By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known QC yesterday said the Government was “terrified to act on its powers” over the Robinson Road gasoline leak because that would mean taking on a multinational oil industry player with deep pockets.

Fred Smith QC, the Callenders & Co attorney and partner, accused the Government’s environmental and health regulatory agencies of being “complicit in sweeping this potential human disaster under the rug” by failing to provide nearby residents and businesses with timely information as it became known.

Apart from renewing his call for the Government to pass an Environmental Protection Act, Mr Smith also urged it to ensure foreign investors and multinationals operating in the Bahamas post bonds/guarantees to cover any liabilities they incur.

He argued that many such investors operated through Bahamas-domiciled limited liability companies, but kept most of their assets and cash ‘offshore’, making it difficult to enforce environmental and other claims against them.

Mr Smith pointed to the case of the Royal Oasis, whose operator, Driftwood (Freeport), fled the Bahamas and closed the resort in 2004, leaving behind more than $20 million in unpaid pension and National Insurance Board (NIB) contributions, plus a whole host of taxes.

“The Government needs to protect human beings from capital flight or an inability to pay debts and liabilities,” the Callenders & Co partner told Tribune Business.

“This is what happened when the Driftwood hotel closed in Freeport. If we are to conduct legitimate business in the Bahamas, the Government must also work to ensure all foreign companies that come to the Bahamas have assets in the Bahamas to guarantee payment of liabilities.”

Apart from unpaid debts, Mr Smith said such guarantees/bonds should also be sought from foreign investors to ensure “performance of their development obligations”.

And, if industrial enterprises were “closed down or mothballed”, Mr Smith said such guarantees would ensure their foreign owners would finance - if not complete themselves - “restoring the property to a greenfield site, as opposed to a brownfield site”.

“It’s all well and good welcoming the big foreign money, but the problem is that the big foreign money is not in the Bahamas,” Mr Smith told Tribune Business.

“They always operate limited liability companies. What guarantees does the Government have from multinationals that their local subsidiaries will be able to meet environmental, financial and other costs?

“This focuses on the bigger issue of unregulated development in the Bahamas. We can no longer accept foreign investors or multinational companies investing through subsidiary companies without making financial guarantees through environmental or developers’ bonds.”

Turning specifically to the gasoline leak from the Rubis-owned station on Robinson Road, Mr Smith said the Government appeared frightened to deal with the situation.

“I think the Government has been terrified to act on its powers and responsibilities because the oil lobby is so powerful in the Bahamas,” he told Tribune Business.

“Government regulators have, for the last two years, been seemingly complicit in sweeping this potential human disaster under the carpet.”