Final Revision: June 24, 2003
HB/cb
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CARICOM SINGLE MARKET AND ECONOMY
ASSESSMENT OF THE REGION'S SUPPORT NEEDS
Prepared for the Caribbean Community Secretariat
ABBREVIATIONS AND ACRONYMS
ACP
ACS
ADR
ASYCUDA
BEST
BHTA
BIDC
CA
CABA
CAHFSA
CAMID
CAP
CARDI
CARICAD
CARICOM
CARIFORUM
CARIFTA
CARIRI
CARISEC
CASE
CBO
CCJ
CCMS
ccs
CDB
CDERA
CDM
CEDC
CEHI
CET
CFRAM
CFTC
CHA
CIDA
CLA
CLIC
COFAP
COHSOD
CORE
COSTATT
COTED
CP
African, Caribbean and Pacific Group of States
Association of Caribbean States
Alternative Dispute Resolution
Automated System for Customs Data
Barbados Environmental and Sustainable Tourism
Barbados Hotel and Tourism Association
Barbados Investment and Development Co-operation
Codex Alimentarius
Consumer and Business Affairs
Caribbean Agricultural Health and Food Safety Association
Caribbean AgriBusiness Marketing Intelligence and Development Network
Common Agricultural Policy
Caribbean Agricultural Research and Development Institute
Caribbean Center for Development Administration
9aribbean Community
Caribbean Forum of African, Caribbean and Pacific States
Caribbean Free Trade Agreement
Caribbean Research Institute
CARICOM Secretariat
College of Agriculture Science and Education
Community Based Organization
Caribbean Court of Justice
Caribbean Center for Monetary Studies
Caribbean Community Secretariat
Caribbean Development Bank
Caribbean Disaster Emergency Response Agency
Comprehensive Disaster Management
Caribbean Export Development Agency
Caribbean Environmental Health Institute
Common External Tariff
CARICOM Fisheries Resource Assessment Management
Commonwealth Fund for Technical Co-operation
Caribbean Hotel Association
Canadian International Development Agency
Committee of Lead Agencies
Caribbean Law Institute Center
Council for Finance and Planning
Council for Human and Social Development
Caribbean Oceanographic Resources Exploration
College of Science, Technology and Applied Arts of Trinidad and Tobago
Council for Trade and Economic Development
Competition Policy
CPC
CPU
CRNM
CROSQ
cs
CSME
CTHRC
CTO
CTO
CUBiC
CXC
DFID
DFIDC
DGIV
Dlffi,
DSU
EC
ECJ
ECLAC
EDF
EEA
EEC
EITA
EFZ
EP
EPA
ERDF
ESM
EU
EXED
FAA
FAO
FPG
ITAA
ITC
ITZ
FZ
GAP
GATS
GAIT
GC
GDP
GIS
GP
GPA
GTZ
Chief Parliamentary Counsel
Community Procurement Vocabulary
CARICOM Regional Negotiating Machinery
CARICOM Regional Organization for Standards and Quality
CROSQ Signatories
CARICOM Single Market Economy
Caribbean Tourism Human Resource Council
Caribbean Trade Organization
Caribbean Tourism Organization
Caribbean Uniform Building Code
Caribbean Examination Council, Secondary Education Certificate Examination
Department for International Development
Division for International Development in the Caribbean
Directorates-General of the European Union -- Competition
Draft Model Law
Disputes Settlement Understanding
Eastern Caribbean
European Court of Justice
Economic Commission for Latin America and the Caribbean
European Development Fund
European Environmental Agency
Eastern European Countries
European Free Trade Association
Export Free Zone
European Parliament
Environmental Protection Agency
European Regional Development Fund
Emergency Safeguard Mechanism
European Union
Excelsior Community College
Federal Aviation Administration
Food and Agriculture Organization
Future Policy Group
Free Trade Area of the Americas
Federal Trade Commission
Free Trade Zone
Free Zone
Good Agriculture Practices
General Agreement on Trade in Services
General Agreement on Tariffs and Trade
General Counsel
Gross Domestic Product
Geographic Information System
Government Procurement
General Procurement Agreement
Deutsche Gesellschaft fiir Technische Zusammenarbeit
HCL
HEART
HEART/NTA
HRD
HS
IADB
IASA
ICAO
ICT
IDA
IDB
HCA
ILO
IMO
INFOSERV
IP
1PM
IPR
JAMPRO
LAC
LDC
LID
LIDD
MARPOL
MCR
MDC
MERCOSUR
METROPOLIS
MNC
MS
MTS
NABs
NGCP
NGGP
NGO
NRCA
NSB
NTA
OECD
OECS
PAM
PCT
PEP
PROCICARIBE
R&D
Harmonized Customs Legislation
Human Employment and Resource Training Trust
The HEART National Trust Agency
Human Resource Development
Harmonized Standards
Inter-American Development Bank
International Aviation Safety Organization
International Civil Aviation Organization
Information and Communication Technology
Interchange of Data between Administrations
Inter-American Development Bank
Inter-American Institute for Cooperation on Agriculture
International Labor Organization
International Maritime Organization
INFOSERV (Information and Services) Institute of Technology
Intellectual Property
Integrated Pest Management
Intellectual Property Right
Jamaica Promotions Corporation
Latin America and the Caribbean
Less Developed Country
Legal and Institutional Division
Legal and Institutional Development Division
The International Convention for the Prevention of Pollution from Ships
Merger Control Regulation
More Developed Country
Mercado Comun del Sur
Metrology in Support to Precautionary Sciences and Sustainable Development
Policies
Multi-National Corporation
Member State
Multilateral Trading System
National Accreditation Bodies
Negotiating Group on Competition Policy
Negotiating Group on Government
Non-governmental Organization
Natural Resources Conservation Authority
National Standard Bureau
National Training Agency
Organization for Economic Cooperation and Development
Organization of Eastern Caribbean States
Probable Associate Member
Patent Co-operation Treaty
Public Education Program
The Caribbean Agricultural Science and Technology Network System
Research and Development
RADA
RASOS
RBTI
REPAHA
RJLSC
RNM
ROSE
RRPP
RTP
SACU
SBDC
SE
SIDSPOA
SME
SRC
TIDCO
TNC
TOR
TRIPS
TIMA
TVET
UG
UNCTAD
UNDP
UNECLAC
UNESCO
UPOV
USAID
USDA
UTECH
UWI
UWICED
VTMIS
wco
WGTCP
WIPO
WPGR
WTO
Regional Agricultural Development Authority
Regional A via ti on Safety Oversight System
Royal Bank of Trinidad and Tobago
Regional Program for Animal Health Assistants
Regional Judicial and Legal Services Commission
Regional Negotiating Machinery
Reform of Secondary Education
Regional Resource Pooling Program
Regional Transformation Program
South African Customs Union
Small Business Development Company
Societas Europaea
Small Island Developing States Plan of Action
Small- and Medium-sized Enterprise
Scientific Research Council ·
Tourism and Industrial Development Company
Trade Negotiations Conupittee
Term of Reference
Trade-Related Aspects of Intellectual Property Rights
Trinidad & Tobago Manufacturers Association
Technical and Vocational Education and Training
University of Guyana
UN Conference on Trade and Development
United Nations Development Program
United Nations Economic Commission for Latin America and the Caribbean
United Nations Educational, Scientific and Cultural Organization
Protection of New Plant Species
US Agency for International Development
United States Department of Agriculture
University of Technology
University of the West Indies
UWI Center for Environment and Development
Vessel Traffic Management and Information Systems
World Customs Organization
Working Group on Trade and Competition Policy
World Intellectual Property Organization
Working Party on GATS Rules
World Trade Organization
CONTENTS
FOREWORD .......................................................................................................... i
INTRODUCTION ...... ...... ..... ......................................... .. ............................... ... ... ii
I.
EXECUTIVE SUMMARY ............. ....... ........ ....................................................... 1
II.
INSTITUTIONAL AND LEGAL FRAMEWORK. .......... .... ........ .-..................... 22
(A) Background: The Treaty of Chaguaramas ........ ......................................... 22
(B)
Provisions for the Harmonization of Laws~ ..... ........................................... 24
(C)
Operationalizing the Caribbean Court of Justice ........................................ 41
(D) Disputes Settlement ........................................................., .......................... 45
(E)
The CARICOM Regional Organization for Standards and Quality ........... 53
(F)
Competition Policy ..................................................................................... 60
(G) Intellectual Property .................................................................................... 76
(H) Government Procurement ........................................................................... 94
(I)
CSME Public Education Program ................ ......... ......... ...... .. ..: ............... 109
Tables 11-1 to II-8 ...................................................................................... ......... 113
III.
MARKET ACCESS .................................................................................. ......... 136
(A) Trade in Goods .......................................................................................... 138
(B)
Rights of Establishment, Provision of Services and Movement
of Capital. ............................ ............................................................. ... ...... 144
(C)
Setting of Priorities ................ ......................................... .......................... 156
Table III-l ................ ........... ..... ....... ............ .. ................ ................... ............ ...... 158
IV.
CARICOM SECTORAL DEVELOPMENT POLICIES .................................. 159
(A) Agricultural Policy ................... .. ........ ..... ..... ............................................. 164
(B)
Industrial Policy ........................................................................................ 1 77
(C)
Services Sector Policy ............................................................................... 195
(D) Transport Policy .................................................................... .... ... ............. 206
(E)
Environmental Protection Policy .............................................................. 235
(F)
Tourism Policy .......................................................................................... 245
(G) Research and Development.. ..................................................................... 252
(H) Information Communication Technology Policy ..................................... 273
(I)
V.
Human Resource Development Policy ..................................................... 287
THE MACROECONOMIC FRAMEWORK .................................................... 304
(A)
Macroeconomic Policy Coordination ...... .,.............................................. 304
(B)
Fiscal Policy Harmonization ................................................................... 305
(C)
Investment Policy Harmonization ........................................................... 308
(D)
Financial Policy Harmonization .......................................................... .... 309
(E)
Regional Development Fund for Disadvantaged Countries,
Regions and Sectors ......................................................... ....................... 311
(F)
Monetary Union/Single Currency ........................................................... 313
Table V-1 ....... ........ ............................................................................................ 316
VI.
PRIORITIZATION ACTION PLAN AND THE ROLE OF DONORS ........... 318
(A)
Prioritization ........................ ................ ........ ............. .. .................... ......... 318
(B)
The Role of Donors ................................................................ ................. 321
Tables VI-1 to VI-2 ............................................................................................ 324
ANNEX I- List of Consultants ......................................................................... 336
ANNEX II -Terms of Reference ..................................................................... 337
FOREWORD
This project commenced on 5 February, 2002 and the first-draft chapters of the report were
discussed at a meeting with CCS staff on 6 May, 2002. Subsequent drafts of the report benefited
from detailed comments and suggestions made by staff members of the Caribbean Community
Secretariat (CCS). Views expressed at a meeting of public, private and civil sector interests
convened in Barbados, 23-24 November, 2002 were also taken into account. Final comments
and other material were received from the CCS on 26 March and 7 April, 2003 and were used as
appropriate in preparing this final version of the report.
The consulting team wishes to thank the Caribbean Development Bank (CDB), and the United
Kingdom Department for International Development (Caribbean) (UK - DFID), for the financial
and organizational support and other facilities placed at their disposal; the government agencies
and private sector representatives consulted for their time in discussing the issues; and the staff
of the CCS for patiently assisting them with information and comments, and for the generous
facilities and courtesies extended to the team.
Havelock R. Brewster
Team Coordinator
June 24, 2003
Tel: (202) 623-1039
Fax: (202) 623-3611
Email: hbrewster@aol.com
INTRODUCTION
The CARI COM Single Market and Economy (CSME) is the flagship of the regional integration
movement, aimed at creating a single economic space which will support competitive production
'
.
within CARICOM for
both intra-regional
and
extra-re~onal
markets.
It is considered critical to
. ..
.
.
.
.. .
. ..
a,s, «..r,:;:cza
.e _ . _
..
...d
the future growth and development of the Region, and intended to ensure that CARJCOM
effectively surmounts the challenges and difficulties that confront Member States and keep pace
with the changing global economic climate.
T~e problems and challenges faced by the Region are often obscured by relatively high social
and economic indicators.
Based on the Human Development Report 2002, the Human
Development Indicators (HDI) for CARICOM States were reasonably high, except in the case of
Haiti. Four countries. (Barbados, The Bahamas, St Kitts and Nevis, and Trinidad and Tobago)
ranked in the first 50. Life expectancy in the Region is over 70 years, except in Guyana and
Haiti. Adult literacy is over 80 per cent, except in the case of Haiti, and GDP per capita levels
-
place the Region in the medium-developed category.
- - --------
Despite substantial social and economic progress, CARICOM States continue to be confronted
!' ,
by a number of imposing challenges, including the high prevalence and rising incidence of ;
HIV/AIDS; increasing poverty, varying among countries in severity and rural/urban distribution;
high rates of unemployed youth; drug abuse, violence and crime, linked to the narcotic drug
trade, and their growing threat to security; the loss of trade preferences for the traditional
products of bananas, rice, sugar and rum, resulting in loss of market security; the negative eff~ct
on offshore financial services, an area in which Member States enjoyed a comparative
advantage, by OECD actions to counter money-laundering; and the impact of changes in
information and communication technology, in giving rise to new economic activities based on
knowledge and information at the expense of traditional natural resources-based industries.
These problems are exacerbated by the small size and opell!ess of CARICOM economies which
expose them to external economic shocks and changes in the terms of trade beyond their control;
·· - · ·· - -··-·-- --------- ----····-·-··-· - .. ···------···--------------------· --- ------ . - .. .
limit their human resource capacity and encourage high rates of migration. In addition, most of
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11
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'\ these countries are vulnerable to natural disasters, especially hurricanes, which frequently create
disproportionate social and economic distress.
The main components of the CSME were inscribed during the 1990s in nine Protocols amending
the Treaty of Chaguaramas Establishing the Caribbean Community (1973).
Each of these
Protocols addressed a specific area of concern, namely; Decision-Making Institutions; Rights of
Establishment, Provision of Services and Movement of Capital; Industrial Policy; Trade Policy;
Agricultural Policy; Transport Policy; Disadvantaged Countries, Regions and Sectors;
Competition Policy and Consumer Protection; Dispute Settlement.
The content of these
Protocols has been incorporated (since July 2001) into the Revised Treaty of Chaguaramas .
Establishing the Caribbean Community including the CARICOM Single Market and Economy, a
Protocol for the Provisional Application of which has been s!gned by most Member States.
The Consultants were requested, building on the existing CARJCOM consultancy and updated
work plan on the CARJCOM Single Market and Economy (CSME), and taking into account the
changing external environment to:
a)
Indicate priority areas, in the short and medium-term, for the implementation of the
CSME and bringing it fully into operation; identifying the progress on
_implementation at the national and regional levels, what has been accomplished to
date, what is currently under way, and what is yet to be achieved.
b)
Review the institutional arrangements, national and regional, for each priority area
and the capacity and mechanisms available to implement and meaningfully
participate in the CSME.
c)
Make recommendations for taking the process of implementing the CSME forward in
the short, medium and long-term, cognizant, among other things, of the need to
address regional and national issues in the context of the external environment, and
other relevant integration experiences such as the European Union.
For purposes of organizing the project, we grouped the major areas into four broad categories,
namely:
nThe Institutional and Legal Framework
ll1
(The Revised Treaty of Chaguaramas; the Caribbean Court of Justice; Harmonization of
Legislation;
Standards;
Competition Policy;
Intellectual
Property;
Government
Procurement, and the CSME Public Education Program)
['{ Intra-Regional Market Access
(Trade in Goods; Rights of Establishment; Provision of Services and Movement of
Capital)
(I Community Sectoral Development Policies
(Agricultural; Services;· Industrial; Transportation; Environmental Protection; Research
and Development; Tourism, Information Communication Technology, Human Resource
Development)
{( The Macroeconomic Framework
(Macroeconomic Policy Coordination; Fiscal Policy Harmonization; Investment Policy
Harmonization; Financial Policy Harmonization; Regional Development Fund; Monetary
Union/Single Currency).
The project was designed as short-term technical assistance to the CCS, extending over a period
of a few weeks.
However, it turned out to be far more complex and wider in scope than
anticipated, and if taken literally, well beyond the time and resources available to the project.
J~ Weaknesses
limpediments.
in communication between the CCS and the Member Governments were also
r
It was realized following the commencement of the project, that if the exercise was to be useful
in the assessment of priorities, potential outcomes, and levels of support needed, understanding
---------·------------- -- - - - - - - - --
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the substantive-conte~t. as distinct from pursuing the formal agenda, would be essential and
would call for some explanation, even if this could not be undertaken in-depth.
·<
. - ---·-------··-------- - - · - - - - - ---·
Ideally, this exercise would have entailed detailed investigations of all aspects of the CSME in
each individual Member State, and a determination in quantitative and specific terms of the
IV
resources and specialized expertise needed by the Community institutions and the Member States
to bring the various outstanding instruments into operation.
Literally hundreds of pieces of legislation and related instruments, government directives and
enabling facilities across the region are involved. To give just one example, it was estimated that
in respect of the harmonization of legislation some 400 instruments would be affected. This task
i\
is not made any easier by the fact that to date there 1:;;;s not exist a comprehensive listing of the
I instruments that would need to be changed in each jurisdiction.
rnThis situation impeded to some extent the drawing up c;,f an agenda for the futur~, including
Vlquantitatively precise and credible estimates of the resources needed. In most instances then our
work had to be based on whatever material was available at or through the CCS Headquarters in
Georgetown, Guyana, and what could be learned through short missions undertaken by some of
the Consultants to Barbados, Jamaica, Trinidad and Tobago, and to the Headquarters of the
Organization of Eastern Caribbean States (OECS) in St. Lucia.
As the project proceeded and we became aware of the existence and content of parallel exercises,
both within the CCS and by external Consultants, consequential adjustments to our approach
became necessary, and had to be made so as to ensure that our product would be complementary.
These parall~l exercises are referred to where they exist and are relevant, in the chapters that
follow. Their results would have to be considered in conjunction with the present report. They
include, among others, the CCS's periodic status reports on the implementation of the CSME, its
work programs, and a detailed report, including a Plan of Action (together with a quantitative
needs assessment), entitled "Implementing the CARICOM Single Market and Economy,"
prepared by the Consultant John Kissoon, sponsored by the Canadian International Development
Agency (CIDA). Certain other studies referred to in the text that are relevant to an assessment of
various aspects of the CSME, and of the resources needed to advance its implementation, are still
m progress.
~ The present exercise, therefore, complements the CCS's implementation status reports and work
{ programs, John Kissoon's report, and other relevant studies in progress by providing greater
\ substantive and policy evaluation of what remains to be dpn~--;i-~~ti~g -th~--;ork~;re rele;ant,
'
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V
at the interface with the external environment, in particular, the ongoing process of external
negotiations; drawing on the experience, where useful, of the European Union (EU), the most
directly relevant and advanced process of integration among States; indicating the type and level
of assistance needed; and attempting some prioritization, both within and across areas.
In regard to the matter of assistance, we considered it more credible to indicate the resources
needed by orders of magnitude, rather than by specific quantities, given the inadequacy of
information at this stage, and the fact that in any event more precise quantities would have to be
determined at the point of preparation of project proposals. The ordinal ranking of levels of
assistance needed ranges from low (less than 12 ·work-months) to medium (12 to 36 workmonths) and high (more than 36 work-months).
The subject matter of the various areas 1s very different, and so is the relevance of and
information available on the various aspects of the evaluation the Consultants were asked to
undertake. This made it difficult to follow a strictly uniform approach and presentation. Each
Consultant, therefore, while responding to the basic questions asked, followed a scheme that
seemed appropriate to the issues being addressed.
We took the task literally, in the sense that decisions, instruments and policies were addressed as
adopted by .the Community authorities, and we did not consider it within our mandate to question
them in any way.
It was thus also not the intention to prepare comprehensive detailed
prescriptions for policies and interventions in the various economic sectors. Questions, however,~
do arise about the approaches or options chosen in respect of many CSME policies 3:nd
instruments, their content, assigned priority, feasibility, and prospective benefits.
·
An impressive range of decisions has been made by the Community Council on the CSME, and
some activity has been proceeding across most of the areas, especially preparatory work at the
national and regional levels, such as diagnostic and informational studies, and the drafting of
legal instruments and donor assistance project proposals. However, the stage of implementation
has not yet been attained for most decisions and instruments, with the exception of the free
movement of goods, a .policy that pr-e-dated the CSME mandate.
Vl
I
Nevertheless, the need to implement the CSME has been persistently pressed by governments
and the private sector, especially in view of the expected conclusion of the FTAA and WTO
Doha negotiations by 2005, and the ACP-EU Negotiations by 2007. The mutual recriminations
that have characterized relations between the Community and the private sector over the slow
pace of implementation of the CSME need to be replaced by more constructive cooperation.
The expectation has been that the CSME would be the precursor to integration into the world
economy, and that its realization would enhance the region's export competitiveness and put the
Community in a stronger negotiating position. The Regional Negotiating Machinery (RNM) has
repeatedly stressed the importance of achieving this, and, indeed, as the relevant Chapters of this
report indicate, the fact that in many respects, effective participation in those international
agreements is premised on CARICOM putting in place those negotiating positions, policies and
instruments that directly interface with those events. In t~is _connection, it should also be borne
in mind that CARICOM can be diluted if it fails to preserve its rights in the WTO under the
<
GATT Article 24; GATS Articles, and as an integration grouping of developing countries. These
,
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r
-.::--
rights would be diluted only if Member States individually make concessions contrary to the.
\
'
Treaty obligations and without regard to their multilateral rights.
The substantive chapters are presented in the broad categories mentioned above. In respect of
each of the areas, apart from an assessment of the state of implementation, a separate
identification is included of the type and level of assistance needed, as well as a priority-ranking
of activities within each area, based on our assessment of their possible economic impacts over
the short, medium and long-term. In the final chapter, a cross-area prioritization analysis is
presented.
Vll
CHAPTER!
EXECUTIVE SUMMARY
INSTITUTIONAL AND LEGAL FRAMEWORK
Sections (A) to (D) of Chapter II of the report set out the action taken to-date with respect to the
main provisions for the harmonization of laws under the revised Treaty of Chaguaramas. In this
respect, the need to quantify and analyze the amount of work that has yet to be done is
highlighted, particularly in relation to Chapter 3 of the Revised Treaty 1•
Some of the key issues and concerns that arise in relation to the development of new Draft
Model Laws are identified. Emphasis is given to the need for jurisprudential cohesiveness in the
drafting of laws; the urgent need for more lawyers in several fields; the need to reorganize and
redefine the future role of the Legal and Institutional Division (LIDD) once the amount of
internal and external legal and legal institutional work is quantified. The issue is raised of legal
. research policy capability within the LIDD that would complement and support the work of any
drafting facility.
The importance of developing the present legal environments in the different jurisdictions is
-·
underlined .so as to ensure that all model laws can be implemented and redress sought. The
inadequacy (indeed, in some cases, the complete absence) of legal professionals in some
is raised as a major concern. Such barriers to the implementation of the CSME
/_ jurisdictions
r
should be quantified.
Some of the key constraints in the development of Draft Model Laws are pointed to and
specifically comments are made on two key instruments i.e. the proposed Harmonized Customs
Legislation and Company Law. Proposals are made in relation to both, drawing on the amended
Kyoto Convention, for direction in the case of the former, and the EU and UK proposals in the
case of the latter.
1
A preliminary .computation of the work that has to be undertaken was provided by the -consultant to the Chief
Counsel and is not attached to this report.
1
The operational differences between the various company registries are highlighted and it is
suggested that there is a need to deal with the large number of inactive companies and registered
businesses. It is also proposed that modem company law enforcement procedures need to be
introduced - with new measures and penalties for non-compliance with the requirements of
Company Law for good governance .
.MT~~ ~ ~ a i s e d of the recognition and~~forcement of judgments of courts or tribun_als
~( which is so fundamental to the effective functioning of the economic community. It is suggested
··-
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.
that there is a need for a protocol to cover this important area. Two model Conventions are
identified that operate in Europe (not just the EU) which could provide direction to CARI COM
when devising their protocol. The models, which are generally recognized to be effective but
complex, were forged bearing in mind the differences that_ exist between the common law and
civil law systems, hence their relevance to CARICOM.
The developments that have taken place in relation to the Caribbean Court of Justice are noted its funding, the preparation for its establishment and the role of the International Preparatory
Committee. The central role of the Regional Judicial and Legal Services Commission (RJLSC)
is noted and in its absence only a preliminary assessment of the technical assistance that may be
required by the CCJ could be made.
The recent establishment of CROSQ is noted.
Its role, proposed funding and anticipated
operating costs are set out. In the absence of a Secretariat and Strategic Plan only a preliminary
list of technical assistance could be proposed.
It is suggested that the implementation of the draft model laws throughout the Community, inter
alia, sets new parameters for the development of all future Public Education Programs (PEP). In
the future emphasis should be placed firmly on the benefits and opportunities that arise prima~ly
for the ordinary citizen but also for other legal persons, such as companies, within the CSM~.
Similarly, attention should focus on the practical benefits and responsibilities_that _!Y_g t ari_~~.fLQ!Il
the implementation of specific pieces of le~islation _under _:Treaty_obligatign.s. The need for
adequate financial support for the PEP is stressed. The creation of a good interactive Internet-
2
ba~€::d._website component is hi~hly_desirable. Ongoing evaluation, monitoring and review of the
program are strongly recommended.
Finally, the present provisions in relation to dispute settlement in the revised treaty, the WTO
Dispute Settlement Understanding and the FTAA proposals are set out. The similarities between
all the provisions are noted and some provisions where accommodation will have to be made by
CARICOM are highlighted. An in-depth study of this matter is needed. The importance of
---· ·
Alternative Disputes Settlement mechanisms referred to by CARI COM, WTO and FTAA are
also noted. The need is stressed for greater awareness and commitment of resources throughout
the Members States to the development of ADR and the training of professionals in this area.
Under the Revised Treaty, the currently under-resourced LIDD will have to provide legal
services in this area. The provisions of articles 196 and 205 in relation to the nomination of
conciliators or arbitrat.ors are noted and the need for immediate action in this respect.
COMPETITION POLICY
S_ection (E) of Chapter II on Competition Policy provides information under three themes: status
of implementation of Chapter 8 of the Treaty, consistency between this chapter and what is being
negotiated in the external environment, and a needs assessment. While some progress is being
made on implementation, only three Member States, Jamaica, Barbados, and St. Vincent, have
competition laws, and only Jamaica and Barbados have institutional arrangements to enforce the
law.
St. Vincent's law has not as yet been promulgated, and is not being enforced.
Most
Member States are in the process of drafting legislation, including sub-regional legislation for the
OECS Member States.
A major problem faced throughout the region is the severe lack of human and financial resources
to implement the regime.
Of urgency is the need to develop an inventory of the laws,
agreements, and administrative practices that are inconsistent with the provisions of Chapter 8.
Another issue to determine is what is the authority of the Commission to represent Member
States in relation to third parties, and, for instance, the proposed Competition Committee in the
FTAA? The section provides some insights on the legal basis of the authority vested in the EC
Commission to represent Member States.
3
This section explores the consistency between Chapter 8 and what is being negotiated in the
FTAA and ACP-EU negotiations, and discussions in the WTO with regard to competition policy.
One issue raised was that Member States need to decide whether they want Merger Control
Regulation (MCR) since it is in the draft bracketed text of the FTAA Chapter on Competition.
Further, while Chapter 8 is silent on MCR, the draft model law for CARICOM includes such
provisions. Another issue that needs to be explored further is the implication of applying the
core principles of transparency, non-discrimination and due process to third parties. Finally, the
section provides some lessons that could be gleaned from the experiences of other developing
countries in implementing and enforcing their competition regimes.
Needs identified centered around the scarcity of human and. financial resources to introduce and
implement the competition regime. Training is required in the drafting of legal documents, and
education at various levels is required. Professional training is required to prepare lawyers,
economists and trade experts to staff competition commissions at the national level, and the
Regional Commission. Education of stakeholders is necessary if the regime is to be accepted
and implementation be made less difficult. To achieve this, there is a need to organize seminars,
workshop, to have scholarships offered for university training, to send staff on internships, and to
develop courses at regional universities to provide sustainable training of human resource for the
region.
Assistance is needed to develop systems for transparency in terms of information
dissemination, and to develop library resources.
Substantial work is needed to develop the
inventory of laws, regulations and administrative practices that are contrary to chapter 8, for
submission to COTED by February 2004. There is also a need to determine where exemptions
may be needed, since most countries have exemptions from their competition laws, and in a trade
agreement context, this means that there could be an uneven playing field.
4
INTELLECTUAL PROPERTY
Section (F) of Chapter II provides, first, an overview of the TRIPS obligations, and then gives an
overview of the extent to which CARICOM countries have complied.
While Antigua and
Barbuda, Belize, Dominica, Saint Lucia, Barbados, Jamaica and Trinidad and Tobago have
complied, other countries have problems, largely due to scarcity of human resources, so that
some are not even responding to WTO requests for information.
These countries include
Grenada, Guyana, Suriname, Saint Kitts and Nevis, and Saint Vincent and the Grenadines. A
major issue being discussed at the TRIPS Council is the level of protection that can be given to
Geographical Indicators, and a concern is that one interpretation is that protection is given to a
region or province within a country, and not to a country.
In terms of plant vatieties, the possibility was posed that where countries had not previously
offered patent protection of plants, they may have until 2005 to comply with the requirement to
protect plant varieties by patents or a sui generis system.
A major problem is institutional
weakness, caused largely by lack of skilled personnel. OECS countries are considering setting
up a combined IP office, or even a combined IP and Competition Policy office.
The Cotonou Agreement reaffirms the TRIPS obligations, offers cooperation in preparation of
laws, establishment and reinforcement of domestic and regional offices and other agencies, and
training of personnel. It provides for further negotiations aimed at protecting trademarks and
geographical indicators. In the FTAA, the US wanted to take the negotiations to TRIPS plus, but
developing countries have resisted. There are extensive provisions in the FTAA draft chapter on
IP on the protection of indigenous knowledge, but at this point, the provisions are square
bracketed and are still to be negotiated.
The criteria to be met for obtaining protection of plant varieties is very complex, and a long time
period is needed before CARICOM countries could be prepared enough in order to be able to
benefit from this regime. It is proposed that pro-active measures be taken now to develop the
expertise in testing new plant varieties for the criteria for protection, and that the Department of
Agriculture of the University of the West .Indies could become a repository of skills in testing
5
tropical plants, not only for CARICOM countries, but for tropical countries generally, since there
is a vacuum in such skills at present.
With regard to progress in establishing a regional administrative body for IPR except copyrights,
modest progress has been made. A Working Group on IP was established in 2000, met twice,
and agreed to commission two studies from WIPO: the feasibility of establishing a regional
administrative body, and the feasibility of developing a regional anti-piracy system based on the
Banderole model. However, the terms of reference was not prepared and the group was not
reconvened between 2000 and 2002 because of lack of human and financial resources. Views on
the feasibility of a regional IP office that were solicited during interviews were reported.
There are few mechanisms established to ensure use of "prot~cted works" in the region, and the
real problem is not inventions, but support to take these to the commercial stage. Inventors have
little capital and are wary of joint ventures with large corporations. The region's business sector
has a history of investing very little in Research & Development (R&D). Similarly, there is little
know-how on how to use patented documents as a source of technological information to
advance R&D. A program of focused public education is needed across all IP issues, not just
copyright, which has been the emphasis so far in the region. There is ignorance both in the
public and private sectors on issues related to IP.
The Treaty calls for the preservation of indigenous culture, and it is assumed that this is meant in
the context of protecting the cultural products through establishing IPR. The paper suggests the
setting up of a committee to examine existing cultural practices and products that could meet the
criteria for. protection, and take action where possible. While TRIPS have no provisions on the
legal protection of folklore, other traditional knowledge and national heritage, particularly
indigenous populations of the Community, several Members have passed laws complying with
the obligations under the Convention on Biological Diversity.
Barbados and Trinidad and
Tobago protects the expressions of folklore. These laws could be examined and copied by other
Member States, where applicable. WIPO has done considerable work towards developing a
global system of protection of traditional knowledge.
6
Finally, the Treaty calls for measures to prevent abuse of IPR by right holders. It is noted that
Chapter 8 does not explicitly proscribe abuse of IP monopoly power, but Art. 66(f) of Chapter 4
explicitly calls for such measures. The draft model law on competition policy provides for
prohibition of anti-competitive conditions linked to sale or licensing of patented goods.
GOVERNMENT PROCUREMENT
The Revised Treaty of Chaguaramas does not cover Government Procurement (GP), and there is
no regional system in place as yet. However, the Member States are currently negotiating a GP
chapter in the · FTAA.
Section (G) of Chapter II provides an in-depth view of the EU
Government Procurement regime, together with an understanding of the problems encountered
over the years of maturing of the system, and the measures .taken to overcome the problems. It
provides information ~m the objective of the EC system, who are affected by the rules, how the
system is structured and administered, and the problems encountered over the years in the
implementation of the regime. It then provides a detailed account of the key provisions of the
current regime.
Based on an analysis of this experience, recommendations are offered for
consideration when develqping a CSME regime. A brief discussion of the GP dimension of the
Cotonou Agreement is provided, as are the issues being discussed in the WTO and the FTAA.
MARKET .ACCESS
CARICOM Member States are confronting a complex challenge in respect of market access
issues, the subject of Chapter III in the report, aiming to complete the CSME by the year 2095,
they are engaged in multiple and simultaneous participati.on in trade negotiations at different
levels and of a differentiated nature. In such a context the major challenge is completing and
perfecting the regional integration scheme as an effective vehicle for development while
managing and adapting to a rapidly changing trading environment. This environment is signaled
by changes in the multilateral trading system (MTS) and a growing web of agreements that
increasingly infringe on sensitive development policy areas.
Since there is an overlapping
agenda in this process, the interface between regionalism and the international environment in
which it must operate emerge as a determining element for future development prospects,
impacting not only on the results and operation of the CSME, but possibly compromising its own
7
identity. The identification of those elements that will confer on CARICOM its individuality
within the changing trading environment, while effectively promoting sustainable development,
should be a primary focus of attention by Member States.
The required effort to effectively manage the interface between national development objectives,
regional initiatives and the overall trading environment demands synchronizing domestic
developmental requirements and objectives with external commitments in different layers of
integration.
This requires in tum developing a comprehensive development oriented trade
policy and a clear perspective of the implications of norms and disciplines being developed in
the different layers of integration, identifying in such a context additional spaces available for
action promoting development in the framework of the CSME. The identification of the required
"plus" elements demand a comprehensive analysis of the dif(erent rule-making developments in
the different layers - multilateral, hemispheric, regional and bilateral, identifying additional
spaces available for action at the regional level, assessing the political viability of adopting
further regional commitments, and evaluating what it would be possible to achieve and in what
timeframe. This assessment should constitute a central exercise by CARICOM Member States
guiding the setting of priorities in the context of the implementation of the CSME. Following
this line of thought, priority support should be provided for the definition and implementation of
a CARICOM Common External Economic and Trade Policy and for strengthening coordination
between the _CARICOM bodies entrusted with conducting external economic relations and those
responsible for the implementation of the CSME.
In the case of trade in goods, it could be concluded, after reviewing the current situation and the
ongoing programs, that the current arrangements and work program seem adequate to a large extent
to achieve the objective of the Customs Union.
Tariffs for intra-regional trade have been
dismantled, with very few exceptions remaining. The Common External Tariff (CET) is in the
process of final implementation, with only three Member States still having yet to implement Phase
IV. The highest priority should be given to institutional capacity-building at the national and
regional levels. Every day more demands are placed on trade management, both at the regional
level and in the international trading system, and these call for enhanced institutional capacities.
Technical Obstacles to Trade, Sanitary and Phytosanitary Measures and Unfair Competition are
now dominant issues in trade, and their importance will only grow in the future. There are obvious
8
deficits in most CARICOM Member States in regard to their institutional capabilities in these areas.
Tue effective participation of Member States in the emerging trading system, and the smooth
functioning of the CSME, will depend to a large extent on developing further these capabilities in
trade-related institutions.
CARICOM has made important progress towards the implementation of the rights of
establishment, provision of services and movement of capital as provided by Chapter III of the
Revised Treaty of Chaguaramas. This is an area where there are significant possibilities of
advancing further at the CARICOM level than in other trade agreements in which the Member
States are participating, thereby conferring important differentiating elements to the CSME. The
Program for the removal of Restrictions should be closely monitored and support provided to
Member States for the domestic implementation of their commitments.
Further work is required mainly in two areas to guarantee an effective exercise of these rights by
CARICOM Member States nationals. On the one hand, rule-making developments are required
for the implementation of the Treaty rights and obligations, while on the other hand, the
domestic implementation of the obligations is in most cases still outstanding. Regarding rulemaking, completing the safeguard regime provided by Article 47 ·would provide predictability to
market access commitments made by Member States, while discipline in respect of subsidies and
the harmonization of incentives would guarantee a level playing field for services providers of
the Member States.
Special priority should be given to implementing a regime for the
liberalization of the temporary movement of natural persons supplying services (Mode 4),
including the free movement of skills where some progress is already evident; and a regime for
the acceptance of diplomas, certificates and qualifications.
Due to the importance of tourism for most of CARICOM Member States and their dependence
on maritime transport for trade, priority work should be undertaken for the adoption of the
Programs for Removal of Restrictions on maritime and air transport.
9
CARICOM SECTORAL DEVELOPMENT POLICIES
In terms of importance to CARICOM integration, it could be argued that Sectoral Programs
which are the subject of Chapter IV of the report are the most important because that is where the
productive resources of the Region are released to generate the output and wealth required to
produce growth and an improved standard of living for the people of the Region. It is selfdefeating to remove all restrictions to trade and to set up numerous institutions to enforce rules
and monitor activities, if the economic sectors that are to drive the process are themselves
neglected. It is therefore critical that the Organs of the Community should not under-estimate
the importance that_needs to be placed on Sect~ral Programs or assume that they can be treated
as residual and will somehow take care of themselves.
The Mission Statement of the Sectoral Programs Unit at the CCS does in fact reflect the
importance of Sectoral Programs. It states that the mission is to: Enhance competitiveness,
profitability and overall development of the productive sectors as a means to achieve sustained
cultural, social, economic and environmental objectives in pursuance of the improved quality of
life for all in the Caribbean Community.
However, the implementation of the CARICOM's sectoral policies is behind schedule and
relatively fe'Y regionally driven initiatives have been taken beyond the conceptual stage. Most of
the objectives or activities identified to support the goals of the sectoral policies outlined in the
Revised Treaty have either not progressed at all, or are at a stage where it is recognized that a
study is required to guide and inform the initial steps, or where a study is in progress or has been
completed. There are a few cases where some post-study implementation has taken place, such
as in the setting up of CROSQ or in defining programs for the removal of restrictions to the free
movement of services, the right of establishment and the free movement of capital. In general,
implementation has been hampered by a combination of a lack of financial resources,
technical/human resources, political will at the national level, and cooperation among Member
States.
The CCS is able to coordinate and act as a catalyst to the implementation of the objectives of the
sectoral policies, but in most cases significant financial and technical resources are required in
10
conjunction with ,coordinated actions at the national level.
Moreover, to be effective,
coordinated action has to come from all participating Member States at the same time.
This Chapter outlines some of the main initiatives that have taken place either at the regional
level or the national level across CARICOM. It was found that, in some areas of the sectoral
programs, implementation, where it has not taken place on a regional basis, might be assisted by
adopting or adapting best practices in one or two Member States that already have sound national
programs in place.
The seven main areas of Community Sectoral Policy examined .in this Chapter are agriculture,
services, industrial policy, transportation, environmental protection, research and development
and tourism. In none of these areas has there been significant progress in the implementation of
objectives.
In Maritime Transportation, Research and Development and Environmental
Protection, there is a general feeling that they receive low priority at the national level, and that
this explains the overall lack of development in these areas across the Region. The fact is that
serious action is required in all of the sectors if the Region is to achieve the objectives laid out in
the Revised Treaty. The priorities identified for each sector are summarized and listed below.
All of them basically require funding and/or technical assistance for their implementation.
Agricultural Sector
Elaboration of strategic plans for the remaining sixteen industries that have been
identified as having strong potential. These plans would identify strengths, weakness~s,
threats and opportunities in each industry and propose the regional mechanisms and
common policies needed for their development.
Development of the Caribbean AgriBusiness Marketing Intelligence and Development
Network (CAMID) as a strong and useful regional agricultural marketing intelligence
database that can be easily accessed by users across the Region.
11
Assessment, rationalization and harmonization of the activities, and pooling (where
possible) of the resources of the various regional agricultural institutions and
organizations.
Organization of a strategic plan for measures to enhance food safety and food security.
Industrial Sector
Identification and selection of key industries in which cross-border resource use can lead
to enhanced regional production, linkages can be exploited, regional production can be
enhanced and diversified, SMEs can find niches to successfully operate and in which
there is scope for public and private sector collaboratjon.
Development and implementation of a strategy to restructure the regional business
environment and benchmark successful businesses inside and outside of CARI COM.
Development and coordination across Member-States of Regional Standards, including
for protection of.the environment.
Services Sector
Enactment of Legislation and/or putting into operation administrative practices required
to eliminate restrictions.
Development of the infrastructural and support services required for a vibrant service
sector.
Identification and development of certain key service sector areas in which the Region
has or can develop a competitive advantage.
12
Air Transport Sector
Institutional strengthening of the Regional Air Safety Oversight System (RASOS)
Development of appropriate national and regional legislation and policies and securing
membership in the pertinent international agreements and complying with their
requirements.
Development and implementation of strategies for cooperation among regional airlines in
training, sharing of facilities and equipment and pooling of resources.
Promotion of investment opportunities in the sector..
Maritime Transport Sector
Elaboration of a plan for the development of a regional shipping industry.
Enhancement of cooperation amongst Maritime Administrations in Member States.
Improvement in cooperation on Maritime Safety and Protecting the Caribbean Sea.
Environmental Protection
Development of a Community Integrated Environmental Management Action Plan.
Organization of an Environmental Protection Promotional Program to pursue measures to
preserve, protect and improve the quality of the environment, such as the BEST program
in Barbados.
Development of an Environmental Research and Development Program, starting with a
baseline study to determine the current situation against which improvements can be
measured.
13
Development of a regional
environmental information system (such as
the
METROPOLIS Network in the EU) to store and analyze data on Member States.
Institutional strengthening and development of legislation, standards, and training.
Tourism
Implementation of the Caribbean Tourism Strategic Plan with emphasis on the Fund for
Sustainable Tourism.
Institutional strengthening of The Caribbean Tourism Human Resource Council
(CTHRC), the CHA and CTO.
Development of low cost marketing/promotional strategies for regional tourism.
Research & Development
Program to promote, reward, train and encourage the involvement of the private sector in
R&D for the development of new products and the generation of increased productivity.
Development of information systems to support global, regional and national R&D and
provide access and linkages between research institutions, Governments, private
businesses and individuals in all economic sectors across the Region.
Facilitation of R&D amongst Member States that maximizes the use of the Region's
biodiversity, abundant resources and other natural advantages.
Identification of sources of funding and the prov1s1on of assistance and training in
tapping these sources by UWI, CARDI and other regional research institutions and
researchers.
14
INFORMATION COMMUNICATION TECHNOLOGY POLICY
In a Region comprised mainly of island states, Information and Communication Technology
(ICT) is probably now the single most important facilitator of integration. ICT was mentioned, if
somewhat briefly, in Chapter 3 of the Revised Treaty where its development was identified as
important in facilitating the free movement of goods, services, capital and the rights of
establishment in the Region. However, the Treaty provided few guidelines or objectives in terms
of policy and strategy.
The importance of ICT and the need for a detailed strategy has been clearly recognized by the
Heads of Government of CARI COM who mandated the CARI COM Secretariat to prepare, by a
participatory process, a CARICOM ICT Strategy. The focus of the strategy would be on ICT as
an instrument for strengthening connectivity to the rest of the world and as a means of fostering
greater prosperity and social transformation among Member States.
The Secretariat responded to the mandate of the Heads and the CARICOM/ICT Connectivity
Agenda 2003 was developed in which a strategy and plan for ICT development in the Region
were outlined. The approach revolves around three primary pillars - infrastructure, utilization
and content.
In February 2003, the CARICOM Ministers responsible for ICT signed the
Georgetown Declaration on CARICOM ICT Development 2003, which is to guide policymaking in this field in the Region.
Based on draft strategy documents and discussions with key persons across the Region, the
following four areas have been prioritized as critical for the implementation of the regional
strategic plan and the development of the ICT sub-sector. They are:
The development of appropriate regional ICT policies, including the development of
regional policies adopted by Member States that focus on a) the CSME trade and services
agenda; and b) Human and Social Development, especially as it relates to issues such as
poverty alleviation, the Digital Divide and Governance.
15
The development of regional training and capacity building programs, involving the
training of persons to understand and implement the policies that have been developed.
The development of a regional legal and regulatory framework, incorporating the
development of an appropriate legal framework to facilitate access and competition while
protecting the rights of all participants in the sub-sector.
The development and implementation of an overarching regional sensitization program to
increase the awareness of the public and private sectors, consumers, and the rest of civil
society.
The level and type of assistance required are detailed in the report.
HUMAN RESOURCE DEVELOPMENT POLICY
The mandates in this area are stated in the 1997 Human Resource Development (HRD) Strategy
and the Measures are set out in Article 63 in the Revised Treaty.
The principal mandates as outlined in this HRD Strategy are to increase access to tertiary level
education; establish a Regional Accreditation Model; universal quality secondary education by
2005; the introduction of programs to achieve appropriate levels of competence in Spanish at
every level; the full enrolment of the pre-primary age cohort in early childhood education and
development programs; the development of computer skills at an early age as well as the
development of human resources to satisfy the requirements for groups of skilled agricultural
personnel at all levels, as outlined in the Revised Treaty.
Several activities have taken place across the various mandates in the core areas of education and
training. The CARJCOM Secretariat, in its coordinating and monitoring role, has facilitated
several activities. The University of the West Indies has undertaken certain activities and some
Member States have undertaken activities consistent with the mandates that can be replicated by
other Member States.
16
Some of the activities coordinated by the Secretariat include: the setting up of the Regional
Accreditation Agency and National Accreditation Bodies (NABs); the orientation of the
Technical and Vocational Education and Training {TVET) systems to adopt competency based
approaches; The Council on Human and Social Development's (COHSOD) approval of over 60
standards in 16 occupational areas as regional standards and the development of technology
education curriculum and units of instructions for the primary and lower secondary levels.
The main gaps identified with respect to the mandates are the development of appropriate
curricula to facilitate broad based education at the lower secondary level; the development and
implementation of standards for the delivery of Early Childhood Education; the integration of
new information and communication technologies into content (curricula), as well as
administration at all levels; the development and implementation of an appropriate technology
education curriculum . to lay a foundation for continuing education and technology; the
development of multilingual skills at an early age and the increased promotion of agriculture as a
career alternative for younger persons.
The requirements for filling these gaps were identified, as well as the level of assistance needed.
Priority areas and the type of assistance needed were also identified. Given the importance of
human resources to the implementation of the CSME, in most cases high priority was given to
the interventions required. However, in general, only moderate levels of financial and technical
assistance would be required to assist the Secretariat to better perform its coordinating role.
MACROECONOMIC FRAMEWORK
The Treaty provisions on Macroeconomic Coordination, the Harmonization of Monetary and
Fiscal Policies, and the promotion of a sound macroeconomic environment are insubstantial.
However, COFAP has recognized the potential disintegrative effects of the lack of
macroeconomic coordination, and has authorized work on rules and procedures for policy
coordination to be undertaken by a technical team, the main needs of which are for technical
assistance. Higher priority needs to be assigned to the macroeconomic aspects of the CSME.
17
Useful diagnostic work has been done on Fiscal Policy Harmonization. A Working Group on
Fiscal Policy has been established and donor support is actively being sought to develop a policy
framework, elaborate the legislative and institutional requirements, and assess the impact of tariff
reductions on government revenue.
CARICOM has already concluded a Double Taxation Agreement that is effective among several
Member States. A legal Draft of proposed Articles for a Protocol on a Harmonized Corporation
Tax Structure for Members of the Caribbean Community has been prepared, and is currently the
subject of consultations with national administrations.
COFAP has also mandated the preparation of a Harmonized Investment Framework and
appropriate regime for investment incentives. These prepar!1tions are now in progress, with
international donor support for regional diagnostic work and a study of international "best
practices" on investment policy, regulatory and administrative procedures, with a view to
drafting harmonized investment principles for CARICOM, to take the form of a CARICOM
Investment Code. The need for technical assistance is foreseen at the stage of intergovernment
negotiating and eventual adoption of the instrument under the legal procedures of each Member
State.
COFAP is m~ndated as well to adopt proposals for the establishment of Financial Infrastructure
Supportive of lnvvstments in the Community. The CCS aims to create a Protocol for the sector,
covering the banks and near-banks, and the insurance and securities industries. The broad areas
for possible harmonization have been identified. Work on tq.ese ;issues is at an ongoing stage o~
technical preparation. However, substantial more technical and legal work needs to be done
before a draft Protocol would be ready for inter-governmental negotiations.
The Revised Treaty est~blished a Regime for Disadvantaged Countries, Regions and Sectors. to
enhance their prospects for successful competition within the Community. For these purposes,
the Community established a Development Fund, among other measures. The modalities and
sources of finance for the operation of this Fund have not yet been determined. In the meantime,
there have been several cross-cutting initiatives that could have implications for the
establishment of the Fund. They include a proposal that has been under examination jointly by
18
the academic institutions with facilitating technical assistance and information sharing by the EU
in particular, could play a useful role in this respect.
PRIORITIZATION ACTION PLAN AND THE ROLE OF DONORS
The individual chapters indicated a priority ranking of projects within given areas. A more
complex issue is ranking priorities across different areas. For the latter purpose, the standard
methodology in this field was used.
It is based on establishing multiple weighted criteria
representing their individual salience to the Community, each associated with a relative value. It
is recognized that the use of this methodology has to be based, given that reliable quantification
is generally not available, to a large extent, on collective qualitative judgment. The criteria used
were urgency; short-term economic impact; long-term econqmic impact; critical building-block
function; opportunity cost; probability of attaining the objective. The weighting of these criteria
was undifferentiated.
A number of general conclusions were drawn from the analysis. They included, among others,
1) rankings across criteria were not highly correlated positively or negatively; 2) many areas fell
into the category of doubtful attainability in the foreseeable future; 3) an experimental cardinal
scoring suggested that areas with the highest ranking were Fiscal Policy Harmonization,
Community_Investment Policy, Tourism, Free Trade in Goods, Free Trade in Services, Free
Circulation, Competition Policy, Standards, and Public Education. The lowest scoring areas
were Industrial Policy, Monetary Union/Single Currency, Free Movement of Skills/Labor,
Intellectual Property, and the Development Fund. Other areas fell into the medium priority
category.
The Community has already benefited from substantial donor support, covering a wide range of
CSME-related projects.
This support has played a very significant role by complementing
Community resources.
Continued assistance will help the Community to cross the
implementation threshold in the priority areas.
Donor agencies are not expected to be part of the Community priority setting apparatus and
should not presume to determine what the Community's principles should be. They are welcome
20
the CDB and the IDB to set up a special fund for the restructuring of Caribbean economies; an
unimplemented decision to create a Regional Stabilization Fund; a proposal to set up a
Sustainable Tourism Investment Fund; a request to the CDB to elaborate the Projected
Investment Requirements for the Region's Infrastructural Development; a request to the CAIC to
develop a Program for the Transformation of Caribbean Economies; and a proposal that a
Regional Integration Fund should be established in the context of the Free Trade Area of the
Americas (FTAA).
The Community needs at this point in time to address both the issue of rationalizing/integrating
the various cross-cutting proposals that impinge on the establishment of the Development Fund,
as to define the prindples, as well as the legal and institutional context, under which a Fund
would operate, include its sources of funding.
It is noted that, unlike the situation in the EU where a Regional Development Fund is operated
with a similar purpose, the source of disparity in the distribution of benefits and costs would
mainly be of extra-regional origin. There may thus be some justification for external assistance
as the regional adjusts to integration into the world economy, an argument that also underpins the
proposal for a Regional Integration Fund in the context of the FTAA.
Monetary Union/Single Currency is not explicitly provided for the Revised Treaty, but is an
agreed aim of the Community, and a core feature of any single economic space. The approach
so far has been to monitor agreed macroeconomic parameters against pre-determined targets, so
as to gauge the extent of macroeconomic convergence, considered as the pre-condition . for
moving to a single currency. Attainment of the targets generally has been below expectation.
COFAP has accepted the recommendation of the Committee of Central Bank Governors that a
monetary union involving all CARICOM Member States is not attainable at this point in time,
but should remain a long-term goal. It proposed that in the interim the focus should be on
increasing public awareness and support of monetary union, and in establishing a greater
demonstration of political commitment. There is thus currently no agreement on the creation of
a common currency or whether any such currency should be fixed or floating. If this objective
- --·-
---·
· were to be advanced, some impetus beyond the Central Banks would be needed. The CCS and
19
CHAPTER II
INSTITUTIONAL AND LEGAL FRAMEWORK
(A)
BACKGROUND - THE TREATY OF CHAGUARAMAS
The Revised Treaty and the Protocols
The Treaty of Chaguaramas of 1973 was amended incrementally over a period of years by nine
Protocols, each of which addressed a specific area of concern. In July 2001, a Revised Treaty of
Chaguaramas, which provides the legal framework for the Community to move from a Common
Market to a Single Market and Economy, was signed by most Heads of Government · of ·
CARICOM in The Bahamas. The concerns of each Protocol now sit (largely unchanged) as
separate chapters within the Revised Treaty. As at July 2002, only two Member States i.e.,
Dominica and Montserrat had yet to sign the Revised Treaty.
In February 2002, the Heads of Government signed a Protocol for the Provisional Application of
the Revised Treaty. Montserrat is now the only Member State that has yet to sign the Protocol
and the Protocol on the Revised Treaty. The Protocol for the Provisional Application provides
Member States with the legal framework to apply the Treaty in a limited way.
The Revised Treaty imposes an obligation on each Member State to enact the revised Treaty into
national law. As of early July 2002, none of the Member States had ratified the Revised Treaty
nor had they enacted the Treaty into Domestic Law.
The Revised Treaty and the Caribbean Court of Justice
As the Community is an association of sovereign States, it was anticipated that the revised Treaty
could be subjected to as many interpretations as there are national jurisdictions, leading to legal
uncertainty. Such uncertainty would be bound to impact negatively on macro-economic stability
and the investment climate in the region. To overcome this potential problem the Caribbean
Court of Justice (CCJ) was invested with compulsory and exclusive jurisdiction in respect of
issues relating to the interpretation and application of the Revised Treaty of Chaguaramas.
22
to contribute to methodologies that can be helpful in determining priorities, especially the
empirical analysis of prioritization. Donor agencies should participate in consultations with the
Community organs on ways and means by which they can assist and further the aims agreed on
and being pursued by the Community. Support programs among donor agencies should be
complementary, not competitive, disarticulated and overlapping. Coordination among donor
agencies should be for the purpose of delivering agreed assistance more effectively, transparently
and productively, not so as to better use their combined power to secure their own ends.
Donor agencies should be encouraged to offer assistance in areas where they have resources,
technology, expertise and experience that the Community lacks. Donor agencies and the CCS
should collaborate in defining the terms of reference of projects of cooperation and the
modalities under which they should be conducted, as well as in evaluations of the progress of
projects and their performance on completion. The Community for its part should recognize that
donors have a legitimate interest in ensuring that their resources are used cost-effectively and
transparently, and produce positive outcomes in respect of agreed objectives. It should set out its
priorities in a manner that is clear, reasoned and time-bound.
21
Indeed, the Preamble to the Revised Treaty affirms that the "original jurisdiction of the
Caribbean Court of Justice is essential for the successful operation of the CSME."
This provision of compulsory and exclusive jurisdiction means that, where a municipal court
(which includes the East Caribbean Supreme Court) in any national jurisdiction of a Member
State party to the Agreement establishing the CCJ is seized of an issue concerning the
interpretation and application of the revised Treaty, it will be required to stay proceedings on
such an issue pending a pronouncement thereon by the Caribbean Court of Justice. In this way,
uniformity of applicable norms is ensured with positive effects on legal certainty, which in tum
buttre·sses the development of the legal, economic and business environments.
Rights and Obligations under the Revised Treaty
The Treaty of Chaguaramas is in common with other treaties governed by International Law
whose legal rules differ from those applied in national courts.
Ordinarily only States are subjects of International Law and not individuals.
Consequently,
individuals only enjoy rights in International Law through their States of nationality on which
those rights are conferred by International Law. For private entities or individuals to enjoy rights
under an international instrument, the instrument would have to be implemented into local law
by the State concerned. There are exceptions such as where laws, which have "direct effect" in
the EU, create rights and obligations.
However, the Caribbean Community is an association of sovereign States and any decisions of
the Organs of the Community must be enacted into local law by national assemblies before such
decisions can create rights and obligations for nationals of the Caribbean Community. In order
to ensure the production and consequent implementation of harmonized legislation throughout
the Member States the device of producing Draft Model Laws has been adopted.
23
(B)
PROVISIONS FOR THE HARMONIZATION OF LAWS
Quantification of Outstanding Work
The Revised Treaty makes extensive provision for the Harmonization of Laws. The provisioning
articles are summarized in Table II-1, as are the subject matter affected. An indication as to the
action taken to-date (July, 2002) with respect to each provision is also provided. The table
should not be treated as conclusive but gives a good indication as to the amount of work
undertaken to-date under the provisions relating to legislative harmonization. As can be seen the
action to-date indicates that while considerable progress has been made in some areas there is yet
much work to be done. The work that has yet to be done has to be quantified and analyzed
further to be of any value in planning.
In addition, the picture outlined above is not itself a complete one as can be seen from the
foregoing.
Under Chapter 3 of the Revised Treaty (formerly Protocol II), Establishment
Services, Capital and Movement of Community Nationals, provision is made for the prohibition
of new and the removal of existing restrictions.
Under an extensive study carried out by the Secretariat, the Restrictions falling under the then
Protocol II were quantified. Following this study, 2 a revised list of agreed restrictions that were
to be removed was agreed with the Member States. A timetable for lifting the restrictions was
also agreed, i.e., Immediate (up to 31 December, 2002), Short Term (up to 31 December, 2003),
Medium Term (up to 31 December, 2004), Long-term (up to 31 December, 2005).
A preliminary computation of the legal instruments,3 i.e., Statutes, Secondary legislation and
Administrative Orders shows that approximately some 400 instruments would be affected, the
vast majority of which would be Statutes. The figure of 400 is for all of the Member States.
This preliminary exercise offers no analysis as to the effect, degree or extent of the changes that
would have to be made to the different instruments.
2
Final Report "Programme for the Removal of Restrictions under Protocol II - Sept. 2001. Watson and Erriah for
the CARICOM Secretariat."
3
Which has been lodged with the Chief Counsel LIDD.
24
Consequent on the agreement to revise the agreed list of restrictions to be removed under
Protocol II, the Member States were asked to notify the Secretariat of the number of legal
instruments that would have to be changed. Only one Member State had replied by July 2002,
i.e., Jamaica. In that single case, there is a significant difference between the number of laws
that Member States see as having to change, and the number calculated using data extracted from
the agreed revised list of restrictions to be removed.
It is clear that there is a need to draw up a comprehensive and authoritative list of the legal
instruments to be changed in each jurisdiction. Without such a list it is impossible to say how
much further work has to be done on harmonization nor indeed which approach should be taken4 •
Such a list would also help quantify the resources required to undertake the work involved both
at regional and national levels.
Provisions for the Elaboration of Protocols
Whilst Articles 44, 74 and 173 of the Revised Treaty contain the main provisions with respect to
harmonization, Article 239 must also be borne in mind i.e., the undertaking by the Member
States to elaborate a Protocol relating to electronic commerce, government procurement,
treatment of goods in free zones, free circulation of goods in the CSME and rights contingent on
establishment, provision of services and movement of capital, all of which will involve
harmonization of legislation. The main provisions are set out in Table II-1 and the progress to
date is noted. Of course, the need for other protocols not referred to in the revised treaty should
also be anticipated.
4
In the EU - two approaches to harmonisation can be distinguished. The older of the two refers to the adoption of
identical rules for application throughout the EU. Such an approach is consistent with the Court of Justice case law
i.e. the need for the uniform application of EU law bearing in mind the general prohibition of discrimination in
Article 6 of the Treaty. A new approach, which can be found in (the new) Article 100a of the EC Treaty, allows the
Council to adopt measures necessary for the establishment and functioning of the internal market by qualified
majority. The three key characteristics of this new approach are - allowable derogations from certain measures;
outline (as opposed to detailed) legislation and mutual recognition.
25
The Development of Draft Model Laws - Different Approaches
The harmonization of laws within CARICOM has been going on for some time, in the case of
The Harmonization of the Company Law project, as far back as 1971. In the early 1990's several
studies and draft model legislation were prepared by the Caribbean Law Institute Center (CLIC)
in a number of areas using internal and external consultants. Their work included the preparation
of a revised draft for Company Law and draft models laws for Insurance and Banking. The
CLIC also carried out work in the areas of Insolvency, Shipping, Consumer Protection and
International Arbitration. Work in other areas, e.g., Coastal Zone Management and Fair Trading
was halted due to lack of funding. Much of the CLIC work is now being used as background
material or has been partially adopted by some jurisdictions.
Draft Model Legislation was also prepared for the harmonization of Customs Legislation and
Procedures. This major piece of legislation consists of some twenty-one modules. The draft has
not been without its critics, both with respect to substance and drafting.
In more recent times the Legal and Institutional Development Division (LIDD) of the CCS has
produced draft model laws in a number of areas, inter alia, consumer protection, competition law
and anti-dumping. These were produced on a collaborative basis using known experts in the
region, especially when it came to drafting. These drafts are currently being reviewed by the
national administrations. In this respect it is worth noting that the Secretariat of the OECS does
not have a mandate for the harmonization of proposed CARJCOM legislation for the OECS
countries.
The production and implementation of draft model laws, two exercises which are critical to the
development of the CSME have not been without difficulties.
As can be seen from the brief history outlined above, various attempts have been made to
produce the necessary draft model laws. With the benefit of hindsight it could be said that some
of the attempts could have benefited from a more rigorous approach to the preparation and
drafting of the model laws at all stages. Bearing this in mind it should not be at all surprising
that the Member States should now appear to be lagging when it comes to their implementation.
26
Delays in Implementation of Harmonized Laws
Several reasons have been proffered for not adopting or for delays in adopting some proposed
Draft Model Laws. No study has been undertaken of the reasons proffered for not implementing
legislation but it is too simplistic to state that it is due to a lack of political will as has often been
suggested. In brief field visits to a cross-section of jurisdictions, i.e. Suriname, Jamaica, Guyana,
St. Lucia and Barbados - several suggestions were made. These included lack of expertise in the
particular subject matter in the supervising ministry; delays in providing legal advice by the
office of the ·Attorney General; the inability to fully grasp the implications of the proposed·
legislation due to lack of English; under-resourcing either in a technical or legal area.
The
reasons for delays are many and varied and are usually specific to an individual piece of
proposed legislation. A brief study of the reasons for the delays and the support needed to
unblock the delays in each jurisdiction is well warranted at this time.
The position with respect to the harmonization of Company Law and Customs Law are a cause
for concern. In the case of the former, it is impossible to say with any degree of certainty the
extent to which Company Law legislation is harmonized throughout CARICOM. It is some time
since the last Draft Model Law revision was proposed (1993) and most jurisdictions have gone
their own way in developing their own legislation, with the exception of the OECS where there
is a harmonized Companies Act.
The position with respect to the civil law jurisdiction of
Suriname is not at all clear.
As regards the proposed Harmonized Customs Legislation (HCL) (Revision 1998), to-date only
one country i.e., St. Vincent and the Grenadines has formally notified CARICOM that it has
adopted the Model Law, although it is thought that Belize has done the same, without making
any notification. It can be assumed that portions of the proposed HCL have been adopted by
various jurisdictions, but no notifications have been made to the Secretariat. In field visits to a
cross-section of jurisdictions, i.e., Suriname, Jamaica, Guyana, St. Lucia and Barbados, a wide
range of concerns were expressed in relation to this draft law. As part of its reform program,
Jamaica is using an external legal consultant to carry out a fairly comprehensive review of this
draft law, the resu1ts of which should be useful to other jurisdictions.
27
Development of Draft Model Laws
Context
The development of draft model legislation is carried out in the context of the provisions of the
Revised Treaty where the principles and contextual framework are provided. The development
of draft model legislation is a lengthy and expensive process. It is also demanding of expertise.
Whilst such expertise may sometimes be "bought-in", the final product, i.e., a draft model law
must itself be grounded in the jurisprudence of the region and fashioned in the style of existing
laws in order to retain a certain jurisprudential cohesiveness. This cohesiveness should be found
·· no·t only in the model bills, but also · in the subsequent secondary legislation.
Each Bill,
particularly if it is a complex matter, will itself require the preparation of an explanatory
memorandum, all demanding of time and expertise.
The development of some new areas, e.g., under Article 239 i.e. the elaboration of a Protocol on
electronic commerce, government procurement etc, requires the involvement of a multidisciplinary team of lawyers, economists, financial, information and trade experts. The effective
management of such experts also demands high management and process skills.
The needs of the Civil Law Jurisdictions, their drafting customs and practices need to be taken
into consideration in the development of Draft Model Laws.
Lack of Professional Staff
As mentioned elsewhere, the present tranche of draft model laws have been prepared by the
Legal and Institutional Development Division (LIDD) of the Secretariat. This Department now
consists of two full-time and one part-time lawyers who in addition to drafting or assisting in
drafting legislation have to service all of the Legal and Institutional needs of the Secretariat.
There is a considerable shortage of professional staff in this Division.
5
Since this report was sent to press, a US-funded technical cooperation project for legal support services has been
organized. Some of the information, proposals and needs assessment set out in this section may have been modified
as a result.
28
A number of proposals have been put forward to help alleviate the situation. One proposal for
strengthening the institutional capacity of the LIDD suggest that immediate requirements are for
five (5) law advisers, 2 contract attorneys, 1 procurement and 1 E-Commerce adviser and three
legislative draftsmen.
A second proposal envisages the establishment of a Regional Drafting Facility. This would
consist of two discrete components, one -each operating out of the two secretariats, i.e.,
CARICOM and OECS. The one based at the CARICOM Secretariat would focus on essentially
broad regional model legislation appropriate for MDCs, whilst the other component would focus
· on adaptations to regional model legislation to address the needs of the less developed countries
(LDCS). The Work Program of the Facility would be informed by inputs from Conference, the
LAC, other organs and the two Secretariats.
The two components would work under the
General-Counsel (GC) of the Secretariats. The GCs would work under the direction of the LAC,
whose sub-committee would identify priorities for harmonization.
At the time of writing, no agreements had been reached on either proposal. There is merit in
both proposals and it may be that aspects of both will have to be adopted. What appears to be
missing however, is any formal analysis of the amount of work that has to be undertaken either at
the CARICOM Secretariat level, covering all aspects of legal work falling under the LIDD or a
quantification of the amount of work that is anticipated will have to be undertaken at both
Secretariats. As at the time of writing, the OECS Members had prioritized issues of judicial and
legal reform and aspects of social reform as key elements in their overall development strategy
for the legal sector. But the Secretariat appeared to indicate that given the additional resources
they were open to participation in the Drafting Facility.
Assuming that a Drafting Facility can be put in place and the issue of quantification of work is
addressed, a solution must be found to the particular needs of the Civil Law jurisdictions. At the
least this should mean that one of the draftspersons in the CARI COM Secretariat is a qualified
Civil Law draftsperson. In addition, at least one of the lawyers engaged by LIDD should be a
Civil Law trained lawyer.
29
The establislunent of a drafting facility will not solve all of the resourcing problems at the LIDD
and the need will still exist for additional legal expertise especially in areas such as Trade Law,
Integration Law and E-commerce.
The proposal developed by the Secretariat for capacity
building needs to be looked at again, in the light of the establishment of the Drafting Facility and
following an analysis of the real demands on the LIDD. Such an analysis should include areas
not included in the capacity building proposal, e.g., the need for a legal research policy section
within the LIDD.
Such a section, which could have a drawdown facility for expertise or TA as required against an
agreed work plan, could play a central role in developing legal policies through drawing on
regional and international expertise and experiences. Properly resourced, such a unit could play
a powerful role in the development of legal policies, protocols and models laws. It could also
provide an advisory service to the economic units, a function that is lacking at the moment. One
other gap that it could well fill relates to the briefing and monitoring of all legal consultants
engaged in any consultancy containing a legal component conducted on behalf of CARCIOM.
This would lead to better coordination and better utilization of consultancy and other resources.
In analyzing the needs of the LIDD, it is important to separate out its internal needs, i.e. those
needs as an organization and the external demands, it is only in this way that one can assess the
real demand for expertise, its nature and duration. This assessment (which is most urgent)
should be carried out by a team of two external consultants, a lawyer and an economist.
Resources at National Level
National administrations are concerned with both the drafting and the implementation of Model
Laws - although in the case of the former, the main weight of this is carried by the CARICOM
Secretariat. However, there is still a demand for first class drafting skills within the respective
Offices of the CPC 6 as they provide critical feedback to the CARICOM Secretariat on any
proposed legislation.
They also need skilled personnel to draft any additional provisions
necessitated by the inclusion of additional national measures.
30
At the implementation level, there is a demand for both legal and other expertise in ensuring the
proper implementation of the draft model laws. Under the present set-up, the main ministry
involved in providing feedback and in implementing the draft model laws is usually the Ministry
of Trade or its equivalent. In a cross section of countries visited there did not appear to be much
forn1alized cooperation as between the different ministries, e.g., at an inter-Ministerial
Conm1ittee level. Without such cooperation it is difficult to see how Model Laws will ever be
implemented. Such an Inter-Ministerial Committee could fill a number of functions inter alia
ensming quality feedback based on considered and timely consultation from all relevant
ministries.7
Such an Inter-Ministerial Conm1ittee could also serve as the key Govenunent
interface with the private and public sectors, and may itself or a sub-conunittee of it form a joint
body to encourage and facilitate the consultative process with the Ministries concerned, the
broader public service and the private sector.
The development of legislation of necessity not only involves draftspersons but invariably other
lawyers, either part of a Ministry team or from the office of the Attorney General. From visits to
a number of jurisdictions, it is clear that there is a big imbalance between the resources available
to the MDCs and the LDCs. In some jurisdictions, Barbados and Jamaica being two examples,
there appears to be adequate reservoirs of professional staff.
In other jurisdictions such as
Guyana, there appears to be a shortage of experienced persomrnl.
In several of the OECS
count1ies, resources are extremely limited; the worst case is probably Montserrat.
In such
extreme cases, very often one is dependant on one or two key officials in all matters legal.
Clearly not the kind of situation in which one can make many demands for feedback and obvious
candidates for much teclmical support.
It is impossible to make any assessment of the resources that are available to carry out drafting or
other legal work without taking into consideration the present legal enviromnent in the different
jurisdictions. In this respect, only one draft report dated April 2000 was made available to the
consultants 8 . This draft diagnostic study was carried out by a team of five consultants, which
included lawyers and economists.
This team attempted to capture the dynamics within the
6
The tem1 Office of the Chief Parliamentary Counsel is used here to cover all CPCs - although this is not the title
used in all countries.
7
Such an Inter-Ministerial Committee should have as a core group, representatives from the following Ministries Justice and or the Attorney General's Office, Trade or Commerce, Foreign Affairs and Finance.
8
An Assessment of the Caribbean Justice Sectors - Draft Diagnostic Report. IDB. April 2000.
31
justice sector in all CARI COM jurisdictions. The scope of the report was very ambitious and it
observations illuminating, especially in light of developments within the CSME. Inter alia, it is
noted that with few exceptions that there was little formal strategic planning going on in the
sector; that (again) with few exceptions that the reform program in the various jurisdictions was
being conducted piecemeal; that by and large the sector was under-funded; that there was little
development in the areas of commercial and trade law and little investment in capacity building.
Since April 2000, there have been a number of initiatives in some jurisdictions, e .g., St. Lucia
and the OECS being obvious cases; the larger jurisdictions are still pursuing their reform goals and with two or three exceptions, it seems, still in a piecemeal mam1er.
This background to the Justice sector has to be mentioned, as this reflects the kind of
environment that currently exists and which is meant to accommodate developments within the
CSME. The IDB report does not build a complete picture of the demands that are made for legal
resources as it was not concerned with "usual" demands of the legislative calendars in all
jurisdictions nor of the special demands being made as a result of external and international
events for the production and implementation of a whole series of laws on international banking,
anti-terrorism laws and compliance with international agreements . Without a proper audit of
both the work to be done and the personnel available, it is impossible to conclude just what
resources are really available for the implementation of draft model laws at national level and
how they need to be supplemented or supported over the next few years. The quickest way of
making an assessment of the needs of the Member States is to ask them. A simple structured
questionnaire sent to those Member States perceived to be in need of urgent assistance could be
dealt with expeditiously. Verification and agreement on needs could be dealt with on the back of
a small consultancy exercise. The benefits could be substantial.
STATUS OF KEY MODEL LAWS- CUSTOMS
Harmonized Customs Legislation (HCL 5/98)
In 1995, CARICOM prepared the Harmonized Customs Legislation (HCL), which in its latest
revision is referred to as Revision May 1998 or HCL 5/98. The HCL is one document consisting
32
of some twenty-one modules dealing with customs administration and fo1111s. The CET is dealt
with elsewhere.
The modules provide for reasonably straightfonvard procedures such as the temporary
imp01iation of commercial samples to the granting of drawbacks, duty, exemptions, prevention
of smuggling and warehousing. Included in the HCL are proposed common fonns to be used in
the administration of customs. The adoption of all modules was not intended to be mandatory, as
·some were not applicable to some jurisdictions, e.g., to islands countiies.
In drafting the HCL, the OECS Customs Management Act and the laws then in place in the
MDC jurisdictions of Jamaica, Barbados, Guyana and Trinidad and Tobago were taken into
consideration. Despite this broad base at the preparatory stage, the HCL as a draft model law has
been c1iticized for a number of reasons - but principally because of inadequate drafting. In
addition, the proposed fonns have also been criticized as being poorly devised.
Since the drafting of the HCL, only one administration has formally notified CARI COM that it
has adopted the HCL, i.e., St. Vincent and the Grenadines. Belize has also adopted the HCL but
without fo1111ally notifying CARICOM.
Since HCL 5/98 was drafted, there has been an increased use of infom1ation technology and
additional pressure to reduce technical barriers to trade. With this in mind the World Customs
Organization (WCO) updated the Kyoto Convention. The amended Convention (2000) consists
of a General Annex, which includes measures for a modem customs administration. It contains
120 binding provisions that have general application across a number of customs procedures
including inter alia provisions on the use of infonnation technology, risk management and
transparency of customs regulations.
Contracting paiiies to the amended Convention must accept the General Annex without
reservation and implement all its provisions. CARICOM is not a contracting party.
In view of the criticism that has been leveled at HCL 5/98, the slow pace at which the HCL has
been processed, the amended Kyoto Convention (2000) and the possible needs under the FTAA
33
(Article 2 - Facilitation and Simplification of Customs Procedures and Article 4 - on
Automation) it is probably prudent at this stage to produce a new draft HCL. It is only in this
way that one can ensure that the requirements of the FTAA and the revised Treaty of
Chaguaramas for hannonized laws and uniform administrative procedures are met.
Cunently there are a number of initiatives being undertaken within some Member States with
respect to updating Customs Legislation. Barbados is working towards a consolidated Customs
Act, which will take on board some of the advanced features of the KYOTO 2000 Convention
related to electronic infonnation processing. Jamaica has engaged a consultant to review the
legislation for consistency with the Laws and Constitution of Jamaica. This review will not be
available for some months, but will almost certainly throw up important legal as opposed to
administrative issues. In other jurisdictions the views of the customs authorities have been
sought and are under consideration by the respective Attorney Generals following feedback from
their respective customs authorities.
The customs documentation poses a special problem in Suriname where it is felt that there is a
need to have the HCL or an updated version translated into Dutch. There is no legal obligation
on CARI COM to provide translations of documentation.
As a first step towards revising the present HCL it would be useful to have a regional consultant
collate the feedback from the various national authorities on HCL 5/98. A second step might be
the identification of key policy issues, which would have to be addressed in the context of the
amended Kyoto Convention and the possible requirements of the FTAA. This would require the
services of an international customs consultant familiar with Kyoto 2000, which could take some
time. A third step would be the drafting of an amended HCL 5/98. The next stage would be the
agreement on the Kyoto 2000/FTAA policy issues and whilst the final stage would be the
integration of these issues and the revised HCL 5/98.
STATUS OF KEY MODEL LAWS- COMPAJ\1Y LAW
Early Developments
34
The Harn1onization of Company Law within the Community can be traced back to 1971 when a
decision was taken by the Eight Meeting of the Council of Ministers of CARIFTA. The final
report of some 355 pages and the model legislation were approved by the working paiiy in 1979.
Although this seminal work provided the platfonn on which much Company Law reforn1 has
taken place in the Community, so many changes have taken place within the individual
jurisdictions in the intervening period that is impossible to state the degree of hannonization
within this important area of law. All that can be said with any certainty is that there has been
considerable boITowing of concepts and provisions within the jurisdictions to the degree that the
differences between the different member states may not be all that significant. To this must be
added the caveat that jurisdictions may not deal with international business corporations in the
same manner.
Proposed Regional System of Company Registration
The most recent initiative in the area of the Company Law has been the proposal to introduce a
regional system of company registration, the main object of which is to reduce the cost of
establishment. Proposals have been invited from the national Company Registrars as to how best
this might be achieved bearing in mind administrative procedures, costs and potential
discriminatory and national treatment issues.
Recent Developments in Company Law within Europe
In looking at the harn1onization of Company Law within CARI COM it would be instructional to
look at recent developments that are taking place within the European Union and in the United
Kingdom. The present position in relation to the right to set up and manage companies within
the EU is summarized below.
EC Treaty - Freedom of Establishment and Company Law
Article 50(2) of the EC Treaty provides that the freedom of establishment includes the right to
set up and manage companies under the conditions laid down for its own companies by the law
of the Member State where such establishment is affected. Under Article 58 such companies or
35
firn1s are those constituted under civil or commercial law including co-operative societies and
other legal persons governed by public or private law. But the provision does not apply to
companies or finns which are not profit-making.
Article 52 of the EC Treaty does not confer any right on a company incorporated under the
legislation of a Member State and having its registered office there to transfer a central
management and control to another Member State. So Companies intending to move to another
Member State must liquidate and incorporate according to the law of the Member State.
Under Article 52(1) a company may establish a subsidiary in another Member State and conduct
its business solely through that subsidiary. So a company registered in one Member State cannot
be discriminated against solely because its registered office is in another Member State.
Societas Europaea (SEs)
In October 2001, the Statute of the "Societas Europaea" (SE) (The European Company) and the
corresponding directive on the rights of employees of SEs were adopted by the Council of
Ministers and the European Parliament.
Under the SE, which was designed with large
enterprises in mind, European companies may merge across borders and transfer their seat from
one Member State to another. The needs of small and medium sized enterprises (SMEs) are not
provided for under the legislative prov1s10ns.
In addition, only companies as opposed to
individuals can incorporate an SE. Another requirement is that companies from at least two
Member States have to be involved in the incorporation of an SE.
None of these requirements met the needs of SMEs and it has been suggested that a requirement
of undertaking economic activities in at least two Member States should be sufficient to justify a
European legal form.
SEs can only be set up in one of four ways :
(a) By the merger of two or more existing public limited compames from at least two
different EU Member States;
36
(b) By the fom1ation of a holding company promoted by public or private limited companies
from at least two different Member States;
( c) By the fonnation of a subsidiary by companies from at least two different Member States;
(d) By the transfom1ation of a public limited company, which has, for at least two years, had
a subsidiary in another Member State.
European Company Statute for SMEs
In March 2002, the European Economic and Social Committee adopted an op1111on on a
European Company Statute for SMEs stressing "the necessity for a European Company project
for SMEs. At this stage in the consultative process, the main questions being asked are:
(a) Is there a real need for an additional European legal fonn of private company?
(b) Would it suffice to infuse greater flexibility in the laws of Member States relating to
p1ivate companies?
In the case of (b ), such flexibility would not necessarily have to take the form of ham10nization
through directives - e.g., a model for regulation of private companies in Europe, which could be
used by Member States to voluntarily amend their regulation of private companies. This would
include a mechanism to update the model if business needs so required it.
Overhaul of UK Company Law
In the UK, the Government has indicated that it plans to save small businesses millions of
pounds sterling with plans to conduct the biggest overhaul of B1itain's company law in 150
years. Existing legislation, which had been centered on big companies, will be replaced by a
new legal architecture based on "think small first" principle. The proposals will include:
amendments to the articles of association;
ending the requirement for companies with a turnover of under £4.8m (sterling) to audit
their accounts;
the removal of unnecessary burdens from small companies
37
Proposals affecting big companies will also include:
improvements to the governance and accountability rules;
a statement of directors' duties (which will be codified) and;
a new rating and financial review to be included in the annual accounts.
Company Law Developments in Europe including the UK
For several years the development of Company Law in Europe has remained stagnant. In the last
two years there has been a new dynamic in trying to introduce changes, which we have
attempted to capture above. The same is true in the UK and other European jurisdictions in
relation to small companies. Some of this work could be of irnn1ediate relevance to CARI COM.
It would be useful at this stage to prepare a paper on the most relevant developments to-date in
Europe with respect to Company Law with particularly reference to recent legislation affecting
small companies and to enforcement legislation.
Practical Issues - Registration and Enforcement
As mentioned elsewhere a Proposed Regional System of Company Registration is cmTently
being studied by the Secretariat. During the course of the field visits, it became clear that there is
a large discrepancy between the standard obtaining in the different Company Registration
Offices, whilst some were "state of the art" computerized based system, others were still
operating a totally manual system.
From indicative figures obtained from the Company Registrars it appears as if there are large
numbers of both inactive registered companies and inactive registered business names. Such
inactivity is usually a sign of poor company law enforcement. Consideration should be given at
the national level to updating company information on the back of modem enforcement
legislation. In some cases this will be a root and branch operation as it was very clear that no
work had been done on Company Records in some jurisdictions for years. This work should be
38
undertaken in parallel with the introduction of new measures and penalties for non-compliance
with the requirements of Company Law for good governance.
RECOGNITION AND ENFORCEMENT OF JUDGMENTS OF COURT TRIBUNALS
One maJor area which has received ve1y little attention to date and which appears to be
fundamental to the effective functioning of the Economic Community is the recognition and
enforcement of judgments of courts or tribunals. However, that said, provision 9 has been made
in the Treaty establishing the CCJ for the enforcement of the judgments of the Caribbean Court
of Justice.
As with the EU, CARICOM consists of both civil and common-law jurisdictions.
The
differences in te1ms of practices, procedures and indeed of an approach to private international
law within Member States can present fo1midable challenges when it comes to the recognition
and enforcement of judgments of courts or tribunals.
The approach taken by the EU to the whole area of the recognition and enforcement of
judgments of courts or tribunals could indicate a way fo1ward for CARI COM. In developing its
approach the then EEC had to invest heavily in the legal expertise to try and solve the complex
(essentially p1ivate international law) questions posed in trying to accommodate the two different
legal systems. The final result was the EEC Convention 10 on Jurisdiction and the Enforcement
of Judgments in Civil and Commercial Matters 11 , which came into effect in 1968.
Aliicle 220 of the Treaty of Rome anticipated that in order for the then EEC to function
effectively as an Economic C01m1mnity, there had to be a machinery for ensuring adequate
recourse to the law.
This article required the high contracting parties to secure: "the
9
Under the Agreement Establishing the Caribbean Court of Justice (CCJ), the contracting parties have agreed to
enact legislation to ensure that the authorities of the contracting parties act in aid of the Court and that any judgment,
decree, order for sentence of the court given in the exercise of its jurisdiction shall be enforced by all the courts and
authorities in any territory of the contracting parties as if it were a judgment, decree or sentence of the Superior
Court of a contracting party.
10
Generally Referred to as the Brussels Convention
11
It is impossible to speak of the Brussels Convention without also referring to the Lugano Convention, negotiated
between the E.C. and E.F.T.A. Member States and signed, on the 14th of September 1988. This Convention
incorporates the Brussels Conventions' rules on jurisdiction and enforcement. However, the two Conventions are
39
simplification of formalities governing the reciprocal recognition and enforcement of judgments
of courts or tribunals." So it became important to ensure that judgments of the courts in each
Member State were, subject to specified conditions being met, enforceable throughout the
conununity on a unifo1111 basis.
In September 1968, the EEC Convention on Jurisdiction and the Enforcement of Judgments in
Civil and Conunercial Matters came into effect.
In essence this Convention ensures that
judgments of the courts in each member state are enforceable throughout the community on a
uniform basis. In June 1971, a protocol was signed by the Member States of the EEC, which
deals with the interpretation of the Convention by the Court of Justice of the European
Conununities 12 • The Convention has been ratified and enacted into domestic legislation in each
Member State.
Prior to the introduction of the Brussels Convention, the courts of the common law world gave
effect to judgments of comis in other countries by applying rules of private international law.
Since the ratification of the Convention by the Member States domestic rules of private
international law have been changed or added to in each jurisdiction. The greatest change is that
brought about by the provision of a new procedure of virtually automatic enforcement of
judgments given in other contracting States.
As the Brussels Convention has been directly applied in the Members States, this ensures that the
domestic courts of the contracting states to the Brussels Convention must give effect to the
judgments of courts in other States and cannot enquire into their jurisdiction to pronounce the
judgments concerned. Provided that the court giving the judgn1ent sought to be enforced has
jurisdiction under the rules of the Convention to entertain the case, it can be enforced in a
relatively simple and speedy manner in the other contracting States.
Under Article 2 of the Convention, the fundamental rule of jurisdiction
13
upon which the
Convention is based is, "persons domiciled in a Contracting State shall, whatever their
said to be to "a large extent" but "not entirely" identical. The major difference being that the Brussels Convention
does not apply to countries outside the EC. The Lugano Convention now applies to much of Western Europe.
12
Various amendments were made to the Protocol to facilitate new Member States.
13
There are also special rules of jurisdiction, but reference to which is outside the scope of this work.
40
nationality, be sued in the courts of that State."
So, unless provided for or required by the
Convention, a defendant is required to be sued in the courts of his domicile.
Since its introduction, a body of case law has built up around the Convention. Both it and its
sister convention, the Lugano Convention, are complex but necessary pieces of law fundamental
to the effective development of a c01mnon market. In tem1s of CARICOM, it seems as if a
Protocol would need to be devised for the purpose of dealing with the recognition and
enforcement of judgments.
Due to the complexity of the Conventions, it would be useful for General Counsel to receive an
extended note on these two Conventions.
(C)
OPERATIONALIZING THE CARIBBEAN COURT OF JUSTICE (CCJ)
Ratification And Entry Into Force
Formal Requirements
The agreement establishing the CCJ is subject to ratification in accordance with the respective
constitutional procedures of the signatory countries. The agreement enters into force upon the
deposit of instruments of ratification of accession by at least three members of the Caribbean
community. Once the agreement establishing the CCJ enters into force, the CCJ will have
jurisdiction over the revised Treaty of Chaguaramas.
The required number of instruments ratifying the agreement has now been deposited.
Constitutional Provisions Of Member States
A number of constitutional provisions will have to be amended by individual countries if they
are to become members of the CCJ 14 . An analysis of such provisions shows referenda would
have to be held in two jurisdictions i.e., Antigua and Barbuda and Grenada.
14
See Table II-2 outlines the constitutional provisions that would have to be amended if countries are to become
members of the CCJ.
41
In all other jurisdictions special provisions within the individual constitutions would have to be
amended by the legislature following specific procedures.
Different majorities would be
required in both upper and lower houses (where applicable). In the case of four countries with
unicameral legislatures i.e., Dominica, Guyana, St. Kitts & Nevis and St. Vincent and the
Grenadines only a two-thirds majority of the house is required in three of these cases. In the
fomih (Dominica), a three-quarters majority is required for ratification.
In six of the jurisdictions there is a delaying provision in the constitution, usually of ninety days.
Funding
Decision of Conference
The 23rd Meeting of the Conference of Heads of Government agreed to inaugurate an
independent and financially sustainable Court (CCJ) by the second half of 2003 . To secure the
CCJ's independence Conference decided that a Trust Fund be established with a one-time
settlement of $1 OOm to finance the Court 15 . The Conference authorized the President of the
Caribbean Development Ban1c (CDB) to raise the funds on international capital markets. Member
States will be able to access these funds to meet their assessed contribution towards the financing
of the Comi.
Budget Estimates
A five-year draft budget was prepared for the CCJ, which shows the following costs over the
five-year period. These figures are subject to change 16 .
Total Recurrent Costs: EC$= 43.2m
Total Capital Costs:
15
16
EC$= 13.6m
See Table II-3 for the Contribution that will have to be made to the Trust Fund by each Member State.
See Table II-4 for a Summary of the Estimated Cost of Operation for Years 1-5 of the CCJ.
42
Total:
EC$= 56.8111
US$ Equivalent:
US$ =20.9111
The draft budget only covers the following areas : Salaries, Allowances and Gratuities of Judges
and Administrative Staff, and other administrative costs.
Timetable for Inaugurating the CCJ
The timetable for inaugurating the CCJ depended on two variables i.e. the ratification of the
Agreement establishing the CCJ by three countries and the putting in place of the funding
mechanism. The first condition has been met and the second condition is in the process of being
met. At the 23rd Heads of Government Meeting, Conference set the second half of 2003 as the
target date for the inauguration of the CCJ 17 •
Preparation for the Establishment of the CCJ
To facilitate Establishment of the CCJ, a Regional Preparatory Committee is in place aided by a
Project Coordinator who heads up a lean Coordinating Unit for the CCJ based at the Secretariat.
This small unit is entrusted with the Public Education Program for the CCJ. The program
activities include a series of workshops for the judiciary and magistracy, members of
quasi-judicial and administrative tribunal registrars, other judicial officials and the public bar. It
also includes symposia and other activities for the media, private sector representatives, trade
unionists, the academic community and schools.
Despite modest funding and shortage of personnel, this unit has managed to carry out its mission
to date, albeit in a limited way. It has recognized the need to step up its activities and to become
more focused. With funding from the IDB, Japan Aid and USAID the Unit is currently putting a
new program of activities together centered around a number of discrete components with the
following overall objectives:
Strengthening the public awareness (education) program;
17
See Table II-5 for a Schedule of the activities that have to take place before the CCJ is established.
43
Designing a transparent and objective system for recruitment of senior CCJ personnel;
and
Preparation of relevant legislation at the national level and supp01iing the mandates of the
Regional Preparatory Committee.
The first component has already been initiated and plans on making use of tlu·ee
Conununications Consultants, each working in a grouping of count1ies over a period of 6-9
months.
International Preparatory Committee
Following the deposit of three instruments of ratification, the Regional Preparatory Committee
goes into a different mode and acts as an International Preparatory Committee in setting up the
Regional Judicial and Legal Services Conunission (RJLSC).
The main functions for which the RJLSC is responsible are:
(a) making judicial appointments;
(b) making appointments of certain officials and employees e.g., Registrar and Deputy
Registrars etc.
(c) determining conditions of appointment
(d) terminating appointments.
Assessment of Technical Assistance Needs
At the time ofresearch it was not possible to make any assessment of the future needs of the CCJ
as the RJLSC was not in place. The Regional Preparatory Committee is only mandated to go so
far with its preparatory work.
As referred to earlier, the preparatory work for the funding of the CCJ is in hand and a
headquarters agreement has been signed for the location and establislunent of the court.
Due to the nature of the court i.e., a court with dual jurisdiction, it is anticipated that there will be
an immediate demand for establishing an international law library of some substance at the seat
44
of the court. Whilst this will satisfy the needs of the Members of the CCJ, it has to be borne in
mind that the CCJ is established as an itinerant court. So it can be expected that library resources
will also have to be significantly enhanced in the Member States and at different locations in
these states. The obvious locations for such mateiials are the courts, the Law Schools and the
professional training schools. Less obvious, but equally important, but perhaps at a different
scale are ministiies, public and specialist libraries, chambers of commerce, trade union
headquarters, non-legal libraries in Universities.
In order to facilitate the demand for such resources, a study of the needs for both the CCJ, the
legal institutions and the broader public should be c01mnissioned.
At the time of research, it was clear from visits to the law schools that very little preparatory
work has been done in anticipation of the establishment of the CCJ and the implementation of
new model legislation in key areas impacting on the general public, e.g., consumer and
competition law.
The Piincipal of the Nonnan Manley Law School has been asked to prepare a Draft Project for
the development of a "Center of Excellence." No details of the project were available at the time
of research. But it is clear that there is a need for a Public Institute of Higher Learning to address
the many issues of integration in all its aspects, political, legal, economic and social.
In the
sho1i-tenn, the need is for practical support to the existing institutes of learning and research
such as university and professional libraries as set out above.
(D)
DISPUTES SETTLEMENT
Background
Disputes Settlement is provided for in Chapter Nine of the Revised Treaty of Chaguaramas and
in the Disputes Settlement Understanding Annex to the WTO Agreement. Disputes Settlement is
also refened to (in bracketed text) throughout in the draft FTAA treaty.
45
Provisions of the Revised Treaty of Chaguaramas
Article 187 of the revised Treaty applies to the settlement of disputes concemmg the
interpretation and application of the Treaty, including:
(a) allegations that an actual or proposed measure of another Member State is, or would be,
inconsistent with the objectives of the Community;
(b) allegations of injury, serious prejudice suffered or likely to be suffered, nullification or
impairment of benefits expected from the establishment and operation of the CSME;
(c) allegations that an organ or body of the Community has acted ultra vires; or
(d) allegations that the purpose or object of the Treaty is being frustrated or prejudiced.
Article 188 sets out the Modes of Dispute Settlement.
Table 1 below summarizes the main provisions and limitations relating to the different modes.
46
TABLE 1: SUMMARY OF MAIN PROVISIONS AND LIMITATIONS RELATING TO
DIFFERENT MODES
Ref
Mode
01
Good
Offices
02
Mediation
03
Consultation
04
Summary
Limitations
Member States parties to a dispute may
agree to employ the good offices of a third
party, including those of the
Secretary-General, to settle the dispute.
Here the parties may agree on a mediator
or may request the Secretary-General to
appoint a mediator from the List of
Conciliators.
A Member State shall enter into
consultations upon the request of another
Member State where that Member State
alleges that an action taken constitutes a
breach of obligations arising from or under
the revised Treaty.
May begin or be terniinated at any time.
Subject to certain procedural rules, good
offices may continue during the course of
arbitration or adjudication
May begin or be terminated at any time.
Subject to certain procedural rules it may
continue during the course of arbitration or
adjudication
There is an obligation to enter
consultations and in the case of urgency
within three days of the receipt of a
request.
Conciliation . Provision is made for a Conciliation
Connnission which hears Member States
parties to a dispute; examines their claims
and objections, and make proposals to the
parties with a view to reaching an amicable
settlement.
Provision is also made for the maintenance
of a List of Conciliators by the SecretaryGeneral.
Usually the requested Member State must
enter into consultations within 14 days of
the receipt of the request or a mutually
agreed period.
Resort may be had to arbitration and
adjudication in specified circumstances.
The Conciliation Commission must report
within three months of its constitution. Its
report must record any agreements reached
and, failing agreement, its conclusions on
all questions of fact or law relevant to the
matter in dispute and such
recommendations as a conciliation
connnission may deem appropriate for an
amicable settlement.
The conclusions or recommendations of a
Conciliation Commission are not binding
upon the parties.
47
Ref
05
06
Mode
Arbitration
Adjudication
-the CCJ 18
Summary
Limitations
A Member State party to a dispute may,
with the consent of the other party, refer
the matter to an Arbitral Tribunal
constituted from a List of Arbitrators
maintained by the Secretary-General.
Where the parties cannot agree on the
interpretation or implementation of the
award, either party may apply to the
arbitral tribunal for a ruling within thirty
days of the award.
Subject to the Treaty, the Court has
compulsory and exclusive jurisdiction to
hear and determine disputes concerning the
interpretation and application of the
Treaty 19 .
Where a national court or tribunal of a
Member State is seized of an issue whose
resolution involves a question concerning
the interpretation or application of the
Treaty, the court or tribunal concerned
must, if it considers that a decision on the
question is necessary to enable it to deliver
judgment, refer the question to the Court
for determination before delivering
judgment.
The award of the arbitral tribunal is
confined to the subject matter of the
dispute and must state the reas ons on
which it is based.
Decisions of the arbitral tribunal are taken
by a majority vote of its members and are
final and binding on the Member States
parties to the dispute.
Any party to a dispute may institute
proceedings in accordance with the Rules
of Court governing Original Jurisdiction.
Persons, natural or juridical, of a
Contracting Party may, with the special
leave of the Court, be allowed to appear as
parties in proceedings before the Court in
certain circumstances.
The Member States, Organs, Bodies of the
Cornnmnity, entities or persons to whom a
judgment of the Court applies, must
comply with that judgment promptly.
Judgments of the Court constitute legally
binding precedents for parties in
proceedings before the Court unless such
judgments have been revised in accordance
with Article 219.
Subject to the provisions of the revised Treaty, the disputes mentioned in Article 187 must be
settled only by recourse to any one of the following modes for the settlement of disputes,
namely, good offices, mediation, consultations, conciliation, arbitration and adjudication.
Article 223 of the revised Treaty provides for Alternative Disputes Settlement. Member States
are obliged to encourage and facilitate the use of arbitration and other modes of alternative
disputes settlement for the settlement of p1ivate commercial disputes among Community
nationals as well as among Community nationals and nationals of third States. In this respect
Member States have to provide appropriate procedures in its legislation to ensure observance of
18 The unique characteristics of the court i.e. as provided in Articles 211·223 inclusi ve are dealt with elsewhere in this report and are not repeated here.
19 Under Article 22 1 the follo wing matters fall within th e jurisdiction of the CCJ:. (a) disputes between th e Member States part ies to th e Agree ment; (b) disputes betwee n th e
Member States parties to the Agreement and the Community; (c) referrals from national courts of the Member States part ies to the Agreement; (d) app licat ions by persons in
accordance with Article 222, concerning the interpretation and application of the Treaty.
48
agreements to arbitrate and for the recognition and enforcement of arbitral awards in such
disputes. However, it is also provided that a Member State which has implemented the 1958
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards or
the Arbitration Rules of the United Nations Conm1ission on International Trade Law
(UNCITRAL) is deemed to be in compliance with the provisions of paragraph 2 of this Article.
Summary of WTO Dispute Settlement Understanding (DSU)
The Annex entitled "The Understanding on Rules and Procedures Governing the Settlement of
Disputes" (or DSU for short)2° attached to the WTO Agreement sets out the rules that apply to
disputes brought under the consultation and dispute settlement provisions of the Agreement
establishing the WTO, the multilateral Agreements on Trade in Goods, the General Agreement
on Trade in Services (GATS), the Agreement on Trade-Related Aspects of Intellectual Properly
Rights (TRIPS). Where Plurilateral Trade Agreements have been accepted they may also be
included. These agreements are generally known as the "covered" agreements and contain21
special or additional rules on dispute settlement. In case of a conflict, between the DSU and the
provisions in the covered agreements the latter will prevail.
The WTO dispute settlement system serves to preserve the rights and obligations of States under
the covered agreements. Under the DSU a Dispute Settlement Body (DSB) was established to
administer the DSU rules and those rules contained in the covered agreements.
operates tlu·ough panels 22 and an Appellate Body23
-
The DSB
whose reports it adopts. However, the
recommendations and rulings of the Dispute Settlement Body (DSB) do not add or diminish the
rights and obligations contained in the covered agreements - thereby excluding precedent.
20
The DSU applies to States - see Article 1 - however, some Member States have made internal provision for
consultations with private parties.
21
See Appendix 2 of the DSU for references to the special and additional rules and procedures in the "covered"
agreements.
22
A panel functions the same as a court oflaw i.e. findings are based on facts and the law.
23
Under ART 17 .3 of the DU, the Appellate Body must comprise persons of authority with demonstrated expertise
in law, international trade and the subject matter of the covered agreements generally.
49
In terms of remedies, under the DSU the objective is to secure the withdrawal of the measure
which prejudices the rights of other states. Compensation may also be awarded, but it is not the
primary objective.
The DSU provides for the usual international law dispute resolution procedures 24 and so contains
provisions for use of good offices, consultation, conciliation and mediation25 •
Particular
emphasis in placed on consultation in the DSU.
Review of the DSU
The 1994 Marrakesh Ministerial Conference mandated WTO member governments to conduct a
review of the DSU by 1 January, 1999. The Dispute Settlement Body (DSB) started the review
in late 1997, and held a series of informal discussions on the basis of proposals and issues that
members identified. Many, if not all, members clearly felt that improvements should be made to
the understanding. However, the DSB could not reach a consensus on the results of the review.
The Doha Declaration mandates negotiations with the aim of concluding an agreement by May
2003. The negotiations will be based on the work done so far and on any additional proposals by
members. The declaration also clearly states that the negotiations on the Dispute Settlement
Understanding will not be part of the single undertaking -
i.e. that they will not be tied to the
overall success or failure of the other negotiations mandated by the declaration26 •
Alternative Dispute Resolution - Arbitration
Aiiicle 25.1 of the DSU states "that expeditious arbitration within the WTO as an alternative
means of dispute settlement can facilitate the solution of certain issues that are clearly defined by
both parties."
Under Aiiicle 25 .2 "resort to arbitration is subject to mutual agreement of the parties which have
to agree on the procedures to be followed."
24
See DSU Articles 4.3, 5.1 and 5.6.
See DSU Articles 4.3, 5.1 and 5.6.
26
Material on DSU Review stated verbatim as per WTO website.
25
50
FfAA Provisions
The FT AA - Second Draft Agreement, Chapter on Dispute Settlement reflects conesponding
provisions in the WTO DSU.
In tenns of dispute settlement good offices, conciliation and
mediation are maintained as voluntary methods of dispute resolution.
Alternative dispute
resolution between private parties is encouraged and facilitated tlrrough the use of arbitration and
other means of alternative dispute resolution for the settlement of international commercial
disputes between private parties. Arbitration is proposed as a binding mechanism.
Under the Revised Treaty of Chaguaramas a Member State which has implemented the 1958 UN
Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the Arbitration
rnles of UNCITRAL are deemed to have complied with the obligations of the Treaty. Article
229 of the FTAA document proposes (bracketed text) to include the following - [or the 197 5
Inter-American Convention on International Commercial Arbitration].
The FTAA document also makes special provision in relation to choice of forum in the case of a
dispute. The following two relevant articles are proposed:
"33. Any dispute arising between Parties under the FTAA Agreement [that also constitute a
violation of the obligations] [and] under the WTO Agreement [or any regional agreement to
which the Parties to the dispute are party] may be settled in either fornm at the discretion of the
complaining Party.
35. Once a Party has initiated dispute settlement procedures under the FTAA Agreement or the
Understanding [or a regional agreement] the fornm selected shall be used to the exclusion of any
other. [This provision shall not apply when, in respect of the same matter, a Party bases its
complaint on a different legal basis under the WTO Agreement or a regional agreement, than that
available under the FTAA Agreement.]"
51
0 bservations
The provisions in the Revised Treaty of Chaguaramas are on par with those set out in the WTO
DSU (allowing for international differences) and the FTAA proposals will be familiar to those
acquainted with the Revised Treaty of Chaguaramas and the WTO Rules.
It is clear that there will be a continued emphasis on alternative dispute resolution - especially
with respect to Arbitration. In terms of the Revised Treaty, some accommodation may have to
be found here for the 1975 Inter-American Convention on International Commercial Arbitration.
There is a need for a line-by-line comparison of the WTO Dispute Settlement Rules and the
FTAA proposals - not provided for under this study. This could help provide inputs to the
drafting of a regional model Law on Arbitration. The provisions relating to the choice of forum
proposals will also have to be considered in the broader context of Private International Law.
Currently there is some attempt being made in the Law Faculty ofUWI and the professional Law
Schools to highlight the importance of alternative systems of dispute resolution.
There are also
some bodies providing services in this area. But there is a need for a greater awareness and
commitment of resources throughout the Member States to the development of Alternative
Dispute Resolution (ADR). It is most important that citizens at all levels are made aware of
ADR.
More specifically it is vitally important that judges, public servants and lawyers are
adequately trained.
It would be most useful to carry out a study of the present level of
preparedness and understanding of ADR within each jurisdiction with the objective of proposing
the most economical and effective way of institutionalizing ADR.
The methods of dispute settlement set out in the Revised Treaty will place onerous obligations
on the Legal and Institutional Development Division of the Secretariat.
elsewhere in this report for review of the work of this Division.
52
Proposals exist
Matters Outstanding
Under Aiiicles 196 and 205 respectively of the Revised Treaty, Member States are obliged to
nominate conciliators or arbitrators. During the course of the study, very few Member States had
met this obligation. It is impmiant that these obligations are met, as the training and mientation
of such individuals would appear to be important. The two main provisions are set out in Table
2 below.
Table 2 Provisions Relating to Lists of Conciliators and Arbitrators
Article
196
205
Provision
A list of Conciliators must be established and maintained by the SecretaryGeneral. Every Member State is entitled to nominate two conciliators.
Conciliators serve a five-year tem1 which may be renewed.
A list of Arbitrntors must be established and maintained by the SecretaryGeneral. Every Member State is entitled to nominate one arbitrator.
Arbitrators serve a five-year term which may be renewed.
Arbitrators must have specific expertise or experience; be independent of
and not affiliated with or take instructions from any member State; and
comply with the Code of Judicial Conduct governing the behavior of judges
of the Court.
(E)
THE CARICOM REGIONAL ORGANIZATION FOR STANDARDS AND
QUALITY (CROSQ) - STANDARDS AND LABELLING
Agreement Establishing CROSQ
The Agreement Establishing CROSQ was signed by nine Member States of CARICOM on
Febmary 4, 2002 in Belize.
The Agreement provided for provisional application of the
agreement by no less than eight signatories.
The Agreement is said to enter into force when it is signed by the States mentioned in Article 3,
paragraph 1, i.e., the Members of CARICOM. Following the signing of the agreement, two
additional members signed the agreement giving a total of 11 signatories.
53
Associate
Membership may be accorded to Associate Members of the Conununity, States and political
entities of the Association of Caiibbean States.
Objectives
CROSQ replaces the Caribbean Common Market Standards Council.
Its objectives are the
establislunent and harn1onization of standards for the en11anced efficiency and improved quality
in the production of goods and services in the community, thereby facilitating consumer and
environmental protection and improved trade within the Conununity and with third States.
Article 4 of the agreement establishing CROSQ sets out the main functions of the organization,
which includes inter alia:
promoting the development and hannonization of standards, metrology, technical
regulations and the mutual recognition of confmmity assessment procedures governing
goods and services produced or provided in the conmmnity with the aim of facilitating
trade and supporting the establislunent of the CSME;
encouraging the mutual recognition of accreditation and certification systems, which are
based on internationally accepted criteria;
facilitating the achievement of international competitiveness of regional goods and services
by fostering a culture of quality in regional enterp1ises;
suppo1ting standards infrastructure development at the national level;
promoting and protecting the interests of State parties and associate members in regional
and international standardizing fora, including external negotiations;
promoting awareness of standards and standards related matters m governments,
commerce, industry and consumers:
54
Composition of CROSQ
CROSQ is pla1med as a small, permanently staffed, regional institution, which is expected to
play a significant role regarding regional and international trade issues. CROSQ's operations are
not meant to conflict with the work of national standards bureaux (NSBs) but instead will
complement their work through networking, representation and synergy. It is anticipated that
these benefits will be de1ived at a lower cost due to CROSQ's existence.
CROSQ consists of a Council, Special Committees and the Secretariat. It is intended to have
only four employees in the Secretariat i.e., an Executive Secretary and three suppo1i staff, who
are currently being recruited.
The number of employees engaged by the various National Standards Bureaux (NSBs) gives
some idea of the present size of the NSBs who will provide some of the funding for CROSQ.
Table 1. NSBs -Total Number of Employees in Year 2000
CROSQ
Signatories
(CS)
Antigua and Barbuda
No. ofEmployees
In NSBs - 2000
cs
4
cs
cs
29
Bahamas
Barbados
Belize
2
Dominica
Grenada
Guyana
Jamaica
cs
cs
cs
Montsenat
St. Kitts and Nevis
St. Lucia
St Viocent and 1he Grenadines
Suriname
Trinidad & Tobago
5
6
30
265
0
cs
cs
cs
cs
cs
55
2
4
3
0
199
Budget
Prior to the establislm1ent of CROSQ an outline budget was prepared. The table below sets out
the total Recurrent and Capital costs over a five-year period.
The Government of Barbados is
acting as host country for the CROSQ headquarters and has undertaken to provide up to 2,500 sq
ft of acconm1odation, suitably furnished for the purpose.
The anticipated recurrent and capital costs are set out below:
Table 2. CROSQ's Anticipated Operating Costs Years 1-5
Total Recurrent Costs US$
Total Capital US$
Year 1
129,350
25,217
Year 2
157,140
0
Year 3
179,140
0
Year4
204,863
0
Year 5
233 ,135
0
Total Operating Cost/Year 1: USD 154,567
Table 3 below shows the potential list of CROSQ contributors. CS indicates that it is an existing
signatory to the CROSQ agreement; PAM indicates a probable Associate Member and a blank
space indicates that a potential signatory has not signed up as yet.
The percentage contribution formula is that as used in determining Members States contributions
to CARlCOM. The amount in US$ shows the expected contribution.
56
Table 3. Contributions to the Operating Costs by Signatories &
Associated States
Percentage
Potential CROSQ
Amount
Contribution
Contributors
US$
Formula
cs
Antigua and Barbuda
1.77
2,736
9.80
15,148
10.74
16,600
2.89
4,467
1.77
2,736
1.77
2,736
7.00
10,820
24.78
38,302
.35
541
cs
cs
1.77
2,736
1.77
2,736
cs
1.77
2,736
cs
cs
7.00
10,820
Bahamas
cs
cs
Barbados
Belize
Dominica
cs
cs
cs
Grenada
Guyana
Jamaica
Montsenat
St. Kitts and Nevis
St. Lucia
St. Vincent and the
Grenadines
Suriname
Trinidad & Tobago
27.0
41,733
BVI
PAM
.36
556
Turks and Caicos Islands
PAM
.16
247
US$ 155,650
Development of Strategic Plan
The newly appointed Executive Secretary is obliged to put together a strategic plan for the
organization during their first six months of office. It is assumed that all potential activities will
be funded by Members States and or International Donor Agencies as the recunent costs outlined
above only cater for Sala1ies, Benefits and Professional Indemnity Insurance.
The Strategic Plan should be able to identify not only cost incurring measures but also income
generating opportunities.
Some of the fom1er (see below) and the latter have already been
identified, e.g., payments for sale of publications, fees/costs generated by investigations, training
57
and other consulting interventions. Fees generated for the use of any Mark owned or operated by
CROSQ should also generate funds.
Services Provided by CROSQ
Some specific services that CROSQ is expected to provide and which either cannot be or are not
being perfom1ed by the region's NSBs:
attracting assistance from international donors for Regional Standards Programs;
representing the interests of the Region in International or Hemispheric Standards work;
increasing the pace of standards development in CARJCOM;
exercising flexibility in responding more readily to CARJCOM standards needs;
facilitating the resolution of CARJCOM trade disputes, which have implications
involving standards;
monitoring implementation of CARJCOM standards by member States;
revising existing and future CARJCOM standards;
acting as the Regional Accreditation Body;
serving as an Enquiry, Notification and Information Point for WTO related matters on
behalf of member States; and
providing international representation from Member States on standards related issues.
FTAA Requirements
As it is intended that CROSQ will act as an accreditation body for the certification bodies in the
member territories, these territories do not have to set up their own accreditation bodies.
CROSQ not only has a role in tem1s of accreditation but also helps in evolving standards,
institutional strengthening, harmonization of standards and in helping set up legal metrology
(weights and measures) units. At the moment there are only 47 CARJCOM standards, all of
which are based on international standards, thus ensuring compliance with potential FTAA
obligations
58
As regards Food Labeling, CARICOM countries have always followed the Codex Alimentarius
(CA) Standards Conm1ission. The CA is referenced in the FTAA.
With respect to Drugs labeling, CARICOM does not have a standard for labeling of drugs.
Throughout the Caribbean, practices differ in each country. Barbados is in the process of
introducing comprehensive legislation on food control and regulation, but it will be based on the
CA.
Need for Technical Assistance
In discussions with CROSQ, the Secretariat and some of the National Bureaux the following
areas of concerns would need to be addressed:
(a) The need to carry out an audit of the undeveloped and smaller member organizations of
CROSQ to serve as a basis for their effective strengthening through mentoring or direct
technical assistance.
(b) The need to assist producers in the region upgrade their labeling and packaging in the
light of increasing competition through focused research; workshops, for producers and
interest groups; by adopting existing international standards; and by undertaking an
education and awareness campaign.
(c) The need to actively promote amongst producers an acceptance that standardization and
metrology are critical components in the development of internationally competitive
products.
(d) The need to devise a Web based information system for CARI COM standards, which is
accessible to all.
(e) To carry out a brief study as to the enlargement of the Inspectorate Role in light of WTO
and FTAA obligations.
(f) system for CARICOM standards, which is accessible to all .
59
(F)
COMPETITION POLICY
At the time of preparation of this report, a consultant engaged by the CARICOM Secretariat
(Stewart Stephenson) was visiting CARICOM Member States to assess the status of
implementation of the Revised Treaty provisions (Chapter VIII) on Competition Policy and
Consumer Protection and to provide guidance on the type of institutional and administrative
arrangements that should be put in place for the management of Competition Policy issues in the
Region in general and Member States in particular. The work undertaken here is intended to
complement the findings of that research project (hereafter referred to as the Stephenson Report)
by providing information on the state of implementation and proposals for technical assistance,
and by focusing on the external dimensions of competition policy, examining for consistency
with the internal CARI COM regime of the external commitments made so far in the FTAA, and
possible commitments in the WTO and in the European Union.
Provisions of Chapter 8 Relevant to Implementation
1. Art. 170 (1) {b) (i)
a. Introduce legislation in national economies consistent with the Chapter 8 of the
revised Treaty of Chaguaramas.
Only one member, Barbados has complied with this requirement. Jamaica, Barbados
and St. Vincent have Competition Laws, and Jamaica is in the process of revising its
law.
St. Vincent's will have to be revised.
While Barbados and Jamaica have
implemented their laws, St. Vincent's law has not been promulgated, and is not
implemented.
A model law has been drafted and sent to member states for
consideration and comment. At the fifth meeting of the Legal Affairs Committee in
November 2001, the draft was presented. The Committee is now awaiting feedback
from Member States.
At a future meeting of the Legal Affairs Committee,
(provisionally carded for May 2003), the model law will be discussed. The OECS
countries and Trinidad and Tobago have draft laws, but neither has been sent to
Parliament as yet. These would have to be scrutinized for consistency with Chapter
60
8. All members, including Guyana, Belize and Sminame, are actively considering the
model law produced by CARJCOM Secretaiiat and drafting their competition laws.
Table II-7 below provides an overview of the status of implementation of the
competition policy regime in the CSME, and the level of skills and capacity that
exists in the region.
This table was compiled without the benefit of fieldwork,
however, and is based on the pre-existing knowledge.
The Secretariat should refer to the Stephenson report in order to identify additional
infom1ation on status of implementation and the specific needs of member count1ies.
Needs
•
Training of lawyers in drafting skills
•
Scrutiny of draft laws by competent experts with experience in implementation of
competition law in mature regimes, to identify loopholes in the law and possible
problems in implementation that could be encountered.
•
Consultation with stakeholders to ensure that they are familiar with the issues and
proposed law, and have an opportunity to provide input. This would influence the
level of acceptance and compliance with the regime that would be experienced at a
later stage. Workshops are required in each territ01y to first explain the proposed
law to technocrats, business sector representatives, the media, consumers, labor
unions, the legal fraternity and others stakeholders.
While consultations on the
Protocols establishing the CSME were conducted, what is being proposed here is
teaching workshops on competition law and its implementation, so that stakeholders
could give informed comment.
61
b. Consistency with External Environment
There is, in large measure, consistency between the CARICOM draft model law on
Competition Policy and the substantive provisions in the FTAA; it would exceed what is
being proposed as a minimum in the WTO and Cotonou Agreements. However, Merger
Control Regulation (MCR) remains a gray area. There is no provision for merger control
in Chapter 8. The model law for CARICOM provides for merger control regulation.
Yet, in the negotiation of Protocol VIII, there was serious disagreement on the viability of
introducing merger control in the region, the major concern being that it may be inimical
to the development needs of these small economies. It was felt that economies of scale
was needed for small firn1s to compete with multinational corporations in their domestic
markets, and to be competitive in export markets. The FTAA draft text includes MCR,
albeit bracketed. Given that CARICOM is negotiating as a single unit, there is a need to
clarify the region's position on MCR, so that it does not take on external obligations to
introduce MCR when some countries do not want this. If there is agreement to remove
the brackets and include MCR in the FTAA Chapter on Competition, CARJCOM will
have to consider requesting exemption from this clause on the basis of Special and
Differential Treatment for Smaller Economies. It is urgent that member states clarify
whether MCR will be in their legislation, since the last phase of negotiations starts in
November.
Needs
•
Analyze whether MCR is relevant and beneficial to development in these small
economies. This would require economic research on existing market structure, the
potential for merger and concentrations and their possible effects on production, and
competition, and the level of competition provided or possible from external sources.
A study which addresses this question is currently unden,vay at the Sir Arthur Lewis
Institute of Social and Economic Research, the University of the West Indies.
62
2. Art. 170 (1) (b)(ii) and (iii) and Art. 170 (2)
a. Establish and maintain institutional arrangements and administrative procedures to
enforce the law, provide for dissemination of relevant information to facilitate
consumer choice
The Stephenson report should provide insights into the specifics of what is required to
implement this provision, and the capacity of the law could be severely compromised by
institutional weakness. Lack of financial and human resource is one of the most pressing
problems.
Yet, without the skills required to investigate cases and arrive at credible
decisions, and to do the advocacy work needed by a Competition Authority, the respect that
the Authority should command would be severely compromised. As it is, there is a dearth
of expertise to staff the proposed Commissions, regional and national, and to service the
private sector. Moreover, there is little knowledge and understanding of competition law
and policy among stakeholders, so a comprehensive education program is needed. Details
of the constraints/needs are elaborated below and in Table II-7 and II-8.
This prov1s10n should be considered in conjunction with Article 171, requmng the
establishment of a Competition Commission at the regional level, and provide for appeal
to the Caribbean Court of Justice (CCJ).
Note that in the FTAA Draft Chapter on Competition Policy, there is consensus that:
Each party shall establish or maintain a competition authority or authorities at the
national or sub-regional level, with the responsibility and power to enforce
national or sub-regional competition laws and advocate pro-competitive policies
and laws, before its own national or sub-regional govenunent bodies.
CARI COM negotiators in the FTAA NGCP were concerned that the micro economies
may not be able to meet the standards specified in the draft chapter for the establishment
of the Competition Authority. They therefore proposed the wording "sub-regional" in
order to allow the option that the existence of the CARICOM Competition Authority
63
could be deemed to be in compliance with the provisions of the chapter. It was reasoned
that there is a greater likelihood that the regional body would have the breath and scope
of power required in the FTAA. There would also be compliance with the requirement
that sanctions be subjected to independent review since the CCJ is intended to provide,
on appeal, independent review on any sanctions applied by the Competition Commission.
There is one point worth mentioning, and that is the fact that the Bahamas is not part of
the CSME, and therefore the CSME arrangements will not apply. They would therefore
not be able to meet the commitments of the FTAA chapter unless they proceed to pass
legislation and set up institutional arrangements on their own, that complies with the
FTAA obligations.
For this reason, CARICOM negotiators should retain the square
bracketing around [shall] [should] in the draft provisions requiring members to have a
competition law and set up a competition authority, until the Bahamas develops a finn
position on its ability to meet these obligations.
Needs
•
There is a need for technical assistance to train technical/professional staff to serve
in Competition Commissions and to service the private sector.
Initially, technical assistance is needed in holding seminars and teaching
workshops to give quick exposure to technocrats, lawyers, economists, trade
experts, magistrates, judges, regulators and others on what are the provisions of
competition law and how they are implemented.
Internships at Competition Authorities, or secondment of staffJ,-om Competition
Authorities of more mature regimes would be of great help in the process of
capacity building.
Seminars and workshops at varying levels of complexity should be delivered to
government technocrats from other ministries, the business sector, police,
journalists and consumers and all the stakeholders who play important roles in
the enforcement of the competition law.
Workshops on the inte,face between Competition Policy and Intellectual
Property, and Competition Policy and Regulated Sectors, involving staff of the
various institutions.
64
However, this is insufficient. More professional training is required through the
granting of scholarships for legal training in competition law from recognized
universities.
There is also the need for a more structured and sustainable approach to training.
The University of the West Indies needs to introduce courses in competition law
and policy and the trade and economic dimensions. This is the only way to
develop sustainability in reproducing skilled persons to administer and function
within the competition regime. However, the University does not have competent
staff in the field to do the teaching. It will take too long to develop that capacity
unaided, and time is of the essence. It is unlikely that experts from countries with
more mature regimes would take up full time positions at the university, given the
comparatively lower salaries. A solution would be to offer a module program,
concentrated over two to three weeks that would be given full semester credits,
with competition experts being adjunct to the university and doing discrete parts
of the program. It would only take a few days from their time. In the process,
faculty could be trained as well, and gradually assume control of the program.
The University will need to develop the course and arrange for its delive,y.
However, there is a need for financial assistance to get technical advice in
developing the course outline, and for supporting the adjunct staff with expenses
and payment for contributing to the course. Further, such assistance must be for
a minimum of five years, so as to develop capacity internally to continue the
course.
A major hindrance to smooth implementation of Competition Law is the lack of a culture
of competition. In the case of CARI COM, the introduction of this regime is a top down
process. The law is being created and introduced in a social vacuum. There is a need to
craft social change over a very short period, rather than allowing the evolutionary process
to unfold, as has been the case in developed countries.
In the circumstances,
governments must have a constructive approach to the process of developing and
implementing of the law. Consultations with stakeholders are necessary, but even that
would require a teaching workshop on provisions of the law and their meaning and
implications before any substantive response is to be expected. It is important to proceed
65
in such a way as to make the stakeholders feel included in the process of law making.
This includes the business sector, the legal fraternity, consumer organizations, the public
at large, universities and law schools, the media, and labor movement.
Beyond that
initial thrust at creating awareness, the competition authority has the responsibility of
developing a program for continuous education of the various stakeholders through
infom1ation flows , transparency in their decision making process, issuing of directives to
clarify and interpret the law.
Needs
•
Technical assistance and capacity building are needed to assist CARICOM countries
in this educative process, directed at all levels of society. Assistance to Competition
Authorities in developing systems for ensuring transparency and continuous dialogue
with the critical sectors of society would also be needed.
3. Article 170(5)
a. Within 24 months of entry into force . . . notify COTED of existing legislation,
agreements and administrative practices inconsistent with the provisions of this
Chapter.
Within 36 months of entry into force of this Treaty, COTED shall
establish a program providing for the repeal of such legislation, and termination of
agreements and administrative practices.
No member has started compiling this inventory, and no member, except possibly
Jamaica, has the skilled personnel to undertake this task. This task must be completed by
February 2004.
66
Needs
•
A full-scale consultancy will be needed, including experts from more mature regimes,
to undertake the task of compiling the inventory. This is an urgent requirement, given
the time constraint.
•
COTED would need assistance in establishing a program providing for the repeal of
such legislation and termination of agreements and administrative practices, since
this would involve some dislocation in the economies.
Economic analysis of the
effects of the removal of the laws and policies is needed, so that a program could
reflect the time needed to adjust.
•
States would need assistance in amending legislation or drafting new laws.
4. Articles 182 and 183 (exemptions)
Article 182 required COTED to develop special rules for particular sectors
COTED has the power to determine where special rules shall apply to specific sectors of
the Community and either suspend or exclude anti-competitive agreements in these
sectors.
Nothing has been done to dete1mine whether any exclusions or exemptions are required. It is
important to do so before the coming into force of the FTAA Agreement, since there may be
asymmetric market access issues if CARI COM does not have its exclusions and exemptions
in place, while other FTAA members do.
Indeed, most competition regimes include
exclusions and exceptions, including those of the US and Canada.
Need
•
An empirical study at the micro-economic level to determine the sectors/industries, which
may require exclusions and exemptions. This is urgent, given the date for the completion
of the FTM negotiations, and the upcoming negotiations with the EU, which also has
exclusions and exceptions in its regime.
67
Discussions in the ,vorking Group on Trade and Competition Policy (WTO WGTCP)
The proposal on the table at the WTO WGTCP for a multilateral frame,vork on competition
policy consists of:
(1) Prohibition against hardcore cartels in domestic legislation
(2) Application of the core WTO principles of non-discrimination, transparency, and due
process.
(3) Peer Review Process
(4) International cooperation amongst Competition Authorities
Comments
1. Chapter 8 and the draft model law go well beyond the proposal for legislation in the
WTO.
2. The Chapter also provides for the application of the core principles of nondiscrimination, transparency and due process, though reference is made only to nationals
of other member states of the CSME.
The FTAA draft chapter contains the same
provisions, applying to Parties to that agreement. This is still square bracketed, though.
There is uncertainty as to how these principles will apply to a competition agreement in
international trade, and this is much debated in the WTO.
3. A Peer Review Process is proposed both in the FTAA and WTO. This is outside the
scope of the Chapter 8 and will be an external commitment, if agreed.
However, if
agreed to, this would create a demand on resources to prepare country reports for the
review.
The proposal in the FTAA is that technical assistance to prepare the reports
could be given to those countries that may require help.
4. International Cooperation with Competition Authorities is a positive prov1s10n for
CARI COM, and one that is expected to be pursued in any case, at bilateral and FTAA
levels. There are issues to be considered, but these are outside the scope of this work.
68
The Cotonou Agreement requires negotiations on developing a competition regime at the
national or regional levels, consisting of prohibition of both anti-competitive agreements
and abuse of a dominant market position. It therefore goes well beyond what is being
suggested in the WTO WGTCP. Further, it includes cooperation both at the case level,
and teclmical assistance to draft laws and provide support for administrative enforcement,
with particular reference to the special situation of the least developed count1ies. It does
not specify smaller economies.
There is therefore full consistency between the
framework for negotiations and the internal regime of CARlCOM. However, while there
is no reference to core principles (non-disc1imination, transparency and due process), it is
certain that this would also be proposed in the Cotonou negotiated text, since the EU is
the main proponent of core principles in the WTO WGTCP.
Need
•
Commission a study on the meaning and practical application of non-discrimination in
the national legislation when also applied in a Free Trade Area or WTO framework.
CARJCOM needs to determine the scope of the application of the provision on nondiscrimination in Chapter 8, and its meaning in practice.
EU Implementation of its Competition Regime: Some Points of Relevance for CARI COM
The question of what legal authority would the CARICOM Competition Commission have to
represent the CSME countries in relations with third states could be explored by looking at
the instrnments in the EU regime. We should note, though, that cooperation agreements can
be either government to govenunent or between competition authorities.
In the case of
CARJCOM, cooperation agreements/anangements between the CARlCOM Competition
Commission and other competition authorities may be possible without inviting legal
questions of authority to represent Member States.
This should be explored further.
However, the question remains of legal autho1ity to represent CARICOM, say, in the
proposed Competition Conunission in the FTAA.
69
Authority to Represent the EC Internationally
The power of the Conunission to represent the EC on the international scene stems from the
Treaties establishing the EC, and specific provisions in these Treaties, which give such
authority to the vaiious EC Institutions for matters arising within the EC territory. Typically,
the Commission acts on the basis of a specific "mandate" by the Council of Ministers for socalled "community policies" (external trade policy, competition policy, transport policy,
telecom, environment, energy etc.).
On the basis of Treaty provisions and enabling
secondary legislation (mostly EC Regulations but also EC Directives and Decisions), the
procedure and limit of this mandate are set out in detail. Some transfer of "sovereignty"
appears inevitable for purposes of giving the Commission authority to act. From this
"internal authority" originates EC representation on the international scene. In the EC this
has been obtained via a famous "opinion" of the European Court of Justice (Opinion 1/94),
which stated that when the EC Institutions have competence to act on a matter "in foro
domestico" (that is, in the internal EC matters) they have competence to bind the EC "in foro
externo" (that is, on the international scene). A full discussion of this can be found on the
internet at http://v.,rww.eji1.org/jouma1Nol6/No2/art3-03.html.
Implementation of the Regime
The basic issues and experience in applying the regime are summarized in the Commission's
proposal for the modernization of the regime.
Infonnation can be
found at
http://europa.eu.int/comm/competition/antitrust/others/ under "Reform of Regulation nr 17."
The main problems encountered were: how to ensure that the Commission has adequate
powers to investigate (solution: obligation of Member States to use their domestic powers to
assist the Commission when necessary), how to ensure uniform application of the rules
throughout the territory (solution: presence and monopoly of the Commission to carry out the
"rule of reason" analysis on all "cross-border" cases, and also when national legislation is
incompatible with EC rules, the later is primary).
70
Need
•
Get legal advice on whether the Regional Competition Commission could represent
member states in relations with third parties, such as in the FTAA.
Experiences in Introducing Competition Regimes in Developing Countries: Some
Lessons
The infonnation and analysis here were derived from examining papers presented at the
FTAA NGCP meetings, findings of the research project on Competition Policy in seven
Commonwealth countries: India, Pakistan, Sri Lanka, Zambia, Tanzania, Kenya and South
Africa administered by the Consumer Unity Society of India, and funded by DFID (7 UP
Project), and infom1ation gleaned during conferences.
1.
Tlze releva11ce of Merger Co11trol Regulatio11 (MCR) :
a. Openness to investment could lead to take over of domestic firms by MNCs, creating
monopolies. This is the case in the South African Customs Union (SACU), in which the
experience has been that large South African fim1s are investing or selling into the region
at a tremendous pace.
For example, South African beer and mining concerns are
acquiring incumbent local producers throughout the region, and attaining regional
dominant positions in these markets . Having MCR could be useful in preventing such
concentration in markets.
b . However, it is still a moot question whether merger control is relevant in small and micro
economies, given the argument that a level of concentration is needed for these microfirms to achieve economies of scale and be competitive against foreign finns . This, of
course, could be tailored to suit the needs of small fim1s by having an appropriate
threshold, exceeding which merger notification would be obligatory. Consideration
should also be given to the following:
c. Cost of managing a MCR regime, both in human and financial tenns.
Chile has no
merger control regulation, one reason being lack of human and financial resources. This,
in spite of the fact that the staff of the Commission is 70.
71
Argentina has had a
Competition Law since 1923, but had no MCR until 1999.
France and other EU
countries, and even US introduced merger control much later.
However, one needs to
evaluate whether it is a question of level of economic development, or openness?
Argentina found that foreign finns were buying up local firms, as was the case in SACU,
and introducing MCR to prevent such take-over.
1. There is a need to detennine the balance required between the penal nature of the
law and softer remedies. The example of Argentina is instructive where the law was
totally penal from 1923 to 1980, and administered by the court. Very few cases were
brought in 60 years . Now the law has been revised to introduced cease and desist,
fines, request to court to dissolve company, undertakings by firms, and this allows
much more room for correcting anti-competitive conduct.
2. The role of competition advocacy is important in this regard, including having a good
information system and providing for transparency. This approach would encourage
compliance. Canada has a very effective advocacy program, and this could be used
as a model.
3. Sanctions must be enough to be a serious disincentive, or firms would fines and
continue anti-competitive conduct if still profitable.
1.
Peru found that fines were too low - increased from US$40,000 to US$800,000 or
equivalent to 10% of previous year's earnings.
11.
Zambia found the need for criminal sanctions in order to obtain infonnation from
MNCs: any person who omits or refuses to furnish any infonnation or document
when required by the Commission, or knowingly furnishes any false infonnation
to the Commission shall be liable to a fine of 10 mil. Kwacha or imprisomnent
for a term not exceeding five years or both. CEOs became ve1y cooperative
subsequent to the passing of this law, whereas before they treated the
Commission's requests with scant respect, and were very uncooperative .
111.
National treatment is being required in the FTAA and WTO contexts and so fines
should be a percentage of earning, rather than a fixed sum, because of the
disparity of earnings between local firms and MNCs.
72
4. Exclusions and exceptions must be worked out smce most countries with
competition laws have exclusions and exemptions, and this could lead to disparity in
a trade context.
5. Institutional framework
a. Competition Authority's Powers.
Autonomy? Should it be part of a Ministry or
should it be set up separately.
1. Peru's experience: initially it was part of the Ministry but this proved to be
inefficient with staff not consistently devoting time to competition work.
An
autonomous unit, Indecopi, was created which is a teclmical and independent
body.
11. In creating the institutional framework, every effort should be made to guard
against political interference in the work of the Commission. It is what happens
in practice that is important. Recently, the head of the Colombian Competition
Authority resigned because the President of the country wanted him to approve a
merger that he had blocked. This is only one example of several. Repeatedly, in
India, Pakistan and Sri Lanka, competition investigations have been stopped
through blatant political interference. Powerful business interests, including
foreign corporations, went directly to the top political directorate (including the
President of the country) and succeeded in stopping investigations into their
conduct (7UP Project).
111.
Argentina revised its institutional structure in 1980, and again in 1999. It would
be useful to look at what problems they corrected in both revisions.
6. Quality of Leadership: A strong person, or committee 1s needed so that the
Commission gains the respect of the stakeholders from the beginning. This was the
case in Zambia; a very strong and active Commissioner was appointed, who launched
a high profile public education campaign. Now, the newspapers business section
can-ies ongoing infom1ation on the work of the Commission, and the Commission has
a high profile with consumers and the business community. A weak and indecisive
start to the regime could result in loss of respect.
73
7. Implementing the law: In a recent evaluation of the 7UP Project (Geneva, July 6&7,
2002), it was found that in almost all of the project countries, competition authorities
have difficulties in implementing the competition law due to lack of capacity in the
Competition Authorities.
The constraints include poor leadership through bad
appointments, lack of suitably trained and experienced staff, inadequate research
capacity, poorly funded agencies, and generally, lack of resources. Authorities had
difficulty enforcing the law because of lack of political will, ignorance of the law
amongst stakeholders, lack of strong consumer movements, and insufficient
coordination among the Competition and Regulatory Authorities.
Further, it was
found that poorly drafted laws led to problems with enforcement, and that lack of
third party/private action also led to problems (S. Africa).
It is important to develop mechanisms for ongoing discussions and collaboration
amongst Regulatory Authorities and the Competition Commission in order to avoid
conflicts.
There is the case between the Banking Regulator and Competition
Commission in South Africa, which went to court to determine who had jurisdiction.
Had modalities for cooperation and consultation been put in place, it could have been
resolved internally, and without conflict.
8. Staffing: there is a very high level of turnover of staff in competition authorities in
Latin American countries, and other new competition regimes. Low salaries offered
by the Competition Commissions, in comparison to the private sector is the main
cause of this loss of staff. Every effort should be made to retain staff, many of whom
would have benefited from training courses that were government sponsored, and
whose commitment is crucial to the development of a new competition commission
and regime. An important dimension of the solution to this problem is the creation of
a pool of experts so that there are enough to supply demands in the private sector as
well. This can only happen if training courses/degrees are offered at the University,
and scholarships and other promotional programs encourage students to go into that
field of study.
74
9. Funding for the Commission could be paii of government's budget, or through fines
and fees, or both. Govenunent's budgetary allocation is always insufficient. Fines
and fees are contingent on how the autho1ity exercises its discretion.
It can be
tempting to fine too easily, or appear to do so. This could hann the credibility of the
Commission.
It would be different if the fees were not dependent on how the
authority exercises its discretion. For instance:
a. In Brazil, the proceeds of fees and penalties must be spent on the educative process.
So, for example, each year a conference is held on competition policy, organized and
paid for by the Commission.
However, in Pem, 80 percent of funding is derived from fees and fines, and there are
no constraints on the use of this money. A closer examination of how this is affecting
the image of the Conunission may be useful.
10. A consideration when developing staff contracts is to provide safeguards against
breach of confidentiality, since staff may be susceptibility to corruption.
For
instance:
a. Pem requires that staff members cannot defend or provide advice on the cases
before Indecopi except cases involving them. Prohibition continues to apply after
they leave, on cases in which he/she participated directly in the performance of
his/her duties;
b. Staff is not allowed to accept contributions, gifts, and hospitalities while canying
out duties;
c. They must submit a sworn prope1iy and income statement on an ammal basis;
11. Good physical facilities are needed. A survey of Competition Commissions in some
Commonwealth countries revealed a serious lack of resources for providing good
facilities, and this had a very negative impact on the Commissions ability to function
efficiently and the conditions of work negatively affected the morale of staff. Needs
include good office facilities, modem telecom and computer systems including
Internet access and a library ofrelevant legal and economic literature. For instance, it
75
was found that the library facilities in the Indian Competition Authority was totally
inadequate, and this affected staffs ability to be adequately infonned.
12. Winning support for the law has proved to be one of the most critical early activities
needed when introducing a competition regime. The experience of Panama and Peru
are most instructive, both of which involved a well conceptualized plan, including:
a. Public consultation - advertise draft in newspaper;
b. Workshops to explain the law;
c. Consultations with private sector and consumer movements to win support by
making them part of the process of developing the law;
d. Disseminate information about government policies to private bar and instruct
business operators about how to comply with the law;
e. Transparency in operations by issuing guidelines, regulations, speeches, media
interviews, website, conferences to explain law and why necessary.
13. It would be useful to examine (critically) the experience of Jamaica in adopting and
enforcing the law over the last decade.
(G)
INTELLECTUAL PROPERTY
Inter-American Development Bank (IDB) consultants have been conducting a diagnostic study
of TRIPS implementation/compliance, i.e., compliance with substantive standards of protection
of copyrights and related rights, trademarks, geographical indications, indust1ial designs, patents,
layout designs of integrated circuits, protection of undisclosed information.
They are also
looking into confom1ity with obligations regarding enforcement: general obligations, civil and
administrative procedures and remedies, provisional measures, border measures, Notification and
findings re compliance with TRIPS rules. This study is near completion.
The TRIPS Agreement requires WTO members to provide a minimum standard of intellectual
property (IP) protection by enacting national IP legislation, and providing the legal infrastructure
to monitor and enforce the law and facilitate the pursuit of litigation. The National Treatment
clause forbids discrimination between a Member's own nationals and nationals of other
76
Members, and the Most-Favored-Nation clause forbids discrimination between the nationals of
other Members. The types of IP protection covered by the TRIPs agreement are in the tlu·ee
broad areas of:
1. Industrial Prope1iy
2. Aiiistic and Literary Works, and
3. Sui Generis systems of protection
1. Industrial Property applies to inventions/innovations of industrial applicability
1.
11 .
Patents
Trademarks
111.
Industrial Design
1v.
Geographical Indications
The TRIPS Agreement requires Members of the WTO to comply with rules on the
protection of Industrial Property in the Paris Convention for the Protection of Industrial
Property (1967). This convention is administered by the World Intellectual Property
Organization (WIPO).
2. Artistic and Literary Works are covered by
1.
11.
Copyrights
Neighboring Rights (rights of Perf01mers, Producers of Phonograms, and
Broadcasting Organizations).
Members are required to comply with the Berne Convention for the Protection of Literary
and Aiiistic Works (1971 Version) administered by WIPO:
There is no specific Requirement to comply with the Rome Convention for the protection
of perfom1ers, producers of Phonograms, and Broadcasting Organizations) administered
by the WIPO. However, much of the provisions of the TRIPS Agreement are inspired by
the Rome Convention. The standards in the TRIPS are higher than those in the Rome
Convention in some respects and lower in other respects.
77
3. Article 27 of the TRJPS agreement requires that countries provide protection for plant
varieties either by patents or by an acceptable sui generis system of protection or by both.
The sui generis system of protection that is considered the yardstick of measurement of
acceptability is the International Convention for the Protection of New Plant Varieties
(UPOV) Convention or generally known as Plant Breeders Rights.
78
TABLE 1. INTELLECTUAL PROPERTY RIGHTS:
SUMMARY OF INSTRUMENTS, SUBJECT MATTER, FIELDS OF APPLICATION,
AND RELATED INTERNATIONAL AGREEMENT
Types of IP Rs
Types of
Inshuments
Subject Matter
Main fields of
Application
Industrial Property
Patients
Utility Models
(Petty Patents
New, non-obvious
Inventions Capable
of Industrial
Application
Manufacturing,
Agriculture
Industrial Designs
Ornamental
Designs
Manufacturing,
Clothing,
Automobiles,
Electronics, etc.
Trademarks
Signs of Symbols
to Identify Goods
and Services
All Industries
Original Works of
Authorship
Printing,
entertainment
(Audio, Video,
Motion Pictures),
software,
Broadcasting
Geographical
Indications
Literary and
Artistic Property
Copyrights and
Neighboring Rights
Breeders' Rights
Sui generis
Protection
Integrated Circuits
An
Trade Secrets
Notes:
Database
Protection
New, Stable
homogenous,
Distinguishable
Varieties
Databases
Original Layout
Designs
Secret Business
Infom1ation
Agriculture and Food
Industry
Information
Processing Industry
Major International
Agreements
Paris Convention
Patent Cooperation
Treaty (PCT)
Budapest Treaty
Strasbourg
TRIPS
Hague Agreement
Lorcamo Agreement
TRIPS
Madrid Agreement
Nice Agreement
Vienna Agreement
TRIPS
Lisbon Agreement
TRIPS
Berne Convention
Rome Convention
Geneva Convention
Brussels Convention
WIPO Cop 1996*
WIPO Perf Phonogram
Universal Convention
TRIPS
UPOV
TRIPS
The European Directive 9
Microelectronics
Industry
Washington Treaty
TRIPS
All Industries
TRIPS
*Administered by WIPO. As of December 31 , 1997, he Washington Treaty and the WIPO Copyright
Treaty were not yet in force .
** This regional approach in the area of database protection provides an example of the evolving definition
of IPRs.
Source: Camos Braga et al, Intellectual property rights and Economic Development: background paper to the World
Development Report 1998.
79
TABLE 2 - SUMMARY OF CONTENT OF INSTRUMENTS
Instrument
Patents
(20 years protection)
Industrial Design
(at least 10 years)
What protected
•
Any field of technology
•
May exclude inventions
(i) to protect public order to
morality, and to
( ii) protect human, animal or plant
life or health
(iii) diagnostic therapeutic and
surgical methods
(iv) plants and animals
non-functionally detemJ.ined
appearance designs, especially the
aesthetic aspects of product
configurations
•
•
Trademarks
(no less than 7 years and
registration renewable
indefinitely)
•
•
•
Geographical Indications
•
textiles may be protected under
indush·ial design law or copyright
law
any sign or combination of signs
capable of distinguishing the goods
or services of one undertaking from
those of other underiakings
well known marks which are not
registered
indications which identify a good as
originating in the territory of a
member, or a region or locality in
that territory, where a given quality,
reputation or other characteristic of
the good is essentially ath·ibutable
to its geographic origin
added protection for wines and
spirits
Right Conferred
•
Criteria for Protection
the right to exclude other persons
from making, using or selling the
associated invention
The innovation must be:
•
new or novel
the right to supply the market with
imports of the patented products
•
non-obvious to an expert in the
field
•
of industrial applicability
prevent third parties from making,
selling or importing articles bearing
or embodying a design which is a
copy, or substantially a copy of a
protected design, when such acts
are undertaken for commercial
purposes
•
new
•
original
•
exclusive right to prevent all third
parties not having the owner's
consent from using in the course of
h·ade identical or sinJ.ilar sign for
goods and services which could
lead to confusion
•
publish each trademark either
before it is registered or promptly
after it is registered and afford a
reasonable opportunity for
petitions to cancel he registration
•
prevent the use of any means that
indicates or suggests that the good
in question originates in a
geographical area other than the
h1.1e place of origin in a manner that
misleads the public as to the
geographical origin of the good
•
authentic geographical origin
•
•
•
80
any use which constitutes an act of
unfair competition
Instrument
•
Copyrights
(Life of the author plus 50 years
protection)
Layout-designs (Typographies)
of Integrated circuits
(at least 10 years)
What protected
works of authors, broadcasting
organizations, performers and
phonogram producers
•
protects expression of ideas
•
does not protect ideas, procedures,
methods of operation or
mathematical concepts
•
computer programs
•
compilations of data
•
Functional designs for computer
programs
•
Eligible mask works against
copying only
•
exclusive right to make and sell
copies of a particular expression
and also derivative works
(translations, marketing images
•
the right to assign the rights in
return for royalties
•
rental rights for phonograms,
computer programs and
cinematographic works
•
Authorization of the right holder
required for importing, selling or
otherwise distTibuting for
commercial purposes a protected
layout design, an integrated circuit
in which a layout design is
incorporated or an article
incorporating such an integrated
circuit only in so far as it continues
to contain an unlawfully
reproduced layout-design
•
•
Trade Secrets
•
Criteria for Protection
Right Conferred
protection of undisclosed
information
81
•
must be original work and must
have a degree of creativity
•
Originality (independent
uncopied creation)
•
novelty
•
the information is secret (not
normally accessible to persons
within the circles that normally
deal with that kind of information
•
has commercial value because it
is secret
•
has been subject to reasonable
steps to keep it secret
Right holder cannot prevent reverse
engineering provided that the
second-comer's own design is
independently created
prevent information lawfully within
their control from being disclosed
to, acquired by, or used by others
without their consent in a manner
contrary to honest conunercial
practices
Instrument
•
Plant Breeder's rights
What protected
new plant varieties
•
reproductive material from new
plant varieties
•
seeds from new plant varieties
•
use of harvested materials
•
essentially derived varieties
Right Conferred
•
•
82
Criteria for Protection
prevent the unauthorized use for
commercial purposes of protected
materials
•
newness
•
uniformity
require royalty payment for use
•
stability
Each provision in the Revised Treaty of Chaguaramas, as it relates to the IP, will now be dealt
with and comments given where possible, without the benefit of fieldwork, which is expected to
be provided by the other consultants.
Chapter 4, Article 66a: The strengthening of the regimes for the protection of intellectual
property rights and {the simplification of registration procedures in the Member States)
Legislative and Institutional Dimensions
The requirement here is essentially to become TRIPS compliant. An interview with the IP
division of the WTO Secretariat revealed that several countries have complied fully, or have only
a few more measures to implement: Antigua and Barbuda, Belize, Dominica, St. Lucia,
Barbados, Trinidad and Tobago, and Jamaica. The WTO Secretariat is quite satisfied with the
progress in these countries, and pointed to the fact that Antigua/Barbuda is almost in full
compliance, excepting for very specialized areas like integrated circuits.
However, they cited the problem countries as Grenada, Guyana, Suriname, St. Kitts and Nevis,
St. Vincent and the Grenadines, where little is happening. According to an interviewee from
Grenada, they are preparing legislation covering some aspects of industrial property (patents,
trademarks, indust1ial design) but none on protection of plant varieties and copyrights. Severe
shortage of skilled staff and personnel exist in most CARICOM countries, particularly the
smaller ones. Guyana, in particular, has not even started the process of TRIPS implementation,
and little understanding of the provisions or process of implementation exists, including at the
governmental level.
Public education is still a critical issue.
Several countries have been
successful in the review of their implementation, but others are not even responding to WTO
requests because they do not have staff with the technical expertise to do so. The RNM is
playing an active role in assisting countries to become TRIPS compliant.
The WTO Secretariat pointed out that according to the TRIPS agreement, there is an additional
transition period of 5 years, to 2005 for fields of technology where patents are not granted. So,
technically, CARI COM countries could have until 2005 to introduce protection of plant varieties,
provided that in the colonial legislation, it was not possible to patent plant varieties. The field
consultants should check this point, in order to determine if any of the countries can claim a
83
further five years to put in place a regime for protection of new plant varieties. Interestingly, the
EU has done a study for the OECS countries on plant varieties, identifying which plants need to
be protected.
Most CARICOM countries are institutionally very weak in Intellectual Property administration.
St. Lucia has set up a registry for IP, with assistance from WIPO in training staff and providing
two computers. The OECS countries are considering setting up a combined IP office, and a
WIPO Consultant was commissioned to carry out a study on Intellectual Property offices in the
OECS.
Recommendations were made to these countries out of this study about how to
effectively manage their IPR protection systems. There is even consideration of setting up a
single IP and CP office. The only other such model is in Peru, where the same body, Indecopi,
administers both competition policy and intellectual property. There are synergies between the
two, and the model has worked well in Peru.
WIPO has provided and is providing an enom1ous amount of assistance to the CSME countries
to implement TRIPS and to administer the regime. In addition to the seminars and workshops
aimed at educating technical and public persons, they also provide examination assistance
through collaboration with WIPO member states.
In Trinidad and Tobago and Barbados, a
patent application is accepted for registration without further examination if the WIPO system
under the Patent Cooperation Treaty (PCT) indicates that the patent has been examined
successfully. If the applicant is not from a PCT country, but the patent had been registered in
five industrialized countries, then they would grant the patent.
The WTO TRIPS Council
Discussions in the WTO TRIPS Council and in the FTAA negotiations on IP are both
concentrating on interpretation of the provisions of the TRIPS Agreement.
The WTO
Secretariat, IP division, pointed out that the issue of protection of geographical indications is
being hotly debated in the WTO TRIPS Council meetings now, and that this has great relevance
for the Caribbean. An interesting, point, though, is that the EU would not accept a country's
name as qualifying for protection; it must be a province or region within the country. That has
implications for the utility of this modality of protection for CARICOM countries, given that
many products with an international reputation are named after the country (e.g., Trinidad Vat 19
84
Rum). There is a good argument here for the specialness of small island economies, given that a
whole country in CARICOM is generally much smaller than a province in Europe.
The
mainland count1ies are an exception here, in physical size, but not in te1ms of size of economy or
population.
The Cotonou Agreement reaffinns the TRIPS Agreement and enjoins its implementation. It
defines the meaning of intellectual property and offers cooperation in preparation of laws,
establishment and reinforcement of domestic and regional offices and other agencies, including
support for regional IP organizations involved in enforcement and protection, including training
of personnel.
The only provision that therefore goes beyond TRIPS is that it provides for
possible further negotiations aimed at protecting trademarks and geographical indications for
products of particular interest of either Party. Given the infonnation available without fieldwork,
there seem to be no conflict between the internal regime and what is being proposed in the WTO
and Cotonou.
In the FTAA, there has been pressure by the US to develop a TRIPS plus
Agreement, but this is being resisted by most countries, including CARICOM.
Protection of New Plant Varieties
There is an important aspect of the implementation of Article 27(3)(b) of the TRIPS agreement
that has implications at the regional level, and this is the legislation and enforcement of
provisions for protection of plant varieties.
The issue is that CARICOM countries will not
benefit from this regime unless a well-designed and implemented program of technical assistance
is undertaken. Very specialized criteria are required for granting of protection of plant varieties,
and in order to benefit from this legal regime, CARICOM countries must do two things: their
plant breeders must develop the expertise to produce plants with the characteristics required to
obtain plant breeders rights, and the IP office has to develop the expertise to test the plants for
the four crite1ia required to grant the monopoly right.
Since members of the International
Convention for the Protection of New Plant Varieties (UPOV Convention), until recently, were
all industrialized countries, this means that mostly temperate plants have been subjected to such
testing, with the exception of horticulturals in Holland, and those plants that were originally
sourced in the tropics and adapted to temperate conditions, such as wheat and maize.
85
The testing procedure involves
detennining whether novelty exists
(not previously
commercialized), and then planting fields with the new variety being tested, and waiting for the
plants to grow, to then determine whether they meet the four criteria of uniformity (same height,
shape and size of leaves etc.), stability (can reproduce repeatedly with the same characteristics),
and distinctiveness (identifiably different from others within its species). Usually, if sufficient
uniformity is established, then the plant has a good chance of also being stable. Given what is
involved in the testing procedure, it will take a decade or more for tropical countries to acquire
the skills through technical training, and to develop production techniques to produce plants that
can be conferred with plant breeder's rights. Benefit from this regime could come only after
some 10 to 15 years, given the most optimistic pace of empowem1ent. Meanwhile, the regime
will essentially protect the rights of foreign owners. Interestingly, though, there has been no
application as yet for protection of plant varieties in Trinidad and Tobago, a member of UPOV,
possibly because the listed varieties are not of commercial interest to foreign producers, and
local producers are not yet ready to apply for protection.
Enforcement of this regime is a serious problem because of lack of skills, and indeed, lack of
such skills specifically for testing tropical plants, and this is a global problem. It is suggested
here that the UWI Faculty of Agriculture be targeted as a repository of skills in testing plant
varieties.
In the UPOV system, countries specialize in testing of particular plants, and all
members send their plants to the specialists for testing. The UWI Faculty of Agriculture can
become the testing station for the CSME for plant varieties, but also, they could offer services to
other tropical countries. It could therefore be an opportunity to offer services in this field for a
fee.
Needs
•
The UPOV Secretariat could provide initial training in the complex procedures for
testing and help to develop a unit at the University to do this testing.
•
Training for plant breeders is essential if they are to take advantage of the regime being
introduced in these countries.
•
Institutional capacity building is a critical need in the region, if Members are to enforce
the IP systems that are being put into place.
86
Art. 66 (b) Establishment of a regional administration for IPR except copyright.
Preparatory work has been undertaken in this regard.
COTED mandated the CARICOM
Secretariat to established a Working Group on IP consisting of heads of IP offices in the region,
and this was done in 2000. This Working Group has met twice in 2000 and made considerable
progress in providing coordinated responses to IP issues in the region. The Group agreed to
conunission from WIPO a feasibility study on the establishment of a regional administrative
body, and requested of the CARI COM Secretaiiat that Tem1s of Reference be prepared for the
Group's consideration. It also agreed to request of WIPO that a study be conducted on the
feasibility of developing a regional anti-piracy system based on the Banderole model. Fmiher,
the group agreed to the drafting of model legislation for CARICOM in the area of Access to
Genetic Resources.
The CSME Sub-Program recognizes the need for Model legislation in
respect oflntellectual Property and has included activity in this regard in its Work Program.
However, the TORs for these studies have not been prepared, nor has the model legislation been
drafted, and the Group did not reconvene since the second meeting in October 2000 and August
2002 because of human and financial constraints.
The legal officer in charge of IP left the
CARICOM Secretariat, and no one was available to develop the TOR.
While there are
competent legal officers at the Secretariat, they are stretched beyond their limit, and are unable to
devote time to this issue. There is a need to recruit more legal officers and to reinvigorate the IP
work in the Secretariat. The Group could not re-convene or even develop a program of work to
execute its mandate due to the unavailability of funds. This situation is a stark demonstration of
the inability to implement conunitments, even where there is the best of intentions and will
continue to do so.
There are several factors to consider regarding the creation of a regional IP office:
(i)
Barbados, Jamaica and Trinidad and Tobago have established IP offices and are earning
revenues. They may be concerned that they will lose revenues and power if a regional
office is set up.
87
(ii) lack of capability in examining applications for industrial property protection points to
the need for a regional office to pool skills and develop joint capability.
(iii) The OECS countries suffer from severe shortage of human and other resources needed to
implement the IP regime. Interviews revealed that in St. Kitts and Nevis, Dominica, and
Antigua, the Intellectual Property Office is housed in the Supreme Court Registry Office,
and inadequately provided for, given the many and pressing demands on that office. In
Dominica, there is a person to administer the IP regime (note, 1 person) , but no building
to house the IP office. In St. Lucia, the IP office is housed in the Registrar of Companies.
Antigua is proposing to put its IP office together with Land and Corporate registration. It
is imperative that IP be given an adequate, independent institutional base, and clearly,
many of these countries are not in a position to do so.
(iv) Possibilities/solutions proffered by interviewees were:
•
To have national offices with a coordinating regional unit and specialization m
administrative skills among the various offices
•
To have a parallel system, so that if there is a registration in one of the three bigger
countries (Trinidad and Tobago, Barbados, Jamaica), then it would qualify for
automatic protection in the rest of CARICOM, and only one registration is needed.
This would require a more integrated system than exists in the EU, where the
European Patent Office examines applications, but when granted, the patent has to be
registered separately in each EU country where protection is desired. This allows the
patent holder to surrender his rights in one jurisdiction without affecting his rights in
another.
•
As indicated before, the OECS countries are conside1ing a single institution for
administering competition policy and intellectual property. One caution though, was
the importance of organizing independent and adequate financing for the office.
Another point of importance is that in June 1999, COTED, at its Sixth Meeting, mandated the
Secretariat to initiate examinations of the issues and requirements to develop a regime for trade
in Intellectual Property in the Common Market. Apart from the preparation of the TOR, nothing
else has been done. There should be a link between this issue and competition policy, since the
88
issue of whether parallel impolis would b allowed under the competition regime will detennine
whether there would be free flow of goods and services in the CSME of protected products, once
introduced into the market legally.
It would be a good idea to study the interface between
competition law and intellectual propeliy rights in intra-regional trade in the European Single
Market, as this would provide pointers for the CSME's regime.
Needs
1.
Technical assistance to conduce a Study leading to proposals for the establishment of a
Regional Administration for Intellectual Property Rights.
2. Assistance to commission a study on parallel imports of products protected by
intellectual property rights and other issues and requirements to develop a regime for
trade ill intellectual property in the CSME.
3. Strengtheni1tg legal expertise of staff of the CCS in intellectual property law.
4. Financial assistance to commission the drafting of model legislatio1t for the
CAR/COM.
5. Financial assistance to commission a study
011
the feasibility of establishing a Regio1tal
Anti-Piracy System based on the Banderole Model.
Art.66 (c) Identify and establish mechanisms to ensure
(i) The use of protected works for the enhanced benefit of the Member States
Few mechanisms have been established to ensure the use of protected works in the region. In
Trinidad and Tobago and Barbados, there are inventors' societies, and they have a
relationship with the IP offices. The Barbados Investment and Development Cooperation
(BIDC) has established an innovation suppoli center. The IP office sits on the connnittee to
give the IP input to discussions. The real problem in the region is not inventions, but the
suppoli to take it to the connnercial stage. This requires money, and most of the inventors
have little capital to invest, and are wary of joint ventures with large corporations. Moreover,
the firms in the region invest very little, if at all, in R&D, preferring to license technology
from abroad.
89
Needs
•
Development of an educational program in the following areas:
I. To teach stakeholders how to access patent information that is available (e.g., WIPOs
website), so that when they have an idea, they can check to see whether that idea has
already been developed and there is a patent in existence.
2. To develop domestic capacity to assimilate transferred technology.
3. Training in negotiating contracts for the transfer of technology.
4. Encourage entrepreneurs to invest in R&D, rather than rely only on commerce, as
has historically been the case in the region.
5. Training of lawyers in the preparation ofpatent applications.
(ii) The preservation of indigenous Caribbean culture
It is presumed that this means, in the context of IP, the protection of rights to the use of
indigenous Caribbean culture. This would require sensitivity to what can be protected
under IP law, by meeting the criteria for the various fonns of protection, and taking the
necessary action before the invention is lost to other enterprising countries' firms or
individuals (such as the loss of the steel pan to enterprising Japanese entrepreneurs). Maybe
the best way to do this, apart from the education process, is to have a committee examine
existing cultural practices that may qualify for protection, and take the necessary action, and
also sensitizing the public, particularly the artistic/cultural groups, to the advice that can be
offered by IP offices on the possibilities for protecting any new knowledge that emerges.
Need
•
A study to determine which aspects of existing culture could and should be protected
under IPR.
(iii) The legal protection of expressions of folklore, other traditional knowledge and
national heritage, particularly of indigenous populations in the Community
Several Members have passed laws complying with obligations under the Convention on
Biological Diversity. The CARICOM IP Working Group had agreed on the need for a study
90
on Access to Genetic Resources, but has been unable to commission it because of lack of
funding. While there is no provision in the TRJPS agreement on protection of indigenous
culture, folklore and traditional knowledge, the consultants in the field will be listing the laws
passed, and that would include any that cover the items in this provision. This is, however, a
much-debated issue in the international arena.
The WIPO has undertaken a tremendous
amount of work in this area with the view to developing a global system of protection of
traditional knowledge. The legal provisions and the modalities of how to apply IP protection
in these areas are still to be detem1ined.
TRJPS Council.
Discussions are also taking place in the WTO
The RNM (represented by Malcolm Spence) and some CARICOM
countries have been participating in these discussions. Barbados and Trinidad and Tobago
have provision in their IP law for protection of expressions of folklore, and other CARI COM
States could examine this.
The FTAA draft chapter on Intellectual Property has extensive provisions for the protection
of folklore, the relationship between the protection of traditional knowledge and IP, and the
relationship between access to genetic resources and IP. However, the provisions are all
bracketed, and still need to be negotiated.
Needs
•
Technical training to empower a cadre of technicians to actively participate in the
WTOIWIPO debate on protection of indigenous laiowledge and folklore so as to
contribute to the creation of an international regime.
•
Financial assistance to attend meetings of WIPO.
•
Commission a study on Access to Genetic Resources.
Article 66 (d) Increased dissemination and use of patent documentation as a source of
technological information.
The idea here is to access information on patented products or processes from the registration
offices and utilize the knowledge contained therein. An obligation of patent registration is full
disclosure of the invention so that a skilled person in the field can reproduce the invention.
There is little use of such information, which can now be found in the WIPO website. Indeed,
91
one of the strategies used by the Japanese in the early post war years was to access information
from the WIPO office on patents, and copy or build on this infonnation. A public awareness and
educative process is required to create an awareness of the potential benefits, and the know-how
to access and utilize this knowledge. No such effort is currently underway in the region, but is
essential so that these countries could benefit from the IP regime.
Need
•
Training zn accessing patent documentation from WIPO's Website as a source of
technological laiowledge.
This should be directed at the Un iversity, Business
Associations, Inventors Associations, IPR Offices.
Article 66 (e) Public education
IP offices in the region have provided some public awareness exercises, but this has been ad hoc
rather than sustained and sustainable programs. In most cases, it is the copyiight associations
that have been active, particularly in St. Lucia and Trinidad & Tobago. WIPO has conducted
several seminars in the region. Yet, there is a high level of ignorance in the region on IPR issues.
What is more disturbing is the lack of knowledge among technocrats in many countries. So,
there is a crying need for a focused education program, targeting not just the public, but also
government officials. Fmiher, there should be more care taken in choosing persons to attend
workshops, to ensure that the right people are targeted, and there is continuity of the persons
chosen to attend, so as to build capacity.
There is also the problem of high staff turnover
throughout the region, and the root causes of this must be addressed.
In Guyana, for instance, the Registrar's office sent their people to WIPO workshops, but the
Attorney General's Office, which is responsible for drafting the law, has not been exposed at all
to the skills training program. As a result, there is a serious lack of knowledge on all IP issues
amongst the staff. There is a serious sho1iage of staff, and at the time of the interview (Feb.
2002), they had been operating without an Attorney General for six months. It is not surprising,
therefore, that at that time, they had done nothing to implement the TRIPS agreement. There
have been no amendments to the Patents Act, 1973, and the Copyright Bill has not yet gone to
Parliament. They need every possible type of technical assistance they can get. In particular,
92
they need to seek WIPO's assistance to proceed with implementation of TRIPS. And problem is
seen in varying degrees in many member states.
Needs
e
It may be useful to conduct an assessment on how effective are the current public
education programs, whether they have failed to influence the stakeholders and why, and
use this information to improve on what exists now.
Article 66 (f) Measures to prevent the abuse of intellectual property rights by right-holders
or the resort to practices, which unreasonably restrain trade or adversely affect the
international transfer of technology.
There is a link between Chapter 8 on Competition Policy and Art. 66 (f) of Chapter 4 above.
This article requires inclusion of provision in the national and regional competition laws of
measures to prevent abuse of IP monopoly. Chapter 8 does not explicitly proscribe abuse of IP
monopoly power, though it can be sanctioned under Article 179 (3) (b) which states that An
enterprise shall not be treated as abusing its dominant position if it establishes that: it
reasonably enforces or seeks to enforce a right under or existing by virtue of a copyright,
patent, registered trademark or design ... The operative word here is "reasonably." This is in
contrast to the explicit prohibition contained in Art. 66 (f). The draft model law on Competition,
Article 33 provides for prohibition of anti-competitive conditions linked to sale or licensing of
patented goods. This provision gives expression to Art. 40 (2) of the TRIPS Agreement. This is
to note that enforcement procedures by the Competition Authorities could rely on Chapter 4,
article 66 (f), as well as Art. 179 (3)(b) and that the positions taken by CARICOM in the WTO
should be informed by this provision.
Another issue that falls under this provision is that of exhaustion of rights and parallel imports.
This has been much debated in the WTO, linked to essential pharmaceuticals, and the Doha
Declaration partially sanctioned parallel imports and compulsory licensing of these products
(particularly HIV/AIDS drugs). The idea of exhaustion of rights is that once a protected product
is legally introduced into a market, then the purchaser, or licensed producer can sell it in other
markets. Hence, within the CSME, once a protected product is brought into the market at any
point, the good can then be sold in any other national market within the CSME without
93
infringing the IP rights. This also applies to sale of goods produced under license. In other
words, the IP holder cannot divide markets geographically within the CSME.
There is
recognition of the validity of parallel imports within the EU, and several cases to illustrate its
application.
Need
o
Training in skills to investigate and enforce competition rules in the complex area of
abuse of IPR monopoly power.
(H)
GOVERNMENT PROCUREMENT
There is no provision for government procurement (GP) in the Revised Treaty of Chaguaramas,
and CARJCOM Member States still have to negotiate a Protocol on procurement.
project on Government Procurement in the region is quite extensive.
The IDB
It proposes to do the
following :
a diagnosis of existing legal and institutional GP framework for each of the 15 Member
States of CARJCOM, including rec01mnendations on streamlining of the procurement
process;
a comparative matrix on national GP frameworks in CARJCOM;
a rep01i outlining possible regional support activities to facilitate improvements
111
national GP frameworks;
collection of GP statistics in each of the beneficiaries;
development of a database of statistical inforn1ation;
regional analysis of the size and scope of GP activities and related trade in CARJCOM;
preparation of a rep01i containing a set of recommendations on how CARJCOM countries
could move towards a regional best-practice framework for GP, covering all relevant
institutional and organizational aspects.
Given that such an extensive study is already being undertaken, it was felt that this report should
provide infom1ation on the process by which the EU developed its procurement regime, and the
experience in implementation, particularly the problems encountered and the lessons which
could be learnt by CARJCOM to inform its development of a procurement regime. Further,
information should be provided on possible obligations under the FTAA Agreement, the
discussions in the WTO and the Cotonou Agreement framework.
94
While the IDB consultants will be providing detailed infonnation on national systems, some
inf01mation gathered will be includ ed here. Barbc1c1 os has a very different 11 ational procmern ent
system from Jamaica and Guyana. In Barbados, the procurement regime has a threshold under
which contracts are not required to be publicly tendered, that is, US$50,000. Above that figure,
contracts paid by the govenm1ent must also be tendered locally, but joint ventures are allowed,
and resident foreign foms (registered under the company's act) can tender.
Contracts paid
tlu·ough international funding must be open to the member countries belonging to the funding
agency, e.g., IDB.
Jamaica has no external contracts value thresholds, only procedural thresholds relating to
different approving authorities for different contract values. All procurement is basically open to
foreign competition. The same is the case in Guyana; there is no threshold, and every contract is
open to international bidding, and so national treatment fully applies .
This ope1mess was
attributed to the lack of local consulting finns in Guyana. There are only about 8, and that figure
includes Trinidadian foms. While there is no official blacklist of defaulters, the government
sanctions defaulters by not giving them contracts for a few years. A draft GP law has been
produced in Guyana, prompted by World Bank conditionality, and drafted by an IDB consultant.
This is now being debated.
As indicated above, the IDB consultants will be providing details of the procurement regimes in
each CARJCOM country.
LESSONS FROM THE EU REGIME
Objective:
•
To draw from the EU's experience lessons that CARJCOM could learn in order to avoid
the same problems and to enhance efficiency in developing and implementing its
procurement regime.
•
To identify areas that would require technical and financial assistance to develop and
implement the regime.
The Treaty of Rome did not provide any provisions on Government Procurement (GP), but by
the mid-l 960s a decision was made to begin negotiations on a common framework for
95
procurement in the Common Market, in an effort to allow EC companies to have access to
contracts awarded by public autho1ities and prohibit discrimination on the grounds of nationality.
Transparency rules (obligation to publish notices before and after awarding a contract, and to
give the reasons for rejecting an application/candidate in a tender) have the effect of cont1ibuting
to fighting b1ibery and conuption. The first Directive on GP was developed in 1971 on Works
contracts, followed in 1976 by Supply contracts. In1989, the Remedies Directive was issued,
and in 1990, the Directive on Utilities, which also has a separate Remedies Directive and in 1992
on Services. However, there were several revisions of the earlier Directives. The Directive on
Works contracts was revised twice (1979 and 1989) and replaced in 1993, while the Supply
Directive was replaced in 1993.
The many rev1s10ns, and the emergence of new Contracts Directives reflect the problems
encountered in implementing the regime, and attempts to remove the bottlenecks and hindrances
to the smooth functioning of the regime. Finally, the most recent revision took place in 2002.
This latest revision b1ings thiee of the four Directives (Works, Supply, and Services) into a
single document.
The Utilities Directive and its accompanying Remedies Directive remain
separate documents .
The value of procurement covered is modest still, because most procurement tenders fall below
the threshold, which requires opening the call for tenders to the whole Community, or are legally
excluded from the Treaty, such as defense. Only 10-15 percent of procurement is covered by the
regime, but there is uncertainty of the amount, since statistics are difficult to obtain. This is
because there was no compulsory requirement to provide statistics, and now it will require time
to change practices and put systems in place to generate the statistics required to measure the
success of the regime, that is:
•
Verification that there is participation in most tenders.
•
The procurement value at the EU level is increasing over time.
The Directives govemmg procurement are administered under the Directorate General for
Internal Market while the Directorate General Trade is responsible for transparency including the
96
WTO Govenm1ent Procurement Agreement. The Directives take legal effect through adoption
by the Parliaments of the member states.
Who is affected by public procurement legislation?
The Directives provide a non-exhaustive list of awarding authorities, such as central government,
local authorities and quasi-public bodies, such as educational establislnnents, development
corporations and utilities. Where an authority subsidizes by more than 50 percent a contract,
which is not let by it, the procurement rules will apply to the body letting the contract.
STRUCTURE OF THE EC DIRECTIVE
Utilities
(Water, energy, transport, telecom)
Traditional Sectors
Work
l
Services
Supply
(Works, Supply, Services)
Remedies
Remedies
There were six Directives covering the traditional sectors (3), Utilities (1) and Remedies (2). In
the new regime that is proposed, the Traditional sectors have now been consolidated into one
document, taking into account and conecting the many problems encountered in implementing
the previous regime.
The Commission has the power of initiative to table a proposal for a new Directive.
(the
Parliament carmot). Then the Council (composed of representatives of Member States) and the
European Parliament (EP) adopt it jointly. When there are different views between the EP and
the Council (and it is cunently the case with GP), a joint adoption makes the procedure rather
97
lengthy and complicated: there are various readings and compromises between the two ; if the
initial proposal is substantially modified, the Conunission is free , at any moment, to withdraw its
proposal and then suspend the law making process (but if this is invoked, then there is the danger
that nothing will be legislated!).
The Directives are a framework law: Member States (MS) must adopt later secondary legislation
(not only decrees, it must also be laws, and the National Parliaments would intervene) in line
with the Directives. These laws are examined by the Commission who may decide that it is not
in line and then ask the MS to modify it. If not, the Commission, through an infringement
procedure, will bring the MS to the Court of Justice. Cunent cases against MS in the Court of
Justice are posted on the web page:
http ://europa.eu.int/comm/internal market/en/pu bl proc/infr/index .htm
Usually, Directives are not very detailed, leaving the MS to flesh out the details through their
own legislation. It is not the case in GP, however, where EU Directives exceptionally are very
detailed, in paiiicular concerning the tendering procedures and time limits. All MS must respect
these provisions. Natural persons or bodies are allowed to complain directly to the Commission
in case of non-respect of the Directives (whether a specific procurement does not respect the
rules or a MS law is not aligned with the Directives). In that case, the Commission is competent
to request modifications (always through the MS) and in case of refusal, it can bring the MS to
the Court of Justice (and the tender or the MS law be declared void) . In any conflict between EC
Law and MS Law (including Constitutions), there is a "preference of EC Law over national
Law." This is a basic principle in the EU since its foundation in 1957.
Member States are usually consulted by the Commission when drafting a new Law (it is the case
in GP). MS, sitting in the Council, must adopt any new Directive proposed by the Conunission
(in the case of GP, together with the European Parliament). Finally, MS are responsible for
adopting (transposing) into national legislation the Directives. Then everybody, the Commission
and the MS, administer their own parts, but it is clear that the Commission has a more important
role to play in GP.
98
The Directives have general principles and rules that must be reflected in national legislation.
However, they are not implemented in exactly the same tern1s in different count1ies because each
country has its historic experience and legal traditions. This may mean modifying the legislation
already in force. For instance, the French authority was forced to create new legal procedures for
implementing the new Directive. In the process of modifying the legislation already in force,
established rights or positions may be challenged.
If implementation requires adoption by
Parliament, then the affected stakeholders could lobby their parliamentary representative, leading
to conflict in getting the legislation passed.
Problems encountered with implementing the regime:
1. The Directives did not keep pace with rapid modernization of the public sector in the last
decade and a half, and suppliers had to deal with outmoded systems and procedures.
•
The procedures for tendering involved too much paperwork and were financially and
commercially burdensome. This served as a detenent to companies.
•
The Directives were dated and out of touch with business developments and trends.
•
The Directives involved unwieldy procedural steps that was out of sync with the
modus operandi of the modernized public sector.
This was particularly the case
where public entities were under pressure to finish projects within budgetary targets
but procurement procedures made that impossible.
2. Contracting Authorities were not efficient in implementing the regime. According to the
1995 Report of the Commission, the Directives were only being implemented at a rate of
70 percent and only 51 percent of the Directives were being properly applied.
For
instance, contracts were artificially split up to reduce their value and avoid public
procurement rules .
Eighty-five percent of contracting authorities, especially local
authorities, were not complying with their advertising and transparency requirements .
3. The many languages in Europe posed a major challenge for the EC to publish calls for
tenders in the EC Official Journal in all languages of the EU simultaneously. Failure to
do so would lead to discrimination against those whose language is unrepresented. The
financial cost of translation was exceedingly high.
99
4. No system for collection of statistics, resulting in an inability by the Commission, even
now, to accurately access the level of success of the regime.
5. It was difficult to determine under which regime mixed contracts would fall when both
works and services were needed. Moreover, because different Directives applied, many
difficulties were encountered because of inconsistencies between the Directives.
6. Difficulty with hannonization because of the different regimes in the various count1ies.
7. Suppliers were reluctant to complain to the contracting Autho1ity against local suppliers
because de facto disc1imination was possible at a later date since conflict of interest
prevailed.
In November of 1995, the EC published the Green Paper on Public Procurement in the
European Union: Exploring the Way Fonvard. The Green Paper provided a framework for a
wide-ranging debate and to this end, the Commission invited all interested parties, and in
particular, contracting authmities, to present their views.
As a result of the feedback from this debate, the Commission revised the regime, bringing the
Traditional Directives into one document and providing consistency and efficiency to the
procedures across the board. However, the law making process is not yet finalized since the new
Directive has to be adopted by the European Parliament, and there could still be substantial
changes before the end of the procedure.
The basic objective of the Directives is to force the contracting Authority to use only economic
criteria and not political and subjective criteria in granting contracts, that is, to force them to act
like private fi1111s.
100
Key provisions of the current regime are:
1. Discriminatory provisions are bam1ed; specifications must be defined by EU standards or
national standards that implement EU standards.
There is a common reference for
desc1ibing specifications.
2. The contracting Autho1ity must publish a notice about future contracts in the Official
Journal of the European Community. The following are the thresholds above which the
call for tenders must be published in the EC Journal.
Works: 5 million Euros
Supply and Services: 130,000 Euros (lowered from 200,000 Euros)
Local Authorities Supply and Services: 200,000 Euros
3. There is an obligation to award contracts based on an objective procedure.
The contracting authority must use either the open or the restricted procedure. In the
open procedure, anyone can tender.
In the restricted procedure, a pre-selection
process is undertaken.
In more limited cases, the contracting authority may use the negotiated procedure
without notice, but this is completely exceptional (as, for example, where there is
only one supplier, but the contracting authority must be able to prove that this is the
case).
4. Contracting Authorities must award contracts according to the lowest prices or most
economically advantageous offer.
5. The Contracting Autho1ity must offer reasons for rejection of bids to tenders, which
failed to win the contract.
The new text not only rationalized the Traditional Directives, but also introduced some new
provisions, which need to be implemented at the national level. All the rules in the previous
Directives are already implemented. New provisions are:
101
(a) Electronic Procurement
(b) New rules for framework agreement, which is a type of contract, which is efficient in
some situations. This is cmTently being used by many procuring entities, but does not
fall under the scope of the GP Directives. The EC Directives only apply to the tendering
process. The amendments to the Directives will introduce new provisions to take into
account the framework contract modality and will impose specific rules for the bidding
process, m particular, how to calculate the value and time limits for these kinds of
contracts.
(c) Competitive Dialogue, which is somewhat like the negotiated procedure, but more
transparent negotiations are involved, and which concerns a schedule for complicated
contracts.
These provisions do not apply until the deadline for implementation is met, and sellers cannot
demand their application until the deadline date. If a member does not implement the new
provisions in time, then they are in breach, sellers and the EC can demand their application, and
countries can be taken to the European Court of Justice (ECJ). The greatest problem is when
non-implementation gives rights and advantages to local sellers.
National Treatment and Transparency
The most important principles in the procurement regime of the EU are national Treatment and
Transparency. Because of the political ramifications, it was a difficult process to get acceptance
of a common approach to reducing discriminating practices, taking some 15 years to do so.
The key issue here is that infonnation on the tendering process is available to all bidders on an
equal footing:
That there is a single point of access to infonnation.
That equal oppo1iunity is provided to all bidders in the Community.
To facilitate this requirement, an official journal was created, dedicated to tendering. It was
made compulsory that all calls for tenders above the threshold and not among the exceptions
must be published in the EC Official Journal. The Journal is updated daily and contains all
102
tender notices falling under the coverage of the EC Directives, and all contract awards. All
infom1ation is available in the 11 languages. The Journal is publicly available, free of cost, at
http://ted.eur-op.eu.int. Publication in the national journal is optional. The system is centralized
in Luxembourg, with publication in all eleven languages taking place simultaneously.
Many
elements of the translation have been automized, and this was done by producing a Conununity
Procurement Vocabulary (CPU) and developing a specific forn1 on which every entity must
provide infon11ation. This fonn is available on the EU Procmement Website http://simap.eu.int
and a code for the CPU refer to sectors or industries, allowing finns to locate calls for tenders
specific to their interests quickly and efficiently.
While the EU experience has been that there is a big interest in more value for money in the
single market, it has been difficult for countries whose suppliers are not competitive. Procurers
are satisfied because they are getting cheaper supplies of a better quality and therefore, better
supplies to citizens. However, procuring entities are losing influence over local suppliers and
this has political consequences. Entities also are under great pressure to meet the fom1at of
publication of calls for tenders and this places a great demand on human resources.
Remedies
The Remedies Directives require, as a first step, action before the domestic court, which has
powers to require interim measures, to set aside unlawful decisions (suspending perfonnance of
contract) and to award damages. There is provision for appeal to the ECJ on decisions of the
national courts.
A provision that was adopted later was an open door for complaints to be made directly to the
Commission. This was because of the conflict of interest in the situation where the purchaser
and the referee in complaints is the same body, if the complaint has to be made to the Procuring
Entity against a national supplier.
Suppliers were afraid to complain because they may be
excluded de facto from later contracts. An independent body is therefore needed. While this
could lead to many complaints on procedures or the national legislation and help
111
the
monitoring process, it also means enonnous human resources have to be dedicated to the
complaining system. Moreover, while the system was initially set up to avoid the National
103
Courts of Justice discriminating in favor of domestic suppliers, m practice, most of the
complaints sent to the Commission are filed by domestic suppliers.
The EC C01mnission can start an investigation on its own, or following a complaint lodged by a
third party. Aggrieved unsuccessful tenders can seek redress through the national courts by
seeking damages and, if the contract has not been let, ask for suspension of the award.
Injunctions are also available.
Recommendations for consideration when developing a CSIM Regime on GP
While the regime in Europe provides very useful lessons for CARICOM to consider when
developing its internal procurement regime, this must, of course, be tailored to the specific
characte1istics of CARICOM economies. Some suggestions for the consideration of the Task
Force, arising out of Europe's experience, are the following:
1. Produce a single document for works, services and supplies, ensuring consistency and
coherence amongst the various areas covered, using same words and interpretations.
2. Identify sectors to be excluded.
3. Make as a compulsory requirement the provision of statistics on procurement. Out of the
results of the IADB project, a database could be built, and kept updated by the statistical
inputs required. Advice from the EC on the methodology for collection of statistics is
recommended.
4. With the inclusion of Suriname, and possibly Haiti, in the CSME, there is a need to
consider the need for development of rapid translation facilities to facilitate the
publishing of calls for tenders in several languages in order to ensure equal opportunity.
The rationalized approach of the EC, with a single fom1, automized translation of key
words and plu·ases, and the C01mnon Procurement Language, should be studied carefully.
There are cost implications to the development of the translation infrastructure, but this is
unavoidable if equal opportunity is to be guaranteed.
104
5. Govenunent technocrats need to be trained to understand both the provisions of the
procurement regime and the implement procedures. If the person in charge does not want
to apply the text, or does not understand how to apply the text, then this would not only
lead to inefficiency, but would have discriminatory effects.
6. Contracting Auth01ities need the tools by which to administer the regime such as
practical guides, standard fom1s, standard model contracts.
These should be easily
accessible, both in hard copy and on a Website.
7. CARlCOM should develop a model legislation to pre-empt the problems experienced by
the EU in hannonizing the regimes across Europe and streamlining procedures for
tendering.
Haimonization of the transparency and equal opportunity principles is
important.
8. There must be created a regular forum for discussion between the CARlCOM Secreta1iat
and the entities responsible for Government Procurement and the suppliers. This would
allow ironing out of problems as they a1ise.
9. Consideration should be given to the creation of an independent body that can receive
complaints so that suppliers are not concerned about later discrimination by local entities.
However, care must be taken to conceptualize and construct a system that would not
require enom1ous human and financial resources, both of which are scarce in CARlCOM.
Cotonou Agreement
This Agreement contains detailed provisions on Government Procurement applicable to all tenders
financed by the European Development Fund (EDF). This represents often a major share of total
procurements launched by mai1y ACP countries. However, there are no provisions of GP that
would impose any obligations on ACP countries when tendering through their internal procedures
and 100 percent financed by their own budget. Future trade agreements between the EC and the
ACP may contain GP provisions for liberalization of markets, but this is not decided upon as yet.
- - - · -·
-·--·------------·---- - - -- ------
·---
----·
-
- - - - - - - --------·
105
~
·---
--- --
----
--------- -- ------
With respect the tendering for contracts using EDF, the key issues are Transparency and Market
Access. However, it is the view of the European Commission that it has taken into account the
realities in the developing countries.
In their view, they could not impose certain non-
discriminatory provisions, especially price preferences, and while use of the EDF must produce
value for money, it was also recognized that there was a need to protect local industries. The EC
recognizes that it will have to take on board issues relevant to small economies. However, they
have had no experience dealing with developing countries under a procurement regime. The
only example of special provisions is in the WTO General Procurement Agreement (GPA), but
this has never been used since no developing country is a signatory. It was suggested by staff of
the EC that the ACP countries, and small economies in paiiicular, need to do their homework
and put ideas on the table.
Government Procurement in the \VTO and FT AA
There is a Procurement Agreement in the WTO, but it is a "plmilateral" regime, that is, not all
WTO members are bound by it; it is optional. No developing country has signed the Agreement
on Government Procurement (1994) (GPA) . This GPA is included in Annex 4 to the Agreement
Establishing the WTO. The GPA does not apply to all government procurement of the Parties,
but to procurement by the procming entities that each Party has listed in its schedule in Almexes
1 to 3 of Appendix 1 of goods, and all services and construction services that are specified in
positive lists found in Annexes 4 and 5 of Appendix 1.
There is a Working Group on Transparency in Government Procurement (WGTGP) in the WTO,
with a mandate confined to issues of transparency in govenunent procurement practices, and the
Doha mandate states that negotiations
011
GP will be limited to transparency. Topics being
discussed in the WGTGP are the following:
Definition and Scope of Government Procurement, Procurement methods, Publication of
Information on National Legislation and Procedures, Infom1ation
011
Procurement Opportunities,
Tendering, and Qualification Procedures, Time Periods, Transparency of Decisions on
Qualification, Transparency of Decisions on Contract Awards, Domestic Review Procedures,
Notification,
Dispute Settlement Procedures, Teclmical Cooperation,
Differential Treatment for Developing Countries.
106
and
Special and
At this point, countries are only giving their views under each of these topics. Discussions in
this group would be of relevance to CARJCOM when it is developing its procurement regime,
and a detailed evaluation of the proposals is recommended at that time, when the discussions
may have advanced, and a negotiating agenda developed, or negotiations may have started.
In the FT AA, there is a substantial draft bracketed text (25 pgs.), but consensus has been a1Tived
at for only one provision, that is, dissemination of laws and regulations. Unlike the proposed
negotiations in the WTO, the FTAA negotiations cover both transparency and market access.
Proposals include general principles of non-discrimination, transparency, due process, publicity,
and the development of cooperation and technical assistance mechanisms. Member countries are
required to ensure that their laws, regulations, procedures, and practices are in agreement with
the provisions of the chapter, that their procurement regime is administered in a reasonable,
objective and impartial manner, and potential disputes are settled through judicial, arbitration or
administrative procedures. The bracketed text calls for non-discrimination, the prohibition of
performance requirements, and rules of origin must not be different from or inconsistent with
rules of origin applied in the normal course of trade.
Service suppliers from another Party
whose enterp1ises does not engage in substantial business in the territory and is owned or
controlled by persons from a non-Paiiy can be excluded from the tendering process.
Scope of application of the text covers methods of purchasing public goods and services, and any
law, regulation, requirement, procedure or practice governing procurement. It does not apply to
subsidies or donations, govermnent services or function, and cross-border financial services.
No threshold has been negotiated as yet.
That will be done during the next phase of the
negotiations, when market access negotiations will begin. The text includes provisions to govern
how the value of procurement is to be estimated, in order to prevent the splitting of contracts so
as to avoid meeting the obligations of the chapter. Exceptions include provision that MFN does
not apply to rights and obligations contained within regional integration movements,
procurement linked to defense, national security, public order, natural disasters, and other
emergencies. The only part of the text that is not bracketed is Art. X: Dissemination of Laws and
Regulations, which outlines rules governing this practice.
107
The rest of the draft chapter provides detailed rules governing the procedures for procurement:
general principles governing procurement procedures, selective tende1ing, limited tendering,
publication of invitation to tender and the content of the invitation, time periods for responses,
content of tender documentation, registries, qualification and other conditions for paiiicipation of
suppliers, application of technical specifications, submission, receipt and opening of tenders,
negotiations disciplines, evaluation of tenders and awarding of contracts, dissemination and
awarding of contract, the handling of confidential infonnation, review and appeal procedure and
dispute settlement.
The chapter also provides details on technical cooperation modalities and assistance, and special
and differential treatment and transition period. In the chapter, the specifics of special and
differential treatment have been fleshed out in detail. Finally, the chapter provides guidelines for
administration of the chapter, and rules governing amendments and privatization.
All these
provisions are bracketed and will be negotiated in the final stage of negotiations . In addition to
the draft-bracketed text, the NGGP has defined the scope and detail of statistical information that
countries are required to submit.
CARICOM negotiators have voiced agreement with the general p1inciples of the draft chapter in the
FTAA NGGP . Their concerns center on capacity to implement the chapter, and they are arguing
'
very strongly for special and differential treatment, and focusing on concrete S&D measures. They
also are arguing that these countries need protection not only from the developed countries, but the
larger developing countries, including the Dominican Republic.
Recommendation
The work being done in the IADB project will provide an excellent basis from which to
development a procurement regime in the CSME, and to rationalize and upgrade the national
regimes. It would have the added benefit of substantially covering the infonnation required by
CARICOM to deal with both the FTAA and WTO negotiations. However, what is recommended is
that the negotiators at the FTAA and WTO be involved in the discussions and negotiation of the
procurement protocol, since CARICOM's interests will be expressed in these negotiations and can
108
inforn1 the positions taken in the external negotiations. This is important if we are to avoid a
situation where the regime adopted is shaped by external conm1itments, rather than catering to the
internal needs of the CSME. The provisions in the text in the FTAA are still to be negotiated, and
what exactly would be the commitments is yet to be detennined. The same applies to the WTO
discussions and fo1ih- coming negotiations. The internal discussions should influence the positions
taken in the external negotiations.
(I)
CSME PUBLIC EDUCATION PROGRAM
The Seventh Meeting of the Conference of Heads of Government of the Caribbean Community in
Barbados in July 1995 reconm1ended that - "a strong public education program should be
developed which should be adequately funded and should enjoy the support of the public sector,
p1ivate sector and the media: Internal structures of Members States should be strengthened in order
to facilitate broad consensus building (before final regional decisions) among government
departments, between government and opposition parties with private sector and other interest
groups and for the sensitization of all sectors on the role and importance of the Single Market. This
should engender a general degree of continuity of the process at the national level..."
In discharging this mandate the CARlCOM Secretariat developed a Public Education Program
(PEP) which was executed in two phases, ending in December, 2002. The first phase of the PEP
sought to broadly explain the concept of the CSME and targeted the general public and the business
community. Its delivery strategy centered on print media, sector specific fora and television. The
second phase covered, the broader CSME and the more specific needs of the Caribbean Court of
Justice. The main objectives of the second phase may be summarized as follows:
to create further understanding of and suppo1i for the CSME among the public and
identified target audiences and to provide opportunities for dialogue with key
stakeholders.
to dispel myths and misconceptions about the CSME;
109
to give joint ownership of the CSME to key sectors, organizations and govenunents
across the Region;
to develop an understanding of and appreciation for the relationship between the CSME
and the CCJ and to aiticulate the importance of the CCJ to the smooth and effective
operation of the CSME.
In putting together a PEP - several "target audiences" were identified which included the following:
investors, consumers, workers, civil servants, students, youth, the general public, media
professionals and Civil Society. The broad c01mnunication strategy for phase t\vo of the PEP
focused on face to face co1m11mlications; fo1mation of a team of spokespersons to engage in face to
face contact; mass media campaign throughout the region; focus on electronic media: radio and
television; and collaboration with key players.
Following completion of the first phase of the PEP, a survey was conducted to help, inter alia, to
assess the impact of the program and to help formulate Phase Two. No further surveys have been
conducted so it is difficult to state how successful the second phase has been. It is clear from the
objectives that were set that the second phase was an ambitious program, as it involved much face
to face contact in the respective national jurisdictions. Such a prograin was carried out on the back
of limited financial resources (estimated to be approximately 50% of what was needed) and with a
small pem1anent professional staff of three. This was undertaken at a time when there were major
events taking place and major decisions being made e.g. regarding the establishment of the
Caribbean Court of Justice and other institutions such as CROSQ; the introduction of the Revised
Treaty of Chaguaramas; the on-going development of the CSME.
The strategy for the delivery of the PEP is based on a combination of elements developed and
delivered at both regional and national levels thus minimizing cost and leveraging the technical and
delivery resources in the Member States.
Since 1996 the PEP for the CSME has been funded by the United Nations Development Program
(UNDP). The final tranche of UNDP funds (some US$54,000) was disbursed to the Secretaiiat in
December 2001 . It is cleai· that there is now an urgent need for long-tem1 funding of a PEP.
110
Public Education Program 2003 - 2007
At present the Communications Unit is based in Guyana with one additional CSME
communications officer based in Barbados. The Communications Unit is preparing a PEP for the
pe1iod 2003-2007, utilizing and strategically placing communications products created with UNDP
funds. There is a commitment from all CARICOM media houses including the private sector
operations, to guarantee free dissemination. However, there is still need for spons01ing prime time
programs and features especially in territories where there is limited or no Govenunent owned
media systems. Provision will also have to be made for Haiti, beginning in the second third of the
five-year program.
In essence, the five-year program should see a continuation of the strategy which mixes research,
advocacy and mass commwucation i11itiatives to educate target audiences and the general public.
One regional drawback is the lack of a regional quantitative market survey. Only a few CARI COM
Members regularly undertake market research.
Future Needs
The establislunent of the CCJ, the introduction of the Revised Treaty and the preparation and
planned implementation of key draft model laws have inter alia set new parameters for the
development of future Public Education Programs. The summarized objectives for phase two, set
out above remain valid, but the focus for the future will have to be firmly on the benefits and
opp01tunities that arise primarily for the ordinary citizen but also for other legal persons, such as
compaiues, within the CSME. It will become increasingly important to focus on the practical
benefits, responsibilities and implications that will arise from the implementation of specific pieces
of legislation under Treaty obligations. The Communications U11it is already playing a role in this
area, but future objectives are likely to be more focused and detailed. There will be a need for
specific commwucations campaigns at both regional and national level as legislation is being
implemented e.g. competition law, consumer law and intellectual property.
The greater the
involvement of the ordinary citizen in such campaigns the more mea11ingful the legislation will
become.
111
The quicker the pace of development within the CSME, the greater will be the need for the
Conm1mlications Unit to herald and be part of that change. The PEP should have built-in review
dates e.g. every eighteen months and should have some objective reference points (e.g. studies,
market research or benclunarking) for evaluating success or failure.
The Conununications Unit is well aware of the limitations that exist when it comes to the delivery
of communications products. The prefe1Ted means throughout the Caribbean appears to be the radio
and to a lesser degree newspapers and television. However, the Internet must be seen as an
important means of distribution of commmlication products. It is a cheap, versatile and fast means
of delivery. The present Website has served it usefuh1ess, and means must be found to make better
use of tllis medium both at the regional and national levels. Already, the need for better internet
communication is well recognized in some jurisdictions who already host pro-active websites and
where efforts are made to keep the cost of conmmnications down and in so doing make it an
increasingly ath·active medium for people to use. The Internet is also the world's way of visiting the
Caiibbean, of learning of the important changes that are taking places and of facilitating business
development and trade.
Its clear that a PEP could benefit not only from significant financial resources, but some external
resources could also help facilitate the work of the existing professional tean1 as they prepare their
long-tenn plan. In particular, it would be beneficial to have external consultants review and assist in
the finalization of the 2003-2007 PEP including its budget; help fonnulate and integrate specific
campaigns based on individual pieces of legislation as part of the PEP; assist in establislling
objective criteria for detem1ining the success or failure of the individual components of the PEP;
assist in reviewing the present CARJCOM Website; its objectives, functioning and relationsllip to
national websites with a view to establishing an attractive, interactive, useful, speedy and valueadded means of conm1wlicating the CSME message amongst the general public.
-I
112
TABLE 11-1. INDICATION AS TO ACTION TAKEN TO-DATE WITH RESPECT TO THE MAIN PROVISIONS FOR
THE HARMONIZATION OF LAWS UNDER THE REVISED TREATY OF CHAGUARAMAS
Provisioning Article
Article 44 (l)a
Article 44(1)b
Article 44(1)c
Article 44(1)d
Subject Matter
Action to Date
The Establishment Of Market Intelligence And Information Systems In The
Community
Harmonized Legal " And Administrative Requirements For The Operation Of
Partnerships, Companies, Or Other Entities
Abolition Of Exchange Controls In The Community, And Free Convertibility
Of The Currencies Of The Member States
The Establishment Of An Integrated Capital Market In The Community
Article 44( 1)e
Convergence Of Macro-Economic Performance And Policies Through The
Co-Ordination Or Harmonization Of Monetary And Fiscal Policies,
Including, In Particular, Policies Relating To Interest Rates, Exchange Rates,
Tax Structures And National Budgetary Deficits
Article 44(1)f
The Establishment Of Economical And Efficient Land, Sea And Air
Transport Services Throughout The Community
Article 44( I )g
Article 46(2)(b)(iv)
The Establishment Of Efficient Communication Services.
Harmonization and Transferability of Social Security Benefits
Article 52
Community Industrial Policy- Member States undertaking to put in place
harmonized legislation in relevant unspecified areas.
Forest Management and Development - harmonization standards for quality
assurance, compatible with international specifications.
Human Resources Development- Harmonization of agricultural syllabuses.
Article 61
Article 62(5)
27
Study Level
The Regional System for Companies Registration - at Study
Level.
Issue currently being studied by the Central Bank
Governors.
Roundtable held for development of policy need for
legislative, regulatory and administrative framework for
Regional Securities Trading.
Treaty on Double Taxation - not applied throughout all
Member States.
Draft Protocol on Corporate Tax Harmonization and
enabling legislation prepared.
Fiscal Policy Harmonization under discussion.
Implementation plans based on the provisions of the Treaty
have been prepared for all, sectors and sub-sectors
A Separate Program for Air Transport has to be prepared .
Policy Study being undertaken
The Social Security Agreement 1997 has been ratified by all
Member States except Suriname. Suriname has to
implement enabling legislation.
Study Level
Study Level
Study Level
Of the seven paragraphs in Article 44 ( 1) only two refer explicitly to "harmonisation" i.e. Article 44(1) (b) & (e), although it is difficult to see how the object of some of the
paragraphs can be achieved without the harmonisation oflaws.
113
Provisioning Article
Article 67(4)
Subject Matter
Action to Date
Article 74(2)a
Standards and Technical Regulations - Standardization program to include
harmonization of standards and technical regulations.
Community Investment Policy - Harmonized system of investment
incentives.
Harmonization Of National Incentives To Investments In The Industrial,
Agricultural And Services Sectors.
Companies Or Other Legal Entities
Article 74(2)b
Intellectual Property Rights
Article 74(2)c
Standards And Technical Regulations
Article 74(2)d
Labeling OfFood And Drugs
Article
Article
Article
Article
74(2)e
74(2)f
74(2)g
74(2)h
Sanitary And Phytosanitary Measures
Competition Policy
Dumping (See Art 133(5))
Subsidies And Countervailing Measures
Article 74(2)i
Article 75"
Article 76j 0
Article 95(2)
Commercial Arbitration.
Development Of Social Infrastructure
Role Of Public Authorities
Cooperation In Customs Administration
Article 116(8)
Article 133(5)JJ
Imposition Of Provisional Measures And Countervailing Duties
Anti-Dumping Legislation
Article 68 '
0
Article 69
28
Some 50 CARI COM Standards have been established.
CROSQ has been established.
IDB sponsored Pre -Study for Investment Code being
undertaken.
Scheme for Harmonization of Fiscal Incentives to Industry
devised .
Draft Companies Law - partially accepted by some
jurisdictions.
Round table called of Company registrars to harmonize
registration procedures.
Regional Administration for Intellectual Property Rights not
set up.
6 Countries have not complied with TRIPS - Jack of skills.
CARICOM Standards established .
CROSQ established
Provision through the Codex Alimentarius for Food but no
draft model law for labeling Drugs.
Study Level
Draft Model Law Prepared
Draft Model Law Prepared
Draft Model Law Prepared
Draft Countervailing and Anti-Dumping Duties Bill
Study Level
Study Level
Study Level
Draft Model Law Prepared - only formally adopted in one
Jurisdiction. DML needs to be revised to provide for recent
developments.
Draft Model Law Prepared
Draft Model Law Prepared
The objects of the "harmonised system of investment incentives" referred to in this article are spelled out in article 69 .
Article 75 does not refer to harmonisation per se, but it does speak of"the conclusion of reciprocal social security agreements among Members States in order to facilitate
the movement of skills."
30
Article 76 (b) does not speak of harmonisation, but speaks of "Removing impediments and improving the regulatory framework for economic enterprises at national and
regional levels.
31
See Article 74(2)g
29
114
Provisioning Article
Article 140(4)d
Article 173(2)c.l'
Article 185
Subject Matter
Action to Date
Development Of Maritime Transport Services
Competition Commission
Protection of Consumer Interests
Need for Separate Protocol
Draft Model Law Prepared
Draft Model Law Prepared
In considering the harmonization of Laws one must also bear in mind Article 239 where the Member States undertake to elaborate a Protocol relating inter alia :
Provisioning Article
Action to Date
Subject Matter
Article 239(a)
Article 239(b)
Electronic Commerce
Government Procurement
Article 239(c)
Treatment Of Goods Produced In Free Zones And Similar Jurisdictions
Article 239(d)
Article 239(e)
Free Circulation Of Goods In The CSME
(a) Rights Contingent on Establishment,
(b) Provision Of Services And
(C) Movement Of Capital In The Community.
CARISEC examining environment - CFTC Fund
Regional Questionnaire compiled.
Proposal for IADB study aooroved.
Part of Draft Customs Law
Further Study and legal opinions sought on key aspects of
the law relating to FTZs.
Study required, prior to drafting protocol.
Draft model Law on Establishment, Provision of Services
and Movement of Capital prepared .
Roundtable on Securities Markets held.
Study Undertaken of Obstacles.
32
The article speaks of "development and implementation of harmonised competition laws and practices by the Member States to achieve uniformity in the administration of
applicable rules.
115
TABLE Il-2. CONSTITUTIONAL PROVISIONS WHICH WOULD HAVE TO BE AMENDED IF COUNTRIES
ARE TO BECOME MEMBERS OF THE CARIBBEAN COURT OF JUSTICE
Antigua and
Barbuda
The Bahamas
Barbados
Belize
Dominica
Grenada
Guyana
Haiti
Jamaica
St. Kitts and Nevis
St. Lucia
St. Vincent and the
Grenadines
Suriname
Trinidad & Tobago
Majority in
House
Majority in
Senate
Unicameral
(Majority)
Delaying
Provision
Two-thirds
[Simple] but
provisio if not
passed in two
successive
sessions House
can bill Section
55(2)
Three-quarters
Two-thirds
Not Stated
Not applicable
YES
Three-quarters
Two-thirds
Three-quarters
Two-thirds
Two-thirds
Two-thirds
Simple
Two-thirds
Simple
Three-quarters
[Simple]
Three-quarters
Two-thirds
Not applicable
Not applicable
Not applicable
Three-quarters
elected members
Not applicable
Two-thirds
Not applicable
Not applicable
Two-thirds
Not applicable
Two-thirds
elected members
Not applicable
116
Endorsement
/Recital
R
R
Speakers
Certificate
Referendum
YES
Yes
YES
No (S 105(3))
No
No
No
YES
YES
YES
YES
YES
YES
E
YES
YES
YES
YES
YES
R
Yes Two-thirds of
votes validly cast
No
No
No
No
No
No
No
No
TABLE 11-3. CARIBBEAN COURT OF JUSTICECONTRIBUTION PER MEMBER STATE TOWARDS
TRUST FUND & YEAR 1 TOTAL EXPENDITURE
MEMBER STATES COMMITTED TO FUNDING THE CCJ
(ALL MEMBERS INCLUDING THESE WITH RESERVATIONS TO THE APPELLATE JURISDICTION)
Trust Fund:
88 ,000,000 US$
Year I Total Expenditure 5,617,449 US$
Member State
Original
Jurisdiction
US$
U$$
1.98
0.0
12,02
3.23
1.98
1.98
7.83
3.35
28.49
0.39
1.98
1.99
1.98
US$
%
2.24
0.00
13.69
3.66
2.24
2.24
8.86
0.00
28,62
0.00
2,24
2,24
2.24
7.63
27.97
100.00
0.00
31.63
100.00
O/o
Antigua & Barbuda
The Bahamas
Barbados
Belice
Dominica
Grenada
Guyana
Haiti
Jamaica
Montserrat
St. Kitts & Nevis
St. Lucia
St. Vincent & the
Grenadines
Suriname
Trinidad & Tobago
Assumptions :
Appellate
Jurisdiction
Original
Jurisdiction
-50%
US$
Total Funds Loan:
Loan Interest Rate :
Appellate
Jurisdiction
-50%
US$
93 ,617,449 US$
5.75%
Total
Maximum
Numbers
of Years
US$
926,957
1,048,354
1,975,312
-
-
-
5,624,588
1,613,507
926,957
926,957
3,665,933
1,571,114
11 ,929,993
183,297
996,957
926,957
926,957
6,361,201
1,711,720
1,048,354
1,048,354
4,146,034
1,048,364
1,048,364
1,048,354
11,985,789
3,223,226
1,975,312
1,975 ,312
7,811,967
1,571,114
25,422,372
183,297
1,975,312
1,975,912
1,975,312
14,807,264
46,808,725
3,665,933
27,899,882
93 ,617,449
3,665,933
13,092,617
46,808,725
13,492,379
25
10
10
30
30
30
30
30
30
30
30
30
30
30
10
Loan Interest
us$
Total Loan
Repayment
Annual
Repayment
US$
US$
US$
1,796,455
3,771 ,767
150,871
4,106,723
3,617,050
2,215,287
2,215,287
8,761,020
1,761 ,984
28,510,864
205,565
2,215,287
2,215,287
2,215,287
16,092,512
6,842,276
4,190,398
4,190,698
16,572,987
3,333,098
53 ,933,236
388,881
4,190,598
4,190,598
4,190,598
1,609,251
228,076
139,687
139,687
552,433
111,103
1,797,775
12,962
139,687
139,687
139,687
4,111 ,297
9,559,411
73,506,802
7,777,229
37,459,292
167,124,251
259,241
3,745,929
9,166,074
I. Cost for the establishment of the Caribbean Court of Justice will be split 50% to the Appellate Jurisdiction and 50% to the Original
J urisd icti on
2. Interest circulated using the reducing balance method assuming equal annual payments.
117
TABLE 11-4. CARIBBEAN COURT OF JUSTICE
SUMMARY OF ESTIMATED COST OF OPERATION - YEAR 1 TO YEAR 5 EC$
Particulars
Year 1
Year 2
Year 3
Year4
Year 5
Total
Salaries and
Allowances:
Judges
Administrati ve Staff
3,040,620
2,050,776
3,040,620
2,173,820
3,040,620
2,304,250
3,344,682
2,442,505
3,344,682
2,589,055
15,811 ,224
11 ,560,406
Gratuities:
Judges
Administrative Staff
Sub-Total
Other Admin Costs
492,678
379,183
5,963 ,257
2,069,195
492,678
434,764
6,141 ,882
2,131 ,130
492,678
460,850
6,298,398
2,195,064
541 ,945
488 ,501
6,817,633
2,260,916
541 ,945
517,811
6,993 ,493
2,328,744
2,561 ,924
2,281 ,109
32,214,663
10,985,049
Total Recurrent
Costs:
8,032,452
8,273,012
8,493,462
9,078,549
9,322,237
43,199,712
Capital Costs:
4,529,563
2,168,000
2,233,040
2,300,000
2,369,000
13,599,603
Total Recurrent and
Capital Costs
12,562,015
10,441,012
10,762,502
11,378,549
11 ,691,237
56,799,315
US$ Equivalent
4,635,430
3,852,772
3,958,119
4,198,726
4,314,109
20,959,156
118
TABLE 11-5. SCHEDULE OF ACTIVITIES FOR ESTABLISHING THE CCJ
Stages
01.01
Agreement
Agreement Establishing CCJ
01.02
02.01
02.02
02.03
03.01
04.01
04.02
04.03
05.01
05.02
05 .03
05 .04
06.01
06.02
06.03
06.04
Enactment of Establishment of the CCJ
into domestic law
Amendment of National Constitutions to
delink from the Privy Council
Revised Treaty of Chaguaramas
Financial Protocol to provide for
Financing of the CCJ.
Establishment of Trust Fund
06.05
07 .01
Establishment of Regional Judicial &
Legal Services Commission (RJLSC)
Action
Ratification of agreement establishing the CCJ
Chairm<}n of PrepCom - to monitor action by Member
States.
Review and refinement of draft enabling legislation by
drafting committee.
Approval of legislation by LAC
Incorporation into domestic legislation
Member States encouraged to take the necessary
Parliamentary action
Signing of Protocol for Provisional Application of the
revised Treaty
Member States should ratify the revised Treaty
Member States should enact implementing legislation.
Drafting of Financial Protocol
COF AP - to approve by Round Robin
The LAC - to approve
Signature of Protocol by HOG
Review of Trust Deed by Drafting Committee-LAC
COF AP to approve Trust Deed by Round Robin
LAC to approve Trust Deed
Conclusion of Agreement in Writing with the CDB on the
management of the Trust Fund
Member States to contribute resources for the
capitalization of the Trust Fund
Appointment of Members of RJLSC
119
Done or Not Done
(Blank)
Some Members have
Ratified
In Process
Stages
Agreement
07.02
07 .02.01
07.02.02
07.02.03
08.01
08.02
Appointment of Judges to the Court
Action
First Meeting of Commission
- approval advertisements for posts of Judges and
Administrative Personnel
-adopt Rules of the Court and regulations respecting the
Commission
- appoint Auditors to assist with selection process
Advertisements Posted
Last date for Applications
120
Done or Not Done
(Blank)
TABLE 11-6. LEGAL COMPONENT- LEVEL OF ASSISTANCE REQUIRED
Area
Quantification of
Outstanding Work
List of the legal
instruments to be changed
in each jurisdiction.
Needs Identified
Using Table 1, as a starting point there is a
need to quantify in detail the outstanding work
that has yet to be undertaken under the Revised
Treaty with the object of preparing a timeline
for its completion.
Using the revised List of Restrictions under
Chapter 3 of the Revised Treaty as a base
document, there is a need to draw up a
prioritized comprehensive and authoritative list
of the legal instruments to be changed in each
jurisdiction.
Suggested Delivery
Tool
Level of Assistance
Needed
Study to build on Table 1
Detailed Inputs from
Secretariat
Legal
Consultant/Coordinator
High with Short-term
Impact
Detailed Study
Legal Consultant/
Coordinator with inputs
from national authorities
and Parliamentary
Draftspersons
High with Long-term
Impact
Using outcome of
Detailed Study above
prepare assessment with
timelines
Legal Consultant/
Coordinator with
Economist
High with Long-term
Impact
High with Long-term
Impact
High with Long-term
Impact
Quantification of resources
Quantification of resources needed to
undertake the work in (2.1) at regional and
national levels.
Delays in Implementation
of Harmonized Model
Laws
An analytical but brief study of the reasons for
the delays and the technical or other support
needed to unblock the delays in each
jurisdiction should be undertaken.
Brief Study
Legal Consultant/
Coordinator with inputs
from national authorities
and Parliamentary
Draftspersons
Role of the Legal and
Institutional Development
Division (LIDD)
The role of the LIDD should be reviewed and
the department restructured in (a) light of the
work that needs to be undertaken for the
completion of the CSME and (b) for ensuring
an adequate pool of legal expertise. The
review should taken into consideration the
existing capacity building proposals; the need
for a legal policy research section; the
provision of an advisory service and
monitoring service to the economic units; the
demands made by the civil law jurisdictions;
the need to interface more frequently and more
robustly with counterparts in the Members
States.
Institutional Review
Followed by a workshop
on likely role of LIDD in
coming years.
High Level involvement
at CARICOM Secretariat
with Legal
Consultant/Facilitator
121
Priorities
Area
Assessment of Needs at
National Level
Harmonization - Customs
Law
Harmonization - Company
Law
EU Company Law
Company Registries
Needs Identified
Suggested Delivery
Tool
Level of Assistance
Needed
Authoritative
Assessment by each
Member State
Legal Coordinator with
inputs from national
authorities and
Parliamentary
Draftspersons
High with Long-term
Impact
Study at High Level
International and
Regional Customs Law
Consultants interfacing at
AG and Ministerial Level
in respective jurisdictions
High with Long-term
Impact
Study using e.g. Law of
Barbados as a proxy for
Model Law
Legal
Consultant/Coordinator
with interface to
Company Registrars and
AGs
High with Long-term
Impact
Report on Developments
within EU - covering
existing legislation and
reports in progress.
External Legal Consultant
Medium with Longterm Impact
An assessment of existing needs of identified
Member States in drafting and implementing
model laws should be undertaken.
Building on the feedback from the respective
offices of the Attorneys' General and National
Customs authorities a new draft HCL should
be prepared under the direction of an
international consultant which should take into
consideration the relevant provisions of Kyoto
2000 and the possible needs under the FTAA.
There is a need to ascertain the exact extent of
harmonization of Company Law within
CARICOM so as to determine the way forward
on further harmonization.
It would be useful at this stage to prepare a
paper on the most relevant developments todate in Europe with respect to Company Law
with particularly reference to recent legislation
affecting small companies and to enforcement
legislation.
A study needs to be undertaken in each
Member State of the Company Registries to try
and ascertain the level of effective operation in
each registry. Such a study should quantify the
number of active versus inactive companies
and business names; the level of
computerization; the adequacy of staffing
levels and the compliance with good
governance procedures by companies.
Study in each Member
State
Study of EU and EU
country/ies
implementation
The study should make recommendations for
the reform of both institutions and relevant
laws including enforcement laws.
122
Legal
Consultant/Coordinator guiding Company
Registrars and compiling
report
External Legal Consultant
Priorities
Medium with Longterm Impact
Medium with Longterm Impact
Area
Recognition and
Enforcement of Judgments
Library Services
Center( s) of Excellence
Audit of Small Member
States - CROSQ
Assistance - Packaging
Promotion of
Standardization
Needs Identified
Suggested Delivery
Tool
Level of Assistance
Needed
A summary report of the scope and operation
of the two EU Conventions should be prepared
for guidance on the issues raised and dealt with
under the two Conventions.
Once the RJLSC is on board there will be a
need for a study of the library and information
needs of the CCJ and national courts, the
various academic, professional and public
libraries.
There is a need to identify the long-term needs
of a Center or Centers of Excellence in the
different jurisdictions in CARICOM.
A preliminary scoping study should be
undertaken amongst the key promoting
institutions so as to identify the anticipated
way forward and the likely cost implications.
An audit of the undeveloped and smaller
member organizations of CROSQ to serve as a
basis for their effective strengthening through
mentoring or direct technical assistance.
Assist producers in the region upgrade their
labeling and packaging in the light of
increasing competition through focused
research; workshops - for producers and
interest groups; by adopting existing
international standards; and by undertaking an
education and awareness campaign.
Actively promote amongst producers an
acceptance that standardization and metrology
are critical components in the development of
internationally competitive products.
Study of Two EU
Conventions and
possible application to
CARICOM
External Legal Consultant
High with Long-term
Impact
Study and Proposal for
Library and Information
Needs
International Consultant
Librarian
Medium with Longterm Impact
Preliminary study of
Implications of Centers
of Excellence and
Costings
External Institutional and
Legal Consultants
Medium with Longterm Impact
Audit /Study of Smaller
CROSQ Organizations
Standards and
Communications
Consultants
Medium with Longterm Impact
Study, Workshops and
direct consultancy
support
Standards and
Communications
Consultants
Medium with Longterm Impact
Targeted Promotional
Campaign
Standards and
Communications
Consultants
Medium with Longterm Impact
123
Priorities
TABLE 11-7. STATUS OF IMPLEMENTATION OF COMPETITION POLICY REGIME IN THE CSME
Chapter 8
What is required by Treaty
National Level
1. Art.170(1)(b)(i)
Take the necessary legislative
measures to ensure consistency and
compliance with the rules of
competition/ provided penalties.
Art. 174 (6) adopt legal
instruments to make decisions of
the Regional Commission
enforceable in national
jurisdictions.
2.
3.
Art. 17 0( 1)(b)( ii)
Provide for dissemination of
relevant information to facilitate
consumer choice.
Art. 170(1) (b) (iii) and Art. 170(2)
Nat. Comp. Authority
Establish and maintain institutional
arrangements and administrative
procedures to enforce C.L.
What
Accomplished
Barbados - Fair
Trading Law
What Currently
Underway
Trinidad and Tobago - Fair
Trading Bill
What Yet to be
Achieved
St. Vincent to revise
existing Act. Others to
develop legislation.
Draft Model Law for
CARICOM currently under
consideration
Jamaica revising law
Jamaica and
Barbados FTC
Jamaican Fair
Trading
Commission
Barbados FTC
Barbados FTC will
incorporate CP into
portfolio.
Study commissioned by
CARICOM Secretariat to
prepare proposals for
establishment of national
institutional and
administrative structures
currently on-going.
124
All others to develop FTCs.
FTCs in all other countries.
An OECS Competition
Commission is being
considered by those
countries.
Consistency with
External Environment (FTAA)
• [Merger Control Regulation] in
FTAA draft bracketed text - no
consensus as yet.
- no merger control in Chapter 8,
but Model law includes MCR
Trinidad
and Tobago wants merger
•
control. What implications for
CSME?
• NT in FTAA/WTO/ - need to make
fines % of earnings rather than fixed
sum because of disparity of earnings
between MNCs and local firms. Not
in Cotonou but EU main proponent
in WTO .
Promotion a culture of competition
included in FTAA text.
FTAA 3.1 Consensus or close to
consensus
• National or sub-regional authority
• Reasonable enforcement powers and
enforcement autonomy
Ability
to promote a culture of
•
competition
• Advocate pro-competition policies
and laws including before other
national or sub-regional government
bodies
1.6 - Independent Review I Appeal Court
Chapter 8
What is reQuired by Treaty
4. Art. 170(1 )(b )(iv)
Access by non-nationals to
competent enforcement authority
including courts
equitable/transparent/nondiscrimination.
5. Art. 170(5)
- Within 24 months of entry into
force, notify COTED of
existing legislative agreement
and administrative practices
inconsistent with the provision
of this chapter.
- 36 months - COTED establish
program providing for repeat
of legislative and termination
of agreement and
administrative practices.
Regional
6. Art. 171
Competition Commission with the
Caribbean Court of Justice being the
Court of Appeal.
7.
Art. 183 (Exemptions)
COTED - to determine where
special rules shall apply to specific
sectors of the Community
What
Accomplished
Jamaican Law
Barbados Law
Nil
Nil
Nil
What Currently
Underway
Trinidad draft law
What Yet to be
Achieved
Will have to be incorporated
in national legislation.
Consistency with
External Environment (FT AA)
FTAA
- Principles of non-discrimination,
transparency and due process included in
draft bracketed text.
Compilation of inventory
from every country Feb.
2004 deadline to be met.
Will have to discriminate as between
CSME and 3rd parties through WTO
exemption under Article 24.
Establish CARICOM
Competition Commission
and Caribbean Court of
Justice.
FTAA
Estab. Competition Authority (CA) at
national or sub-regional level.
CCC would qualify for compliance of
FTAA requirements providing has Court
of Appeal. If not, then every member
will have to have CA as above (or OECS
CA plus National CAs in other members).
Exclusions and exemptions allowed, but
must notify, must be transparent.
Need to act upon this because all existing
regimes in FTAA have exclusions and
exemptions. Need to examine (1) if would
be put at competitive disadvantage if have
none. (2) what sectors need protection vis
avis CL in FTAA context
Nil
Study to prepare proposals
for establishment of
Competition Commission
on-going
Do analysis of which
sectors, industries may need
exclusion or exemption and
act upon it so that in place
by 2005.
Nil
125
8.
Chapter 8
What is required by Treaty
Art. 66(f) and Art. 179(3)(b)
Measures to prevent abuse ofIPR
by right-holders
What
Accomplished
What Currently
Underway
Nil
Nil
126
What Yet to be
Achieved
Included in draft model law
on competition policy
presently under
consideration by Member
States
Consistency with
External Environment (FTAA)
WTO Art. 8 and Art. 40 suggest that
members take measures to prevent abuse
of patent monopoly rights through anticompetitive elements in licensing
agreements. Parallel imports also an
issue.
TABLE 11-7 (cont'd)
Skills Required
Capacity/Econ. of
Scale/Tech.-human-financial
Constraints
1. Art. 170(1)(b)(i)
2.
• Drafting skills
• Knowledge oflaws and
experiences in other
countries
•
Have very few trained
people in the region.
Art. l 70(l)(b)(ii)
• Information technology
skills
• Information systems
management expertise
• PR
•
Have some qualified
people in region but will
need training for staff in
newCAs.
Technical Assistant needed
from mature Competition
Authorities.
Donations to
Library/Guidance on
materials/journals to
source, Financial
Assistance.
•
•
Merits of National vs.
Regional Action
Sustainability
Lessons from Other Relevant
Initiatives
Develop internal capacity at
University to deliver required
training. This will be a slow
process, but can be done by
offering module courses with
adjunct professional from
mature regimes doing the
teaching and training faculty
members at the same time.
Both required by Treaty.
•
•
•
•
•
Allocation of sufficient
funds .
Qualified staff.
•
•
•
127
Systems at national level
for information gathering
fed to regional level.
Regional Library
accessible on-line by
National Authority.
Website for Stakeholders .
Administration at regional
level - inputs from
National Authority.
Submission of Draft laws
of DR and Nicaragua for
scrutiny by delegates to
FTAANGCP in technical
assistance sessions
following negotiating
meetings. Proved
extremely useful and
showed the value of having
persons of experience and
expertise comment on
proposed law, able to point
out loop holes, ambiguous
wordings, etc.
Canadian Competition
Bureau has extremely well
thought out systems for
information dissemination
and education of
stakeholders.
Skills Required
3. Art. 170(1)(b)(iii) and Art.
170(2)
• Lawyers trained in CL
• Economists trained in CL
and Rule of Reason
procedures
• Trade specialists trained in
CL
• Accountants trained in CL
• Magistrates, Judges trained
in CL
• Police sensitized to CL
• Systems for interface
between Regulators and
Competition Commission
4. Art. 170(1)(b)(iv)
5. Art. 170(5)
Lawyers with competence
in Competition Law
working together with
economists and trade
specialists with competence
in Competition Law and
knowledge of competition
in the market.
Capacity/Econ. of
Scale/Tech.-human-financial
Constraints
Training/Technical
Asst/Financial Assistance.
•
•
•
•
•
•
•
•
•
Little or no capacity- a few
in Jamaica. None in other
member countries
Same
Only one in region
None in region except
Jamaica
None in region
None in region
Barbados may have both in
same office. Good
model/many problems
experienced in other
countries would be by
passed.
Have little capacity in all
countries with the possible
exception of Jamaica.
Need technical assistance
to train a group of people
in the region to undertake
this task/or provide
consultants to initiate task
and do on-hand training of
locals to complete task.
Sustainability
•
•
•
•
•
Merits of National vs.
Regional Action
Lessons from Other Relevant
Initiatives
•
How will Commission be
funded?
Pay skilled employees well
so that they would remain .
Otherwise - will move to
private sector or overseas.
For those trained through
government-sponsored
programs - tie contract to
working for number of
years .
What happens to fines
imposed by Commission?
•
OECS could have a single
Commission and each
member could have a
competition officer or unit
in a Ministry. If CCJ does
not exist, then need Court
of Appeal from decisions
of OECS Competition
Commission to qualify
underFTAA.
Has to be targeted as a
project and funded to be
able to meet deadline of
end of January 2004.
•
Should be regional project
which is articulated at the
national level, and should
have a core person or
persons to liaise with in
each member state.
128
7 UP project funded by
DFID in seven
Commonwealth Countries
on examination of their
competition regimes would
provide useful experiences
and lessons. So too would
the papers submitted to the
FTAA-NGCP under the
Study for Smaller
Economies and Countries
without CL.
Skills Required
6. Art. 171
Experts in commerce,
finance, economics, law,
competition policy and
practice, international trade,
information technology and
management systems,
intellectual property,
consumer protection.
7. Art. 183
Trade and economic
specialists to evaluate
competition in targeted
sectors and whether
excluding and exemption
needed. Private sector
should do own evaluation.
Capacity/Econ. of
Scale/Tech.-human-financial
Constraints
Little
capacity, except as
•
could be found in Jamaica.
Need to send experts for
training in CL/have
intensive seminars
locally/offer scholarships
for past graduate training
in CL. More expertise
available in consumer
protection.
• There are economists in
the region who could do
the evaluation providing
they understand
competition law and the
implications for sectors
when implemented.
Training of economists in
Competition Law essential.
Sustainability
•
Need to offer training at
UWI so that scarcity of
skilled people to serve
private sector can be filled.
This way, there will be less
likelihood of quick
turnover of staff at the
Commission
•
•
•
129
Merits of National vs.
Regional Action
Lessons from Other Relevant
Initiatives
Both national and regional
needed for CP and
Consumer protection.
Role of Commission in
consumer protection
important in single market
- requires monitoring
across the region.
•
Will have to be done at the
national level and then
submitted to COTED. But,
may be best done as a
regional project. Private
sector should be sensitized
to the role they must play
in evaluating their
exemption/exclusion needs
and submitting to national
governments.
EU DGIV's experience
very useful.
TABLE 11-8. LEVEL OF ASSISTANCE NEEDED AND PRIORITIES
Implementation
Requirements
COMPETITION LAW
1.
2.
3.
4.
Introduce legislation on
competition at national level.
Develop institutional
framework.
By February, 2004, MS to
provide an inventory of
legislative agreements and
administrative practices
inconsistent with Chapter 8.
COTED to determine
exceptions and exclusions
from competition law.
Needs
Identified
Suggested
Delivery Tool
(a) Training oflawyers in
drafting skills.
(b) Scrutiny of draft laws by
competent experts from
mature regimes or
institutions.
(c) Consultation with
stakeholders.
(d) Analyze whether MCR is
relevant for CARICOM.
(a) Get legal advice on whether
the Regional commission
has legal authority to
represent CARICOM
Members vis-a-vis third
states, and if not, what
needs to be put in place.
(b) The CCJ is essential for
CARICOM to comply with
FTAA obligation.
(c) Technical and financial
assistance to build
institutional capacity.
MS need assistance to compile
inventory.
(a) Training program in
drafting laws.
(b) DGIV, UNCTAD or the
OECD Sec. could provide
assistance.
(c) Workshops for stakeholders.
(d) A study on the relevance of
MCR for CARI COM is
currently being done at the
SALISES, UWI.
(c) Technical assistance:
Commission a full-scale
consultancy, including experts
from more mature regimes, to
compile inventory.
High
High. Deadline of February
2004. Short-term impact.
An empirical study at the microeconomic level to determine the
sectors/industries which may
require exclusion/exemption.
Commission a study analyzing
the impact of competition law on
the economies of CARI COM, to
determine effects on sectors and
industries. Analysts to include
both economists and competition
experts.
Medium
Medium. Needs to be put in
place before FTAA
agreement implemented
•
•
•
•
Level of
Assistance
Needed
(a) High
(b) High but Free
(c) High
(d) Low
(c) High
Training of
technical/professional
staff for Commission.
Exchange of staff with
mature agencies.
Seminars/Workshops
for stakeholders.
Scholarships for
professional training
courses at UWI.
130
Priorities
(a) High with short-term
impact.
(b) High with short-term
impact.
(c) Medium with long-term
impact.
(d) High with short-term
impact. Needed to
develop position for
FTAA negotiations.
(c) High with short and long
term impacts.
Without training, there
will be no capacity to
implement the regime on
competition policy either
at the national or the
regional levels.
(2005).
Medium-term impact.
Implementation
Requirements
Needs
Identified
Suggested
Delivery Tool
Study on core principles being
done at the SALISES, UWI. In
addition, should do analysis of
the application of these
principles in the EU vis-a-vis
third parties.
(a) Training in procedure for
testing at Department of
Agriculture by UPOV
Secretariat.
(b) Workshop for plant
breeders.
(c) Provide staff training
through workshops,
intensive courses,
scholarships and internships
at mature institutions.
Financial assistance with
upgrading institutional
facilities. Upgrade
institutional facilities.
5.
Application of principle of
non-discrimination,
transparency and due process.
Determine the effects of
applying these principles beyond
intra-CARICOM relations to
third parties.
6.
INTERLECTUAL
PROPERTY
(a) Develop unit at the
Department of agriculture at
UWI to test new plant
varieties.
(b) Training of plant breeders to
meet criteria for protection.
(c) Strengthen institutional
capacity to manage IP
regime through training of
staff of IP offices to deal
with protection of plant
varieties.
Protection of new plant
varieties (TRIPS
requirement).
131
Level of
Assistance
Needed
Medium
(a) UPOV should
supply
technical
assistance for
free.
(b) UPOV should
provide free of
charge.
Financial
assistance to
bring
participants.
(c) High Financial
assistance
needed to
accomplish (b)
and (c).
Priorities
High. Needed for developing
position for FTAA/WTO.
Short-term impact
(a) Medium priority with
long-term impact.
(b) Medium priority with
long-term impact.
( c) Medium priority with
long-term impact.
Implementation
Requirements
7.
Establish a regional
administration for IPR except
copyright.
Needs
Identified
Suggested
Delivery Tool
(a) Strengthen legal expertise in
IP law of staff at CCS.
(b) Draft model legislation for
CARICOM.
(c) Establish a Regional Antipiracy System
(a) Technical assistance to
conduct a
Study leading to
proposals for the establishment
of a Regional Administration for
Intellectual Property Rights.
(b) Financial assistance needed
to draw upon legal expertise
elsewhere on a contractual basis.
(c) Financial assistance to
commission drafting of a model
law in IP.
(d) Funding to commission a
study on the feasibility of
adopting the Banderole Model
(e) Assistance to commission a
study on parallel imports of
products
protected
by
intellectual property rights and
other issues and requirements to
develop a regime for trade in
intellectual property in the
CSME.
132
Level of
Assistance
Needed
High level of
assistance needed
for (a), (b) and (c).
Priorities
High priority with longterm impact.
Implementation
Requirements
8.
Identify and establish
mechanisms to ensure
enhanced benefits for MS in:
(a) The use of protected works.
(b) The preservation of
indigenous culture.
(c) The legal protection of
expressions of folklore, other
traditional knowledge and
national heritage, particularly
the indigenous populations in
the Community.
Needs
Identified
(a) Educating stakeholders on
how to access patent
information.
(b) Encourage entrepreneurs to
invest in R&D.
(c) Train lawyers in preparation
of patent application.
(d) Develop domestic capacity
to assimilate transferred
technology.
(e) Provide training to
technocrats and private
sector in negotiation
contracts for transfer of
technology.
A study to determine which
aspects of existing culture could
and should be protected under
IPR.
Public Education
(a) A study needed on access to
genetic resources.
(b) Training of technicians on
issues related to protection
of indigenous knowledge
and folklore so as to
contribute to the creation of
an international regime.
(c) Attendance at meetings at
WIPO, the TRIPS Council
meetings and the FTAA
negotiations.
Conduct an assessment on how
effective current public
education programs are and how
they can be made more effective.
Suggested
Delivery Tool
Financial and technical
assistance to develop educational
programs to conduct workshops
covering each of the specific
areas identified. May need
private law firms to deliver
workshop on (b), (c), (d) and (e)
rather than WIPO.
Level of
Assistance
Needed
High level of
assistance needed
Low priority with long-term
impact
High level of
assistance.
Low priority with long-term
impact.
Financial assistance to
commission study. IP expert and
cultural expert needed on term.
(a) High level of
assistance
needed.
(a) Low priority with longterm effect.
(a) Financial assistance to
Commission study.
(b) Financial assistance for
workshops.
(b) High level of
assistance
needed.
(b) High priority because
international. convention
being developed now,
with long-term effect.
(c) Financial assistance to
attend meetings.
(c) High level of
assistance
needed.
(c) High priority because
meetings taking place
now.
Funds needed to commission
evaluation.
High level of
assistance.
Low priority with long-term
effect.
133
Priorities
Implementation
Requirements
Needs
Identified
Measures to prevent abuse ofIPR
by right holders
Training in skills to investigate
and enforce competition rules in
the context of abuse ofIPRs.
Suggested
Delivery Tool
Workshop for enforcers of both
competition and IP laws.
134
Level of
Assistance
Needed
High level of
assistance.
Priorities
Low priority with medium
term effect.
TABLE 11-9-CSME PUBLIC EDUCATION PROGRAM
Disputes Settlement Draft
Model Law - Arbitration
Disputes Settlement
Information System
Role ofinspectorate
Public Education Program
2003-2007
Detailed Study ofFTAA Agreement and WTO
DSU to provide inputs to Draft Model Law on
Arbitration.
Study of ADR level of preparedness and
understanding in each jurisdiction.
Devise a Web based information system for
CARICOM standards which is accessible to
all.
To carry out a brief study as to the Inspectorate
Role will be enlarged in light of WTO and
FTAA obligations.
External Evaluation of proposed PEP to ensure
(a) central place of citizens and other legal
persons in plan (b) adequate benchmarking
provided for in plan; (c) adequate provision for
Internet and related ICT in plan; (d) integration
with national plans (e) adequate costings and
budgets.
Study
Draft Model Law
TAWTO
Legal Consultant
High with Long-term
Impact
Study - Proposals for
most economical and
effective way of
institutionalizing ADR
Targeted Promotional
Campaign
Consultant Lawyer and
Economist
High with Long-term
Impact
Information and IT
Consultants
Medium with Longterm Impact
Brief Study of National
Standards Organizations'
Role
Evaluation of proposed
PEP
Standards Consultant
Medium with Longterm Impact
135
ICT Consultants
Communications
Consultant
· High with Long-term
Impact
CHAPTER III
MARKET ACCESS
GENERAL CONSIDERATIONS REGARDING MARKET ACCESS ISSUES
CARI COM currently confronts a complex challenge in respect of market access issues. It is in
the process of completing and perfecting its own regional integration arrangements and, at the
same time, it has to manage and adapt to a rapidly changing international trading environment.
Work is underway to implement the CSME by the year 2005 while the Community is involved in
a web of trade negotiations at different levels, results of which have implications for a variety of
other policy-areas. The Doha Round has been launched in the WTO, the FTAA process entered
a qualitatively new stage after the last meeting of the TNC and negotiations between the ACP
and the EU began last September. Furthermore, the Community has initiated a number of trade
initiatives with individual countries and groups of countries in the region.
There is an
overlapping agenda in these processes in respect of both trade in goods and services, and capital
flows. Thus, the interface between the CSME and the international environment in which it must
operate emerges as a determining element for the future of CARICOM, and not only could
impact on the results and the operation of the CSME, but could also compromise its own
identity.
A relevant question regarding the interface between the CSME and the trading environment is:
what spaces for differentiated norms and disciplines involving deeper commitments would exist
in the CSME once all the trade agreements currently under negotiation come into effect, and
their provisions implemented in all CARICOM Member States? This leads to a related question:
what should CARICOM do when implementing the CSME to ensure that the identity of the
regional grouping will be maintained when merged into a complex web of agreements? The
identification of those elements that will confer on CARICOM its individuality within the
changing trading environment should be the primary focus of attention of Member States, and be
the guide for future actions and for the setting of priorities for the implementation of the CSME.
In the area of market access, the CSME will evolve from the progressive implementation of
measures allowing for the free movement of goods and services, the free movement of persons
and capital to the granting of the rights of establishment. Progress in implementation has not
136
been uniform across these vanous commitments.
However, current disciplines and the
instruments to be developed for the exercise of the rights conferred by the Treaty could be
seriously compromised by multilateral and hemispheric norms and disciplines, and by the
commitments adopted by Member States in bilateral trade agreements. Furthermore, CARICOM
would need to determine at what level the different issues should be approached, and whether
norms and disciplines are necessary in every policy-area at all levels, or if the CSME could rely
in some policy-areas on disciplines developed at other levels, as in the multilateral or
hemispheric agreements.
CARICOM has defined a general approach to dealing with the interface between the CSME and
the trading environment evolving under the different trade agreements at the multilateral,
hemispheric and regional levels.
In broad terms, the approach adopted is that the FTAA
framework should be CSME-minus, and the multilateral trading regime should be FTAA-minus.
The challenge confronting CARICOM is to clearly define, in those areas where it is possible to
do so, the graduation of commitments and the depth of the disciplines that would make this
approach a reality. Also, it would be necessary to develop and implement in the different policyareas the disciplines and instruments incorporating those elements that would confer the plus
character to the CSME over the other levels.
The effort required to manage adequately the interface between the CSME and the international
trading environment goes beyond synchronizing the internal arrangements with the external
negotiating positions. It requires developing a comprehensive CARICOM trade policy and clear
perspective on the norms and disciplines being developed in the trading environment, identifying
at the same time the additional spaces available for action at the regional level. It would demand
a comprehensive analysis of the different rule-making developments, at least in the WTO, the
FTAA, and of the implications of the future economic partnership agreement to be negotiated
with the EU.
This exercise would also require an early definition of the real political
commitment of CARI COM to the different instruments of the CSME, and a realistic assessment
of what it would be possible to achieve and in what timeframe. This exercise should be given
the highest priority at this time, by both CARI COM and donor agencies. The results of such an
analysis would provide the inputs required to set priorities in the work program and to define the
orientation that the different actions should take in the near future.
137
The analysis and management of the interface between the construction of the CSME and the
international trading environment might demand some new institutional arrangements to increase
and deepen the coordination between the bodies entrusted with coordinating the CARICOM
position in international trade negotiations, such as the CRNM, and those entrusted with the
definition and implementation of the instruments for the consolidation of the CSME, such as the
COTED, the Quasi-Cabinet and the CARICOM Secretariat. Some decisions have been adopted
in this respect that need to be implemented. Furthermore, an effort should be made to increase
the participation of the business sector associations, and of civil society in general, in the process
of the construction of the CSME and in the management of the interface with the external trading
environment.
The current work program incorporates different actions regarding public
education to increase awareness of the process and enhance participation. However, business
and civil society associations lack the required capabilities to become effective counterparts in
the process. Upgrading the capabilities of those institutions for effective participation would be
needed in the near future. This is an area in which donors can play a supportive role.
Finally, special consideration should be given to the prompt integration of Haiti into the
CARICOM trading-system.
It will be necessary to provide specific support for the
implementation of the different CSME instruments in this country now that it has become a full
Member of the Community. There is the risk that slow integration of Haiti into the different
instruments could become a retarding element in the overall completion of the CSME.
(A)
TRADE IN GOODS
In respect of trade in goods, it may be concluded, after reviewing the current situation and the
ongoing programs, that the current arrangements and work program seem adequate to a large
extent to achieve the objective of the Custom Union. Tariffs for intra-regional trade have been
dismantled, with very few exceptions remaining.
The Common External Tariff (CET) is in
process of final implementation, with only three Member States still having yet to implement
Phase IV. The COTED has agreed that a comprehensive review of all arrangements in the
Community relating to trade in goods should be undertaken, and the results of such a review
made a part of the CSME implementation efforts. At this present time, efforts to eliminate
remaining obstacles to the free movement of goods have to be carefully evaluated, taking
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account of the limited potential marginal effects on trade versus the political implications at the
Community level deriving from high level of sensitivity of the few products involved. 33
Some problems remain regarding the free movement of goods resulting from non-tariff barriers.
A comprehensive study, commissioned by the Secretariat, has been done by the Caribbean
Export Development Agency (CEDC) preparing an updated inventory of non-tariff trade
restricting measures maintained by each CARICOM Member State, including an assessment of
their degree of consistency with the Member States' regional and international obligations. A
significant number of the identified existing restrictions are compatible with the provisions of the
Agreement, and those that are non-compatible are product-specific, affecting only a very limited
number of products. A program is already being developed to address the measures that are in
violation of the Member States commitments. Non-conforming measures, in the cases that are
not eliminated, should be subjected to discipline to the Dispute Settlement Mechanism
contemplated in Chapter Nine of the Revised Treaty.
The major problems regarding free movement of goods seem to reside in the "other duties and
charges" levied by some Member States, and in restrictions based on sanitary and phytosanitary
considerations.
Some Member States maintain other duties and charges that are levied on
imports, and there is a lack of discipline in their imposition. This is an area that merits prompt
intervention by Member States to seek a solution that would take account of fiscal sensitivity.
Moreover, these duties have not been bound in the National Lists of CARICOM Member States
that are members of the WTO according to the provisions of Article II (b ), of the GATT, and the
Understanding on the Interpretation of Article II achieved during the Uruguay Round. This
confers a certain urgency in dealing with this issue at the regional level.
Sanitary and phytosanitary problems and issues of standards on some agricultural products
constitute elements that hamper the free movement of goods in the regional market, affecting
some Member States that basically rely on agricultural exports to the CARICOM area. These
problems have led in some cases to bilateral trade protocols between CARICOM Members to
address these issues and facilitate the free movement of goods.
33
Sanitary measures and
The option of some negotiated limited exception to the free movement of goods could be evaluated to address to
the sensitivities of the different countries, in particular the LDCs. Those could be temporary exemptions linked to
product or sectoral development programs, avoiding dispute settlement issues in the future .
139
agricultural products standards should receive priority attention.
However, a solution, as
discussed below will require upgrading the institutions capabilities in Member States to address
to sanitary and phytosanitary requirements.
The Common External Tariff has not yet been fully implemented by all Member States. The new
trade environment signaled by a web of trade negotiations imposes some urgency in regard to the
final establishment of the CET to establish CARI COM as a single trading entity in the international
trading system. In this regard, for example, participation in the FTAA has promoted the accelerated
implementation of the CET both in MERCOSUR and in the Andean Community.
The CET
Suspension Facility has been a source of concern among Member States. A comprehensive study
has been conducted reviewing the administrative practices governing the operation of the
CARICOM CET and rules of origin. The implementation of its recommendations would contribute
to addressing some of the problems identified. Work on the implementation of the 2002 edition of
the HS is underway, and it should be accelerated in view of the FTAA negotiations that would
require the submission of liberalization commitments and the base tariff to which they will apply. It
has been agreed that the base tariff should be notified by October of this year.
Based on a study commissioned by the CARICOM Secretariat, the CET for agricultural products is
undergoing review, considering the Member States commitments in the WTO, and also the
development of current negotiations. The study has been concluded, and is under consideration by
Member States.
The Sub-Committee on the CSME has already agreed to undertake a
comprehensive review of the entire CET. This exercise should receive priority, and should be
conducted evaluating the new trading environment that CARICOM will be confronting in the near
future, in particular the expected effect of the tariff commitments to be adopted in the FTAA and in
the future Association Agreement with the EU.
Particular attention should be given to the
differentiated approach contemplated for the LDCs in the Cotonou Agreement regarding tariff
concessions and its possible impact on the CARICOM CET.
There are two issues related to the CET that should be analyzed in order to adopt decisions in this
respect. One of particular relevance for the Custom Union and the overall issue of the interface
between the CSME and the external trading environment is the conduct of a single foreign
economic policy by CARICOM as a whole.
The challenges confronting CARICOM demand
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collective action and strong limitations on individual initiatives by Member States. The degree of
freedom that Member States should have to develop individual initiatives is a matter that should be
reviewed.
At least in theory, trade preferences granted, and commitments undertaken in other
policy-areas, should be on a collective basis in a Custom Union as otherwise they could generate
distortions in the conditions of competition in the regional market.
In this regard, the Treaty of Chaguaramas provides a mandate for the conduct of a common external
economic policy by CARI COM Member States, with the following objectives: (i) the expansion of
trade and economic relations with third states; (ii) the achievement of a greater measure of
economic leverage and effectiveness of Member States in dealing with third states, groups of states
and entities of any description; and, (iii) enhanced coordination of Member States foreign and
foreign economic policies. The Conference of Heads of Government constitutes the final authority.
Trade and cooperation initiatives to be undertaken by CARICOM Member States acting collectively
must therefore be validated at the highest political level. A common negotiating strategy in trade
agreements with third states and groups of states shall be undertaken "where possible," as provided
by Article 13 of Protocol IV. Furthermore, participation and joint representation in international
and regional organizations, which negotiate, establish and apply disciplines governing international
and regional trade should be sought "as appropriate." Member States shall coordinate their trade
policies with third States or groups of third States, as provided by Article 14 of Protocol IV. In
terms of the negotiation of trade and economic agreements, the Community should pursue
negotiations on a joint basis in accordance with the principles and mechanisms established by the
Conference.
Therefore, joint action to enter into trade and economic agreements with third
countries or groups of countries would be undertaken by CARICOM Member States where
possible, and according to the particular decisions adopted for each case by the Conference.
Furthermore, bilateral trade and economic agreements between a CARICOM Member State and
a third country or groups of countries are allowed by the existing community legal framework.
Those agreements must comply with the following requirements: (i) they shall not compromise
the country's obligation under CARICOM agreements; (ii) prior to their conclusion, be subject to
certification by the CARICOM Secretariat that the agreement does not prejudice or place at a
disadvantage the position of other CARICOM States vis-a-vis the agreement; and, (iii) where
trade agreements involving tariff concessions are being negotiated, the prior approval of the
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COTED shall be required. Belize has a special treatment by which nothing in the Treaty shall
preclude it from concluding arrangements with neighboring economic groupings provided that
treatment not less favorable than that accorded to third States within such groupings is accorded
to CARICOM Member States, and that the arrangements make adequate provision to guard
against the deflection of trade into the rest of CARI COM from the countries of such groupings
through Belize.
Priority support should be provided for the definition and implementation of a CARICOM
Common External Economic and Trade Policy in line with what was discussed in the first
section of this Chapter, and for strengthening coordination between the different CARICOM
bodies for conducting external economic relations and managing the interface between the
CSME and the international trading environment. The current Secretariat's Work Program 9 on
External Economic and Trade Relations contemplates a variety of actions, identifying 24
different projects in this area without any clear criteria for setting priorities.
Moreover, an
overarching external economic and trade policy has yet to be developed for CARICOM.
Another relevant issue regarding the CET is the treatment of special custom regimes as temporary
admission, among others, and Export Free Zones (EFZ) in the context of the CSME. The treatment
of EFZs is currently under review and some work has been done. What is pending is the definition
of the treatment to be granted in intra-CARICOM trade to goods, or services, produced in EFZ.
This will require further work as identified in the Eleventh Meeting of the COTED, and the
adoption of a legal instrument on the treatment of goods produced in Free Zones and similar
jurisdictions. Work on the treatment of FZ should be accelerated and supported in view of the
issues of compatibility with WTO commitments, the FTAA developments and because of the
possible distortive effect on intra-CARICOM trade.
During the review undertaken, no evidence
was found of work done regarding other types of special customs regimes that might be in effect in
CARICOM Member States. Such work should be undertaken as those regimes affect the efficacy
of the CET, generating distortions in competition in the regional market.
In respect of trade in goods, the highest priority should be given to institutional capacity building at
the national and regional levels. Every day more demands are made on the management of trade,
both at the regional level and in the international trading system, and call for much enhanced
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institutional capacities. Technical Obstacles to Trade, Sanitary and Phytosanitary Measures and
Unfair Competition are the dominant issues in trade, and their importance will only grow in the
future. There are obvious deficits in institutional capabilities in most CARI COM Member States. ·
The effective participation of Member States in the emerging trading system will depend to a large
extent on further development of the institutional capabilities of trade-related institutions.
CARICOM and donor agencies should give priority to institutional development. The example of
the CARICOM Regional Organization for Standards and Quality (CROSQ) that needs further
support for its adequate implementation and functioning, could be replicated, for example, in the
case for a regional sanitary and phytosanitary institution.
The initiative of implementing the
Caribbean Agriculture Health and Food Safety Agency should be pursued as an issue of high
priority. According to the information collected, it seems that not very much is being done in the
sanitary field at the CARICOM level. A study, financed by the IDB, is being conducted to support
the implementation ofWTO commitments in the Caribbean Community. This study would provide
a diagnosis of the situation with respect to sanitary institutions in the region. It could be the basis
for adopting definitions in this regard.
The second stage of the project contemplates support
services activities in the area of institutional reform. This project could provide the design of an
institutional arrangement to deal with sanitary and phytosanitary issues at the regional and
international levels.
Building regional organizations would facilitate achieving levels of expertise and institutional
capacity that would not be possible in each individual country.
It is not only crucial to avoid the
current trade problems between Member States due to sanitary restrictions deriving from the lack of
credibility of some national agencies, but will make it possible to adequately address the increasing
demands of international markets. This is an area in which CARI COM could go much further than
other trade arrangements, aiming to achieve in time, regional organizations and automatic
recognition of certification for intra-regional trade. Otherwise, any regional regime could be blurred
by the commitments made by Member States in other agreements, in particular the FTAA.
Automatic recognition of standards and sanitary certification among Members could give an
interesting advantage to Community business against third countries in the Community market.
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Another area in which institutional capabilities should be enhanced concerns trade remedy. A
number of Member States have not established competent national authorities in this matter, and
those existing would benefit from further support. This should be done at the national level because
national institutions would also have to address problems arising from intra-regional trade applying
the provisions of the revised Treaty, Articles 99 and 125. CARICOM Member States should
implement a common countervailing and anti-dumping legislation. Some work has been advanced
in this area. Draft model legislation on dumping and subsidies has been prepared and is currently
with Member States for review.
Support would be required for the implementation of the
responsible institutions at the national level in each CARICOM Member State.
An element that would differentiate the CSME from other agreements in which CARICOM
Member States participate, such as the FTAA, would be the establishment of Free Circulation of
goods within the Community. This issue is incorporated in the work programs of the Secretariat
and there is a mandate to analyze this issue further with a view to developing a Protocol on Free
Circulation. This issue needs to be studied in detail. However, due to the fact that free circulation
requires prior fiscal and custom harmonization among Member States, it does not seem feasible to
be achieved in the medium term.
(B)
RIGHTS OF ESTABLISHMENT, PROVISION OF SERVICES AND MOVEMENT OF
CAPITAL
This part of the Chapter will analyze the implementation of the provisions of Chapter III of the
Revised Treaty, incorporating Protocol II, in regard to the right of establishment, provision of
services and movement of capital. Obligations deriving from Chapter III provisions are applicable
to all Member States, except The Bahamas. The provisions of Chapter III might apply to all
measures, at any governmental level, that affect the right of establishment, the provision of services
and the movement of capital between CARICOM countries. Chapter III has incorporated the
definition of trade in services contained in the GATS, recognizing the four modes of supply of
services. No type of measure has been excluded a priori. Chapter III excludes from its provisions
all activities involving the exercise of governmental authority, which means, activities conducted
neither on a commercial basis nor in competition with one or more economic enterprises.
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Chapter III incorporated what has been called in the literature a "top-down" approach to services
trade liberalization. The granting to Community nationals the right of establishment, the right to
provide services, and the right to move capital in the Community are general obligations that bind
Member States, subject to its provisions from its entry into force. There is a "stand still" obligation.
Member States may not introduce any new restriction affecting the three basic rights. Existing
discriminatory restrictions shall be notified to the Council for Trade and Economic Development
(COTED), which means the elaboration of a list of non-conforming measures, on which the lifting
of restrictions will be based. Existing restrictions on the provision of services, establishment and on
the movement of capital would be progressively lifted though the Programs approved by the
Conference.
In the Programs established March 1, 2002 by the Conference, the restrictions identified were
intended to cover all restrictions existing with respect to Establishment, Services and the Movement
of Capital. The only area that had not been completed was Transport Services for which it was
agreed a separate Program would be established. 34 The adopted Program for the provision of
services provides that all restrictions should be lifted by the year 2005 . Work should be expedited
on the enactment into legislation of Chapter III provisions in each Member State. Draft Enactment
model legislation is already available and waiting circulation for review of Member States.
The following analysis highlights a set of issues relating to the implementation of the provisions of
Chapter III. It discusses some areas in which further work could be undertaken by Members States
to establish a free trade area for services, implement the right of establishment and the free
movement of capital, and to guarantee the required predictability and stability of the rules under
which the market should function. It also examines the relationship between the construction of the
CSME in these areas and some of the negotiating issues both in the GATS and in the FTAA
process.
34
The Program for the Removal of Restrictions available in the CARICOM Secretariat web page only incorporates
restrictions to the provision of services.
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Trade in Services
With respect to the provision of services, with some delay, on February 2002, the proposals for
removing restrictions by Member States was finally elaborated and presented to the Conference,
identifying in the proposal the sector in which restrictions exit and when they will be lifted.
According to the proposal, trade in services through the four modes of delivery, in principle,
would be totally liberalized by the end of 2005. The Programs became effective on 1 March
2002. Montserrat has been allowed a two-year derogation from the obligation to implement
programs for the removal of restrictions.
A four-stage program has been agreed for the
progressive removal of all restrictions. The Program incorporates the exercise of rights under the
three headings of Chapter III, that is right of establishment, provision of services and the
movement of capital. However, the Conference did not adopt any criteria guiding the process in
line with the provisions of Article 37.3 (a), (b), and (c). Article 37 provides for the definition of
sectoral priorities, and that measures should be established to ensure the abolition of restrictions
affecting those sectors, both in terms of the conditions to provide the service as well as the
conditions governing the entry of personnel, including their families.
No services sector was excluded a priori from the obligations. However, some of the provisions
of the Treaty grant Member States the right to exclude some sectors. It has been decided that the
removal of restrictions on international maritime, air transport and financial services will be
negotiated in different Programs.
Due to the importance of the sectors excluded from the
program for lifting restrictions to trade in services, work in these areas should receive high
priority.
Sectoral studies would be required, and in the case of financial services, some
harmonization of national regulations prior to trade liberalization.
CARICOM is more advanced than other integration groupings in the region in fostering services
trade liberalization.
MERCOSUR is in the process of elaborating a positive list of specific
commitments that would be adopted by Members, and defining the negotiating procedures for
further incorporating more sectors into the national lists. The Andean Community, which has
adopted like CARI COM, a negative list approach has just elaborated the lists of non-conforming
measures, which should be subjected in the future to a negotiating process for their progressive
elimination. The Central American Common Market has not yet approved a regime for the
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liberalization of trade in services. In contrast, CARICOM has incorporated in the proposal for
removing restrictions, the specific date on which they will be lifted.
Compared with other
regional groupings, CARICOM is on track for the liberalization of trade in services among
Member States.
Notwithstanding the progress achieved up to date, there are some issues CARICOM Member
States might wish to consider in order to adopt some measures to ensure and facilitate the
implementation of the mandates of Chapter III of the Revised Treaty concerning the
liberalization of trade in services.
Implementation of the Program for the Removal of Restrictions
There is an ongoing CIDA financed project to support CARI COM in the implementation of the
program for lifting restrictions35 . The project is oriented to support the implementation of the
commitments assumed by Member States in the areas of administrative and legislative reform,
monitoring the new environment, identification of investment opportunities in services and
building statistical capacity to undertake the collection, analysis and publication of services
statistics. This project should be concluded in December 2003 . The general orientation of this
project should be further supported due to the enormous amount of work that would be required
in terms of administrative and legal reform in every Member State, and the statistical
requirements for monitoring trade in services, not only at the regional level, but as necessary
inputs for the different trade negotiations in which CARICOM is involved. Particular emphasis
should be given to the monitoring of the evolution of the Program for lifting the restrictions to
trade-in services.
35
CARI COM Protocol II Trade Policy and Facilitation Project, CIDA Project No 4434/A-021061.
147
In implementing the Program for lifting restrictions to the provision of services, the following
issues might deserve further attention by CARICOM Member States:
1.
In a negative-list approach only the non-conforming measures are listed in the Members
reservation lists. It should be understood that any sector in which no reservation appears
is bound "free ofrestrictions." The Conference agreed that where restrictions that were in
place prior to 1998 are identified in the period up to 31 December 2005, Member States
should notify the COTED with a view to agreeing to their removal. Any restriction in
effect after 31 December 2005 would be deemed illegal and should be removed
immediately. It might be worthwhile to undertake a further effort to perfect the lists of
remaining restrictions. In that way, there will be certainty when trade-in services will be
totally liberalized and the objectives of monitoring the standstill commitment and
achieving transparency would be achieved. Furthermore, trade liberalization would be
enhanced.
11.
The lists of non-conforming measures should provide for a comprehensive description of
the restriction, identifying those measures that limit national treatment and market access
that the Member State will maintain.
This is required to adequately monitor the
fulfillment of the "stand still" commitment. Without this information available to all
Member States, it will not be possible to determine if any Member has introduced new
restrictions after the Treaty came into effect. Furthermore, one of the main benefits of
the negative lists, which is transparency, can only be achieved if the existing restrictions
that would be maintained are inscribed on the lists and the lists are made public.
n1.
Article 48 permits Member States to be granted a waiver of the requirement to allow for
right of establishment, right to provide services or to allow for capital movements in
respect to any industry, sector or enterprise, and Article 38 allows Members, after
consultation, to exclude certain financial services from the removal of restrictions.
Furthermore, as discussed below, the provisions regarding right of establishment and
provision of services incorporated in Articles 148 and 149 would allow for further
exclusion of sectors from the coverage of Chapter III. An ex-post exercise of this right
can generate serious disturbances in the liberalization process, and affect business
148
decisions of service suppliers as markets conditions to be expected in the future will not
be predictable.
Moreover, it is not clear how the provisions of Article 148 will be
implemented in the future regarding measures relating to trade in services for
disadvantaged countries.
1v.
In the implementation of the Program for the removal of restrictions, the relationship
between Article 37 and Article 36 should be further explored. Article 36 provides that
persons providing services may engage in "approved" activities, in the Member State
where the services are to be provided, "under the same conditions enjoyed by nationals of
that Member State." Therefore, it is not clear if the elimination of discrimination on the
grounds of nationality is a general obligation to be applied to all sectors and activities, or
only to those activities that are a priori approved.
The Community Council, when
addressing the establishment of rules to prohibit discrimination on the grounds of
nationality, should clarify the relationship between Articles 37 and 36 of Chapter III.
v.
The Conference has agreed that the issue of Alien Landholding could be addressed under
Protocol VII, as reflected in the Revised Treaty, providing special consideration to be
given in particular circumstances in identified Member States. However Articles 34 and
37 require Member States to ensure that nationals of the Community shall have on a nondiscriminatory basis to access to land, buildings and other property required for their
undertakings. Restrictions on access to property can constitute an absolute barrier to
establishment, annulling all the commitments that a Member State might have adopted in
the program for the removal of restrictions, both in the provision of services and
establishment in general.
Therefore, it is imperative that some clear guidelines be
developed regarding the "particular circumstances" under which special treatment will be
conferred, to which Member States, and what would be the nature and scope of such
special treatment.
Given that the majority of Member States are less developed, an
extensive use of limitations to landholding could, in practice, exclude Mode 3 from the
program for removal of restrictions, putting in jeopardy even its compatibility with
Article V of the GATS. Furthermore, landholding restrictions would impair the right of
establishment. A proposal de-linking land from shareholdings as an approach to treating
Alien Landholding restrictions is being evaluated. This, and other options aiming to
149
allow for unrestricted establishment, should be explored and implemented in the near
future.
Rule-Making
Adequate implementation of the CSME in the field of trade in services would require some rulemaking covering important areas aimed at guaranteeing the effectiveness of Member States
commitments, and that all service suppliers will benefit from the rights granted under the
Revised Treaty.
In some of these areas, CARICOM Member States should monitor closely
developments in international negotiations geared towards rule-making for trade in services.
Safeguards Regime
The Revised Treaty, in Article 47, grants the right to CARICOM Member States to apply
restrictions departing from its obligations under Chapter III. That is, Member States can apply
restrictions to establishment, to the provision of services, and to the movement of capital and
Community nationals, where the exercise of those rights creates serious difficulties in any sector
of the economy or, occasions economic hardships in a region of the Community. It introduces a
general safeguard to which any CARICOM Member State can have recourse when the
circumstances identified in Article 4 7 are present.
According to Article 4 7, restrictions shall be confined to those necessary to resolve the
difficulties, or to alleviate the economic hardship.
In applying restrictions, Members shall
minimize damage to the economic interests of any other Member State, and prevent the
unreasonable exercise of rights granted, the exclusion of which could impair the development of
the CSME.
Measures shall not discriminate, may be maintained only to the extent that
conditions justify their application, and shall be progressively relaxed as relevant conditions
improve.
Member States intending to apply restrictions should notify, prior or upon the
application of the measure, to the competent Organ, the intention and the nature of the measures.
The competent Organs, the COTED or COFAP as the case may require, have to make a
determination on the appropriateness of the measure, the adequacy of the program to resolve the
difficulties or to alleviate the hardships, and the period for which the restrictions should continue.
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The Organs have the right to impose conditions, as they consider necessary, and can also
recommend alternative arrangements to address the problem.
The adequate application of Article 47 to trade in services should provide for predictability to
economic operators in the CSME. For this purpose, it will be advisable to develop rules and
procedures to govern the use of the right to apply safeguard measures by Member States. It
would be necessary to further develop some of the provisions of Article 47, and to introduce
some procedural norms. 36 In particular, the following issues should be analyzed by CARICOM
Member States for further development of the provisions of this article:
1.
Situations in which Economic Safeguard Measures (ESM) can be applied: The concepts
of "serious difficulties" and "economic hardships" have to be operationally defined.
Clear and quantifiable indicators are needed to allow the determination of the
appropriateness of the measure, and the overall review that has to be undertaken by the
competent Organs of the Community, with respect to the conditions established in
paragraphs 5, 6, and 7 of Article 47. The concept of "serious difficulties" could be
approximated to that of "serious injury" of the Agreement on Safeguards of the WTO to
maintain consistency between CARICOM norms and disciplines and developments in
other agreements. In the case of services, an increase in imports by a Member State,
resulting from the exercise of rights granted under Chapter III, could be incorporated as a
test condition for safeguard action.
11.
Definitions of the concept "region of the Community."
As is the case in different
agreements on safeguards that incorporated identifiable criteria of the subject of serious
injury, the application of Article 47 would demand clear criteria to adequately define the
territorial space in which hardship is occurring.
36
For a conceptual discussions of the issues involved and some alternatives for trade in services refer to, Abugattas,
Luis: Safeguards in Agreements to Liberalize Trade in Services: Issues for Consideration of CARI COM Member
States in the WTO, the FTAA and in the Application of Article 47 of the Revised Treaty ofChaguaramas, draft,
May, 2002.
151
111.
Appropriate type of restrictions: It would be useful to clarify the type of restrictions that
would be legitimate under Article 47. This is particularly important with respect to the
right of establishment, and the treatment to be granted, when applying a measure to
service providers already established in a member State. As will be discussed below, this
is the most sensitive issue in the debate on ESM for trade in services in the WPGR.
1v.
Ex-post notification: Article 47 is silent with respect to the conditions that would enable
a Member State to apply restrictions without prior notification. It merely states, "Where
a Member State is unable to comply with sub-paragraph (a)."
Due to the nature of
measures restricting market access or limiting national treatment, ex-post notification can
render useless the recommendations or the conditions imposed by the competent Organs
of the Community. At least the notion of "irreparable damage" that would have to be
demonstrated if there is delay in the application of measures, should be considered by
CARICOM Member States to justify ex-post notification.
v.
Non-discrimination: Paragraph 7 establishes that Member States shall not discriminate
when applying a measure. An issue that has to be dealt with is the fact that CARICOM
will be engaged in other agreements liberalizing trade in services, where there might not
be a safeguard regime. In this case a Member State would be allowed to impose a
safeguard measure on other Member States but not on third parties?
Subsidy Regime and the Harmonization of Incentives
The Revised Treaty establishes in Article 79:2, that Members "shall refrain from trade policies and
practices, the object or effect of which is to distort competition, frustrate free movement of goods
and services, or otherwise nullify or impair benefits to which other Member States are entitled under
the Treaty." This article would, within the type of policy or practice, cover subsidies. However,
contrary to the case in goods, there are no specific provisions for remedial action in case of
subsidies in services.
The only possible course of action would be recourse to the Dispute
Settlement Mechanism. Since Article 69: 1 calls for the harmonization of national incentives in the
industrial, agricultural and services sectors, clear criteria would be required to determine the type of
policy or action, other than approved incentives, that will fall under the prohibition of Article 79.2.
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Rules and procedures for addressing the type of problem envisaged in Article 79.2 for the case of
trade in services should be developed and put into effect. These provisions of the Treaty already
introduce basic obligations and commitments that might provide for guidance regarding actions to
be undertaken in the case of trade-distorting subsidies within CARI COM. However, more specific
norms should be developed governing the application of subsidies to services by Member States and
the nature of remedial action available to the Member States.
CARICOM Member States should, in order to avoid market distortions generated by government
support of their services suppliers, put into effect a regional incentive scheme to be applied by all
Members. A CARICOM Investment Code is being developed with support from the IDB. The
proposal is expected to be ready by September 2002, and will cover the issue of incentives, both for
goods and for services. In developing the Code an apparent contradiction in the Revised Treaty
should be addressed. Article 69:3(c) provides that regimes for the granting of incentives may
provide for non-discrimination in the granting of incentives among Community nationals, therefore
accepting the possibility of discriminatory measures. The relation between Article 69:3(c) and
Article 7 that prohibits any discrimination on grounds of nationality without prejudice to any other
special provision of the Treaty should be reviewed to determine if discrimination in granting
incentives would be compatible with the general obligation to grant national treatment.
Regime for the Liberalization of Mode 4: Temporary movement of natural persons service
suppliers
Article 36.4(b) incorporates in the definition of provision of services those supplied by a service
supplier of one Member through the temporary presence of natural persons of a Member State in
the territory of another Member State. This is a different situation from the one contemplated
under the right of establishment to engage in any non-wage-earning activities, provided under
Article 32, and the one provided under Article 46, referred to the movement of skilled nationals
of Community states to the right to seek employment.
It also differs from the obligation,
established in Article 34(c), to remove all restrictions on managerial, technical and supervisory
staff of companies established in the Community. These articles refer to those situations in
which a national of one Member State moves to another Member State to reside in its territory
and to intra-corporate transferees.
The particularity of Mode 4 of supply is the temporal
153
character of the displacement to another Member State territory to engage in non-wage-activities.
The implementation of the right to provide services through Mode 4 of supply would require the
development of an appropriate set of rules and procedures. Once the objective of Article 45 is
finally achieved, that is the free movement of Community States nationals within the
Community, then the distinction between Mode 4 and movement for residence will be blurred.
However, until that goal is achieved, the liberalization of trade in services would require rules
governing the temporary displacement of service suppliers.
In any sector in which a Member State has not inscribed a restriction in the program for their
removal, i.e., it has bound it free of restrictions, and there is not a horizontal limitation, the right
to supply a service through Mode 4 should be in effect as from the time specified for nationals of
other Member countries. However, this right cannot be exercised without some rules and
regulations that take into consideration the different situations that might arise. Therefore, the
adoption of measures to guarantee the exercise of the right should be given some priority.
CARICOM Member States, when implementing the exercise of the right to provide services
through Mode 4 of supply, should consider the different possible modalities of movement of
persons. Different modalities have different implications in terms of taxation, work permits, and
social security matters, among others.
Mode 4 only addresses the movement of non-wage
earning activities. Under this category, at least three different situations can be identified that
should be taken into consideration. 37
Regime for the Acceptance of Diplomas, Certificates and Qualifications
The acceptance of diplomas, certificates and other evidence of qualification issued by a Member
State, by the other Member States, is a required condition to give full effect to the free movement
of natural persons service providers, and the movement of skilled Community nationals. The
37
(a) a person hired by a company in Member State A to provide a service in Member State B. In this case there is
no labor relation, or payment, in the State in which the service will be provided, therefore no work permit would be
required; (b) a national of Member State A being hired by a company of Member State B to provide a service in the
territory of Member State B. In this case there is a contractual relation in Member State B and payment takes place
in that territory; and. (c) a national of Member State A moving to provide by itself a service in Member State B. In
this case there is no labor relation with a company in Member State B, however income is generated in that territory.
154
implementation of the free movement of natural persons services providers reqmres the
establishment of criteria for identifying such persons and the skill level to allow for the
recognition of the diplomas, certificates or required qualifications. Article 35 establishes two
possible mechanisms to achieve recognition of qualifications:
mutual recognition or the
establishment of common standards to determine equivalency or accord accreditation to
qualifications.
Article 46 calls for the establishments of mechanisms for certifying and
establishing equivalency of degrees and for accrediting institutions.
Work on regional accreditation is being undertaken. There is a proposal for the establishment of
a Regional Accreditation Agency. Not all Member States have national accreditation bodies;
those should be established in the short-term. Support would be required for the implementation
of the regional agency and the national bodies, and to develop the regional accreditation model.
This work should be expedited, and receive the highest priority.
This is an area in which
CARICOM can move further than other agreements, such as the GATS and the future FTAA.
The objective should be to achieve mutual recognition for all categories of skills regarding
service providers, differentiating the regional regime from the one that probably will be put into
effect by the FTAA.
Disciplines on Domestic Regulation
Chapter III does not explicitly include provisions on domestic regulation, other than those
concerning monopolies, similar to the ones deriving from Article VI of the GATS or to those
being suggested in the FTAA negotiations. However, non-discriminatory measures can emerge
as a significant restriction to trade in services.
CARICOM Member States might consider
evaluating the introduction of some rules governing domestic regulation to avoid impairment of
the rights granted under the Revised Treaty. This should be a medium-term goal once the
liberalization process is advanced.
155
Right of Establishment and Movement of Capital
The right of establishment is defined in the Revised Treaty, Articles 31-34, as the right to engage
in any non-wage earning activities of commercial, industrial, agricultural, professional or
artisanal nature; and to create and manage economic enterprises defined as organization for the
production of or trade in goods and the provision of services. Articles 39-44 of the Treaty
provide for the notification and removal of restrictions to the free movement of capital within
CARICOM and prohibit the introduction of any new restrictions 38 • There are restrictions on the
movement of capital and establishment (e.g. foreign exchange controls, alien land holding,
company registration, discriminatory practices) and further work is in progress to have a more
specific focus on these areas to ensure that there are no serious omissions in the Program for the
Removal of Restrictions. Work is pending on the domestic implementation in Member States of
these obligations under the Treaty.
As mentioned above, landholding restrictions should be
abolished as a necessary condition to guarantee the right to establishment.
(C)
SETTING OF PRIORITIES
General Undertakings
•
Adoption and implementation of a comprehensive CARICOM external economic and
trade policy, which incorporates the definition and management of the interface between
the CSME and the changing trading environment. Highest priority.
•
Enhancement of coordination between bodies entrusted with external economic and trade
policy, and conducting trade negotiations with those entrusted with the implementation of
the CSME. Upgrading of negotiating capabilities.
•
Support to business associations and other relevant institutions to enhance their
participation in the process.
•
Additional resources to support the compliance of Haiti with the CSME instruments.
38
Capital and related payments include: equity and portfolio investment, short term bank and credit transactions,
payments on interests and loan amortization, dividends and other income on investment after taxes, repatriation of
proceeds from the sale of assets and other transfers and payments relating to investment flows.
156
Trade in Goods
•
Evaluation of the CET in the light of the new trading environment and commitments to
be adopted in trade agreements at different levels.
•
Addressing the issue of "other duties and charges" being levied by Member States.
•
Upgrading the capabilities of trade related institutions. Highest priority.
Implementation of the CARI COM Regional Organization for Standards and Quality
(CROSQ).
Developing a Regional Sanitary and Phytosanitary Institution, and supporting
national agencies.
Establishment of national trade remedy institutions where they exist and supporting
the existing ones.
Establish a regime for export free zones (if necessary) - Production versus
consumption Zones.
Provision of services, establishment and the movement of capital
•
Implementation of the Program for the removal of restrictions to the prov1s10n of
services.
•
Adoption of the Programs for the removal of restrictions on maritime and air transport,
and on financial services. High priority.
•
Adoption of the Program for removal of landholding restrictions. Priority.
•
Adoption of a regime for the liberalization of the temporary movement of natural persons
services providers.
•
Implementation of a regime for the acceptance of diplomas, certificates and
qualifications.
•
Adoption of the Program for removal of restrictions to establishment. Priority.
•
Adoption of the Program for the removal of restrictions to the movement of capital within
the Community. Priority.
157
TABLE 111-1 - MARKET ACCESS - NEEDS ASSESSMENT AND PRIORITIES
TREATY REQUIREMENTS
LEVEL OF ASSISTANCE NEEDED
PRIORITY RANKING
Adopt and implement a comprehensive CARICOM External Trade policy
H
H
Coordination among external trade policy agencies
M
M
Private sector and civil society institutional capacity strengthening
H
H
Program for incorporation of Haiti
L
L
General
•
•
•
•
Trade in Goods
•
Evaluation of CET in light of forthcoming trade obligations
M
L
•
•
•
Address "Other Duties and Charges"
L
L
Upgrade capacities of trade-related institutions
H
H
Establish regime for export-free zones
L
L
M
M
H
H
M
M
L
L
L
L
M
M
M
M
Services, Establishment and Movement of CaQital
•
Implement Program for removal of restrictions on the provision of services
•
Adopt Programs for removing restrictions on Maritime and Air transport
and on financial services
•
Adopt Programs for removal of land holding restrictions
•
Adopt regime for liberalization of the temporary movement of natural
persons services providers
•
Implement regime for acceptance of diplomas, certificates and
qualifications
•
Adopt Programs for removal of restrictions to establishment
•
Adopt Programs for removal of restrictions to the movement of capital
within the Community
158
CHAPTER IV
CARICOM SECTORAL DEVELOPMENT POLICIES
In terms of importance to CARI COM integration, it could be argued that Sectoral Programs are
the most important because that is where productive resources of the region are released to
generate the output and wealth required to produce growth and an improved standard of living
for the people of the region. It is self-defeating to remove all restrictions to trade and to set up
numerous institutions to enforce rules and monitor activities, if the economic sectors that are to
drive the process are not vibrant. It is therefore critical that the Community organs do not miss
the focus that needs to be placed on Sectoral Development Programs or assume that they can be
treated as residual or will be taken care ofby the invisible hand.
The Vision and Mission Statements of Sectoral Programs Unit at the CARICOM Secretariat do
in fact reflect the importance of Sectoral Programs. The Vision identifies Sectoral Programs as:
a) an effective leader and partner, fully responding to the national and regional ideals and
priorities of CARICOM; b) a dynamic, competent team with well-managed projects; and c) an
effective communicator and mobilizer of support for the productive sectors of CARI COM. The
Mission is to: Enhance competitiveness, profitability and overall development of the productive
sectors as a means to achieve sustained cultural, social, economic and environmental objectives
in pursuance of the improved quality oflife for all in the Caribbean Community.
However, while the implementation of the CARICOM's sectoral policies was intended to have
been far along the way at this point in time, relatively few regionally driven initiatives have been
taken beyond the conceptual stage. Most of the objectives to support the goals of the sectoral
policies outlined in the Revised Treaty are either still 1) at the stage that they were at when they
were written, 2) at a stage where it is recognized that a study is required to guide and inform the
initial steps, or at a stage where a study is in progress or has been completed. There are a few
cases where some post-study implementation has taken place. In general, implementation has
been hampered by a combination of a lack of financial resources, technical/human resources,
political will at the national level, and cooperation among Member States.
159
In discussions with a wide range of persons from different sectors in several Member States,
there seemed to be a general cynicism and a tendency to conclude that the Community is full of
talk but little action. However, inaction is usually not deliberate but typically caused by one or
all of the above factors. For example, in some Member States there may be only one or no
qualified legal draftspersons to amend laws necessary to implement certain changes. Another
example is where the desk responsible for a particular sector in a Member State comprises only
one person who is required to deal with all national issues, deal with international trade issues,
write ministerial briefings, and attend national, regional and international meetings.
This
partially explains why little is often achieved at the national level and points to the fact that
regional cooperation and pooling of resources must be fostered to enhance regional output. In
fact, the funding of a Regional Resource Pooling Program (RRPP) would be money well spent
and quite feasible if information technology is used and there is a commitment among Member
States to the sharing of information and resources.
The CARICOM Secretariat is able to coordinate and act as a catalyst to the implementation of
the objectives of the sectoral policies, but in most cases significant coordinated input from the
national level would be required.
Moreover, this input has to come from all participating
Member States at the same time to be effective. For example, in the area of regulation of
maritime transport, all Member States are required to put in place efficiently operating Maritime
Authorities and agree upon common standards (whether they be international standards or
regional standards). However, it has been a challenge to get Member States to submit accurate
and timely information on their current operating standards so that steps towards regional
standardization can take place. Such lack of responsiveness by Member States (which may be
due to lack of resources locally, lack of political will, or cumbersome procedures) slows down
any regional attempts to coordinate and harmonize.
Even in the area of services, where Member States have now put in place Programs for the
Removal of Restrictions, the process has been delayed by the fact that some Member States were
slow in identifying and declaring restrictions. In addition, those Member States that were further
ahead in the process were not always prepared to declare their hands until all other Member
States were ready to come to the table.
Ultimately, the services of regionally contracted
Consultants were required to undertake some of the activities that should have been carried out
160
by Member States. This example brings to the fore the fact that intra-regional national interest is
sometimes in conflict with regional harmonization: these opposing forces act to delay the overall
objective of regional integration. The reality is that to accelerate the implementation of some
aspects of Community sectoral policies may require external inputs to carry out some of the
technical activities across Member States. However, the use of Consultants is costly and has to
be funded either by Member States or donor agencies.
In some areas of the sectoral programs where implementation has not taken place, regional
implementation may be assisted by adopting or adapting best practices in one or two Member
States that already have sound national programs in place. For example, in maritime transport
regulation, Jamaica has taken steps to establish a strong Maritime Authority, which is well
staffed and has newly drafted legislation to work with. In its endeavor to be an internationally
and nationally recognized registration center for ships, Jamaica has signed on to most
International Conventions and is implementing international standards.
Jamaica is actually
driven by international standards and Conventions but it is setting a model that can be patterned
by other Member States subject to the availability of financial and technical resources. It is a
costly affair to establish an effective Maritime Authority staffed with senior professionals to
conduct surveys and to interpret and enforce Maritime legislation, but once again the effective
pooling of regional resources could take the Region as a whole much further.
For environmental protection, the work of the Environmental Protection Agency (EPA) at the
University of Guyana should be examined. This agency is staffed with high level professionals
and has worked hard to develop a Biodiversity Plan, a Coastal Zone Plan, and an Environmental
Action Plan. There are 68 Environmental Clubs in Guyana, which the EPA was instrumental in
setting up. The Guyana EP A's position is that if regional harmonization is to be a reality then
regional environmental planning is necessary, and this would require common protocols,
common standards and common legislation across Member States. This would inform investors
of environmental standards prior to coming in to invest. For example, investors in the Guyanese
mining industry would have to be aware of standards applied to mining in order to avoid
problems such as rivers changing courses.
Of course, common standards, practices and
legislation would facilitate all the countries in the Region taking the same position collectively in
161
international fora. At the moment there is no regional mechanism for consensus building and a
united approach to environmental protection.
In manufacturing, lessons can be learned from Trinidad & Tobago, the most successful
manufacturing zone in the Region. In tourism, Barbados and Jamaica could be examined for
best practices.
And in areas where there are no appropriate laws or practices in the region
models based on practices in the USA, Canada, the U.K. or progressive developing States can be
benchmarked to design and put into operation a CARICOM approach, including its legislative
requirements.
The seven main areas of Community Sectoral Policy examined in this chapter are:
(A) Agriculture
(B)
Industrial Policy
(C)
Services (excluding tourism)
(D) Transportation
(E)
Environmental Protection
(F)
Tourism
(G) Research and Development
In addition, separate sections are included on:
(H) Information Communication Technology Policy
(I)
Human Resource Development Policy
In no area has there been major progress in the implementation of objectives or supporting
activities. In Marine Transportation, Research and Development and Environmental Protection,
there is a general feeling that these areas receive low priority at the national level and that this
explains the general lack of development across the Region.
The size of the task faced by the Region in implementing just the sectoral programs examined in
this report is summarized in the following table.
162
There are at least 93 discrete
objectives/supporting39 activities to be implemented in the Community Policy areas examined in
this report. Furthermore, some objectives/supporting activities need to be broken down and dealt
with separately.
Sector
Number of Objectives/
Supporting Activities
Agricultural Policy
Services Policy
13
Industrial Policy
Transport Policy
12
29
Environmental
Protection
Research &
Development
Total
10
Inputs Required
Financial and technical
Financial and technical - Member States
have been finding some of this funding
because of the importance they attach to this
sector
Financial and technical
Financial, technical and political
commitment to maritime transport,
especially in light of the fact that 95% of
cargo is transported by sea.
Financial, technical and political
commitment
Financial, technical and political
commitment
13
16
93
To implement all of these objectives/supporting activities or even to put them in progress over
the medium-term would require massive effort on the part of many interests across all sectors. In
nearly all cases, financial and technical resources need to be secured to plan and/or implement
the objectives/supporting activities outlined in the Revised Treaty. Successful implementation
would require the Community authorities to:
•
Commit totally to the integration process, a higher level of mutual trust must be fostered
at all levels (not just at the Heads of Government level);
•
Prioritize the implementation of objectives to gain maximum momentum and impact in
the initial stages;
•
Pool technical resources to provide a critical mass of skills to tackle many issues
•
Share information, especially as it relates to best practices from other regional countries
or integration movements such as the EU, that will prevent duplication and re-invention
of the wheel;
39
In this report, the term objectives will be used to describe objectives as well as supporting activities. The
Consultant identified discreet activities laid out under the relevant areas of sectoral programmes in the Treaty and
has basically placed them under the heading of objectives but in many cases this includes supporting activities.
163
•
Identify creative mechanisms for funding certain activities such as taxes that are not
overtly too burdensome while being equitable;
•
Tap all available sources of external financial assistance;
•
Put in place implementation teams/mechanisms to keep the process moving;
•
Set meaningful implementation targets and reward implementers for timely and complete
implementation.
(A)
AGRICULTURAL POLICY
CARICOM's Agricultural Policy is laid out in Chapter 4 Part II of the Revised Treaty or in
Protocol V. The goal of the Community Agricultural Policy bears in mind the differences in the
resource endowment and economic development of Member States. The goal is complex and
comprises the following components:
1. The fundamental transformation of the agricultural sector towards market-oriented,
internationally-competitive, and environmentally-sound production of agricultural
products;
2. The improvement of income and employment opportunities, food and nutrition security,
and poverty alleviation in the community;
3. The efficient cultivation and production of traditional and non-traditional pnmary
agricultural products;
4. Increased production and diversification of processed agricultural products;
5. An enlarged share of world markets for primary and processed agricultural products; and
6. The efficient management and sustainable exploitation of the Region's natural resources
including its forests and the living resources of the exclusive economic zone.
A set of thirteen (13) objectives/supporting activities is set out in the Revised Treaty in support
of the agricultural goal. Implementation of the objectives/supporting activities, however, has
been slow. The main reasons given for the slowness by relevant members of the CARICOM
Secretariat and members of the regional private and public sectors include: lack of political will,
unrealistic expectations given the resources available, the heterogeneity of Member States and
their different areas of focus, and limited human and financial resources.
164
The Regional Transformation Program
In order to achieve the goal and meet most of the objectives of the Community Agricultural Policy,
a Regional Transformation Program (RTP) for Agriculture was set up in 1996.
The RTP is a
vehicle to execute Community Agricultural Policy. There is a mapping from the RTP to the
Community Agricultural Policy so if the RTP is implemented the Community Agricultural Policy
ultimately will be implemented.
The RTP was established with the underlying thrust that what happens at the regional level must
support national level activities. 40 The RTP was intended to stimulate and diversify regional
agriculture looking at all aspects including forestry and research and development. In attempting
to implement such a broad program with limited resources, little could be achieved.
In year
2000 it was decided that the program focus should be narrowed by selecting a list of priority
products for which production, distribution and marketing strategies would be developed. Based
on the work of CARDI, the CARICOM Secretariat and other Regional players, an initial list of
twenty-two (22) priority commodities was selected based on the following criteria:
•
Import substitution potential
•
Development impetus
•
Food security
•
Export potential
A decision was made to face the challenge by further breaking it down and dealing with subsets
of products in tum. The initial concentration has therefore been limited to seven (7) products:
1. Hot peppers
2. Papaya
3. Small ruminants - goat and sheep
4. Poultry
40
The RTP to CARICOM is like the EU's reformed Common Agricultural Policy (CAP), which is discussed briefly
at the end of this chapter.
165
5. Coconuts and oils & fats
6. Sweet potatoes
7. Rice
The aim of diversification can be seen by the fact that traditional products such as sugar, and
citrus are not included in the list. The initial seven products chosen were based on the results of
prioritization work carried out by CARDI, which showed that the basic conditions were in place
for these products in the Region.
The institutional arrangement for the implementation of the RTP was based on lead agencies.
These lead agencies and their main roles are:
1. UWI - Human resource development and research
2. CARDI- Market development and research
3. University of Guyana - Forestry
4. CARICOM Secretariat - Policy framework
5. CFRAM - Fisheries
6. CDB - financing
This group formed the committee of lead agencies (CLA) to be coordinated by CARICOM and
as shown, each was assigned different areas of responsibility.
IICA and FAO were selected as regional support agencies. In 2001, the CDB supplied initial
funding of US$250,000 to get the process off the ground. This has facilitated the other lead
agencies in making their contributions in kind, etc.
The expected outputs of the RTP include:
1. An industry strategic plan for each commodity in the agricultural sector, which would
have evolved from the national firm to the national industry and then to the regional
industry.
166
2. An institutional framework for each industry in terms of having its own regional
association (such as the Caribbean Poultry Association) that will ensure selfsustainability and support the industry.
Associations will be supported by member
contributions.
3. Regional industries that can influence the public sector to provide investments where the
private sector will not invest such as in roads, irrigation systems, power and light,
communal cold storage. The private sector would carry out its own investment.
4. Technology and information production systems that result in greater international
competitiveness
5. A developed marketing system, which will lead to a commodity exchange for the Region.
The Caribbean Poultry Industry as a Success Model
The CDB has provided assistance to the Caribbean Poultry Association, which was considered to
be the most vibrant. A consultant was hired to put in place a 10-year plan for the regional poultry
industry - looking at competitiveness, investment requirements, etc. The private sector poultry
industry is trying to implement the plan across the Region, with many farmers in the process of
having obtained or are seeking investment. Several of them are in the process of changing the
technology for poultry production and are receiving development and private money to carry out
their investment.
The study on the poultry industry identified Belize, Suriname and Guyana as having a
competitive advantage in that industry because they have domestic supplies of grain. They are
able to produce poultry at rates competitive with producers in the United States. As a result a
regional feed arrangement has been examined and a project to produce hatching eggs in the
region is being looked at to substitute for imports. In Suriname, Good Agriculture Practices
(GAP) training is taking place in the poultry industry. The technology for slaughtering chickens
has also been enhanced to meet international standards and food safety requirements. However,
more investment in processing plants is necessary.
Though still in its initial stages, it can be seen that some activity has taken place in the regional
poultry industry with the RTP acting as a vehicle and catalyst. Initiatives are not as advanced
with respect to the other priority products. However, Consultants have been identified to do a
167
similar study (as the one done for poultry) for the regional Coconut Industry (looking at potential
in oils and fats) and for the regional Small Ruminants Industry (sheep and goat). The region
imports vast amounts of small ruminants but it is felt that the capacity exists in the region to
produce these commodities competitively.
CARICOM Secretariat has already started to put in place measures to launch initiatives on the
other 15 priority commodities after the first seven have been put in motion. The critical success
factors in the regional poultry industry transformation will be transferred where possible to the
other commodity groups.
Apart from the commodity specific activities outlined above, two other activities are being dealt
with under the RTP. These are:
•
Market information, market intelligence, marketing - CARI COM Secretariat is looking at
intra-regional marketing so that Member States buy from within the Region rather than
importing from outside what is or can be produced regionally. For example, the Region
currently imports 65,000 tones of poultry meat per year, it is felt that the capacity exists
in the Region to satisfy the demand. A positive example is the fact that Jamaica has
recently had to purchase sugar from Belize and Guyana to satisfy domestic demand.
CAMID, the Regional Agricultural Marketing Intelligence System, is to be significantly
enhanced to provide product and market information and support the regional marketing
thrust.
•
The issue of regional food security and food safety.
The above areas of focus basically show the priorities for the regional agricultural sector. The
following analysis attempts to place each objective for the agricultural sector under the RTP.
Objective 1: National policy measures directed at promoting production, diversification,
processing and marketing of agricultural products
The thrust of the RTP is consistent with this objective and the initiatives that have been taken in
this area were discussed above under the RTP. The approach being adopted under the RTP is an
168
action-oriented micro approach where each industry in agriculture is addressed and developed
individually with lessons learned in one industry used to cross-fertilize others. Each industry will
be developed and strengthened from the national farm level up to the regional industry level with
market intelligence systems to facilitate information flow. These industry market intelligence
systems will be then harmonized through CAMID to provide a regional market intelligence
system.
This objective is still at the early stage of implementation but activities in the poultry industry are
encouraging. The Agricultural Unit at the Secretariat considers this a priority area.
The CDB is providing funding of US$250,000 for the first six industry studies to be conducted.
It is estimated that a further US$ I million will be required to fund the remaining 16 industry
studies. Financial and technical assistance is required to conduct the remaining studies and to
implement the findings across the Region.
Objective 2: Effective agricultural financing systems including insurance
The design of the RTP industry competitive studies look at financing systems for each
commodity. Each commodity needs its own financing system. After this is done common
threads can be looked at across industries and financing systems used in other small developing
countries could be examined and considered.
So far under the RTP's poultry industry activities farmers and investors are sourcing their own
funds and the Governments are expected to provide public goods. The industry study assists
farmers in putting forward a strong case for obtaining loans.
Additional research is necessary to identify appropriate financing systems, especially in high cost
regional markets such Jamaica and Suriname. The lack of working capital financing for farmers
is identified by the Ministry of Agriculture in Suriname as a major constraint to farming.
169
Objective 3: The establishment of linkages amongst member states with complementary
natural resources, industries, agricultural skills and technical abilities
The implementation of the Protocol promoting the movement of capital and of people is
expected to facilitate linkages. In the case of rice, there is a mill in St. Vincent that sources its
rice from Guyana. In the areas of oils and fats, St. Lucia and Trinidad & Tobago have sought
raw materials from Guyana and St. Vincent. In the area of citrus, Belize has been providing raw
materials to Jamaica and Trinidad & Tobago. Guyana has provided some sugar to Trinidad &
Tobago and attention is being paid to the possibility of refining (cheaper Guyanese) sugar in
Trinidad & Tobago where energy costs are lower. CARICOM Secretariat hopes to work to
develop linkages between sectors. For example hotels should use more local vegetables rather
than import them from overseas.
This objective is consistent with the RTP, which looks at production at farm, national and
regional levels. There is need for more research to identify and promote regional synergies.
This should be facilitated by CAMID. Funding to enhance CAMID is required. The framework
for the enhancement of CAMID has been designed, however funding is now required to get it off
the ground. A requirements specification is necessary and experts brought in to develop the
software, design the regional network, train the users and provide the hardware.
Objective 4: The development of human resources and delivery systems responsive to the
requirements of the agricultural sector
There is scope for greater emphasis to be placed on human resource development under the RTP.
This is especially the case, as the focus on training young people in agricultural sciences does not
seem to have increased over the years. The Faculty of Agriculture has been merged with the
Faculty of Natural Sciences at UWI, which sends a signal regarding the focus on human resource
development. There was a drop in the enrolment in the faculty, which resulted in the merger.
Agricultural graduates find themselves with fewer job opportunities with good salaries compared
with their counterparts in other disciplines and this acts as a deterrent to students going into
agriculture.
170
The College of Agriculture in Jamaica has not been expanded and there is little evidence to
suggest that there is much training in secondary schools across the region.
In Suriname, there are training activities to upgrade skills in chemical use and plant propagation.
There is also an extension service aimed at providing technological support to farmers, however
this service is in decline.
The Regional Program for Animal Health Assistants (REPAHA) has been in place in Guyana
since the 1970s. However, there has been a reduction in enrolment in recent years reflecting a
reduction in the number of scholarships available for this program. This program is expected to
be absorbed into the Guyana School of Agriculture.
There are ad hoc programs around the Region m forestry management, water resource
management, agricultural health and safety issues. There is need for increased promotion of
agriculture as a career alternative for younger people. However, this will probably need to start
by giving more emphasis to the development of the agricultural sector in the Region.
CABA is trying to change the focus on agriculture by looking at the bio-food industry, which
will show that the agricultural sector contributes much more to GDP than usually estimated.
Agriculture is usually thought to contribute 8% of GDP in Jamaica but CABA estimates it to be
really about 26%. This should enable the sector to get a larger share of the Government budget.
An initiative to harmonize and coordinate the activities of agricultural training institutions and
programs across the Region would serve a very useful purpose.
Objective 5: The development of appropriate policies for the use of land and marine space
with a view to increased agricultural production
The CARICOM Secretariat intends to address some of these issues through its Sustainable
Fisheries Management Project and its Forestry Development Project. No common approach has
been developed in the Region as yet. The countries of the Region still operate as individual
countries rather than as part of a Region.
171
In terms of mariculture and aquaculture, there are national initiatives in Guyana and Jamaica,
such as pond fish and shrimps, which have already been produced and marketed.
On the whole, very little is being done at the national level, which leads to concerns amongst the
agricultural community, especially where housing developments are taking place on agricultural
land. Given the different sizes and endowments of regional countries, national level studies and
implementation plans will be required to achieve this objective.
This objective is consistent with the RTP and each industry study should have a section
indicating the optimal policies that should to be pursued with respect to land use across the
Region.
Objective 6: Appropriate land tenure systems to provide the farmer with security of tenure
No regional level initiatives have been taken to date. This issue is not an area of focus of the
RTP but appropriate policies need to be put in place to support the RTP. At the national level,
Guyana is trying to regularize land tenure for residents and Jamaica is attempting to deal with the
issue through the land-titling program.
Given the different circumstances in regional countries,
individual research and solutions will be required in each case. However, lessons could be
learned from Suriname where there is a working system in place, which provides every
Surinamese with a right to piece of land as long as they apply and make the required payment.
More leadership in solving these issues is required at the regional level and this issue should be
tabled at Heads of Government meetings.
Objective 7: The establishment of effective information and market intelligence services
One area of focus of the RTP is on market intelligence. Initiatives are been taken to develop
CAMID, a marketing intelligence database network that would have private sector and some
public sector input. As mentioned earlier, funding is being sought to get this off the ground.
172
Currently, there is a program under CARDI to look at pre and post harvest agricultural
information and other areas of increased yield technology. The strengthening of CARDI has
been endorsed by Ministers of CARI COM. A possibility for the Region is to integrate CARD I's
information system with CAMID through the design and implementation of a web-based
regional information system. This could be added to the CARICOM Secretariat website with a
facility for regional states to update information related to their territory.
Objective 8: Research and development with a view to the adaptation, dissemination and
application of appropriate technologies at all levels of the sector and all stages of
production
Agricultural research has been the domain of the UWI and CARDI.
CARDI has been
experiencing challenges in recent years with at least one Member State withdrawing financial
support. However, there have been recent discussions and regional cooperation is expected to be
back on track shortly. However, CARDI does continue to do research.
In Jamaica, some initiatives have been taken by the Scientific Research Council (SRC) in the
area of research in ginger, pepper, tissue culture, and cocoa. However, more funding is required
to do this successfully.
From a regional perspective it would be beneficial to coordinate the efforts of CARDI, UWI,
SRC and other research institutions and present research findings and applications under
CAMID. This objective is consistent with the RTP.
Objective 9: The adoption of effective measures for rural enterprise development
Nothing much has been done in this area to date, however these issues should be addressed under
the RTP industry plans.
In Jamaica, cottage industries and rural women's organizations have been put in place.
More initiatives need to be carried out with respect to cottage industries and how the Jamaican
model can be expanded and applied in other countries.
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Objective 10: Public education to enhance the economic and social profiles of agriculture,
particularly among the youth
In general very little has been done in this area. Brochures have just been produced by the
CARICOM Secretariat aimed at informing people about the RTP. However, it is unlikely that
these brochures will find their way down to the grass roots level. More promotional measures
need to be taken to transmit the message to people across the Region.
The whole CSME
Program needs to be promoted across the Region and the Agricultural Sector should be given a
prominent role since it affects the lives of a significant proportion of CARI COM nationals.
Some successes in this area can be found in the 4H movement, which is very involved in
promoting agriculture to the youth in Jamaica. A regional meeting of the Youth Forum took
place in Barbados recently to bring young people into the agricultural program and familiarize
them with the R TP. More regional initiatives are needed to reproduce the successes of the
Jamaica 4H movement across the Region.
Financial and technical assistance is required to develop programs to enhance the economic and
social profiles of agriculture.
Objective 11:
The establishment of an effective regime of sanitary and phytosanitary
measures
This is a part of the marketing initiatives that are being looked at under the RTP. CARICOM
facilitated the development of model legislation for plant health and quarantine and animal
health and quarantine, which has been circulated to Member States. Member States are in the
process of examining the model legislation sent to them. There is a need to take follow up
initiatives on the model legislation and attempt to have it implemented across the Region.
The CARICOM Secretariat has also facilitated training in the establishment of WTO SPS
measures and is working in this area through its Agricultural Health and Food Safety Project,
which amongst other things, aims at setting up the Caribbean Agricultural Health and Food
Safety Association (CAHFSA) and provide regional cooperation in critical agricultural health
174
issues such as SPS and pink mealy bug elimination.
Consideration should be given to the
possibility of subsuming some of the SPS activities under Caribbean Regional Organization for
Standards and Quality (CROSQ).
This objective needs to be an area of focus if the Region is senous about exporting more
agricultural products. Assistance is needed to support the development, implementation and
monitoring of SPS Protocols for agriculture; this is critical to the defense of market shares and
the gaining of access to new markets.
There are Member states currently complaining that
standards-related technical barriers are being erected by other Member States against their
agricultural products.
Objective 12: Technical cooperation and the dissemination of knowledge in agriculture
As mentioned earlier, this is an element of the RTP and CAMID. It is fair to say that technical
cooperation has always been part of the regional landscape and the CARICOM Secretariat has
played a role in arranging visits to extra-regional countries and visits from experts from other
countries.
CABA feels that capacity building; institutional strengthening and trade related technical
assistance are required.
Lessons from EU Agricultural Policy
Much of the EU's agricultural policy falls under the Common Agricultural Policy (CAP), which
has provided massive production subsidies to European farmers in one way or the other over the
last 45 years. It is estimated that the CAP costs EU taxpayers US$40 billion per annum. In its
original form the CAP focused on attaining the goals of the Treaty, securing a fair standard of
living for the agricultural community, and ensuring security of food supply at affordable prices
and controlling the resultant imbalances (such as butter mountains, etc). The approach under the
CAP was reformed in 1992 and it became based on a combination of lowering of institutional
prices and making compensatory payments.
175
In 2000, the CAP was once again reformed with the aim of widening the 1992 reform by
replacing price support measures with direct aid payments and accompanying this process by a
consistent rural policy. It is expected that in the next few days, based on a mid-term review of
the CAP, that the EU will announce modified proposals with the focus on rural agriculture,
compliance with environmental protection, food quality and animal welfare standards. Strong
new financial controls are also expected.
The new proposals will aim at redistributing
agricultural support to farms that are most in need and limiting the overall sum paid to any farm
so that the EU's overall agricultural budget falls by 20% over the next seven years. It is also
hoped that these measures will render the EU more WTO compliant. Changing the CAP may
not be easy because countries such as France, Spain, Ireland, Italy and Greece are heavily
dependent on subsidized agricultural production and the political ramifications may be
significant.
The EU's proposed change of approach is in direct contrast with that of the USA, which recently
introduced a program of agricultural support, which will provide US farmers with production
subsidies of nearly US$200 billion over the next ten years.
CARJCOM clearly cannot afford to provide subsidies to its farming community as in the EU and
the USA. However more creative ways need to be sought to give incentives to farmers, such as
tax breaks, more marketing information, rewards for excellence in farming, and rewards for
farmers whose methods act to protect and preserve the environment.
The RTP aims at
accomplishing some of these things, such as the market intelligence system.
Priority Areas for Financial and Technical Support
1. Funding to complete strategic plans in the remammg 16 industries that have been
identified as having strong potential. These plans would identify strengths, weaknesses,
opportunities and threats in each industry as well as suggest financing mechanisms. The
design of these strategic plans basically captures nearly all of the objectives of the
Community Agricultural Policy but deals with them on an industry-by-industry basis
rather than on a horizontal basis. The CARJCOM Secretariat estimates that this will cost
a further US$1 million. The success of the poultry industry, for which such a plan has
176
been completed, supports the need for such strategic plans. The template used in the
poultry study can be used to ensure consistency and standardization in the production of
different plans.
2. Funding and technical assistance is required to develop CAMID as a strong and useful
regional agricultural marketing intelligence database that can be easily accessed by users
across the Region. CAMID could be a web-based system that is developed initially to
capture existing information generated by CARDI and UWI as well as the findings and
developments from the industry strategic plans funded under the RTP.
3. Funding is required to review, determine the strengths, harmonize the activities, and pool
(where possible) the resources of the various regional agricultural institutions and
organizations. This would facilitate enhanced regional understanding of the sector and
greater synergies and would be incorporated under CAMID.
4. Funding and technical support are required for a strategic plan for measures to enhance
food safety and food security and to develop, implement and monitor SPS Protocols.
Some of these activities can be subsumed under the development of CROSQ.
(B)
INDUSTRIAL POLICY
CARJCOM's Industrial Policy is laid out in Chapter 4 Part 1 of the Revised Treaty (Protocol 111).
The goal of the Community Industrial Policy is the achievement of market-led, internationally
competitive and sustainable production of goods and services for the promotion of the Region's
economic and social development. There are pockets of success in industry around the Region
and some companies moving to establish businesses or trading regionally. However there is still
a long way to go in terms of establishing a Community Industrial Policy - it has been difficult
enough for most Member States to set up and implement National Industrial Policies.
In order to pursue the goal of the Community Industrial Policy, nine (9) main objectives were set
up. The following discussion outlines these objectives and examines the extent to which they
have been met as well as what remains to be done and the resources needed.
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Obiective 1: Cross border employment of natural resources, capital, technology, and
management capabilities for the production of goods and services on a sustainable basis
The CARICOM Secretariat wishes to facilitate the deepening of production linkages across
borders in the Region.
To date the main focus has been on industries that have potential.
However, this has not been supported by strong research to determine the criteria for selecting
industries with the greatest potential. CARICOM Secretariat has recommended that a study be
done for the identification of such industries.
Sugar, rice, bananas and bauxite are amongst those identified preliminarily as having the greatest
potential for diversification. For example, proposals for diversification have been submitted to
the Japanese to examine the minerals present in the red mud in Jamaica from which bauxite is
extracted, and to produce paper from banana stems.
Study proposals have been submitted to the CDB "For enhanced internationally competitive
production and trade in CARICOM Member States." Another proposal submitted to CDB is for
a "Regional economic and enterprise competitiveness program."
A proposal for a study on "Packaging and labeling for international competitiveness" has been
submitted to DFID. CROSQ would act as a central body to deal with standards for packing and
labeling.
It is worth noting that there have been several private sector initiatives involving regional
companies moving across borders to operate, these are discussed later in this report. The main
initiatives have typically been in the tourism and financial services; significant amounts of
capital and management skills have moved in these cases.
Actions and resources required
Conduct scientific research on industries where cross border opportunities exist. Promote the
findings across the Region. This is still at the pre-study stage. Financial and technical assistance
are required to get this objective going.
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A feasibility study needs to be carried out to establish the possibilities for production integration
e.g. looking at lumber in Guyana and where processing could be done or looking at the
processing of rice paddy from Suriname, Belize and Guyana elsewhere in the Region.
Objective 2: Foster linkages amongst sectors and enterprises in the CSME
There are some linkages within some Member States, such as between the agricultural sector and
tourism, or the transportation sector and tourism and agriculture. However, no formal studies
have been conducted to determine the extent of such linkages and to identify other opportunities.
The Sandals Group and Air Jamaica are taking cross-sectoral initiatives to the extent that Air
Jamaica transports tourists to Sandals and other hotels in Jamaica, St. Lucia and Barbados.
BWIA also plays a major role in linking transportation, tourism and business across the Region.
The Barbados government is in the midst of a regional tourism campaign to generate more
tourists from the Region, this will bring BWIA and Air Jamaica further into play.
By buying cement plants in several Member States, the Trinidad & Tobago Cement Company is
able to forge some linkages between the cement industries in each country and this company is
truly a regional entity.
Actions and resources required
There needs to be a clear definition of the focus that will be taken in terms of fostering linkages
and identifying and promoting existing linkages and potential linkages which can be exploited.
Actions should also be taken to further the development of industry associations to promote
deepening of investment and cooperative relationships.
Research needs to be conducted to
identify factors that will prevent multinational companies such as Nestle or Colgate-Palmolive
from de-investing in CARICOM countries because of relatively high costs when compared to
other countries in the (proposed) FTAA.
Financial and technical resources are required to identify linkages and promote opportunities.
179
Objective 3: Enterprises capable of competing in domestic and extra- regional markets
In the Rice industry several meetings have taken place to discuss issues such as setting up
milling operations in consuming countries and the expansion of trade for producer countries.
Recommendations came out of the meetings but nothing has actually been implemented on the
ground. A donor conference has been recommended for financing initiatives in the rice industry.
Business leaders in Jamaica feel that opportunities exist in tourism and in entertainment. Some
of the trading houses in Trinidad & Tobago have expanded. S.M. Jaleel in Trinidad & Tobago is
identified as one company that is able to face the extra-regional as well as regional market.
However, there are few signs to suggest that hardcore regional manufacturing can succeed. It is
felt, for example, that most Jamaican businesspeople are trying to follow the Jamaican Diaspora
rather than move regionally.
Sandals and Super Clubs in the Jamaican tourism sector are two businesses capable of facing the
extra-regional market and are forced to do so now as it is the main source of their revenue.
Actions and resources required
The execution of this objective is still at the preliminary stage. Research needs to be carried out
to examine market opportunities for local businesses and to create the local/regional environment
to induce growth to a size that will render them internationally competitive. Work needs to be
done on improving the quality of packaging in the Region.
Benchmarking is required of the strategies of companies that grow large enough to penetrate
global markets but emanate from a small domestic or regional market.
A specific proposal has been submitted to the CDB for a study "To facilitate internationally
competitive production and trade in CARICOM Member States", if such a study develops a
strategic plan that can be implemented, this will be of great help to the Region.
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Financial and technical resources are needed to upgrade and modernize production facilities, to
improve packaging, to benchmark success cases in other regions 41 , and promote regional
opportunities for business development.
Objective 4: Viable SME Sector
The CARICOM Secretariat is aiming at dealing with some of these issues through its Regional
Economic & Enterprise Competitiveness Project, which will focus on planning and human
resource development for micro, small and medium scaled enterprises across the Region. From
the regional perspective this is still at the conceptual stage. USAID is considering the funding of
a regional round table on SMEs, which could act as a major catalyst for SME development.
In Jamaica, USAID, CIDA, and the Government of the Netherlands have been working with
local financial enterprises to fund and promote SMEs. The models used are not those that offer
subsidized loans to borrowers but those that develop appropriate models or strengthen
institutions.
The model used by USAID has been very successful in several Jamaican
institutions and could be benchmarked by other Member States.
Guyana also has some
successful small and microfinance enterprises.
Barbados has introduced new legislation and established a small business development center,
which offers business assistance in starting up at no cost (incubator). Businesses are provided
with the expertise of business development officers who prepare business plans for them.
Library services are also available.
The Small Business Act allows these small and micro
enterprises to register as Limited Liability Companies at a lower cost. In addition, the Barbados
Ministry of Commerce has just introduced an Innovative Fund to fund the development of new
initiatives and ideas to avoid replication of what is already there. This concept is well worth
trying in other Member States.
41
Work has already started in this area in the OECS and other countries in the Region as part of the economic
diversification exercise.
181
In Trinidad & Tobago there are initiatives to assist the SME sector, The Small Business
Development Company (SBDC), in which Government is the main shareholder, provides
guarantees and business support services. Development Finance Limited provides finance for
SMEs.
Actions and resources required
There is need to set up a regional working group for SMEs to establish the strategy for SME
development. Research needs to be done in regional countries to identify if the effective demand
is there to support a regional micro finance enterprise.
Harmonized legislation needs to be established and research needs to be conducted on the
development of programs that support sustainable development - current programs only
encourage loans and not equity.
This is still at the mobilization of resources stage. Funding and technical assistance are required
to design an optimal strategy for the development of a viable SME Sector and to set up
microfinance institutions to provide capital for the sector.
Objective 5: Enhanced and diversified production
Nothing of major significance is going on in this area. The CARI COM Secretariat is hoping to
address this objective in its Development of Strategic Industry Clusters Project, which aims at
selecting industry clusters for support and the identification of factors and options for industrial
diversification.
There are some programs in the Agricultural sector, including programs to increase coffee
production. Free Zone activities have also yielded positive results in some sectors across the
Region in that they have facilitated the strengthening of the informatics, electronics and garment
producing sectors.
It is very important that diversification of production takes place in the
Region, especially in banana and tourism dependent states where increasing vulnerabilities exist.
182
Actions and resources required
A clear set of additional production activities need to be defined, tested and implemented, such
as aquaculture, agro-processing and packaging. Part of the Strategic Plan for industry should
include an examination of the diversification of industry, including the utilization of waste from
agro-processing; mineral extraction industries; renewable energy industries as well as ecotourism and sports tourism. Such activities utilize more intensively the resources in which the
Region is abundant.
A US$7 million project has been approved for work to be done in the area of non-traditional
energy, this is a very positive move and a unit has just been set up at the CARI COM Secretariat
to deal with it.
Financial and technical assistance are required to identify, promote and
implement other production opportunities.
Objective 6: Private and public sector collaboration to secure market led production
At the Regional level, nothing much is happening in this area. There is a strong sentiment
amongst certain elements of the private sector that governments should only give incentives and
stay out.
JAMPRO tries to work with the private sector in Jamaica but the focus is mainly on investors
coming in rather than helping to find markets outside. The Trinidad & Tobago Manufacturers
Association (TTMA) works with The Tourism and Industrial Development Company (TIDCO)
on several trade missions per annum. TTMA also works closely with the Ministry of Industry.
In Suriname, major steps have been made in terms of public and private sector communication.
The two groups are now able to meet and discuss issues, which was not a feature of past
relationships, however there is still some way to go in terms of collaboration for market led
growth.
The CAIC is developing proposals for establishing operations aimed at the international market.
It is felt that the FTAA will bring opportunities for CARI COM producers to attract foreign
investment partners (FDI) from within the FTAA and outside the FTAA. But opportunities will
be accompanied by threats as well.
183
Actions and resources required
A survey amongst the private sector business community is required to identify the kind of
assistance from the Government that would be most far-reaching. This would then require
follow-up workshops to discuss the findings and implement recommendations.
Research is
required to identify business activities with natural synergies emanating from collaborative
efforts between the public and private sectors.
Financial and technical assistance are required to conduct the survey, and to promote and
implement findings.
Objective 7: Industrial production on an environmentally sound basis
Nothing of note is happening regionally. However, at the national level, Jamaica is giving
environmental awards to companies that meet high standards with respect to environmental
issues.
Furthermore, many donor agencies are requesting environmental assessments before
providing funding. This is also happening in Trinidad & Tobago.
There is a proposal to pass a law on environmental safety in Jamaica but it has not been
implemented as yet. In Barbados there are efforts to use cartoon characters to get the message
across concerning the imp~rtance of a clean environment.
Actions and resources required
Across the Region it may be necessary to tighten planning laws to ensure that industrial
development does not encroach on water catchments, residential and other sensitive areas.
Incentives should also be extended to companies to set up their own waste treatment plants and
there should be a strengthening of legislation on industrial waste disposal and discharge.
Public education is needed to raise the awareness of the impact that poor environmental
protection on the part of industry can harm the health & lifestyle of citizens.
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Funding is required to put together model legislation, plans to deal with environmental issues
and to promote the importance of production on an environmentally sound basis.
Objective 8: Balanced economic and social development in the CSME considering special
needs in disadvantaged countries, regions and sectors
There is a focus on disadvantaged regions and countries in the Revised Treaty. However, at this
stage little has been done in terms of specific policies.
Analyses are required to define and assist disadvantaged regions and countries without leading to
market distortions. Financial and technical resources would be required to conduct evaluations,
as well as develop and implement the findings .
Objective 9: Stable industrial relations
The relatively well organized labor organizations in Member States and the relatively stable
industrial relations renders this a non-priority area at the moment, except in the case of Suriname
where the unstable currency and political situation has led to labor unrest. However, with the
tightening economic situation in the Region, Labor Unions must not be ignored because they
play an important role in industrial relations generally.
Objective 10: A developed standardization program consistent with the international
obligations of Member States
CARICOM is addressing this objective under the Enhanced Regional Standardization Program,
which mainly focuses on the development and support of the regional standards body (CROSQ).
Staff is now being recruited for CROSQ. Efforts have been made to promote CROSQ using the
CARICOM 2002 calendar as well as making it an issue to be discussed at regional meetings. A
project is being developed to look at the sustainability of CROSQ
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Bureau of Standards have been established in all Member states, except Haiti, Montserrat and
Suriname. Cooperation has been taking place regionally between the standards bodies and 47
Regional standards have been approved over the years and introduced in Regional countries.
With respect to the standardization of regional building codes, the Caribbean Uniform Building
Code (CUBiC) project document has already been prepared and requires funding. Trinidad &
Tobago is quite advanced in the area of standards and has the only Institute in the Region for
accrediting IS0-9000 standards.
Actions and resources required
It is important to complete the setting up of the CROSQ office, recruitment of staff, strengthen
the institution and promote standards throughout the Region.
For example, support will be
required in the implementation of the CARICOM Regional Standards for Rice at the ports of
entry in Member States, as well as in the implementation of the Rice Monitoring Mechanism for
the import/export of the commodity.
Financial and technical assistance will be required to facilitate the development, harmonization,
implementation and monitoring of the standards infrastructure at the national and regional levels.
In addition, funding will be required for the CUBiC project. The CDB has been approached for
some assistance but the total funding required is about US$500,000.
Objective 11: Coordination of national industrial policies
This process has not yet begun. The first step will be to ensure that all Member States have a
current Industrial Policy.
It will then be necessary to construct a regional industrial
policy/strategy based on relative strengths and preferences identified by each Member State.
Technical and financial resources will be required to help develop or update Industrial Policies
and coordinate/harmonize them.
Objective 12: Proposals and programs for sustainable tourism development
The Caribbean Tourism Organization (CTO) and the Caribbean Hotel Association (CHA) are
making efforts in the areas of training, marketing and standards for the industry. However, it will
186
be necessary to streamline incentives to the tourism sector and strengthen the CTO to enhance its
capacity for product development and marketing.
(See section on tourism).
The following table attempts to throw more light on the main obstacles to the implementation of
the Community Industrial Policy based on discussions with the specialist at the CARICOM
Secretariat.
Obstacles to Implementation
of Community Industrial
Policy
Unreasonable expectations m
the Treaty
Lack of commitment on the part
of Regional Governments
Lack of commitment on the part
of Regional private sector
Lack of information and
awareness of regional public
and private sectors
Lack of financial resources
Lack
of
resources
trained
human
Rating (Important or Unimportant)
This is not considered to be an important factor
Governments have shown commitment though they
tend to move at a slow pace given legislative resource
constraints
There lS no lack of commitment but a lack of
knowledge. In Jamaica the focus is North rather than
South. However, Trinidad & Tobago has exploited
competitive advantages and regional opportunities.
This is an important factor, especially as one moves
further north in the Region. Jamaica and Belize are
less aware of what takes place in the rest of the
Region.
Bahamas may need to look more to
CARICOM than it currently does.
This may have been a problem but the risk associated
with investing in other countries has been a greater
deterrent. Money is in the Region financial system,
but there is perceived risk in investing regionally.
More information is required in order to reduce the
perceived risks. CARICOM Secretariat needs to get
more involved in investment promotion efforts e.g. by
providing regional investment information. However,
there is a shortage of public sector funding to create
the environment that minimizes perceived risk and
stimulates more regional as well as national
investment.
This is an important factor especially with respect to
setting up specific types of industries in Member
States e.g. to what extent could Belize handle tourism?
Could Guyana, given its brain drain, deal with an
expansion in investment?
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Major successes in the implementation of Community Industrial Policy
The most significant achievement in the implementation of the Community Industrial Policy is
the setting up of CROSQ. After six years CARICOM finally got CROSQ off the ground in
February 2002 when an inter-governmental Agreement was signed in Belize. The first meeting
of the Council of CROSQ has taken place. Candidates have been interviewed for the position of
Executive Secretary.
Other positions have been advertised in the Region.
CROSQ was
scheduled to start up in Barbados by the 1st Qtr of 2003.
Other successes include the fact that the OECS Standards Bodies has been strengthened and
there are Bodies up and running in Dominica, St. Kitts and Nevis and St. Vincent and the
Grenadines. Only Suriname, Haiti and Montserrat do not have fully operating Standards Bureau.
How far are we behind in the implementation of Protocol III?
1. CARICOM is quite advanced in standards because the various standards agencies from
Member States have co-operated over the years.
4 7 Regional standards have been
approved over the years and introduced in Regional countries. Member States tend to
lead in areas where they have greater interests. For example, though Jamaica may take
the lead in food standards, Grenada will develop standards relevant to the specific spices
in which it trades.
2. In terms of production diversification CARI COM is behind in implementation.
3. In terms of industrial investment, more work needs to be done in the production of data
and investment opportunities
Research and Development (see section on Community Research)
There is scope for more R&D in the Region, especially in the private sector where there is a
tendency for business people to want quick returns on their investment so a low weighting is
attached to the long-term benefits of R&D. The Scientific Research Council (SRC) in Jamaica
conducts research that leads to the development of new products for the private sector. The new
Innovative Fund set up by the Ministry of Commerce in Barbados should stimulate some R&D
activity at the small and micro end of the business spectrum and may attract more technology
based micro enterprises.
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On a regional basis, the strategy has been to eliminate duplication and to link the activities of
various R&D entities, such as CARIRI and SRC, especially in terms ofR&D for SMEs.
The University of the West Indies does work with CARDI m conducting research and
development for the Agricultural Sector and much important work has been carried out.
However, there is still scope for The University of the West Indies to get more involved in
industry related research. The Mona School of Business has recently taken a major step in this
direction by assigning a senior manager on secondment from Grace Kennedy, to develop
linkages between UWI and the private sector.
Intellectual Property Rights (See Consultant's report on intellectual property rights)
In the area of intellectual property rights some work has been taking place in the Region.
Barbados has introduced new IP legislation. Entertainers in Barbados have put this item on the
agenda and feel that the progress being made is too slow. A new copyright unit has been set up
in Barbados and the public is being sensitized and people are registering their ideas. The issue of
IPR is coming on the table in Jamaica and there are private sector law firms now specializing in
this area.
The University of the West Indies Law School in Cave Hill has also strengthened its focus in this
area and has introduced courses in this area. However, given the growing importance of this
area, more attention needs to be given to it.
Private and public sector collaboration
There is much scope for greater public and private sector collaboration at the national and
regional level. JAMPRO plays an important role in Jamaica except its focus seems to be on
providing opportunities for investors coming into Jamaica. As mentioned earlier Barbados has
initiatives going on especially in the small and micro sector and incentives such as tax breaks are
given to investors.
On a regional level, there is scope for greater linkages between the Secretariat and National
industrial organizations, some of which may need to be further developed. Greater linkages
between the private sector and the Secretariat are also needed so that regional business people
189
can feel free to call to investigate regional opportunities. CARICAD has been doing on-going
work in the Region in terms of offering training to public sector employees and looking at best
practices around the Region. Examples worth examining are:
Barbados' social partnership program, where the Government, the Unions and the private
•
sector come to agreements on issues such as the exchange rates and wage settlements;
•
Jamaica's introduction of Executive Agencies to replace Government Departments;
•
Trinidad & Tobago's training for public sector officers, an Agency is set up specifically
to train public sector officers;
•
Belize's public sector managers, Permanent Secretaries, are on contract as in private
sector business arrangements. This makes them more accountable.
In the EU they have recently introduced the Interchange of Data between Administrations (IDA)
Program, which uses advances in information technology to support rapid exchange of
information between the European Commission and Member State administrations, and between
these and the private sector.
Initially, the IDA Program assisted administrations to set up
infrastructure, establish common formats and adopt new IT based business processes. It is now
focusing on improving network interoperability, services, tools and security, and promoting
convergence towards a common telematic interface. The IDA is also extending the benefits of
the administrative networks to EU enterprises and citizens, thus contributing to the achievement
of thee-Europe Action Plan.
Regional Private Sector Initiatives and the Extent to which they were influenced by the
CSME
There have been several private sector initiatives in the Region wherein companies have moved
across borders to operate in other territories. Some of the major initiatives that have taken place
include:
•
Financial sector: Trinidad & Tobago banks have established operations m vanous
territories across the Region, most notably, RBTT has set up operations in several
locations with a major investment in Jamaica.
In the insurance sector, Trinidad &
Tobago and Barbados entities - Guardian Life and Life of Barbados - have made large
investments in Jamaica and are looking out for other regional opportunities. Grace
190
Kennedy of Jamaica is actively seeking opportumties to set up Cambio Services in
Guyana (where its entry is being blocked) and in other regional territories.
Jamaica
Money Market Brokers has also established operations in Trinidad & Tobago.
•
Tourism: In Tourism, the Sandals and Super Clubs Groups of Jamaican have invested in
other countries such as Antigua & Barbuda and St. Lucia. Trinidad & Tobago investors
have also acquired tourism properties in Jamaica, which were assets of some of the
financial institutions that they purchased.
•
Cement:
In the cement industry, the Cement Company of Trinidad & Tobago has
acquired the Caribbean Cement Company in Jamaica and the Arawak Cement Company
in Barbados.
•
Distribution: In distribution Grace Kennedy has established a presence in Belize. Neal
and Massy also has investments across the Region.
•
Agriculture: In the citrus industry, Jamaica has had some interests in Belize. Belize has
shipped substantial quantities of concentrate to Barbados and Trinidad & Tobago. It is
felt that there is much greater scope for cross border activities in agriculture such as in
rice where Suriname and Guyana have a comparative advantage in production but
Trinidad & Tobago may have a comparative advantage in milling due to its low cost
energy resources.
Discussions with members of the regional business community do not support the view that the
planned implementation of the CSME has created an environment more conducive to doing
regional business. These private sector initiatives were taken based on private opportunities by
business people rather than any impetus given by the Treaty or the proposed implementation of
the CSME. However, CARICOM should use these cases as examples of companies that have
taken opportunities to operate successfully across borders within the Region.
The issue arises as to whether it matters whether these businesses have moved across borders
based on private internal decisions or as a result of opportunities or expected opportunities
191
created by initiatives at the regional level. That fact remains that these cross border movements
capture the spirit of regionalism. However, the fact that they are not due to regional initiatives
may mean that no policy lessons can be learned and reused or intensified.
It should be noted, however, that the Caribbean Transnational Conference held in April 2002 in
Jamaica concluded that "enlightened self-interest is now driving the private sector to buy-into the
integration process being driven by globalization. The need for a strategic repositioning of the
Region as a unit in the global economy is becoming accepted as an urgent necessity requiring
collaborative action by the public and private sectors."
The EU and Industrial Policy
The EU has taken many steps in this area and several initiatives have been introduced. Some of
the main ones include:
•
Enterprise Policy - which outlines a EU enterprise policy strategy with a multi-annual
program from 2001-2005 .
•
Promoting entrepreneurship and SMEs - which deals with EU actions to promote SMEs
and looks at access to finance, business support networks, etc.
•
Preparing enterprises for the Euro
•
Interchange of Data between Administrations (IDA)
•
Promoting Innovation and Technology Transfer
•
Services, Commerce and Distribution, Tourism - this examines EU developments in the
area of business services (consultancy, legal, marketing and technical); wholesale,
intermediate and retail trade; tourism, etc
•
e-Business - ICT Industries and Services - this looks at ICT standardization, e-Business
policies, monitoring of the ICT sector, etc
•
Environment and Sustainable Development
•
Single Market - Regulation - New and Global Approach
192
Conclusion
It can be seen that most aspects of the Community Industrial Policy have not yet been
implemented. This chapter has outlined the main initiatives that have been taken to date and
those that remain. It can be seen that in most cases studies are required to provide guidance to
the process. As a result, financial and technical resources are required to:
•
Assist in developing terms of references for the required sector evaluations
•
To conduct the various evaluations
•
To communicate the results regionally (through workshops, etc) and to get further input
and the necessary buy-in
•
To implement the results of the evaluations.
The Chapter also shows that some lessons can be learned from actions being taken at the national
level across the Region, as well as from what is taking place in the EU.
Summary of Resources Required for the Development of the Regional Industrial Sector
Funding and technical resources are required to put in place a Regional Industrial Development
Action Plan covering three main areas: a) key industries; b) Restructuring and Benchmarking;
and c) Regional Standards, Environment, and Policy Coordination. Each area will cover the
aspects described below:
1. Identification and selection of key industries
•
In which cross border resource use can lead to enhanced regional production, the
sugar and rice industries are cases with strong possibilities. Greater cooperation and
information exchange will be required to minimize the importation of products from
extra-regional sources when they are available in the Region;
•
In which linkages can be exploited, linking agriculture, tourism, transportation,
distribution and manufacturing should be examined carefully;
•
Into which regional production, especially more value-added activities, can be
diversified, such as banana paper making for territories whose banana markets are
under threat;
193
•
In which SMEs can find niches to successfully operate, with information available on
markets and rates of return on investment;
•
In which there is great scope for public and private sector collaboration;
2. Restructuring of the Regional Business Environment and Benchmarking successful
businesses
•
Optimal restructuring of the regional business environment to make it more attractive
to a wider variety of investors, requires a survey involving regional and overseas
investors;
•
Benchmarking successful businesses that compete in the international marketing and
identifying their key success factors.
3. Development of Regional Standards, Protection of the Environment and Policy
Coordination
•
Development and strengthening of CROSQ and Bureau of Standards in Member
States to comply with international requirements;
•
Development of regional incentives, penalties and legislation to promote the
importance of environmental protection while being sensitive to the industrial sector.
Best practices from Member States that have started their own programs can be
applied;
•
The development (where necessary) and coordination of national industrial policies
bearing in mind the special needs of disadvantaged countries, regions and sectors.
In each of the above-mentioned area, some degree of information gathering will be required but
the main thrust should be on action-oriented activities. Priorities should be set in each area, such
as which industries to develop first, which Member States have the greatest competitive
advantage in certain activities, etc, and the focus should be on implementation.
194
(C)
POLICY ON THE SERVICES SECTOR
Community policies relating to services and services development are outlined in Chapters 3
(Articles 36-38) and 4 (Article 54) of the revised Treaty. Chapter 3 looks at the policies on the
treatment of restrictions relating to the movement of services and Chapter 4 deals with policies
for the development of the services sector.
CARJCOM Member States have recognized the importance of the services sector and have
started to give it greater focus in recent years. It is generally felt that service providers are less
aware of regional and global issues compared to goods providers. Arguably the most significant
activity that has taken place regionally in the area of services has been the completion by all
Member States, of programs for the removal of restrictions to the free movement of services in
the Region. Member States are also aware that any restrictions not included in their programs
must be removed and no new restrictions can be added.
The main challenge facing most
Member States is the lack of financial and technical capacity to amend and implement the
legislation required to give effect to their programs. Whereas Jamaica has given the commitment
to accelerate the removal of restrictions and some are to be removed within 2002, other Member
States have not given such commitments. Jamaica faces uncertainty in that it does not want to
apply a methodology to the removal of restrictions that is different to other Member States. For
example, it may not want to remove work permits by amending its labor laws while others deal
with it later under their immigration laws. The working group on services needs to determine a
consensus on the approach at its 61h Meeting in Trinidad & Tobago at the end of August 2002.
CARJCOM, through the Secretariat will need to put in place a monitoring mechanism to track
the extent to which Programs have been implemented.
There has been some cross-border movement of service providers within CARJCOM, especially
in the financial services, tourism and management consultancy fields . However, it is generally
agreed that these cross border movements were the result of business people taking decisions
based on specific business opportunities rather than a focus on regional integration.
Unfortunately, appropriate mechanisms for measuring the volume and value of such services are
not yet in place.
195
The following discussion outlines the main objectives for the Services Sector as outlined in the
revised Treaty.
The status in terms of implementation is outlined along with the types of
resources required for implementation.
In addressing the issues relating to the Community
Policies for the Development of Services, interviews were held with representatives from the
CARICOM Secretariat, the OECS Secretariat, the Regional Governments and members of the
regional private sector. Documents from the recent COTED meetings were also used.
Objective 1: Develop a Program for the removal of restrictions
All Member States, with significant assistance from the Secretariat, have completed programs for
the removal of restrictions across the spectrum of services.
The Programs outline the
restrictions that are in place and the time frame for their removal.
Member States are aware that no new restrictions can be implemented and that any restrictions
not identified as yet will have to be removed if identified at a later date.
Implementation of programs has not started in most Member States, mainly because of the lack
of financial and technical capacity to amend and pass the legislation that will give effect to the
removal of restrictions. However the implementation may have not started because in most
cases the implementation deadlines are not immediate.
CARICOM Secretariat is in the process of commissioning a study to assist Member States by
identifying the details of legal and administrative restrictions and providing guidelines for their
removal.
Funding and technical resources are required by Member States to implement their programs for
the removal of restrictions. Donors could help to fund a pool of about six persons to assist in
amending legislation. This pool of resources would not have to be resident in the Region but
available on call. These persons would operate over the next three years. A work plan would
have to be put together to structure their work schedule.
US$8,000 per month but would have strict deliverables.
196
Consultants would be paid about
One of the consultants would need to know the English system and the French legal systems to
deal with Haiti. There would need to be one that knows the Dutch as well as English systems to
deal with Suriname.
Objective 2: Increased investment in services
It is not easy to say how much investment is taking place because there is no monitoring on a
structured basis. Very little has been done to date. However there is work being undertaken
which is looking at harmonizing incentives for investment region - IDB project.
COFAP is looking at movement of capital and shares for companies in an attempt to harmonize
treatment and free up the market across the Region. This is particularly important in the Member
States that have alien landholding restrictions that extend to shares and restrictions on purchases
of foreign exchange.
With respect to the movement of skilled nationals, artistes, media persons and sportspersons, a
decision has been made that, by the end of 2002, all restrictions will be removed.
In terms of private sector investments in the Region, the Sandals Hotel Group has increased its
tourism investment in other CARICOM States. In the OECS, locals are moving into providing
support services to the tourism industry such as restaurants, boating, tours, and flowers for
hotels. In the financial services sector, Trinidad & Tobago and Barbados companies have made
major investments in Jamaica.
In order to facilitate establishment of businesses in other CARI COM States, funding is required
to design and implement a central registration regime for companies.
Funding is also required by some member states that do not have the financial and technical
capacity to amend the laws that are necessary to facilitate the free movement of capital and
persons. Some funding is in place and work has begun on a study for the removal of legal and
administrative restrictions.
197
Objective 3: Increased volume, value and range of trade in services within the Community
and with third States
There is an attempt to enhance our ability to measure regional trade in services with a CIDA
funded project to organize member states to collect data on services. The project is also is
looking at institution strengthening of the private sector, especially as it relates to data.
The CARICOM Secretariat, in conjunction with Member States, is at Phase 1 in the process of
setting up National Coalitions of Service Industries in Member States. The model will have the
Chambers of Commerce as the core in each Member State. All services will then be brought
under one Regional Coalition, which will also facilitate Regional networking. The assessment
has been completed for about seven Member States who have expressed a willingness to form
this body.
The next phase will be the formation stage, which is due to come on stream in the near future and
will involve the selection of leaders in various areas of the service sector to drive the process.
Member States need initial resources to develop optimal marketing programs for Regional
services (including distribution).
There is a need to fund scholarships to develop the Region's statistical capabilities, especially in
the service sector. CARICOM Secretariat needs at least two qualified services statisticians who
continually move between Member States to gather and standardize services data.
Objective 4: Competitiveness in the modes of delivering services
For Mode 1, the focus has been on reducing the Telecom rates in the Region so that benefits can
be gained for other services. For Mode 2 the focus has been on the Community Policy for
Consumer Protection (Chapter 8). For Mode 3, the focus has been on Competition Policy. Work
is being done on company legislation and incorporation.
For Mode 4, work is in process on the removal of work permit restrictions, a regional
accreditation process and the free movement of labor.
198
The OECS is moving towards
accelerating the removal of work permit requirements amongst themselves and facilitating the
free movement of sub-regional labor.
However, for Mode 3, the private sector has been making its own initiatives to deliver services
across the Region. RBTT Bank and Guardian Life Insurance have increased investment in other
Member States in the financial services sector. Grace Kennedy has increased its branches of
Western Union in Trinidad &Tobago in order to take advantage of regional advantages. Jamaica
Money Market Brokers has also opened new branches in Trinidad & Tobago. In the area of
telecommunications, C&W controls a major proportion of the Region but other companies, such
as Digicel, are seeking licenses to operate elsewhere in the Region. However, there may be a
Rules of Origin issue to deal with in such cases. Some member states are involved in cross
border activity in R&D in computer technology. Some member states, including St. Kitts &
Nevis are concerned because they do not currently have regulations for professional services; so
regulations will have to be put in place.
Funding will be required to assist Member Sates to remove work permit barriers and facilitate
the development of mechanisms wherein regional people share information on the movement of
persons. One Member State could be given regional responsibility to act as the clearinghouse on
the movement of people thereby identifying who is moving and what occupational categories
they fall in. This will facilitate the efficient payment of income tax and social security benefits.
It will also provide a manpower monitoring mechanism, which would outline states having
surplus labor and those having shortages. A computerized system would be required to track
labor movements and the qualifications of those who move.
The smaller Member States require funding and technical resources to put in place legislation for
its professional services sector. 2-3 Legal draftspersons and one person who can formulate
policy (develop strategy papers) are required for 18 months for the entire OECS.
199
Objective 5: Enhanced enterprise and infrastructural development, including that of micro
and small service enterprises
Work has been done on looking at SMEs but not specific to those in services. The ILO has done
some work on the informal sector in Trinidad & Tobago. Also the governments of Belize,
Guyana and Jamaica have completed studies on SMEs. Member states will need to find a way to
formalize the SME sector. Jamaica has introduced a Credit Bureau to assist in formalizing this
sector.
The SME sector accounts for a significant percentage of GDP in Member States, especially in
Belize where it is estimated to earn 50% of GDP. Belize seems more typical of Latin American
countries where the SME sector is a major contributor to GDP.
The Secretariat is trying to focus on developing a legislative and institutional framework for
SMEs generally and not just for services. Financing for SMEs in services is in the plan but has
not yet started. However, most Member States have institutions that provide funding for SMEs.
There is need for funding and technical resources to conduct an assessment and formulate a
regional policy for financing for services, developing legislation and promoting growth of SMEs.
Objective 6: Designing programs for the development of human resources to provide
competitiveness in the provision of services
Work was started in 1996 when the Heads of Governments considered a regional plan for human
resources development. The Secretariat is currently working on the development of a regional
plan. COHSOD has made progress in the area of regional accreditation and equivalence. Ongoing regional training takes place through UWI. In Jamaica, the HEART program trains many
people in tourism, accounting, auto mechanics and other service areas.
In the OECS, the
community colleges offer some level of training in tourism and other services. The Bahamas
offers advanced training in tourism.
200
However, funding and technical resources are required to pull together and implement a
coordinated and comprehensive regional human resources development plan.
Objective 7: Establishing a regime of incentives for the development of and trade in
services
In the work plan to develop incentives, most Member States agreed that focus should be placed
on the informatics sector, financial services and tourism services. Work is still at the preliminary
stage, except in Jamaica, where the Monte go Bay Free Zone is heavily focused on attracting
investment in informatics. Antigua & Barbuda is also looking at a similar arrangement and have
observed Jamaica. Jamaica has also been developing the Call Center industry. A working group
has been set up for regional investment and export promotion agencies to develop the regional
policy and plan for the Informatics sector. Cable & Wireless had done some work in this area
some time ago but there was some inertia and concern given C&W's role and size in the services
area.
Some member states have identified music and entertainment as their mam service sector
industries; others have looked at financial services. However, some of these preferences have
taken the back burner to poverty alleviation and other priorities.
Funding is required to develop and implement an incentives plan. The plan will examine the
areas of focus and the capacity of Member States in informatics. Incentives need to be designed
so they do not become a trade issue on the multilateral front.
Objective 8: Adopting measures to promote the establishment of an appropriate
institutional & administrative and legal framework to support the Community services
sector
This is related to work currently being finalized for the removal of restrictions as mandated
under chapter 3 of the Revised Treaty (provision of services, rights of establishment and free
movement of capital). A study has just started aimed at identifying legal and administrative
restrictions in Member States and outlining the process necessary to remove them.
201
As
mentioned earlier, funding and technical resources will be needed to fully implement programs
for the removal of restrictions.
Member States will also need to coordinate the development of their services sector so that what
is happening in health is coordinated with education and other sectors, etc.
Objective 9: The efficient provision of infrastructural services including
telecommunications, statistical data generation and financial services
With respect to financial services, work is going on to harmonize financial instruments.
In
insurance, banking and securities, a model set of instruments is being developed by Regional
Central Bankers/COPAP for discussion later in the year. This will include common rules, etc.
In terms of telecommunications most of the focus has been on ending the monopoly provision of
the service in the Region. Jamaica has already taken major steps in this direction by opening up
its market and selling Cellular licenses to at least two new companies to date. It has also granted
a license to Digicel to offer wired telephone services starting in 2003. The OECS has also taken
major steps in this direction with the formation of ECTEL (which is an entity set up by an
Agreement between Cable & Wireless and all Member States - except Antigua & Barbuda) to
regulate the sub-regional telecommunications industry and to reduce the time period for which
C& W will be able to retain its monopoly. Guyana is facing some resistance in its attempts to
remove the monopoly position of the U.S. company, ATN, that controls its telecommunications
sector.
Distribution services are seen as important infrastructural services necessary to link trading
activities, the Secretariat plans to closely investigate this area.
In terms of data generation there is a data generation project being funded by CIDA. A major
constraint is the smallness of our economies leading to confidentiality issues where there might
be only one (main) player in a given industry. CIDA is providing some funding for improving
service sector statistics by providing the current status. Substantial funding will be required to
develop the database following CID A's assessment of the current status.
202
Funding will also be required to carry out the study on distribution services, trade related aspects
of telecommunications services (such as e-commerce) and financial services.
Objective 10: The development of capacity-enhancing services including education, and
R&D
As mentioned earlier, COHSOD is looking at accreditation and mutual recognition. They are
looking at developing harmonized accreditation institution.
In fact agencies are already
functioning in Jamaica and, Trinidad & Tobago, Barbados and Guyana are taking steps to set up
similar agencies. Some funding has been received from Member States themselves but more
will be required to develop education and R&D to support the services sector.
Objective 11: The facilitation and development of services, which enhance cross -sectoral
competitiveness
Work by the CTO is currently in progress on this subject. Using St. Lucia as a pilot, it is aimed
at analyzing the cross-sectoral linkages between tourism and agriculture and tourism and
manufacturing. It will address issues such as the scope to use more local input in furniture for
tourism? JAMPRO, in Jamaica is looking at some linkages between agriculture and tourism and
agriculture and manufacturing.
Funding and technical resources are required to conduct regional studies on linkages between
sectors.
Objective 12: The development of informatics and other knowledge-base services
The medium term economic strategies of most Member States have identified informatics as a
priority sector for development (mentioned earlier).
Most Member States have in place computer training programs, either through private
institutions set up for that purpose, community colleges, the University of the West Indies or the
203
University of Technology. The Educ Tech 2000 computer program in Barbados (IDB and World
Bank funded) is trying to develop an awareness of computer technology from preschool level.
As mentioned earlier, funding is required for a regional assessment of the informatics sector to
form the basis of a regional policy.
Compliance with the WTO
In the area of services, CARI COM is compliant with the WTO because it is closely following the
framework outlined by the WTO with respect to the GATS. Trade in services has been dealt
with based on the four Modes and some sectors have been excluded from liberalization.
CARICOM's approach, as a group of developing countries liberalizing amongst themselves, is
acceptable under the WTO. Where CARICOM has concerns is with the fact that there are
disciplines that have not been dealt with at the multilateral level. For example, there is no
multilateral agreement on Safeguards for Services. The Region is trying to present this as an
issue in negotiations. Other concerns include the fact that some operators in the tourism industry
have been receiving subsidies and this could ultimately become a trade issue.
Even though CARICOM is coordinating trade policies amongst its members, there is a concern
that the pace of regional integration is too slow in light of developments with regards to the
FTAA and the WTO. The slowness to implement is mainly attributable to lack of financial and
technical resources on the part of Member States. It is generally felt that regional governments
are committed to the process while the private sector is now beginning to come up the curve.
Summary of Funding and Technical Resources Required for the Services Sector
With respect to service sector development, funding is required in three broad areas. Firstly to
assist Member States to amend legislation and administrative practices required to eliminate
restrictions, secondly to assist Member States to develop the infrastructural and support services
required for a vibrant service sector, and thirdly to select and develop certain key service sector
areas.
204
Removal of restrictions
1.
Funding and technical resources are required by Member States to implement their programs for
the removal of restrictions. Donors could help to fund a pool of about six persons to assist in
amending legislation across the Region. This pool of resources would not have to be resident in
the Region but available on call. These persons would operate over the next three years. A work
plan would have to be put together to structure their work schedule and outline deliverables.
One of the consultants would need to know both the English system and the French legal systems
to deal with Haiti. There would also be need for one that knows the Dutch as well as English
systems to deal with Suriname.
This is important because trade in services, the rights of establishment and the free movement of
capital are required in order to have a regional services sector.
Infrastructural and support services development
2.
In order to develop the infrastructure and support services of the service sector funding 1s
required develop and implement a strategic plan which includes the following elements:
•
Design and implementation of a central registration regime for companies
•
Scholarships to develop the Region's statistical and data generation capabilities in the
service sector and support two qualified service sector statisticians who continually move
between Member States to gather and standardize services data
•
Design and implementation of mechanisms wherein the Region captures and shares
information on the movement of persons
•
A coordinated and comprehensive regional human resources development plan
identifying training needs and regional institutions capable of satisfying these needs
•
3.
Design of a set of incentives to the service sector that do not violate multilateral rules
Selection and development of key areas of the service sector
Funding and technical resources are required to design and implement a comprehensive regional
services sector development plan with focuses on certain key industries and outlines roles for
different types of businesses. The plan will include elements including:
•
A regional policy for financing for services, developing legislation and promoting growth
ofSMEs
205
•
An outline of the capacity of the Region in Informatics and the incentives required to
fully develop this industry
•
Trade related aspects of telecommunications services (such as e-commerce) and financial
services
•
Linkages between the services sector and other between service sector industries such as
distribution, financial services and professional services.
(D)
TRANSPORT POLICY
The CARICOM Transport Policy is contained in Chapter 6 of the Revised Treaty and was
formerly Protocol 6. The goal of the Community Transport Policy is the provision of adequate,
safe and internationally competitive transport services for the development and consolidation of
the CSME.
The objective of this report is not to review the transportation sector in the Region in terms of
volume of traffic, persons and cargo nor the competitiveness of regional transportation.
However, it goes without saying that in a Region comprising mainly island states that an
effective intra-regional transportation system is critical if the CSME is to be a reality. Without
such a system the expected gains from trade in goods and services will not be realized. The
significant losses being experienced by the Region's two main airlines, Air Jamaica and BWIA,
is cause for concern and really begs the question as to whether the Region has the critical mass to
sustain more than a single airline.
Air Transport
In terms of air transport, main regionally owned and operated airlines are:
1. Air Jamaica
2. BWIA
3. Suriname Airways
4. LIAT
5. Caribbean Star
6. Bahamas Airways
206
International Airlines that operate within the Region include:
1. British Airways
2. Air Canada
3. American Airlines/American Eagle
4. Dutch Airlines
5. Virgin Atlantic
6. US Air
7. Continental
8. Northwestern
9. TACA
10. Cayman Airways
11. Air Martinique
12. Air Guadeloupe
There are also some small domestic airlines that operate within individual Member States.
However, most Member States do not meet the ICAO safety oversight standards and only
Jamaica, Bahamas and Guyana have the IASA Program Category 1 classification. In light of the
fact that most CARICOM States do not operate services to the USA, the IASA categorization is
not of great concern in such cases.
In terms of the adequacy of regional air transport, persons can travel between most regional
destinations within a day and on most days, with the exception of moving between extreme
destinations when going through Miami might be necessary or going to Montserrat where only
limited air access (by helicopter) has been available since the eruption of the volcano a few years
ago. However, with respect to the air transportation of goods, this is usually considered too
expensive, especially for heavy or high volume low value (per unit) items e.g. agricultural
products. The relatively long distances between major regional destinations, the relatively small
shipments, and the lack of economies of scale and scope render the cost per unit of air transport
quite high. The reality is that this situation is unlikely to be resolved unless some authority or
Government(s) is prepared to provide subsidies.
207
Maritime Transport
The main shipping lines operating in the Region are:
Out of Miami:
•
Tropical
•
•
Bemuth out of Miami
•
•
Sea Board
Sea Freight
CGMCME
Out of Europe:
•
BWL
•
Europe West Indian Line
•
Europe Caribbean
Global but out of Mexico:
•
Maersk Sealand
Out of the Caribbean:
•
Trade Winds is the only Caribbean owned service, which operates m the Eastern
Caribbean and Guyana using feeder vessels.
Intra-regional maritime transport is considered to be inadequate as there is no regular service
between destinations.
Shipping of cargo to smaller islands is often infrequent because it is
uneconomical to ship small volumes. Consolidation has to take place so that a critical mass can
be shipped. The low volumes are considered the main reason why a scheduled regional shipping
service has proven uneconomical in the past and will continue to be so in the future.
208
The objectives/support activities42 of the Revised Treaty, which support the goal of an adequate,
safe, and internationally competitive community transport policy, are laid out below along with
initiatives taken to date. This will allow us to assess the extent to which the objectives/support
activities have been implemented.
Objective 1: Protocol VI in effect and promoted in member states
Initial sensitization has taken place and as a result of a study completed on Protocol II,
restrictions have been identified, however little has been accomplished beyond that. The
CARICOM Secretariat is planning a meeting of transport officials to deal with issues. The
technical nature and complexity of the transportation industry, in terms of international
agreements and requirements, has meant that this sector has required separate treatment from
other services with respect to the removal of restrictions. The implementation of the CARI COM
Multilateral Air Services Agreement is an important step towards the establishment of a single
market for air services within the Region, whereby CARICOM air carriers can provide air
services between any two points in the Community.
Actions and resources required
Constitutional procedures to give effect to the Protocol/Policy need to be concluded and national
legislation needs to be developed and implemented to give effect to the provisions of the
Transportation Policy. A regional awareness program needs to be put in place.
This objective is still at the early stage of implementation and requires financial and technical
assistance to complete legislative changes required in Member States as well as to promote the
Policy in the region.
42
As mentioned earlier, the term objective will be used to describe various initiatives to be undertaken, which
include objectives as well as support activities. The term objective is used to indicate the major activities that
require fulfilment in order to fully implement the Treaty. In fact, the Transport Policy in the Revised Treaty has
only six objectives but several of these objectives have sub-objectives/activities - all of these are captured and
included in the 29 objectives/activities for Transport Policy.
209
Objective 2: Protocol registered with the International Civil Aviation Organization (ICAO)
The Protocol has not been registered. However, now that the Protocol is a part of the Treaty the
exact process needs to be examined.
Action and resources required
Appropriate information needs to be forwarded to the President of ICAO. The CARICOM
Secretariat will follow up with ICAO. The activity has not been carried out.
Objective 3: National transportation policies coordinated
National transportation policies have not yet been fully coordinated. Some Member States do
not have a transport policy or national transportation plan. A common definition of a common
transport policy has not been agreed by member states. A Community Transport Policy on
various aspects of transportation is embodied in the CARICOM Multilateral Air Services
Agreement and Chapter Six of the Revised Treaty, which should allow Member States to
broaden their focus beyond airlines.
Actions and resources required
A proper review of transportation policies of Member States is required along with identification
of significant differences in national policies, which will be inconsistent with the Regional
Policy.
This objective is still at the early stages. Technical and financial assistance are required to
develop, coordinate and standardize national policies around what is contained in the CARICOM
Multilateral Air Services Agreement and Chapter Six of the Revised Treaty.
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Objective 4: Uniform regulations and procedures consistent with standards and
recommended practices and in particular respect of operations, safety, licensing and
certification implemented
This objective is being dealt with under the rules and procedures to be produced by the Regional
Aviation Safety Oversight System (RASOS), which is being established. The aim is to get all
regional countries to be category 1 in terms of FAA rating - only Jamaica, The Bahamas, and
Guyana are in category 1 in the Region at the moment. Most countries are not compliant with
safety oversight nor do they have a national airline.
So far Barbados and the OECS are on route to standardizing regulations with what has been done
in Jamaica. Suriname and Trinidad & Tobago have adopted model regulations from ICAO. It
may be appropriate for these states to adopt the same regulations as Jamaica, which is more
complete and fits international Conventions. Jamaica is in compliance with ICAO standards.
Guyana was working with German consultants and it is not clear if their regulations are similar
to Jamaica's.
All countries have given baseline information on their airline regulations except Guyana and
Belize. Belize is an interesting case because it may be easier for it to harmonize with Latin
America given its geographical location.
Funding has been secured for the development of maritime legislation in accordance with global
standards through the IMO's 2000-2001 technical cooperation program for the Caribbean.
Actions and resources required
A review of regional aviation regulations and procedures in Member States is required to serve
as a basis to make them uniform. Promotion of the implementation and acceptance of uniform
regulations and procedures is then required.
Technical and financial assistance is required to develop the information base of RASOS and to
put in place uniform legislation across the region. Funding for RASOS has still not been settled.
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A full time Consultant has been hired since May 2002. Member States are going to contribute to
funding RASOS, which will require about US$350K per annum to operate.
The FAA will provide some cash and the Government of Canada will provide technical
assistance for two to three months to help put rules and regulations in place. There has been a
recently concluded agreement Memorandum of Cooperation between CARI COM and the FAA
for the provision of technical and other assistance through RAS OS.
Objective 5: Development of institutional, legal, technical and administrative support for
the balanced, sustainable development of the transport sector
With respect to air transport, nothing has been done to date - it is expected that the development
of RAS OS will also provide greater regional support.
Actions and resources required
A Regional Transport Advisory Committee needs to be established or this role given to RASOS.
Also there is need to design and develop a regional transport database system.
There will be a need to convene regional semmars and workshops for transport officials.
Technical and financial assistance is required to get this activity of the ground.
Objective 6: Establish measures to ensure that the development of the transport sector does
not impact adversely on the environment and in particular the Caribbean Sea
CARI COM and its wider Caribbean neighbors are united on this issue and is a major issue of the
ACS. Most CARICOM Member States do not have the financial resources to put in place the
receptacles and other facilities required to make the Caribbean Sea qualify for protected area
status. In Jamaica the Marine Authority establishes rules for the prevention of marine pollution
based on international pollution prevention standards.
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Actions and resources required
Financial resources are required to put in place the facilities required to make the Caribbean Sea
a protected area.
Objective 7: Establish measures for the acquisition and transfer of technology in the
transport sector
The Regional Aviation Oversight System (RASOS) is expected to take care of .some of these
issues. RASOS has been set up for about one year but activities have been given more focus
since Sept 11, 2001.
Actions and resources required
There is need for the organization of regional workshops involving the private sector for the
formulation of recommendations and transfer of technology with respect to all modes of
transport. This process is in the early stages and requires financial and technical resources to
organize workshops.
Objective 8: Put in place measures for the establishment of joint ventures and programs
for human resource development
Through RASOS work is being done with ICAO to establish certified training centers across the
region. The FAA is also arranging training programs. Trinidad & Tobago has a training school
and will be offering training starting in 3rd Qtr 2002.
Actions and resources required
This objective is still in its :formative stages. An assessment is required to determine regional
training needs and capabilities and to formulate and implement recommendations for the
development of human resources.
Financial and technical assistance are required by the Secretariat to conduct needs assessment
and convene workshops and implement recommendations.
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Objective 9: Promote investment in the transport sector, including ancillary services
supportive of the sector
To date nothing has been done at the regional level and nothing seems to be on the horizon.
Actions and resources required
Activities such as workshops need to be arranged to generate ideas and implement strategies.
Nothing is in place as yet. Financial and technical assistance required.
Objectives 10: Remove obstacles to the provision of transportation services by nationals of
Member States in accordance with the relevant provisions of Protocol II
See Service Sector study completed on Protocol II. All member states outlined their programs
for the removal of restrictions.
The objectives for the transport sector still require further
development.
Actions and resources required
Administrative restrictions have to be identified and a program put forward for their removal and
legislation must be put in place to facilitate the planned removal of restrictions. This activity is
in progress in terms of the fact that most restrictions have been identified. The legislative and
administrative changes that need to be made will require technical and financial assistance. In
addition, all Member States need to become part of the Multilateral Air Services Agreement.
Objective 11: Develop programs to facilitate the achievement of the objectives of the
Community Transport Policy
No specific programs for the Transport Sector have been put in place. It is hoped that RASOS
will drive much of the process with respect to air transport. Legislative actions have to be taken
in Member States and information on what has happened in other integration movements
examined and incorporated where necessary. (The EU did it in three phases).
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Actions and resources required
Workshops involving private sector interests need to be set up to examine the objectives of the
Community Transport Policy and to identify specific programs for their achievement. Technical
and financial assistance will be required to set up workshops and implement programs.
Objective 12: Coordinate actions of member states to secure the best terms and conditions
for the provision of transport services by service providers
Possible actions are limited because a privatized transport sector, such as is found in CARICOM,
can only operate if it is profitable unless it can be subsidized. Air transport has costs determined
by weight and volume and this means high cost for low value items.
Similarly, a regional shipping company is threatened by the fact that only small volumes are
moved by some Member States. These factors contributed to the demise of WISCO.
Actions and resources required
•
Identification of critical transportation issues which can impact negatively on regional
transport (such as taxes, charges, withdrawal of services).
•
Facilitation of joint negotiations with third parties, such as joint negotiations of the Open
Skies Agreements with the United States or with cruise liners for marine transport.
Technical assistance will be required to identify critical issues and conduct negotiations in order
to generate the best terms and conditions for service providers seeking to provide transport
services.
Objective 13: Promote cooperation in air and maritime search and rescue operations in the
Community
This is a requirement in the International Civil Aviation Organization (ICAO) Agreement. The
Caribbean Disaster Emergency Response Agency (CDERA), a regional body, has the details on
this. The region is apparently meeting international standards in this area. There are plans in
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place to deal with both air and marine disasters. The Caribbean has been divided into regions
and sub-regions for search and rescue.
Assistance can always be requested from regional
partners. The equipment to deal with search and rescue is not always there. However, there are
serious problems in agreeing on the regional standards. The problems are with Governmental
restrictions in terms of where planes can land, etc. The French Government wants to assist all
the countries in the vicinity of its Caribbean territories but no Member State has responded
because of the demands of customs and other Government agencies.
Actions and resources required
The COTED needs to monitor the activities of CDERA and the ICAO regional office with a
view to providing support as required.
CDERA presented to the last COTED meeting "A
Comprehensive Disaster Management Framework and Strategy for the Caribbean." The study
outlined the need for stronger regional and national institutions to promote comprehensive
disaster management (CDM), research and training support, greater promotion of CDM by
regional institutions and donors and more hazard information incorporated into development
planning and decision making.
The region currently has a relatively strong safety record in Air and Marine transport. But
collaboration with CDERA and Member States is necessary in updating and testing search and
rescue plans in accordance with ICAO and IMO requirements. Financial and technical resources
are required to support the regional CDM.
Objective 14: Adopt uniform standards and recommended practices for the provision of
intra-Community transport services
Uniformity of standards and practices is not in place at the moment but should be developed
under RASOS. The Civil Aviation Authority in Jamaica is well set up and well regarded but it is
the regional situation that is deficient.
The Jamaican Civil Aviation Authority has received
excellent ratings and signed on to most International Conventions and has a category 1 rating
from the FAA. Barbados and OECS and Jamaica have already started harmonizing standards for
pilots, flight engineers and air- worthiness mechanics.
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The whole regulation of the maritime sector needs to be dealt with - both the regulatory and the
commercial elements. IMO has been trying to get the Region to harmonize for the longest time
but nothing seems to be happening. It is felt that Maritime transport is not given the emphasis
(relative to its importance) that it deserves by regional governments.
Actions and resources required
CARICOM needs to develop proposals for common documents for international passengers and
freight, common Government procedures, etc.
The European Union is in the process of
introducing an agency equivalent to the FAA to regulate and provide uniform standards across
the EU.
With respect to Maritime, Governments need to get together to set, agree and enforce standards.
CARICOM could play a role as a coordinator and agitator.
CARICOM Secretariat needs financial and technical assistance to strengthen RASOS so that
uniform standards and practices can be established and maintained for both Air and Maritime
transport industries.
Objective 15: Establish measures to ensure that air carriers and operators that provide
international services are financially viable and technically qualified
To date nothing is being done at the regional level with respect to this issue. This is dealt with at
the level of granting an air transport license, which is a National level decision. However, if the
regionally determined criteria are put in place then they can be applied at the national level. In
the EU, national certificates are issued as proof of carriers' technical fitness and financial
standing.
Actions and resources required
At the regional level it is necessary to formulate and enforce harmonized technical and financial
codes for the issuance of authorization to international air carriers and operators.
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A regional coordination mechanism should be put in place - an Advisory Board has been
recommended by the CARICOM Secretariat. Resources to set up and maintain the Advisory
Board would be required.
Objective 16: Cooperation among Member States in the registration of aircraft and
enforcement of applicable standards in the air transport industry
This is to be dealt with under RASOS . CARICOM has been trying to promote cooperation
amongst national airlines but this is not easy because they are competitive commercial entities.
This is being looked at under regional tourism efforts.
BWIA is looking at obtaining the same types of aircrafts as Air Jamaica and is looking at
possibilities of offering maintenance services to Air Jamaica.
Actions and resources required
An operating environment needs to be established by Governments so that Regional airlines can
compete with each other and with foreign carriers. Governments need to provide aero-political
support to operators so they can expand their services and become more profitable.
Technical and financial resources are required to establish and promote uniform criteria for the
registration of aircraft by nationals of CARI COM. Resources are also necessary to examine the
feasibility of having a liberalized system such as in the EU in which all carriers can land with
passengers in all other regional destinations.
Objective 17: Uniformity in the Community in licensing and certification procedures and
equivalencies for aviation personnel in conformity with international standards
The process has started and has gained momentum as a result of September 11, 2001. RAS OS
will deal with this in its plans to have common examinations and technical requirements for all
member states.
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Actions and resources required
Examination of certification and licensing requirements and procedures of Member States for
aviation personnel and develop a set of approved training institutions and establish uniform
licensing requirements and procedures and promote this in CARICOM. Currently aviation
personnel are trained to international standards by extra-regional institutions.
Financial and technical assistance will be required to establish the uniform system across the
region.
Objective 18: Cooperation among air transport operators in purchasing inventory
management, commercial operations, reservations, insurance, leasing, etc.
Little progress has been made in this area.
Given that airlines are now privatized, they are
unlikely to share sensitive commercial information. Sharing equipment at airports may not have
any commercial implication but sharing information is a different story. Efforts were made to
have joint insurance, but due to different risks and issues associated with the airlines this has not
progressed. Even the insurance companies were not in support of this. Initiatives were taken but
failed with the bulk buying of fuels.
The airlines could not agree because one airline felt it was
giving a greater benefit to the other. All regional Airlines are no longer cooperating in load
sharing - even though BWIA and LIAT have recently started to cooperate in sharing resources
(such as check-in services) and there are plans to ultimately grant BWIA miles to customers
flying on LIAT. However, a customer can no longer buy one ticket and fly around the region
across all airlines, as was the case in the past. Airlines can no longer agree on issues including
the prorating of revenues/costs, as was the case when Governments owned them.
Actions and resources required
An assessment needs to be conducted to show regional airlines the benefit of cooperation and the
areas in which cooperation makes sense. Financial and technical assistance will be required to
carry out such an assessment.
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Objective 19: Collaboration in the investigation of aircraft accidents and incidents
To date in CARICOM there have been relatively few aircraft accidents and incidents. Certain
procedures would have to be followed by airline industries of Member States if anything did
happen and RASOS will play a major role in this. RASOS expects to form a central accidents
investigation group. Jamaica has already got a crew but has little experience.
Actions and resources required
Member States need to be assisted in developing their capacity for the investigation of accidents
and incidents (despite the fortunate record to date) in light of CDERA and ICAO guidelines.
The region is only capable of dealing with small accidents like helicopter crashes. To investigate
an accident costs millions of dollars - a crash of an airliner in our waters would cost over
US$ I 00 million. It is therefore unlikely that the Region will be able to deal with large accidents
so it will still rely on the FAA or UK.
Technical assistance 1s required to develop the regional investigative capacity for aircraft
accidents and incidents.
Objective 20: Develop infrastructure and expertise in the shipping industry
To date very little relating to this issue has been done on a regional basis. The IMO Regional
Maritime Adviser, based in Trinidad & Tobago, has been coordinating some regional activities
within the framework of the Revised Treaty. The IMO has also been working on developing
regional expertise. Jamaica has a Maritime Institute, which has provided training to people from
other Member States.
Actions and resources required
CARI COM needs to commission an evaluation of port facilities, services and human resources in
order to establish a program for the improvement of the efficiency of ports.
A regional
workshop would be required to examine the findings of the evaluation and make
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recommendations for the development of human resources and improvement of efficiency of
ports.
Financial and technical assistance is required to conduct the evaluation and support the workshop
for developing infrastructure and expertise in the shipping industry.
Objective 21: Protection of the marine environment from vessel source pollution
The Region needs to put in place reception facilities for garbage and facilities for treating and
disposing of it.
Actions and resources required
Funding and technical resources would be required to identify the needs of Member States and
establish a regional strategy for the prevention of vessel source pollution.
Objective 22: Put in place conditions for the provision of efficient and affordable maritime
transport among member states
Little has been achieved in this area - given the spatial distribution and size of member states.
Actions and resources required
Technical and financial resources are required to evaluate and identify scope for a more costeffective regional maritime transportation system.
Objective 23: Put in place relevant international maritime instruments relating to maritime
safety, marine environmental protection, marine accident investigation and the facilitation
of maritime traffic
The IMO drives this process from an international level. However, regional impetus is required.
The agenda of the International Bodies may not coincide with the Regional agenda. All regional
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countries need to put the necessary legislation in place and become signatories to MARPOL.
Very few Member States have signed this international Convention.
Each country in the Region is signatory to most Conventions regarding safety but most citizens
have no idea. It is important for individuals to know what is going on because Conventions take
into consideration things that will impact people not only at sea but also the movement of people,
the carriage of dangerous goods, and the operation of vessels in ports. An explosion or pollution
can affect the general public. What are the implications of pleasure craft boats operating off our
coasts? People who own pleasure crafts are not as regulated or trained as they should be and are
therefore hazards at Sea.
Actions and resources required
Technical and financial resources are required to support an exercise to develop an inventory of
instruments and other facilities for Maritime transport in the Region and to put in place a plan to
deal with existing deficiencies.
An awareness program needs to be developed and implemented to make people in the Region
more aware of the dangers and benefits of marine activity.
Objective 24: Develop proposals for the establishment and upgrade of small vessel
enterprises
This issue is still to be addressed. Trade Winds, which is a regionally owned company deals
with shipping between the smaller islands and countries of the Eastern Caribbean. Schooner
traffic also provides unscheduled transportation of cargo between OECS countries.
Actions and resources required
An assessment of the small vessel enterprise sector is required based on which proposals can be
made for the development of regional enterprises.
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Objective 25: Establish or improve port facilities in the region
This objective has received little or no regional attention to date.
A major problem is that
regional countries are in competition with each other for shipping. Each of the larger countries
would like to be a hub.
Several Member States have been improving their ports, including
Jamaica and Trinidad & Tobago.
Actions and resources required
An assessment needs to be conducted on how regional countries can cooperate with each other to
improve ports and grow revenues so that all Members are better off.
Objective 26: Cooperation among maritime administrations
Regional Maritime Authorities communicate on a regular basis but there is minimal action.
There is also cooperation in some areas such as training such that if one Member State is training
people it will invite other Member States to send candidates.
Actions and resources required
A regional information system is required to foster greater cooperation amongst maritime
administrations. Data needs to be generated to show regional Member States the net benefits of
cooperating in planning and implementation.
Objective 27: Promotion of joint ventures among Community nationals and extra-regional
shipping enterprises
To date, nothing is taking place on a regional level. It is felt that the shipping industry is kept a
deliberate secret by those who control it.
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Actions and resources required
An evaluation needs to be conducted to determine the form and nature of any profitable market
driven joint ventures in regional shipping.
Objective 28: Maritime training programs organized and harmonized
Currently there are training programs offered in shipping by Trainmar and the Caribbean
Maritime and Fisheries Training and Development Institute (both in Trinidad & Tobago) and the
Maritime Institute in Jamaica. The Maritime Institute in Jamaica is recognized as an important
institution providing regional training, however courses offered there are considered expensive.
Actions and resources required
An evaluation and workshop are needed to set standards, strengthen institutions (if necessary)
and harmonize training programs as well as determine if additional training facilities are
required.
Objective 29: Achieve international recognition for the Caribbean Sea as a Special Area
The United National General Assembly has failed to give a full recognition of the Caribbean Sea
as a Special Area and has, instead, adopted a Resolution (54/255) to "Promote an integrated
Management Approach to the Caribbean Sea Area in the Context of Sustainable Development."
In reference to the Caribbean Sea Area, the Resolution encompasses South Central and North
American countries bordering the Caribbean Sea, as well as States within the Caribbean Sea.
The Resolution, inter alia:
1. Encourages Caribbean countries to develop regional cooperation in ocean management,
within the context of sustainable development;
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2. Encourages the application of regional and international conventions to protect and
develop the marine environment of the Wider Caribbean Region;
3. Recognizes that the Caribbean Sea Area includes a large number of States, countries and
territories, most of which are developing countries and small islands as low lying coastal
states;
4. Takes account of the fact that the Caribbean countries have high degree of vulnerability
occasioned by climate change and climate variability, associated phenomena such as sea
level rise, the El Nifio phenomenon, and increasing frequency and intensity of natural
disasters; and
5. Recognizes the efforts by Caribbean countries to address, in a holistic manner, the
sectoral issues relating to the management of the Caribbean Sea, mindful of the
importance of the Caribbean Sea to the continued economic well-being and sustenance of
present and future generations, as well as its importance to the Region's heritage.
Integrated management of the Caribbean Sea must include a precautionary and anticipatory
approach to prevent degradation of the marine environment. This approach requires among other
things, the adoption of environmental impact assessments, clean technologies, waste
minimization techniques, the proper handling, storage and transportation of hazardous
substances, and environmentally acceptable means of waste disposal. Due attention also has to
be paid to conservation of biological diversity, access to scientifically derived data and
information, and socio-economic aspects of the resources. All of these issues must be taken into
consideration in developing any plan of action or framework for the implementation of the
Caribbean Sea Area Resolution.
Actions and Resources Required
Review of problems and issues and the preparation of a Plan of Action for implementation of the
Caribbean Sea Area Resolution.
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CARI COM and the Association of Caribbean States (ACS) have been collaborating to determine
appropriate steps towards the development of the implementation plan, as well as to mobilize
resources. Some resources have been secured.
Obstacles to the implementation of Community Transport Policy
Obstacle
Unreasonable expectations in the Treaty
Lack of commitment on the part of
Regional Governments
Lack of commitment on the part of
Regional private sector
Lack of information and awareness of
regional public and private sectors
Lack of financial resources
Lack of trained human resources
Ratin2 (Important or Unimportant)
Not unreasonable at all. The political will
is what may be missing. Also member
states. Jamaica has not signed unto the
Multilateral Air Services Agreement.
This is a main reason
This is a main reason
This is important, especially in Maritime
Transport, because the public and private
sector ignore the importance of the fact that
95% of cargo moved within the Region is
transported by Sea. Furthermore, they fail
to realize that the Caribbean Sea is what
links the Region and probably what we
have in common more than anything else.
Not the main reason, it is a process that
will take time
This is an important reason because there
are very few aviation experts in the region.
RASOS
The development of RASOS will depend on funding initially but eventually revenues will come
from the services provided. The Secretariat is playing a lead role in the setting up of RASOS,
which is to be operated by a qualified airline pilot. All member states have signed an agreement
forRASOS.
RASOS has started the process of trying to bring everyone together under the same umbrella.
Jamaica has adapted the Canadian rules and regulations because they were revised about nine
years ago. The OECS and Barbados are also going to use the Canadian rules and regulations and
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Trinidad & Tobago may be planning to do the same thing. The OECS has only started preparing
their regulations about three months ago.
Barbados has several small carriers, which explains why the regulations are important from its
perspective. Nevertheless, even countries without any carriers require guidelines.
The structure of RASOS has not been fully determined.
Each country will have its own
authority and its own licensing authority. RASOS will perform activities including:
•
Audits
•
Check rides on certain kinds of aircraft
•
Inspectors trained in the same standards
Air Transport in the EU
Liberalization of the European Transportation
Liberalization of air transport in the EU was completed in three successive stages. The first
package of measures was adopted in 1987 and brought a first relaxation of the rules (for example
it limited governments' powers to block the introduction of new fares). In June 1990 the second
package continued the opening up of the market with greater flexibility in pricing and in the
allocation of seat capacity. The third and final package was introduced in 1992 and freed up the
provision of services within the EU, culminating in the liberalization of cabotage, that is to say
one Member States' carrier can operate a route in another member state. It also stipulates that
carriers must submit a two year development plan to the authorities and demonstrate their ability
to meet their operating costs for a period of three months without receipt of any revenue.
The free market in the EU is open to all carriers holding a Community Air Transport Operators
License. However, such licenses are issued only to carriers where the majority of capital is held
by member states of EU nationals.
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Public Service Obligations in the EU
A safeguard under the regulation of market access is the public service obligation wherein
Governments are permitted to maintain services deemed essential for the harmonious
development of their territory. There are two stages:
•
For a given route the member state first makes known the public service obligations
which the carrier must fulfill in terms of capacity, frequency of flights and fares
•
If no carrier comes forward to provide the service, then the state can limit access to that
route to one carrier only and subsidize it for carrying out the public service obligation.
CARICOM needs to examine public service issues, especially as it relates to the claim made by
some groups that the transportation of goods between countries is too expensive.
Freedom to Set Fares in the EU
EU carriers do not have to file fares with national authorities, at most they must be filed 24 hours
before a new fare is introduced. The regulation does provide for control mechanisms to be
introduced in exceptional circumstances such as where carriers are engaged in a price war and no
carrier is making a profit, the national authorities in a member state can block further fare
reductions.
Treatment of new carriers
The EU system has mechanisms for the entry of new carriers wherein a certain number of unused
slots must be set-aside for new competitors.
Safety oversight institution in the EU
Europe accounts for one third of airline traffic but only 10% of accidents, however higher safety
standards are being demanded.
A safety oversight institution similar to the FAA is being
developed.
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Environmental safety
The EU has defined within the framework of international standards, levels of protection in the
area of noise and intends to do the same for gaseous emissions so as to limit strictly the
environmental impact of aviation. A single administering authority is being considered to deal
with the fact that different member states would have different environmental tolerance levels.
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Maritime Transport in the EU
The EU has completely liberalized its maritime transport sector to the extent that shippers from
any member state are able to provide shipping services within the jurisdiction of any other
Member State (cabotage). Traffic between EU member states has also been opened to non-EU
shipping with the exception of cabotage.
The EU has been pressing the WTO for a fully
liberalized world market because it feels that EU operators are discriminated against outside of
the EU while the EU has opened its market.
The EU has come up with a new strategy to restore their fleets to competitiveness having lost
significant market share over the last 30 years.
The strategy comprises the following five
elements:
1. To help operators facing international competition by allowing member states to provide
aid to the maritime transport sector
2. To promote short sea shipping as an environmentally friendly alternative to road transport
3. Improving qualifications of crews to use latest technology by developing and assisting
suitable training programs
4. Improving safety by putting in place a campaign to promote quality shipping
5. Supporting research and technological development, which subsidizes researchers m
various member states who act together on quality projects.
Seaports and maritime infrastructure
A significant proportion of EU trade takes place through ports. The following measures have
been taken:
1. Connecting ports to the trans European network so that shipping will be seen as an
alternative to road and other forms of transport
2. Ports are now being viewed as commercial activities rather than public services funded
by taxpayers
3. Systematic liberalization of port services.
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Safety for people, ships and the environment in the EU- quality shipping
The EU has worked hard to enforce rules laid down by the International Maritime Organization
(IMO) and the ILO. The EU strategy is based on several broad lines:
1. Apply international rules - Port State Control is a major legislation wherein member
states are empowered to inspect foreign vessels visiting their ports. If vessels are found
to be defective they can be banned from all EU ports.
2. Guarding against human error - the International Safety Management (ISM) code has
been applied by all companies operating ferry services in the EU. The code lays down
standards for the operation of cruise ships and how to deal with emergencies. There are
also minimum training requirements for crew, all seafarers have to hold a certificate
recognized under the Standards of Training Certification and Watch Keeping for
Seafarers Convention.
3. Making passenger ships safe - the EU has adopted the Convention for the Safety of Life
at Sea which lays down detailed technical requirements focusing on vessel construction,
stability, fire protection and life saving equipment. Rules have been put in place with
respect to number of passengers on board.
4. Protecting waters from pollution by ships - a notification system has been put in place for
all ships carrying dangerous or polluting goods (regardless of their flags) bound for or
leaving EU ports. Operators must provide authorities with detailed information on the
cargo carried. On the subject of waste disposal into the sea, the EU has put in place a
proposal for waste collection facilities in ports and it would be mandatory for all vessels
visiting EU ports to use these facilities.
5. Safe flow of traffic - vessel traffic management and information systerris (VTMIS) as
well as radio navigation systems have been implemented to improve the safety of
navigation.
6. Research and technological development to promote safety at sea, massive amounts of
funds have been dedicated to promotion of maritime safety.
Amongst the products
developed is the Maritime black box to give details in the event of accidents or
emergencies.
CARICOM needs to benchmark the air and transport industries in the EU in order to assess then
improve its own safety, service and other standards.
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Summary of Funding and Technical Resource Requirements for the Regional Air and
Maritime Transport Sector
Regional Actions Plans need to be completed for regional air and maritime transport. The plans
would deal with safety issues and service issues. Assessments are needed to determine the most
cost-effective way to provide a safe and efficient air and transport service across a Region where
relatively low volumes are moved on a regular basis. Financial and technical assistance will be
required to develop and implement the various aspects of strategic plans.
For the air transport industry, support will be needed to deal with the following four issues,
which are further divided into sub-issues:
1. Institutional Strengthening of the Regional Air Safety Oversight System (RASOS)
•
Development of a comprehensive regional information base for RASOS
•
An assessment of the appropriateness of RASOS as a Regional Air Transport
Advisory Committee for regional coordination or the establishment of another body
to perform the role. In either case there would be need to convene regional seminars
and workshops for transport officials to make an input.
•
Equipping of RASOS to be given responsibility for the acquisition and transfer of
technology in the air transport sector. The Maritime Authority of Jamaica could be
· strengthened to perform a similar role in Maritime transport.
2. Legislative, policies and international agreements
•
Finalization of the regional air transport policy and register it with the ICAO.
•
Development, coordination and standardization of national transport policies.
•
Make legislative and administrative changes in order to remove restrictions and
achieve greater uniformity in standards and practices across the Region.
•
Member States need to take initiatives to become part of the Multilateral Air Services
Agreement
232
•
Establishment and promotion of uniform criteria for the registration of aircraft by
nationals of CARI COM.
•
Examination of the feasibility of having a liberalized system in CARICOM such as in
the EU in which all carriers can land with passengers in all other regional
destinations.
•
Examination of certification & licensing requirements and procedures of Member
States for aviation personnel and development of a set of approved training
institutions and establish uniform licensing requirements and procedures and promote
this in CARICOM.
•
Development of the regional investigative capacity for aircraft accidents and
incidents.
•
Formulation and enforcement of harmonized technical and financial codes for the
issuance of authorization to international air carriers and operators.
3. Training and Cooperation among airlines
•
Assessment of regional training needs and capabilities and formulation and
implementation of recommendations for the development of human resources.
•
Assessment of areas where regional airlines would benefit from cooperation and the
areas in which cooperation makes sense.
4. Promotion of investment opportunities
•
Activities such as workshops need to be arranged to generate ideas and implement
strategies for the promotion of investment in the regional air and maritime industries.
•
Identification of critical issues and conducting negotiations in order to generate the
best terms and conditions for service providers seeking to provide transport services.
For the Maritime Transport industry, financial and technical support is required in the following
three components of a strategic plan:
233
1. Developing the shipping industry
•
Conduct an evaluation and convene a workshop for developing infrastructure and
expertise in the shipping industry.
•
Evaluation of the scope for a more cost-effective regional maritime transportation
system.
•
Assessment of the potential of the small vessel enterprise sector to operate profitable
regional enterprises.
•
Evaluation to determine the form and nature of any profitable market driven joint
ventures in regional shipping.
2. Cooperation amongst Maritime Administrations in Member States
•
An assessment of how regional countries can cooperate to improve ports and grow
revenues so that all Members are better off.
•
Development of a regional maritime information system to foster greater cooperation
among maritime administrations. Data will be generated to show regional Member
States the net benefits of cooperating in training, planning and implementation.
•
Member States need to make efforts and work together to reach the stage where they
can all sign on to important Maritime Transport Agreements such a MARPOL.
3. Maritime Safety and Protecting the Caribbean Sea
•
Development and support of the regional Comprehensive Disaster Management
(CDM) plan in collaboration between CDERA and Member States in order to update
and test search and rescue plans in accordance with ICAO and IMO requirements.
•
Development of an inventory of instruments and other facilities for Maritime
transport in the Region and put in place a plan to deal with existing deficiencies.
•
Put in place initiatives to set standards, strengthen institutions and harmonize training
programs as well as determine if additional training facilities are required.
•
Identify the needs of Member States and establish a regional strategy for the
prevention of vessel source pollution.
234
•
Design and implementation of an awareness program to make people in the Region
more aware of the dangers and benefits of marine activity.
•
Put in place the facilities in the EEZs of Member States to make the Caribbean Sea a
protected area.
(E)
ENVIRONMENTAL PROTECTION POLICY
As with R&D and maritime transport, environmental protection issues are not a major focus in
the Region despite the importance to the tourism industry, the agricultural sector, natural
resources, and the safety and health of the nationals. Environmentalists feel that too little is
spent on enhancing the environment and preventing its deterioration. Examples are given of
squatters being allowed to settle on hillsides and cut down all the trees because politicians may
be more afraid of losing votes than the negative environmental repercussions. However, this is
often a myopic view as when the rains come and flooding takes place in nearby communities,
millions of dollars are required to recover from the devastation. The economic cost of moving
the squatters would possibly have been much less than the long run cost of disaster recovery.
Community environmental policy is outlined in Chapter 4 Part 2 of the Revised Treaty. The
objectives are discussed below. From discussions with the Sustainable Development Unit at the
CARICOM Secretariat, it was identified that relatively few activities had taken place to date in
terms of implementing the Community Policy. Experts at the University of the West Indies and
the Environmental Protection Agency at the University of Guyana explained that numerous plans
are in place sponsored by different international agencies but implementation has not followed.
Some success has been reported in the Caribbean Renewable Energy Project in which Phase 1
identified barriers to the use of renewable energy. Phasel was coordinated by Caribbean Energy
Information System, which is based in Jamaica. Phase 2 is expected to start soon and will be
coordinated by the CARICOM Secretariat and will aim to address the issues outlined in Phase 1.
The following are amongst the areas to be addressed:
. 1. Poor and effective financing mechanisms for renewable energy projects
235
2. Development of the Information System to provide more information on renewable
energy projects
3. Improvement of the appreciation and increasing the confidence of traditional suppliers of
renewable energy, as this type of energy is often considered to be inefficient and
ineffective.
A Coordinated Environmental Management Action Plan for the Region that pulls together the
important elements of existing plans is required to set the platform. If the process is to be led by the
Secretariat, there must be acceptance of this by Member States so that inconsistencies do not
emerge across the Region. To execute effectively and generate sustainable development would
require an integrated management regime including fishing, transport, environment, industry,
tourism and other areas. The coordination would be carried out by the CARICOM Secretariat with
guidance and support from CEHI, CDERA, the Climate Center (to be set up) and UWICED in
Jamaica.
However, most of the implementation would have to be done at the national and
community levels but the CARICOM Secretariat. To facilitate implementation will involve:
a) developing legislation, norms and standards in the various area (for example, at the moment
there are no standards for cruise ship disposal of waste so it can be done at Sea); and
b) ensuring compliance with standards (monitoring would be the challenge)
No additional regional institutions would be needed, however, some institutional strengthening of
regional and national institutions would be necessary. It will also be worthwhile for CARICOM to
look at what is taking place in the EU with respect to environmental protection (discussed later).
The Objectives of Community Environmental Protection Policy
Objective 1: Promotion of measures to preserve, protect and improve the quality of the
environment
Regional experts feel that very little is happening in this area and that one of the major problems
of the Region is that we fail to act together. There are individual initiatives taking place in some
islands but these are not emulated across the Region. If Member States could act as a Unit, more
236
funding could be attracted for environmental protection. In contrast, the islands of the Pacific are
highly organized in their approach to environmental protection, which makes them well placed to
gain concessions and assistance.
There have been experiments in Jamaica with the National Resource Conservation Agency,
which was an independent agency but the politicians were concerned about its independence and
now it has been brought under the Ministry of Housing. Lack of funding, commitment by
Government and technical resources are at the core of the problem. Jamaica and Trinidad &
Tobago have technical resources, however there is not a big environmental lobby in the Region.
In Trinidad & Tobago where there are mineral resources the concern is more about oil and gas.
A tourism dominated state like Barbados is somewhat more advanced and is trying to adopt
sustainability measures. Barbados runs cartoon and other media campaigns in order to alert its
citizens of the importance of environmental protection.
Barbados Hotel and Tourism Association (BHTA) launched the Barbados Environmental and
Sustainable Tourism (BEST) program in early 2001 aimed at promoting a comprehensive
approach to the development of sustainable tourism in Barbados and across the wider Caribbean.
The objectives of BEST are detailed and consistent with those of the Community Environmental
Policy. The BHTA has been cooperating with the Caribbean Tourism Organization (CTO) and
the Caribbean Hotel Association (CHA) in an attempt to have the program implemented across
the wider Caribbean.
At the University level, especially in St. Augustine there is activity as it relates to Environmental
Studies. There are 20 Ph.D.'s in Life Sciences and most of them are working on Environmental
issues. In economics there are two large research groups, one dealing with environment and
policy (Sustainable Development Economic Unit, headed by Dennis Pantin) and the other is in
health economics dealing with AIDS.
These are positive signs and hopefully these trained
individuals will be used to further regional environmental protection.
Resources Required: Financial and technical resources are required to harmonize environmental
programs across the Region and to implement them - this includes training of persons and
237
marketing of issues.
The BEST program could be augmented and implemented across the
Region with the backing of the CARICOM Secretariat.
Objective 2: Measures to protect the life and health of humans, animals and plants
There is no coordinated regional program. Some of these issues are dealt with under the BEST
program. In Trinidad & Tobago efforts are being made to introduce new standards for water,
noise and air pollution. However, only the noise pollution standards have been implemented to
date as the legislation for air and water standards have not been implemented. There are similar
plans in place in Jamaica. In Barbados there is a Zoos Legislations Act, which determines what
constitutes a zoo and what should be allowed in it. There is also an Alien and Exotic Species
Act, which looks at what animals and plants should be brought into the country. The Region does
not have a grasp of the potential impact of alien and exotic species and the potential costs.
This area needs to be approached from two angles:
1. Protection of living resources of the Caribbean Sea
2. Protection of the terrestrial resources of the Region
A program needs to be developed to determine what alien and exotic species customs officers
should look for and to train customs officer to identify and deal with them. At the moment customs
officers do not have complete knowledge of what to look for, which leaves the region vulnerable.
This should be part of the integrated management plan.
fu 1990 there was Caribbean Oceanographic Resources Exploration (CORE) where a ship went
through the Region identifying and mapping marine organisms. Some training was done in that
Nationals from Member States were on the ship doing the implementation. The Region could pick
up from where CORE left off and make everything consistent with the Small Island Developing
States Plan of Action (SIDSPOA) (supported by UNECLAC), which outlines fourteen areas to be
improved, monitored and reported on by Member States on a regular basis.
Resources required: Financial and technical resources are required to develop legislation,
coordinate best practices and implement them across the Region bearing in mind the priorities of
238
the Member States. For example, solid waste issues may be priority in some small islands and
coastal zones may be a greater priority in low-lying areas like Guyana and Belize. In some
countries there is coastal zone legislation and alien and exotic species could be added to such
legislation.
Objective 3: Measures should be adopted at the community level to address regional
environmental problems
Some clarification is required concerning whether the Revised Treaty is referring to Community
level or community level approaches. At the Caribbean Community level the role must be an
oversight role and regional rules could be set up with which member states would be expected to
comply.
Member states would have to report to the CARICOM Secretariat and report their
performance with respect to regional environmental objectives.
The aspect of local community involvement has been looked at from a regional level through
programs funded by UNDP and CIDA. A Green Fund was set up in Jamaica and was seeded by
an endowment from CIDA to be accessed only by NGOs and CBOs. The Green Fund in Jamaica
has been working but there are inadequate resources to tackle all the problems. In most islands
UNDP has funded projects at the community level in an attempt to get bottom-up approach to
environmental protection. The usual problem is getting past the planning stage.
In Trinidad &
Tobago there is an unusual situation where a Green Fund has been set up by a 0.1 % tax on the
turnover of all companies. The fund has TT$ I QOM and none of it has been spent. This fund can
only be accessed by NGOs and CBOs for reforestation, remediation, etc, however these
organizations do not have the capacity to implement.
Resources required: Financial and technical assistance to determine what type of sustainable
funding schemes can be put in place across the region, can the Trinidad & Tobago approach be
used as a model? A plan is then required for the provision of technical support and other support
for implementation at the community level across the Community.
Objective 4a: In formulating measures in relation to the environment take account of available
and accessible scientific and technical data.
239
Very little use of scientific data is present around the Region.
However, the Caribbean
Renewable Energy Project and the BEST programs have information and data as important
elements. The work done in these programs should therefore be built upon to form a regional
database to be consulted when decisions are being taken. It is felt that at the political level, where
important decisions are taken, science and facts do not come into play. Making an impact
amongst voters is the main concern rather than science and hard data. Planting trees for job
creation is a more important concern, such programs are useful but more scientific and major
impact projects are required.
Resources required: Perhaps resources are required to establish and fund a regional
environmental data and information bureau or technical group with . the necessary expertise,
which should be consulted on environmental issues.
A set up such as the European
Environmental Agency and the METROPOLIS Network could be benchmarked (this is outlined
in more detail at the end of this chapter).
Objective 4b: In formulating measures in relation to the environment take account of
environmental conditions in the Member States
A regional environmental plan should prioritize the needs of Member States.
Resource required: Funding and technical resources to pull the priorities of Member States
together and fund the implementation of environmental protection programs.
Objective 4c: In formulating measures in relation to the environment take account of the
potential costs and benefits of action or inaction
This needs to be part of any comprehensive regional environmental plan. There are interesting
case studies across the region where proper cost-benefit analyses do not appear to be done. For
example, Trinidad & Tobago uses more leaded gas than its regional counterparts, which is ironic
since Trinidad & Tobago produces the substitute for lead but does not use it to produce unleaded
gas. However, it has to import the lead and face the negative impact of leaded gas. The negative
240
extemality is not been factored into the analysis. Moreover, it seems strange that the country
produces the substitute for lead but continues to buy lead overseas.
Similarly, cost-benefit analyses are not being down when people are allowed to squat on hillsides
where they dump garbage and cut down trees that leads to flooding and the associated costs.
It is worth noting that Trinidad & Tobago is now considered a "dirty destination" for yachts since
there was an oil spill last year with a barge and a ship transferring fuel and the current took the
oil to Chaguaramas and fouled many boats; the arrival of yachts has declined in Trinidad &
Tobago in the last year. Failure to take care of the environment has come back to haunt Trinidad
& Tobago and possibly other regional territories.
In Guyana there are resource usage issues such as the fact that the country has vast lumber
resources but still imports white pine. There are also issues relating to mining where river
courses are altered by mining activities.
It is fair to say that in most regional countries, most large projects, especially those seeking bank
finance or government assistance are required to conduct an environmental impact assessment
prior to start up. This is a positive measure and must be made standard practice.
Resources required: The regional technical group mentioned earlier should be available to
conduct cost-benefit analyses on regional environmental protection issues and concerns. They
would also set regional environmental standards so that producers moving from one Member
State to another would be aware of the standards.
Objective 4d: In formulating measures in relation to the environment take account of the
precautionary principle and those principles relating to preventive action, rectification of
environmental damage at source and the principle that the polluter pays
Nothing has been done on a regional basis in this area, however these principles should be
implemented. Legislation in Trinidad & Tobago includes the principle of polluter pays and the
proportionate principle but in practice the polluters do not pay because they are usually quite
241
powerful and have access to politicians. An independent environmental court has been set up in
Trinidad & Tobago to deal with these issues but no one has tried it as yet. In Jamaica bringing
the NRCA into a Ministry basically gave the Minister control. Guyana has the Environmental
Protection Agency and an environmental tribunal with two judges, but these are not as active as
they should be.
In Barbados, there is a Marine Pollution Act, The Health Services Act, Coastal Zone
Management Act and the Quarries Act, all of which make provisions for these principles.
In St. Lucia, environmental levies have been placed on new car imports and these funds are
supposed to be used for environmental protection.
Resources required: Financial and technical resources are required to set up a court or a
tribunal as in Trinidad & Tobago or Guyana to take serious action when the principles of
environmental protection are violated. Maybe this could be dealt with under the Caribbean
Court of Justice. If the Region is serious about this issue this should be an imperative. The
legislation already developed in certain Member States could be adapted for the region as a
whole.
Objective 4e: In formulating measures in relation to the environment take account of the
need to protect the Region from the harmful effects of hazardous materials transported,
generated, disposed of or shipped through or within the Community
This is one of the bright spots for the Region in that Member States have taken effective action
together to prevent dumping of waste in regional waters. There seems to be general agreement
across the board that the Caribbean Sea is to be a protected area.
Resources required: Funding to set up receptacles and other instruments required to give the
Caribbean Sea protected area status.
242
Objective 5: COTED shall ensure a balance between the requirements of industrial .
development and the protection and preservation of the environment
This issue has not yet received any attention. The envirorunentalists claim that no balance has
been achieved to date and rapid industrial development is given priority little concern for
sustainability.
Resources required: As mentioned earlier, a regional technical group should be put in place to
advise on this issue. Funding is required to set up and sustain such a group who will be required
to conduct assessments, do cost-benefit analyses and write reports.
Objective 6: The Community and Member States shall cooperate ·with third States and
competent environmental organizations
Several Member States are signatories to certain International Conventions on marine protection.
Furthermore, regional countries will cooperate at international meetings where different Member
States may take the lead on certain issues.
Environmental Policy in the EU
The EU has the European Envirorunental Agency (EEA), which deals with envirorunental issues
and policy. Policy areas are grouped in the following themes: General policy and overview;
Sustainable Development; Climate Change; Air; Land; Waste; Water; Urban Environment;
Nature Protection and Biodiversity; Industry and Product Policy; Chemicals; Biotechnology;
Enlargement;
Environmental
Assessment;
Envirorunental
Economics;
Environmental
Governance; Envirorunental Law; Education and Training; Radiation Protection; and Civil
Protection.
A network of 38 scientific institutes, universities and enterprises from 17 countries has been
launched across the EU called the METROPOLIS network, which will work with the EEA and
monitor the environment across Europe.
METROPOLIS aims to identify environmental
standards and scientific assessment tools.
It will facilitate better European Cooperation in
243
monitoring the environment and contribute to reinforcing Europe's science base for
environmental policies.
When implementing the CARICOM Environmental Policy, it will be worthwhile to examine the
objectives and operations of the EEA and METROPOLIS as well as the areas of focus to ensure
that all these areas are examined and prioritized for CARICOM Member States.
Summary of Resources Required for Community Environmental Protection Policy
A Community Integrated Environmental Management Action Plan is required that deals with all
aspects of the environment. The Plan needs to take into account the special circumstances of
each Member State and identify best practices being used, which can be applied elsewhere.
Significant funding and technical resources will be required to develop and implement the Plan,
one donor could accept responsibility for funding the entire Plan or taking a component, a
detailed costing would need to be worked out. The CARICOM Secretariat would coordinate the
Plan or some other institution designated to do so, and support would be provided by regional
institutions such as CEHI, CDERA, UWICED, The Climate Center, and UNECLAC. The Plan
would be implementation focused and cover priority areas including:
1. Environmental Protection Promotional efforts
•
Promotion of measures to preserve, protect and improve the quality of the
environment, such as the BEST program in Barbados
2. Environmental Research and development
•
Baseline Study to determine the current situation so that improvements can be
measured
•
Development of a regional environmental information system (such as the
METROPOLIS Network in the EU) to store and analyze data on Member States
and all other relevant aspects of the environment
•
Examination and replication of best practices
•
Alternative energy sources and recycling opportunities
244
•
Cost-benefit analyses (on such issues as the balance between industrial
development and environmental protection)
•
Approaches to making polluters pay as well as other prevention principles
3. Legislation & standards development, training and institutional strengthening
•
Developing legislation, norms and standards in the marine, terrestrial, air noise
and other aspects of the environment (coastal zone and alien/exotic species
legislation needs to be added to existing legislation)
•
Training of customs officers to identify alien species
•
Training of judges and magistrates to deal with environmental violations
•
Training of personnel of national environmental institutions
•
Training of local community members and provision of incentives to protect the
local environment
•
Acquisition of receptacles and other instruments required to give the Caribbean
Sea protected area status.
(F)
TOURISM POLICY
Background
The Region (including all 33 Members of the CTO) was estimated in 2000 to earn approximately
US$19.6 billion in foreign exchange from tourism per annum of which the Commonwealth
Caribbean, Haiti and Suriname accounted for US$6.7 billion or 34.2%. The tourism industry
was estimated to employ at least 900,000 people in 2000 but it is estimated that close to 40% of
these jobs have been lost since the economic decline in the USA and the compounding impact of
September 11, 2001. The tourism sector is a major source of Government revenue being the
largest industry in several CARICOM countries.
There is no doubt that the regional tourism industry is under pressure given recent economic
declines in the USA and mainland Europe, which have resulted in reduced visitors and airlift
from these countries. Major tour operators no longer operate in most Caribbean countries (none
in CARICOM countries). There has also been a decline in cruise line visits to the Region.
245
Given the importance of tourism, many ask why it is not separated and treated as a sector on its
own (as is done in this review) rather than being subsumed under "Services". This is not just a
regional question but also a global question where the travel industry is one of the largest, if not
the largest, in the world.
A major challenge faced by the tourism industry at the national and regional level is the chronic
shortage of adequate affordable resources to develop and maintain the tourism sector at
competitive levels. There are problems associated with the marketing and product quality, which
need to be addressed quickly, especially in light of the impact and repercussions of September
11, 2001.
At the CARICOM Heads of Government meetings in the Bahamas in October 2001, a decision
was taken to create a US$16 million Joint Public/Private Sector regional T.V. campaign for
2002. However, there has been much difficulty raising the funds.
As a result, at a CTO
Ministerial Meeting in Barbados in February 2002, a mandate was given to the CTO to develop a
Caribbean sustainable tourism development fund to provide an adequate and sustained source of
funding for regional tourism development programs. It is proposed that the fund be developed
by levying a US$5 per visit consumer charge on incoming visitors to the Caribbean (airline and
cruise line ticket tax). The proposal was tabled at the recent COTED meeting in May 2002 in
Guyana.
At the same meetings, the first draft of the Commonwealth Fund for Technical
Cooperation: Caribbean Tourism Strategic Plan was also submitted. This study deals with the
vision, the core strategies, the Tourism Development. Fund., short terms strategies (2003-2005),
long-term strategies (2003-2012), and implementation and organization.
Objectives of the Revised Treaty
The Revised Treaty in Chapter 4 Article 55 outlines objectives for Sustainable Tourism
Development. These are:
1. An enhanced image for the Region as a tourist destination
2. A diversified tourism product of a consistently high quality
3. An expanded market base
246
4. Education programs designed to ensure that appropriate practices are pursued by service
providers
5. Linkages with other sectors in the economy
6. Conservation of the natural and cultural resources of the region through proper
management
7. Appropriate infrastructure and other services m support of tourism, considering the
natural and social carrying-capacity of Member States
Caribbean Sustainable Tourism Zone for ACS Members
A Convention was si~ed in December 2001 by 23 of the 25 Members of the Association of
Caribbean States (ACS) for the establishment of the Sustainable Tourism Zone of the wider
Caribbean. All Members of CARICOM are Members of the ACS so have signed on to the
Convention. The Sustainable Tourism Zone is intended to deal with the following issues:
1. Culture and identity - research, disclose and disseminate Caribbean culture
2. Community participation - decision-making, planning, development and benefits from
tourism
3. Environment - research and development programs to preserve, conserve and promote
sustainable use and management
4. Technology for sustainability - use of best technologies in managing sewage, drainage
and solid waste
5. Economic policies and instrument to promote sustainable tourism
6. Marketing - Enhanced tourism marketing to develop the product
7. Education - develop education and training programs to increase awareness and quality of
service
8. Legal framework - set up legislative framework to support a Sustainable Tourism Zone
9. Air and Maritime transport - promote development of intra-regional transport systems
10. Coordination with the private sector in organizing and planning
11 . Information center - promote development of a regional Information Center available to
all Member States
It can be seen that the objectives of the Revised Treaty and those of the Sustainable Tourism
Zone for the ACS are overlapping. However, the Convention has not yet been ratified because
247
of issues raised by (Jamaica on behalf of) CARICOM, which require clarification and redrafting
of provisions. Work is still continuing to achieve ratification, however a major challenge faced
by CARlCOM is to get full cooperation of all Member States to attend ACS meetings.
In a telephone interview with Mr. Holder of the CTO, it was recognized that most of the
objectives for regional tourism development that have been outlined in the Revised Treaty are
accounted for under Commonwealth Fund for Technical Co-operation: Caribbean Tourism
Strategic Plan (hereafter referred to as the Plan). It should be noted that while the CTO is not an
official institution of CARICOM (under the Revised Treaty) it is considered by CARICOM to be
its main tourism-implementing arm. In fact, CARlCOM played a leading role in establishing the
Caribbean oftice of the CTO.
Enhanced image for the Region
In terms of an enhanced image for the Region as a tourist destination, this is covered in the Plan
with a strategy based on the fact that the Caribbean brand is stronger than an individual country
brand. The objective is to develop a strong global association between the words Caribbean and
Tourism. A campaign was started in 1993 but was not sustained because of lack of funds. It is
felt that given the regional importance of tourism, Governments need to be committed to it as
part of their national plans and should budget for it accordingly. CTO wants the Caribbean
branding to be transformed from a marketing concept to a policy.
Diversified Tourism Product
The Plan also deals with a diversified tourism product of a consistently high quality by looking at
small hotel branding and niche market development. The plan also deals with the objective of an
expanded market base by outlining strategies for more effective marketing in the USA, UK and
other markets.
248
Education Programs
In terms of education programs designed to ensure that service providers pursue appropriate
practices, the Plan refers to The Caribbean Tourism Human Resource Council (CTHRC), which
was set up in 1997 to serve as an overall coordinating agency for tourism human resource
development. The Plan outlines the fact that the council requires additional human and financial
resources to execute effectively. It is also recognized that technical and financial resources are
required to develop programs of international standards for training of management personnel in
tourism.
Linkages with other Sectors
The Plan outlines that linkages with other sectors in the economy is an important part of
sustainable development of the tourism sector and of regional economies. It also deals with the
issue of conservation of the natural and cultural resources of the Region through proper
management.
The Plan deals with appropriate infrastructure and other services m support of tourism,
considering the natural and social carrying capacity of Member States. It outlines the fact that
institutional strengthening is required such that national and regional organizations such as CHA
and CTO must be equipped with the technical and financial resources to achieve their objectives
in marketing, HRD and information management.
Financial and Technical Resources for the Plan
As mentioned earlier, it has being proposed that a fund be created by the levying a tax on
incoming air and sea visitors. This would ensure sustainability and generate enough resources to
fund regional and national initiatives. The private sector wants most of the funds to be used for
marketing while CTO would prefer the funding to be used for broader purposes such as HRD,
linkages, cultural development, internet technology.
The proposal is that 50% of the funds
collected will go to regional initiatives and the other half will be returned to national
governments for national development. The enabling legislation would specify the usage of the
funds so that it is used for tourism.
249
The total cost to implement the Plan is substantial but it is hoped that proposed US$5 tax on
arrivals will be adequate to support Plan. The implementation of the Plan is dependent on
approval by the CARICOM Heads of Governments (July 2002) and on available resources.
The CTO will require financial and technical resources to implement the components of the Plan,
including the Fund. However, if the proposal for the Fund is accepted then the source of funding
should be guaranteed and sustainable.
National level activities in CARICOM
In Barbados a new piece of legislation has been put in place to support the concept of sustainable
tourism development.
Recently new standards were adopted and a piece of it has focused
sustainable tourism development.
In Jamaica, the Jamaica Tourism Board had been embroiled in discussions with the private sector
over the use of its budget. The private sector wants more money to be spent on advertising and
less on administration. There is merit to the arguments put forward by both sides and much of
the debate points to the fact that information technology could be used more intensively to
reduce costs and improve efficiency. For example, many offices set up in countries around the
world could be closed and replaced with a 1-800 number that is answered 24 hours per day in a
single location (maybe at the JTB offices in Jamaica) which is the repository of all information.
This would lead to better information quality in some cases as well as cost savings, the proceeds
of which could be utilized for more advertising.
The European Union and Tourism
The tourism sector is very important for the EU as it is for the Member States of CARICOM. It
is estimated that tourism directly employs about 8 million people in the EU, representing 5% of
total employment and of GDP, and 30% of external trade in services. In the year 2000, five EU
countries were amongst the 10 leading tourist destinations in the world, and in 1999 the EU
accounted for 43 % of arrivals and 40% of receipts in non-domestic world tourism.
250
EU tourism is largely a small and medium sizes enterprise dominated sector, with many of them
employing less than 10 persons. The introduction of a common currency in the EU facilitates
cross border tourism within the EU. It is estimated that 75% of EU tourism is between EU
countries. CARICOM needs to examine opportunities for greater intra-regional tourism.
The importance of tourism to the EU is reflected in the fact that in 1986, the Tourism Advisory
Committee was set up to facilitate exchange of information and consultation and cooperation on
tourism. The Advisory Committee comprises representatives from the 18 BEA countries who
provide information on the measures taken at the national level in the area of tourism. The
Committee meets several times a year. CARlCOM should study the mandate of the Advisory
Committee and consider establishing a similar Committee (maybe under the CTO) to play a
similar role.
The EU has set up five working groups on tourism, each group dealing with one of the following
five topics:
1. Facilitation of the exchange and dissemination of information, particularly through new
technologies
2. Improvement in training in order to upgrade skills in the tourism industry
3. Improvement of the quality of tourism products
4. Promotion of environmental protection and sustainable development in tourism
5. Management of the impact of new technologies in the tourism sector
All groups tabled their reports on recommendations in the summer of 2001 and provided
important material for the European Commission's communication entitled "Working together
for the future of European tourism."
This communication outlined the need to enhance
cooperation on and the consistency of tourism policies amongst the stakeholders involved in
tourism, which includes the European Commission, Member States, regional and local
authorities, industry associations, and tourist destinations.
251
Summary
In order to avoid duplication of efforts and resources, it makes sense for the Caribbean Tourism
Strategic Plan being developed by the CTO is adopted. The discussion above shows that the
Plan is consistent with the policies outlined in the Revised Treaty. National Government's need
to play their role in supporting the funding of the Plan as well as in implementing the fiscal
measures that will generate a sustainable fund for regional tourism. The main requirements for
funding and technical resources can be summarized as follows:
1. Support for the implementation of the Caribbean Tourism Strategic Plan with emphasis
on the Fund for sustainable tourism
2. Institutional strengthening of The Caribbean Tourism Human Resource Council
(CTHRC), the CHA and CTO
3. Development oflow cost marketing/ promotional strategies for regional tourism.
(G)
RESEARCH AND DEVELOPMENT
Community R&D is mainly carried out at the University of the West Indies and at CARDI,
which are both recognized as Institutions of the Community. Research also takes place at the
CDB as it relates to projects and at the CRNM as it relates to international negotiations
(especially for small states). There are pockets ofresearch taking place at the national level such
as at:
•
The Scientific Research Council (SRC) in Jamaica where product research is conducted
and new products developed and the rights sold to the private sector
•
The Environmental Protection Agency (EPA) at the University of Guyana, which has a
well qualified staff that carries out research on the environment as it relates to coastal
zones, biodiversity, the impact of mining activities, and other issues particularly relevant
to Guyan.a.
UWI has identified certain areas of focus in an attempt to project what the regional society needs
as well as keep up with the latest trends. These pillars of focus are:
1. Information technology - to develop skills for software development as India has done.
The Region has. the human resources. This pillar is still in the development stage with
UWI at the stage where it is training people in developing software.
252
2. Biotechnology (on all campuses) - this has focused on developing new crops. Funding
has been obtained through CARIFORUM for a joint venture with the private sector in the
development of new anthuriums. In Jamaica R&D is taking place in developing new
strains of yams that are smaller and more marketable in North America and new crops of
papaya that are more resilient and resistant to diseases. The Biotechnology of diseases in
plants and animals is being examined at the Mona and St. Augustine campuses.
3. Health and wellness - the Caribbean is considered a natural lab of ethnically linked
diseases because of the variety of ethnicities in the Region. This pillar is still at the
developmental stage and will be the main focus of research in health and medicine.
4. Environment - looking at the sustainability of our limited forestry areas, our shorelines as
it relates to tourism, as well as erosion. The marine environment is being looked at more
closely, given that many islands have a larger marine area than land area. Marine plants,
etc are been examined. Marine chemistry is being looked at on all three campuses.
There is also research on the bauxite waste examining what other valuable elements are
present in bauxite soils. The general thrust is to look inwards and try to develop things in
our own regional environment. The activities in this area are consistent with aspects of
the Community Environmental Protection, Community Tourism, Community Agriculture
and Community Industrial Policy.
5. Culture ,.... there is significant cultural diversity in the Region, which provides a
competitive edge in research in this area. Regional culture is reflected in music and
language. Significant research is going on in cultural studies to exploit opportunities
such as the fact that the steel band is unique to the Region and that the Region has
produced two Nobel Laureates in literature.
6. Economic and social policy (including Governance) is seen as a beam that runs across all
pillars, especially as it relates to the socio-economics of small states. Professor Theodore
has done important research on health economics, which shows that a healthy population
is more productive, thereby offsetting the additional cost of a quality health care system.
253
The late Professor Oliver Headley carried out seminal work on solar energy that is
reflected in the fact that most of the water heaters in Barbados are solar. He developed an
ice-making machine on the East coast of Barbados using alternative energy (solar). The
Government of Barbados was planning to fund a large institute of alternative energy
under his control and direction, the outcome is uncertain given his untimely passing
away. In social sciences Professor Deosoran is conducting innovative research on crime
and justice in Trinidad & Tobago.
Adequate funding is the major constraint to innovation. On the whole, at the regional level,
Governments need to make a commitment to increasing the proportion of GDP spent on R&D
and to stimulate the private sector to get involved, as well as increase the strength and capacity of
community research and training institutions.
It is worth noting that in December 1999, the University of the West Indies (Mona) and the
CARJCOM Secretariat signed an agreement to work together and "harness their resources to
create within the Community a cadre of human resources capable of contributing meaningfully
to the multifaceted strategies which the changing global economy dictates".
So far the
Agreement as yielded a number of activities such as:
•
A radio documentary, which traces regional integration from CARIFTA to the CSME
•
A skills assessment exercise to identify skills shortages in UWI and the Secretariat and to
facilitate an assessment of the skills needed through innovative training, in order to
respond to the needs of an increasingly knowledge based culture
•
The hosting of the University Singers on a visit to Guyana
•
The publication of a number of books including: CARJCOM: Beyond Survival; Integrate
or Perish - Perspectives of Leaders of the Integration Movement (1963-1999); Unity in
Adversity; and the Integrationist Journal.
While this initiative is a very positive move and should be encouraged, it is likely to suffer from
the "usual lack of funding" as both institutions are short of research funding, which ultimately
comes mainly from subventions of Member States.
254
Although R&D is taking place in the Community, it is generally agreed that it is not taken
seriously enough and insufficient funds are dedicated to it. This is borne out by UNDP data,
which show that CARI COM countries spend less than 0.1 % of GDP on R&D compared to nearly
3% in the EU, 2.5% in the USA and 1.5% in Latin America. If the GDP of CARICOM States
was as large as any major developed country then 0.1 % would be significant in absolute terms
but the fact is that GDP is not large relative to the countries that are spending a much higher
percentage. These data capture the major challenges facing R&D in the Region. Even the
private sector of the Region does not participate significantly in R&D in order to develop new
products and approaches, so there is a tendency to wait for the latest developments from the
USA, Europe, Japan and other developed countries to introduce them into our economies, which
leads to a continued dependence and balance of payments pressures.
For sustainability, funding for more regional R&D should initially come from government after
which international agencies can be tapped for additional funding. The University of the West
Indies is currently in discussions with the CDB, which is willing to put in US$1 million to "kickoff' the Caribbean Regional Research Funding Agency. This Agency would fund any researcher
in the Caribbean willing to undertake quality research. Research proposals would be submitted
and appraised by a qualified team prior to funding being made available. The major concern
with this fund is how it can be made sustainable.
Given the very small size of CARICOM territories, it is definitely important that a community
approach to R&D is adopted in order to develop a critical mass of researchers and to generate a
large enough pool of investment funds. If each island would commit 1% of GDP into R&D it
would make a serious impact. The following assessment of the implementation to date of the
Community R&D shows that shortage of funding is the main obstacle because to a large extent
the technical competence is resident within the Region. The conclusions drawn in this analysis
are based on information provided by senior faculty members or staff at UWI and CARDI as
well as information obtained from documents and websites.
255
The Objectives of the Community Research and Development Policy
The objectives of the Community Research and Development Policy are detailed in Chapter 4,
Part 3, Article 64 of the Revised Treaty. These objectives are presented below and comments
made.
Objective 1: Encourage public and private sector agencies, research establishments and
tertiary institutions in their research and technological development activities and assist in
identifying sources of funding for such activities
So far little is being done in this area from a community perspective. However, the Secretariat
will engage the services of University staff members to undertake research on its behalf using
funds that it has identified and sourced. A more structured approach needs to be developed
wherein public and private sector agencies are shown the benefits ofR&D.
In the field of Agricultural R&D, CARDI plays the role of facilitator to regional or local entities
by carrying out needed research work. CARDI does not conduct basic research as this is carried
out by UWI with which CARDI collaborates. CARDI coordinates R&D activities across its
regional offices, for example in pest management, it has developed Integrated Pest Management
(IPM) Systems. CARDI works with Ministries of Agriculture and their extension officers to
implement research findings and the outcomes shared across the Region.
Actions and resources required
More funding is needed to develop an integrated R&D plan for the community with the CDB and
the financial sector of the Region playing a greater role. In addition, technical resources could
also be engaged to train people to write proposals and source funds from international donor
agencies.
CARDI needs the necessary funding so that it can conduct research and coordinate activities
across the Region without threats of it being closed through lack of funding. An assessment of
CARDI may be required to ensure that its priorities are in line with the needs of regional
Member States as a whole (and not of individual Member States).
256
Objective 2: Promote co-operation in research and technological development among
Member States, and with third States and competent international organizations
Very little has been done in this area apart from what takes place at the University of the West
Indies. A plan needs to be designed to support this. In the field of Agriculture, CARDI launched
in 1998, an initiative called PROCICARIBE, which is a system of networks to deal with themes
like pest management, informational systems or commodities such as fruits and small ruminants.
Through this system of about ten networks, CARDI facilitates linkages between member states
and between third states.
Action~ and resources required
Financial resources are needed to put the plan together. The technical resources can be sourced
in the Region.
CARDI needs more financial support in order to further develop the
PROCICARJBE networks.
Objective 3: Facilitation of cooperation in training
Very little has done on a structured and sustained basis apart from what The University of the
West Indies does. However, there are areas (on an ad hoc basis) in which Member States cooperate, for example:
•
The Maritime Institute of Jamaica trains people from across the Region
•
CARICAD runs training programs for · public sector personnel from across the
community
•
The CARICOM Secretariat also arranges training programs for representatives of
Member States in areas such as the harmonization of Customs procedures and the
conducting of cost-benefit analyses as it relates to the CSME
•
CARDI has been involved in training in the Region from the farmer level up.
Researchers, extension officers, farmers and CARDI staff are trained in areas including:
research technology, production technology, information technology, and natural
resource management. CARDI facilitates long term and short term training, and
257
•
UN Agencies arrange training programs for Member States in areas such as disaster
preparedness and assessing the impact of disasters.
Actions and resources required
A more structured (less ad hoc) approach to training outside of the University needs to be
developed. This could be in the form of a database of all training courses taking place across the
Region, which are open to participants from other Member States. A mechanism to promote
these courses would also be necessary. The work that COHSOD is doing should assist in dealing
with issues such as accreditation and equivalencies.
CARDI requires more funding to facilitate more training.
Objective 4: Facilitation of cooperation in the exchange of scientific and technical
information among competent institutions
There is scope for R&D activities taking place in the University and other institutions to be
shared more widely amongst not only those in the specific field or amongst academics but to the
general public or to other institutions.
The University advertises (in the media) the main
activities taking place in terms of presenters coming in to share R&D findings but a more
structured approach is · required to maximize the benefits.
CAROi's initiatives with
PROCICARIBE were mentioned above.
Actions and resources required
Financial assistance is required to develop a regional database of institutions, professionals and
practitioners in the various disciplines. Information technology can be used to inform
participants as well as seek their opinions on R&D issues.
258
Objective 5: Facilitation of cooperation in the free movement of researchers in the
community
Until recently, movement of researchers was not a straightforward issue because of the
requirement of work permits for individuals to operate in various Member States. Researchers
from UWI do move between Member States to carry out work but given the low level of funding
this tends to be on ad hoc projects.
Actions and resources required
The scope of this objective needs to be clearly defined and then funding will be required to
implement it.
Objective 6: Facilitation of cooperation amongst private sector enterprises to integrate the
results of R&D in the production process
Very little has been done in this area. Funding is required to get private sector enterprises more
involved in R&D. The recent initiative in Barbados to set up an Innovative Fund to support
ideas of small and micro entrepreneurs is a positive step. Trinidad & Tobago is also planning to
set up a science & technology park to facilitate private sector cooperation.
Actions and resources required
There is a need for more meetings to be held between institutions that are involved in R&D and
the private sector so that the needs of both types of organizations can be shared. There are many
cases where university researchers could use private sector case studies as the basis of research
projects.
Financial resources are required to clearly define the scope of this objective and to develop and
implement a plan to achieve it.
259
Objective 7: Develop and implement technological policies and strategies, having due
regard for the importance of technology management and protection of intellectual
property rights
The whole area of intellectual property is relatively new to the Region. The University of the
West Indies has recently started offering courses in IPR. Some Member States have passed
legislation in this area. There are private sector lawyers in Jamaica now specialized in IPR.
However, this objective needs to be developed and implemented given the implications for WTO
compliance.
Actions and resources required
Funding and technical resources are required to clearly define, develop and implement this
objective.
Objective 8: Facilitate access by Community nationals to technological and research
facilities of Member States
To the extent that Member States have technological and research facilities, there seems to be
little done to facilitate regional access.
A database of regional R&D facilities (such as
laboratories) needs to be developed and their areas of specialization identified. This information
should be made available through a well promoted website.
Actions and resources required
Funding and technical resources are required to develop the inventory of research facilities and
to set up and promote the website.
Objective 9: Promote the development of technology extension services
CARDI is involved in this activity through training and collaboration with extension officers in
regional territories. For example, in Jamaica, CARDI liaises closely with agencies such as the
260
Regional Agricultural Development Authority (RADA) and Coffee Board.
CARDI's
involvement needs to be deepened and broadened across the Region.
Actions and resources required
Financial assistance is required to strengthen CARDI and to sharpen its focus in this type of
activity. This is a better approach than setting up a new institution to carry out this function.
Objective 10: Promote and encourage R&D to achieve increased agricultural production
and productivity, bearing in mind the need to protect the environment, and the
independence and needs of the farming community
This is considered to be foremost in CARDI's agenda and most of its activities are geared
towards this end. Many R&D and training activities are undertaken across the Region in the
areas of pest management, natural resources, plant breeding and livestock. However, CARDI is
limited by budget as well as what Member States deem to be priorities. CARDI simply does not
have the resources to deal with all issues of all Member States as well as emerging issues.
Actions and resources required
Financial resources are required for CARDI to execute its program and to ·deal with all issues of
Member States. The funding of workshops may be necessary to re-examine the priorities of
CARDI and to get the full commitment of Member States to make their contributions on a timely
basis.
Objective 11: Facilitate the access to and use of new and appropriate technologies in the
agricultural sector
This is part of CARDl's mandate and has been discussed earlier. The region must determine the
full scope of CARD I's range of activities.
261
Actions and resources required
Resources are required to define the scope ofUWI and CARDI's work in this area and to support
the implementation.
Objective 12: Develop efficient systems for the generation and transfer of appropriate
technologies compatible with competitive and sustainable agricultural production
CARDI has improved its information systems to facilitate communication and information flow
across the Region and continues to facilitate R&D initiatives subject to its resource availability.
Actions and resources required
Financial resources may be required to further develop CARDI's systems and/or to promote
them.
Objective 13: Develop technological and institutional capabilities in the public and private
sectors compatible with competitive and sustainable agricultural production
Developing human resource capabilities is done through UWI and CARDI's training programs.
Technological development (as it relates to IT) is a priority area for UWI and CARDI. CARDI
tries to provide some leadership in the application of information technology. For example,
CARDI uses GIS to manage databases in analytical activities in pest management. CARDI has
arranged training.sessions in GIS. Though the GIS initiative is a pilot project, it has helped to
convince the USDA that Jamaica can monitor pest distribution and infestation levels.
Actions and resources required
A "gap analysis" is required to identify the technological and institutional needs of UWI,
CARDI, Agricultural Ministries and other entities involved in agriculture.
required to prioritize the sequence in which needs are addressed.
262
A plan is then
Objective 14: COTED shall encourage the private sector to play a vital role in the
development, adaptation and transfer of appropriate technologies in the agricultural sector
Very little has taken place in this area. Private sector involvement needs to be stimulated. Some
clarification is required of the exact role, approach and focus of COTED in encouraging the
private sector.
Actions and resources required
Funding and maybe technical assistance are required to develop and promote effective programs
to generate greater private sector involvement.
Objective 15: Encourage the private sector to play a vital role in the development of
producer associations as a basis for autonomous action and intra-regional transfer of
technologies and research findings
Very little has taken place in this area. Private sector involvement needs to be stimulated.
Actions and resources required
Funding and maybe technical assistance are required to develop and promote programs to
generate greater private sector involvement.
Objective 16: C~TED shall cooperate with Member States and competent organizations to
devise means of protecting, developing and commercializing local knowledge about the
value and use of the Region's biodiversity for the benefit of their populations, especially
their indigenous peoples
Little has been done by COTED in this area. A regional plan is needed which clearly defines the
role of COTED in the process. (See discussion above on some of the research being conducted
byUWI).
263
Actions and resources required
Financial and technical resources are required to develop and implement a comprehensive plan.
Conclusion
The above assessment has shown that some R&D activity is taking place in the University,
CARDI and on an ad hoc basis in other institutions, however there is need for:
1. Greater coordination of information, research activities and institutions
2. A greater awareness of the importance ofR&D as an input into the production process
3. Some of the objectives laid out for Community R&D need to be clarified and more
clearly focused so that a clear set of activities can be charted
4. Much more funding to support R&D activities
With respect to CARDI, a re-examination of its role and priorities may be required so that its
relevance is not questioned by Member States and its funding stream not threatened but
enhanced. Without the necessary funding, the critical depth and breadth of R&D activities will
not be forthcoming in the Region. The importance of R&D needs to be demonstrated and
promoted in the Region so that both the public and private sectors can recognize that there is a
positive rate of return on such activities.
264
TABLE IV-1 - COMMUNITY SECTORAL POLICIES - NEEDS AND PRIORITIES
SECTOR
REQUIREMENTS IDENTIFIED
Agricultural Policy
Funding to complete strategic
plans in the remaining 16
industries that have been
identified as having strong
potential.
•
Development of CARICOM
Agricultural Market
Intelligence Database
DELIVERY TOOLS
ASSISTANCE NEEDED
SUGGESTED LEVEL OF
PRIORITIES
Technical support for
studies
Financial support for
farmers
Training
Workshops for input and
awareness
Substantial assistance given
the wide range of industry
strategic plans required.
Estimated that at least
US$ Im will be required
Short to medium term
High Priority
•
•
•
•
IT support & training
Research
Workshops
Financial support for
system
Medium level technical
assistance is required given
the nature of the activity
Medium term
Medium to high priority
Strengthening and
coordinating activities of
(national level) agricultural
institutions across the Region
•
•
•
Training
Workshops
Research
Medium level of technical
assistance because there are
many of them already up and
running
Medium term
Medium to high priority
A strategic plan for measures
to enhance food safety and
food security
•
•
Research
Workshops
Training
Financial support
Medium level of technical
assistance
Longer term
High priority
•
•
•
•
•
265
SECTOR
REQUIREMENTS IDENTIFIED
Industrial Policy
Identification and selection of
key industries
DELIVERY TOOLS
•
•
AsSISTANCE NEEDED
SUGGESTED LEVEL OF
PRIORITIES
Technical support for
research Training
Workshops for input and
awareness
Substantial assistance given
the range of industries and
linkages that need to be
investigated and strategic
plans required
Medium to long term
High priority given that this
represents the core of
regional integration
Restructuring of the Regional
Business Environment and
Benchmarking successful
regional and international
businesses
•
Research
Workshops
Medium level technical
assistance is required given
the nature of the activity
Longterm
Medium to high priority
Development of Regional
Standards, Protection of the
Environment and Policy
Coordination
•
Research
Training
Workshops
Substantial level of technical
assistance is required because
the required activities are
multifaceted and have
regional and international
implications.
Medium term
High priority but can be
combined with activities in
Environmental Policy and
other sectors
•
•
•
266
SECTOR
REQUIREMENTS IDENTIFIED
Services Policy
Removal of restrictions to the
free movement of services,
the right of establishment and
the free movement of capital
Infrastructural and support
services development
..
Selection and development of
key areas of the service sector
DELIVERY TOOLS
AsSISTANCE NEEDED
•
Technical support for
amending legislation
Financial support
Medium level assistance
given the range of legislation
to be amended and the
language and legal system
barriers
Short term
High priority given that it
creates the environment
necessary for regional
integration
•
•
•
•
•
Research
Workshops
IT support
Financial support
Training
Medium to substantial
assistance is required given
range of activities
Long term
High priority given the
importance of services in the
Region
•
•
Research
Financial support
Workshops
Training
Substantial level of assistance
is required because of the
wide range of service
activities
Short to Medium term
High priority because this is
at the core of what the
regional integration
movement is all about
•
•
•
267
SUGGESTED LEVEL OF
PRIORITIES
f
SECTOR
REQUIREMENTS IDENTIFIED
Air Transportation Policy
Institutional Strengthening of
the Regional Air Safety
Oversight System (RASOS)
DELIVERY TOOLS
•
•
•
•
•
AsSISTANCE NEEDED
SUGGESTED LEVEL OF
PRIORITIES
Personnel
Financial support
Training
IT support
Workshops
Substantial assistance given
the wide role expected from
RASOS in safety and
monitoring and ensuring
international compliance
Short to medium term
High priority
Research
Training
Workshops
Financial support
Substantial assistance is
required given the range of
activities that are to be
performed
Short to medium term
Medium to high priority
Support for legislative &
policy development and
compliance with international
agreements
•
•
Training needs assessment,
training and cooperation
among airlines
•
Training
Workshops
Research
Medium level of technical
assistance
Medium to longer term
Medium to high priority
Promotion of investment
opportunities
•
Promotion
Workshops
Research
Medium to substantial level
of assistance. The reality is
that the rate of return is
unlikely to be very high
Longer term
Medium priority
•
•
•
•
•
•
268
SECTOR
.REQUIREMENTS IDENTIFIED
Maritime Transportation
Policy
Development of the shipping
industry
•
•
•
Workshops
Research
Financial support
Substantial level of assistance
given the number of ports
across the Region
Longer term
Medium priority
Cooperation amongst
Maritime Administrations in
Member States
•
•
•
•
Workshops
Research
Financial support
IT support
Medium level of assistance
especially as it relates to
achieving compliance with
international Conventions
Medium to longer term
Medium priority
Maritime Safety and .
Protecting the Caribbean Sea
•
•
Workshops
Research
Financial support
Public awareness
Substantial level of assistance
given the breadth of the task,
the level of coordination
required and the expensive
equipment and facilities
required
DELIVERY TOOLS
•
•
269
AsSISTANCE NEEDED
.
SUGGESTED LEVEL OF
PRIORITIES
.
Medium to longer term
High priority ( can be
combined with activities
under Environmental Policy)
SECTOR
REQUIREMENTS IDENTIFIED
Environmental Protection
Policy
Design oflntegrated
Environmental Management
Plan with detailed activities,
time frame and costing
•
'Technical resources
Financial support
Low level assistance given
the fact that much of the plan
will involve pulling together
work that is already done
Short term
High priority given the
importance of the
environment to the Region
and that this should be the
frrst step in the process
Environmental protection
promotional efforts
•
•
•
•
Workshops
Media production
Media advertising
Financial support
Substantial assistance given
the importance of the subject
matter and the cost of media
and other promotions
Medium term
High priority given the
importance of the
environment to the Region
•
•
•
•
•
Research
Workshops
I'T support
Financial support
'Training
Medium to substantial
assistance is required given
range of activities
Short to Medium term
High Priority for some
activities such as the Baseline
Study
•
'Technical support
Research
Financial support
Workshops
'Training
Substantial level of assistance
is required if the receptacles
for protecting the Caribbean
Seas are included, otherwise
it will be a ineqium level of
assistance
Short to Medium term
High Priority for some
activities such as training of
customs officers and
magistrates and development
of legislation
Environmental Research and
Development
Legislation & standards
development, training and
institutional strengthening
DELIVERY TOOLS
•
•
•
•
•
270
AsSIST ANCE NEEDED
.
SUGGESTED LEVEL OF
PRIORITIES
DELIVERY TOOLS
AsSISTANCE NEEDED
SUGGESTED LEVEL OF
PRIORITIES
SECTOR
REQUIREMENTS IDENTIFIED
Tourism Policy
Support for the
implementation of the
Caribbean Tourism Strat~gic
Plan with emphasis on the
Fund for sustainable tourism
•
•
Advocacy
Financial support
Medium level assistance
given the fact that the Plan
has already been designed
Short term
High priority given the
importance of tourism to the
Region
Institutional strengthening of
The Caribbean Tourism
Human Resource Council
(CTHRC), the CHA and
CTO
•
•
Medium level of ongoing
assistance
Medium term
Medium priority
•
Training
Personnel
Financial Support
Development of low cost
marketing/promotional
strategies for regional tourism
•
•
•
•
•
Training
Research
Workshops
IT support
Financial support
Low to medium level of
assistance is required but
regional training is needed to
find cheaper methods of
promoting tourism than
international media
advertisers
Short to Medium term
High priority for some
activities such as the Baseline
Study
271
SECTOR
REQUIREMENTS IDENTIFIED
Research &Development
Policy
Promote, reward, train and
encourage the involvement of
the private sector in R&D for
the development of new
products and generation of
increased productivity
•
Workshops
Training
Financial support/setting
up of funds
Substantial assistance given
the fact that funds need to be
set up and training delivered
across Member States
Medium to long term
High priority given to the
importance to increased
productivity
Develop information systems
to support global, regional
and national R&D and '
provide access and linkages
between research institutions,
Governments, private
businesses and individuals in
all economic sectors across
the Region
•
•
IT support
Training
Workshops
Financial support
Medium to substantial level
of assistance
Medium to long term
High priority given the
importance to increased
productivity
Facilitation ofR&D amongst
Member States that
maximizes the use of the
Region's biodiversity,
abundant resources and other
natural advantages
•
•
Training
Research
Workshops
Financial support
Substantial assistance is
required but extended over a
long period of time
Long term
Medium priority given that
some activities are already
taking place in this area
Identification of sources of
funding and the provision of
assistance and training in
tapping these sources by
UWI, CARDI and other
regional research institutions
and researchers
•
Training
Research
Workshops
IT support
Financial support
Medium level of assistance is
required
Short to Medium term
High priority because funding
is required to stimulate R&D
and increase the Region's
spending on R&D in
proportion to developed
countries
DELIVERY TOOLS
•
•
•
•
•
•
•
•
•
•
'Y7'l
AsSISTANCE NEEDED
SUGGESTED LEVEL OF
PRIORITIES
(H)
INFORMATION COMMUNICATION TECHNOLOGY POLICY
In a Region comprising mainly island states, information and Communication Technology (ICT)
is probably the single most important facilitator of integration in this day and age. This fact has
been clearly recognized by the Heads of Government of CARICOM who mandated the
CARICOM Secretariat to prepare, by a participatory process, a CARICOM ICT Strategy. The
focus of the strategy would be on ICT as an instrument for strengthened connectivity to foster
greater prosperity and social transformation between and among member states, as well as the
rest of the world. 43
The following discussion looks at the steps that have been taken and the role that the CARICOM
Secretariat has been playing in the development of regional strategies on ICT.
The main
initiatives that need to be taken are outlined and prioritized in terms of requirements for technical
and financial assistance.
CARICOM's Policy Approach to ICT
It was decided that in keeping with the hemispheric and global approaches to ICT development
..
and agenda for connectivity, CARICOM's policy approach should rest on three primary pillars:
Infrastructure
Utilization
Content ·
Three basic success measures have been outlined, namely, that the agenda must be:
1. Designed and implemented with an active participation of civil society including the
private sector
2. Based on principles of equity, universality and affordability
43
The decisions of the Heads of CARI COM are outlined in a document produced by the CARICOM Secretariat
"Towards CARICOM Connectivity: Agenda 2003 & Platform for Action."
273
3. Geared to stimulate the production and availability of relevant content in critical areas
addressing the fundamental needs of the citizens of the Community and ultimately of the
Americas.
In February 2003, the CARICOM Ministers in charge of ICT met and considered the proposed
ICT strategic approach in CARICOM !CT/Connectivity Agenda 2003, which was approved by
the Heads and will be presented at the 24th Meeting of the Heads in July 2003. The strategic
approach should be put in full operation by 2005.
In February 2003, the CARICOM Ministers in charge of ICT also signed off on the Georgetown
Declaration on CARICOM ICT Development 2003, which is to guide policymaking within the
context of the Community. In setting up the Georgetown Declaration the team factored in the
technological revolution, globalization and the new liberalized global, hemispheric and regional
markets. There was also an awareness of the "digital divide," which takes into account the gap
between states able to exploit opportunities in the use of digital technologies and those that are
not able to do so. The Declaration notes the new employment, cultural development and income
generating opportunities of a vibrant ICT sub-sector. In the Declaration, there is an agreement
amongst Member States to:
Adopt a coordinated approach to conceptualization and development of ICT policies, and
development of structural, legal and regulatory frameworks, to stimulate and promote
broader access to and use of ICT and the transfer of technology in the Region
Establish a specialized Group responsible for ICT within the CARICOM W_o rking Gr<mp .
on Services, under the COTED
Provide support to the Working Group to enable it to fulfill its mandate, especially as it
relates to the development, adoption and maintenance of global standards; regulations
and the facilitation of development of efficiencies of micro, small and medium sized
enterprises
Have the ICT specialized Group report to and advise the COTED and the Heads on the
facilitation of training, research and technological transfer supported by the CARICOM
Secretariat
274
Have the JCT specialized Group collaborate with international agencies and Regional
bodies to ensure the development and maintenance of a program to support the
CARICOM JCT/Connectivity Agenda, and adherence to the principles of universal
access.
The initiatives mentioned above clearly show a regional commitment to the JCT sub-sector,
which was not captured in detail in the Revised Treaty. The Revised Treaty does make mention
of the JCT sub-sector in Chapter 3 Article 4 where it states that "In order to facilitate the
exercise of the rights (Establishment, services, capital and movement of community nationals)
provided for in this Chapter, COTED and COFAP shall, subject to the approval of the
Conference, adopt appropriate measures for:
(a) The establishment of market intelligence and information. systems in the
Community; and
(b) The establishment of efficient communication services."
Regional policy makers recognized that a vibrant, efficient and well-regulated regional JCT subsector is required to support most of the policies laid out in Chapters 3 and 4 of the Revised
Treaty. These policies relate to:
Harmonized legal and administrative requirements for the operation of partnerships,
companies, or other entities;
Abolition of exchange controls m the Community, and free convertibility of the
currencies of the Member States; .
The establishment of an integrated capital market in the Community;
Convergence of macro-economic performance and policies through the co-ordination or
harmonization of monetary and fiscal policies, including, in particular, policies relating to
interest rates, exchange rates, tax structures and national budgetary deficits;
The establishment of economical and efficient land, sea and air transport services
throughout the Community
Community Industrial Policy
SME Development
Service Sector Development
275
Sustainable Tourism Development
Agricultural, Natural Resources, Fisheries and Forestry Policy
HRD and R&D Policy
Environmental Protection
Protection of Intellectual Property
Standards and Technical Regulation
Community Investment Policy
Legal Infrastructure
Financial Services
Given this impressive list of policy areas that are to be supported by ICT development, the
importance of a robu~t regional ICT strategy is clear.
ICT Development in CARI COM: Areas of need and initiatives taken to date
The following discussion outlines the set of activities that have been identified as important
elements of the Platform of Action necessary for the development of a vibrant ICT sub-sector in
the Region.
1. Development of national strategies
Each Member State should formulate a vision statement of their own agendas with realistic
objectives, goals and deadlines.
The CA.RICOM Platform for Action document provides a
general framework and outlines a three-step process for CARICOM countries to develop and
implement their connectivity strategy.
The three steps are a) Assessment & planning, b)
Implementation, and c) Evaluation. In the strategy, an infrastructure plan will be required to deal
with telecommunications, information technologies and human resources. Supporting policies
and legislation will also be required.
The infrastructure plan should deal with innovative means of extending access to the entire
society, including schools, .government offices, post offices, dedicated telecenters, etc.
276
Actions taken to date
In terms of the development of national strategies, the larger Member States of CARICOM have
national strategies in place, however this is not the case for all smaller Member states. The
OECS has adopted a sub-regional approach, however funding is the main challenge to the rolling
out of a completed strategy.
The OECS is seeking funding to complete the work.
The
CARICOM network will be strengthened once the OECS has completed its strategy.
It was recommended that National Coordination Offices should be established in each Member
State to facilitate the development, implementation and continuity of national strategies/agenda.
ICT has typically been dealt with by Member States in a fragmented way with a sectoral
approach rather than an integrated global approach. Most Member States have set up an office to
coordinate ICT strategies even though they may not be conspicuous in that they may fall under
different Ministries. · However, in all Member States, someone can be identified that has
responsibility for coordination. Jamaica, Trinidad & Tobago, Barbados, Guyana, Grenada, St.
Lucia, St. Kitts & Nevis have all established National Coordination Offices.
working on a sub-regional office.
The OECS is
The Secretariat has outlined the main design and
responsibilities for national coordination offices, the major issue is the extent to which financial
and technical resources are available in Member States to render these offices effective. From a
regional perspective this is a priority area in order to deal with cross cutting issues, especially as
it relates to providing consumers with an effective voice.
2. Education/sensitization programs on the importance and benefits of ICT
During implementation and after CARICOM Member States have implemented their
Connectivity/ICT strategies, education programs should be put in place to build support and
increase demand for the full range of services.
At the private sector level, the education
programs should provide an effective framework that builds on trust in the digital marketplace,
clarifies rules, and encourages the adoption of e-Commerce, especially by SMEs. For the public
sector, there should be an orientation to create a culture of Government as a model user and
develop a strategy that focuses on providing Government services on-line e.g. paying taxes online, etc.
277
Actions taken to date
Member States have been carrying out public education activities but mainly in an ad hoc way so
there is no good measure of the effectiveness of their efforts. The OECS led its program with
education reform. Barbados took initiatives under its International Business and the EduTech
Program. The Cayman Islands carried out activities in International Banking and Finance and
has an ICT Agency that regulates !CT-related activities. Trinidad & Tobago has also set up an
ICT Regulation Authority.
· 3. RegionalICT Policy Formulation and Facilitation
CIDA funded the Protocol II ICT Trade Policy Formulation and Facilitation Project as part of the
development of trade in services. This has been advanced under the Japan/ UNDP program
where the focus is the development of ICT policies and strategies so that the impact of JCT can
be measured and harmonized across the Region. The CARICOM Ministers in charge of ICT
have asked the Secretariat to continue work in this area. Funding is being sought for workshops
and training programs to look at ICT and its relationship with trade in goods and services. It has
been recognized that issues will become more complex and overlapping as time goes on so more
expertise and capacity will be required in the region - this is a priority.
Actions taken to date
The Region is at the early stage of a learning phase in terms of ICT policies. Apart from setting
up national coordinating offices, certain positive policy initiatives have been taken such as the
removal of taxes on computers and (some) computer-related equipment across the Region.
However, more work has to be carried out to determine what computer related products should
be tax exempt as well as the impact on Government revenue.
4. e-Commerce Development and Implementation plans for Region
At the Regional level, work has started for the elaboration of a Protocol on e-Commerce. This is
in recognition of the fact that Member States accept the fact that e-Commerce is a lucrative and
278
essential means of augmenting and transforming their service-based economies. The objective is
"to employ strategies to leverage the available technologies to create the basic info-structure for
an intelligent CSME, appropriately integrated and connected in systems and processes for its
own purposes. "44
E-commerce has been clearly identified as a way that regional SMEs can successfully
· market/sell their products as well as a way to enhance regional trading, bi-lateral trading and
global trading opportunities.
In 2002, the UWI Center for International Services was engaged by the CARICOM Secretariat to
convene a meeting of experts to develop strategies and .·produce guidelines for e-commerce :;.
development in the Region. The group acknowledged that yarious Member States would adopt
different models to develop and customize their national strategies for e-commerce development
based on their own realities. The group identified that some of the main issues to deal with in
developing and implementing a regional e-Commerce plan should include:
Settlement issues - this includes legislation issues and the involvement of the local
banking sector.
Capacity building and learning systems - this includes a universal access policy and joint
regi_onal training and education projects for private sector, public sector and training
institutions.
Role of Government - this includes appropriate trade and investment policies,
appropriate infrastructure,
areas.
.
.and preservation of lucrative business
'
.
Governments
should also play a leadership role by providing e-government services.
Role of private ·sector and other stakeholders - private sector should play a leadership
role and should work with public sector.
Consumer interests - consumer education, safeguard of consumer interests, and education
of local suppliers in international standards. It was recommended that a comprehensive
code for consumer protection in the Caribbean should be developed.
44
Taken from a Preliminary Report entitled "Towards Draft Guidelines for Electronic Commerce in the Caribbean"
prepared by The UWI Centre for International Services (in conjunction with the CARICOM Secretariat).
279
Trade and investment arrangements - with attention focused on establishing a regional
certification authority, the implications of the WTO and the WIPO process and treaties.
Statistical development - the implementation of a common statistical framework to
measure e-commerce levels and scope in the Region.
Legal and regulatory framework - applicable law and jurisdiction, consumer contracts
and liability, dispute resolution, dealing with cyber crimes, etc.
Completion of a protocol on e-Commerce.
5. Development of legal and regulatory framework for connectivity and e-Commerce in
.
Member States
As outlined in the "Agenda 2003 ,& Platform for Action" document, the national regulatory
framework plays .a key role in supporting the Agenda for Connectivity arid should be based
on the following principles:
Equitable, universal and affordable access to information
Transparency
Technological neutrality
A competitive ICT industry
Effective civil society participation in the development of the regulatory framework
Information protection mechanisms
Training in the use ofICT services
,
~·
Protection of the new information society's intellectual property
Coordination of legislation governing information and communication
Regional objectives as defined in the revised Treaty of Chaguaramas
6. Training programs in various aspects of ICT for civil society and the public sector
The CARICOM Secretariat has identified training needs and funding will be required to develop
programs and impart training especially in the following areas
Trade and investment policy - appropriate duties and incentives
Human and Social Development - governance and poverty reduction
Legal and regulatory environment
280
7. Financial and macroeconomic policies
The financing of ICT development in Member States must come from the private and the public
sectors.
Macroeconomic policies should b~ put in place to support and encourage the
development of the sector (most regional countries have removed taxes on computer related
imports). ICT Venture Funds could be established to encourage investment in innovative ICT
initiatives. Donor agencies could play a critical role in this area.
8. CARJCOM Working Group on Connectivity
This group needs to be supported and funded so that it can -assist Member
States' Governments,
.
civil society and private sector in the development and implementation ofICT Plans as well as to
ensure as much communication and standardization (where possible) across the Region. The
CARJCOM Secretariat has dedicated part of it website to dealing with ICT issues so the more
support that is received the more information that can be disseminated to Member States.
9. Establishment of a Regional Coordinating Agency for Connectivity
The entity, with responsibility for coordinating the Agenda for Connectivity should direct its
activities so as to optimize the technological, financial, human, and legal resources necessary to
execute all the associated projects. The Heads of Government agreed that the coordinating
activities should fall under the CARJCOM Secretariat.
The specific activities of the CARJCOM Secretariat as coordinator are laid out in Annex 8 of
CARJCOM ICT/ Connectivity Agenda 2003. These activities include:
Provision of support to national, sub regional and regional ICT efforts to strengthen
connectivity and minimize digital divide
Work with relevant indigenous institutions and agencies that are engaged in the various
strands of ICT Policy development in the Region to ensure viable positions in the area
and the roll out of implementation
281
Participate in regional and international activities on behalf of the Caribbean Community
Prepare submissions and report on major ICT developments impacting on the
Community to the Heads and the appropriate organs of CARICOM.
Work with other countries, regional and international institutions and agencies for
effective implementation of the regional policy on ICT.
Actions taken to date
The Secretariat has already been making strides in several of the above areas. Work has been
done on the international sphere with CITIL and Alliance for the Information Society (@lis). At
. the regional level work has been done with Member States in policy development. Documents
have been prepared for COTED and COHSOD meetings. Also significant collaboration has
taken place with regional institutions such as CARICAD, CBU, CANA, UWI, and CD ERA.
It would be impossible and impractical for the Secretariat to successfully implement the regional
ICT plan on its own: the capacity must be in place at the national level. The Secretariat's role
should, in addition to delivery of some technical assistance, be that of management and
coordination. In this regard, it has played a key role by leading the process of developing a
regional connectivity plan and platform for action. Member States will now be required to take
ownership and implement the plan.
To the extent that this has not taken place, lessons could also be learned from benchmarking
some of the initiatives taken by the EU in terms of ICT policy and strategies. ICT has been used
in the EU to share information amongst governments, the private sector and other civil society
groups.
The EU has also identified the Internet as a critical ingredient to foster trade and
commerce and economic growth. 45
45
Details can be obtained by visiting the Europe Online website - www.europa.eu.int
282
Priority Areas for Assistance in the Development of the ICT sub-sector in CARICOM
The above discussion has outlined the importance that the Region's leaders place on a welldeveloped ICT sub-sector in CARICOM. The discussion has shown that most Member States
have started initiatives to develop their ICT sub-sectors. In addition the CARICOM Secretariat
commissioned a study that conducted a high-level assessment and comparison of the
development of the ICT sub-sectors across Member States. This study showed that Member
States are at different stages of development in terms ifICT. 46
The CARICOM Secretariat, at the request of regional Heads of Government and Ministers in
charge of ICT has put in place the main components of a strategic plan for development of ICT
development in the Region. 47
This plan has been deve·loped based on consultations with
representatives from the public sector and civil society across CARICOM. The discussion in this
paper has reflected that the Region is at the early stages of development in terms of ICT
development, which means there are many areas in which assistance is needed both at the
national and regional levels.
Based on discussions with key persons across the Region, the following four areas have been
prioritized as critical for the implementation of the regional strategic plan and the development
of the ICT sub-sector. The four areas are:
1. The development of appropriate regional ICT policies - this involves the development of
regional policies adopted by Member States which revolve around a) the CSME trade and
services agenda; and b) Human and Social Development especially as it relates to issues
such as poverty alleviation, the Digital Divide and Governance.
2. The development of regional training and capacity building programs - this involves the
training of persons to understand and implement the policies that have been developed.
This is critical if the regional strategic plan is to be implemented and harmonized across
46
47
See the CARICOM Secretariat website www.caricom.org.
To be presented at the 24th Heads of Government meeting in July 2003.
283
Member States.
Training programs will have to be developed and the appropriate
persons selected and trained.
3. The development of a regional legal and regulatory framework - this involves the
development of an appropriate legal framework to facilitate equitable, universal and
affordable access to information; transparency; technological neutrality; a competitive
ICT industry; information protection mechanisms; protection of the new information
society's intellectual property; coordination of legislation governing the information and
communication sectors; and the achievement of regional objectives as defined in the
revised Treaty of Chaguaramas.
4. The development and implementation of an overarching regional sensitization program to
increase the awareness of public sector, private sector, consumers, and the rest of civil
society. This is vital if the use of ICT is to become a way of life and an effective tool for
citizens of CARJCOM - both in terms of fostering regional integration as well as
penetrating global markets.
284
TABLE IV-2-INFORMATION COMMUNICATION TECHNOLOGY POLICY -NEEDS AND PRIORITIES
ICT Policy Requirements
Needs Identified
Delivery Tools
..
Development of
appropriate regional ICT
policies consistent with the
CSME trading objectives
and the regional Human
and Social Development
objectives
• Educating policy makers and other
stakeholders across the Region in how to:
1. Conduct appropriate assessment, priority
setting and planning exercises
2. Carry out consultations with key
representatives of civil society
3. Develop action plans and policies with
respect to infrastructure, utilization and
content
4. Develop the roles of public and private
sectors and consumers
5. Determine financing needs
6. Set performance measures
The development of
regional training and
capacity building
programmes to facilitate
the implementation of the
regional ICT strategic plan
and harmonization of
national ICT policies
•
• Technical and -financial support
to conduct the research to
underpin the development of the
appropriate policies
• Financial support to hold
workshops and consultations
with all the key stakeholders
from across the Region
.
Development of harmonized regional
training courses
Selection and strengthening of
institutions to carry out on-going training
Selection of appropriate implementation
teams
Development of regional data
warehousing & mining capacity
•
•
Training of implementers in the use of
• · Workshops, seminars and
•
performance targets
Training of implementers in policies and
strategies of main trading partners
•
•
•
•
Financial and technical
assistance to develop courses
for policy makers,
implementers and those playing
key roles in the process.
Financial and technical
assistance to strengthen
institutions
courses for policy makers,
implementers and other groups
Level of
assistance
Needed
Medium level of
resources are
required for the
Secretariat to
perform these
support functions
Medium to high
level of
assistance
required for the
Secretariat to
provide the
necessary
support
Priority
Ranking
High priority
with short term
impact
High priority
with short term
impact
ICT Policy Requirements
Needs Identified
The development of a
harmonized legal and
regulatory framework that
can be incorporated into
national legislation and
used to guide the
development of the ICT
sub-sector in accordance
with global standards and
development objectives
•
The development and
implementation of a
regional sensitization
programme for public
sector, private sector and
consumers in general
Delivery Tools
Educating of regional legal fraternity of
the ICT objectives, proposed policies
and the need to ensure a competitive
environment
Selection of an appropriate set of legal
persons to draft regional legislation
Benchmarking and adapting legal
framework used in other countries but
mindful of cyber crimes, etc
Ensuring compatibility of regional
legislative framework with international
requirements and legislation of main
trading partners
•
•
The development of a regional
marketing campaign for all target groups
in the society
•
•
Special education programmes for key
public and private sector persons
•
•
•
•
•
•
•
286
Financial and technical support
for legal personnel
Workshops, seminars and
training sessions to train other
members of the regional legal
fraternity, policy makers and
key stakeholders in the
application of the laws
Financial and technical support
to assist Member States to
incorporate new legislation into
their national laws
Financial & technical support to
develop/execute a marketing
campaign
Workshops to educate the
public sector on the, policies and
legal framework
Funding for the airing of a
standardized regional
promotional campaign to
inform the private sector and
consumers of the policies,
legislation and the benefits and
opportunities
Level of
assistance
Needed
High level of
assistance
needed
High priority
with short term
impact
High level of
assistance
required
High priority
with short term
impact
Priority
Ranking
(I)
HUMAN RESOURCE DEVELOPMENT POLICY
Introduction
CARICOM over the years has embarked on or supported a number of activities that have
contributed to the development of Human Resources in the Region. They include:
•
The identification of HRD priorities by the Secretariat's now defunct Division of
Functional Cooperation
•
The development of regional manpower plans
•
The preparation of a Directory of regional HRD personnel
•
A regional_response on the role of higher education in the Caribbean
•
The inclusion of Article 63 in the Revised Treaty, which deals with Human Resource
Development
The Conference of Heads of Government, at its 18th meeting in July 1997, emphasized the
importance of HRD to economic development and recognized that international and regional
· imperatives demanded a rethinking of the way in which Human Resource Development was
conceptualized, developed and imple:mented. A new strategy was developed to deal with these
.
imperatives, . which have since been known as the "1997 Human Resource Development
Strategy." The following two documents were also endorsed:
•
Creative and Productive Citizens for the 21st Century
•
Science and Technology in the Context of the Single market and Economy
The 1997 HRD Strategy from the Heads embraced the c,verall principles ofHRD but the specific
mandates focused on , a narrow band of operation activities in the traditional core areas . of
education and training. This Strategy consists the following elements:
•
Access to and participation in Education and Training
•
Quality Issues in Primary and Secondary Education
287
•
Teacher Education
•
Certification and Accreditation Issues
•
Curriculum Reform
•
Use of Technology to provide access to education
•
Tourism Training
The assumption is that the Strategy was developed as a consequence of the demands of a
knowledge society, globalization as well as an understanding of the measures laid out in Article
63 of the Revised Treaty.
i
i
\
I\.
The European Union on Education and Training ._'.
It is worth ,noting that .the EU has a 10-year mission to become the most competitive and
dynamic knowledge-based economy in the world, capable of sustained economic growth with
more and better jobs and greater social cohesion. Life Long learning was seen as one of the core
elements. .of; this strategy and has become the guiding principle.for the development ofeducation
and,traitiw,g policy in the EU.
Lifo long learning ·encompasses learning for personal, civic, and sociatprirposes as well as for
emplo~ent-related purposes. It takes place in .a variety of environments in and outside the
..
~
formal educftion
and training systems. In ·the implementation of the Free Movement of Skills,
,'{
CARICOM can look at two of the initiatives that the European Union has initiated:
•
The "Ell!qpass-'.fraipjng ~ a pers,cmal document in which training skills acquired 9-utside of
your home country can be registered.
•
The .:auropean CV - a common form.at for curriculum vitae across the Union. In addition,
the "European CV" is different ftc::>m most other CVs in that it emphasizes the importance
of non-formal and informal learning;
The elements in the HRD Strategy capture to. a large extent the measures in Article 63 of the
Revised Treaty even though the Revised Treaty's treatment was more general in nature. In this
paper the Consultants establish the following:
288
•
The extent to which there have been responses to the 1997 Vision and consequently the
Revised Treaty
•
The extent to which the responses have been successful (to establish if there are any
gaps)
•
The activities which are necessary to close these gaps
This next section of the paper will not only delineate the responses to the 1997 Strategy but will
show the links between the Mandates of the 1997 Conference and Parts 1 and 2 of Article 63 of
the Revised Treaty where the focus is mainly on HRD measures within the context of Education
and Training.
Mandate #1: 15% enrolment of the post-secondary age cohort in tertiary level education by
2005
This target of increasing tertiary enrolment to 15% by 2005 clearly signals the imperative of
achieving a knowledge workforce in the region.
This mandate can be linked to the HRD
Measure in the Revised Treaty, which speaks to "establishing and strengthening educational and
training institutions for formal and informal modes of delivery and alternative modes for distance
education."
In response to the need for increasing tertiary level enrolment, several member states have
embarked on programs directed by the CARlCOM Secretariat to reorganize and rationalize the
Community College system. One example is the amalgamation of several non-university tertiary
institutions in Trinidad & Tobago to form COSTATT - the College of Science, Technology and
Applied Arts of Trinidad and Tobago. The aim of this amalgamation is intended to systematize
provision at this level and allow for horizontal and vertical movement among these formerly ·
different institutions. There are other member states that are moving in the same direction, for
example, St. Lucia, Antigua, Dominica and Belize. In addition, several Community Colleges in
the Region, like the Ex-ed Community College in Jamaica, are moving towards upgrading their
programs to offer degree courses.
289
There have also been several changes in the structuring of the programs as well as the changes in
the syllabuses at the main Universities (UWI, UTECH, UG) with the introduction of the semester
system. There have also been changes in the mode of delivery of higher educational courses
toward degree programs via UWI and to a lesser extent the University of Guyana by distance
education teachings.
By creating opportunities for increased access, there have been increased
enrolment rates at both UWI and UG.
Statistics on full-time enrolment for non-university Tertiary Level Institutions in UWI campus
territories indicate increases in enrolment over the five-year period 1995-2000 ranging from
approximately 13-40%.
However, the World Bank Report 'Caribbean Education Strategy'
(2000) notes that although tertiary level enrolment is growip.g, the average is still relatively low
compared to the glo~al average in low and middle income countries. Only Barbados and the
Bahamas have so far achieved the 15% target set.
Mandate #2: Establishment of a single, coherent system of training and education with
clearly defined levels of knowledge and skills
CARICOM has embarked on the development of a model for a Regional Accreditation
Mechanism to be adopted at the regional level. The ability of this model to function properly is
dependent on the efficient operation of similar accreditation bodies at the national level. The
mechanism is expected to facilitate the promotion of quality assurance, program harmonization,
equivalency and articulation at the tertiary level, as well as the establishment of coI111l1:on
standards and measures for accreditation and for the mutual recognition of qualifications from
different institutions across the Region.
The CARICOM Secretariat has executed several projects aimed at providing technical assistance
(including the conducting of workshops) to member states for the establishment and
strengthening of national accreditation bodies. A functioning accreditation system is seen as
necessary, not only for promoting internal and external efficiency at the national level but is also
of critical importance for the free movement of persons in the Single Market and Economy.
290
Mandate #3: Universal quality secondary education targeted for the year 2005
In response to this mandate, Member States have been addressing increased access through the
conversion of some schools and the building of new ones. In Jamaica, there is the Reform of
Secondary Education (ROSE) program, which has seen the conversion of schools to new
Secondary schools.
The Secondary Reform Project in Guyana and the School Expansion
Program in Trinidad & Tobago are two other responses to this mandate.
This mandate can be linked to the measure in the Revised Treaty that speaks to "establishing and
strengthening educational and training institutions for formal and informal modes of delivery and
alternative modes for distance education."
The challenge in this response is the development of curricula suitable for the varying ability
range of students at this level and in particular, the certification of student competencies for the
large per~entage of students who do not write the CXC Secondary Education Certificate
examinations.
Mandate #4: Introduction of Programs for achieving appropriate levels of competence in
Spanish and other languages among secondary and post secondary graduates
This mandate is linked closely to the measure in the Revised Treaty that speaks to the
"promotion of multi-lingual skills at all levels for general education, with particular emphasis on
the needs of the services sector."
At the regional level, the CARICOM Secretariat has conducted projects aimed at the training of
trainers in Spanish. Educators have been trained in Mexico and Cuba as part of the Regional
Action Plan developed for Foreign Language training.
There has been increased emphasis on the promotion of foreign language teaching at the
secondary level and a few countries have in recent years, introduced, on a pilot basis, the
teaching of a foreign language at the primary level.
291
One teacher educator from each of the twelve Member states has been trained in the use of new
technologies for Language Teaching. Each member state was provided with US$4000 for the
purchase of related equipment.
Mandate #5: The identification of Desirable Learning Outcomes in Language and
Mathematics at the Primary level
This mandate has been addressed through a project executed by the CARICOM Secretariat and the
result has been Learning Outcomes in Language and Mathematics. Some Member States have
already incorporated these Outcomes into their curricula.
The Secretariat has also worked on developing, with funding from the Organization of American
States (OAS), assess~ent instruments for use with the Outcomes. These regionally pre-tested
instruments give credibility to the Learning Outcomes and are now available to Member States.
Mandate #6: Target date set for the full enrolment of the pre-primary age cohort in early
childhood education and development programs
In many Member States, there has been a significant increase in the enrolment rates at the early
childhood education level. Guyana is close to universal state provision and Barbados at 84%. In
several countries, for example, Belize, provision is still largely through the private sector. There are
concerns related to the training of teachers for this level, the quality of the teachers and the
accountability procedures especially in those countries where there is more private than state
provision.
Mandate #7: Emphasis must be placed on the development of computer skills at an early age
The Secretariat has worked on the development of a technology education curriculum and units of
instruction for the primary and lower secondary levels.
This mandate is linked directly to the measure in the Revised Treaty that speaks to the
"development of industry oriented curricula designed to improve the competitiveness of regional
292
institutions."
Several member states are engaged in projects addressing the introduction of the new technologies
both for teaching and administrative purposes. The Barbados EDUTECH program provides a
useful model for others to adopt.
Very recently, Jamaica has been the recipient of a mobile computer lab for Basic school students (35 age group) from PACE University in the US. Dubbed "tech de bus," the lab travels to different
schools to give the students exposure to computers at a very early age.
Mandate #8: Ensure that Learning Outcomes are achieved through regular in-service teacher
education workshops and careful monitoring of progress
The Secretariat has worked on the development of assessment instruments for measurement of
student performance with regard to the Outcomes.
A survey of programs in the region was undertaken with funding from UNESCO and follow up
working group meeting held to decide on priorities for action.
Mandate #9: The Setting up of a Tourism Human Resource Council
The Caribbean Tourism Human Resource Council was set up in 1998 and has since spearheaded the
production of learning materials for use by students and teachers and has also conducted a
Caribbean Tourism Educators' Forum.
OTHER CARICOM INITIATIVES:
With respect to Article 63 of the Revised Treaty, the Secretariat has also been working
assiduously on other regional programs. The following are examples of some of the projects in
the Secretariat's work program.
293
•
With respect to industry-oriented curricula, the CARICOM Secretariat works closely
with National Training Agencies in the area of Technical and Vocational Education and
Training (TVET) with regard to orientation of their systems to adopt competency-based
approaches and in collaboration with other agencies for example, GTZ which provides
training for TVET professionals in a range of related areas.
•
Another important aspect of the work in this area centers on the harmonization of
occupational standards used to guide and assess training in technical subjects. In late
2002, COHSOD approved over 60 standards in 16 occupational groupings as regional
standards.
These initiatives are aimed at the harmonization of vocational qualifications and the eventual
establishment of regi9nal vocational qualifications which will facilitate the movement of skills in
the Region.
This section of the paper will look at other regional as well as national initiatives which have
taken place and which are in keeping with the Revised Treaty.
Other Regional Initiatives:
This section of the paper will look at other regional as well as national initiatives which have
taken place which are in keeping with the Revised Treaty and then it will move on to examine
the gaps in terms of actions which are still to be taken in order to achieve successes.
In addition to the forementioned regional initiatives, there are many other activities that have
been undertaken in the Region, which are not necessarily spare headed by the CARICOM
Secretariat, but by some of the regional institutions or organizations. The following discussion
will focus on some of these.
294
UWI
•
The University of the West Indies (UWI), as a matter of course, has sought to link its
strategic plan with CARICOM's strategic policy.
•
UWI is integrally involved in the refinement of the strategy for Human and Social
development that has been adopted by the Council of Human and Social Development
(COHSOD).
•
UWI has been improving its Distance Education programs by increasing the number of
Centers across the Region. This has helped significantly to increase accessibility to the
University.
•
.
UWI has re-oriented its curriculum to take into account the need to assist m the
development of human resources required to enable the region to respond to the
fundamental challenges it faced.
•
At the Mona School of Business, courses are designed with not only the CSME in mind
but the context in which the CSME falls in the international arena. Entrepreneurship is
being stressed.
In fact the University has just launched a special entrepreneurship
competition - The Vincent Ho-Sang Award - which involves a submission of a bankable
and implementable business plan.
•
In recognition of its role in human capital formation in the region, UWI has designed its
curricula as well as defined its intake policy with that in mind
OECS
The OECS has developed an overall strategic framework for educational reform for the first
decade of the twenty first century. The broad objective is to continue to mobilize people in the
OECS to progress by constructing their future and that of their sub-Region in terms that are
meaningful, satisfying to them in a world that is changing fundamentally. The objectives listed
below are the strategies taken from the OECS' Education Reform document and really show the
course that the OECS is charting for its member states. The extent to which these objectives are
295
in keeping with the measures in the Revised Treaty is indicative of the extent to which there is a
close relationship between the Revised Treaty and the Reform program.
The continuing reform of Education in the OECS seeks to:
•
Establish circumstances for inspiring noble visions of the Caribbean society and of the
"Ideal Caribbean Person" as described by the Human Resources Protocol from the 181h
meeting of the CARI COM Heads in Montego Bay in 1998.
•
Establish a common system of education in the sub-region in order to have:
More efficient deployment of talent and freer internal movement of such talent
The pooling and sharing of resources in effecting critical and important education
functions such as planning, research, curricu1um development and testing and
evaluation
High levels of sustainability of interventions designed to improve the delivery of
education including its quality.
The following are the main reform strategies which are set to bring about continuous reform in
the education system in the OECS:
1. To·accelerate and complete the harmonization of the schools' systems in the sub-region
by:
Synchronizing the education system of the OECS within the framework · of
CARICOM
Reviewing the program of teacher preparation m light of current trends and
challenges.
This includes ICT, Foreign Languages, Physical Education, Creative
Arts, Health and Family Life, Guidance & Counseling
Accelerating the standardization of the curricula for early childhood, primary and
secondary education within the OECS.
2. The OECS is also actively pursuing the objective of strengthening foreign language
teaching through cooperation with neighboring non-English speaking Caribbean and
296
Latin American countries.
3. Expansion of tertiary · education opportunities within the OECS by strengthening
institutions, the use of modules, computer assisted instruction, on-line learning, etc. At
the same time, the under-representation of females in Science and Technology and the
deprivation of rural residents require attention.
4. The integration of single-discipline colleges into larger multi-disciplinary institutions is
seen as a feasible measure to ensure the better utilization of manpower and scarce and
expensive resources.
National Initiatives
The following are some national initiatives that are currently being undertaken in some of the
Caribbean countries.
Jamaica
UTECH
The Technology Innovation Center (formerly the Entrepreneurial Center) is a business incubator
at the University of Technology, Jamaica, that provides support to start-up technology businesses
and also provides training, business, consultancy and information services to existing small and
micro enterprises, the University community, and institutional clients.
The Heart Trust/National Training Agency in Jamaica
The Heart Trust/National Training Agency in Jamaica is currently embarking on a myriad of
programs. Two programs stand out and could be replicated in the Region, these are:
•
The National Vocational Certification Program which sees the establishing and awarding
of certificates in 70 skill areas. The same program is currently being used in Barbados,
Trinidad & Tobago and St. Lucia.
297
•
Occupational Standards - these standards are set across a wide cross section of
occupations. This program is driven by the employers in the industry who get a chance
to make inputs in the programs as well as validate these standards before they are
implemented. In addition, these standards are also used by HEART/NTA to design the
respective curricula. Other CARICOM countries like Barbados and Trinidad and Tobago
have been using the standards.
The HEART/NTA is looking at expanding partnerships with Community Colleges in Jamaica,
UTECH and Professional Training Programs. It has also franchised aspects of it to the EXED
Community College and INFOSERV.
Trinidad & Tobago
COSTATT
The College of Science, Technology and Applied Arts of Trinidad and Tobago (COSTATT) is
the amalgamation of several pre-tertiary institutions there. The College is being established to
increase Trinidad & Tobago's competitiveness on the international business market.
NTA
The National Training Agency is the new umbrella agency for effecting reform in technical and
vocational education and training (TVET) in Trinidad & Tobago. Its role is to coordinate and
regulate technical and vocational education and training, promoting and facilitating a coherent
system of quality TVET.
This system is designed to satisfy the changing needs of industry as well as cater to the
aspirations of individuals in pursuit of their career goals and opportunities. The agency works in
close collaboration with the relevant partners in industry, the professions, education and training.
A new standardized qualification for technical and vocational education and training is currently
being developed and introduced by the National Training Agency, as part of the TVET reform.
Based on the competency standards set by industry experts, the qualification will be offered for
298
TVET courses at different levels. The new qualification framework will allow people at any
stage in their life to have access to training which is at the right level for them.
Agriculture
Article 63 of the Revised Treaty speaks to the Community adopting effective measures for the
development of human resources to satisfy the requirements for cadres of skilled agricultural
personnel at all levels in the Member States. Provision shall be made to:
Monitor and evaluate the demand for and appropriateness of agricultural education and
•
training
•
Establish training programs in the agricultural sector_
•
Develop effec_tive delivery of in-field training for farmers, foresters and fishers
•
Improve the facilities and strengthen the capabilities of regional training institutions and
national administrations in support of agricultural development.
The Revised Treaty also states that the Community shall collaborate with education and training
institutions and relevant regional and international organizations in developing harmonized
agricultural syllabuses, training materials and case studies in key areas such as farming, fisheries
and forestry utilizing distance education technology where appropriate.
CARDI, REPAHA, UWI, CASE (Jamaica) are to some extent responding to the HRD measures
as they relate to agriculture, as set out in the Revised Treaty.
It is felt that there is scope for greater emphasis to be placed on human resource development in
Agriculture, given its current state in the Region. The following are some of the critical
indicators with respect to the fall off of human resource development in agriculture in the
Region:
•
The merging of the faculty of Agriculture with the Faculty of Natural Sciences because of
the drop in emolment.
•
The fact that CASE in Jamaica has not been expanded
299
•
The lack of emphasis on agricultural training in the schools
•
The apparent disinterest in Agriculture by today's youth
•
The reduction of enrolment at REP AHA in Guyana
Conclusion
Since the outlining of the vision by the Conference in 1997, there have been significant changes
in the world as a consequence of globalization and trade liberalization. In addition, CARICOM
has been working assiduously on the realization of a CARlCOM Single Market and Economy
(CSME) . . The objectives of the Single Market an4 Economy alo_ng with eD).erging new
information technology, science and technology and knowledge-based development demand new
skill formations and consequently new approaches to education and training.
The following issues have been presented by the working Group on Human Resource
Development:
•
The context within which the Regional HRD Strategy is being implemented and further
elaborated
•
Identification of useful mo'dels/experiences/lessons learned from Community members
•
Identification of HRD issues and challenges to be considered within the framework
outlined in the Working Document
•
Indicative actions which might be taken at the national and regional levels to address the
identified challenges
•
Proposals with regard to the Futures Policy Group (FPG)/Institutions with a view to
recommending appropriate mechanisms for the further development of the Strategy
•
A program of work to address the reformulation and further implementation of the
Strategy
It has since been accepted that the scope of the HRD strategy needs to be broadened to take into
account the Social Development aspects. In fact, there is a suggestion that the HRD Strategy be
renamed "Human and Social Development."
300
Needs Assessment and Implementation Plan
The mandates set out by the HRD Strategy are ongoing. A fair amount of progress has been
made in the implementation of specific human resource and development mandates in the core
areas of education and training. Member States as well as UWI will need funding to continue the
implementation of some the activities. Table IV-3 shows the gaps and identifies priority areas
for funding.
301
···,.,
.
TABLE IV-3 -HUMAN RESOURCE DEVELOPMENT-NEEDS ASSESSMENT AND PRIORITIES
HRD Elements/Mandates
Access to and participation in
Education and Training and
the use of technology to
provide access to education
Early Childhood
Development & Education
Curriculum Reform &
Teacher Education
Needs Identified
•
Delivery Tools
Level of
Assistance Needed
Medium
Priority Ranking
Development of appropriate
curricula to facilitate broad
based education at the lower
secondary level to facilitate
continuing education and
training.
• Expansion ofUWI program
offering in non-campus
territories
• Use of more varied modes in
delivery of distance education
courses
• Priority to be given to the
development and
implementation of standards for
the delivery of Early Childhood
Education
• Integration of new Information
and Communication
Technologies into content as
well as administration at all
levels
Promotion
of Science and
•
Technology at all levels
•
Financial and Technical
Assistance for curriculum
development
•
Technical Assistance and
workshops for the
development of the standards
Medium
Medium Priority with
Long-Term impact
•
Workshops
Medium
High Priority with
Medium-Term impact
•
•
•
Technical Assistance to
evaluate and reform the
effectiveness of Science and
Technology curriculum
Technical Assistance to
examine international
approaches and the Jamaican
model to come up with
harmonized approach
Develop computer skills at an
early age
302
High Priority with Short
to Medium-Term impact
Low
High Priority with short to
Medium-term impact
Low
High Priority with short to
Medium-term impact
HRD.Elements/Mandates
Needs Identified
•
Foreign Language Learning
•
•
The development of the
human resource development
systems which are responsive
to the needs of the
agricultural sector
•
Develop and implement an
appropriate technology
education curriculum to lay a
foundation for continuing
education and technology to
transform the population from a
region of consumers to creators
of technology.
The development of
multilingual skills at an early
age and the introduction of
programs for achieving
appropriate levels of
competence in foreign
languages particularly Spanish
and French.
Spanish should become the
second lamruage of the region
Increased promotion of
Agriculture as a career
alternative for younger persons.
Level of
Assistance Needed
Medium
Delivery Tools
•
Technical Assistance
•
Technical and financial
assistance to conduct a study
to develop a program to
promote the teaching of a
foreign language at the
primary school level
•
Workshops and technical
assistance
.
303
Priority Ranking
High priority with
Medium- to Long-term
impacts
Medium
High priority given the
FTAA with Medium- to
Long-term impact
Low
High priority with
Medium- to Long-term
impact.
CHAPTERV
THE MACROECONOMIC FRAMEWORK
(A)
MACROECONOMIC POLICY COORDINATION
Articles 44 and 70 of the Revised Treaty contain the Community commitments in respect of
macroeconomic coordination.
They provide (in Article 44) for the adoption of appropriate
measures for macroeconomic coordination, the harmonization of monetary and fiscal policies,
and (in Article 70) for promoting a sound macroeconomic environment in the Member States.
The Fifth Meeting of the Council for Finance and Planning (COFAP) (2001) explicitly
recognized that the lack of macroeconomic coordination could result in severe disintegrative
effects, that the institutional arrangements for policy coordination have been largely inadequate,
and that countries must be prepared to cede some degree of sovereignty in economic policy
formulation to the regional level. It agreed that the rules and procedures for policy coordination
and implementation, when formulated, should be translated into instruments such as Protocols
that would be binding on Member States. The task was assigned to a Technical Team on Policy
Coordination. The main needs at the present time would be for economic technical assistance in
elaborating proposals for rules and procedures, implementing mechanisms for policy
coordination, including the upgrading and timely provision of macroeconomic data, and
education and public awareness programs. To this end the CCS has prepared a project the
objective of which is to strengthen its capacity to implement the program for the convergence ~f
policies toward the creation of the single market and monetary union.
The Caribbean Center for Monetary Studies (CCMS), an affiliate of the CARICOM Committee
of Central Bank Governors, located at the UWI, St. Augustine Campus, has also been providing
useful support in the study of the issues of macroeconomic coordination. This Center prepares
annually a report on The Economic Performance and Convergence of the CARICOM Region
which reviews the main macroeconomic aspects of regional economic performance, surveys
changes in respect of the criteria used (import level, exchange rate stability, debt service) in
measuring economic convergence of CARI COM countries, and puts forward economic prospects
304
for the period ahead. This report is reviewed by the Committee of Central Bank Governors, but
does not seem to lead to any operational measures or recommendations, either in respect of
macroeconomic coordination or policy conclusions in respect of the results of the tests of
economic convergence.
To date, the single economy issues, with the possible exception of investment policy, have not
received much emphasis in the Community's short-term work-program. · However, with the
progressive implementation of the rights of establishment, provision of services and movement
of capital aspects of the CSME, issues relating to financial policy harmonization, investment
policy harmonization and economic policy coordination in general (including balance of
payments policy, exchange rate policy, employment policy, pricing policy, etc.) will need to be
addressed in a concerted manner to avoid the disintegrativ_e impacts on the CSME originating
from national actions. Work in this area is now becoming a priority for the Secretariat.
More recently, the downturn in export earnings and its impact on incomes and government
revenues, due largely to external events, has prompted governments to recognize the need for a
Regional Stabilization Fund (and for an ad hoc program of short-term stabilization assistance to
Dominica).
The task of designing the Regional Stabilization Fund was assigned to the
Committee of CARJCOM Central Bank Governors. Some progress has been made in defining
the basic features of the Fund, but issues relating to the source of funding, the formula for
assessing contributions, and the scheduling of contributions remain to be resolved.
(B)
FISCAL POLICY HARMONIZATION
The CCS has done useful diagnostic work on this issue. It indicates that tax structures in
Community States are already fairly convergent, thereby facilitating the attainment of
harmonization. Based on EU experience, it also points to the importance of an organizational
structure to administer and enforce tax harmonization.
Further, it is recognized that tax
harmonization policy must go beyond harmonization. It must rationalize tax systems while
narrowing distortions that may impede free market access.
305
COPAP agreed that a Tax Harmonization Policy Framework should be developed for its
consideration; Tax Harmonization Guidelines should be drafted for its consideration; rules and
procedures for the COPAP to direct and oversee the process of tax harmonization and
coordination within the Community should be developed; that these rules and procedures should
encourage coordination, exchange of information and tax harmony; and that a Working Group on
Fiscal Policy should be established.
Toward these ends the responsible department in the CCS has prepared and submitted for donor
support a project proposal that focuses mainly on developing a policy framework, and
elaborating on the legislative and institutional requirements. Additionally, assistance is being
sought for a study on the impact of tariff reductions · on government revenue, an issue that is
crucial to any attempt at harmonization and rationalization of tax structures.
Substantial technical assistance is needed to get these initiatives off the ground. In particular,
they are areas in which the EC institutions could provide valuable support, especially in respect
of elucidating conceptual approaches, the lessons to be drawn from the harmonization measures
it employs, and possible options for the way forward of the Caribbean Community.
For
example, in regard to the tasks of developing a Framework and Guidelines, little has been said
about conceptual approaches and options, aspects of the issue on which donor technical
assistance would be helpful.
While the salience of fiscal harmonization to the success of
economic integration and the objectives of the CSME are fully acknowledged, COPAP's
commitment to date is that the Framework and Guidelines should be "developed for
consideration." A further complicating factor for fiscal harmonization would arise from ~he
introduction of "free circulation" of imports, a normal feature of a single economic space. This
would raise enormous problems for the individual Member States given their dependence on
border taxes. It is doubtful that this could be anticipated in the near future. It is a matter that
would require detailed study, including of the kind of mechanism that would ensure equitable
distribution of revenues among the Member States.
Related regional tax initiatives include a Double Taxation Agreement among CARICOM States,
a Protocol on the Harmonization of Corporate Structure, and a CARICOM Investment Code.
With respect to the CARICOM Double Taxation Agreement eleven Member States have signed
306
and ratified the instrument and it is effective among the eight States that have put in place the
enabling legal framework.
With respect to the remaining four States, there is a need to
strengthen their capacity to enact the national legislation to give effect to the Agreement.
Currently, some support is given by the Barbados-based multilateral agency-supported
Caribbean Technical Assistance Center (CARTAC) to individual CARICOM countries in the
fields of public expenditure management; tax and customs administration; on- and offshore
financial sector regulation and supervision; and economic and financial statistics.
Its well-
appreciated work at the national level on the reform of the tax regimes and on national accounts
could contribute indirectly to the aim of regional fiscal policy harmonization, though it is not
explicitly focused on that objective. The CCS has made the recommendation that there may be
need to make a shift in the balance between regional an~ country-oriented activities, and to
collaborate to a greater extent with the CCMS. It has also noted that while emphasizing the need
to strengthen the generation of services and foreign investment statistics, national income
accounting and ASYCUDA-type streamlining of custom data, CARTAC's strategy should be to
use ongoing programs as a basis .for the development of a regional statistical capability, rather
than pursuing country-by-country approaches.
A Legal Draft of proposed Articles for a Protocol on a Harmonized Corporation Tax Structure
for Memb~rs of the Caribbean Community has been prepared.
Most of the articles of the
Protocol have been agreed by Member States, namely those in respect of pensions, minimum
corporation tax (with the rate still to be agreed), mergers and splitters/divisions, exploration and
research expenses.
Elements still to be agreed include specific tax allowances and specific
aspects of certain articles. The main aspects to be addressed in the next stage of the work
program in this area are: an optimum/target corporation tax rate; income tax rates that encourage
multidirectional mobility; and consumption taxes versus the incentive provided for regional
production via the CSME. Consultations are ongoing with the national administrations with a
view to reaching agreement on the outstanding issues, following which they would be submitted
to COFAP for consideration, with a view to a decision.
307
(C)
INVESTMENT POLICY HARMONIZATION
Article 68 of the Revised Treaty provided that a Community Investment Policy should be
established which, inter alia, should include a harmonized system of investment incentives.
Article 69 further stipulated that Member States should harmonize national incentives to
investment in the industrial, agricultural and services sectors.
COFAP was charged with
formulating proposals for the establishment of regimes for the granting of incentives to
enterprises in these sectors.
To this end a Technical Team comprising representatives of the Member States and regional
institutions was established to prepare recommendations that would talce into account the
different levels of development among these States.
The CCS also concluded a technical
cooperation agreem~nt with the Multilateral Investment Fund of the Inter-American
Development Bank to facilitate the task entrusted to the Technical Team.
This technical cooperation project has undertaken diagnostic studies of the existing legal
framework and investment climate, including key bottlenecks to private investment in the
individual Member States. These studies, once they have been reviewed and revised, are to be
used to prepare a Draft Investment Incentives Report and a Draft Investment Policy Best
Practices Report. Further Planning and Coordination Meetings and a Regional Workshop would
follow thereupon, before the project is finalized, and the proposed Community Investment Policy
and Harmonized System of Investment Incentives put to the inter-governmental organs for
approval.
The intention is that these instruments should provide best practice investment principles for
both intra-regional and foreign investment flows, would be WTO-compatible, and would take
into account the region's positions in ongoing negotiations for the FTAA and for the new ACPEU Economic Partnership Agreement. Following approval by the relevant Community organs, a
legal text would have to be drafted and negotiations commenced with Member States. Finally,
the Code would have to be adopted under the legal procedures prescribed in each Member State.
Further technical assistance would be needed for these phases, or for the actual implementation
of the instruments.
Thus, although a Work Plan and Timetable have been established
308
(September 2002) for the phase up to finalization and evaluation of the technical cooperation
project with the IDB (which seems to be behind schedule), the realization of the mandate given
in the Revised Treaty is a long way off.
(D)
FINANCIAL POLICY HARMONIZATION
Article 71 mandates COFAP to adopt proposals for the establishment of financial infrastructure
supportive of investments in the Community. In particular, COPAP is expected to assist the
Member States in establishing capital markets, financial institutions and appropriate financial
instruments to facilitate capital investment on a sustainable basis.
The CCS work on financial policy aims to go beyond the lib~ralization of restrictions in this field
as mandated in respect of the Rights of Establishment, the Provision of Services and the
Movement of Capital, and reviewed in Chapters II and III.
It is the intention "to create a
Protocol for the sector, paying attention to the conditions necessary to assist policy makers in
creating an appropriate policy environment and a sound regulatory and supervisory regime for
the development of banks and near-banks, insurance and securities industries."
In January, 2002 the broad areas were identified in the banking, insurance and securities
industries, by industry practitioners for possible harmonization. For the Banking Industry they
included, but were not limited to, the harmonization of licensing standards; enactment of
reciprocal legislation/regulation; harmonization and standardization of the supervisory
framework; harmonization of anti-money laundering legislation; harmonization of accounting
and auditing standards in banking; harmonization of loan classification and loan provisioning
standards.
In the insurance industry, they included corporate governance; investment-local asset ratios;
criteria for the appointment of Directors and Senior Officers; cross border operations; minimum
capital requirements; prudential regulation; standards on licensing and registration of
intermediaries; standards concerning unacceptable, unfair or deceptive act or practice; merger
and acquisition; unregistered insurance providers. In the Securities Industry, the areas identified
309
included listing requirements; disclosure requirements; prospectus requirements; registration and
certification of industry participants; investment protection.
The harmonization process is expected additionally to provide policy recommendations that
would become binding for the development of the banking, insurance and securities industries;
facilitate reform of the supervisory and regulatory framework governing industries and their
activities and, more so, those of a cross border nature; enhance corporate governance at all levels
of the sector; provide inputs to governments on wider issues affecting the financial services
sector; promote the further development of the regional financial services sector; and promote
education and training for the development of the capital market in order to raise the standards
and enhance the skills of all market participants.
The CCS proposal to. establish a protocol for the financial services sector has been presented to
the Committee of Central Bank Governors and the Caribbean Group of Bank Supervisors and the
need to avoid duplication, and take account of previous work recognized.
The work on these issues is at an ongoing stage of technical preparation; an initial consulting
report having been completed and in the process of review and revision. Subsequent stages will
involve consultations with the regulators in Member States, regional associations in these
industries, and other stakeholders, before final proposals can be made for a draft protocol to be
acted upon by COFAP.
Such a Protocol would itself upon approval eventually have to be
adopted by Member States as an amendment to the Revised Treaty, and its provisions in the
various financial industries would have to be inscribed in legal instruments to be enacted into
law under the legal procedures prescribed in each Member State. It may be anticipated that
substantial more technical economic and legal work would be needed once the CCS is able to
follow up the identification in greater detail of the gaps that must be filled in the various
financial industries before inter-governmental negotiations on a draft protocol can take place,
and the subsequent requirements determined for transposing the provisions into the laws and
other instruments of the Member States, and for implementing them in practice. The stage
reached is thus very far from realization of the objective.
310
(E)
DEVELOPMENT FUND FOR DISADVANTAGED COUNTRIES, REGIONS
AND SECTORS
Article 142 of the Revised Treaty established a regime for disadvantaged countries, regions or
sectors to enhance their prospects for successful competition within the Community, and address,
to the extent possible, any negative impact of the establishment of the CSME.
For these
purposes, the Community established a Development Fund, among other measures.
The
Community Council authorized in Article 158 the determination of modalities to govern the
Fund's operation, including Member States contributions, and public or private sector
subventions.
These modalities, which the CDB was requested to elabora!e, have not yet been determined. In
the meantime, there have been several cross-cutting initiatives that could have implications for
the establishment of the Development Fund, and the sort of fund it should be. They include a
proposal that has been under examination jointly by the CDB and IDB to set up a special fund
for the re-structuring of Caribbean economies; an unimplemented decision to create a Regional
Stabilization Fund; a proposal to set up a Sustainable Tourism Investment Fund; a request to the
CDB to elaborate the Projected Investment Requirements for
the Region's Infrastructural
Development; a request to the CAIC to develop a Program for the Transformation of Caribbean
Economies; and a proposal that a Regional Integration Fund should be established in the context
of the Free Trade Areas of the Americas. In the meantime, too, the economic capacity of
CARICOM economies to contribute to all these initiatives, as well as external development
assistance flows, have diminished.
Evidently, the CCS should now put to the relevant
Community organs the need to take stock of all these cross-cutting developments and to
rationalize their priorities.
The Development Fund seems to have been patterned after the European Regional Development
Fund (ERDF) (1995).
This is one of European Union's four Structural Funds48 which are
financed out of the European Union's own resources. They take up about one-third of the EU's
budget. The ERDF's main aim is to promote economic and social cohesion in the European
Union by working to reduce inequalities between regions or social groups. Its resources are
311
allocated to the Structural Fund regionalized objectives. They are targeted mainly at supporting
small-
and
medium-sized
enterprises;
promoting
productive
investments;
improving
infrastructure; and furthering local development. .The ultimate aim of assistance from the ERDF
is to create jobs by fostering competitive and sustainable development.
Alongside the four
Structural Funds, the Cohesion Fund provides additional structural assistance to the four least
developed Member States (Portugal, Spain, Greece and Ireland) by financing project concerning
the environment on transport infrastructure.
The EDRF has played a positive role in strengthening European integration by helping to reduce
inter-country (and inter-region) economic disparities, ameliorate the distribution of the benefits
and costs of European Integration, and better position the Member States so that they can all
benefit from the provisions of integration. These are also _highly desirable aims for Caribbean
integration which a ~egional Development Fund can help to realize. In groupings where there
are significant inequalities among countries (and regions), and very different capacities and
opportunities to benefit from the process of integration, the distribution of benefits and costs is
bound to be skewed to the detriment of the broader and more dynamic aims of that process.
They could thus be serious impediments to the accomplishment of a Caribbean Single Market
and Economy.
There are however, certain differences between European and Caribbean integration in this
respect. First, the measurement of inter-country disparities in the Caribbean is more complicated
by differences of interpretation as to the validity of national income as a measure of development
vis-a-vis such other characteristics as vulnerability to external physical and economic
phenomena, and size and diversity of resources.
Second, whereas in Europe the source of
disparity in the distribution of benefits and costs would very largely be of European origin, and
thus essentially a matter for intra-European adjustment, in the Caribbean they would be mainly
of extra-regional origin.
In the latter case, therefore, it may be argued that there is some
justification for external assistance as the region adjusts to integration into the world economy.
This argument has indeed underpinned the proposal for a Regional Integration Fund in the
context of the FTAA. Thirdly, unlike the situation in the EU, none of the CARI COM Member
48
The others are the European Social Fund; the European Agricultural Guidance and Guarantee Fund; and the
Financial Instrument for Fisheries Guidance.
312
States has reached the stage of development where it can afford to be a net donor of development
assistance to its lesser developed partners, though it should be recognized that some States will
benefit, and at present are benefiting, disproportionately from the process of integration.
The Community itself thus needs at this point in time to address both the issue of
rationalizing/integrating the various cross-cutting proposals that impinge on the establishment of
the Regional Development Fund, and to define the principles, as well as the legal and
institutional context, under which such a Fund would operate, including its sources of funding.
In the latter connection, the question of an own-resources system for the Community also arises,
especially if such a Fund were to be endowed with resources of sufficient volume to make a
significant difference to regional inequalities.
(F)
MONETARY UNION/SINGLE CURRENCY
Monetary union/single currency is not explicitly provided for in the Revised Treaty or in any
Protocol, though it is an agreed aim of the Community. It is a core feature of any single
economic space. The approach to this issue so far has been to monitor set macroeconomic
parameters (import cover, exchange rate stability, debt service) against pre-determined targets, so
as to gauge the extent of macroeconomic convergence, the accepted pre-condition for moving to
a single c1:11Tency.
This exercise is conducted annually by the Committee of Central Bank
Governors with the aid of a report prepared by its affiliate, the CCMS, on the Macroeconomic
Performance and Convergence of the Caribbean Region. Attainment of the individual targets
generally has been below expectation in respect of all parameters. However, beyond "noting"
the facts, no measures are identified or recommended for improving performance. Indeed, no
means are provided for determining the degree to which overall macroeconomic convergence is
being attained, and at what level and for what duration their attainment would support moving
forward to a single currency.
In considering the issue of monetary umon, COFAP at its fifth meeting, accepted the
recommendation of the Committee of Central Bank Governors that a monetary union involving
all CARICOM member States is not achievable at this point in time, but should remain a long-
313
term goal. In the interim, the focus should be on increasing public awareness and support of
monetary union, and "establishing a greater demonstration of political commitment."
The Committee of Central Bank Governors also recommended that the targets should be viewed
as guideposts to assist accession to monetary union, and that with a view to operationalizing the
approach a mechanism should be established for dealing with violators of the agreed targets,
with provisions for temporary waiver. It also recommended adding to the convergence criteria
overall fiscal balance and inflation. It was thought that convergence in respect of interest rates
was unlikely to occur any time soon as the differentials reflect structural differences, a variety of
monetary regimes and the lack of capital mobility.
There is thus at the present time no agreement to move forward to a common currency, or even
whether such a currency should be fixed or flexible. Evidently, the political will to implement a
common currency is absent.
But the objective technical requirements, as set out by the
Community, that would justify monetary union among CARICOM States also do not seem to be
persuasive. Convergence in respect of the agreed macroeconomic targets seems a long way off.
Underlying the divergences are big structural differences, such as those giving rise to wide
disparities in wage rates, interest rates, and debt-service ratios. It is evident too that there is
insufficient flexibility in the economic systems, for example, to ensure that productivity/wage
differentials adjust to the requirements of a common currency, or that the approximation of
interest rates, given a common currency, would be substantially in the interest of all Member
States, particularly with respect to promoting domestic investment and employment.
On the other hand, a common currency could have positive effects in reducing transactions cost,
increasing intra-regional trade, and inducing inward investment. Whether CARICOM should
wait for the attainment of sustainable macroeconomic convergence and evidence of sufficient
systemic flexibility before inaugurating a common currency, or should use a common currency
to leverage the attainment of convergence and flexibility, using adjustment mechanisms as
appropriate, is a question that seems not to have been examined.
The Central Banks apparently have been less than enthusiastic in pressing ahead with the
objective of establishing a common currency. It has not even been possible so far to reconcile
314
the flexible/fixed exchange rate issue such as by the publication of agreed official daily exchange
rates for all currencies. If the objective of monetary union were to be advanced some impetus
beyond the Central Banks would be needed. The CCS and the academic institutions could play a
useful .role here and this could be facilitated by technical assistance and information sharing by
the EU that has now put into operation a single currency after decades of substantial research and
activity on the issue of monetary integration. The investment of donor resources in an issue of
such doubtful outcome could however not be ranked among the top near-term priorities.
315
TABLE V-1-MACROECONOMIC FRAMEWORK-IMPLEMENTATION AND NEEDS ASSESSMENT
• Tr,eaty R~quiremeilts
Community Decisions
_ ···_·
Macroeconomic
Coordination
Fiscal Policy
Harmonization
-·
Status
fo,;Pr~gress/Futunr
·Ag¢ilJfa
.,
+·
iN'e¢dsAssessinent
- Rules & Procedures
- Instruments
(Protocols)
Develop:
- Tax Harmonization
Policy Framework
- Tax Harmonization
Guidelines
- Rules and Procedures for
COFAP
- Double Taxation
Agreement
- Monitor Macroeconomic
convergence
- Increase Public
Awareness and Political
Commitment
- Currency. C:::onvertibility
Nil
Nil
Nil
Nil
Nil
Effective in eight
States
Legal draft prepared
Nil
Ongoing
Nil
Project Document for
Experts on
Donor Technical
Macroeconomic
Assistance prepared to . Coordination
aid Technical Team
established on Policy
Coordination
Fiscal and Tax Law
Project Document for
Donor Technical
Experts
Assistance ( on Policy
Framework and Legal
and Institutional
Requirements)
Prepared
Remaining States to
Legal Assistance with
Enacting National
Ratify
Legislation
Completion oflnterGovernmental
Consultations
Study in progress
(IDB) to assist
Technical Team
established
Monitoring and
Research by Central
Banks Caribbean
Center for Monetary
Studies
Nil
316
fs:~t!~·!e .:.J;. l!i ~~!fity'
Ranking
Neede.d
- ~ :__:_:_______'__
Formulate:
- Protocol on
Harmonization of
Corporation Tax
Structure
- CARICOM Investment
Code
Monetary
Policy/Single Currency
Impfornen:tafion,
Medium
Medium with High
Long-term Impact
Medium
High with High Shortterm Impact
Low
Low
Low
High with High Shortterm Impact
Dependent on Study in
progress
Learning from EU
Experience
(Seminars, Publications)
I,
Low
Low with High Longterm Impact
I' Treaty,~equit eµi~~ts
l
, Co,µimiinily ~ ~dsiq~s·
,
:._
Investment Policy
Harmonization
Financial Policy
Harmonization
Regional Development
Fund for
Disadvantaged
Countries, Regions
and Sectors
,,:- 'm.·.:.:p.1¢.ni'enta-tion _
; .S tatus ,
- . -- - -
-----
l
-- - -
- Harmonized System of
Investment Incentives
Nil
- CARICOM Investment
Policy
Nil
- Establish Financial
Infrastructure, financial
institutions and
appropriate instruments:
• Banking
• Insurance
• Securities
- Determine governing
modalities and
contributions formula
-
-
I .In-F~~gr;s
.s/Futlir~
.Agenda
' -
Nee~~As~essm¢nt
<IL
.....
Technical work in
progress
Technical preparations
in progress
Nil
Nil
Nil
Nil
1 ,..··
In an indeterminable
stage with a number of
cross-cutting/
competing proposals in
existence
317
Dependent on technical
work in progress.
Assistance with
subsequent Legal Drafting
and Implementation in
Member States
Substantial additional
technical economic and
legal work needed.
Followed by intergovernment negotiations
and drafting of Protocol;
Legal Drafting and
Implementation in
Member States
Rationalize Proposals and
Define operational
principles, modalities and
contribution formula
TuevelLOf
Assist~nce
Needed
:, ~fforiJy.1lanltjng.
High
High with High Shortterm and Long-term
Impact
High
Medium with
Medium-and Longterm Impact
Low
Low with Low-, Shortand Long-term Impact
CHAPTER VI
PRIORITIZATION ACTION PLAN AND THE ROLE OF DONORS
(A)
PRIORITIZATION
In the preceding chapters, a priority ranking of projects within given areas was indicated, based
on our assessment of their possible economic impacts over the short, medium and long-term. A
more complex issue arises in ranking priorities across different areas, and this is attempted in this
Chapter. Intra and cross-area priorities are not necessarily congruent. Standard methodology in
this field is based on establishing multiple criteria representing their salience to the organization
(Community), each associated with a relative value, and each also given a relative weight in
terms of its salience. Thus,
Priority rank
nwi Vi
, i=l,
n = number of criteria,
Where Wi is the weight attached to a particular criterion and Vi is the value associated with that
same criterion.
The issue of prioritization was discussed extensively among the Consultants, and also with CCS
staff, and other interlocutors. The consensus view was that multiple criteria are involved in the
determination of priorities. A few are amenable to fairly reliable quantification, while most are
essentially a matter of subjective judgment. It was felt that a multivariate prioritization analysis
should be attempted, recognizing that to a good extent this would have to be based on qualitative
judgment and that an ordinal system of ranking, from low to medium and high, should be used.
It was also considered less contentious to use undifferentiated weighting of the criteria, so that
they all have more or less equivalent salience. The use of a relatively small number of the most
significant criteria was recommended.
The criteria used are:
(1) urgency, that is the presence of timelines established by political
decisions or required by external events (negotiations); (2) short-term economic impact, that is
up to three years; (3) long-term economic impact, that is beyond three years; (4) logical
dependence, that is serving a critical building-block function for the implementation of decisions
318
in other areas; (5) opportunity cost of assistance needed to implement the decision (cost and rank
being inversely related); and (6) probability of attaining the objective, that is an inverse indicator
of the risk involved.
While obviously there can be no pretension that the analysis is scientifically rigorous, it could be
useful as a conceptual aid to the CCS in shaping its own perspectives on priorities, and as an
input to donor agencies in their technical cooperation planning. In any event, the consultants
were requested in their terms of reference to indicate time-related priorities. These are their
views, and they may of course be divergent from those of the Community Organs, the CCS, and
individual
donor agencies.
,
(1) On the whole, rankings across criteria are not highlY. correlated, positively or negatively.
This implies, to give a couple of examples, that the economic impact of a given area is
not typically correlated with the probability of attaining the objective; nor is the assigned
urgency of a given area positively related to its building-block function.
(2) A surprising number of areas (20 out of 33) fall into the high-risk category of objectives
that may not be attained, in the foreseeable future. Most of the areas of Macroeconomic
Policy Coordination and Community Sectoral Development Policies belong to this
category. It is of further interest to note that while most of them rank high in terms of
their potential economic impact, they are assigned low urgency.
(3) The areas of Market Access are all assigned high urgency, but, with the exception of
services, this is not correlated with their potential economic impact, nor with the
probability that they would to be attained, apart from free trade in goods.
(4) The picture in respect of the Institutional and Legal Framework is mixed. Some areas of
this framework, such as the Caribbean Court of Justice and the Harmonization of
Legislation, have high rankings as building blocks and for urgency as well, but score
low in respect of economic impact, cost and attainability.
For others, such as
Competition Policy, Standards, Government Procurement, and Public Education, high
urgency correlates positively with their building-block function and the likely
319
probability of their attainment, while they score moderately in respect of cost and
potential economic impact.
(5) An experimental (cardjnal) scoring (recorded in the last column of the Table), indicates
that areas with the highest scores (2:32.0/45.0) include Fiscal Policy Harmonization,
Investment Policy Harmonization, Community Tourism Policy, Free Trade in Goods,
Free Trade in Services, Harmonization of Banking and Securities Legislation,
Information Communication Technology, Human Resource Development and Public
Education.
The lowest scoring sectors (:S25.0) are Macroeconomic Policy Coordination,
Community Industrial Policy, Community Agri~ultural Policies, Financial Policy
Harmonization, the Development Fund, Harmonization of Company Law, Government
Procurement, Air Transport, Monetary Union/Single Currency, Free Movement of
Skills/Labor, Intellectual Property and Environment Policy.
Those areas falling into the medium priority category (>25.0 <32.0) include the
Caribbean Court of Justice, Customs Law Harmonization, Dispute Settlement, Free
Movement of Capital, Rights of Establishment, Other Services Policy, Maritime
Transport Policy, Research and Development.
It bears repeating that this scoring is an experimental exercise. We previously indicated our
preference for an ordinal system of analysis, the main results of which were given in points (1) to
(4) above.
The shortcoming of the cardinal system of scoring is that the result obscures
differentiated interpretation in respect of the criteria used, the conclusions of which may be of
greater interest to the parties concerned.
Interest has been expressed in the fact that some of the results differ from assertions that are
conventionally made without priorities.
This is most likely explained by the fact that
prioritization, as analyzed in this exercise, is a multidimensional concept, whereas it tends in
general usage to be associated with a single quality, such as urgency, or economic impact. A
case in point is the free movement of skills/labor. This is the subject of timelines fixed by the
320
Community, and is considered an important means of Community strengthening. However, the
potential economic impact of the free movement of skills is probably small given their endemic
scarcity and limited geographical flexibility, while the probability of dismantling frontiers to the
movement of unskilled labor in CARICOM seems remote at the present time. The CCJ and
Rights of Establishment, on the other hand, were assigned higher priority rankings basically
because of their stronger building-block function and probability of attainment.
A final comment needs to be made on the matter of donors' priorities. Donor agencies often
assert that their primary interest is in supporting the implementation of the beneficiaries'
priorities. Nevertheless, this perspective should not be viewed as inconsistent with the fact that
donor agencies do have their own priorities and they are subject to change overtime. For
example, some rank highly projects with big short-term ra~her than long-term benefits. Some
avoid projects that may have potentially large impacts but above-average risk of nonperformance. Some are more interested in projects with an urgency pre-determined by highprofile political acts or by decisions taken by the international community in trade and economic
negotiations - the external interface issues. And yet others give preference to projects in areas
where they have some special advantage, or resource, or from which they derive benefits, though
their impacts on the beneficiaries may not be large.
(B)
THE ROLE OF DONORS
CARI COM has .been the beneficiary of substantial assistance from a variety of external donor
agencies - UNDP, CIDA, IDB, CDB, USAID, EU/EDF, Japan, World Bank, GEF, US, GTZ,
JEYTAD, Mexico, CFTC, UNESCO, DFID.
The list of CSME-related donor funded
programs/projects set out in Table VI-2 is impressive.
These contributions have played a
significant role in complementing Community resources and helping to advance the
implementation of the CSME.
An evaluation of external donor support to CARICOM was beyond the scope of this project, nor
was it required by its terms of reference. The Consultants were nevertheless asked to address the
question of the role of donors. This is a pertinent question if it is assumed that continued
assistance is vital to taking the CSME process forward, and that it could be decisive in getting
321
the Community to the point of crossing the implementation threshold in respect of many highpriority initiatives.
The role of donors thus had to be considered without the benefit of evaluations, either by the
CCS or donor agencies, of past and ongoing programs of assistance. Nevertheless, the matter
was discussed extensively with CCS staff and other CARICOM interlocutors. The Consultants
also did not have the benefit of the views of the donor agencies themselves involved in this
exercise, DFID and CDB, or of others on their role as donors.
The consensus among our
CARI COM interlocutors was that donor agencies are not expected to be part of the Community
priority setting apparatus, and should not presume to determine what the Community's priorities
should be. It was recognized that the Caribbean Community, like any other inter-government
organization, would have sensitive or classified informatio!l to which donor agencies would not
automatically have access.
They should not therefore get involved in situations where
confidentiality may be pre-empted, including, for example, the funding of established positions
where there is a possibility of the loyalty of incumbents being called into question.
On the positive side, donor agencies are welcome to contribute to methodologies by which
priorities can be determined, especially the empirical analysis of prioritization. Donor agencies
are also welcome to participate in consultations with the Community Organs on ways and means
by which they can assist and further the aims agreed on and being pursued by the Community.
Their efforts should be supplementary to, not a substitution for, the Community's. Support
programs among donor agencies should be complementary, not competitive, disarticulated and
overlapping. Coordination among donor agencies should be for the purpose of delivering agreed
assistance more effectively, transparently, and productively, not so as to better use their
combined power to secure their own ends.
Donor agencies are encouraged to target their assistance (resources, technology, expertise,
experience) to areas where there are deficiencies in the Community. Such assistance is not
welcome simply because it is in excess supply in donor countries or responds to interests,
commercial or non-governmental, in those countries. Donor assistance is intended neither to
displace Community resources and expertise, nor to transfer their own experience where
inappropriate.
Donor agencies should acknowledge and design their cooperation programs
322
bearing in mind that the Community institutions and Member States have already developed
impressive cadres of skills, the employment of which is often impeded by shortage of :financial
resources. Where the transfer of skills and technology is appropriate, assistance programs should
provide for training components, so as to ensure that the Community becomes more selfsufficient, and transfers are sustainable.
Donor agencies and the CCS should collaborate closely in defining the terms of reference of
projects of cooperation and the modalities under which they should be conducted. Unilateral
actions in this respect by donors, is likely to vitiate the recipient's feelings of ownership of the
projects. And unilateral actions by the CCS is likely to detract from a sense of substantive
participation on the part of donors, giving the impression that their contribution is valued only
because of the expectation of finance.
Donor agencies are welcome to participate in joint evaluations of the progress of projects and of
their performance when completed. Such evaluations should be for the purpose of identifying
and remedying obstacles and for putting improvements in place. These evaluations should be
conducted in a genuine spirit of jointly searching for ways to do better. Donors should not use
them for the purpose of imposing conditionalities or issuing unilateral directions.
The Community for its part should recognize that donors have a legitimate interest in ensuring
that (heir resources are used cost-effectively and transparently, and produce positive outcomes in
respect of agreed objectives; that those objectives conform to the Community's priorities, and are
realistic and feasible, taking account not only of internal Community affairs but of the effect on
them of the external environment.
The CCS should be transparent in their cooperation
arrangements. It should avoid creating the impression that it is playing one donor off against
another. It should ensure that a single recognized coordination point for cooperation with all
donors is maintained in respect of all project proposals. Donors should avoid situations in which
it appears that they are ganging up Jo exert collective pressure to achieve their own aims and
priorities.
'
Finally, while donors' involvement in the setting of priorities is consiq7red
unwelcome, there is an expectation on their part that the Community's priorities would be set out
in a manner that is clear, reasoned and time-bound.
323
TABLE VI-1-MULTI-CRITERIA CROSS-AREA PRIORITIZATION PLAN
URGENCY
(TIMELINES)
SHORTTERM
ECONOMIC
IMPACT
LONGTERM
ECONOMIC
IMPACT
LOGICAL
DEPENDENCE
{BUll..DINGBLOCKS)
OPPORTUNITY
H
L
L
H
H
H
L
H
H
L
L
L
L
M
L
H
L
L
M
L
M
M
M
M
M
M
H
PROBABll..ITY OF
AITAINING
OBJECTIVE
{INVERSE OF
RISK)
EXPERIMENTAL
SCOREb
H
H
35 .0
H
M
L
L
H
L
M
M
M
M
M
M
M
M
H
27.5
32.5
20.0
25.0
37.5
M
M
H
M
H
H
M
M
M
L
L
L
25.0
30.0
32.5
M
M
M
H
H
H
L
L
M
H
30.0
37.5
H
H
H
H
L
M
L
L
L
H
M
L
M
M
M
M
H
M
M
M
H
L
M
L
32.5
32.5
30.0
25.0
H
H
L
L
M
L
H
H
M
L
L
30.0
27.5
CosT•
INSTITUTIONAL AND
LEGAL FRAMEWORK
• Revised Treaty of
Chaguaramas
• Caribbean Court of Justice
• Competition Policy
• Intellectual Property
• Government Procurement
• Standards
• Harmonization of Legislation
- ComoanyLaw
- Customs Law
- Banking and Securities
Legislation
• Dispute Settlement
• Public Education
INTRA-REGIONAL MARKET
ACCESS
• Free Trade in Goods
• Free Trade in Services
• Free Movement of Capital
• Free Movement of
Skills/Labor
• Rights of Establishment
• Free Circulation
M
-
• Opportunity Cost: H = Low Cost (<12 work months of assistance needed), M = Medium Cost (12-36 work months), L = High Cost (>36 work months)
Experimental Score: Maximum= 45.0, H = 7.5, M = 5.0, L = 2.5
b
324
COMMUNITY SECTORAL
DEVELOPMENT
POLICIES
• Industrv
• Agriculture
• Tourism
• Other Services
• Air Transport
• Maritime Transport
• Environment
• Research & Development
• Information Communication
Technology
• Human Resource
Development
MACROECONOMIC
FRAMEWORK
• Macroeconomic 'Coordination
• Fiscal Policy Harmonization
• Investment Policy
Harmonization
• Financial Policy
Harmonization
• Development Fund
• Monetary Union/Single
Currency
URGENCY
{TIMELINES)
SHORTTERM
ECONOMIC
IMPACT
LONGTERM
ECONOMIC
IMPACT
LOGICAL
DEPENDENCE
{BUILDINGBLOCKS)
OPPORTUNITY
COST"
PROBABILITY OF
ATTAINING
OBJECTIVE
{INVERSE OF
RISK)
EXPERIMENTAL
SCOREb
L
M
H
M
M
M
L
L
H
L
M
H
M
M
M
L
L
H
L
H
H
M
H
H
M
H
H
L
L
L
H
L
H
M
H
M
M
L
L
L
L
L
M
M
M
L
L
M
L
L
L
L
M
L
17.5
25.0
32.5
27.5
25.0
30.0
22.5
30.0
35.0
H
M
H
H
M
M
37.5
L
H
H
L
H
H
M
H
H
H
H
H
M
M
M
L
L
L
25.0
37.5
37.5
L
L
L
L
L
L
15.0
L
L
L
L
M
M
M
L
L
M
L
L
20.0
20.0
325
TABLE VI-2 -LIST OF CSME-RELATED FUNDED PROGRAMS/PROJECTS {TO DATE)
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Creation of the CARICOM
Single Market and Economy
(CSME), Phase II
Deepening the integration
movement through legal
instruments and institutional and
administrative arrangements that
create an integrated economic space
for the establishment of business,
the production and trade in goods,
the development and provision of
services and the movement of
factors of production.
US$1.6m
UNDP
Ongoing. Project contributed
significantly to the finalization
of the legal framework for the
CSME.
•
CARICOM Protocol II Trade
Policy and Facilitation Project
To create an environment and
regime for free trade in services by
harmonizing policies and
regulations, and broadening the
base ofregional trade flows and
business opportunities.
CND$0.8m
CIDA
Ongoing.
•
Review of the Common
External Tariff(CET) and
Instruments Governing Trade
in Goods in the Caribbean
Community (CARICOM)
To facilitate the operation of an
effective regime for trade in goods
within CARICOM, and between
CARICOM and the rest of the
world, that is consistent with the
international obligations of the
Member States.
US$0.lm
IDB
Completed in 2002.
,.
•
Support for the Integration of
Haiti in the CSME
To establish a CARICOM Office in
Haiti in order to facilitate Haiti's
full participation in the CSME.
US$0.3m
Government of Norway
The CARICOM Office was
established in rnid-2001.
•
Support for Implementation of
WTO Commitments in the
Caribbean Community
To support the Member States of
CARICOM meeting their WTO
commitments with the purpose of
enhancing their ability to participate
effectively in the multilateral
trading program.·
US$0.5m
IDB
Ongoing.
326
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Investment Frameworks in the
Caribbean Community:
Towards a Regionally
Harmonized "Best Practice"
Regime
To support Member States of
CARICOM in their efforts to
improve and harmonize the
institutional and organizational
framework faced by private
investors in the Region, in order to
stimulate greater private investment
activity.
US$0.4m
IDB
Ongoing .
•
Development of Standards in
the OECS
To establish and/or enhance
standards management capability in
;the OECS countries, through the
provision of consulting services,
training and equipment.
US$0.5m
CDB
Program executed by
CARICOM Secretariat.
Completed in 2002.
•
Caribbean Regional Human
Resource Development
Program for Economic
Competitiveness
To strengthen the capacity of the
CARICOM Region to compete in
the global economy through human
resources and institutional
development.
CND$25.0m
CIDA
Ongoing. A Regional
component ofCND$5.0m is
included in the Program. The
sectors of focus are: tourism,
agriculture and agro-industry,
and financial services.
•
Regional Trade Support:
Support for the Regional
Negotiating Machinery (RNM)
To enhance the capacity of
CARICOM Member States to
formulate trade policy options,
facilitate compliance with trade
agreements and promote effective
participation in trade negotiations in
WTO, FTAA and CSME.
CND$2.5m
CIDA
Ongoing. Commenced 2001.
•
Government Procurement
Frameworks in the Caribbean
Community: Towards a
Regional Best-Practice Regime
for the CARICOM Single
Market and Economy (CSME)
To support CARICOM in its efforts
to: (a) establish an effective regime
for government procurement that
facilitates the full implementation
of the CSME; and (b) participate
more effectively in external trade
negotiations relating to government
procurement.
US$0.5m
IDB andCIDA
Ongoing. (US$260,000
provided by IDB, with cofinancing ofCND$250,000
fromCIDA) .
327
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Regional Special Program for
Food and Security for
CARIFORUM Countries:
Enhancement of Smallholder
Production, Productivity and
Marketing
To demonstrate and establish the
feasibility of livelihood alternatives
and improve existing production,
processing and marketing systems
for food and other agricultural
products produced by smallholder
farmers.
US$5.0m
Government of
Italy/FAQ
Program developed by
CARICOM in collaboration
with FAO and the Italian
Government. Total Program
Budget is US$26.2m. The
US$5.0m approved in March
2003.
•
Support for the Caribbean
Regional Technical Assistance
Center (CARTAC)
To provide assistance and training
in fiscal, monetary, financial and
related areas to CARICOM Single
Market and Economy.
CND$8.0m
CIDA
CARTAC has sponsored a
number of regional activities in
tax administration, statistics
and .other related areas during
2001-2002.
•
Regional Transformation
Program for Agriculture:
Commodity Development
To assist CARICOM Member
States in developing competitive
agriculture and a more diversified
agricultural export base.
US$0.25m
Caribbean Development
Bank(CDB)
Ongoing .
•
Caribbean Regional
Program: Economic
Diversification,
Environmental
Management and Justice
improvement and support
for HIV/AIDS
To support regional planning in
designing and implementing
programs in the areas of economic
growth and diversification,
hemispheric free trade,
environmental sustainability, and
improvement in the administration
of justice, and support for the fight
against HIV/AIDS.
US$39.0m
USAID
CARICOM is the primary
counterpart to USAID, in the
execution of this 5-year
Caribbean Regional Program.
Program commenced in 2000.
The OECS Trade Policy
Project
To build the capacity of Member
States and the OECS Secretariat to
participate in and benefit from
regional and international trade
liberalization, particularly FTAA.
CND$3.0m
CIDA
This 5-year project will assist
in developing a trade strategy
and strengthen the capacity of
the OECS to meet obligations
under regional and
international trade agreements
such as the WTO.
•
.
328
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
Establishment of a
Legislative Drafting
Facility in
CARICOM
Secretariat
To establish a Regional Drafting
Facility which will develop/produce
harmonized model legislation
relevant to the CSME, Justice and
Security, and HIV/AIDS.
US$2.5m
USAID
The project, which commenced
in December 2002, is funded
under USAID-Caribbean
Regional Program (CRP).
•
Strengthening Trade Related
Legislation in the OECS
To foster economic growth in order
to address the matter of
harmonization of trade legislation
among Member States in improving
their competitive position in the
global economy.
US$0.25m
USAID
Supported under USAIDCaribbean Regional Program.
•
Caribbean Regional Trade
Development/OECS
Institutional Development
Component
To promote the development of
trade in the OECS and strengthen
export-oriented institutions in the
sub-region.
US$0.6m
EU/EDF
Funded under the 7lh EDF.
•
Support for the Caribbean
Court of justice (CCJ)
To assist in establishing the Court
and provide public education on its
operations.
US$1.0m
USAID,IDB,
UNDP/Japan
US$ I .Om represents various
projects funded by donors.
The CCJ is critical to the
implementation of the
CARICOM Single Market and
Economy (CSME).
•
.
•
Support for the Establishment
of the Caribbean Court of
Justice (CCJ)
To provide support for preparatory
activities related to the
establishment of the CCJ.
US$0.9m
CARICOM Member
States
Contributions by CARICOM
Member States, 2000-2002, to
meet start-up costs of the CCJ.
•
The Conduct of An Assessment
of the State of Social Security
in the Single Market and
Economy (CSME)
To safeguard the social security
systems in the CSME in order to
support the free movement of skills
and the transferability of benefits.
CND$0.lm
CIDA
To be implemented under the
CIDA-funded CARICOM
Capacity Development
Program (CCDP).
•
Implementation of the
CARICOM Single Market and
Economy (CSME)
To meet the cost of activities
related to CSME implementation,
as Member States' contribution.
US$0.2m
CARICOM Secretariat
Funded from CARICOM
Secretariat's Research and
Advisory Budget.
329
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Establishment of Program
Support Frameworks for
Micro-Enterprise Development
in the Eastern Caribbean
To provide support through a
Micro-Start Pilot Project that will
improve the capacity of microfinance institutions in selected
OECS States.
US$1.7m
UNDP and CIDA
The Project commenced in
2002 and is scheduled to be
completed in 2003.
•
Social Development and
Poverty Eradication Project
To support the formulation of the
regional framework for poverty
eradication and social development
in the OECS.
US$0.4m
UNDP
Implementation commenced in
2000.
•
Capacity Building for the
collection of Social Data for
Poverty Reduction Strategies
and Monitoring Millennium
Development Goals in
CARIICOM Member States
To build capacities in CARICOM
States in order to conduct poverty
assessments, harmonize
methodological approaches for the
development of poverty reduction
strategies, carry out social policy
analysis and build data bases that
will facilitate analysis.
US$0.2m
World Bank/IDB/UNDP
Approved December 2002.
•
Program for the Promotion of
Management - Labor
Cooperation (PROMALCO)
To improve collaboration and
cooperation between Management
and Labor in an effort to increase
productivity, efficiency,
effectiveness and competitiveness
of Caribbean enterprises.
US$1.5m
US Department of Labor
Developed by the ILO,
PROMALCO is implemented
in 21 English and Dutchspeaking Caribbean countries.
•
Establishment of LMIS and
Labor Exchange Systems in
CARICOM Member States
To establish or upgrade LMIS and
Labor Exchange systems, through
the provision of software and
hardware, and training in the
processing and analysis of Labor
Market data.
US$1.5m
US Department of Labor
Ongoing.
330
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Strengthening the Institutional
Establishment Response to
HIV/AIDS/STI in the
Caribbean
To reduce the spread and impact of
HIV/AIDS in the Caribbean by
strengthening.
EURO 6.9
EU
The Program commenced in
2002, involves funding for a
Project unit and technical and
material assistance to six
regional institutions:
CARICOM, UWI, UNAIDS,
CAREC, CRN+ and CHRC.
•
Caribbean Regional Program:
Enhanced Caribbean Response
to the HIV/AIDS crisis in
Target Countries
To support efforts to reduce the
spread of HIV/AIDS in OECS
countries, Guyana and Barbados.
US$4.0m
USAID
An amount ofUS$100,000 has
been allocated for use by the
CARICOM Secretariat.
•
CAREC HIV/AIDS Project
(CHAP) Caribbean Regional
Program:
To strengthen the English-speaking
Caribbean countries' capacity to
respond effectively to the
HIV/AIDS epidemic.
CND$4. lm
CIDA
CHAP provides support to 12
CARICOM countries in the
areas of prevention and
treatment, surveillance systems
and care and support for
persons living with HIV/AIDS.
•
Caribbean Fisheries Resource
Assessment and Management
Program
To assist fisheries authorities to
collect data on fishery resources
and strengthen their ability to
manage and develop fisheries
resources on sustainable basis.
CND$1.5m
CIDA
Implemented 2000-2002.
•
Developing the Information
Management Capacity of the
Caribbean Community
Secretariat
To increase the CARICOM
Secretariat's capacity to manage and
apply information and
communication.
CND$0.5m
CIDA
Funded under the CARICOM
Capacity Development
Program (CCDP).
•
Support for Analysis of Data
from the 2000 Round of
Population and Housing
Censuses in the Caribbean
To strengthen the capacity of
CARICOM Member States to
undertake demographic research,
prepare census data for reference,
and provide and disseminate
analyses and information in the
Region.
CND$1.0m
CIDA
Support by CIDA under the
CARICOM Capacity
Development Program
(CCDP).
331
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Caribbean Renewable Energy
Development Program
(CREDP)
Removing barriers to the increased
use of renewable energies thus
reducing the Caribbean Region's
dependence on fossil fuels and
contributing to the reduction of
greenhouse gases.
US$6.8m
UNDP/GEF and GTZ
(Germany)
UNDP/GEF's contribution is
US$4.4m, with co-financing of
US$2.4m from GTZ (Federal
Republic of Germany).
•
Mainstreaming Adaptation to
Climate Change Project
(MACC)
To build capacity for identifying
and reducing Climate Change
Vulnerabilities and Risks, and to
access and effectively utilize
resources to minimize the cost of
climate change, as well as
implement a public education
outreach program.
US$5 .0m
IBRD/GEF
Agreement between
CARICOM and IBRD signed
in March 2003. Project to be
completed by 31 March 2007.
•
Support for Good
Manufacturing Practices in the
CARICOM Pharmaceutical
Industry
To improve the processes and
quality of pharmaceuticals
manufactured in CARICOM
Countries.
US$0.lm
Government of Mexico
Support for a second Phase of
the Project planned. First
Phase included Workshops for
Pharmaceutical manufacturers.
•
OECS Telecom Reform Project
To introduce pro-competition
reforms in the telecommunication
sector and increase the supply of
informatics-related skills.
US$10.2m
World Bank
An independent sub-regional
regulatory authority was
established under this Project.
•
Development of an Internetbased Port and Maritime
Database for the Greater
Caribbean
To provide updated and internetbased information on maritime
transport which will help to
improve maritime services and
contribute to economic and social
development.
US$0.15m
IDB
Executed by the Association of
Caribbean States (ACS).
332
.
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
To enable CARICOM to develop
policy, legal, institutional and
technical capabilities for the
conduct of business by electronic
means.
US$(Not available)
Commonwealth
Secretariat/CFTC
The Project should result in a
Report on the nature, trends,
volume, scope and impact of ecommerce/business in the
Region, and recommendations
for positioning CARICOM to
take advantage of e-business
opportunities.
Building Policy, Regulatory and
Technical Capacity for EBusiness in CARICOM
•
OECS Legal and Judicial
Reform Project
To strengthen judicial practices by
improving the efficiency of the
court system.
CND$4.8m
CIDA
The project, with a duration of
1999-2003, includes the
introduction of a legal
information system among
other key activities.
•
OECS Environmental Capacity
Development Project
To assist OECS States in
developing and managing their
natural resources in a sustainable
manner, through harmonized
standards.
CND$4.5m
CIDA
This 4-year project, 19982002, was designed to
strengthen environmental
institutions and formulate
environmental policies.
•
Training for Public Service
Officials in the Implementation
of the CARICOM Single
Market and Economy (CSME)
To improve capacity in all national
level public service departments in
Member States for the effective
implementation of decisions in
advancing the CSME.
CND$0.5m
CIDA
Support for this project
approved under the CARICOM
Capacity Development
Program (CCDP).
•
The Eastern Caribbean
Education Reform Project
To enhance the quality and
effectiveness of the education
system in the OECS sub-region,
thus strengthening the quality of the
human resource base for
development.
CND$12.9m
CIDA
To project involves:
harmonization of aspects of the
education system, including
the legal and regulatory
framework for education,
primary level curriculum, and
teacher training; and the
introduction technology in
.
schools.
333
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Organizational Development
Project
To strengthen the Caribbean
Community Secretariat's overall
capacity, in order to facilitate
effective implementation of
decisions, and mobilization and
management of human and
financial resources.
CND$1.5m
CIDA
Funded under the CARICOM
Capacity Development
Program (CCDP). This Project
will include training in project
planning and project
management; and the
development of a database on
development projects.
•
The Caribbean Distance
Leaming Education Project
To support the promotion of
distance education in the
Caribbean, through the provision of
relevant equipment, training and
materials.
US$1.0m
UNESCO/Japan Trust
Fund
The Project is being executed
by the UWI, in collaboration
with UNESCO and
CARICOM.
•
ACS Language Training PilotProject
Strengthening the foreign language
skills ofOECS nationals directly
involved in areas where language
capacity is crucial to the success of
their function.
US$0.lm
COB
Project involves intensive
training in French and Spanish
and is executed by the ACS, in
collaboration with the OECS.
•
Eastern Caribbean Economic
Management Program
(ECEMP)
To build the capacity of key subregional and national institutions to
manage public sector expenditure,
generate revenue, and improve
fiscal policy.
CND$12.0m (Phase III)
CIDA
The Program, which is in its
Third Phase, delivers technical
assistance, training and
equipment for projects in areas
such as tax administration, and
financial sector reform.
•
Tertiary Level HRD Program
To upgrade the level of trained
human resources in the OECS labor
market in priority sectors by
improving the number and quality
of trained nersons.
US$6.7m
EU/EDF
Project is being implemented
in association with the UWI.
Executed by CARIFORUM
Secretariat, under the 7th EDF.
.
334
Program/Project Title
Objectives
Amount
Donor Agency
Comments/Status
•
Technical and Vocational
Education and Training
(TVET)
To support the implementation of
TVET initiatives within the
Education Reform process,
including curriculum development,
training and harmonization of
policies.
US$1.0m
GTZ (Germany)
Implemented by the OECS
Secretariat, in collaboration
with CRICOM, ILO and CXC.
•
Primary School Teacher
Training Project
To improve the quality of primary
school teaching and management in
the OECS.
£0.3m
DFID
Implemented by the OECS
Secretariat.
335
ANNEXI
CONSULTING TEAM
Mr. Luis Abugattas (Peru)
Market Access
(Luis.Abugattas@unctad.org)
Mr. Havelock Brewster (Guyana)
(hrbrewster@aol.com)
Macroeconomic Framework
Team Coordinator
Mr. Tom Dolan (Ireland)
Institutional and Legal Framework
(tmjdolan@eircom.net)
Dr. Taimoon Stewart (Trinidad & Tobago)
(tstewart@tss.uwi.tt)
Competition Policy and Consumer Protection,
Intellectual Property, Government Procurement
Dr. Noel Watson (Jamaica)
Community Sectoral Development Policies
(noelwatson@hotmail.com)
aaaaaaaaaaaaaaaaaa
Mrs. Stella Araguas
Administrative Assistant
Ms. Clare Beharry
Administrative Assistant
336
ANNEX II
TERMS OF REFERENCE
THE CARIBBEAN SINGLE MARKET AND ECONOMY (CSME)
ASSESSMENT OF REGION'S SUPPORT NEEDS
The consultant is to supply the services below to the CARICOM Secretariat.
1.
Background
1.1
At the 1989 Heads of Government conference of the Caribbean Community (CARICOM)
in Grenada, revisions to the Treaty of Chaguaramas wei:e agreed, in order to establish the
CARICOM Single Market and Economy (CSME). Over the following decade, nine protocols
were developed and agreed, which take forward the process of establishing the CSME49 .
Monetary Union and Fiscal Harmonization are also considered important components of the
CSME, even though they are not included in the nine Protocols.
The challenge is now to
implement the protocols and move toward fiscal and monetary union.
1.2
Increased integration, and in particular the implementation of the CSME, is designed to
increase regional output for export on a sustained basis. The aim is to maximize the benefits of
increased inter-regional and international trade, leading to sustained economic growth, for the
region as a whole, and for each member state.
1.3
Globalization has given an added urgency to the work involved in the implementation for
the CSME. The CARICOM countries are facing a very significant task in preparing the region to
compete effectively in the increasingly global market place, and while much has to be addressed at a
national level, there is also a great deal that can be achieved more effectively at the regional level.
For instance, much progress is being made in building the region's capacity to effectively negotiate
for Caribbean interests in the range of international fora/agreements. The establishment of the
49
The protocols address: the institutional arrangements and procedures for critical decision making in CARICOM;
the rights of establishment, provision of services and movement of capital in the community; industrial policy; trade
poiicy; agricultural policy; transport policy; disadvantaged countries, regions and sectors; competition policy,
subsidies and dumping; disputes settlement.
337
Regional Negotiating Machinery is one example.
1.4
It is essential that the private sector is able to maximize the opportunities created by these
negotiations; this will require addressing key issues in the enabling environment, on both a regional
and national basis, in order to promote the effective functioning of markets.
Of particular
importance is the design and implementation of a competition policy, which targets the relationships
between country members of the single market as much as individual enterprises operating with the
single market.
This should ensure that the potential benefits of increased investment are not
undermined by monopoly power and other market inefficiencies; and the implementation of fair and
transparent regulatory and legal systems.
1.5
Progress with implementing the CSME has not been a~ fast as at first envisaged. As a result
there is a risk that the potential benefits of the CSME could be reduced by the rapidly changing
external environment. In any event, it is clear that a good understanding of the relationship between
the external, regional and national environments is required.
For example, the work being
undertaken in negotiating the Caribbean's position on international trade agendas must be informed
by the legal and regulatory position of all CARICOM member states.
In turn the legal and
regulatory position of each CARICOM member must be adjusted in the light of changes in the
external environment.
Arrangements for effective information exchange between national
Government agencies, the regional public sector, the private business community, and civil society,
needs to be put in place and maintained if external and internal environments are to inform one ...
another.
1.6
In recognition of the challenges facing the region, the CARICOM Secretariat has
commissioned a consultancy to prepare an updated and integrated work program for implementing
the CSME to December 2005. The draft report which was completed at the end of December 2001
includes: (a) a status report on CSME implementation identifying action required to complete the
CSME; (b) a work program and draft plan of action; and (c) indicative project profiles for some
regional interventions. The consultancy report will provide a good basis for prioritizing CSME
implementation initiatives and identifying the links between the external and internal environment.
338
1. 7
The overall aim of this study is to review the CSME process in light of the changing
external environment. It is anticipated that by looking at the read across between the external
and internal environments it will be possible to prioritize the CSME within a time bound
framework. For instance there may well be implications for the CSME in terms of depth, speed
and sequencing of integration arising from the FTAA.
2.
Overall Objective
2.1
The purpose of this study is to identify the priority areas for action within the region with
regard to the CSME in light of the changing external environment. The study will provide a time
bound action plan conditioned by expected developments in the external environment. The study
will also assess the capacity, including institutional and financial needs, of the region in
implementing these priority areas.
3.
Scope of Work
3.1
Building on the existing CARICOM consultancy and updated CSME workplan, and
taking into account the changing external environment the consultants will:
Prioritize
(a) Requirements to complete the establishment of the CSME and bring it fully into operation.
(b) At both the national and regionai level assess the progress in implementation - identify what
has been accomplished to date, what is currently under way, and what is yet to be achieved.
(c) In light of (a) and (b) and taking into consideration rapidly changing external environment,
indicate the priority areas for implementing the CSME in the short and medium term.
339
Review the institutional arrangements
(d) For each priority area:
•
assess whether it should be addressed on a regional, sub-regional or national basis (or
combination thereof)
•
identify the current lead institution and other stakeholders. Assess the success of the lead
institution to date
•
make recommendations for enhancing the level of read across between the external and
internal environment
Review the region's capacity to implement
(e) Assess the capacity and mechanisms available to Government, private sector and civil
society, particularly within the region's smaller countries, to implement and meaningfully
participate in the CSME.
Make recommendations
(f) In light of the findings above, make recommendations for taking the process of implementing
the CSME forward in the short, medium and long terms. These recommendations should be
cognizant of:
•
the dynamics in the external environment and the need to address regional and national
issues within this context;
•
lessons learnt from relevant experiences of regional integration in other parts of the
world, for instance the EU;
•
the need to achieve economies of scale;
•
the merits of national versus regional action in different cases;
•
the success to date of other relevant initiatives;
•
the need to enhance interaction between regional bodies and the need to identify lead
agencies for the different priorities
•
the need for sustainability
340
•
the skills set required for talcing forward the priority areas
•
the capacity of key institutions
•
the technical, human and financial constraints within the region
•
dislocations that may arise in the process of implementing the CSME and the
liberalization of the economies more generally.
(g) Recommend the most appropriate role, if any, for development partners in this process,
and how donors can maximize the impact of their support. Particular attention should be paid
to the special assistance frameworks of bilateral development partners, including the draft
Cotonou arrangement.
4.
Expected Outcome and Deliverables
4.1
A comprehensive report containing the findings from the study and including a time
bound action plan for implementing the CSME, to be delivered to CARI COM, DFIDC and CDB.
5.
Competency and Expertise Requirements
5.1
The team of consultants must have in depth understanding of, and experience in the
following fields: macro-economic policy development; international law; international trade and
investment policy; and issues relating to the enabling environment for private sector
development such as legal and regulatory reform, competition policy and tax policy.
5.2
The consultants should have experience of working at both a national and regional level
and some experience in regional integration. The team should combine international expertise
with knowledge of the Caribbean and its relevant institutions.
6.
Conduct of Work
6.1
The team will consist of an international, a regionally recruited consultant and a Senior
CARICOM Manager. The former will be the Team Leader.
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6.2
The work will start as soon as possible (before February 2001) and will take the team a
full 7 weeks (6 weeks field work, and 1 week writing up). Additional days will be allowed for
the various stakeholder meetings.
6.3
A technical "reflection group" meeting would be held following the consultants
submission of the draft report, to discuss and provide input for the final version of the report.
The reflection group meeting will be attended by a small group of regional and international
experts. Stakeholder meetings, involving all relevant donors, will be arranged following the
completion of the report to present the overall findings.
The team's main point of contact will be the CARICOM Secretariat. The team will also need to
liaise closely with all other relevant regional bodies, and k~y national governments and private
sector agencies. A list of the key stakeholders is attached.
7.
Reporting Requirements
7.1
The report will be provided in draft within 14 working days of completing the fieldwork.
The final report should be provided within two weeks of "reflection group" meeting. It should be in
hard copy (2 copies each to DFIDC, CDB and the CARICOM Secretariat) and an electronic form
(Word).
7 .2
A presentation of the final report, to a wider audience of key stakeholders, may be
required.
DFID Caribbean
17 January 2002
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