There was a Special Sitting of the House of Representatives today but
the term “special” doesn’t do it justice – it was historic,
epochal, seismic. The Prime Minister introduced and the House passed the Belize
Telecommunications Act of 2009 which allows government to acquire Belize Telemedia
Limited. It is the most dramatic, consequential and bold piece of legislations
ever taken to the legislature – and it changes everything. Government
did it to resolve what had become an intractable and costly series of legal
battles with Ashcroft affiliated interests which own BTL. The central basis
for those battles was the Accommodation Agreement secretly signed by the Musa
Administration in 2006. The Prime Minister gave a detailed rationale.
Hon. Dean Barrow, Prime Minister
“Let me once say that the long title is quite clear and what the government
is doing by way of introducing this measure is preparing to take control of
the company formerly known as Belize Telecommunications Limited and currently
going by the name of Telemedia. I must also say immediately Mr. Speaker that
government intends to take the bill through all its stages today. The Senate
will then meet tomorrow and we expect that the Bill will be signed into law
by Tuesday or Wednesday morning at the latest. At that time, the new government
appointed board of directors will assume operational control over Telemedia
and the re-Belizeanation of the company will be complete.
The infamous secret Accommodation Agreement in which the PUP government
guaranteed the Ashcroft group a minimum rate of return of 15%. According to
that agreement and under that guarantee, Ashcroft could in any year declare
that BTL had not made that 15%, entirely a matter for him, declare under a formula
that did not give the government any opportunity to seriously dispute what he
was saying, Ashcroft could declare that BTL had not made that minimum 15%, declare
how much the supposed short fall was and simply not pay his taxes until the
so-called shortfall had been recovered. That Mr. Speaker s exactly what happened
in 2007 so that thereafter Ashcroft’s Telemedia ended up paying no business
tax, no Customs duties, no impress of any kind. In addition the Accommodation
Agreement stipulated that the Public Utilities Commission, which is there to
regulate all utility services providers, that Accommodation Agreement stipulated
that the PUC, could not regulate Telemedia’s rates, just leaving the consumers
at the complete mercy of the company.
The UDP Cabinet voted in the name of the Belizean people to resist this
treasonerous Accommodation Agreement. Belizean law and Belizean dignity would
be upheld, Belizean pride and Belizean patriotism and Belizean patrimony vindicated.
And of course resisted we have.
Now no one can doubt the justice of our stance but as we always knew it
would, it has been costly. Michael Ashcroft had Telemedia invoke a arbitration
in London, arbitration which the PUP administration and in particular the then
Prime Minister and the then Attorney General had provided for in that Accommodation
Agreement, Michael Ashcroft had Telemedia invoke arbitration in London to enforce
the Accommodation Agreement and as we all know, he obtained a judgement of $38.5
million and an LCIA mandated requirement that this government now begin to honour
this Accommodation Agreement. Well Mr. Speaker, I have said that as God is my
witness I will never pay that award.
But it doesn’t stop there, in April of 2009 Telemedia informed the
government of further claims they will make to the London Court of International
Arbitration and that the size of the new award they hope to get, and I am quoting
now, could pale the current award of $38 million into insignificance, end of
quotation. Mr. Speaker, Members, fellow Belizeans, this is intolerable. I and
the United Democratic Party government in the name of the people will put up
with it no longer. That an agreement, so patently illegal, so patently immoral,
so patently anti-Belize should continue to torture us, to bleed us, to subject
us to this death by a thousand cuts cannot for one second more be countenance.
This is our House, this is our country. Here we are masters. Here we are
sovereign. And with the full weight of that sovereignty, we must now put an
end to this disrespect, to this chance taking, to this new age slavery. There
will thus be no more Telemedia awards against us, no more Telemedia court battles,
no more debilitating waste of government’s energy and resources, and there
will be no more suffering of this one man’s campaign to subjugate an entire
nation to his will. After long and sufficient consideration and in the exercise
of that national power that is ours by constitution and inalienable right, this
government will now acquire Telemedia.
This is no ideology, this is not triumphalism, this is a country in particular
circumstances reaching the end of its patience and doing a singular necessary
righteous thing to protect its national interest. It is not part of any pattern,
part of no new philosophy, it is plain and simple, a special measure for a special
No one need feel any sympathy for Lord Ashcroft. This is not an ad hominem
move. It is to deal with a structural problem. Indeed, apart from his compensation,
Lord Ashcroft’s interests will remain profit making participants in Belize’s
telecommunications sector because those interests own Speednet and Speednet
will be left free to fly.
This I repeat then is only about Telemedia and no more and no less than
a case of the Belizean national interests trumping any other consideration.
Thank you Mr. Speaker, I look forward to the debate.”
As we said, it is historic. The Government of Belize has never - to
our knowledge acquired a private company by an act of parliament – particularly
one of the most profitable, essential and ubiquitous companies in the country.
It is a bold manoeuvre, but beyond the broad stokes there are the details, the
practical considerations that will operationalise such an acquisition. The Prime
Minister also listed those today.
Hon. Dean Barrow,
“That the Bill makes every provision for fair and proper compensation
to be paid to the owners of the shares that we will acquire. This is not, I
repeat, some cowboy action but something done in the full plenitude of and compliance
with our constitution. As well, we are only acquiring the 94 percent or so of
Telemedia that is controlled by the Ashcroft interests. The shareholding owned
by Belizeans will be left intact. The actual acquisition will be done by an
order made by the Minister of Telecommunications who will in that same order
appoint a new Board of Directors.
As soon as practicable after, an extraordinary general meeting will be
held and new Articles of Association adopted. The new Articles will essentially
be the articles of the successful BTL that was launched in 1988. In other words
the safeguards to protect Belizean shareholders will be re-established including
protection of the special share and the limitations on the amount of single
As well and perhaps most important, the Articles will guarantee that dividends
will be paid annually to the shareholders at the rate of 40% of the company’s
yearly profits. I also want to say that the new Board of Directors will be chaired
in an executive capacity by Mr. Nestor Vasquez and it will have as one of its
members the Rt. Hon. Manuel Esquivel.
Telemedia’s current employees will of course all keep their jobs.
Indeed we expect a greatly improved industrial relations climate and the quick
resolution of any current outstanding worker grievances. I think particularly
of the arbitration case of the dismissed workers, a case that the current owners
of Telemedia have utterly frustrated. I am positive therefore that Telemedia’s
staff like all other right thinking Belizeans will completely support the government’s
move and cooperate to make the transition as seamless as possible.
For consumers, we expect services to continue uninterrupted. We do not
believe that the present operators of the company will try any kind of sabotage.
If they do, we will have to use already existing provisions of the law to move
and take control even before the passage of this bill.”
The timeline is as follows, the Senate meets in its own special sitting
tomorrow to consider the act, approval is expected to be forthcoming and thereafter,
either on Tuesday evening or Wednesday morning, the governor General is expected
to sign it into law. The Minister of Public Utilities will then sign an order
activating the new board of directors, which should go into BTL on Wednesday.
And while that’s the plan – it is expected that BTL’s Ashcroft-controlled
ownership may throw a series of legal obstacles to undermine that plan.