Compiled by Sandra CA Ferguson
Points to Ponder
This series seeks to create awareness among we the people of the award of the International Centre for the Settlement of Investment Disputes (ICISD) in favour of the Claimants, Grenada Private Power and WRB Enterprises Inc. – which own the controlling interests in Grenlec – in their dispute with the Government of Grenada over the change in the regulatory and legislative environment triggered by the 2016 Electricity Supply Act and the 2016 Public Utilities Regulatory Commission Act.
The Acts were passed in May 2016 and came into force on 1 August 2016.
- Part 1 presented a summary re the claim by GPP/WRB, the Claimants in this dispute; the counterclaim of the Respondent, the Government of Grenada and the Tribunal’s award.
- Part 2 highlighted some of the arguments put forward by the Government in support of its counterclaim and the Tribunal’s observations and conclusions re the Government’s arguments.
- Part 3 highlighted the issue of wilful malfeasance on the part of Grenlec – the justification put forward by the Respondent/Government for its intervention, via 2016 legislation, to put an end to Grenlec’s monopoly licence.
- Part 4 presented the timelines in respect of Grenlec and the electricity sector over the period 1960 when Grenlec was established by the Colonial Development Corporation, to March 2020 when Arbitration Award was issued.
- Part 5 will conclude the series by offering some points to ponder based on the information obtained from the Award document and other sources.
Continued from Part 5.1.:
3. Discriminatory Application wrt Rules and Procedures re State-Owned Entities:
The NNP administration has spared no expense in investigating the privatisation of Grenlec and putting forward “wilful malfeasance” arguments in rejection of WRB’s claim for Second Schedule compensation. Are the rules, procedures and performance measures applied to/demanded of Grenlec/ WRB being applied to other investors wooed by the NNP administration?
Following the lead of the NNP in respect of Grenlec, we the people need to remind the Rt. Hon. Prime Minister/Minister of Finance and Hon. Gregory Bowen that we the people are still awaiting information and answers in respect of the following:
- Gravel and Concrete/Grenada Postal Corporation: The Government of Grenada has been mum on actions in respect of Gravel and Concrete and the Grenada Postal Corporation, two of the state-owned enterprises targeted for privatisation under the Structural Adjustment Programme, 2014-2017.
- Grenada Postal Corporation: We note that the Grenada Postal Corporation and Grenada’s Ambassador to the Russian Federation – Ukrainian-born American, HE Oleg Firer – seem to have some “connection”.
- Gravel and Concrete: Is it true that a Trinidadian outfit is running the quarry at Telescope and shipping gravel to Trinidad while Grenada is importing blocks from this outfit in Trinidad while all the small block making operations in Grenada have folded?
- Digicel–GoG Public Private Partnership: Government entered into a public-private partnership with an almost BANKRUPT Digicel in September 2018 under the CARCIP. In Grenada, this appears to be a well-guarded secret. We the people are not aware of any requests for expression of interests that were publicised locally or elsewhere. What were the criteria which determined that Digicel was chosen to be the partner of the Government of Grenada? What are the details? What role did ECTEL and the NTRC play in this choice of partner?
- Enquiries into MNIB and Grenada Sustainable Aquaculture Project: Back in late 2018 early 2019, the Rt. Hon. Prime Minister/Minister of Finance made grand announcements about “sparing no efforts” re enquiries into alleged improprieties in the operations of the Marketing and National Importing Board and the whereabouts of the monies collected on behalf of the failed CBI-Grenada Sustainable Aquaculture. We have heard nothing since!
The Second Schedule Compensation forms part of the Exit Strategy of both WRB and the GoG in the 1994 Share Purchase Agreement. At the Tribunal hearing, the GoG acknowledged that many of the Repurchase Events of the 1994 Share Purchase Agreement “closely mimic either the substantive obligations typically imposed on host states by bilateral investment treaties, or the express stabilisation obligations featured in numerous investment arbitration cases.”
In defence of its rejection of the Second Schedule Compensation, the Government argued that:
- Lawful and Executive Actions: The 1994 SPA imposed “exorbitant” costs as the “price” for the exercise of Government’s otherwise “lawful executive and legislative actions”.
- Unconstitutional Constraints and Principle of Executive Necessity: The SPA deters Government action in the public interest, therefore it imposes unconstitutional constraints on the Government’s freedom of action contrary to “the principle of executive necessity”.
- Purpose of Contract: The Tribunal rejected the argument noting the following: “the whole point of a contract is to “hamper” the parties from engaging in conduct contrary to its terms”. It further noted that the SPA 1994 was “properly construed is constitutionally compliant.”
4.1 Executive Abuse:
- Has the Government REALLY acted in the public interest when the consequences of its action is an “exorbitant” US$65 million debt – costs to be borne by we the people – in addition to its own substantial legal fees of US$6 million.
- Is seeking to wrest control from WRB and putting Grenlec into the hands of “4 Chinese investors” and “local boys” in the best interests of we the people?
4.1.1 Acquisitions of Private Property for Private Purpose:
We the people are aware of the NNP’s abuse of executive authority in respect of the acquisition of private property of we the people. We natives, lacking the deep pockets of foreign investors and the protection of investment treaties, have noted the Government’s acquisition of local private property for “private purposes” WITHOUT payment of compensation to date – both actions contrary to the Constitution and law.
- Levera: Most notable is the acquisition of property from adjoining small landowners to facilitate the Levera Development back in 1998. Some 24 years later, we the people of Grenada are liable for the debt of US$11 million guaranteed by the GoG for the property in addition to approximately 240 acres of property – OUR RESOURCES – “given” to the project by the GoG with NOTHING to show for it. Contrary to law, it has appropriated private property for “private purpose” WITHOUT paying any compensation as required under the Constitution. That property is now passed to the hands of Chinese developers and is a citizenship by investment project.
- Camerhogne Park: In 2016, there seems to have been an attempt to pass public property into the hands of private investor. We the people took action and to date that has been staved off.
4.1.2 Draft PURC Regulation, Transfer of Shares of Grenlec to the Government:
- The PURC Regulation – Draft Grenlec Network Licence, August 2019 – provides that at the expiration of the term of Grenlec’s licence ( or a period of 25 years), “the property of all shares of Grenlec held by private persons shall be irrevocably transferred to the Government of GRENADA free of charge and WITHOUT payment for such transfer”. (my emphasis).
- This is another proposed act of acquiring private property for private purposes, apparent intended to acquire the shares of private individuals, most of them locals at home and abroad, WITHOUT PAYMENT, to transfer to the Minister’s selected Chinese investors and local boys? It is CONTRARY to the Constitution and law of Grenada and DISCRIMINATES against we the people in OUR country!!
5. Public Interests or Settling Personal Scores:
There appears to be an unnecessary antagonism in the manner in which the Government of Grenada led by the Minister of Utilities, Hon. Gregory Bowen – the former of Manager of Grenlec whose services were terminated on privatisation – is treating with Grenlec. All reputable utility companies appreciate the existential challenge of climate change, particularly for small island developing states such as the Caribbean, and the need for change. Therefore, this provides the basis for negotiation and re-negotiation. Grenlec has already expressed and demonstrated such a commitment to electricity reform. Is the NNP administration, and Minister Bowen in particular, seeking to “settle a personal score” at the EXPENSE of the Grenadian taxpayers?
6. Lessons for We the People:
- Motive of Foreign Investors: Investors do not come to Grenada because they like us. Their motive is profit.
- Grenada Has Something to Offer: Notwithstanding our small size and other disadvantages and unequal power in the face of powerful multi-nationals and deep-pocketed foreign investors, Grenada has something to offer. That is why the investors come, motivated by the possibility of returns.
- Technical and Legal Advice: Therefore, it is the obligation of those charged with “minding the people’s business” to NEGOTIATE in our best interests, guided by SOUND legal and technical advice. We also need to dot our ‘i’s and cross our ‘t’s.
- Recourse to Legal Action: It is about law and the contract, not about policy positions. The Tribunal noted that its task was to determine whether the complex contractual arrangements between the Parties had been complied with and, if not, what remedy should be awarded.
- Continuum of Government: Government is a continuum. While public policy viewpoints may differ, contracts and obligations undertaken do not change simply because a government has changed. The Tribunal ruled, “…that a court or tribunal has no authority to set aside the bargain because the purchaser now claims he agreed to pay an “extravagantly disproportionate” price.”
- Inclusion and Consensus Building in Policy Making: Therefore, there is the importance of inclusion and consensus-building in respect of policy. Policy should not be about the administration. It should reflect consensus from all stakeholders, including we the people and political parties in opposition.
- Performance Standards: In order to advance policy objectives, the Government must ensure that clear performance standards are inserted in contracts with investors. e.g. what percentage of energy is regenerated by renewable source and in what time frame.
- Responsibility of We the People: We the people have learnt the hard way that we CANNOT simply leave matters to those whom we have elected to be the stewards of our affairs. We need to seek information, DEMAND answers from our representatives and hold them TO ACCOUNT. This is a monumental task as we have let the NNP administration from 1995 pauperise the country and Papa has established himself as Grand Provider, source of all fish, even as the people are being excluded from their “fishing grounds” which are being destroyed or given over to the control of foreign interests. But be aware, it is OUR FISHING GROUNDS!! We need to ASSERT our ownership rights!! We OWE it to the ancestors who came before and the generations who will come after!!
7. In Hindsight, the 1994 Share Purchase Agreement:
The Piper Commission of Enquiry set up by the 1995 NNP administration to investigate the sale of Grenlec described the provisions of the agreement as “thought provoking” – an arrangement into which the NDC administration entered with “eyes wide open”, advised by a battery of competent experts. The Commission identified some provisions that it considered “not in the best interests of Grenada. It was a DELIBERATE decision. By not proclaiming the 1994 ESA, the NDC administration, led by Prime Minister Nicholas Brathwaite, left open the possibility of challenge by the incoming administration, following the June 1995 elections. The incoming NNP administration unsuccessfully challenged the constitutionality of the 1994 ESA.
Given the track record of the NNP administration and of Minister Gregory Bowen in particular – BOTCHED PROJECTS, SECRET DEALS AND MONUMENTAL DEBT – with the vision of “hindsight”, perhaps we the people can envision what Grenada’s electricity sector might have looked like without the protection of the 1994 Share Purchase Agreement. This is not to say that the 1994 Share Purchase Agreement does not need modifications. But there must be a better and less expensive way than a US$65 million-plus bill and the exchange of WRB Enterprises for Chinese investors and local boys, selected by Minister Gregory Bowen.
 Caribbean Regional Communication Infrastructural Project
 Eastern Caribbean Telecommunications Regulatory Authority
 National Telecommunications Regulatory Commission
 ICISD Tribunal Award, para.230, pg. 85
 ICISD Tribunal Award, para.220, pg. 81
 The law provides for acquisition of private property for “public purpose” and the Constitution provides for prompt payment at market value.
 Draft PURC Regulation – Draft Grenlec Network Licence, August 2019, Part Q,
 ICISD Tribunal Award, para. 258. Pg. 99