Follow us: Entypo-facebook Entypo-twitter

CM-web-Banner-2014-b

Jamaica’s logistics hub

Legal framework is key to success of landmark project

IMG 1377

The proposed logistics hub has emerged in Jamaica as a national project and the centrepiece of the country’s maritime strategy. In scope and implications it represents the single largest project to be undertaken by the Government of Jamaica for decades. 

The project has tremendous implications for Jamaica’s ports and terminals, contemplating as it does a series of bold activities which seek to take advantage of the imminent widening of the Panama Canal – now scheduled for practical completion in April 2015 – and Jamaica’s strategic location at the crossroads of major international shipping lanes. 

ambitious

The goal is to position Jamaica as a fourth node in the global logistics network to complement Singapore, Dubai and Rotterdam. It is accepted that the project is “the most transformative economic activity that we will undertake as a Government”, according to the Hon. G. Anthony Hylton, MP, Minister of Industry, Investment and Commerce. The audacious components of the project will affect many Jamaican ports. The project calls for:

• Expansion of the Port of Kingston to receive post panamax ships

• Construction of a dry dock at Jackson Bay in Clarendon

• Installation of bunkering facilities at Cow Bay, near Yallahs, St. Thomas

• Construction of a cargo and maintenance, repair and operations facility at Vernamfield in Clarendon

• Development of an economic zone at Caymanas with a direct road link to the Port of Kingston.

The project is as far-reaching as it is ambitious and has the potential to catalyse several export-driven manufacturing and service industries. It will complement Jamaica’s already established tourism product.

However, as always, there has to be framework, and for projects such as the logistics hub that framework is almost always provided, in whole or in part, by the law. At the level of international law, it will be essential in providing both framework and foundation, that Jamaica has a robust, coordinated set of international and bilateral trade and investment agreements in place to facilitate the successful implementation of the logistics hub, ever mindful of the overarching World Trade Organisation regime. 

Minister Hylton has promised an intensive and practical review of Jamaica’s international and bilateral trade and investment arrangements, including but not limited to trade agreements, bilateral investment treaties, double taxation treaties and air services agreements.

Speedy

At the level of municipal or local law, a similarly intensive review must take place. Each and every piece of legislation relevant to the speedy establishment of a modern logistics hub must be placed under the microscope of value-added change and, thereafter, the repeal or revision of existing legislation and the promulgation of new legislation must be expedited.

It must also be recognised that the range of legislation will be like the range of the project. The process will involve legislation ranging from statutes that impact the ease of doing business; those dealing with regional and international trade; and those affecting local and international finance. For example, the most obvious municipal/local laws to be affected are the statutes affecting the environment and the reservation and zoning of land. Immediately, the development plans for the logistics hub must be accommodated by revisions to development orders, zoning decisions, user permits and environmental compliance.

Yet it is not simply at the level of both international law and municipal law that the legal framework will be provided. 

Executive policy, which is often as real as administrative law, must be considered. For example, in October 2012, under the imperative of ‘Shaping New Partnerships for National Development’, the Cabinet of Jamaica adopted a ‘Policy and Institutional Framework for the Implementation of a Public-Private Partnership Programme for the Government of Jamaica’. Although the policy was stated to be the ‘PPP Policy’ addendum to ‘The Policy Framework and Procedures Manual for Privatisation of Government Assets’, its principles and guidelines are highly relevant, given the centrality of local and private sector investment to the successful implementation of the logistics hub. 

Practical

The principles and guidelines dealing with transparency and probity, fiscal responsibility and achieving value for money, and risk transfer and management, will all have a practical impact on the use of the PPP model for investing in any element or component of the logistics hub. 

The way in which the PPP Policy uses the various teams through the various stages of the outlined process will also impact investor activity and Government support. When one considers that the components of the logistics hub present real and compelling investment opportunities for local, regional and international private-sector interests, and that the project itself and its elements are at the conceptual stage and must be reduced to pragmatic investment opportunities in order to attract the private-sector support essential to implementation, then one realises just how important a careful consideration of executive policy is to the success of this major project. Jamaica’s logistics hub is a significant and compelling investment opportunity that will be frameworked by modern legislation and executive policy. 

It will change the Region. In that regard it is not alone. The Dominican Republic, The Bahamas and Cuba are all implementing smaller plans to take advantage of the Post Panamax Era. One thing is certain. Several ports and terminals in the Region will be affected and Caribbean shipping will never be the same.