Chapter 3 of the Treaty of Chaguaramas

Chapter 3 of the Treaty of Chaguaramas is considered to be central to the building out of the CARICOM Single Market and Economy and was therefore accorded priority in terms of implementation. The Chapter in essence provides for the liberation of the economies of the region. It therefore covers all activities with the exception of Government services that are neither produced on a commercial basis nor in competition with some economic enterprise. For example there are no specific member states obligations with respect to central banking, social security or national security.

The Nationals of the Community are the beneficiaries under the agreement. This includes both individuals and legal entities such as companies.

The Chapter seeks to remove restrictions that exist with respect to the right to establish businesses, the provision of services, the movement of people and the movement of capital within the community. Upon the signing of the Revised Treaty there were to be no new restrictions imposed by the Governments of the region. Further Chapter 3 creates a comprehensive framework by addressing all matters central to the effective functioning of a single market including the coordination of macro-economic polices.

While there is a broad mandate with respect to the movement of people this process has been a gradual one which started with the movement of categories of individuals such as university graduates, media workers, artists and sportspersons. It is expected that these categories will be expanded. The Chapter also allows for anyone carrying on a business including self-employed people to carry on their business in the region.

There are also provisions that are facilitating in nature, for example the requirement that members should put measures in place to establish accreditation bodies. Barbados, Trinidad & Tobago and Jamaica have started this process. The procedure for the notification and removal of these restrictions was through the agreement of a programme. During this process Member States were required to take into consideration the special needs of the less developed states. This programme has already been agreed to by Member States and anticipates the removal of substantially all restrictions. Ultimately the region is working towards:

 Elimination of the requirement for passports
 Elimination of the requirement for work permits
 Establishment of a mechanism for certifying and establishing equivalency of degrees
 Harmonization and transferability of social security benefits.

There are exceptions to these general provisions. They arise with respect to hardship, measures to safeguard balance of payments and the retention of monopolies on the grounds of public policy. Members may also decide that certain financial services should not be subject to discipline under the Chapter.

There is however by implication an exception with respect to exchange controls, alien landholdings and the movement of people which will be addressed over the long term. It should be noted that Montserrat has utilised its right to a waiver with respect to the implementation of the obligations.

Companies Act Chapter 308

The Companies Act of Barbados is a piece of legislation passed in 1982 with several subsequent amendments to keep pace with corporate developments. Essentially anyone can incorporate a business. The person must be over 18, must be of sound mind and must be solvent. The Corporate Affairs and Intellectual Property Office is the government agency responsible for the administration of the Act and therefore is the office through which documents can be sourced and filed www.caipo.org.bb . Generally speaking the word “limited”, “corporation” or “incorporated or the abbreviation “ltd.”, “corp.” or “inc.” must be a part of the name of every company.

Owning a Company
In most cases a company has the capacity, the rights, powers and privileges of an individual. Shares are issued in order to designate ownership in a company. The Act does not allow for the issue of bearer shares. The return on investing in the shares of a company is made through the payment of dividends. The payment of a dividend must not however, result in the company not being able to meet its liabilities; neither must the capital of the company be eroded.

Directors and Officers
The Directors of a company are appointed by the shareholders. Shareholders can also be directors. The Directors exercise the power of the company. Directors can be found personally liable for certain acts of the company. Directors must take their responsibilities seriously and avoid conflicts of interest. Where they exist they should be declared. Officers may be appointed by the Directors.

Every director and officer of a company is required to act honestly and in good faith with a view to the best interests of the company. They must exercise the care, diligence and skill of a reasonably prudent person.

Meetings
There must be an Annual General Meeting of the Company, not later than 18 months after the company comes into existence and not later than 15 months after the last AGM. Directors may hold meetings as determined by the by-laws of the company or as they see fit that would allow them to exercise their duty in the best interests of the company.

There are a number of obligations that must be met at the AGM:
1. Comparative financial statements duly signed by a Director must be presented
2. Audited Financial Statements must be presented if the company is a public company or if the gross assets or revenue exceeds $1,000,000
3. An Auditor is to be appointed where there is a requirement for audited Financial Statement.
4. Directors are appointed.

Dissolution
If you no longer wish to have the company, it can be dissolved by a special resolution of the shareholders and by filing the required documents with the corporate registry. If the company is bankrupt the insolvency legislation would apply.

The Catastrophe Fund Act, 2007

As many of you know the entire Caribbean region is vulnerable to natural disasters, especially hurricanes. Barbados itself has not felt the full brunt of a hurricane in several years. However the housing stock of the country, especially that comprising chattel houses does suffer when the high winds and heavy rains from weather systems brush this country. In these circumstances the Government is usually called upon by the public to provide support to families that have suffered loss or damage to their homes. In order to address this matter in a more efficient and transparent fashion the Owen Arthur piloted through Parliament legislation for the establishment of a Catastrophe Fund.

Purpose of the Fund
According to the insurance industry, the susceptibility of the region to catastrophes contributes to relatively high re-insurance premiums that are then passed on to consumers. The purpose of the Fund is to provide financial assistance to low income earners who own and occupy chattel houses. In setting up this Catastrophe Fund there are some individuals that might question the propriety of this initiative. Questions might be raised as to whether individuals should not have the responsibility of insuring their own premises.

The truth is that in the aftermath of a disaster the public as a whole does not wish to enquire into the circumstances of the victims and rather expresses the view that Government should take substantial responsibility for reinstating the homes of Barbadian families. In addition some of the houses that will fall under the purview of this new legislation are not considered to be insurable by insurance companies in Barbados. Finally sometimes individuals live in circumstances that the payment of insurance premiums might in fact, be a luxury.

Criteria for Assistance
The provision of this assistance is however circumscribed by certain criteria:
1. There must have been a catastrophe and that catastrophe could have been caused by fire, earthquake, storm, hurricane, flooding, a storm or sea surge, lightning, or by some other force of nature.
2. The house must have been damaged or destroyed by a catastrophe and must be valued at under $125, 000.
3. The recipient must earn less that $22,500 annually.
4. The individual must both own and occupy the house.
5. The house must be a chattel house, which means a house where 75% or more of that house is made of wood.
It should be noted however that agencies through which Government usually provides assistance will remain operational so that assistance can be provided in deserving cases where the criteria can not be fully met. For example a pensioner that owns a house valued in excess of $125, 000 but the level of his income and family assistance does not allow him to effect the necessary repairs.

The Fund
For a period of five years a sum of $2.5 million will be voted by the Parliament. In addition, monthly contributions will be made through the National Insurance Scheme. The contribution is 0.1% of the earnings of both employed and self employed people. It will also consist of amounts realised by investment proceeds and proceeds from the operation of the fund. The National Insurance Office will be responsible for the management and investment of the fund.

The Committee
The legislation also proposes a committee that is responsible for the consideration, the assessment of claims and the issue of grants. The members are:
• The Supervisor of Insurance
• The Director of National Insurance
• The Chief Fire Officer
• The Accountant General
• Two other persons appointed by the Minister of Finance

All of this is subject to the appropriate governance principles including proper accounting, auditing and reporting requirements. Within the legislation it is clear that this BLP administration, in keeping with good governance principles is making every effort to ensure transparency and that this initiative makes contact with the genuine cases. This innovative piece of legislation is expected to be debated in Parliament during the month of February.