Belizeans across the length and breadth of the country spoke loudly about privatization in 2008, and the statement they made was that they didn’t like it. The PUP government of 1998 to 2003 had privatized everything it could get its hands on, with the country’s telecommunications (BTL), electricity generation and distribution (BEL), water collection and distribution (BWSL), and main port (PBL), being among the prime assets that were sold. By 2008, after a second PUP government, the people had seen enough of privatization, and they voted the party out of office, massively. The PUP, which had been swept into office in 1998 with an overwhelming 26-3 victory, was ejected from government in 2008, 25-6.
Privatization was disastrous. For Belize it was the definition of neocolonialism. Rich foreign investors gobbled up the national assets; government coffers got an injection of cash, some to invest, some for government ministers to play with. The BWSL privatization ended up with the company being bought back by the 2003-08 PUP government; and over its three terms in office, from 2008 to 2020, UDP governments were able to buy back BTL, at tremendous cost, and, along with the Social Security Board, acquire majority shares in BEL. By 2020 only PBL remained in private control. The government (PUP) had sold the company to a local businessman, and it had ended up in a receivership controlled by foreign parties.
Since being sold by government, PBL has largely been neglected. A couple years ago, the receiver, Waterloo Investment Holdings Ltd., announced a bold proposal, a $400 million investment that would include improvement of the critical bulk storage facilities at PBL, on condition that it got approval for a cruise ship terminal at the port. But there were serious environmental and social issues associated with Waterloo’s project. The proposal involved the dumping of 7.5 million cubic meters of dredged material between Turneffe Atoll and English Cay, and it was rejected by the National Environmental Appraisal Committee (NEAC).
Last week a second proposal submitted by Waterloo, this one with plans to dump the massive quantity of dredged spoils onshore and near to the shore, also failed to meet the standards of the NEAC. The rejection was unanimous. The business organization, BCCI, later informed the public that it wasn’t present when the body met, and if it had it would have voted in support. The NEAC membership is comprised of a number of interest groups, with representation from government ministries, environmental NGOs, and the BCCI. For the BCCI, it is critical that the facilities at PBL be improved, so, maybe understandably, they were prepared to overlook some serious concerns that other members of the body aren’t prepared to cut corners on.
All are in agreement that with its many possibilities for the Belizean people at large, and for its workers, the Port needs to be improved, that its structure and machinery cannot be left to crumble/rust away. We, the children of slaves, refugees, and the original owners of this land, have suffered while development of the Port has been stymied under the receivership. So, the question now is, whereto for PBL? Will it be more neglect from Waterloo, will it be partnership with the workers at the Port on a more realistic project, or will it be nationalization?
The talk of nationalizing PBL has been floated before. In a July 30, 2020 letter, Lord Ashcroft, the chairman of Waterloo, wrote to then Prime Minister, Dean Barrow, after a GoB press conference at which the possible nationalization of PBL was said to have been broached. In the letter, which is reproduced by The Reporter on its social media page, the Waterloo chairman reminded the Barrow government about the steep cost of nationalizing private companies.
In the unpleasant reminder, Lord Ashcroft stated that the compensation for BTL was “in excess of BZ $580 million; as well as legal costs associated with more than 9 years of international litigation.” Lord Ashcroft mentioned the ongoing litigation over the International Merchant Marine Registry of Belize (IMMARBE) and the International Business Companies Registry (IBCR), companies which we have since paid his group over US$38.5 million for; and he also mentioned the Universal Health Services debt which had ballooned from BZ$20 million to BZ$90 million after 13 years of international litigation.
The Barrow government was informed that if it chose not to be prudent, if it insisted on the path of nationalization, Waterloo would be happy to sit down with the government and address the matter “in a fair and equitable manner, and with the country’s best interests at heart.” Ashcroft stated that the claim, which his group estimated to be in excess of US$85 million, could be settled simply, by the parties agreeing to arbitration under the UK-Belize Bilateral Investment Treaty.
It is no secret how a PUP government allowed Lord Ashcroft to take control of BTL. In the original Articles of Association set out by the UDP government of 1984-89 when it privatized telecommunications and created BTL, the government owned the controlling shares, and no individual or group was allowed to own more than 25% of the company. Just before leaving office in 1993, however, the PUP government of 1989-1993 declared, in a letter, that Lord Ashcroft was a “permitted person”, and when the party returned to office, 1998-2003, it allowed Ashcroft’s group, Carlisle Holdings Ltd., to acquire 52% of the shares in the company.
In respect to the ownership of PBL, Belizeans are clamoring for reason to prevail. How the company fell into the control of Waterloo has not yet been fully explained. We only know what happened on the surface. The local investor who was “gifted” with PBL fell into debt with a foreign-owned local bank, and from there the company went into this receivership, under whose management it has been since 2012.
There is a place for foreign investment in Belize, but it must be in step with the goals of the Belizean people. Lord Ashcroft was a minority shareholder in BTL, and there he should have remained. If foreign investors don’t like the progressive rules in this former colony, such as the Esquivel decision that BTL control remain in Belizeans’ hands, there are other countries where they should take their money to invest. Independence doesn’t mean we stopped being “hewers of wood”, but that we also own or have major shares in the mill. It is of little profit to Belizeans if they have no shares in the engines of production.
Lord Ashcroft is a businessman, a very successful one, but his ego might be too big for Belize. It didn’t help Waterloo any that under its management PBL has treated its workers, particularly the stevedores, poorly. As previous governments ensured that small farmers in the sugar industry were protected, that the small farmers in the citrus industry got a stake when foreign ownership of the factories was dissolved, that the workers at BSI got a share in the company, it should have followed that the workers at PBL were included when the company was privatized. A good road for the receivership might be to come to the table with the workers, with respect.