STATEMENT BY THE CHIEF MINISTER
DR. THE HONOURABLE D. ORLANDO SMITH, OBE
TWENTY –SIXTH SITTING OF THE FIRST SESSION OF THE
FIFTEENTH LEGISLATIVE COUNCIL OF THE VIRGIN ISLANDS
Thursday, 7th April, 2005
10:00a.m
UPDATE ON THE PURCHASE OF PROSPECT REEF RESORT
Madam Speaker I am pleased to present an update on the
purchase of Prospect Reef Resort. My Government was elected to office with
one clear mandate: to protect and promote the interests of the citizens
and residents of the British Virgin Islands. That is the fundamental
principle that guides all of this Government’s actions and informs all
this Government’s decisions.
And it was in this spirit that on 11th February, 2005
the Government concluded the agreement to purchase the Prospect Reef
Resort from the Cripps Family, for the purpose of establishing a
world-class Hospitality Centre and a full-service business hotel.
The Prospect Reef Hospitality Training Centre is a
central part of this government’s deep commitment to empowering the
people of this territory by providing them with the skills and experience
to make the most of their God-given potential. In the coming years the
graduates of this programme-young British Virgin Islanders- will enter the
workforce as elite leaders in the hospitality industry prepared to take
positions of authority and responsibility at all levels.
And with this goal in mind, and with great pride and
excitement in the possibilities that this centre could provide, on 31st
March, 2005, the Prospect Reef property was delivered vacant possession,
that is, free of any encumbrances or occupants, to its new owners: The
People of the British Virgin Islands.
Madam Speaker, the decision to purchase Prospect Reef
and transform it into a world-class Hospitality Training Centre is not a
small idea- it is a significant project based on a large vision for the
future of our tourism industry and the role of our people in that
industry, and like many big ideas, it has drawn its share of critics. I
would like to use this opportunity to try to put some of those criticisms
to rest.
Madam Speaker, first allow me to address the question
of the Resort’s current employees. During the process of the
Government’s purchase of the resort, there was some speculation that the
employee’s interest would not be attended to. As I have noted on several
occasions, nothing could be further from the truth.
Since the passage of the Prospect Reef Resort
Management Act and the inauguration of the Management Company, the
Government has ensured that the interests of the employees were fully
taken care of. A combined team of the Departments of Labour, Immigration
and the Social Security Board, the Management Company and my Office met
with the employees to establish a workable solution to their severance pay
and vacation pay entitlements. The employees were fully satisfied and
appreciative of this Government’s efforts in resolving their concerns.
The result was that by 31st March, 2005 all employees were paid their
entitlements by their employer.
Madam Speaker, I should also wish to inform this
Honourable House that the independent operators on the Resort have been
accommodated to continue with their business undertakings on a
month-to-month basis while the Resort remains closed, as the Management
Company works out the requisite arrangements. I have directed the
Management Company to have these arrangements in place within the next
three months.
But beyond the interests of the employees and
independent operators, a great deal of attention and misinformation has
focused on the issue of the timeshare holders. Among these comments was
the unfounded charge that in purchasing Prospect Reef the Government of
the British Virgin Islands was illegally expropriating property.
In fact, so much emphasis was placed on the issue of
the timeshare holders that at times it appeared that their interests were
the only consideration. It appeared that in fact their interests were to
be considered first among equals, more important than the interest of the
employees, more important than the legitimate interest of Government and
more important that the future of our young people for whom this purchase
was made.
Be that as it may, there is no question that anyone who
conducts business in the BVI is entitled to fair treatment and the full
protection of the laws.
And these are two very separate questions – fairness and law. First,
allow me to address the legal question. Government’s position is clear
on this matter: The issues at hand are not a problem between the
Government and the timeshare holders; rather the issues raised are a
matter between the timeshare holders and the person or persons with whom
they had entered into timeshare agreements.
The Government of the BVI purchased Prospect Reef
Resort. It did not purchase every agreement ever entered into by the
previous owners or operators of the facility. What the previous owners or
operators did, remains their responsibility to address. This is the
essence of ‘vacant possession.’
I should wish, Madam Speaker, to advise that before the
Government proceeded into a purchase agreement regarding the resort, we
had conducted thorough due diligence. Paramount in this was the importance
of ensuring the integrity of the transactions and the fact that no
liability attached to the Government as a result.
And so, Madam Speaker, the legal issue is clear: the
Government of the BVI is well within its rights to purchase Prospect Reef
Resort without incurring any liability from the previous ownership. And
let me make this perfectly clear: this Government will stand up for the
legal rights of the people of the British Virgin Islands in all
circumstances.
But beyond the strict legal question, there is a border question of
fairness.
Madam Speaker, this Government values every visitor to
our Territory. We particularly appreciate the friendship of long-time
visitors who have made our islands a “home away from home.” And so we
understand the feelings of the Vacation Club members and are prepared to
work with them in a spirit of good-faith and basic fairness to resolve
their concerns.
Madam Speaker, let me remind Honourable Members how
this issue has unfolded. A letter dated 23rd February, purportedly written
on behalf of the members of the Prospect Reef Resort Vacation Club, was
received in my Office on 11th March. That letter essentially presented
proposals for Government’s intervention to resolve their concerns, and
threatened certain actions if they were unable to reach what they termed a
“very fair settlement”. They had indeed acknowledged the fact that
their investment contracts were negotiated and concluded with a person
other than the Government of the British Virgin Islands.
Madam Speaker, in a response from my Office dated 31st
March; it was made clear to the Club that the Government had not been
privy to their investment contracts. The Government had simply engaged in
a legitimate transaction as I have already noted. There is no legal nexus
between the Club and the Government and therefore the Government did not
and could not accept their claim that the Government, by entering into a
valid purchase agreement, had expropriated the Club’s property. In this
context, my Government considered it inappropriate to consider their
proposals, as we had no power to do the things they were demanding of us.
However, Madam Speaker, in the spirit of good faith,
the Club was advised that the Government will do what it can to
appropriately undertake to assist in bringing about an amicable settlement
of the Club’s concerns. Accordingly, they were invited to submit for the
Government’s study any documents pertaining to the interests of the Club
and other persons concerned. We are still awaiting these documents.
I must stress though, Madam Speaker, that this voluntary effort by the
Government must not be construed as an acknowledgement of any
responsibility or liability on the part of the Government.
The Club’s representative has since responded in a
less confrontational tone and in a manner, which suggests that with
willingness and good faith on the part of all stakeholders, resolution of
the current concerns is possible.
Madam Speaker, my Government has a clear policy
regarding any potential intervention in this matter towards arriving at an
amiable settlement. First, all outstanding debts owed to Government, and
statutory bodies must be paid. In addition assets of sufficient value and
devoid of any encumbrances must be turned over by the former operator to
the government to make up for any expense that may be incurred by the
Government as a result of its intervention.
Madam Speaker, efforts in these areas appear to be
progressing well as already demonstrated by the settlement of the
employees’ entitlements. We are also aware of correspondence from the
former operators to the members of the Club advising them of temporary
arrangements to continue to honour their current contractual arrangements
as time shareholders while long term solutions are worked out. Copies of
this correspondence will be circulated later today to all Members of this
House. Ultimately, it is my Government’s hope that what today appears or
has been presented as an insoluble problem with respect to the members of
the Club, whose friendship we as a country value, will be settled to the
satisfaction of all.
Madam Speaker, as I have noted above this Government is
rooted in the BVI’s tradition of hospitality and warm welcome. We do not
seek out, nor do we enjoy confrontation, especially with visitors to our
shores.
That said, let me say this and let all those in this
House understand my meaning well: This Government was elected by and is
responsible to the people of the British Virgin Islands. We do not respond
to threats. We do not respond to intimidation. And we will not be bullied
into compromising the interests of the citizens and residents of this
territory. Period.
The purchase of Prospect Reef was a legitimate action
taken in the interests of this country and its people. It was performed
within the letter and the spirit of the law. At this juncture, let me say
thank you to all the civil servants who contributed to our efforts to
purchase this signature property.
In conclusion, Madam Speaker, my Government recognizes
the rights of people to express their concerns and seek to have them
resolved in the best manner possible. That is part of the democratic
process we practice in this country and it is one we seek to promote.
However, the right is one to be exercised responsibly and with the utmost
respect. I wish to assure the members of the Club that we recognize their
frustrations and will endeavour to assist them where assistance is
legitimate and appropriate. We continue to welcome them and others to the
British Virgin Islands and will extend to them the customary British
Virgin Islands hospitality.
I look forward to many more years of friendship and
partnership between them and the BVI. And it is my fondest hope and most
cherished dreams that they and their children will be here in the BVI when
the first graduating class of the Prospect Reef Hospitality Training
Centre enters the workforce and begin to provide the kind of world-class
service that will soon become as much a part of the BVI experience as our
waters, sand and sunshine.
I thank you, Madam Speaker, for your kind indulgence.
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