By NEIL HARTNELL
TRIBUNE Business Editor
nhartnell@tribunemedia.net
THE GRAND Bahama Chamber of Commerce’s president yesterday asserted that losing Freeport’s free trade zone model is “not an option” while pledging that businesses will “fight against losing their rights” under proposed governance reforms.
Ralph Hepburn, telling Tribune Business that the Chamber and its members, many of whom are also Grand Bahama Port Authority (GBPA) licensees, are still studying the Government’s ‘Green Paper’ for the island, said the original free trade zone concept - underpinned by Freeport’s founding treaty - is “not something we want to lose or do away with”.
Uncertainty now surrounds the 230 square mile Port area’s free trade model, established by the Hawksbill Creek Agreement’s passage some 71 years ago, amid the Davis administration’s push to redress what it describes as the development “imbalance” between the city and Grand Bahama’s East and West End.
The proposed Grand Bahama Development Act, detailed in the ‘Green Paper’, would in its present form be designed to extend Freeport’s tax breaks, incentives and other concessions to other areas of Grand Bahama with the Government stating that its “primary objective is to establish transparent and equal governance and regulation across Grand Bahama and surrounding cays”.
Mr Hepburn, telling this newspaper that the free trade zone model was key to attracting multiple foreign companies to do business in Freeport and drive the city’s growth, and remains so to this day, also affirmed that GBPA licensees will not give up the rights, concessions and other benefits they presently enjoy under the Hawksbill Creek Agreement.
These will have to be transitioned, or grandfathered over, into any new investment and regulatory regime governing Freeport and wider Grand Bahama, and the GB Chamber chief also warned against imposing “any additional burdens” on the island’s businesses as part of the Government’s reform ambitions.
The ‘Green Paper’ does not explicitly mention retaining Freeport’s primary business model, but Mr Hepburn told Tribune Business: “When we look at the founding and creation of Freeport, the city of Freeport, it was created based on the free trade zone model. We had a lot of foreign entities come to Grand Bahama to do business here because of the free trade zone.
“We don’t see that as something we want to lose or do away with. That’s not an option. We want to see that whatever’s done can be implemented under a means and method, and it’s used properly and not abused, and it gives us an advantage to promote Grand Bahama as an island of choice for anyone in the industrial sector, the maritime sector, even the tourism sector so they can use Grand Bahama as a genre for whatever their business is.”
Mr Hepburn said the GB Chamber and private sector would have to look at how the Government’s proposed Freeport and Grand Bahama governance reforms, which have been put out for public consultation starting on November 1, will impact the free trade zone model. He added that its benefits could even be expanded outside the Port’s bonded area to benefit the island as a whole.
The GB Chamber chief was backed by his immediate past predecessor in the role, Dillon Knowles, who said: “Every developing country who has surpassed us in the last 70 years has done so by creating a free trade zone. We are the only ones who seem to want to disrupt our free trade zone.”
Mr Hepburn, meanwhile, said Chamber members who are also GBPA licensees would not want their existing rights, benefits and investment incentives to be lost, diluted and diminished by any change. He added that the Hawksbill Creek Agreement stipulates that any change to Freeport’s founding treaty can only be made with the consent of 80 percent of licensees.
“It is very important, and a lot of businesses in Grand Bahama are in the Freeport area because of the rights, benefits and agreements they have in their contracts, their business plans, as it pertains to the Hawksbill Creek Agreement,” Mr Hepburn said.
“A lot of them would not be in Grand Bahama if those agreements, rights and benefits were not in place. We don’t see those as an avenue to lose. There’s a need to protect that so it doesn’t become a deterrent to growing business. Based on that, the way I read it [Mr Davis’s speech] is that’s not something on the table immediately.
“It will be under deep consideration and a lot of discussion before we get to that. Businesses in Freeport will fight against losing existing benefits that they have and taking on any additional burdens they see as not beneficial to operation of our businesses.”
Mr Hepburn added that, while pleased the Prime Minister addressed questions it had raised over progress on the Grand Lucayan, Grand Bahama International Airport and hospital developments, the GB Chamber plans to “hold the Government to those dates and the information given”.
Mr Davis said the international airport terminal is targeted for completion in early 2029, with construction set to start before April 2027, while demolition work is underway at the Grand Lucayan property under Concord Wilshire and its partner, Mediterranean Shipping Company’s (MSC) cruise arm.
However, Mr Hepburn promised that the GB Chamber is focused on making sure it understands the Government’s proposed governance reforms so that it can “contribute very constructively, very deliberately, and very intently on how this moves forward and manage and monitor it properly so nothing falls through the cracks”.
“We’re still looking at it, reviewing it and seeing what the Chamber can offer as a contribution to the way forward for Grand Bahama as a whole,” he told Tribune Business.
“It’s not an indication that the Chamber is in support of it. We want to look at it, review it in detail, hear from the licensees and members of the Chamber, to provide constructive and articulate feedback to move Grand Bahama forward. We are prepared to work with all parties and partners for the betterment of Grand Bahama.
“We’re carefully going through it to make sure we have a good understanding. We want to make sure we have a proper understanding, look at all the concepts and all the industries for how Grand Bahama can truly be the GRAND Bahama we ought to be.”
Mr Hepburn added that the planned public consultation also aligns with the GB Chamber’s call for “more meaningful engagement and constructive engagement”, and said: “We want to make sure we are on the right footing and moving in the right direction. We have to look at both sides of the coin to make sure we are on the right path and heading down the right road.
“We see what’s done in Grand Bahama as not only beneficial to people in Grand Bahama, but the island’s contribution to the entire economy, and we need to make sure we contribute to the development of the entire Bahamas.”