The Government has overreacted

May 15, 2021 Features / Columnists, Peeping Tom

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Kaieteur News – Two separate incidents, occurring under different political administrations, have harmed the country’s investment image. The first occurred within the bauxite industry during a protest against the Russian-owned RUSAL; the second was the recent actions taken by the Government against officials of a company which were allegedly operating a concrete factory without the requisite permits.
The first incident took place under the APNU+AFC. Workers took to blocking the river in order to press their demands with RUSAL – which is involved in bauxite operations. That illegal tactic of blocking the river thereby preventing the operations of the company is tantamount to economic blackmail and should never have been condoned.
The withdrawal of labour is the final and most serious resort of workers. The strike weapon is the most potent arsenal of trade unions, not blocking rivers and infringing on the rights of others. But when industrial action becomes about winning at any cost, such actions are generated.
The APNU+AFC Coalition, which was in office at the time, was sympathetic to the union and therefore it did nothing to stop the illegal protests. As such, it did nothing and the investor walked and is not likely to return. The workers have lost. More than 500 families have been affected by the closure of the RUSAL’s local operations.
The company called the union bluff and suspended its operations. There were hopes that with a new government, the company would have resumed operations. But that is not likely to happen since the company has advertised for the sale of its equipment.
RUSAL will end losing millions of US dollars. But the loss to the country in terms of investment confidence will be higher.
This will hurt future investment particularly in the bauxite industry. It is hardly likely that, given the unstable industrial climate which affected RUSAL just before it walked, any other company is going to be willing to come and invest in bauxite operations in Linden, Kwakwani and Ituni. The government also lost since it was a 10 percent shareholder in the Bauxite Company of Guyana.
The second incident is of most recent vintage. The government has moved to issue cease-operations Order on a cement making operation on the outskirts of the city. It is reported that the company disrespected the cease orders and this forced a visit by the Minister of Housing and the Head of the Central Housing and Planning Authority.
One of the principals of the company was overheard saying that he was willing to meet with the government officials but not in the presence of the media. This is a fairly reasonable position to take. But apparently the situation deteriorated and the government officials had to take their leave.
Now if the company was in violation of any regulations or laws, they should have been prosecuted under those regulations. However, instead of taking the company to court, the government decided to play nasty and used the immigration laws to order two of the principals of the company to leave the country within 24 hours.
This is bullying tactics on the part of government. But the government is emboldened to undertake such actions because it knows that its high-handed actions will enjoy public sympathy because it targets a foreign firm which is alleged to have been disrespectful to government officials and alleged also to be in the breach by operating such a facility.
However, the better way to have dealt with this matter would have been to take action against the violations. But the decision to expel the principals for alleged immigration violations is spiteful and shows the government is prepared to wield the heavy hammer against investors who are deemed to be disrespectful to government.
The actions of the government are going to be observed carefully by potential investors. And there are some companies which will not want to do business with a government which instead of addressing the specific violations which took place, sets out to punish the company through other means.
The Constitution of Guyana protects the right to property. And investors know that if government seeks to dispossess them of property, it is required to pay compensations. But the real fear of investors no longer is about government seizure of private assets. The real fear is that government can be vindictive and use its immigration powers to do what it is not inclined to do under other laws.
The PPP/C has made a mistake and is behaving just as rouge as the APNU+AFC. And that sort of conduct will shatter investor confidence in Guyana.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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