The snickering from the lawyers’ benches in the Anguilla House of Assembly on the afternoon of Wednesday 20 February 2019 was audible the length and breadth of the island. The Assembly was debating and passing into law the Business Licence Moratorium Act 2019. The Hon Pam Webster, the sole member of the Opposition in the House of Assembly, was absent. She was in the British Virgin Islands serving as the Head of the Election Observer Mission for the 25 February general elections. She was not able to make her contribution. So, the Bill passed without real discussion or dissent.
A little background may be useful. The Trades, Businesses, Occupations and Professions Licensing Act is the principal Act to which the moratorium applies. Section 7 creates an obligation for persons carrying on any trade, business, occupation or profession in Anguilla to pay a fee to government and obtain an annual Licence. Every rum shop, lawyers’ chambers, engineering firm, or grocery should annually pay a Licence fee into the Treasury.
This Act is not unique to Anguilla. It is found around the Leeward Islands. It was introduced in about the 1970s to ensure that every business was placed on some sort of record, and was obliged to pay a tax or fee. As there is usually in the islands no income tax law that applies to individuals, government would otherwise be unaware of what little businesses are being carried on in the island.
The Licence fee is payable for every place of business. I well remember Clement Daniels’ consternation in the early 1980s when I advised him that he had to pay for a separate Licence for each of his two Galaxy Supermarket outlets, the one in Wallblake and the other in South Valley, barely a half mile apart. Still, they were two separate places of business.
There is case law on the Trades, Businesses, Occupations and Professions Licensing Act. In or about 1995, the Antigua version of the Act said that when a person applied for his or her business to be licensed, the Minister “may” issue a Licence. In other words, the grant of a Licence was not automatic. The Antigua Act appeared to give the Minister a discretion whether to issue a Licence to persons who paid for their annual Licence.
The Antigua and Barbuda Bar Association, the medical profession and others brought legal proceedings to challenge the law. They objected, among other matters, to the discretion being given to the Minister to determine who could be licensed as a lawyer or a doctor. Ann Goodwin (now Ann Henry QC) was at the time the President of the Antigua and Barbuda Bar Association. The case was brought in her name among others.
They won in the High Court and in the Court of Appeal. These courts both ruled that the Act was unconstitutional. In its judgment in the case of A-G v Goodwin and others (Antigua CA 10/1997, unreported) the Court of Appeal upheld the judgment of Justice Redhead in the High Court. Once the applicant satisfies the requirements of the Act and pays the fee, there is no discretion to refuse. The Licence must be automatically issued. There is under the Act no power for the minister to regulate who can carry on business. The Minister has no discretion to refuse to grant a Licence.
The Business Licence Moratorium Act 2019 (assuming the Governor assents to it) recites that,
WHEREAS it is in the public interest that a temporary moratorium prohibiting the granting of licences under section 7 of the Act is adopted so that the Government of Anguilla may review the business licence regime in order to regulate the grant of such licences in relation to clearly defined categories of enterprise and business activities having regard to the emerging needs of the economy of Anguilla and to protect and safeguard certain Anguilla businesses; . . .
Essentially, section 2(1) imposes a moratorium for a year on the grant of all Business Licences. That is bad enough, but what is more worrying, the Bill provides for exceptions to be made. Section 2(2) provides:
Notwithstanding subsection (1), the Permanent Secretary shall have the power, after consultation with the Minister of Finance, to grant or refuse a licence during the period of the moratorium to any person having regard to all relevant considerations and the overarching policy of the Government in respect of the animating purpose of the moratorium and review of the legislative regime for the grant of such licences.
This sub-section provides an exception for the Permanent Secretary, after consultation with the Minister, to grant a Licence during the moratorium. It is a general principle of common sense that any law which allows a politician to make an exception to a regulatory law is an invitation to wrongdoing.
Persons will assume that either the loophole will be taken advantage of through corrupt means, or, the real reason for introducing the loophole was to invite corrupt offers. It was not that long ago that a previous minister in Anguilla was charged by the police with assault for demanding sexual favours in return for exercising his power to instruct the issue of work permits to foreigners where such permits had previously been refused by the relevant government official.
One reason for the Bill may be to get around the Ann Goodwin case. It gives a discretion to the PS (who, of course, often does what his Minister tells him to do) to make an exception to the moratorium and to give a suitable applicant the necessary Licence to start up a new business. That is, this Act creates a power for a politician, the Minister, for the first time, to be able to decide which Anguillian entrepreneur can start up a business and which ones will be blocked by pointing at the Act and saying, “I’m sorry.” This must be a very worrying development.
A suspicious person may see other reasons for a government introducing such a measure. The first reason could be to invite an offer for high government officials to be paid off for the making of an exception. The second could be that Executive Council wishes to devise a way to stop certain types of businesses from opening up in Anguilla, or to stop certain types of persons from doing business in Anguilla.
The first theory above is doubtful. No one could seriously suggest such a thing. The second is more likely since there is a huge ground-swell against foreign-owned businesses that have been allowed into Anguilla over the past 40 years. It seems that every month a new foreign-owned mega-store is being constructed. These foreign businesses have been beating local businesses into the dirt through their access to much cheaper foreign government and foreign private investment capital. Their running costs are further reduced by importing dozens of impoverished fellow-countrymen who are willing to work for several years stocking shelves for little remuneration besides board and lodging. Few if any locals are employed. This allows foreign-owned shops to be much more competitive than local Anguillian ones.
It may not be long before ABC Supplies, Ace Hardware, Albert’s Marketplace, Anguilla Trading, Apex, Ashley & Sons, Benny’s, Best Buy, Lake’s Do It Best, JW Proctor’s and Romcan (our prominent local groceries and dry goods stores) are forced to close their doors. Indeed, if I heard a comment on radio correctly, the principal reason for the new law is to restrict the number of foreign-owned business opening up in competition with Anguillian businesses.
Of course, the whole exercise may just be for show, designed as smoke and mirrors for the upcoming general elections, or to appease supporters. There must be some political pressure on government as a result of the recent failure of a locally owned business, Tropical Distributors, to challenge in court the issue by government to a foreign-owned business of a business licence, resulting in losses by the local business to its foreign competitor, International Wines and Spirits. The Court of Appeal in an oral judgment in January 2019 dismissed the appeal from the High Court, promising to deliver written reasons at a later date. At the time of writing, these had not yet been seen. In this scenario, the main reason for the Bill would be to allow government to demonstrate they are taking action to stop this situation from arising again.
Over the past decades, foreigners who apply for business licences in Anguilla soon learn that once they are prepared to give away a 10 or 20% interest in the business to a politically favoured individual (officially referred to by government officials as “partnering”), the process for receiving the licence is smoothened. Interestingly, no land development planning regulations seem to apply to these partnership enterprises any longer. While the Planning Department obliges all locally owned businesses to provide customer parking seemingly the area of a football field, few foreign-owned businesses are made to provide parking for more than three or four vehicles. This anomaly raises suspicion and distrust among the public.
In light of these two factors, one must question whether Government officials could have any interest in genuinely stopping or restricting foreign-owned businesses from out-competing local businesses. Government officials could have no interest in limiting foreign-owned businesses, only in encouraging them. In this scenario, this law could not be intended to restrict foreign-owned businesses.
Next week we continue with “Part 2 – The Law”.
