that are consistent in volume and quality,” he said.

Charles also addressed “possible negative environmental impacts that are being suggested to affect the construction of the resorts at Golden Grove and Buccoo estates, especially the area associated with the 18-hole golf course.

“ It should be noted that there are well established international standards and protocols that guide mitigation measures against harmful effects of golf courses on the environment. It is noteworthy that in 2006, Angostura was granted permission by the Environment Management Authority (EMA) to construct an 18-hole golf course in the same general area as is being proposed by Sandals International today,” he said.