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Bermuda's History after 2007

News and significant events in the second third of this ninth month

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By Keith Archibald Forbes (see About Us) at e-mail exclusively for Bermuda Online

To refer by email to this web file, please use "bermuda-online.org/history2007Sept11to20.htm" as your Subject.

History to 1699 History 1700-1799 History 1800-1899 History 1900-1951 History 1952-1999
History 2000 to 2005 History 2006 part 1 History  2006 part 2 History 2007JanFeb History 2007 March
History 2007 April History 2007 May History 2007 June 1-15th History 2007 June 16 to 30th History 2007 July 1-15
History 2007 July 16th to 31st History 2007 August 1 to 7 History 2007 August 8 to 14 History 2007 August 15 to 21 History 2007 August 22-31
History 2007 September 1 to 10 History 2007 September 11 to December 31 History after 2007    

2008

Early. The face of insurance company regulation in Bermuda changed after Government passed the Insurance Amendment Bill in the House of Assembly. The new bill made a number of changes to the Insurance Act 1978, allowing the Bermuda Monetary Authority (BMA) to prescribe standards for an enhanced capital requirement and a capital and solvency return for insurers to comply with, and making new provisions for classes of insurance companies and Special Purpose Insurers (SPIs). It also allowed for the provision of additional financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) by Class 4 insurers. The changes came about through a consultation and from International Monetary Fund Offshore Assessment recommendations carried out in 2003 and published in January 2005 to evaluate the regulation of the banking, insurance and securities sectors on the Island and review the financial services legislation and identify steps to be taken to improve the country's regulatory framework. The amendments will further enhance Bermuda's regulatory framework and ensure that it keeps up with the evolving international standards. The amendment to GAAP reporting for Class 4 insurers would be extended by the BMA to Class 3 commercial sector insurance companies after a recategorisation of the Class 3 section had been completed as per the timeline set out in the Authority's 2009 Business Plan. The recategorisation of Class 3 insurers, meanwhile, will separate the captive and commercial insurance firms, redefining the Class 3 sector and forming two new sub-classes, namely Class 3A and 3B to allow the BMA to supervise and regulate each range and type of insurer consistently.

February 28. Government set out its stall for tackling illegal companies trying to open up shop in Bermuda following the passing of the Companies Amendment Act 2008. The proposal to amend the fifth schedule of the Companies Act 1981, which lists the annual company taxes incurred by local, exempted and permit companies, used to help improve the Island's regulatory structure, was given the go-ahead by the House of Assembly on Monday. Earlier this month Finance Minister Paula Cox announced in her Budget statement that company fees would be raised 6.5 percent, effective April 1 this year. Ms Cox said the Act would help to recover the costs of policing international business in Bermuda so that the Island retained its "blue chip" reputation. She said stricter procedures were necessary to watch for illegitimate companies setting up on the Island and to ensure all business complied with international regulations. Shadow Finance Minister E. T. (Bob) Richards asked Ms Cox how Bermuda compared with other financial jurisdictions in terms of costs for companies. He said: "We have to pay for the protection of our reputation. The Minister has made a good case for the protection of reputation but I don't believe she has for competitiveness." But Ms Cox said that it was a case of "swings and roundabouts" and that in comparison with other destinations, Bermuda offered lower work permit fees. An example of this was the Cayman Islands, where work permit fees cost up to $15,000.  "When you look at the raft of fees in other jurisdictions, it's swings and roundabouts. Although in company fees we may be seen as considerably higher, and companies recognise that in certain areas Bermuda is more costly, they also feel it's worth it because of our reputation. We are seen as blue chip. Certainly, I think on swings and roundabouts, Bermuda is not out of the ball park. In some areas we're higher but in other areas, other jurisdictions are much higher. We aren't going to tolerate abusive and sham transactions. We are going to protect our reputation and are not going to tolerate sham or abusive transactions. We are serious about protecting our reputation and are not willing to be tarnished or sullied by those wishing to use us." The Exempted Partnerships Amendment Act 2008 and the Overseas Partnerships Amendment Act 2008 were also passed in the House of Assembly without any objections from the Opposition. Meanwhile, the Bermuda Monetary Authority Amendment Act 2008 was also passed in the House of Assembly, which includes annual fees for insurance companies such as $210,000 for Class 4 insurers and $10,000 for those in the Class 3 category.

March 30. The Bermuda II agreement between the UK and USA was  replaced in two stages, on this date and on June 24, 2010, by an Air Transport Agreement between the European Union (representing 25 European countries) and the United States. This provides for an Open Skies regime, which is more liberal even than Bermuda I and Bermuda II.  

March 30. Bermuda-registered aircraft crashes in UK. The Cessna Citation I crash near Biggin Hill aerodrome south east of London, was attempting to turn onto final approach having suffered engine problems. It came down on the edge of a residential area, hitting a house, but no-one on the ground was killed. The aircraft was VP-BGE, Bermuda-registered, that entered service in 1975, according to Flight's ACAS database. Owned by the UK division of US fixed-base operator Ross Aviation, the aircraft was powered by a pair of Pratt & Whitney JT15D-1 engines, and has notched up a total of 5,780h and 5,242 flight cycles. Both pilots and all three passengers died in the accident, which occurred shortly after take-off from runway 21 bound for Pau, France. The impact point was about 3.7km (2nm) north east of the threshold of Biggin Hill's runway 21, close to the extended centreline. Just after take-off the crew put out an emergency call to Biggin Hill reporting engine trouble, citing severe engine vibration. The aircraft hit a house in the village of Farnborough, Kent, [not the town associated with the international air show], but the residents were away.

April. Norman Palmer, 57, who ran his own excavating business, died after he got into breathing difficulties at his Paget home and was taken to King Edward VII Memorial Hospital by ambulance. After Mr Palmer’s body was repatriated to the UK, many of his body parts, including his brain, spleen, a kidney and throat, were found to be missing, sparking international headlines.  A UK coroner stated he was "satisfied the body parts would have been removed in Bermuda because of the lack of the Human Tissue Act. That meant the family were not advised of the removal and it only came to light as a result of further examination in this country. I have to say it is not uncommon for bodies to be returned to this country with body parts missing.” Ms Bishop, sister of Mr Palmer, said the harrowing mystery of what happened to her brother’s body parts still haunted her and her sister-in-law and they had no intention of giving up their search for them. A Bermuda Police Service investigation into the body parts found no evidence of wrongdoing but recommended that the Island consider introducing regulations about permission for retaining body parts. A Bermuda Hospitals Board spokesperson said the missing organs “were not retained by BHB. As we have previously stated, in accordance with regulations, a small number of tissue samples were initially retained with the approval of the coroner’s officer to ascertain cause of death, but the organs were returned with the deceased to the funeral home in line with BHB’s policy. We have every sympathy for the family of Mr Palmer. We have already given detailed evidence in a public court about this matter, at which time our physicians, emergency staff and pathologist were extensively questioned. The facts show that our staff acted entirely appropriately.” 

April. Bermuda's insurance industry was worth a staggering $6.8 million per person, if its total aggregated assets of $440 billion were distributed among the Island's population of 64,000. The report by the Bermuda Monetary Authority (BMA) reveals that the Island's insurance sector was in good shape despite a softening global market after boosting its aggregate total assets by 33 percent, while increasing its gross premiums written to the tune of more than $15 billion. The BMA's findings show that the Island's insurers reported aggregate total assets of $440.4 billion over the past year, compared to $329.9 billion the previous year. Gross premiums written totaled $115.8 billion for the year, surpassing the $100.7 billion written the prior year. Of these amounts, captives accounted for $72 billion in total assets and almost $22 billion in gross premiums written. A total of 71 new insurance and reinsurance companies were established in the Bermuda market during 2007, compared to 82 in 2006, the BMA reported. The fall in registrations reflected the generally softer market conditions globally, which saw a slowing of captive incorporations. In such conditions, companies typically are able to purchase reinsurance coverage at competitive rates in the traditional commercial markets. According to the BMA, the majority of the new Bermuda market entrants for 2007 were once again Class 3 insurers, a combination of captive and commercial companies. With respect to the commercial sector, 2007 saw the formation of two Class 4 companies. This reflected the general inactivity in the property and casualty market, and the relative lack of major catastrophic events during the year, resulting in the likely record profitability of existing insurers and a sufficiency of global capital in the property/casualty sector.

August. Demolition of the old Club Med in St. George's occurred. As a direct result, developer Carl Bazarian was later awarded a 262-year lease to build a resort at the site of the old Club Med in St George’s. The Park Hyatt Resort (St George’s) Act 2008 was the authority. The lease stipulated a “construction period” mean “a period not exceeding forty-eight (48) months commencing from the date of completion of the demolition under Article 6 of the MDA (master development agreement)”. St George’s was still desperately in need of an economic revival and a new hotel will definitely help change that. But as reported in March 2012, with 42 months since the property was imploded, the property was in breach of this deadline, Furthermore, Bermuda was promised development would have commenced in 2011 at the latest. 

The skeleton of Governor George Bruere (Governor from 1764 to 1780) was unexpectedly found under the floorboards of St Peter's Church in St, George's when archaeologists from Boston University were searching for evidence of the foundations of the original church on the site, built in 1612. His wooden coffin had crumbled away, but a copper plate supposed to be from the top of the coffin was found in the skeleton's chest cavity, bearing the inscription "His Excellency / George James Bruere Esq / Governor of Bermuda /Lieut. Col. In His/ Majestys Service OB / The 10 September 1780/ AE 59 Years". The vicar of the church commented that he had no record of the funeral. From the bones, it was estimated that Bruere was 5 feet 4 inches (1.63 m), in height, which was about the average for the 18th century.

Beyoncé Knowles visited Bermuda, including a presence at the 2008 Music Festival at the Bermuda National Stadium.

A controversial company was set up by the Bermuda Hospitals Board (BHB). Healthcare Partners Ltd was formed to go into business with private partners as a subsidiary of BHB. But the scheme soon came under fire, facing allegations that hospital staff were profiting from its activities at the expense of home-grown medical companies.

The Progressive Labour Party Government axed dozens of Bermudians working in the Tourism Ministry’s New York office and replaced them with a US sales firm, Sales Focus.

Others not available here.

2009

Celebration of the 400th anniversary of the accidental settlement of Bermuda.

Her Majesty Queen Elizabeth II and her husband the Duke of Edinburgh visited Bermuda

January. Bermuda was in the American political spotlight once again with the publication of a report on "tax havens" which shows that the 100 largest US corporations have a combined total of 229 subsidiaries on the Island. The USA's Government Accountability Office (GAO), which includes the Island on its list of tax havens, showed that 83 of the 100 companies had at least one subsidiary in what it defined as a tax haven. Citigroup, the recipient of some $45 billion in US Government aid during the market turmoil since 2008, topped the list of companies with Bermuda subsidiaries, with 19. Another banking group, Wachovia, was second on the Bermuda list with 18 subsidiaries here. Wachovia was taken over last year by Wells Fargo, which received $25 billion in US bailout money in 2008-2009. Citigroup is one of several corporations with Bermuda units to have received government bailouts, including General Motors (three subsidiaries on the Island), Bank of America (two), American International Group (five), Merrill Lynch (two) and Morgan Stanley (two). Two oil company giants, ConocoPhillips and Chevron, who achieved a combined full-year net income of more than $30 billion in 2007, take third and fourth places on the Bermuda list, with 17 and 16 subsidiaries respectively. Pharmaceutical giant Merck is fifth with 14, while Caterpillar, the machinery manufacturer that stands to cash in on incoming President Obama's economic stimulus and its focus on infrastructure spending, is equal sixth with 13. Drinks giant PepsiCo also has 13 subsidiaries in Bermuda. AIG, an insurer which employs around 200 people on the Island and which has received some $150 billion of federal support to enable it to survive, has five subsidiaries based on the Island of its 18 in "tax havens" the GAO report showed. The report was requested by US Senators Carl Levin, a Democrat from Michigan, and Byron Dorgan, a Democrat from North Dakota, who have pushed for tougher laws to fight offshore tax havens around the globe. Sen. Levin, who leads the Senate Permanent Subcommittee on Investigations, has estimated abusive tax havens and offshore accounts cost the US government at least $100 billion a year in lost taxes.  

March.  It was reported that as UK Prime Minister Gordon Brown and his fellow European leaders prepare for the April 2009 G20 summit in London, where Bermuda and other 'tax havens' will be debated, the island's business sector is being targeted from another direction: the state of New York. New York Governor David Paterson has thrown his weight behind state insurance commissioner Eric Dinallo's plan to bring reinsurance business back from Bermuda to the US by establishing a New York Insurance Exchange (NYIE). Mr. Dinallo intends to have the NYIE up and running by 2010 and plans to narrow the tax gap in order to compete with Bermuda in its most lucrative sector. Mr. Dinallo believes his plan will see insurance jobs move back to New York, which he recently described as a reinsurance "vacuum." While the last incarnation of the NYIE folded in 1987 after losses mounted, those working on the 2010 version believe the current state of the economy will work in New York's favour. "The US currently gets none of the tax revenue from this activity because all of this is in Bermuda, so if we can capture some tax revenue from the business that comes to NYIE, that would be a big benefit," the New York State Insurance Department's Mr. Mais said. "This is particularly important, given the hits that employment in the financial markets has taken recently. The NYIE itself would be a new employer and presumably numerous insurance companies, capital providers, syndicates and brokers would have to hire more people here in New York to work on the exchange. We hope to get favorable tax treatment and a relatively small amount of initial capital committed and the exchange set up, so that as the economy begins to turn around, the facility is available and New York will enjoy the benefits of drawing new sources of capital to our financial markets. There is also the probability that there will be a shortage of reinsurance capital, particularly catastrophe coverage, over the next few years, which will create an opportunity for the NYIE."

2009 visit of Queen and Duke

April 17. Tucker's Point Hotel and Spa opened, at 60 Tuckers Point Drive, Hamilton Parish, Harrington Sound, Bermuda, HS 02, as a reincarnation of the old Castle Harbour then Marriott's Castle Harbour Hotel. Performing the opening ceremony were Michael Douglas and his wife Catherine Zeta-Jones and Premier Ewart Brown. It had been 37 years since Bermuda had last constructed a new luxury hotel.

Tucker's Point Hotel Opening

April. The Lamb Foggo Urgent Care Centre  opened to much fanfare in Southside, St. David's. It was built on the site of the former US military hospital. 

May. The Bermuda Government's application was approved to become a contributory member of the University of the West Indies (UWI). Bermuda's membership was slated to allow Bermudian students to enter the University at an agreed upon subsidized rate possibly as early as the 2009/2010 school year. UWI also agreed that their Open Campus (online degree courses) would become open to Bermudian students in the future, with Bermuda becoming the 13th country to have access to the Open Campus.

May 16. Roy Talbot, the last surviving member of Bermuda's famed Talbot Brothers band, has died. The 94-year-old, who with his talented family helped popularize calypso music in the wider world, was yesterday remembered as a skilled bass player, "a gentleman and a fine Bermudian" and an early promoter of the Island as a tourist destination. The Talbots were hugely popular here, in the United States and the United Kingdom in the 1950s and 1960s. The group released four albums and were known for such songs as 'She Has Freckles On Her Butt', 'Bermuda Buggy Ride' and 'Yellow Bird'. Mr. Talbot played the bass fiddle and actually created his own instrument, a double bass known officially as "the doghouse", and affectionately as "Bermudavarius" a nod to the Stradivarius violin. The group's accomplishments were never forgotten. VSB radio and television station manager Mike Bishop recently produced a documentary. Last month, the 94-year-old was presented with a lifetime achievement award and a book, CD and DVD collections compiled by Mr. Talbot's nephew Clement were released. Mr. Talbot's health quickly deteriorated soon after, however. "It's a real loss," said his nephew, who started the Ross (Blackie) Talbot Foundation, named eponymously after his father, another band member. "I spoke to (his wife of 22 years), my aunt Mary this morning. It was a shock. She knew his time was running to the end but wasn't anticipating it would end as abruptly as it did. Obviously it has an emotional impact but I think the family is holding up well although we're all saddened by the loss. " Several tributes were paid to the legendary musician in the House of Assembly yesterday. Said Environment and Sports Minister Glenn Blakeney: "The Talbot Brothers were a national treasure, known not just here on these 22 square miles, but around the world as they traveled bringing incredible joy to communities with their unique style of performing original and classic calypso songs. Roy Talbot was the bass player and actually invented an upright bass made of one string, he hit all the right notes." Several MPs added their comments to his, among them former Premier Dame Jennifer Smith: "I was glad he was around to see the book his nephew published." Culture and Social Rehabilitation Minister Dale Butler described Mr. Talbot as a "gentleman and fine Bermudian". However one of those who best knew him was his nephew, who spent three years trying to convince him to agree to the special project he had in mind. Mr. Talbot said he persisted because he saw his relatives as being "the last of what you call the almost-forgotten." Roy Talbot also enjoyed the production of a new book and DVD on the Talbot Brothers. "He and his brothers made a significant contribution to Bermuda's hospitality industry. They broke down a number of barriers and were able to climb a number of barriers (which existed) because of their skin colour."

May 27. Visitor arrivals and spending plummeted by more than a quarter in the first three months of this year, according to figures released yesterday. Announcing the Department of Tourism's 2009 First Quarter figures, Premier Ewart Brown said: "It should be abundantly clear to everyone that Bermuda Tourism is not immune to the regional and global trends of an economy in dramatic downturn." Shadow Tourism Minister Michael Dunkley however, dismissed this as "spin". "No amount of recession, no amount of words, aka 'spin', can cover over the fact that the Government's tourism woes are self-inflicted," he said. Senator Dunkley said what was needed now was a Tourism Authority, to put "the management of tourism into the hands of hospitality professionals and out of the hands of politicians". Dr. Brown, Tourism Minister, yesterday revealed air arrivals have dropped by more than a fifth and occupancy of hospitality properties declined 28 percent. Government statistics for the first quarter of 2009 show visitor spending also fell. The figures show visitors spent between $734 and $922, compared to $1,013-$1,216 per person in January to March 2008. Total visitor arrivals for the opening quarter of 2009 fell by 27.84 percent year over year, with 32,361 tourists during this period, compared to 44,845 last year. Air arrivals fell 22.75 percent, with 32,235 visitors 9,500 less than the first quarter of 2008. The statistics also point to a steady decline in 'all arrivals' as the year progresses, with 17.3 percent fewer arrivals in January, 26.1 percent less in February, and 33.4 percent <\!m> a third less in the total number of visitors for March. The number of people travelling to Bermuda for a vacation dropped by 29.1 percent in the first quarter, year over year. Business visitors declined by 10.5 percent and convention visitors were down by more than half compared to 2008, with a 53.6 percent drop. Yesterday however, Dr. Brown said he was optimistic things would pick up in the summer. Commenting on future hospitality bookings, he said: "The rest of May and going into June have been better than anticipated." He added the opening of Tucker's Point had created "a buzz in the industry", and that hoteliers would succeed by showing "creativity". But Dr. Brown added that for some visitors, the Island was perhaps too expensive. He said: "There is something about the Bermuda price point which didn't sit well with visitors. I don't know that it wasn't acceptable value for money but it didn't sit well with some." Announcing a raft of measures to attract more tourists, he said: "I feel good about all the good things that are happening. In spite of the tendency of some of the media to paint a miserable picture, we believe there are some good things happening, but they must do what they do." Dr. Brown said the opening of the new Heritage Pier in Dockyard would also buoy up cruise visitation figures. He said that once global tourism recovered from the economic downturn, people "would start travelling again. And when they travel again, we believe they will be more likely to visit or re-visit those destinations where the tourism product is fresh and buzz-worthy. With the new Port Royal and the revitalised Dockyard, with the new Tucker's Point Hotel and the crowd-pleasing Newstead, with the soon-coming Park Hyatt, Four Seasons and Grand Atlantic we think Bermuda Tourism is in a position to capitalise on the comeback. I trust all of our local Tourism partners will be ready." Yesterday however, Sen. Dunkley said: "We need a new approach to tourism and new leadership. The best thing the Premier can do today to improve tourism is to begin the transition to a Tourism Authority." The Opposition Senator said Government had failed to provide a "dedicated cruise ship for Hamilton this year" and "did not vote extra marketing dollars this winter to pump up Bermuda's market profile, as did our competitors to the south". He added: "We don't have a working sales force in the United States as a result of the Minister's destruction last year of the New York sales office. The so-called 'reorganisation' fired its Bermudian sales force in favour of a US company that was dumped just a few weeks ago by the Minister. As we said last week in an editorial: The upshot is that Bermuda Tourism's marketing organisation is in a shambles; with the Minister supervising the meltdown of our North American operations. In the midst of a worldwide economic crisis, when Bermuda needs its strongest sales effort against intense competition, we are without a dedicated sales force in our most important market." Last night Stephen Todd, President of the Bermuda Chamber of Commerce, said hoteliers and hospitality partners, retailers and restaurateurs had anticipated a fall in visitor numbers. "They are concerned, as we all are, but also guardedly optimistic," he said. "We are all looking at the manner in which we deliver our products and services, and the restaurant and retail sector are looking to provide value to their customers, and also the way they deliver those products and services. While we can't control the ability to get people to come to Bermuda and to travel in this current global economic climate, we need to encourage visitors who do come here to return.  We've seen a number of initiatives the Department of Tourism has and will be moving forward, some of which the Premier indicated in his speech today, but the true test will be if we see an increase in visitor numbers in the coming months. This is really something we can't predict." Premier Dr. Ewart Brown outlined a number of initiatives to encourage visitors to the Island as the tourism industry is hit by recession and the global economic downturn. The measures announced yesterday at a Ministry of Tourism and Transport press conference, include Partnership with the Bermuda Hotel Association (BHA) in the 'Compliments of Bermuda' $200/$300/$400 promotion, from November 2008 to March. The Department of Tourism provided $650,000 in subsidised funding to hotels for the hotel package promotion. Government contributed a total $900,000 to hotels for joint promotions with Bermuda Tourism in the fall and winter of 2008-9. This resulted in 5,031 bookings, or 10,062 passengers. A 'Sizzling Summer 400 Program' to mark Bermuda's 400th anniversary of permanent settlement, will provide a credit of $400 to visitors spending four nights of more on the Island. The Department of Tourism executive team completed a 2009/2010 sales and marketing plan in mid-February. Dr. Brown, Tourism Minister, said this was "designed specifically to address the current challenges faced by Bermuda in the face of the current economic downturn". This includes more emphasis on digital (Internet) marketing. $2.5 million has been allocated to digital and interactive marketing, with a revamped Bermuda Tourism website and more marketing on social networking sites. Marketing efforts will also focus on the "core northeast market with secondary attention to the UK, Canada and Europe". The Premier, the Director of Tourism and the director of Global Operations, have given presentations to industry partners in Philadelphia, New York and Boston. Dr. Brown said: "Approximately 25 percent of Bermuda's business is attributed to retail travel agents and we will continue that commensurate level of support to this distribution channel." Speaking engagements. Dr. Brown said this was a means for Bermuda "to get word out on the street about our outstanding tourism product". He cited a speech to the Young Presidents' Organisation at a regional function in Miami as an example, and said the aim was to get business leaders inspired to visit Bermuda for a retreat. New marketing partnerships with the Boston Red Sox and the Deutsche Bank Golf Championship. A Red Sox Bermuda Night is to take place at Fenway Park on June 19. The course renovations are now complete for the new Port Royal Golf Course and the Premier said Tourism has "big plans for Port Royal" in its strategy, with plans to focus on New England in marketing. The Bermuda International Love Festival. Dr. Brown said this year's sponsors included: Elle, W, and Departures magazines, Golf World, Robb Report, Veranda, Chopard Jewellers and JetBlue. The partnerships would lead to more "editorial coverage of Bermuda". Dr. Brown said that while this year's Love Festival attracted 160 people, next year the target would be 300. Salsa dancing and street festivals could feature among the activities on offer this summer. The Department of Tourism is sponsoring free events around the Island, which include: an increased schedule for the 'St. George's Historical Reenactment; storytelling in Bob Burns Park; 'Gombey Saturdays' at Par-la-Ville Park; a 'Taste of Bermuda Calypso Sundays' at Royal Naval Dockyard; and the return of Movies on the Beach.,Whenever cruise ships are berthed at Dockyard on a Saturday, the ferry service will operate to St. George's with four round trips a day. Dr. Brown said: "We are providing this service in response to input received from residents and businesses in St. George's."

June 11. Four Uyghurs who had been held in extra-judicial detention in the United States Guantánamo Bay detention camp, in Cuba were deported secretly to Bermuda under a conniving deal reached solely between the-then Premier of Bermuda, Dr. Ewart Brown, United States Consul General in Bermuda and the United States government - and in violation of Bermuda's Constitution. The four men were among 22 Uyghurs who claimed to be refugees, who were captured in 2001 in Pakistan after fleeing the American aerial bombardment of Afghanistan. They were suspected of training to assist the Taliban's military. They were cleared as safe for release from Guantánamo in 2005 or 2006. But U.S. domestic law prohibited deporting them back to China, their country of citizenship, because the U.S. government determined that China was likely to abuse their human rights. In September 2008 the men were cleared of all suspicion, and Judge Ricardo Urbina in Washington ordered their release. However domestic opposition to their admittance to the United States was very strong and until Bermuda and Palau agreed to accept them, the U.S. had failed to find a home for them. The Uighurs concerned were banned from ever going back to the USA for having accepted training from al Qaeda and taken part in terrorism. The secret, sneaky and illegal bilateral discussions that led to prisoner transfers between the U.S. and the devolved Bermuda government sparked diplomatic ire from the United Kingdom, which was not consulted on the move despite Bermuda being a British territory. Tensions between Bermuda and Whitehall reached fever pitch with then-Governor Richard Gozney calling the move 'invalid' and 'unacceptable.' The British Foreign Office issued the following statement: "We've underlined to the Bermuda Government that they should have consulted with the United Kingdom as to whether this falls within their competence or is a security issue, for which the Bermuda Government do not have delegated responsibility. We have made clear to the Bermuda Government the need for a security assessment, which we are now helping them to carry out, and we will decide on further steps as appropriate."

June 12-15. Bermuda participated in the international event linking Europe and North America also part of the 400th anniversary celebrations of Bermuda’s permanent settlement after the wrecking of the Sea Venture. Bermuda was named one of the host ports for the Tall Ships Atlantic Challenge along with Vigo on Spain, Tenerife in the Canary Islands, Halifax, Canada, and Belfast in Northern Ireland. Young Bermudians were given the opportunity to be placed as trainees on some of the international ships as they sailed from port to port. The Spirit of Bermuda took part in some stages of the event. Between 30 and 40 tall ships were on hand for the festival, which got a boost in 2009 as it coincided with the 100th anniversary of the Royal Canadian Navy, also bringing a number of military tall ships. A fleet of ships from Europe raced to Bermuda and gather back in Halifax for another leg of the race. This leg ended in Belfast, Northern Ireland.

August 18. A new digital marketing campaign has proven extremely successful for the Department of Tourism, Premier Ewart Brown said yesterday. The Department released the second quarterly bulletin which showed that despite arrivals being down between April and June visits to BermudaTourism.com were up 81 percent compared to the same period in 2008. Dr. Brown, who is also Minister of Tourism, said several high impact promotions on the site in the second quarter attracted approximately 301,000 visits. Page views were also up 49.9 percent to 2.7 million. The results mean potential tourists are now spending more time while viewing more pages and sections of the website.  Dr. Brown said he believes the increase is due to the website's new look as well as an increased amount of new information being posted. Data also shows that people are staying on the website longer as the "bounce rate" is down 48.5 percent. "We believe this trend will continue which is important because search is a cost effective way of touching our target audience and we will continue to increase investment not only with our own website development but also with our online distribution partners. Increased traffic to the website, despite fewer visitors, is an extremely encouraging indicator that our goal to increase destination awareness is definitely working and this augurs well for the future." News is also good from online booking agencies. Dr. Brown said in 2007 they realised more effort needed to be put in online tourism sites as 57 percent of North American consumers booked vacations online. Online bookings on Expedia were up 33 percent year to date, compared to the first six months of 2008, while Orbitz bookings were up 45 percent, Travelocity bookings up 35 percent and Purely Bermuda, a key UK online operator, up 36 percent. No actual numbers were provided. He added that in key markets BermudaTourism.com is the first site located by a Google search, previously the site ranked third or fourth. "These numbers are very encouraging," Dr. Brown said. "In fact they are exciting. I have supreme confidence we are moving in the right direction on our digital marketing strategy and I will be compelling our Internet group to keep their foot on the gas pedal." Tourism stats for the second quarter of 2009, compated to the same period in 2008, showed Air arrivals were down 14.2 percent, brining 74,979 visitors to the Island this year; Air arrivals for people coming on vacation were down 12.4 percent; Air arrivals for people coming for business were down 16.4 percent; Air arrivals for people coming for a convention were down 41.9 percent; Air arrivals for people coming to visit friends or family were down 0.8 percent; Air arrivals from the core US market were down 12 percent; Air arrivals from the rest of the US market were down 13 percent; Air arrivals from Canada were down 10.8 percent; Air arrivals from the UK were down 19 percent; Air arrivals from Europe were down 28 percent; Cruise arrivals were down 3.7 percent, bringing 124,553 visitors to the Island this year; Yacht arrivals were down 7.98 percent, bringing 3,529 visitors to the Island this year. For the year to date the number of total visitors was 235,525, down 11.28 percent. In the past 30 years the total visitor number has surpassed 200,000 only eight times. This year's total visitor number is the fifth best since the modern recording system was implemented. 201,565 visitors came to the Island in 1982. 213,931 visitors came to the Island in 1987. 200,607 visitors came to the Island in 1994.  200,676 visitors came to the Island in 1996. 228,768 visitors came to the Island in 2006. 232,806 visitors came to the Island in 2007. 220,634 visitors came to the Island in 2008. 203,061 visitors came to the Island in 2009. 

September. What for centuries in Bermuda used to be known as Spanish Rock formally renamed Portuguese Rock in a ceremony attended by dignitaries from Bermuda and Portugal. The ceremony was held at the rock, which was engraved here almost 500 years ago. Portuguese Rock is a poignant reminder that Bermuda has and will continue to have strong cultural connections with Portugal and a shared maritime and international commercial history that built the foundations of the modern Atlantic world. Antonio Nunes de Carvalho Santana Carlos, Ambassador of Portugal, flew in from London for the ceremony and made a short speech. Once the new sign was unveiled, Bishop Robert Kurtz and Father Julio Blazejewski both said prayers. The Portuguese national anthem was performed on the accordion by Antonio Araujo and Wendell "Shine" Hayward played Bermuda's official national anthem God Save the Queen, on his saxophone. It was thought that the inscription 'RP 1543' was made by the Spanish who roamed the seas in the 1500s and hence it was called 'Spanish Rock.'  But subsequent research indicated that the inscription was made by a Portuguese sailor who was wrecked off Bermuda's reefs in 1543. 

September. Government’s Washington office opened, on 7th Street in the US capital. The-then Progressive Labour Party administration said that its core functions were to maintain open channels of communication with US policymakers and their advisers while also facilitating business development opportunities for Bermuda. Opposition MPs branded the initiative extravagant — it is understood that the Government signed a ten-year lease on the office, paying $180,000-a-year to rent the space.

October. Bermuda's honey bees were badly hit when the varroa mite hit the Island, causing thousands of local bees to die.  The mite infected most of the bee hives in Bermuda. There was a knock-on effect on agriculture as bees are needed to pollinate crops.

October 26. With the closure of Elbow Beach Hotel's main building for the next several years, many people have been left wondering what does this mean for much touted hotel developments across the Island. Last Wednesday, when the announcement was made that 160 people would loose their job as a result of Elbow's partial-closure, Premier Ewart Brown said he was saddened by the news but optimistic. A press statement indicated that the Premier believed the hotel was in "dire need of upgrading" and added that he was "expressing optimism on the future. The rooms that will replace the old-style accommodations in the old building will make a welcome addition to the improved product that will come when other hotels are developed," he said. "Elbow Beach will then be able to compete with brands like Park Hyatt, Four Seasons and St. Regis." The press statement added that Elbow Beach will neighbour the proposed Four Seasons to be developed at the site of Coral Beach/Horizons. Here's a look at the progress of the hotel developments Dr. Brown mentioned as well as six other properties across the Island: Ariel Sands, Devonshire. After closing its doors indefinitely in January, the owners attempted to find an investor to redevelop the property. In March executive director John T. O' Brien said its original investor had backed out of the deal because of the deteriorating financial climate and the company was looking for new investors. Since then no new investors have been publicly named. Grand Atlantic Resort and Residents, South Shore, Warwick. In 2007 it was announced that a nine-storey, 706-bed hotel would be built at the former Golden Hind site. A Special Development Order was passed outlining that Government and landowners Atlantic Development were to build a 100-room hotel and 125 affordable homes in a public-private partnership. It added that the 125 two and three-bedroom condos would be built in four phases, while the hotel was constructed on a neighbouring site, with a projected completion date by 2013. St. Regis. Hamilton. In November 2007 the Corporation of Hamilton signed a deal to develop a five-star Ritz Carlton on the site of the Par-La-Ville car park. However, in June Premier Ewart Brown announced the exclusive five-star hotel and residence development would now be a St. Regis. The St. Regis Bermuda will feature 140 rooms and suites and 80 serviced residences, and will be located on the corner of Par-la-Ville Road and Church Street, overlooking the park. A spokeswoman for the overseas developers said the ground breaking will take place between July and December next year and the foundation will be laid sometime in 2011. The hotel will be opened by September 30, 2013, at the latest. She added that they were confident with their financing. Coral Beach Club and Horizons, South Shore, Paget. Owners are waiting for the Draft Plan Tribunal to decide on an appeal against the Development Applications Board's refusal of planning permission for the Four Seasons Hotel in Paget. The plans include a 150-room hotel, 60 fractional ownership villas, 20 residential units, a spa, fitness centre, tennis courts, pools and conference centre to be located at the properties. The developers did not respond to a request for comment. Former Wyndham/Sonesta property, Southampton. In January 2008, developers Scout Real Estate Capital announced plans for a $300 million resort called Southampton Beach Resort. Last week the company declined to comment on rumours it was looking for a quick sell-off of the property and did not respond to a request for an update. Coco Reef Hotel, South Shore. In January 2008 Coco Reefs Hotel was granted a Special Development Order to build 66 apartments on Government owned property. In March this year Coco Reef Resorts Ltd. owner John Jefferis said he planned to break ground on the 66 new lease back Coca Villas cottages in December. Mr. Jefferis did not respond to a request for an update. Stonehaven Development Condominium Hotel, Hamilton. The 81-unit apart-hotel at the corner of Court Street and Reid Street will house 42 'hotel condominiums', 39 'residences', plus a restaurant and spa. The development, on the site of the former Canadian Hotel, was granted a Special Development Order in 2008. Owner Ted Powell said they were still working on financing the project and talking with prospective hotel brands. There is no date in place for breaking ground on the project. Former Club Med, St. George's. In June Dr. Brown told a PLP Town Hall meeting in St. George's financing for the five-star Park Hyatt hotel at the former Club Med site would be signed in July. Financing is at an advanced stage. Final documents are to be signed in July. That will secure all of the funding both from the investment side and the debt side. These documents will be signed next month. Developer Carl Bazarian did not respond to a request for an update as to whether financing had been secured or a start date for the project. Morgan's Point, Southampton.  Government agreed to a land-swap with developers to swap Southlands for the Morgan's Point property in April 2008. Originally the Jumeirah hotel group was attached to the project. In March, a Jumeirah spokeswoman said the ultra-luxury Dubai-based chain had signed an agreement to manage a new hotel in the US Virgin Islands, but not in Bermuda. But she added: "Jumeirah was appointed in 2007 to manage the first five-star resort to be built in Bermuda in 35 years. Since then, the developers, along with the Government authorities, have been looking at a new opportunity on a different site. We continue to be committed to Jumeirah's resort in Bermuda." Attempts to reach developer Craig Christensen for an update were unsuccessful.

November. Establishment of the Bermuda Government's Energy Commission. The mission is to assist in the development and maintenance of affordable, clean and sustainable energy, for the economic, social and environmental well-being of residents and businesses in Bermuda. As required by the Energy Act 2009, appointed by the Minister of Energy, Telecommunications and E-Commerce in November 2009. The Commission consists of a chairman and four other members, though an additional member may be appointed to assist in an inquiry by the Commission if their expertise/experience is required. Members are appointed for a period of three years. Meets twice a month and primary duties are to Review, and subsequently approve or disallow variations to the price or charge for electrical power submitted to the Commission by a specified businesses; Set out the terms and conditions under which a specified business may make a variation to the price or charge for electrical power; Conduct inquiries into the price or charge made for any energy-related commodity; Conduct inquiries into other matters concerning the cost or supply of any energy-related commodity; Conduct inquiries into any matter which may affect the exercise of the Minister's powers under the Energy Act 2009; and Advise the Minister in the discharge of the Minister's functions under the Energy Act 2009.

2009. John Barritt & Son Ltd began importing Coca-Cola and other soft drinks from overseas, rather than bottling them locally, to cut costs amid falling sales.

2009. Gosling’s joined with Polar Beverages of Massachusetts to create, package and distribute its own ginger beer soft drink.

2009. Plans to develop the South Shore, Warwick homes were announced by Premier Ewart Brown. He promised a combination of 125 housing units and a 100-room hotel would be built on the site of the former Golden Hind resort and before that, in the 1960s, the Bermudiana Beach Club premises fronting one of Bermuda's loveliest beaches.

2009. The government of Bermuda transferred Casemates Barracks and its adjacent Ordnance buildings and fortifications into the existing Bermuda Maritime Museum and the combination, involving a total of 16 acres of land and buildings, became the National Museum of Bermuda. 

2009. The Bermuda Chamber of Commerce, Real Estate Division, published its 2009 Handbook on buying and selling Bermuda Homes, see  2009 Bermuda Real Estate Handbook.pdf  

2009. Death of Bermuda war veteran David Lindsay. Born in Bermuda on March 4, 1920, he was the son of Walter and Mary Lindsay, formerly of Kirkaldy, Fifeshire, Scotland. Walter had come to Bermuda to be chief electrical engineer at the Hamilton Hotel, then the largest in Bermuda, where city hall now stands. David attended Saltus Grammar School until he was 16, when he went to Scotland to complete his education. He remained in Scotland after leaving school. He wrote a vivid account of his experiences as a soldier overseas in World War Two. It was originally published in the Bermuda Mid-Ocean News of October 20, 2000, under the headline "My 6 ˝ years as an anti-aircraft gunner". At the outbreak of the Second World War, he was 19 and an apprentice insurance actuary. He had not long to wait before being called up for the Royal Scots, the oldest regiment in the British Army. Following 12 weeks of basic training, a special course and a lance corporal's stripe, he qualified as an instructor. He could really shout in those days! His platoon was in dawn-to-dusk stand-to duty. He decided it was time to move on and, along with three others, answered a call for volunteers to become Lewis gunners on trawlers. He trained in everything from basic .303 ammunition to six-inch naval guns. On completion, we were posted to the 3/2nd Maritime Anti-Aircraft Regiment in Middlesborough.mA further call for volunteers for training on 40mm Bofors guns saw him posted to a troop ship leaving Gourock in Scotland for South Africa. He was sea-sick for days. After a stop at Freetown, Sierra Leone, he reached South Africa. He spent three glorious days there, and a further nine at Durban, where people were wonderfully hospitable. He still had his Glengarry (the special Scottish cap worn by the Royal Scots) which was a great passport abroad. Eventually, he returned to Glasgow where he went to Sheerness to join a tanker bound for the United States. It had been refitted at Mobile, Alabama. On the way to Halifax to join a convoy for Britain, he eas torpedoed. He got off safely, was picked up and taken to Norfolk, Virginia. He ended up in a convoy named Operation Pedestal with 14 merchantmen and 50 escort ships bound for Malta. He hardly got through the Straits of Gibraltar when the aircraft carrier Eagle, at the rear of the convoy was torpedoed and sunk. He fired so many rounds he had to change gun barrels twice as they became too hot. After two days of chaos, the two battleships and the aircraft carriers departed, leaving him to get on with it. He was the loader on top of the gun and at dusk someone handed him an ammunition clip the wrong way round. The gun jammed just as German Stuka dive bombers were attacking him and his party. "I looked up and saw a Stuka coming straight down. Its bombs went diagonally across the aft part of the ship, just below us. The blast blew me off the gun against the parapet. All I got was an injured knee. Another guy broke his wrist. We were lucky. Next day we came upon the convoy's only tanker, which had been torpedoed. Another destroyer was standing by. The two destroyers (HMS Penn and HMS Braham. I was on the Penn) got ropes aboard the tanker. But the dive bombers appeared and the destroyers had to let go of the ropes. Eventually, they lashed the destroyers to the tanker, one on each side and, in spite of further attacks, we got into Malta's Grand Harbour where, later, the tanker sank. They gave the tanker's captain the George Cross. They should have given our destroyer's captain a medal. I don't know how or when he could have slept. When we got him ashore, they had to cut his boots off, his feet were so swollen. Things were so bad that each gun crew had been on a ration of only four rounds of ammunition a day. That took two seconds to fire off. We were kept in Malta. We thought we would be there until the war ended. However, Allied victories in North Africa and Sicily changed things. I was put on a trooper and a guard to prisoners-of-war going to Egypt and Palestine. It had been a hard year in Malta. We had dysentery and sores which wouldn't heal due to shortage of rations and Vitamin C. After four months on a tanker plying between Haifa and Egypt, I got shipped to Scotland, and my fortunes improved. I went to a new regiment in Bristol, and was placed on a small Dutch coastal ship loaded with coal. I was waiting to go on a sergeant's course when D Day intervened. I was assigned to a top-heavy American vessel, taking supplies to Utah and Omaha Beach Heads in Normandy. We ran the ship up on the beach at high tide and waited for low tide to unload . Later, we twice went up the River Seine to Rouen. After a course at the Royal Artillery School of Survey, I went to Hanover, Germany, and Osnabruck, Austria, and ended up in charge of a 25-pounder team in Dortmund before demobilisation after six and a half years of service. Looking back, it didn't seem that long." During David's post-War period of duty in Germany, he met and married Maria. They were married for 54 years before Maria died following a serous illness. They are survived by a daughter, Elinore Thomson, and a son Robert. Elinore and Robert are now retired but still live in their ancestral home city of Kirkaldy in Scotland.

2009. British American Insurance Company (BAICO) was wound up after its collapse. Later, its distinctive blue building was listed with agents Coldwell Banker, initially for $3.6 million, then $2.7 million, most recently for far less than that, $1.95 million. In October 2012 it still had not sold. The building was home to BAICO. The drop in asking price means the final distribution to be divided among creditors or policyholders still awaiting a final cheque will be less than hoped. In a statement sent out in October 2012, KPMG Advisory Ltd, agents to the Official Receiver, said: “Creditors should be aware that it remains the objective of the Official Receiver to execute a sale as soon as possible, and that notwithstanding the significant reduction in price aimed at attracting a buyer, no one has yet been identified with the ability to finance the building’s purchase. As such, in order to assist those purchasers who are finding it difficult to obtain financing in the prevailing economic environment, the Official Receiver has further reduced the asking price to $1.95 million.” BAICO owns 40 percent of the building with the other 60 percent belonging to the BAICO Bermuda pension scheme. There are approximately 3,800 BAICO policyholders and 6,000 policies.

2009. The Bermuda Housing Corporation (BHC) warned Cabinet against building the Grand Atlantic development in Warwick. BHC was informed of the plan for a hotel and housing development on the South Shore in 2009. The Grand Atlantic project was a Cabinet directive, which the Corporation cautioned against. At that time, the data regarding the real estate market supported the case that the cost of housing was falling and the demand was not there. It was agreed that BHC would buy 78 of the 125 units and offer them for resale, with an option to buy the additional 47 units “if the market supported the purchase.”

2009. The controversial Heritage Wharf cruise ship terminal at Dockyard was opened at a Bermuda taxpayer cost of $60 million — a huge increase on the original estimated cost price of $35 million.

2009. November. The Energy Commission, a regulatory body, was empowered by the Energy Act 2009.  It does not release its annual reports to the public — nor does it have to. The Energy Act requires only that it provides the relevant Minister with a report on its activities, not taxpayers. Visit www.energy.gov.bm for more information on the Commission and the Department of Energy.

2009. Revision of the original Grand Atlantic Resort and Residences (Warwick Parish) Special Development Order 2007, which specified that the site was to contain a nine storey, 220 room ‘five star’ hotel, 20 luxury fractional suites, five luxury villas and 52 luxury condominiums. The revision announced that the project would be a hybrid project consisting of 125 affordable housing units and a 100-room hotel.

2010

January 2. The 2009 draft valuation list is now ready for publication in 2010, according to the Land Valuation department. The Draft Valuation List is a list of all properties on the Island assessed for land tax purposes and according to a press release, the Land Valuation and Tax Act 1967 requires all properties on the Island be revalued every five years, with the last revaluation carried out in December 2004. All properties are revalued at the same time to maintain fairness in the Valuation List. Property values change over time with some property types and areas going up in value while others in some cases may go down. The revaluation re-levels the playing field by reflecting these relative changes in value. Copies of the draft valuation list will be available in the post offices throughout the Island. The information will also be accessible on the Land Valuation website www.landvaluation.bm. If anyone believes the information is wrong, contact the Land Valuation Department until June 29 to make an objection.

January 2. A compendium of Government statistics has revealed more than a third of hotel rooms and guest houses lay empty in 2008. The latest Environment Statistics Compendium says the 2008 tourism occupancy rate was only 59.1 percent. This is a drop of eight percent on the previous year. Tourism arrivals fell by 17 percent to 550,021 visitors, and total expenditure dropped from $513 million to $402 million from 2007 to 2008. Visitor expenditure includes hotel accommodation, meals and drinks, shopping, entertainment, transport and sightseeing. Government recorded 18 percent fewer visitors from the US in 2008, and an overall decrease in air arrivals of 14 percent. Cruise ship passengers reduced in numbers by 19 percent. The first Environment Statistics Compendium was released recently, providing a comprehensive overview of land use, population, energy, transportation, environmental health and the natural environment. The latest figures, for 2008, will assist in guiding Government's Sustainable Development Strategy and Implementation Plan, particularly in 'Protecting and Enhancing Our Environment and Natural Resources'. In the foreword to the new report, Chief Statistician Valerie Robinson-James says: "The thrust of this project is to ensure that environmental considerations are integrated within social and economic planning contexts." The compendium includes data on the number of vehicles on our roads; fishing catch; electricity consumption; and the growth in fertilizers and pesticides. It is broken down into nine sections: Agriculture and Land Use; Biodiversity; Coastal and Marine Resources; Energy, Minerals and Transport; Environmental Health; Natural and Environmental Disasters; Population and Households; Tourism; and Water. The report reveals registered vehicles on our roads rose from 48,054 to 48,571 in 2008, however, less gasoline was imported. A total of 34 million liters was brought to Bermuda, a tenth less than the 37.3 million liters in 2007. The population of Bermuda only officially grew by 200 people in 2008 to 64,209. This gives a population density of 1,181 people per square kilometer. Electricity consumption also only increased marginally, from 644 million kilowatt-hour (kWh) in 2007 to 645 million kWh last year. Copies of the 2009 Environment Statistics Compendium are available from the Department of Statistics, 3rd floor, Cedar Park Centre Building, 48 Cedar Avenue, Hamilton, or can be downloaded from: www.statistics.gov.bm.

January 8. The bad news is air arrivals have dwindled to a few hundred thousand a year, another of Bermuda's hotels closed down, and no ground was broken last year on any of at least ten proposed new resorts. But the good news is developers behind most of the highly publicized hotel developments announced in 2009 remarkably are pushing on. Despite the economic uncertainty, construction could finally begin this year on at least three, and possibly four, new hotels. Some of the proposed developments, including the St. George's Park Hyatt, appear to have been scaled back. However, 2010 may finally see at least a dawning of Government's much-touted and badly needed "platinum period" of tourism revitalization. Last year two new, or rather, redeveloped hotels opened, Tucker's Point and Newstead Belmont, while Elbow Beach made the shock announcement it was closing its main hotel in order to upgrade the rooms. In the past decade the number of tourists flying to Bermuda has dropped from close to 400,000 to just 264,000 in 2009. But that's not putting off developers. U.S. hotel developer Carl Bazarian says he now has full financing in place and could finally break ground on the planned Park Hyatt at the old Club Med site in St. George's possibly "at the end of the year" once the design is finalized and approved. Mr. Bazarian told The Royal Gazette: "We have received a commitment on rounding out the equity from a London-based investor well known to HSBC and Credit Suisse." Officials with Ariel Sands hotel, closed for a year, say they are close to a redevelopment deal with a Canadian developer and high-end hotel operator, which could see ground broken this year. "Feasibility studies are currently underway and will be completed within three months," said Trevor Boyce, accountant-consultant to Ariel Sands. "If successful Ariel could well see ground broken this year." He said the Canadian developers view the site as "absolutely unique" and were very serious about proceeding once the studies are done, if there are no major red flags. Officials with the planned Par-La-Ville Hotel and Residences says the project is "on track" and the development is now featured on the St. Regis Residences website, which has begun taking names of people interested in buying one of the 80 private residences. Detailed plans for developing Morgan's Point into "a five star luxury hotel resort with full amenities" were shown to Government at a meeting in early December. A spokesperson for Premier Ewart Brown said the proposal was still being reviewed by the various Government agencies involved. "Southlands Ltd made a presentation to the Cabinet Committee on Special Hotel Development," the Premier's spokesperson said. "The developer's proposal continues to emphasize tourism use for the land at Morgan's Point." Government has held off completing a planned swap of the Southlands site for Morgan's Point land until the plan for the entire development is revealed. A spokesperson for Southlands Ltd., said "(Earlier in December) the principals of Southlands Ltd made a presentation to Bermuda Government representatives at a recent Tourism Cabinet committee meeting. There, they presented their proposal for developing Morgan's Point into a five star luxury hotel resort with full amenities. At this point they are waiting for a response from Government on the success of that proposal." Plans for a Four Seasons 150-room hotel and residences at the Coral Beach Club are proceeding. The project, which will include a pedestrian tunnel, won in-principle approval upon appeal and owner George Wardman said "a new slower approach" was being taken with U.S. partners Brickman. He said the hotel remains open, having never actually closed down in November as originally planned. "I believe something is going to happen soon," Mr. Wardman said. Brickman officials did not return phone calls.  Developer Gilbert Lopes said plans for a 100-room hotel and 125 affordable homes for Bermudians on South Shore, Warwick, are on track and he is involved in "almost daily" talks with Government, the Housing Corporation and lenders to finalize the details and the financing. Mr. Lopes said he and Larry Swenson, of Atlantic Development, hope to have a building permit by this summer and to break ground right after. Coco Reef Resorts Ltd. owner John Jefferis announced plans to break ground next year on 66 serviced villas, to initially be leased back to the hotel for six months a year. He said financing is in place. A second phase at the South Shore, Paget site will include a six-storey hotel. It's unclear whether Bermuda's foreign home ownership rules will have to be revised in any way to accommodate the new kinds of residential components of some of the proposed resorts, such as the St. Regis Residences. Bermuda laws right now allow foreigners only to purchase certain houses and condos, and they must have certain high annual rental values. Fees up to 22 percent to acquire a property are also charged by Government. Plans, meanwhile, look uncertain for the former Wyndham/Sonesta prime beachfront property that now sits derelict in Southampton. In January 2008, developers Scout Real Estate Capital announced plans for a $300 million resort called Southampton Beach Resort to open in 2011. The hotel was demolished and Lehman Brothers was supposed to finance the new resort, but went bankrupt. Last October Scout declined to comment on reports it was looking for a quick sell-off of the property and that it had been newly appraised. Scout CEO Alan Worden did not return repeated phone calls seeking an update. Plans for an 81-unit hotel and residences at the corner of Court Street and Reid Street also seem to have gone cold. The development on the site of the former Canadian Hotel was granted a Special Development Order in 2008. But owner Ted Powell said last year financing was still not in place. Also stalled, are plans by Lawrence and James Doyle, of New York, to create a $145 million "ultra-luxury resort" on the site of the old Lantana cottage colony.

January 13.  Bermuda's rental market has picked up considerably over the past year, with total closed units increasing by 18 percent versus 2008, according to the latest report released by Coldwell Banker Bermuda Realty. The Real Estate Sales Update, which is complied by Coldwell Banker's agency manager Susan Thompson based on company data, revealed that despite the number of closed units rising year over year, the overall average price per unit was down by 15 percent as a result of lower rental prices or fewer high end properties for rent. Furthermore, there was a 32 percent reduction in the volume of properties renting for $9,000 and above from 2008 to 2009, but those that were rented were approximately 14 percent higher than the same category in 2008 and average days on the market was up 25 percent. The average price for a one-bedroom apartment was $2,378, two-bedroom was $3,576 and three-bedroom $5,514, equating to a rental reduction of around 25 percent from 2008 as a whole. The report also found that rental prices began to fall at the end of 2008 through March 2009, before levelling off as landlords placed their properties on the market at competitive prices. Information compiled by Coldwell Banker which was gathered from Government's Registrars Office records, while at least three months behind actual closing dates, showed that the figures for 2008 compared to 2009 were little changed, with the average price of a single family home in 2008 at $1,415,003 versus $1,422,169 for 2009. The data also revealed that condo/townhouse prices were basically unchanged, with $803,271 reflecting the 2008 average price and $807,274 in 2009. Vacant land was again almost the same, with $644,136 (2008) compared to $624,447 (2009) once the $10,000,000 South Shore Road (2008) sale and Loughlands (2009) land sale at $11,864,000 were removed as anomalies. "Because all 2009 figures are unaccounted, it is difficult to reconcile the overall strength of the Bermuda housing market," the report read. We suspect that even though the average price per unit has not varied greatly that the overall volume of properties sold has diminished. We can report that 40 percent of the recorded inventory for 2009 that successfully closed were condos, followed by 25 percent being single family homes. Only nine properties thus far have been recorded as selling at $3,000,000+. Available inventory is still at an all time high with 56 percent of the inventory condos."

March 12

March 13. The Department of Tourism will use its 18 percent budget increase to fund innovative promotional contests, a new public relations firm and increasing the number of visitors from UK and Canada. Minister Derrick Burgess delivered the Ministry of Transport and Tourism's budget brief yesterday as Premier Ewart Brown, who is responsible for those ministries is in Dominica at a CARICOM conference. Mr. Burgess said that 2009 had been a "weak" year for the Department of Tourism largely due to the global worldwide recession. Total arrivals increased modestly by one percent over the previous year, buoyed by encouraging cruise arrivals while air arrivals declined in 2009 by 10.5 percent compared to 2008. Hotel occupancies reflected the "weak performance of 2009" Minister Burgess said with average occupancy at 51 percent, compared to 59 percent in 2008. But he added that cruise ship arrivals were up. "The decision of government to invest in the Heritage Wharf terminal in Dockyard is clearly paying dividends. Cruise ship arrivals were 318,528 in 2009, an increase of 11.2 percent over 2008. This trend will continue in 2010 with strong advanced bookings reported, and double digit arrivals projected." Looking ahead Minister Burgess announced the Department has hired a Public Relations company, Lou Hammond and Associates, effective April 1, 2010. The budget for PR went up by 71 percent, to $1.5 million, which has been allocated to drive awareness of Bermuda the Minister said. "This also includes a greater focus on Canada with the advent of Westjet," he added. In total the Department of Tourism was allocated $38.1 million for 2010/2011, this represents an increase of $6 million or 18.7 percent compared to 2009. Minister Burgess outlined several projects the Department will do in the coming year to encourage people to visit the Island, including the renewed deal with Fenway Sports Group. "The deal includes additional Bermuda themed nights; more static signage at Fenway Park; sponsorship opportunities at the Deutsche Bank and the Barclays golf tournaments, the first two tournaments in the prestigious FedEx Cup; and for the first time there will sponsorship in the Champions Cup Legends of Tennis series in Boston in April this year," he said. Bermuda has also inked a deal to be the first destination promoted in a new nationally televised half-hour programme on NBC, entitled Global Golf Adventure. It airs in May. The PGA Grand Slam will also return this year to Port Royal. And billboard advertising will again be on display in key cities of New York, New Jersey and Boston, he said. And Minister Burgess said the Department was thinking outside of the box when it came to attracting attention. "We are set to launch an exciting and innovative promotional contest designed specifically for a growing, buoyant niche for Bermuda, i.e. the destination wedding business," he said. "The Perfect 10. Ten themed weddings, all-occurring on October 10, 2010, at 10 of Bermuda's great resorts where ten winning couples with ten of their friends and family will come to Bermuda after a major destination awareness campaign. The promotion will be exclusively executed by the most influential wedding website in the world, the Knot.com. In the UK the Department will expand the services of the PR agency of record, Rooster Inc, to include sales and marketing services. "We have cemented our partnership with BA this year with coop marketing support that leverages a major campaign that the airline will be launching in April," he added. Minister Burgess said the Department would have a major focus on Canada this year now that Westjet will be flying to the Island in addition to Air Canada. To assist this the Department will appoint a new Sales and Marketing representative in Canada on April 1, 2010. On the Island The Department is again working with hotels to attract visitors. "The Minister of Tourism & Transport has reiterated on previous occasions, our firm commitment to directly support the Island's hotels with tactical support during this very difficult period," he said. "The Department has directly contributed support to hotels in excess of $2.5 million in the past 18 months. We have again committed to support two similar major promotions that will be launched in the USA, Canada and the UK in the next few weeks. These promotions will be designed as Early Booking Promotions and will attempt to encourage increased advanced bookings for the important upcoming Beach and Sizzle season."

March 12. MPs backed legislation doubling foreign currency purchase tax, creating extra costs for customers in Bermuda, according to local businesses. The Foreign Currency Purchase Tax Amendment Act sees the tax on buying foreign currency jump from 0.5 percent to one percent, giving Government an extra $14.5 million windfall for 2010/11. This means businesses will have to pay more tax on goods bought overseas, passing that burden onto the consumer, with Butterfield & Vallis claiming it faces paying an extra $350,000 alone as a result of the legislation. Introducing the debate on the act on Wednesday, Finance Minister Paula Cox said other people affected by foreign currency purchase tax include those paying off credit card balances, buying goods on the Internet or purchasing foreign money to go travelling. Giving two examples illustrating the impact of the tax increase, the Minister told the House of Assembly: somebody making a credit card payment of $1,000 currently has to pay $5 tax; that will increase to $10; somebody paying a university tuition bill of $25,000 currently has to pay $125 tax; that will double to $250. Ms Cox said: "The rate of the tax is being doubled. However, due to the small base of the tax, the impact is not unduly large in effect. A good analogy is the weekly shopping list. If the price of bread, or the price of eggs, or the price of milk doubles, the overall impact is not to double the final cost of the total grocery bill. The total percentage change in the overall grocery bill very likely will be less than one percent. In the existing climate of low overall inflationary pressure, a 0.5 percent change in the cost of goods and services is not a burden." Shadow Finance Minister Bob Richards warned the act would lead to "a devaluation of the Bermuda dollar" in the economy. Mr. Richards said: "The Bermuda dollar we have now buys less foreign currency than what it used to. With this one-way devaluation it gives an incentive for people to use Bermuda dollars less and less. A person might say, 'Why should I use this Bermuda dollar? They're purchasing less and less currency. Why don't I just use the US dollar'." Bermuda Democratic Alliance MP Mark Pettingill said Government should take heed of Mr. Richards' cautionary tale. Ms Cox responded that there was no question of devaluation, claiming she felt like she was listening to a nursery rhyme that "the sky is falling in". Former Shadow Finance Minister Patricia Gordon-Pamplin said: "We have just made it a little bit more expensive for families to afford to pay their fees for their children when they go abroad to study." Mrs. Gordon-Pamplin said many families would also find it difficult paying off the extra tax on the credit card balances. She said the pond is being dredged for cash because of Government's fiscal indiscipline. The bill was passed by the House.

April 1. A controversial rise in payroll tax comes into force today, along with a slew of increased government fees. The extra costs come courtesy of this year's Budget, which critics claim unfairly punishes the working poor for Government's failure to prepare for the economic crisis. Workers will feel the pinch initially when they check their take-home pay. Payroll tax for most jobs has gone up from 14 percent to 16 percent, with Government expecting employer and employee to share the two percentage point increase. That means that if you earn $60,000 a year and your employer makes you pay the maximum employee contribution for payroll tax of 5.75 percent, you will now pay $3,450 a year, compared to $2,850 previously. If you get paid weekly, that equates to about $66.34 a week, as opposed to $54.80, an increase of more than 20 percent. Your employer will pay almost 11 percent more a year on your salary $6,150 compared to $5,550 previously. Companies which stump up the entire payroll tax contribution for their employees - as many exempt firms do - will be looking at an overall increase of 14 percent on those payments. High earners will have to pay 16 percent payroll tax on their salaries up to $750,000, where previously it was tax-free after the first $350,000. But payroll tax w ill not be the only factor reducing disposable income for the majority of people. Anyone with a car, motorcycle or scooter - and there are more than 40,000 of them on the roads - will have to fork out about five percent more for their vehicle licence from today. If you ride a bike with an engine under 50cc, for example, the licence now costs $58.40, rather than $55.81. The licence for a 100cc motorcycle is now $83.95, as opposed to $78.95. Annual Car licenses now cost between $281 and $1,551, depending on length, where previously the range was $268 to $1,476. If you own a boat, there is even more bad news. You will have to pay almost 90 percent more for a mooring licence this year as it has gone up from $79 to $150. With an estimated 5,200 moorings on the Island, that change alone should boost Government's coffers by almost $370,000. Pet owners needing to obtain a licence for a dog or bitch which has not been neutered or spayed will now have to pay $100, an increase of more than 40 percent from the previous $69 fee. The same fee increases from $69 to $100 when applying for entering a marriage notice. Gaining a short birth certificate will now set you back $20, as opposed to $16, and standard size passports have gone up to $84 from $66. Foreign currency purchase tax has doubled from 0.5 to one percent, which will give Government an extra $14.5 million windfall for 2010/11. That means if you take US $500 out of the ATM for a trip to the States, the tax will now be $5, rather than $2.50. You will also feel the effects of the increase when shopping locally, as businesses here will have to pay more tax on goods bought overseas and will pass the burden onto the consumer. The Island's most needy will be hit by yet another increase today as the monthly premium for the basic state health insurance plan (HIP) will jump to $299 from $241, with another rise expected next year.

April 13. Visitors spent 23 percent less on the Island in 2009 than they did in 2008. The Quarterly Bulletin recently released illustrated the financial fall out of the reduced air visitors who came to the Island in 2009. Last year 235,860 visitors flew to Bermuda a 10.53 percent drop compared to 2008 and of those, 18 percent of visitors came for business and 16 percent to visit family and friends. Four percent of visitors came for a convention, down 24 percent compared to 2008. The report, compiled by the Department of Statistics added: "Overall, spending by visitors in 2009 totaled $266 million, a drop of 23 percent year-over-year. The overall decline in spending reflects both the weak air arrivals in 2009 and the lower average daily expenditure by these visitors." And with cruise arrivals up 11 percent to 318,528 people, spending also rose 12 percent to $65 million. The large drop in air arrivals spending resulted in less money for those in the hospitality sector. "Total hotel gross receipts stood at $211 million at the end of 2009, down $63 million from the previous year," the report stated," the report stated. "The fall in occupancy levels was partly responsible for the industry employing 153 less employees at the end of October 2009 when compared to the year prior. Hotels employed 1,852 workers which was 218 less than the same period in 2008. In contrast, employment at cottage colonies increased by 65, to 654 workers. Total employees at guesthouses remained unchanged at 20 workers." In particular visitors arriving by air spent 23 percent less on shopping, entertainment and transport than they did in 2008 while hotels and restaurants also saw visitor spending drop by 22 percent.

May 1.  Effective immediately, nationals of the following countries require Bermuda entry visas. Cyprus, Republic of Kuwait Sierra Leone, Albania (northern part of), Kyrgyzstan, Somalia, Algeria, Djibouti, Lebanon, South Africa, Angola, Dominican Republic, Lesotho, Soviet Union (former), Armenia, Ecuador, Liberia, Sri Lanka, Azerbaijan, Egypt, Libya, Sudan, Bahrain, Eritrea, Malawi, Swaziland, Bangladesh, Ethiopia, Moldova (Rep. of), Syria, Belarus, Macedonia (Former Yugoslav Mongolia Tajikistan Bolivia Rep. of Macedonia), Montenegro (Rep. of), Tanzania, Bosnia-Herzegovina, Gambia, Morocco, Tunisia, Bulgaria, Georgia, Myanmar (Burma), Turkey, Bolivia, Ghana, Nepal, Turkish, Rep. of N. Cyprus, Burundi, Guinea (Rep. of), Nigeria, Turkmenistan, Burma, Guinea-Bissau, Oman, Uganda, Cambodia, Haiti, Pakistan, Ukraine, Cameroon, India, Palestinian Authorities, United Arab Emirates, China, (People's Republic of) Iran, Panama, Uzbekistan, Iraq, Philippines, Venezuela, Colombia, Jamaica, Qatar, Vietnam, Congo (Brazzaville), Jordan, Romania, Yemen, Congo (Kinshasa), Kazakhstan, Russian Federation, Yugoslavia, Croatia, Kenya, Rwanda, Cote d'Ivoire, Korea, Senegal, Zimbabwe, Cuba, Saudi Arabia, Kazoo Serbia.

May 18. Shadow Tourism Minister Michael Dunkley has questioned Government's ability to "get things done properly." He made his remarks after news that visitors to the Island were barred from stepping off their cruise ship for not being compliant with new visa regulations for foreign nationals. More than 30 countries have been added to the list of nationalities that now require a visa to enter Bermuda, as of May 1. Expatriates from the affected countries make up a large portion of the Bermuda workforce and The Royal Gazette has received calls from several employers and employees, mostly South Africans, who claim they were never informed that their countries had been added to the list. "The new visa requirements came into effect on May 1 and it is evident in the confusions for cruise ship passengers that the changes were not effectively communicated to the marketplace, from travel agents to cruise companies," said Mr. Dunkley. "This is a basic function that once again calls into question the Government's ability to manage the nuts and bolts of Government – to get things done properly. Although communicating with the tourism market is not a sure-fire proposition it is clear that not enough was done to warn and inform our visitors. Incidents like these could damage Bermuda's tourism industry and the Country's reputation. I urge the Minister responsible for the mishap to apologise. I can't imagine how upset the people were who were not allowed off of visiting ships. Our tourism business is too delicate for word of these kinds of mishaps to spread," he said. "The Minister of Immigration should contact the visitors impacted and make amends for their stopped visit to Bermuda and take the appropriate steps to make sure future visitors are aware they must have proper documentation." In response to media reports, as well as complaints from the community, the Department of Immigration released a statement explaining the visa situation and how it intends to fix it. In the statement, a spokesman for the Department said it was working to ensure that all of the affected parties were up-to-date. "Regarding perceived immigration challenges at the Island's cruise ports, the Department of Immigration can confirm that its staff have been in contact with the relevant travel agencies for the visiting cruise ships and are working with them to minimize any future delays or disruptions. Well in advance of May 1, the Department of Immigration undertook to inform as many organizations as possible about the impending visa changes. The Department had a system in place to inform anyone and everyone who may be affected. It has been the Department's normal practice to circulate new policies to local employer industry groups who then inform their membership. This practice has been very effective in the past in getting the relevant information to the majority of employers, and by extension, to their staff." The Department claimed that similar to other countries, visitors planning to travel to Bermuda must check whether they require a visa. South Africa and India are among the countries that now require additional documentation to live and/or work on the Island even if they have a valid work permit. Guest workers from the newly-added countries, currently in Bermuda on valid work permits, must submit their permit to the Department of Immigration in order to be compliant. The new condition involves having a stamp put on the permit and will take two weeks to process, said Chief Immigration Officer Rozy Azhar. "Visa controlled nationals who are already residing in Bermuda on a valid work permit may submit their work permits to the Department to be updated with the condition 'BONA-FIDE RESIDENT, DOES NOT REQUIRE A BERMUDA ENTRY VISA'," she said. Government put the new regulations in place in compliance with the UK Direct Airside visa list which indicates which countries not only require visas to enter the United Kingdom but also require a visa to transfer through the country's airports. Ms Azhar said:  "Nationalities added to the list are considered high risk. All nationalities on the United Kingdom Direct Airside Transit (DAT) visa list have now been added to Bermuda visa controlled nationals list," she stated in an e-mail. "These nationalities are considered high risk as they cannot transit through the United States, Canada or the United Kingdom without a visa. We have taken this action because of the number of nationals on this list that have come to Bermuda to work and then have not been able to obtain a visa to leave Bermuda, thus requiring two Immigration Officers, at great expense, to escort the nationals out of Bermuda at great cost to the employer or the tax payer. Visa controlled nationals who are already residing in Bermuda on a valid permit are not affected by the new list. They are encouraged to submit their work permit to the Department of Immigration to add the new condition. However, work permit holders coming to Bermuda for the first time will have the condition on their work permit policy: 'VISA CONTROLLED NATIONAL, MUST HAVE BERMUDA ENTRY VISA'. Such persons will have to go to the British Embassy in their country to obtain a Bermuda entry visa." There have been a number of complaints from guest workers, mostly South Africans, who claim neither themselves nor their employers had been informed of the policy change by Government. Most said they were informed through word of mouth. According to a South African employee of one of the Island's largest employers of guest workers, her company's human resource section received no indication from Government. Ms Azhar claimed that the Department of Immigration only informs certain sections of the business community and then relies on them to spread the message. "It has been our practice to notify the employer organizations. Specifically we inform the Association of Bermuda International Companies; Bermuda Bar Association; Bermuda Chamber of Commerce; Bermuda Employers' Council; Bermuda Hotel Association; Bermuda Human Resources Association; Bermuda International Business Association. Those organizations then circulate the policies to their members which guarantees the largest possible circulation. Your Human Resource Department should contact their member organization." As with other jurisdictions, visitors planning to travel to Bermuda must check whether they require visa. Our new list of visa-controlled nationals have been circulated to the British missions; the Department of Tourism overseas offices; and to the airlines. The list can be found on our website, www.immigration.gov.bm."

June. The Canadian Consul General in New York, which has jurisdiction over Bermuda too, signed a Tax Information Exchange Agreement (TIEA) with Bermuda's then-Minister of Finance, Paula Cox. MP. It is believed this TIEA instrument serves at least two purposes. One is to curtail money laundering. Another is understood to require or authorize Bermuda to routinely feed info to Canadian tax authorities about bank and other accounts held in Bermuda by Canadians. A third may require Bermuda to also release info about Canadians living and/or working in or dealing with Bermuda. Many other countries specifically including the USA and UK, have similar TIEAs with Bermuda and operate under the same basic and/or more complex provisions.

June 9. The mainstream Bermuda media yesterday signed up to a "cogent, thoughtful" code of practice it said would help improve accountability and uphold the principles of press freedom. The 25-point code, published in full in today's edition of The Royal Gazette, has been adopted by this newspaper, the Bermuda Sun, DeFontes Broadcasting Company, Inter-Island Communications and Bermuda Broadcasting Company. The Royal Gazette has followed its own code of practice for more than two years, which has now been replaced by the joint code. Managers of the five organizations sent a copy of the code to Premier Ewart Brown yesterday, as well as a draft plan for a self-regulating media council to be up and running by mid-September. They told Dr. Brown the code was based on one used by the British Press Complaints Commission and could be reviewed annually to keep pace with changing circumstances and technology. "Having worked through the code meticulously, we're in agreement that the final version is a cogent, thoughtful document that will prove useful both in terms of accountability and as an essential guide to journalists," wrote the five signatories. "But most important, it upholds the principles of press freedom." The pledge to draft a code and set up a voluntary council was prompted by the tabling of a controversial media council bill in the House of Assembly by Dr. Brown on May 7. The proposed legislation, if approved, would have meant the creation of a statutory watchdog with the power to ban publication or broadcast of material. It was denounced by global press freedom groups and local lawyers and journalists. The media admitted to the Premier last month it had "dropped the ball" on the formation of a media council after being told Government wanted one in the 2008 Throne Speech. Dr. Brown told the House of Assembly on May 28 that Government would review the proposal for a self-regulatory body and withdraw the bill if satisfied with the media plan. The Premier's press secretary said yesterday he was in Washington DC for meetings but would comment on the code on his return. Those behind the new set of ethical standards are PLP Senator Thaao Dill, from Inter-Island; Chris Lodge, from DeFontes; Tracey Neale, from Bermuda Broadcasting; Tony McWilliam, from the Bermuda Sun; and Bill Zuill, from The Royal Gazette. They said in a joint press release: "The main role of the council will be to serve members of the public who have complaints about the media, while protecting freedom of expression.  Our plan is very much a work in progress and we, that is, the media working group, will meet regularly to flesh it out and ensure that the council is up and running by our self-imposed deadline of September 14, 2010." Their letter to Dr. Brown said online news providers had been asked for feedback and their views were taken into account, though none are understood to have yet signed up to the code. Bermuda Democratic Alliance chairman Michael Fahy said the Island now had several online-only news sites and it would be preferable for them to adopt the code, along with print media, radio and television. He said he was pleased the media had finally drafted an agreed code. "It's a shame it's taken them to have a government bill on the table to make them put something together," he added. Patricia Burchall, owner/operator of Bernews.com, said yesterday she was not approached personally but would have no problem signing up to the code. International human rights lawyer Toby Mendel, from the Centre for Law and Democracy in Canada, said the media had set itself a "reasonable" deadline to form the council. "They should try to follow the example of better practice jurisdictions, including the UK, where a majority of members of the complaints body, including the chair, are not from the media. This helps both ensure credibility and that the body remains connected to everyday values."

June 23. Premier Ewart Brown has threatened to issue 100 temporary taxi permits due to poor service during this year's Newport to Bermuda sailing event. Dr. Brown said the bi-annual race, which sees hundreds of wealthy sailors and their families visit the Island, generates more revenue for Bermuda than any other tourism event. He called an urgent meeting yesterday afternoon at the Cabinet Office with representatives of the two Taxi Dispatching Companies to deal with the issue. He described the meeting as "productive and fruitful. It provided an opportunity to outline the criticism and complaints that have been received regarding the level of service provided by the taxi industry particularly, as it relates to the people involved in the Newport-Bermuda Race," he said. "This event generates more revenue for Bermuda than any other tourism event we host and we must ensure that the people who are drawn to Bermuda by this exciting race are given ample reason to return to our shores. As the Minister responsible for Tourism and Transport I shall take whatever steps are necessary to provide transportation for Bermudians and visitors to Bermuda. If that means authorizing 100 temporary additional taxis to the existing pool, than that is what we shall do. Those taxi drivers who tend to park their vehicles for most of the day should consider this a warning." The owners of the two companies could not be reached for comment last night. It is not the first time the taxi industry has been reprimanded by the Government. Last year, after the Cup Match holiday, Acting Transport Minister Derrick Burgess said it was "not reasonable" for cabs to stay home on public holidays. He said an efficient taxi service year round is crucial to Bermuda's success as a tourism destination. Shortly after Junior Transport Minister Marc Bean said it was unacceptable that 316 passengers were stranded at the L.F. Wade International Airport for up to an hour-and-a-half during the Remembrance Day holiday. And the Premier has waged a long battle to get GPS equipment, which monitors the amount of time a cab is on the road, for years. One company, Radio Cabs, has until the end of this month to ensure all its drivers are compliant or their dispatching licence will be revoked.

June 25. Internet subscribers in Bermuda are paying on average four times more for web access than consumers in other developed countries, according to the latest figures. An annual survey conducted by the Organization for Economic Cooperation and Development (OECD), which did not include Bermuda, found the most expensive average Internet connection to be in Mexico - at $26 per megabit per second. Next was Luxembourg, with subscribers in the tiny European country paying on average $19.86 per Mbps. However, the average monthly charge in Bermuda is $104.68. This figure includes two components. The first is the advertised monthly rate charged by Internet Service Providers (ISPs). The second is the rate charged by so-called "broadband access providers", such as Bermuda CableVision, with its fibre-optic network, or the Bermuda Telephone Company, which offers DSL. The price of this component varies considerably. The survey found the highest monthly price on the Island to be $119.09 and the lowest $88.95. Some ISPs have in the past attributed high costs of broadband here to the Island's isolation, and the high rates charged by carrier services for use of under-sea cables. Representatives from the three local ISPs were not available for comment.

By the numbers

Average monthly broadband cost per Mbps

July. Construction on the Grand Atlantic project began at the South Shore site of the former Golden Hind Resort and before that, the Bermudiana Beach Club. The $150 million development will feature 125 affordable homes, including 30 three-bedroom units and 95 two-bedroom condos. The site is also expected to host a 100-room hotel and 20 fractional units. Warwick residents complained that construction has blocked access to the beach through Tribe Road 2. They grew more concerned when they recently discovered what they believe are surveyor and contractor markings on Tribe Road 1, the remaining path leading to the beach.

July 14.  The first decline in the number of jobs in international business for at least five years is a warning sign that Bermuda cannot afford to be too dependent on any one industry in the future. That was the message from David Ezekiel, chairman of the Association of Bermuda International Companies, who was responding to the latest jobs report released by Government this week, which revealed that seven percent, or 330 positions, were lost in the international business sector - marking a significant drop from 4,761 jobs in 2008 to 4,431 jobs in 2009. The international business sector has been the mainstay of the Island's economy and employment market over the past 25 years, providing opportunities for Bermudians and significant revenue for local service providers. The fall was driven by mergers, redundancies and business closures last year, with the biggest drops in senior and junior accountants (82 jobs), office clerks (31) and executive secretaries (25), according to the Department of Statistics' Bermuda Job Market Employment Briefs report for June 2010. Meanwhile the disparity in earnings between races continued with white employees taking home on average $21,000 more than their black counterparts at $74,176 versus $52,303 respectively during 2009. The median income for mixed and other races was even lower at $49,513 per year. And the share of jobs filled by older workers increased by three percent from 18 percent in 2005 to 21 percent in 2009, accounting for a total of almost 8,200 jobs last year and indicating that more people are continuing to work beyond retirement age in order to boost their income. Mr. Ezekiel described the decrease in jobs as a "worrying trend", but questioned whether there had been any major closures that had contributed to it, pointing instead to a number of mergers that had resulted in redundancies. In addition to this, he said there was a continuing move towards outsourcing, which usually, by attrition, ended up impacting the number of positions available. "Clearly I think there are some warning signs," he said. "It is the first year for a while that international business has posted such a decrease." Mr. Ezekiel added that it was interesting to see the gap between international business and public sector jobs had continued to close, with the former dropping to 4,431 and the latter climbing from 4,223 in 2008 to 4,318 last year, while the rising cost of Government remained at the forefront of most people's minds. "But at the end of the day it is better having people employed, whether in the public or in the private sector. I think the goal is to try and get back to where we were to full employment and clearly that is where we should be aiming." Turning to the other figures, he said it was important not to read too much into them, with the average salary of females being higher than males due to the significant number holding senior positions in international business, such as underwriters and HR professionals. "The report is interesting - it clearly provides a lot of back-up to the various initiatives that have been started to look at how Bermuda maintains its position or re-tools itself, like Bermuda First, and we have got to keeping looking at them. The danger, as we all know, is becoming too dependent on one sector. When you see it for the first time, this decline in jobs is worrying. But it is also interesting from an international business perspective to see that it has given Bermudians an opportunity to work in the sector and earn salaries substantially in excess of what they would have been able to earn in other sectors. The figures themselves in terms of the reduction of jobs in the international business sector have a trickle down effect on landlords, restaurants and the like, and each part of the report to a certain extent confirms what a lot of us have known is happening, but this is the first time we have seen it in black and white." The median age of workers reached a high of 43.6 years in 2009, reflecting a steady ageing trend in the workforce, while the increase from 2008 was down to the loss of 435 jobs held by guest workers, mostly aged between 25 and 54, through the completion of contracts and redundancies. The total number of filled jobs held by males dipped by 413, while positions filled by females declined by 280, and the number of jobs held by Bermudians fell by 391 and non-Bermudians by 435. In contrast, the number of filled jobs held by non-Bermudian spouses and permanent residents rose by close to two percent and 14 percent respectively. Significantly the construction industry was hit hard by the downturn, shedding 161 jobs or four percent of its workforce from 3,649 jobs two years ago to 3,488 jobs in 2009, while the business services sector saw the loss of 129 positions or three percent of its staff base from 2008. But last year's influx of registered nurses (86) and other medical workers (87) contributed to an 11 percent increase in the number of jobs in the education, health and social sector. Seven of the 10 major occupational groups recorded a drop in employment from the previous year, with categories such as clerks, senior officials and managers, and craft/related workers, posting a combined loss of 219 positions. Blue and white and collar professions suffered particularly, with the number of jobs for masons down by 66, tax drivers 55, office clerks 45, truck drivers 43, finance managers 35, secretaries 23 and office messengers/porters 43. The median income earned by all job holders in companies with 10 or more staff was $56,429, representing a three percent rise in annual employee pay compared to the 2008 estimate of $54,867. Despite the decline in the number of jobs filled for the year, job holders in the international business sector still received the highest pay packet with an annual median salary of $102,023. Other sectors that paid higher salaries included electricity, gas and water ($76,054), business services ($65,603), and education, health and social work ($58,520). However, those working in the hotel and restaurant, cafe and bar trade took home the lowest estimated salary, with median annual incomes of $35,891 and $37,312 respectively.

July 14. Government raises $500 million in bond sale. The Bermuda Government yesterday raised $500 million in a public bond offering that was six times oversubscribed. Government will pay a fixed interest rate of 5.6 percent on the 10-year bonds, or a total of $28 million a year. Originally, the intention was to raise $400 million, but then Financial Secretary Donald Scott revealed last night that the strong global demand, which generated an order book of $2.4 billion, had enabled Government to upsize the transaction to $500 million. Mr. Scott added that the debt sale had attracted 146 investors, 10 percent from Bermuda. The other geographical areas of greatest demand were North America (60 percent), Europe (20 percent) and Asia and the Middle East (10 percent). The Government is saddled with a debt burden that has soared in recent years and total debt outstanding was $826 million at March 31 this year. The proceeds of the bond sale will be used to repay a bridge loan covering a revolving credit facility, short-term indebtedness with local banks of around $140 million and to fund ongoing capital expenditure programmes. Finance Minister Paula Cox was said to be overseas and unavailable for comment. Yesterday's sale was managed by HSBC and followed a roadshow designed to drum up global investor interest in the bonds. This involved a delegation led by Mr. Scott, with Assistant Financial Secretary (Economics and Finance) Anthony Manders, Director of Budget Tina Tucker and Economic Adviser Hasan Durham meeting some 35 high quality investors in Singapore, Hong Kong, London, Los Angeles, Boston, New York and Hamilton earlier this year. Mr. Scott said the bonds had been priced at the lowest yield ever offered by a Caribbean region issuer in the US dollar public bond market and it locked an historically low interest rate for the 10-year duration.  Mr Scott noted The Ministry of Finance borrowing strategy is set well in advance of a given financial year taking account of long term capacity to repay debt, the view of debt capital markets, the borrowing requirement signaled by planned capital investment in infrastructure for Bermuda's sustained future and other important policy factors.  However, the pricing of the bonds attracted criticism from Acting Shadow Finance Minister Grant Gibbons, who said it was bad news for the taxpayer. The Government will undoubtedly spin this issue as a great success as they were able to get subscriptions for the full $500 million offering, Dr. Gibbons said last night. However, in the cold light of day, the community should understand that it is just more debt and that it will cost $280 million in interest payments over the 10-year life of the bonds. In fact, a number of financial observers have noted that the 5.6 percent pricing (at 2.5 percent spread over US 10-year bonds) was at a premium and certainly no bargain to the long suffering Bermudian taxpayer. The Finance Ministry last night stated that included in the deal were major investors from Bahrain, Bermuda, Denmark, Germany, Great Britain, Hong Kong, Israel, Italy, Portugal, Saudi Arabia, Singapore, Spain, Switzerland, and the US, among others. Most of the demand came from institutional accounts, driven by asset/fund managers (66 percent), private banks/retail (12 percent), insurance companies (nine percent), financial institutions (nine percent) and other (four percent). But one potential local investor had been frustrated in his attempt to buy the bonds, having read The Royal Gazette's exclusive story on the offering yesterday morning. The Bermudian caller said he had contacted HSBC, the agent managing the sale, to find out more. He said the bank had not been able to tell him the price of the bonds and added that a bank employee had told him that he was awaiting confirmation that the issue is being offered on a retail level. The caller said: "This is a bond issue for the people of Bermuda. But nobody at the bank can tell me anything about the bond, never mind the coupon."ť Mr. Scott revealed more about the Government's pricing strategy for the historic offering. He said that on Monday this week, the Government took advantage of a positive market window by whispering a price range of US Treasury 10-year bill rate plus around 275 basis points (2.75 percentage points), generating a more than $1.5 billion order book by market close in the US. Based on this strong early market response, the transaction was left open overnight for Asia, Europe and Bermuda at a revised, tighter price range of 262.5 basis points over US, which generated more than $1 billion in additional demand. With an order book approaching $2.5 billion, the Government proceeded to launch and price the deal on Tuesday, July 13, at a revised price of T+250 basis points, the tightest end of guidance. Fitch, which yesterday rated the bonds AA+, said in its commentary: "Bermuda's creditworthiness is underpinned by a high per capita income of over $94,000, low public debt burden and effective management of the business and economic environment. Moreover, Bermuda's well-established reputation as a domicile of choice for (re) insurance and financial services companies provides a basis for sustainable economic growth." But Fitch warned: "Such credit strengths, however, are counterbalanced by the island's lack of economic diversification and small size, which curbs the capacity to absorb extreme shocks relative to other high-grade sovereigns. Policy flexibility is limited by the lack of reserve currency status and a lender of last resort to the financial sector, as well as a limited scope to incur and fund large fiscal deficits."ť

September 2. Companies are taking advantage of competitive rents in an over-supplied commercial property market to upgrade from their current premises. With a number of new developments nearing completion and others seeing their first tenants move in, there is an abundance of supply. Companies are relocating to get more room, better value for money or simply upgrade their facilities. Several businesses have moved from to prime locations in Front and Reid Street due to more competitive rents and others are set to follow that trend in the coming months. One beneficiary from relocating tenants is the Sago Properties' SE Pearman Building in Par-la-Ville Road, which is expected to be 55 percent occupied by the end of the year, according to Sanz Pearman, owner of Overnight Construction Ltd., who has been overseeing the project. Mr. Pearman, who is also a director at Sago, said that tenants were set to start moving into the new building by the close of 2010 following completion of construction work earlier this year. "We are finally moving," he said. "People have been signing leases and we expect a 55-percent occupancy by the end of the year and that is a good number compared with what is going on around us at the moment." He said that there had been a lot of interest in the six-storey (including one underground) mixed use/commercial development but a number of potential clients were waiting for their current leases to expire in 2011 before committing. "People who are looking for the bigger space are maybe tied up to their leases until the mid part of next year.  A couple of people are negotiating leases and guys who were biting four or five months ago are calling up now to see what is available." Mr. Pearman said that the basement (which houses a private fitness club), ground and second floors were already taken by international business and insurance companies with fit outs due later this year, but there were still four floors available. Rental prices start at $27,597 per month for 5,810 sq ft on the third floor to $29,845 per month for 5,510 sq ft on the sixth floor. Work on the 45,000 sq ft building, formerly the site of Just Shirts, started in late 2008 and despite the recession Mr. Pearman and his team pressed ahead with finishing the job And its key selling points of distinctive blue glass windows, and curtain wall combined with the masonary band, as well as panoramic views, complemented with a public art glass lobby wall mounted on black granite commemorating Bermuda's five national sports have helped to set the development apart from its competitors in Hamilton, such as neighbour The Power House and 141 Front Street. An added incentive for any tenant who decides to take three floors will be entitlement to the naming rights of the building, which also boasts one generator with 100 percent redundancy in the event of an outage and air conditioning. Elsewhere. a place on the ninth floor of Sir John Swan's new 141 Front Street development would set you back $73,460 per month for 11,019 square feet (sq ft), while The Power House has 4,190 sq ft available on the third floor for $34,437 per month, according to the Coldwell Banker Bermuda Realty website. At the other end of the scale, rents in the existing Swan Building range from $12,412 per month for 3,310 sq ft on the second floor and $34,437 per month for 8,265 sq ft on the third floor and Mintflower Place prices run between $11,047 per month for 2,946 sq ft of space on the third floor to $39,783 for 8,680 sq ft on the fifth and sixth floors.

September 3. Plans for a new resort complex on the former Club Med site in St. George's have been submitted to Planning. The Park Hyatt resort would feature 122 hotel beds spread between eight buildings; a further eight buildings would house 39 villas. The main building would be located on the Fort Victoria site. Also shown in the plans are 12 four-bedroom homes bordering Barry Road, and a condominium complex featuring more than 70 units. The site will also have a fitness and activity centre, a beachside restaurant on Fort St. Catherine Beach and a spa and gardens inside Fort Albert. The plans also show the newly redesigned 18-hole golf course, which can be played as either a 67 or 71-par course. A desalinization plant, a sewage facility and 90 living quarters for staff are also included. The $90 million, 262-year lease on the property was signed in 2008 following the demolition of the former Club Med hotel. According to a Bill passed in 2006, the hotel must be built by 2013, and is expected to cost around $294 million. US-based developer Carl Bazarian announced in January that financing for the resort is in place. At that time he said work on the site could start by the end of this year. The hotel is hoped to help lift the St. George's economy, which has been hard-hit by a decline in visiting cruise ships.

John Barrett & Son Ltd stopped bottling and canning ginger beer in Bermuda and instead began importing it from Florida. Barritt’s Bermuda Stone Ginger Beer, sold as a Bermuda product, is now (since the end of 2010) produced in Florida from a special concentrate made in Milton Keynes, England, derived from raw Jamaican and African ginger.

October 21. Bermuda’s balance of payments surplus grew by 50 percent year on year to $269 million in the second quarter. The surplus, which represents transactions between Island entities and the rest of the world, grew by $90 million compared to the same period last year. A fall in imports meant the goods trade deficit fell by $24 million to $246 million. The surplus in services transactions was $132 million, up $32 million compared to 2009.

November 27. The National Library will showcase films about Bermuda throughout next month, Minister of Public Information Services Neletha Butterfield told the House of Assembly this morning. The films will be shown in December at noon on Tuesdays and Thursdays, in the Hamilton library's Bermuda History and Cultural Studies Room. The Minister said that due to limited space, groups of between six and 15 people should contact Ellen Hollis to arrange special viewings. Offerings include the history film 'Bermuda Five Centuries' by Panatel Productions; 'The Riddle of the Crest', based on Dr Philippe Rouja's investigation into the origins of Bermuda's coat of arms; nativity story 'First Christmas' by Alastair MacDonald with illustrations by Adel Nasief; documentary 'Behind the Mask: Bermuda's Gombeys, Past, Present and Future'; 'Bermuda's Defence Heritage'; 'The Bermuda Tattoo' — showing a performance of military music — and a documentary narrated by Michael Douglas called 'The Lion and the Mouse: the Story of America and Bermuda', on the history of US/Bermuda relations.

November 27.  Premier Paula Cox hinted an election was not on the cards as MPs approved the Constituency Boundaries Commission report. The new Boundaries Commission map — which would give a number of MPs an uphill battle retaining their seats — was outlined by Premier Cox in the House of Assembly yesterday. She said a bi-partisian committee decided to make changes to ensure each constituency had a similar number of eligible voters. The report was tabled in May but not debated during the summer parliamentary session. This prompted some United Bermuda Party members to speculate the delay was intentional, so Government could utilise the boundaries in place when they won the 2007 General Election. Yesterday, Ms Cox referred to the speculation about an election last summer and said: "We did not deal with this before summer break because there was no immediate need to and some would say there was no immediate need to now." The Premier also said amendments to the Parliamentary Election Act could be brought forward in the future. The changes approved last night have altered several boundaries and will affect 14 percent of the voting population, or 6,594 voters. Political commentators have previously said they believe the new boundaries could impact several MPs including Patrice Minors of Smith's North, Zane DeSilva of Southampton East Central and Donte Hunt of St. George's South. Last night Premier Cox said: "The 2009/2010 Commission convened on Thursday, 4th June 2009 and after utilising all the information obtained, the Commission took note that an examination of the variation in the number of qualified electors in certain areas of Bermuda demonstrated that some constituencies had changed such that they were as much as 19 percent over and in some cases more than ten percent under the mean. Having noted the significant variations, the Commission resolved, pursuant to section 54.1b of the Constitution, that changes to the boundaries were required." The new boundaries will not be in place until the next general election and have no impact on bi-elections before then. The Governor will order the changes to be gazetted when Parliament is dissolved before the next general election.

November 29. Business Development and Tourism Minister Patrice Minors told MPs in the House of Assembly on Friday that the new laws will seek to provide a better legal framework with regard to functions such as electronic signatures and digital certificates. She said the aim was “not only to strengthen our already existing legislation, but to also ensure that Bermuda remains a competitive jurisdiction with respect to conducting business electronically.” Ms Minors also stated that her Ministry is open to suggestions from the public and the business community on the Electronic Transactions Act 1999. A five-week consultation process will take place from November 29 to December 31. Ms Minors said the Act had been introduced to ensure that information should not be denied legal effect, solely on the ground that it is in the form of an electronic record, with added electronic communications security provisions. Ms Minors said: “It is now over ten years since the ETA was passed. While the Department of E-Commerce has not received any feedback suggesting that the ETA is outdated, there have been a great many technological changes during that time. With this in mind, it was felt that it was time to review the ETA and its supporting regulations. As a part of the Department of E-Commerce’s internal review of the legislation, it was believed prudent to seek external comment from ETA stakeholders.” Ms Minors officially launched the consultation period at a press conference last Wednesday. An E-Commerce Advisory Board has been consulted for recommendations and the resulting consultation document will be the basis for public discussion. The document applies to e-commerce service providers and it has been suggested that it be amended to update its contents, correcting some anomalies that have arisen as a result of changes in the use of technology. The Department of E-Commerce encourages all suggestions regarding any potential changes to the ETA. It also wishes to hear from interested parties with regard to any potential opportunities and/or challenges that might exist for the IT, E-Commerce and E-Business sectors.” Anyone wishing to add their views can do so in a response form, available at www.gov.bm or at the front desk of the Department of E-Commerce. A summary of responses will be published on the Government website. The consultation will include a public meeting on Monday, December 6, from 5.30pm to 7.30pm at the Bermuda Chamber of Commerce. An additional session will be held for business and technology industry representatives on Thursday, December 2, from 1.30pm to 3pm at the Bermuda Chamber of Commerce. Ms Minors said the Department of E-Commerce would collate all responses and deliver its recommendations to her. Following ministerial approval, a Cabinet memorandum will be drafted. This will be submitted to Cabinet for consideration and, if approved, drafting instructions will be prepared for submission to the Attorney General’s office.

December 3. It doesn’t really feel like the holiday season until you’ve had Christmas cookies and beverages as part of the annual Bermuda National Trust Christmas Walkabout. One of the Island’s favourite seasonal events, it takes place tonight in the town of St. George. “The excitement and romantic yesteryear elegance that the Bermuda National Trust Walkabout brings to St. George should not be missed,” said organiser Kelly Way. “It is a special event with the pulse of history beating strongly. The walkabout is a yearly tradition that is the start of Christmas for many. It is a time when the warmth of friendship prevails. Neighbours walk and talk. Visitors observe and participate by getting out and touring the historical places. The joy of this event brings people together.” There will be entertainment throughout the town and refreshments will be served at various locations marked on a map distributed on the evening. Churches will be decorated and open for the event parishioners of the Stella Maris Church will offer soup and rolls; there will be live entertainment at St. Peter’s Church and Ebenezer Methodist Church. There will be children’s Christmas crafts at St. Peter’s Church Hall where Santa and an elf will listen to Christmas wishes. The Trust’s walkabout is a free community event thanks to generous support from volunteers. It allows people to explore some of the oldest continually occupied buildings in the New World, all of which will be decorated for the event. The Old Rectory, Samaritans’ Lodge, Samaritans’ Cottages, Buckingham, Tucker House and the Globe are among those that will be open. Meanwhile, performances in King’s Square will include those by Jackson School of Performing Arts, In Motion School of Dance, the Bermuda School of Music and the Salvation Army Band. “The Christmas walkabout is a wonderful way of touring the extraordinary living history of St. George’s World Heritage Site,” said Ms Way. “Each year the popularity of this event is evident as crowds embrace the old town. The National Trust hopes everyone will come and enjoy the festivities. The National Trust could not hold this event without a huge amount of community support and our generous sponsor Butterfield Bank. We look forward to seeing you there.” The event runs from 6.30 to 8.30pm.

2010. Bermudian author Brian Burland died. He published several acclaimed novels including ‘A Fall From Aloft’, ‘Stephen Decatur, the Devil and the Endymion’, ‘The Flight of the Cavalier’ and ‘The Sailor and the Fox’. He was elected a Fellow of the Royal Society of Literature in 1979. In 2012 his daughter Susan approached the Bermuda College to see it it was interested in housing her father's works which includes numerous unpublished novels, poems and artwork, and if so under what conditions. In May 2013 the Bermuda College formally opened the Brian Burland Centre for Research. The area serves the dual purpose of providing new facilities for the college and honouring the late Bermudian writer. It features a reading room and a climate-controlled vault that holds a collection of Mr Burland’s work. To satisfy the conditions of the endowment, the Centre has two components — a vault which houses the catalogued papers and artwork, and a reading room where students, scholars and researchers can access the materials. The reading room, while essentially for study, is also a place that celebrates the pioneering nature of Brian Burland’s work. As part of this, the College commissioned one of Bermuda’s foremost artists, Graham Foster, to paint a mural with the unique idea of one fine artist interpreting the work of another.

2010. December 11. Insurers will have to provide more financial information in their yearly reports under regulations approved by the House of Assembly yesterday. Category 3B and E insurance companies are affected by the Insurance Accounts Amendment (Number 2) Regulations pushed through by Premier and Finance Minister Paula Cox. MPs gave full backing to the regulations, which also mean 3B insurers are required to report the same financial statement information currently provided by Class 4 insurers. Ms Cox said the move comes in addition to amendments already made to the Insurance Act 1978 which aims to set standards for corporate governance that will enhance Bermuda’s international reputation. United Bermuda Party MP Patricia Gordon-Pamplin said: “There are worldwide standards that must be upheld. It’s not sexy or riveting, but it’s necessary for us to continue to have the cutting edge.”

2010. December 16. The Senate agreed to increase fees for captive and domestic insurers yesterday. Amendments to the Bermuda Monetary Authority Act will also impose financial penalties on those companies who are late paying their fees and enable the BMA to recover unpaid fees as a civil debt in any court or competent jurisdiction, if required. Previously the Bermuda Insurance Management Association told The Royal Gazette the increases would have a detrimental impact on the Island’s competitiveness as a domicile. The increased fees will see Class 3 insurers pay $30,000 to the BMA compared to the $19,000 they used to pay. Domestic insurers will also see their fees increase by $25,000 Yesterday Junior Finance Minister David Burt said the fees were being increased because the BMA had an increased regulatory role in Bermuda. He added: “While the BMA is committed to running its affairs efficiently so as to keep the financial burden on regulated firms as low as possible, further increases in resources remain necessary if the BMA is to achieve its objectives and continue to play its key role in Bermuda’s economy.” Opposition Senate Leader Jeanne Atherden said she was concerned the fee increases may have an impact on Bermuda’s reputation as a competitive business jurisdiction. She questioned why the BMA could not achieve best practice without a rise in fees. “Why not reorganize so there isn’t more expense?” she asked. “The reason I am asking this is it has a direct knock-on effect to the cost of doing business in Bermuda. We have a real concern as we go forward as to whether we are going to maintain the competitiveness.” She asked when the last time was that there was a review of the operational efficiency of the BMA. She also said perhaps it is time for the BMA board to be replaced with an independent body to oversee the authority. Independent Senator Joan Dillas Wright said: “I understand the BMA has a major responsibility in overseeing the companies registered in Bermuda, but I also have concerns about this increase and I just wondered whether this was exorbitant.” In his reply, Sen Burt said Bermuda remains competitive when its fees are compared to those in other jurisdictions. “Our fees are definitely within reason,” he said. He added that the International Monetary Fund last reviewed Bermuda’s regulatory regime in 2007. In other legislation related to the BMA yesterday, the Senate also passed the Insurance Amendment (No.3) Act 2010. The bill requires that insurers have enough funds to satisfy regulatory levels so there is a basic amount of money available when people are ready to make a claim. It will also extend the powers of the Bermuda Monetary Authority allowing them to investigate other classes of insurers and establish a new regime for the classification of long-term insurers. The legislation was passed without debate, other than a comment from Sen Atherden who said: “We understand the need for this piece of legislation.”

2010. December 23. Shadow National Security Minister Michael Dunkley yesterday called for all house buyers caught “fronting” to face the same outcome as the couple who bought Southampton property Laughing Waters. About 20 homes are thought to have been purchased using fronting: when a non-Bermudian uses a local as a front to gain illegal interest in Bermuda land. And Sen Dunkley said he hoped others would be treated the same way as the expatriates who saw their $1.5 million Laughing Waters given to the Bermuda Housing Corporation at no cost. “The UBP has always been on record stating that fronting arrangements are not on,” Sen Dunkley said. “We support the Department of Immigration getting to the bottom of this case. But if we are going to make a big deal about it publicly, we need to always make sure the law is being adhered to. I am sure there are other people who fall into a similar situation. We need to make sure their cases are treated the same way.” Sen Dunkley said the law firm which acted as trustees should also be dealt with by the authorities, although Sen Burch yesterday said it would not be penalized. On Tuesday, Sen Burch announced the BHC had acquired the home as a settlement after finding out the expatriates bought it illegally. Instead of being prosecuted and facing a possible jail sentence, the couple must pay $4,500 rent a month for the next five years; that cash will go towards national housing needs. Sen Burch believes there have been around 20 cases of fronting, and hopes others will now be encouraged to strike similar deals with Government or end up in a legal battle “you cannot possibly win”. He says one case is ready to go to court in the New Year, with two others close. As part of the crackdown, expatriates have until December 31 to get a licence for any property they own or face up to five years in jail or a fine of up to $1 million. Expressing a long-held UBP criticism of that aspect, Sen Dunkley said yesterday: “We still feel many Bermudians are very concerned that because they are married to a non-Bermudian they need to go and apply for a licence.”

2011

February. Cable & Wireless, which had operated in Bermuda since 1890, announced it had sold its Bermuda operations to the Canadian cable company, the Bragg Group. Cable & Wireless Bermuda operations had most recently been part of Cable & Wireless Communications' Channel Islands and Isle of Man business unit. At the time of the acquisition and renaming, Ann Petley-Jones, CEO of EastLink International and the LinkBermuda Group, said: “We have kept, and are growing, our local Bermuda workforce. We have repatriated dozens of corporate functions to Bermuda from the UK. We have hired Bermudians in executive management, operations, sales and customer care positions.” (In October 2011, Cable and Wireless (Bermuda) Holdings Ltd was rebranded with the new name LinkBermuda Holdings Ltd. EastLink International Holdings Inc.)

February 15. The Corporation of Hamilton filed a writ against the developers of the St Regis hotel near Par-la-Ville park last week. Mayor Charles Gosling told The Royal Gazette he could not expand on the issue yesterday, as it was now a matter for the courts. The writ against Par la Ville Hotel and Residences Ltd was filed on Friday. Donal Smith, vice president of the development company, said he was overseas and was not aware of the writ yesterday afternoon. He added that there was no reason the development would not go ahead from his company's point of view. He said he could not comment further until he knew more about the writ. Shortly before retiring in October former Premier Ewart Brown said the Corporation was holding up the development, but did not expand. The Royal Gazette understands the issue is based on unmet deadlines. Previously Corporation Alderman Pamela Ferreira said groundbreaking would take place between July 31 and December 31 last year. Mr Smith denied that the issue was based on deadlines. The two groups signed a ground release in 2007. At the time former Mayor Sutherland Madeiros said: “The lease contains certain conditions that must be met by Par-la-Ville Hotel & Residences Ltd. prior to the development of the site.” Ritz Carlton was originally attached to the project however the St Regis got involved in 2009. The hotel has “in principle” planning approval to build nine storeys on the Church Street side and ten storeys on the Par-la-Ville side, with three levels of underground parking. In addition to the hotel rooms the development was granted permission for 80 residences.

February 19.  Finance Ministry forecasters do not expect Bermuda’s economy to emerge from recession until the middle of next year. The grim prognosis came in the National Economic Report of 2010, which estimates that Bermuda’s gross domestic product (GDP) fell four to five percent last year, against the Ministry’s forecast of 0.5 to one percent growth. In 2011, GDP is expected to contract again, by between 0.5 percent and one percent, “with only a modest recovery likely by the middle of 2012.” This follows the 8.1 percent fall in GDP in 2009, taking inflation into account. The report states:  “The 2009 recession was the most severe one to have affected Bermuda since the 1930s and the Bermuda economy was adversely affected by economic forces far beyond its control. The higher than anticipated contraction in GDP was largely driven by sharp declines in output in the financial intermediation, international business, hotels and restaurant and the construction sectors. In particular, the 27.5 percent decrease in output in the financial intermediation sector was extraordinary, which highlights the vulnerability of Bermuda’s small open economy, as external shocks can have quite substantial effects on output as they are magnified throughout the economy.” The report expects 2011 growth in the international business sector to be “less robust than in previous years, but it will still remain as the primary driver of the Bermuda economy.” The Island ended 2010 with 15,091 international companies registered, 558 fewer than a year earlier, representing a fall of 3.6 percent. But the report reflects some more positive signs too, with the net asset value of the Island’s investment funds having grown by 18.9 percent year-over-year to $183.6 billion by the end of the third quarter. The sector appears to be rebounding strongly after a dramatic fall from its pre-crisis high net asset value of $250 billion. The report noted that the Island’s insurance companies showed resilience during these difficult times in terms of revenue, capital and surplus, and the captive sector grew in assets and gross premiums written. The decline of the construction industry was highlighted, illustrated by the huge decreases in the value of work done and work started. During the first three quarters of 2010, work put in place was valued at $135.8 million, down 49.5 percent from the $268.7 million recorded in 2009. The value of new projects put in place plunged by 59.2 percent to $78.2 million, compared to $191.8 million in 2009. Offices, shops and warehouses accounted for nearly two-thirds of construction work carried out last year, with residential projects accounting for about a fifth. The suffering sector will get a welcome boost from the building of the new hospital, the report stated, adding that it will create 300 jobs over the duration of the project. Tourism continued to be badly impacted by the downturn, but air arrivals, down 1.5 percent to 232,262 last year, showed signs of stabilizing, the report stated. Cruise ship arrivals increased by 9.2 percent to 347,931, aided by the opening of the new Heritage Wharf cruise ship pier in Dockyard, which can accommodate mega ships with a passenger capacity of 3,200 passengers. The report projects the number of cruise ship visitors will increase again in 2011, by 11 percent. Hotel occupancy rates averaged 54 percent an improvement of 5.7 percent on 2009. Major hotels (58.3 percent) did best in filling their rooms, followed by small hotels (52.9 percent), but cottage colonies recorded the lowest occupancy rate of 37.6 percent, unchanged from last year. In its conclusion, the report points out: “Under these circumstances, it is imperative that Bermuda addresses the issue of its competitiveness in key economic sectors. If everyone in the community is prepared to pull together, Bermuda could then be well placed to take advantage of the eventual upturn in overseas economies, particularly the United States.” In her Budget statement yesterday, Premier Paula Cox noted that stimulus spending was continuing in the US, encouraging growth. “In all likelihood, the Bermuda economy will benefit from this trend, but probably not until next year at the earliest,” she said.

March 4, 2011. HSBC 2010 report card shows Net income: $254 million, up 15 percent from 2009 (includes $31 million sale of HSBC Insurance (Bermuda) Ltd). Underlying profit: $182 million, up three percent from 2009 (excludes $31 million sale proceeds of HSBC Insurance (Bermuda) and the $41 million profit it contributed in first half of 2010. Loan impairment charges: $10.8 million compared to $6.1 million in 2009. Total assets: $11.8 billion compared to $10.8 billion in 2009. HSBC's  net pre-tax profit rose 15 percent to $254 million in 2010, boosted by a one-off gain from the sale of a subsidiary. Underlying profit - which strips out the $31 million booked from the transfer of HSBC Insurance (Bermuda) Ltd to another HSBC affiliated entity and the $41 million profit the unit contributed in the first half of the year - was also up by three percent to $182 million. Customer accounts grew, as did the bank's loan book, while total assets increased 10 percent over the year to $11.85 billion. Evidence of economic strain taking its toll on borrowers is evident in the bank's figures which showed a sharp rise in loan impairment charges from $6.1 million in 2009 to $10.8 million last year - but that is still at a low level relative to the bank's $3.2 billion loan book. There are signs that more people are struggling to make repayments on time. The bank's breakdown of loans and advances by risk category show that loans classed as “performing” fell from 97.5 percent at the end of 2009 to 91 percent at the end of last year, while 4.6 percent were rated “substandard” and 4.4 percent “non-performing.” In an exclusive interview with The Royal Gazette, the bank's CEO Philip Butterfield said yesterday: “It's a good performance that has come in a period of continuing challenge. Both globally and locally, things are more uncertain than they ever have been. HSBC Bermuda's response to that uncertainty would be to exercise a higher degree of caution and conservatism. The hard work of employees and the bank's fiscal discipline were key to achieving the increase in underlying profit. Record low interest rates are putting pressure on bank earnings and I do not expects rates to climb any time soon." Chief financial officer Michael Schrum said the quality of HSBC's revenue was high, since a large portion of it was fee-related and not impacted by interest rates. Net interest income rose year on year, to $236.8 million from $230.4 million, while net fee income climbed to $217.4 million from $211.7 million in 2009. Mr Schrum said the bank's core Bermuda and Cayman Islands banking operations contributed $139 million to earnings, while the Global Private Banking trust businesses contributed another $28 million, with the remainder generated by overseas operations. The bank was very strongly capitalized at the end of last year with a tier 1 capital ratio - a measure of core financial strength - at 31 percent, far in excess of regulators' requirements. Rating agency Standard & Poor's affirmed the bank's AA- rating in October last year, raising its outlook to stable from negative. The CFO added that he was happy with the quality of the loan book, with total allowances as a percentage of total loans and advances to customers having climbed to 0.6 percent in 2010 from 0.4 percent in the prior year. Expenses rose to $308.4 million as general and administrative expenses jumped about 12 percent, although employee compensation and benefits costs were trimmed to $192.7 million, compared to $196.2 million in 2009. The amount of money in customer accounts rocketed to $9.71 billion, up 18 percent from $8.22 billion at the end of 2009. Mr Butterfield said the bank's aims for 2011 were threefold. To improve profitability, to maintain and improve a high standard of service to customers, including linking them with HSBC's global network, and to continuously improve efficiency and effectiveness. He also hoped to encourage Bermudians working at the bank to consider working for stints overseas within the HSBC group. “Within the past year, we've had six Bermudians working in places like Hyderabad, London, New York, Malaysia and Vancouver,” Mr Butterfield said. “They have wonderful stories to tell, of learning how to function in another culture, how they have managed to be successful outside their own country and have come back with a set of skills that will allow them to make a bigger contribution in their own country.” Last year also saw the opening of HSBC's new Harbourview building on Front Street - a move that had been very popular with staff, Mr Butterfield said, as well as customers and those using the building as a thoroughfare between Front Street and Reid Street. The CEO also highlighted two major transactions that he said illustrated the way in which HSBC could leverage its global network for the benefit of the Island. Firstly, the $500 million Bermuda government bond issue, for which HSBC was the book runner, and second, the financing agreement for the new hospital. Chief risk officer Sonja Salmon said the bank regarded risk management as a contributor to performance. She said that changes in regulation were a major challenge. “The regulatory environment is changing a lot and we see ourselves having to adapt, particularly to international changes,” she said. High on the list of such changes was the Foreign Accounts Tax Compliance Act (FATCA) being introduced by the US, in an attempt to better track the holdings of US citizens in order to clamp down on tax dodging. “We are trying to understand exactly what impact this will have,” Ms Salmon said. “We have a real benefit in that we are part of a large company and we can draw on resources and expertise from inside the US and outside.” Mr Butterfield added: “The world is becoming more interdependent. Globalization is a reality and there is more global oversight of financial services. It is incremental to the cost of doing business, but it can't be ignored.”

March 15. Bermuda has been overtaken by Vermont to lose its long-held position as the world’s leading captive domicile, according to The Captive Review magazine. But that assessment - derived from a weighting system based on captive numbers, premium and assets under management - was contested by leading members of a Bermuda delegation at a captive conference in Arizona yesterday. In terms of numbers of captives, Bermuda is still number one, with 845, compared to the Cayman Islands’ 738 and Vermont’s 576. But the magazine found Vermont to be the leader on both assets under management and premium. The magazine said assets under management in Vermont of $134.4 billion compared to Bermuda’s $118 billion, while captive premium was $73.8 billion in Vermont and $19.6 billion in Bermuda. Another publication, Business Insurance, also published captive domicile rankings yesterday and had Bermuda at number one, based on captive numbers. Tom McMahon, president of the Bermuda Insurance Managers Association, said: “It seems to be based on one year’s premium levels, but from an overall perspective Bermuda is still number one.” Mr McMahon was part of a dozen-strong delegation of captive managers, lawyers, accounts and regulators at the Captive Insurance Companies Association conference in Tucson, who were busy yesterday networking at the Bermuda Insurance Development Council booth. Making up the rest of the top ten are Guernsey (333), Anguilla (252), Luxembourg (249), Barbados (242), the British Virgin Islands (219), Utah (188) and Hawaii (168). The Captive Review article quotes Brady Young, president and chief executive officer of Strategic Risk Solutions (SRS) as saying: The tax advantage of being offshore had gone and that it had become politically incorrect to base offshore. Arizona, South Carolina, Utah and others have attracted big captives from Bermuda and have landed new ones that historically would have gone offshore. Bermuda has positioned itself as more of an insurance company domicile and is not really focused on captives, unlike every other domicile listed.” That statement went down particularly badly with Mr McMahon, who said: “I take great exception to that.” Just last week, he said he had been part of a Bermuda delegation in Brussels for talks with European Commission officials on Europe’s planned new Solvency II rules. The group was arguing the case for captive insurers, who predominantly underwrite the risks of their parent corporations, to be treated differently under the regime from commercial insurers writing higher-risk third-party business. Solvency II will require insurers to hold more capital but whether there will be different treatment for captives is not yet clear. After a couple of lean years for new incorporations, Mr McMahon said there were prospects for growth in the Bermuda captive market. “We see a lot of opportunities for new business particularly coming from Latin America and Canada, so I’m confident that Bermuda will continue to be number one.” That point was seconded by Shelby Weldon, director of insurance licensing and authorizations, at the Bermuda Monetary Authority. “We are seeing some interest from a number of parties in Canada. Barbados has been their traditional domicile of choice, but from the interest we’ve seen in the first two months of this year, I would expect to see growth in that area.” Nick Dove, chairman of R&Q Quest Management, also with the Bermuda group in Arizona, said about the Captive Review findings: “I think the stats they used were skewed by a couple of extremely large captives that produced significant premium.” He said the fact that Bermuda had one of the largest delegations at the Tucson event was reflective of its importance as a captive domicile. The Captive Review also quoted Charles Winter, head of risk finance at Aon Global Risk Consulting as saying about the survey: “It confirms and further illustrates the notion that captives are no longer formed for tax reasons and suggests offshore domiciles may be in relative decline.” Eduardo Fox, corporate commercial and trusts manager at Appleby in Bermuda saw the situation differently, suggesting that much of the growth for US domiciles had come about through state-run organizations that were keen to base their captives on home soil. “The majority of captives that really matter go offshore, especially to Bermuda,” Mr Fox said. “Before Vermont and Delaware, Bermuda had no US competition and there still isn’t competition for multinational companies.” Mr Fox said he saw great opportunities for Bermuda from Mexico, following recent changes to Mexico’s tax law, which lowers the withholding tax rate to Bermuda-based captives. He added that the Island was in negotiations with Brazil, Argentina and Chile to forge similar arrangements.

 2011. March 21. The cost of Government health care plans will increase by more than ten percent on April 1, it was announced today. Health Minister Zane DeSilva said HIP, Government’s basic health coverage plan, would increase by $86 a month while FutureCare, Government’s health plan for seniors, would increase by $35 a month. It will now cost $384 a month to enroll in HIP and $635 a month to enroll in FutureCare. Mr DeSilva said: “The primary reasons for this significant premium increase are: increases in utilization; increases in medical inflation in Bermuda; and increases in administration costs. The combination of these increases led HIP’s cash position to decline approximately $7.7 million, or 190 percent, to a deficit of minus $3.6 million at March 31,2010. This was in contrast to a surplus of $4.1 million in 2009. The significant premium increase is needed and is the right thing to do at this time. All health insurers in Bermuda are experiencing similar increases in claims costs. The Ministry of Health is working closely with the Health Insurance Committee, the Health Insurance Department and the Ministry of Finance to ensure financial support is available to HIP in fiscal 2011-12.” As of April 1 all seniors in Bermuda will be eligible for Future Care Mr DeSilva said. He said the insurance plan ended in a strong financial position with approximately $8. 2 million. Neither plan will see any additional benefits in the coming fiscal year.

2011. March 22. The cost of Government's basic health care plan has jumped 60 percent in two years. Meanwhile, the cost of FutureCare has also increased. Senior citizens will be asked to pay six to 25 percent more for Government health insurance depending on the plan they're enrolled in. The changes were announced by Health Minister Zane DeSilva yesterday. He said the monthly Heath Insurance Plan (HIP) premium would be $384 a month starting April 1. It represents an $86 increase from the 2010-2011 fiscal year and a $144 increase from the 2009-2010 premium. HIP covers unlimited inpatient care at King Edward VII Memorial Hospital as well as 40 days inpatient treatment at Mid-Atlantic Wellness Institute. It also covers some specialist treatment at the hospital as well as a portion of annual visits to a physician. The number of people on HIP has risen by 500 over the past 12 months. There are currently 3,203 HIP policyholders. Yesterday, Mr DeSilva said the cost of enrolling in the programme had to increase to ensure the long-term viability of the health plan. "The primary reasons for this significant premium increase are: increases in utilization; increases in medical inflation in Bermuda; and increases in administration costs," he said. HIP went from having a $4.1 million surplus in 2009 to a $3.6 million deficit in 2010. Mr DeSilva said the program's surplus had been inflated for years as a result of a slow turn-around time for paying claims. HIP also added benefits, such as dental care in 2008, and automated its claims process last year without increasing the premiums. As a result of these issues Mr DeSilva said: "The significant premium increase is needed and is the right thing to do at this time. All health insurers in Bermuda are experiencing similar increases in claims costs. The Ministry of Health is working closely with the Health Insurance Committee, the Health Insurance Department and the Ministry of Finance to ensure financial support is available to HIP in fiscal 2011-2012."As for FutureCare, Mr DeSilva said that would also be rising. There are currently 2,840 people on FutureCare; approximately 400 of them receive financial assistance to help cover the cost of the plan. The plan was first implemented in 2009 for seniors who were on HIP at the time. Approximately 2,600 people joined in the first phase. Their premium will rise this year from $300 to $375. Phase two, which opened in 2010 and was for seniors over 70, saw an additional 160 seniors join the health care plan. Their premium will rise from $600 to $635 in April. This year Government will implement the third and final phase of the programme which means all seniors are eligible to join the plan. Anyone who joins phase three will pay $635. Mr DeSilva said: "In doing this, the Government of Bermuda has now fully achieved its promise of offering an affordable and comprehensive health insurance plan to all seniors." As of March 31,2010 the FutureCare plan had an $8.2 million surplus. Mr DeSilva added: "We are prudently managing HIP and FutureCare. Our external actuaries provide advice to the Ministry to ensure the sustainability of the funds. Appropriate premiums are required to ensure FutureCare and HIP's viability. This means we must act both fiscally and actuarially responsible, and at times that means by increasing premiums. We must avoid prolonged periods where premiums are inadequate to cover the risks accepted." He added that the Government must also ensure they manage risks properly and place limitations on benefits where needed. Government must also control reimbursement rates, manage administrative expenses and look for ways to generate greater efficiencies.

March 30.  The Bermuda Sloop Foundation was given $100,000 toward its youth programmes aboard the Spirit of Bermuda. Validus Group’s donation was hailed as “extremely significant” by the Foundation’s Malcolm Kirkland. The Spirit is under regular use by the Island’s students. Validus Group CEO Conan Ward said that the challenges of life at sea had a tremendous impact on youngsters. He said: “We are proud to be associated with a programme that accomplishes so much for our community, all in the context of Bermuda’s rich sea-faring tradition.”

April 1. Brazen residents have been making quick cash by selling on the food they buy with government vouchers right outside the doors of grocery stores. This is why Government has replaced its monthly paper food vouchers with new grocery cards, which will be used like debit cards. The Department of Financial Assistance will today hand out about 600 of the new cards and activate each one with a person's monthly food allowance. Shoppers have been spotted paying for $100 of groceries with government food vouchers, then going outside and selling them for $50. They then use the cash to buy cigarettes and alcohol, which cannot be bought with the vouchers. Youth, Families, Sport and Community Development Minister Glenn Blakeney admitted calculating minds were abusing the system as he revealed a whole raft of changes to government handouts. It comes after the Department spent almost $10 million more than its $25 million budget for the fiscal year, pointing the finger at the number of applicants rising from 650 to 1,600 in the past six years. Mr Blakeney said: "People are brazen, they simply walk around the corner and sell on the goods. But those who abuse the system will be ousted and suffer a consequence that will deny their basic need. The Non-Cash Grocery Cards will be marked with a person's name and use of the card at the checkout will require photo identification. MarketPlace staff will also work in partnership with Government to look out for any fraudulent activity. MarketPlace has been very vigilant and diligent in assisting us with what has been going on. They pick up the phone and tell us exactly what is happening. Our investigation officers then follow it up." People will only be able to use the cards at The Shopping Centre for a one-month trial, then from May 1 the cards will be accepted in MarketPlace stores island-wide. Mr Blakeney said: "No longer will the clients of the Department have to make a monthly trek into the office in order to collect their monthly paper food vouchers." It is also hoped that the cards will increase the integrity and self esteem? of people receiving financial assistance as they have been designed to look like normal MarketPlace charge cards. Mr Blakeney said the department had been trying to add dignity and respect to seeking financial assistance as he knew it could be embarrassing to ask for help. He said: "More and more people have been made redundant, lots of people are being affected. People are becoming victims of circumstances beyond their control. They have never had to be dependant on Government before, but now they find themselves in that position. It can be embarrassing and humiliating because of their pride." To be eligible for a childcare allowance the income threshold has now been reduced to $50,000 from $70,000. This will force about150 people to go without after the budget for this programme was reduced from $3,840,000 to $2,500,000. Property is now considered an asset so anyone who owns property is no longer eligible to apply for help. And people who sell on property cannot apply for handouts within five years of the sale. Returning Bermudians must have lived on the island one year before applying for help and if a person loses their job because of their own actions, they cannot begin the application process until three months after the date of termination. Mr Blakeney said it was their duty to continue to provide people with basic financial assistance but it would be "workfare not welfare" as able-bodied people would be encouraged to find jobs. He said making savings was essential as they had seen ?an influx of applicants in need of assistance over the last several years.? He said: "Times are hard because of the economic downfall. We have to tighten up. People hold us accountable and feel Government should not be an agency that gives out handouts. We are, in essence, endeavoring to do more with less." The financial assistance changes also includes the axing of help with mortgage interest, property insurance and personal household allowances. And only one month's arrears will be paid on expenditure items to encourage people to be more timely and responsible. Seniors will continue to be able to retain $5,000 in investments or assets, while all others will be able to retain $500. All income over this amount will be calculated in the assessment for a financial award.

April 7. British Airways plc (BA), which flies to Bermuda, is increasing its fuel surcharge on long-haul flights including to Bermuda for the second time this year because of recent oil price rises. BA said Friday that it will raise the fee by 10 pounds (around $16) per flight from Friday. That means passengers will pay a surcharge of between Ł85 and Ł145 depending on the class of cabin and the length of the flight. Surcharges on BA’s short-haul flights will be unchanged. The company last raised the long-haul fee in February. An earlier rise in December was the first in more than two years. Political unrest in the Middle East has pushed Brent crude oil well above $100 a barrel.

April 11. Bermudian students may find it cheaper to attend some Canadian universities, with tuition fees set to rise in the UK. Locals who have paid home tuition fees at UK universities, rather than the international rate, face a substantial price hike for the coming year, as the UK government transfers costs from the state to students. This week, 31 UK universities announced their 2012 fees. The University of Warwick, which will cost Ł9,000 ($14,700) for the coming year, showed a standard home fee of Ł3,375 ($5,500) for last year the same as the University of Portsmouth, which is now charging Ł8,500 ($13,900), and Coventry University, which at Ł4,600 ($7,520) was the least expensive on the list. Out of the 31 academic institutions, 23 have hiked their annual fees to the Ł9,000 upper limit more than Nova Scotia’s Acadia University, whose tuition fees for full-time undergraduates this academic year were just under $13,000 (BDA$13,500). An international undergraduate taking a Bachelor of Management course at Dalhousie University stands to pay about $15,000 (BDA$15,700). Attending university in the US, which can cost international students $40,000 a year, remains the most expensive option for Bermudians.

April 11. Harbour Nights event is to end two months earlier this year due to budget cuts but will remain a quality event, says the Bermuda Chamber of Commerce. The Ministry of Cultural Affairs and the City of Hamilton will continue as lead sponsors for Harbour Nights. However, they have had less money to spend due to the recession, said Diane Gordon, the Chamber's executive director. She said the event would take place from May 18 to August 31, for a total of 16 weeks compared to 24 weeks in past years. "Like everything else in the world, in particular Bermuda, there are certain budgets that have been cut. That goes all the way from the top of Government all the way down to small businesses. So while sponsors are still supporting us. the money is less than in previous years. Because we have been urged to continue putting on this event, we have had to get out to a broader spectrum of businesses to seek sponsorship dollars. We have also had to make the cut in terms of weeks, not in the quality of the event," Ms Gordon said. Harbour Nights has run for the past 19 years and has an annual average of 85 food, arts and crafts vendors on Front Street each Wednesday night. According to Kristi Grayston, of the Chamber, retail stores typically don't benefit from increased sales during the event, but stay open late in support of the small businesses. Ms Gordon said some restaurants and bars in Hamilton have stepped forward as sponsors, because they also benefit from higher traffic through the city. She said this year, more than ever, there has been a huge interest from local performers and added: "I would suggest the reason being many people have either lost their job or lost benefits." This year the Chamber is looking to get buskers, people who play instruments and get paid through cash donations from the audience, rather than a set fee. Such changes, in addition to the heavy traffic from the cruise ships and groups coming to the Island, will ensure the event is a success, according to the Chamber. "We have decided this is definitely a worthwhile event for the community," she said, adding that it gives tourists a chance to mingle with Bermudians and learn about the Island's culture and entertainment.

April 29. It was business as normal for the Progressive Labour Party as it dismisses the emergence of new political party One Bermuda Alliance (OBA) as “a non-issue.” Most PLP politicians and supporters have today played down the significance of the merger between the United Bermuda Party (UBP) and the Bermuda Democratic Alliance (BDA). They say the OBA will mean “very little,” adding that the new party won’t be much of a threat to the PLP at the next general election. They are calling it a “reunion of the UBP” rather than a merger, comparing the OBA to “a new wine in an old bottle.” The UBP and the BDA have not yet been dissolved and nothing has been officially signed to say the amalgamation has taken place. But Bermuda is expected to return to a two party country before the House of Assembly resumes on May 13. UBP MP John Barritt will initially lead the OBA and he yesterday said the new party would “work together to do what is best for Bermuda.” Mr Barritt said voters were looking for change and the PLP should be happy to “see signs of positive development on the political scene.” But PLP public relations officer Curtis Williams branded the new political party a “non-issue” as it means so little to the PLP. He said the “reuniting of the UBP and BDA” included “the same people, in the same Parliamentary seats as have been there since 2007.” Mr Williams said: “The reunited UBP will not have any effect on the business of the PLP as nothing has changed. The BDA MPs have simply gone back home and changed the name of the house. The PLP and Premier Cox are solely focused on the many challenges that are currently facing our community and will not be distracted by the UBP reunion and name change. The Premier’s standing in the community is sound and Bermudians know and see that she is working hard for Bermuda.” PLP MP Ashfield DeVent said the PLP would simply continue to serve the country. He said: “A rose by any other name is still a rose. This party is nothing new. There is going to be no change for us. We don’t see it as two parties combining. It’s like a husband and wife who break up then get back together. This is a party that’s had a break, they had a little falling out and now they are trying to mend their differences.” Mr DeVent, an MP for Pembroke South East, added that he didn’t think there would be “much new and exciting” about OBA. He said: “As nothing has officially been announced, we don’t yet know who really is in charge, what their plan is and what direction they will go in. Only time will tell.” Former Premier and PLP MP  for Warwick South East Alex Scott said he wasn’t too worried about the “re-emergence of the UBP” especially during the party’s honeymoon period. "It’s a reconstruction of the UBP with the addition a few very new BDA members. It will be business as usual for the PLP. As far as the PLP and its political base are concerned, I don’t think that’s going to change dramatically. In recent years that political base had held firm and I don’t see that changing. I predict the early days of the OBA will see several politicians “jostling” for the new party’s top jobs. The question is can they get themselves in order to campaign for a general election in a short period of time? The answer is probably not. Their best shot will be future elections.” But Mr Scott added that the country was “moving into a new era” with uncertainty over the economy, crime and health. “The PLP shouldn’t underestimate this new construct. It has to make the Opposition stronger. We should take these politicians seriously and shouldn’t write them off. We’ll just have to see if the new political muscle will cause ripples and see how the voting public reacts.” Former PLP Senator Walton Brown said: “The UBP have just rejoined together and changed its name. It’s the same Opposition party, I don’t see any difference, positive or negative. Every political party obviously represents a certain threat, but nothing that’s been reported so far shows that there is going to be any drastic change. We will have to assess their performance and objectives, then if something does come up we can reassess the situation.” However political commentator and PLP supporter Jonathan Starling said the “reunification of two UBP factions” could capitalise on people’s disappointment with the PLP. “I think they have a lot of potential at the moment, but it really depends on how they play their hand from now and what the PLP does from now on. People are upset with the PLP, and the PLP’s base is far from happy with the current situation. I wouldn’t have thought this a year ago but, quite honestly, unless the PLP gets their act together pretty quick, I wouldn’t be at all surprised if the Opposition were able to form the next Government.” Mr Starling said the new party was “old wine in a new bottle” but said it didn’t have to be if they worked together to become “a very new entity” putting pressure on the PLP. To do this he believes the OBA needs to tackle the race/class issue and convince the public of a more economically stable environment. “I do look forward to seeing if they can contribute to a better level of politics than we’ve had so far. We’ve seen the PLP can govern as well as, and as bad as (and in some ways better and worse than) the UBP did.” Guilden Gilbert, who describes himself as “a lukewarm PLP supporter”, also questioned whether the combined entity would be more effective than the UBP, but he believes Bermuda is ready for a new governing party. “I thought the BDA had the potential to eventually become a valid choice for the voters and I think they have given up the fight too soon and this could be reflected in the poll numbers as we move forward. Some may see this merger as a sign that a third political party is not viable in Bermuda, I firmly disagree with this position as I think this merger is more a case of impatience on the part of the BDA. The fact remains that if the BDA remained as a party it would have killed off the UBP and being able to ably compete for the seat of Government, the UBP needs this merger more than the BDA.” Mr Gilbert added that the PLP changed with the election of Paula Cox as leader and the party was immediately given “a softer look.” He said: “Ms Cox, from what I know of her, is not going to focus her attention on berating the Opposition or get into a game of name calling. She will instead put her head down and focus solely on her task.” When Mr Barritt was asked about being the new leader of the OBA, he said: “Nothing in life is ever certain at least not until that certain something actually happens. That’s the case here, and when there is something definitive to be said, it will be said.” Mr Barritt called comments in yesterday’s Royal Gazette by PLP chairman Anthony Santucci “nasty and vituperative.” He said: “What we have here is a group of Bermudians, young and old, experienced and not so experienced, trying to work together to do what is best for Bermuda. We believe what we are trying to do is a good start to the sort of change the people of Bermuda are looking for when it comes to politics and political parties. I would have thought then that the PLP and Government would be happy to see signs of positive development on the political scene.”

May 20. Energy Systems (Bermuda) Ltd (AES) has announced the completion of Bermuda’s first commercial installation of a photovoltaic (PV) solar energy system for Lindo’s Market in Devonshire. This 300 solar panel system will produce approximately 11,340 kilowatts of energy per month, enough to handle between 40 and 60 percent of Lindo’s load requirements at any given time. “It’s extremely gratifying to bring solar energy to Bermuda’s commercial market,” said AES founder and CEO, Tim Madeiros. “I commend Lindo’s Group of Companies for continuing to be an environmental leader in our community and I am grateful to the Bermuda Government for their support in raising awareness of solar energy in Bermuda.” In one year, Lindo’s solar energy system will produce more than 136,000 kilowatts of power, which equals a 211,000-pound reduction in dangerous CO2 emissions. This reduction in CO2 is equivalent to planting 2,300 trees or not driving 209,000 miles in a standard car. The solar panels have been designed to tilt up in four-panel sections to allow the roof to be cleaned or painted and without interrupting the energy supply - an exclusive feature provided by AES. “We worked diligently with our solar panel vendor, SunPower, to provide a customized solution for this project,” said Mr Madeiros, “We chose SunPower panels because of their patented technology that provides up to 50 per cent more power than conventional panels, thus maximizing energy output.” A system such as the one installed at Lindo’s, requires specialized electrical engineering to factor in the high DC current and voltages that are inherent in a large-scale commercial solar system. Mr Madeiros, who is a Chartered Engineer with the UK Council of Engineering, was able to draw on his extensive knowledge and experience in the electrical and solar industries to design the system to meet the stringent requirements. The system employs all of the specialized equipment and protective devices to tie safely and efficiently into the store’s electrical system and, ultimately, into the utility grid. “This is just one of the green initiatives that Lindo’s Group of Companies has implemented,” said Giorgio Zanol, president of Lindo’s Group of Companies. “Not only will this solar energy system provide cost savings on energy for us, but it’s a step toward helping the environment - one that we hope other companies will also be inspired to take.” AES manages all aspects of photovoltaic projects in-house, offering cost-effective and seamless solution for its clients. In addition to Mr Madeiros, the AES team comprises project manager Earl Wescom and technician Armindo Ferreira. The company offers a free site evaluation and financial analysis to residents and businesses.

2011. May 29. New legislation has been passed to ease the workload of psychologists who are struggling to cope with the impact of gun crime on our communities. Politicians have unanimously approved the Psychological Practitioners Amendment Act 2011 to assist the Island's 32 qualified psychologists. Health Minister Zane DeSilva, who introduced the second reading of the bill yesterday, said the amendments would tighten up the profession's code of conduct by checking on qualifications, training and experience. The current restriction on practicing based on old age will be scrapped. Going forward the only practicing restrictions will be mental and physical health. Mr DeSilva said it was “less than ideal” that psychologists were restricted by old age, especially at a time when more people needed psychological help. OBA MP Grant Gibbons said the legislation was important as there was currently “increased pressure” on the Island's practicing psychologists. Dr Gibbons, who was speaking on behalf of the OBA, said the updates to the Psychological Practitioners Act 1998 were “sensible.” He said: “There's a shortage of psychologists with little over 30 on the current register. Many of them have their hands full. We have to support them to help them fulfill a particularly important and critical role at the present time.” UBP MP Charlie Swan said the UBP was “entirely in agreement as well.” He then questioned whether the change in the age restriction would “open the door for those who are retired to rejoin the profession.” PLP Randy Horton called it a “great” piece of legislation and said he was pleased it had attracted lots of support. He said: “The question of age is particularly relevant. Just because you continue on through old age doesn't necessarily mean that you don't have that physical or mental capacity. Some of us know that when you go past a certain level you can still continue at the same level as young people.” Attorney General Michael Scott said within the Department of Corrections there were three psychologists “delivering a very important service to inmates.” He said: “These are professional doctors who try to understand the issues and profiles of people through their concerns. They say our children are being asked to raise themselves, which almost cuts off their time to enjoy their childhood. They tackle the stresses and strains of life in our community, they are doing really good work.” Mr DeSilva introduced the legislation's second reading, saying there were “just a couple of amendments”, calling them “housekeeping changes.” The Act also adds “both practical experience and continuing education credits” to the list of requirements that need to be met by professionals wanting to renew their certificates of registration. This aims to enforce that local psychologists keep up with changes and developments in their field. Members of the Bermuda Psychologists Registration Council will also be paid a fee in accordance with the Government Authorities (Fees) Act 1971. Mr DeSilva said they “put in a huge amount of time” so members deserved to be compensated. Shortly before the new bill was passed, Minister of Youth, Families, Sports and Community Development Glenn Blakeney had praised the work of the Bermuda youth counseling services' high risk intervention unit. He said they “strengthened and transformed the lives” of those affected by violence through training, mentoring and coaching. Since the high risk intervention unit was set up in 2010, 58 referrals have been received, with 19 referrals received since January this year. They are also helping about 60 additional family members. Mr Blakeney said: “The unit is having a progressive impact on lives that may otherwise be directly or vicariously affected by social issues related to gang affiliation. The unit takes seriously the strongholds of gang involvement and the emotional pains that break the hearts of Bermuda's people.”

May 30. Bloomberg reported that Bermuda-based Alpha Prime Fund Ltd and Senator Fund SPC, two funds sued along with HSBC Holdings Plc by the trustee liquidating Bernard Madoff's firm, filed so-called cross claims against HSBC to try to recoup damages they incurred in the fraud. HSBC, which acted as custodian for the funds, failed in its duty to monitor Madoff and profited from his Ponzi scheme at their expense, Alpha Prime and Senator Fund said in a filing. The London-based bank is therefore liable for any damages accrued by the funds, they said in the May 27 filing in US Bankruptcy Court in Manhattan. HSBC is the direct cause of the loss of hundreds of millions of Alpha Prime's dollars and tens of millions of Senator Fund's dollars, they said. Irving Picard, the Madoff firm's trustee, sued HSBC and a dozen feeder funds for $9 billion in December, saying they should have known of the fraud. HSBC, Europe's biggest lender, has asked a district court judge in New York to dismiss Picard's suit, saying it didn't know of the fraud and lost $1 billion of its own money investing in funds that in turn put money with Madoff. The tax and advisory firm KPMG LLP told HSBC about the risks of Madoff's business in 2006 and 2008, according to copies of the reports obtained by Bloomberg, which was allowed access to them on the condition they not be published. KPMG identified 25 fraud and related operational risks in the way Madoff received, checked and accounted for client funds, it said in a 56-page report dated February 16, 2006, more than two years before the fraud came to light. The limited controls in place may not prevent fraud or error occurring on client accounts if management or staff at Madoff LLC either override controls or undertake activities where appropriate controls are not in place,? according to the report. In an e-mailed statement to Bloomberg in March, HSBC said that ?KPMG did not conclude in either of its reports that a fraud was being committed by Madoff. HSBC did not know that a fraud was being committed and lost $1 billion of its own assets as a victim,? the bank said. According to Alpha Prime and Senator Fund, HSBC failed to verify trades reported by Madoff, even though that was its duty as custodian. If the bank had done so, it would have seen that trades were allegedly executed at prices outside the daily range of prices of such securities on the days in question, the funds said. HSBC misled Alpha Prime and Senator Fund to believe that they were complying with these obligations, they said in the filing. The funds said they were told on December 5, 2008, about a week before Madoff's arrest, that the bank had started to receive copies of trade tickets from Madoff and to try to replicate the trades. Answering Picard's case against them, the two funds said they were investment funds, not feeder funds. They received money from Madoff in good faith and were not obliged to return it, they said. Picard's suit against Bermuda-based Alpha Prime seeks to recover $213 million. HSBC spokesman Patrick Humphris and spokeswoman Juanita Gutierrez didn?t immediately respond to an e-mail seeking comment. Madoff is serving a 150-year sentence in federal prison in North Carolina. The case is Picard v. Alpha Prime, 09-01364, US Bankruptcy Court, Southern District of New York (Manhattan).

June 10.  Government needs your help in tracking two recently introduced species of lizard. The Department of Conservation Services within the Ministry of Public Works yesterday advised that two geckos, the Mediterranean or Turkish gecko, (Hemidactylus turcicus) and the Asian gecko (Hemidactylus frenatus) have been inadvertently introduced to the island. Both geckos have spread successfully around the world via cargo and are well-established in the southern states of the US and it is suspected they arrived in Bermuda by the same method, likely hidden in bales of peat moss or similar material. The geckos have been spotted at four locations. Both species feed at night and hide in the day, usually in houses and buildings. They can be seen at night on walls under lights waiting to catch insects. They make a loud TCKKK noise which is very distinctive. Director of Conservation Services Drew Pettit said tracking the geckos will be important because they will compete for food sources with the endemic Bermuda Skink and the introduced and established populations of anoles lizards and tree frogs. Mr Pettit added: "Also they might bring with them unknown viruses that could impact the same species. We are unsure how invasive they are and how rapidly they will spread if left to their own devices. The geckos are easily distinguished as they have a mottled tan, brown or grey skin with distinctive bumps all over the body. Also the pupil of the eye is orientated vertically." The Department of Conservation Services seeks the cooperation of the public in reporting any suspected sightings to Alison Copeland, Biodiversity Officer at 293-2727. It is safe to capture the animals and they can be brought to the Bermuda Aquarium Museum and Zoo in Flatt's.

2011. June 27. Royal Gazette  financial columnist Nathan Kowalski wrote this:  "I just received a letter from my local healthcare provider indicating that my monthly healthcare premiums have been increased 16.9 percent this year. This meant that the monthly payment had jumped almost 27 percent in two years. Although I was disappointed, it was not really a surprise. Let me explain why. Bermuda’s health industry is currently going through a period of drastic change and review. The National Health Plan of 2011 has been initiated to reset the direction of Bermuda’s health system. Specifically, it lays out a conceptual framework with the goal of making healthcare more affordable and to improve the quality and access of care. Healthcare reviews over the last 15 years have identified a number of ways to improve the healthcare system. The major concerns highlighted are the increasing level of healthcare costs and the affordability for Bermudians. Overall health in Bermuda.  Recently the Bermuda Health Council (BHC) and the Department of Health commissioned a report titled “Health in Review: An International Comparative Analysis of Bermuda Health System Indicators.”. This report provides a benchmark of Bermuda versus other OECD countries with respect to the state of the nation’s health, access to healthcare, and quality. It detailed 76 various indicators. The following are some of the key findings:

Unfortunately, in comparison to other countries, Bermuda shows the greatest level of inequality in terms of access to healthcare (this could be disputed as I am unaware of anyone being turned away from the hospital that needed emergency medical assistance, for example). Bermuda’s total health expenditure per capita in 2007 was US$4,959 (PPP). In relation to the OECD, this places Bermuda as the country with the second highest level of expenditure, surpassed only by the US. Healthcare costs in Bermuda have been running at an annualized growth rate of about 6.5 percent per annum based on the government of Bermuda’s CPI index. This compares to the Bermuda Health Council’s annual increase of health spending of roughly 8.8 percent per year. From the “Health in Review” report, total household expenditures for healthcare services as a share of total household consumption has increased steadily since 2004, reaching 17.8 percent in 2007. This rapidly escalating cost is driven primarily by the aging demographic profile of the Bermuda population, the associated consumer expectations and greater utilization of services. For years these escalating costs were absorbed in a thriving economy where people were earning more. Now, Bermuda is experiencing what many other developed Western countries have had to deal with. In fact, Bermuda’s use of tertiary care in top US hospitals has also driven up costs; in 2009 the cost grew by 40 percent. These escalating costs have been followed with ever increasing health premiums. Since 2004 the standard premium rate in Bermuda has more than doubled and has grown in excess of 12.6 percent every year between 2004 and 2010. Actuarial studies recently conducted suggest that claims expenses do not appear to be moderating. According to the government actuary, the actual healthcare inflation and claims in Bermuda continues to grow at nearly 14 percent per year. These spiraling costs are becoming a large economic burden on the government (which sponsors and funds FutureCare) and lower-income Bermudians. As a result, government is trying to enact measures to slow cost increases and force greater efficiencies onto the healthcare providers such as the hospital. As an example, the Bermuda Hospital Board (BHB) has been mandated to limit its fee increases to below the inflation rate and absorb the cost of increased utilization of its facilities. Via a memorandum of understanding with health insurers, the BHB will cap the total fees that it can bill. The Grey Tsunami.  One has to factor the impact of demographic changes on entitlement obligations and ultimately healthcare in Bermuda. Seven hundred post-war “baby boomers” will turn 65 in Bermuda this year. This compares to only 276 in 2010, an over 150 percent increase. The Department of Social Insurance says this is the largest number in the history of Bermuda and they estimate equal or greater numbers each year for the next 20 years. As a result, FutureCare is slated to expand massively over the coming years here in Bermuda. It is not a stretch to assume that current levels of healthcare spending will not suffice for a rapidly aging population. Costs can be kept down artificially through rationing, but the Bermuda public and even the government will likely reject any kind of triage, “death panels,” in the popular parlance. There are ways to reduce spending somewhat, such as eliminating inefficiencies in the system, but they would not likely provide enough in savings to fund the additional demands of an increasingly older population. Simultaneously, the total fertility rate of 1.76 in Bermuda continues to trend lower than replacement levels of 2.1. In the past a relatively stable birthrate combined with the large annual waves of expatriates was enough to ensure that there were far more young people in the insurance-paying workforce than older people reliant on benefit payments. None of those conditions seem to exist today. The demographic pyramid is flipping and will create a negative drag on funding escalating costs. In summary: fewer working young people simply will not be able to pay the medical bills of a growing population of older retired people. This poses somewhat of an overall economic problem. If enough resources to cover the medical costs of the coming “grey tsunami” were to be taken from the productive private sector, it would devastate job-creating investment and innovation. The economy in Bermuda could shrivel even further. There is a simple solution, however, people could work longer or invest more to fund more of their own medical needs. The ultimate effect on this situation in Bermuda may be twofold. 1. Escalating healthcare costs are job killers. As the marginal cost to retain an additional worker escalates due to rising healthcare premiums, employers’ budgets for staffing will get squeezed somewhat. This may not be a large expense for the multinational firms here in Bermuda but it is one additional reason why Bermuda may become uncompetitive compared to other jurisdictions. For the small business owner these escalating costs may actually make the difference between hiring an additional worker or not, frustrating Bermuda’s unemployment problem. 2. It is too early to definitely state what the effect of these costs will be on future increases in premiums, but it would not be a stretch to assume that the local healthcare insurers may be hard pressed to maintain margin levels as witnessed in the past. Either that or the level of services offered may be reduced to assist in defraying costs. The healthcare situation in Bermuda is not a problem. It is becoming a crisis."

July 11. Government announced two major policy changes on Friday, which while late and limited, should do something to improve the economic mood. The first is an incentive for a limited number of non-Bermudian “job creators” to enable them to get ten-year work permits and to open up the possibility of their gaining permanent resident certificates. The second initiative is a review by National Security Minister Wayne Perinchief into landholding policies. Both of these decisions will be seen at best as modifications of past policies that have hurt the economy and slowed any chance of recovery. They appear to be a recognition, at last, of the poor state of the economy, and that international business cannot be taken for granted. In the first instance, the incentive for job creators recognizes that the policy of six-year term limits and the effective cessation of the grant of permanent residents certificates has been a disincentive to businesses wishing to have a substantial physical presence in Bermuda and that it has been a contributing factor in the movement of some companies establishing their holding companies elsewhere and of moving senior executives off-Island. More broadly, the strength of the Bermuda international business sector has been its ability to innovate. That can best occur when the leaders of these companies are in Bermuda and are creating a marketplace of ideas and competition. To be sure, Bermuda continues to have a strong underwriting market, but that is not the same as having the leadership of the companies on the Island. There is a further aspect to this. If the leaders of these businesses are not in Bermuda, they have less interest in the well-being and success of the Island. It is just another office, or location on the map. So given the well publicized departures of some executives and the relocation of some companies to other domiciles, this move is welcome, although long overdue. Similarly, Mr Perinchief’s land review recognizes that the restrictions on property ownership for permanent residents certificates are too onerous. The suggestion that restrictions on foreign property ownership may be eased is also welcome in the current environment as is the likelihood that Bermudians will be able to sell their property to non-Bermudians again. The previous policy, enacted by the Progressive Labour Party government, was well-intentioned in the sense that it aimed to protect Bermudians’ ownership of Bermuda land, but the policy put in place had the consequence and this was well flagged and warned of at the time of devaluing Bermudians’ property and depressing the real estate market as a whole. Mr Perinchief also stated that he would keep an open mind to perhaps the worst policy of all, the one which restricts Bermudians married to non-Bermudians from owning more than one property and requiring that they get a licence to own a property at all. This is fundamentally wrong because it discriminates against Bermudians who choose to marry non-Bermudians. But the apparently onerous process of getting a licence to buy property at all has also done great damage to them. This policy does not directly damage the economy, or deter international business. But it is bad policy all the same. However, having substantially modified Government positions in two other areas, Premier Paula Cox and her colleagues may feel this is too much to swallow at one time. These initiatives may be calculated to satisfy swing voters, but they are sufficient reversals of policy that they will unsettle the PLP’s base. By the same token, whenever a Government does change policies in this way, it throws its earlier judgment into question, especially when the warnings against these policies have been made for years. No doubt the Opposition will see this as a policy U-turn and will attempt to exploit it as such. But for all of that, these are welcome decisions, albeit overdue, and show Government finally is doing something to reverse the serious decline in Bermuda’s economic fortunes.

July 15. Hundreds of Bermudians working in the Island’s reinsurance industry - even in this economy - are making an average of almost $200,000 a year.  In addition, the Island’s 22 major re/insurers pumped nearly $1 billion ($971 million) into the local economy last year, including $10 million to charities. New figures from the Association of Bermuda Insurers and Reinsurers (ABIR) also show the industry employs 1,696 people- on the Island. Of that number, 66 percent are Bermudian. While the total number employed in the industry on Island has slipped from about 1,782 in 2007 to just under 1,700 in 2010, the number of Bermudian employees has risen from 1,098 in 2007 to 1,128 in 2010. By comparison, ABIR’s 22 members, who include Ace, XL, PartnerRe and Hiscox, employ some 32,000 employees globally. ABIR says reinsurers have been increasing their employee counts in Asia, Europe and the US. The figures are based on the results of ABIR’s 2010 economic impact survey. According to the survey, ABIR members’ 2010 economic contribution to Bermuda included:

“ABIR’s members are integral to a successful economy in Bermuda,” said Dinos Iordanou, ABIR board chairman and Arch Capital Group CEO. He noted that the average salary and benefits compensation for ABIR member Bermudian citizens only was $197,000 in 2010; while the median was $127,000 (that means of the 1,128 Bermudian employees, half had compensation higher than this number and half had compensation lower than this number). Average salary and compensation for Bermudians has risen substantially to $197,000 from $108,000 back in 2007. “ABIR members provide good quality jobs for Bermudian citizens and it is in our self interest to hire Bermudian employees with skills and talents that match our needs,” Iordanou said. ABIR president Brad Kading said the group is pleased by the Government’s plans to offer permanent residency status to some 10-year work permit holders, plus other initiatives including plans to identify job categories that will be exempt from term limits. “We strongly support the government’s efforts to create incentives for senior executives with hiring authority to be resident in Bermuda. We are quite encouraged by the Premier’s recent announcements on this matter and we are looking forward to the development of the implementing measures. The more executives with hiring authority located in Bermuda, the more opportunities there will be for additional Bermudian citizens to find jobs with these employers. Additional executives will provide additional spending which will further boost the hard hit hotel and restaurant sector.”

July 23.  People are to get the chance to have their say on what needs to be done to try to salvage Bermuda’s tourism industry. The initial proposals of the National Tourism Plan are to be “taken to the community” this summer to find out what people think. It is hoped public discussions will add to the master plan, which is intended to guide Bermuda’s tourism policies for the next decade and beyond. In recent years the industry has suffered from the closure of hotels and guest houses as well as a decline in tourist numbers. But the formulation of Bermuda’s first strategic plan for the industry is seen as the way to save the industry. Tourism Minister Patrice Minors said the Tourism Board was “working diligently to formulate a document that represents the full, comprehensive input of all stakeholders.” The Minister insists progress is being made, even though drawing up the tourism blueprint is taking longer than planned. It was originally announced that it would be completed by the summer. Ms Minors now estimates the National Tourism Plan will be published by the end of the year, but she said it was important they weren’t rushed as they wanted a “a truly balanced view of all the crucial issues that need to be properly addressed.” The Tourism Board was set up at the start of the year specifically with the aim of developing and sustaining the tourism product to make Bermuda “an envied tourist destination of the world.” Then at the end of April about 30 key tourism figures attended a two-day retreat to brainstorm the future of the industry. Hoteliers suggested passing gaming legislation to make them more competitive and creating revenue through the winter months. Other options discussed at the retreat were a convention centre, the Island having its own airline, waiving landing fees for Lear jets and scrapping property tax. Ms Minors said over the last month Tourism Board members have split up into smaller committees to discuss “a series of hot topics.” These topics include hotel development, branding, gambling, entertainment, service standards and the much-talked-about creation of a tourism authority. Policy issues such as hotel concessions, immigration, residence and property taxes have also been discussed. The board will then draw up a document of ‘Key Strategic Imperatives’ and Ms Minors says these will become “crucial components of the National Tourism Plan.” Ms Minors said: “A series of town hall meetings, public panel discussions and stakeholder engagements will occur in early September where these imperatives will be presented to the public. We are going into the community, we are rolling it out through town hall meetings. We want to show the Bermuda people where we are heading with the National Tourism Plan. We want to hear what people have to say, we are not going to be dismissive of any ideas. It is my intention to lay these fundamental proposals in Parliament when it resumes in November. We don’t want to rush things, we accept that this is the pillar of our economy and we have to take our time. It has required a greater depth of discussion than first imagined. We want to be able to produce a truly comprehensive plan, we are not going to rush it”. Ms Minors discussed the progress of the National Tourism Plan after revealing the 2011 second quarter visitor statistics at a press conference on Wednesday. When asked who Bermuda’s competition was, Ms Minors said lots of people considered it to be Aruba, but she added it was important not to make comparisons with Caribbean islands. She said: “Our greatest competition is ourselves. We don’t like making comparisons with others. Competing against ourselves makes us much more creative, it’s one of the ways we can make ourselves shine.” Ms Minors was also put on the spot about tourism as she sat on the panel at Tuesday’s town hall meeting about what Government is doing to strengthen the economy.

2011. July 23. Members of Parliament have approved legislation to tighten the regulation of imported prescription drugs so they meet the high standards stipulated by other key Western countries. The move by Health Minister Zane DeSilva came after concerns over an order that came into effect on July 1 allowing such drugs to be imported from India, Brazil and Israel. Now, drugs can be imported to Bermuda from anywhere in the world, but they must have been approved for sale in the US, Canada or an EU country and meet the country’s regulatory standards. The move came after concern from pharmacy industry figures over patient safety following Government’s decision to allow drugs from India, Brazil and Israel. The experts, along with the Opposition, cited concern that countries such as India have a problem with counterfeit medication. Before the new bill was passed just after midnight, the law had restricted the importation of prescription drugs based on two conditions; where they are manufactured and where they are approved for sale. Drugs could only be imported from a list of designated countries, which included India, Israel and Brazil after the recent controversial order was approved. Last night’s follow-up legislation scrapped the designated countries list. Now, explained the Minister, prescription drugs may be imported from any country, provided that they meet the regulatory standards of the United States, Canada or European Union. In addition, the product must be eligible for sale in one of those countries. Furthermore, all commercial importers of prescription drugs must register with the Ministry of Health and prove they meet data collection and storage standards. Introducing the bill, Mr DeSilva told MPs: “Following meetings with the representatives of the pharmacy community, I assured them I would make every effort to bring amendments to the (Pharmacy) Act before the House recessed for the summer. I listened, I took action and I’m here today to present those amendments as promised.” He said local prescription drug importers have always stuck to high standards. However, he acknowledged that the act needed to be amended because not all countries have the same regulatory standards. Pharmacy industry figures had been at pains, despite their criticism of Government, to assure patients that they should not be put off embracing generic drugs. Last night, Mr DeSilva said generic drugs, which can be produced cheaply on a mass scale once the patent for brand name drugs has expired, will save money for ordinary Bermudians. The One Bermuda Alliance complained the new law is too ambiguous and suggested an amendment to take the safety measures even further. Its MP Grant Gibbons said in addition to stipulating that drugs imported to Bermuda must be eligible for sale in the US, Canada or EU, they should also “meet the same regulatory, safety and bio-equivalence standards” required for importation into one of those countries. Dr Gibbons said the suggested amendment came after consultation with industry experts. He explained the US Food and Drug Administration examines those issues when deciding if a drug can be imported into the US. He explained that bio-equivalency standards are checks on whether a generic drug acts the same in patients as the original branded product. He added that safety standards are important as some low-standard generic drug manufacturers might use the same production line for different types of drugs, leading to dangerous cross contamination. “If we really want to assure people that these generics are as safe, I suggest we take on board this amendment. It will provide additional assurance,” he said. Shadow Minister of Health Louise Jackson also spoke in favour of the amendment. She urged Government to “do the right thing” and accept it “as a small thing to do.” She said the Opposition otherwise backed the bill, albeit with concerns that it should have been tabled sooner. The Government rejected the suggested amendment in a vote after Mr DeSilva questioned which industry experts the Opposition had spoken to about it. He said they had already been consulted and approved the bill as he tabled it. “These amendments were made with every stakeholder that we have in the industry,” he insisted.

July 30. Business leaders and employment specialists have welcomed Government plans to offer permanent residency status to some 10-year work permit holders. They said the proposals, which were outlined by Premier Paula Cox in the House of Assembly on Friday and would enable certain key workers, including senior executives and leading decision makers, to obtain Permanent Residents Certificates for themselves and their families after 10 years in Bermuda, would help boost business and create and maintain jobs. Martin Law, executive director at the Bermuda Employers Council, viewed the proposed changes in immigration policy as entirely positive. He said: "The Bermuda Employers? Council recognizes these welcome initiatives by the Government as ones that should have a beneficial effect on stimulating the economy and helping with job creation and retention. Giving job creators an increased stake in Bermuda sends the positive message that we want them here. There will be a knock-on effect for existing local firms too - the stronger our overall economy is, the greater the benefit to all employers and employees. Any and all economic stimulation measures will help our existing employers to survive and re-grow their businesses and keep people employed." Mr Law also commended the statement that Economy Minister Kim Wilson would shortly identify job categories that will be exempt from term limits and said it would send a clear signal that Bermuda was very much open for international business at the same time as dispelling a lot of the negativity about the Island that came from its competitors. "We recognize that Government has to balance Bermudians national interests with the need to stimulate the economy but with these policy initiatives we believe that the balance is right. Job creators and key persons need to feel welcome and part of Bermuda in a tangible way so that they can become personally vested in the Island, creating and retaining jobs so that Bermuda can begin to re-grow its employment base." Doug Soares, partner at Expertise Ltd, Bermuda's largest management consulting and outsourcing company, said that despite the specific details of the new policy not yet being revealed, the result was likely to be beneficial to all parties. "To provide key executives with residency rights makes good economic sense. Furthermore, providing automatic waivers from term limits for specific categories will provide greater certainty for key employees in international business without sacrificing job opportunities for Bermudians. This bodes well for Bermuda as a top jurisdiction for global companies. Some Bermudians would struggle to see the merit in the new changes due to having a false sense of job security, pointing out that few jobs needed to be based in Bermuda nowadays and that the Island was competing on an international stage for business. Many believe that jobs and country are inextricably bound together. Many believe that having a job is simply a matter of restricting foreigners from entering our country. But the fact is that relatively few jobs are in Bermuda by necessity in the 21st century. Jobs nowadays belong to a global economy and Bermuda must compete with other jurisdictions to domicile those jobs in Bermuda. Consequently, we need to begin to see the Department of Immigration as an enabler of job creation, not just as border control and a protector of local jobs." Brad Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers, said: "We support the multiple proposals from the government on workplace reforms. We support liberalization of policies that can lead to incentives for job creators - those executives with hiring authority - to be located in Bermuda. We expect successful implementation of such reforms will lead to more jobs for Bermudian citizens." Stephen Todd, president of the Bermuda Chamber of Commerce, also welcomed the announcement. He said: "We believe it sends a very positive message to the international business community and allays some of those concerns that have been expressed in the past. From a business development standpoint it not only reassures our international business partners that we have on the Island but also gives us the ability to further our relationship going forward. It also gives a stability to the business sector knowing that their continued participation in the local economy is welcomed."

August 3. Bermuda featured prominently in a report on US corporate tax avoidance.  The report entitled ‘Corporate America Untaxed: Tax Avoidance on the Rise’ was published by The Greenling Institute, a national policy, research, organization and leadership group. It revealed that 184 significant corporate subsidiaries were based in Bermuda - considerably less than the likes of the Cayman Islands (580) and Ireland (287), but more than Switzerland (179). It also disclosed that the Island accounted for 10.4 percent of dividends that came back to the US during the 2004 one-time tax holiday that allowed corporations to repatriate offshore earnings, according to Internal Revenue Service figures. American corporations are known to avoid approximately $60 billion in US corporate income taxes through using “devices and gimmicks” to shift profits to foreign subsidiaries, according to the report, and since the US Government Accountability Office reviewed the issue in 2008, top companies had added 44 new subsidiaries in countries it had identified as tax havens. Fifty-two of the 100 largest corporations in terms of 2010 revenue added at least one subsidiary in a tax haven and 21 companies reduced their subsidiaries in tax havens by at least one between 2008 and 2010, the report stated, with each company adding on average 2.9 foreign subsidiaries and 0.5 in a tax haven over that period. CitiGroup was the outlier, decreasing its number of foreign subsidiaries by 1,129 during that time, 404 of which were in tax havens. Caterpillar Inc, which has 10 Bermuda subsidiaries listed on the Registrar of Companies website, was listed as having 38 subsidiaries based in tax havens, down by 11 between 2008 and 2010, bringing in revenue of $42.5 billion. General Electric (GE), which also has 10 subsidiaries listed in Bermuda, has 14 significant subsidiaries in tax havens and 57 significant foreign subsidiaries, bringing in revenue of $151.6 billion, and Google, with six subsidiaries on the Island, had two significant subsidiaries in tax havens and two significant foreign subsidiaries, with a revenue stream of $29.3 billion. GE made $94 billion in undistributed earnings of profits from foreign subsidiaries, while Google earned $17.5 billion.

September 9. The Bermuda Stock Exchange (BSX) celebrated 40 years in business this year. Set up in February 1971, today it has more than 800 securities listed, including more than 360 funds, with a combined market capitalization of more than $225 billion. Among the factors which have helped to shape the BSX have been its operational reliability, Bermuda’s unique service-based economy, its geographical proximity to the US, UK and European markets and the streamlined regulatory regime in which it operates. It has also been able to tap into the success of the Island’s financial services and insurance industry which is home to more than 1,000 insurers with total assets of $96 billion and gross premiums of $120 billion, as well as providing approximately 40 percent of US and European Union broker-placed catastrophe covers, most recently through its Insurance Linked Securities catastrophe bond listings. Maintaining itself at the fore of international standards of regulation and transparency, while meeting the needs of the local economy and remaining cost competitive with other offshore stock exchanges, the BSX has achieved a number of accolades, including becoming a full member of the World Federation of Exchanges, a “Recognised Stock Exchange” by the UK’s HM Revenue & Customs, a “Designated Offshore Securities Exchange” by the US Securities and Exchange Commission, and recognised as a ‘Designated Investment Exchange’ by the UK’s Financial Services Authority. A report in The Royal Gazette dated February 3, 1971, said that the BSX opened to a cautious reception with high asking prices and low bids, predicting that while there was interest in the market it would take “several weeks” before it settled down. According to the report, the Exchange started life out of the Bank of Bermuda’s conference room, with a number of household names such as Argus Insurance, Butterfield Bank, Belco and Bermuda Fire & Marine among the first securities listed. Others have come and gone from the original 35, and today there are around 20 or so listed. David Brown, chairman of the BSX, said: “Forty continuous years of service to the capital markets is an achievement in any jurisdiction and notable in one the size of Bermuda. Leading edge technology and niche market opportunities have placed the BSX on the international stage and further demonstrated Bermuda’s ability to innovate and deliver services to a sophisticated and demanding global marketplace. In the wake of the international economic crisis and in the absence of a Federal Reserve to buoy the market, the BSX has demonstrated its considerable strength and value to the core domestic capital market by clearly illustrating its regulatory and operational capabilities as the global financial crisis affected the local market.” Former president and CEO of the BSX William Woods said that the same forces of globalization behind several mooted mergers between large international stock exchanges formed the original vision for the transformation of the BSX as it evolved from a domestic marketplace for local stocks to a truly internationally recognised exchange. He said that the BSX had kept pace with the rest of the world, introducing an electronic trading and dematerialized securities settlement in the mid-1990s, enabling traders to buy and sell shares and providing business owners with the ability to raise fresh capital through rights issues. Mr Woods said that while enhancing Bermuda’s reputation as an international finance centre, the BSX had also helped to attract business to the Island, enabling companies domiciled here to list their securities on the Exchange, with 10 international insurance companies listed to date. The BSX has also served as a leading example to other offshore centers to follow, with the Cayman Islands and the Channel Islands soon following suit, he said. Launched initially as an idea, the Bermuda Exchange, as it was known then, was devised by bankers Donald Lines and Richard Thatcher, who acting on behalf of their clients, saw the need to create liquidity in the local market and move away from the burdensome tender process used to buy and sell stock locally. Having floated the concept to the four banks Bank of Bermuda, Butterfield Bank, Bermuda Provident Bank and Bermuda National Bank it soon became a reality with a representative from each bank sitting at the trading table and drawing numbered ping-pong balls out of a bag to establish their position for the day. Each trader would state their offers using an open cry system and the remaining traders would then bid on the position, taking place every Monday afternoon and rotating between the banks. By mid-1971, the total value of securities traded since February of that year was more than $500,000, and by the end of the year that figure had surpassed $1 million. The BSX was incorporated in March 1993, with the management committee being replaced with a more formalized council and the appointment of current president and CEO Greg Wojciechowski as project manager two months later to oversee its day-to-day operations, ultimately taking on the full role in 2001. “The development of the BSX has contributed directly to the growth and maturity of the domestic capital market, which is evidenced by over $1.5 billion being raised by listed companies in Bermuda from investors in the domestic capital market,” said Mr Wojciechowski. He continued: “For nearly two decades I have had the distinct privilege of working with scores of people who shared the vision of the development of an exchange in Bermuda. Collectively we have grown and matured into a team of world-class stock exchange professionals. I believe we have established the rock solid foundation upon which a great exchange institution will continue to develop and serve investors far beyond the shores of Bermuda. The BSX will not only continue to do its part in driving the evolution of the domestic capital market for Bermudians and the country, but it will also provide the support for innovative global financial products. Regardless of how changes in global market structures play out, I know that the BSX will have a future role in the global exchange and capital market systems. I am confident that when I hand over the reins to the next generation of BSX management, the spirit of dedication, entrepreneurialism, old fashioned grit and hard work that has defined the organization thus far will provide the impetus for even further growth, achievement and success.”

September 13. US movie and TV subscription service Netflix is now available in Bermuda. For just $7.99 a month, the same price as in the US - local residents can get unlimited movies and TV episodes downloaded instantly over the Internet to their TV or computers. But there’s a catch! The service costs the same as America, but the library of movies and shows the Island’s residents will have access to is not the same. Due to licensing and other issues the library is far smaller and does not appear for now to include many new releases. And many of the movies and shows available in Bermuda are dubbed in Spanish and Portuguese without the English versions being available as well.  Also, Netflix’s service here is streaming-only, with no DVD-in-the-mail option. To compare, Netflix’s streaming library in the US is about one-fifth the size of the 100,000 selections in the physical DVD section plus new movies are not available on the streaming service until several months after their retail release date. It’s not clear if the library will grow over time. A Netflix representative admitted yesterday the US market does have access to “way more” movies as it has had the service longer and she said new movies are not available on the streaming service for at least three to six months after they are released. The launch in Bermuda is part of Netflix’s rollout in Mexico, South America and the Caribbean by September 12, as part of a major international expansion. The company has also announced a deal with CBS to offer content in these regions. While the new service is a concern to local video rental stores, Games + Flix owner Kirby Brackstone said he is confident that for now he will still be able to compete with the movie rental giant. ”I went on and signed up and most of the movies available are in Spanish or Brazilian Portuguese and the selection is very limited,” Mr. Brackstone said. “There is nothing really current I could see.” He said he could find no episodes of the popular TV shows House, Dexter and Weeds. He also pointed out Bermuda and his store actually get many new release hit movies a few weeks before the US. And new releases are not available on even Netflix US for at least a month after his store gets them in. For example, he said his Dundonald Street store has had the summer hit “Thor” for two weeks already and it is only just being released in DVD tomorrow in the US and probably won’t be available as a download in the US until October. “We are not that worried at this point in time,” he said. “We feel our unlimited plan is very competitive and we certainly have a lot more titles.” For $25 per month you can take home as many titles from Games + Flix as you want as long as you only have three DVDs out at a time. Netflix hasn’t been available in Bermuda before, not because of any local Government restriction or lack of approval, but mainly because it simply had not set up the servers and technology to service the market and was not set up to accept Bermuda credit cards and IP addresses. Mr Brackstone compared the new Netflix service to shopping online. Bermuda CableVision yesterday said it had no comment on the new Netflix service. Netflix subscribers can watch movies and TV shows on their computers or they can watch instantly via certain game consoles (Wii, Xbox, PS3), or any other device that streams instantly from Netflix such as certain Internet connected Blu-ray players and Internet-connected High-def TVs (HDTVs). In addition, digital video recorders and Internet video players; Apple’s iPhone, iPad and iPod touch, as well as Apple TV and Google TV, can all be used to stream/view Netflix movies. In an interview published last week with Associated Press, Netflix CEO Reed Hastings declined to say how many movie and TV titles would be available to Latin American and Caribbean consumers. The AP report said Netflix has been scrambling to fill a potentially big void in its video library that will be created in March if it loses the rights to stream movies and TV shows from Starz Entertainment, part of Liberty Media Corp. AP said Netflix had been trying to renew the Starz deal, which included recently released movies from Walt Disney Co’s various studios, only to have the talks collapse last week when Starz announced that it wouldn’t renew a contract that allows Netflix to stream recently released movies and TV shows online under the $30 million annual deal. Those developments have raised fears that Netflix might lose subscribers in the US, and that has driven down the company’s stock price significantly.

September 17. St. George’s businesses yesterday expressed apprehension over a study suggesting that the Town Cut be dramatically widened to allow larger ships. Media reports detailing the study say it recommends doubling the width of Town Cut, destroying large portions of Higgs, Hen and Horseshoe Islands. The widening is expected to cost between $48 and $71 million, and would not be completed for at least another six years. A Government spokesman last night could not confirm if the published information was accurate, but said that details of the study would be released to the public in the near future. St George’s Mayor Kenneth Bascome said yesterday that he still had not seen the final report and could not comment on the specific details. And while he reiterated the Corporation of St George’s plans to seek input from the public before any decisions are made, Mr Bascome warned that the final decision would be made not by the Corporation, but by Government. “The final decision will not be mine,” he said. “If Government decided that this is the way forward, there is no stopping them. I’m hoping that the Corporation will have the opportunity to view the total plan before it is released to the public. Since 2000, we have not had any sort of tourism promotion about the fact that St George’s is a World Heritage Site. That is something that could be used to bring cultural tourists to Bermuda and the town.” In the last four years, the number of cruise ships visiting the town has plummeted as the average size of cruise ships has grown. According to statistics in the report, 126,158 visitors visited St George’s on a cruise ship in 2007, but this year only two ships carrying a total of 1,023 were scheduled to dock in the town. The Holland America Line’s Veendam also made regular visits to the east end, tendering at Murray’s Anchorage and ferrying passengers to the town, but rough weather and medical emergencies have repeatedly caused the ship to divert to Hamilton. The concept of modifying the Town Cut has long been viewed as a possible remedy, allowing larger ships to reach the port. The study, ordered in 2010 by then-Premier Dr Ewart Brown, was intended to look at the possibility of straightening, widening or dredging the waterway. According to media reports, of 14 strategies investigated, the three recommended each involve widening the shipping channel by between 75m and 95m by cutting away at islands to the south. The proposals are also expected to impact sea grass and coral in the area. While awaiting the complete results of the study, Mr Bascome said the Corporation is doing what it can to prepare for next year’s cruise ship season the first in many years in which there are no regular cruise ships scheduled to visit the town. “We are looking to do many things for next year to bring people to St George’s now that we know the Veendam will be going to Hamilton. We will have to up our game when they come in so they catch a bus to St George’s, enjoy themselves, and go away to tell their friends what a pleasant time they had.” He also said that a tourism promotion focusing on the town’s World Heritage Site status could be used to bring additional tourists to both Bermuda and the town, but such a campaign has yet to be launched. Despite the challenges, he reiterated that he believed the town is on the verge of an upswing, and that there are numerous opportunities for young entrepreneurs. Speaking yesterday, several St George’s businesses said that they felt the cost of widening the channel could be better spent on improving ferry service to the town and seeking a ship that could service the town as is. Geza Wolf, co-owner of Wahoo’s Bistro and Patio, said that improving public transportation to help visitors travel between Dockyard and St George’s would make a massive difference, both to visitors and to businesses. “In Dockyard, they have more people than they can handle,” he said. “You need to have eight or ten buses there, ready to go. That’s the key.” He said that he has on several occasions called taxis for customers in the evenings, but 45 minutes later the taxis still haven’t arrived. “I call them back and ask when it’s expected, and they can’t tell me. It looks bad for the place, the whole Island.” Regarding the proposed modifications to Town Cut, he said: “I don’t think that’s the right solution.” He said business at the restaurant was steady, but others were not faring as well. One business owner said over the past few years, he has struggled to keep his Water Street business up and running. “We just don’t have the bodies to sell to,” he said, indicating towards a largely empty street. “I really need to see the light at the end of the tunnel in the next year or two.” He said that investing in ferries to serve St George’s could be an effective short-term solution, but the long-term solution would have to be a smaller ship. While he acknowledged that operating ferries would cost the Government, he said the collapse of more local businesses would be more costly in the long run. He dismissed the idea of bringing a larger ship to the town, saying: “If they did bring a big boat in here and all of a sudden there were 3,500 people looking for a bus, what are they going to do? Take the buses away from Dockyard? It’s a lot harder finding a smaller ship, but it’s the ideal solution. If we can get two small ships, that’s 4,000 people a week.” Regarding the St George’s economy, local sculptor Paul Clinton said: “There is no economy. We need a hotel. We desperately need a hotel. How many announcements were made about groundbreakings, and yet we have seen nothing.” He called the proposal to widen the cut a “disaster,” and said that public transportation to the town had drastically limited the number of visitors who can reach it. “The ferry service has been crippled and the buses, when they are running, scarcely run on time. And they are concerned about Town Cut?”

September 27. Relaxing the Island’s 60/40 rule could help local companies raise significant capital in the challenging economic times. This is according to financial analysts, who said if Government changed the rule and allowed more domestic companies to sell their shares to foreign investors it would boost liquidity on the Bermuda Stock Exchange. The Exchange’s president and CEO Greg Wojciechowski said that opening up the market is something the BSX would back. “Anything that further modernizes the domestic capital market and encourages investment is something that would be supported by the BSX,” Mr. Wojciechowski said. “A fluid, modern capital market is important to the economic well-being of the country and it benefits the shareholders and the companies by creating an environment in which to raise capital.” At this time only Butterfield Bank and Bermuda Commercial Bank are not bound by the 60/40 rule, but other local companies are. HSBC is not considered a local company. As of March 8, 2011, Butterfield Bank made up well over half of the entire BSX market capitalization, with the total market value of its outstanding shares worth $713.8 million.  Despite the limitations here, Mr Wojciechowski said to date the BSX has helped local companies raise $1.5 billion in new capital. The 60/40 ownership rule means that any company that’s listed as a local company must be owned by a 60 percent majority of Bermudians or Bermudian companies, the other 40 percent can be owned by people or institutions from outside Bermuda. Paul Cox, Premier and Finance Minister, said: “The Bermuda Government is currently engaging in discussion with both publicly-listed and privately-held companies in order to arrive at a position which is in the best interest of the country. I indicated in a speech just yesterday on PPP public private partnerships that it is ‘game-on time’. In essence, this means we have to look at bold and innovative measures as we seek to spur greater economic activity and also to spur job creation and retention. Access to capital for business, both in a global and domestic environment has become even more critical. Joint ventures and strategic partnering is what will distinguish business models going forward and private sector financing and private equity will play a role. There are no easy answers or cookie cutter solutions to the issue. The Bermuda Government, specifically the Ministries of Economy Trade and Industry, Business Development and Tourism and Ministry of Finance on an ongoing basis review and consider and discuss these issues with our stakeholders and are mindful of a number of options. The appropriate policy options will be discussed in the near future. At a time when we need game changers there are no ‘sacred cows." Anchor Investment Management chief financial officer Nathan Kowalski said: “The 60/40 rule is definitely not helping the liquidity conditions. Obviously opening up the market to foreign ownership will increase the ultimate investor base and potential level of total capital.” He noted average daily trading value on the BSX was approximately $204,000 per day last year based on the total value traded of $51 million. Therefore, an investors’ ability to exit a sizeable investment is limited, he said. For example, according to AIM, if you owned $1 million in BF&M, it would take you roughly 65 days to reduce the position to zero based on a daily average trading value of about $15,400 and assuming you were the only one selling. In times of stress this window is even narrower and in many cases unavailable unless a large discount is applied, Mr Kowalski said, adding, “The bid/ask spread on local shares make the total cost on trading much higher than more liquid securities.” LOM portfolio manager Bryan Dooley said local companies are clearly faced with the issue of having a limited number of buyers for their shares at any one time , which “will always keep a cap on what they can do. If the market can be opened up in way to foreign investment that would certainly be constructive in terms of providing more liquidity,” he said.

September 30. A Willowbank worker has spoken of the “hurt and frustration” of staff as the 50-year-old hotel prepares to close. The woman, who did not want to be named, says even though the 46 full and part-time staff are struggling to come to terms with losing their jobs, they are said to “understand that this needed to be done”. Staff are now calling on the public to let them know of any jobs available as they believe they will struggle to find work in today’s economic climate. Willowbank trustees announced this week that the family-run Christian hotel would close “for an indefinite period” on November 30. The female hotel worker had high praise for Willowbank manager Terri Allison, but said: “I’m sad to see that it will close its doors after all these years. The staff understand that this needed to be done and we have accepted the fact. The leaders of the company haven’t offered much help to the staff but they did say they are sorry. We leave it in the Lord’s hands and hopefully something good will come of this. Many lives will be affected by this terrible loss and I hope that those with families and other major responsibilities can get back on their feet after getting such devastating news. In this bad economic time I feel as though many of my fellow co-workers will struggle to find a new job and that’s the sad part. Everyone is feeling the blows from this global recession. Businesses are trying to let go staff and cut down on cost by any means necessary.” The woman said staff had many concerns, such as how they were going to continue to pay their mortgages or rent, afford childcare or buy presents for Christmas. She said they knew it was “hard out there” and that “the job market is tough” as there were now so many people unemployed in Bermuda. She also called on Government to “take a good look at the crisis and figure out a solution. I’ve been listening to different people after we all got the news on Monday morning and I see the hurt and frustration that they are dealing with. It’s a sad situation. We all just need to have faith that God will help us through this rough time. “I ask that the public of Bermuda keep the staff in prayers and try to reach out to some of my co-workers to try and encourage them and offer some assistance in any way. If any one knows of jobs, even if its part time ... Please let us know.” The woman described her time at Willowbank as “a beautiful experience” and she particularly praised the on-the-job training.

Willowbank, Bermuda

Willowbank Bermuda, closing

October 8. Bermuda became a more prominent trading partner with the US as other offshore financial centres suffered from the fallout from the financial crisis. That is according to the ‘US-Bermuda Economic Relations: Economic Impact Study 2011’ conducted by Dr Charles Ludolph, senior vice-president of the Washington DC-based Albright Stonebridge Group. The report, which was obtained by The Royal Gazette, revealed that the two-way trade in services between the two countries had grown to more than $80 billion by the end of last year. Bermuda also became the leading supplier of reinsurance to America averaging $20 billion in payments or as much as $35 billion in recovered losses annually and the leading export market for the US primary insurance sector in 2010, while US exports of research and development and testing services to companies here rose by $2 billion during the recession. The study found that over 2010 the Island was the fourth largest investor in US government bonds, the eighth largest investor in the US, the fifth largest export market for banking and investment funds, the eighth largest for shipping services and the 11th largest for business services. In addition, Bermuda represented the 14th largest market for all US services exports, excluding royalties and service fees and was the 10th largest portfolio capital investor. “The overall economic relationship between Bermuda and the United States continued to expand through the 2000s,” wrote Dr Ludolph, who is due to report his findings at a Business Bermuda meeting next week. “The relationship even strengthened during the most recent global economic crisis as Bermuda continues to offer economic advantages that met US business needs and expanded employment opportunities.” Furthermore the report concluded that the Island’s prominent position in the US marketplace, particularly in insurance, was due to a number of factors including its proximity to the US financial and capital markets, UK and US compatible law and regulation and extensive financial regulatory co-operation and quality. And it surmised that Bermuda’s economic independence from larger global financial centres and concentration in niche risk insurance sectors which were not correlated with the world’s financial meltdown gave it a more competitive capacity. The Island’s trade and investment relationship with the US helped to sustain 300,00 jobs during 2010, with 101,000 US jobs created by annual exports to Bermuda and 200,000 were derived from US majority-owned affiliates of Bermuda companies. From a re/insurance perspective, approximately 75 percent of the 500 top American companies have captives in Bermuda, while Bermuda-domiciled shipping companies provided $1.1 billion in energy-related shipping services designed to work with existing US refineries, ports and pipelines. The report said that US operating companies continued to domicile in Bermuda, with Freescale, Marvell, Contel, AOSL and Chipmos moving base to the Island since 2006. Since 2008, these chip companies provided more than $3 billion of service-based export business to Bermuda in testing and research and development services thus creating more US jobs.

October 14.  Congressman Richard Neal and US Senator Bob Menendez have reintroduced legislation that aims to levy more US taxes from some Bermuda reinsurance groups. The Neal bill, which was referred to the House of Representatives Committee on Ways and Means on Wednesday, would limit the ability of US subsidiaries of foreign insurance groups to claim deductions for reinsurance ceded to affiliates that are based offshore. Rep Neal, a Massachusetts Democrat, has been trying for three years to push through this legislation, but has failed to muster serious support so far. But with the heavily indebted US Government desperate to find new sources of revenue, observers have recognised a growing threat of legalization punitive to the offshore reinsurance industry. Eli Lehrer, vice-president of US-based think tank the Heartland Institute, which opposes the bills, spelled out the gravity of the threat to the Island’s biggest industry. “The risk for Bermuda is greater than it has been in some time,” Mr Lehrer told The Royal Gazette. “For the first time, the bill has a Senate sponsor and, in many ways, Republican anti-tax orthodoxy seems to be crumbling. The sponsors of the bill still have a long road ahead of them and the negative consequences of the bill become clearer with each passing day. The threat that this could pass is very real.” The legislation applies to all foreign reinsurers and does not single out Bermuda. Both the House and Senate bills met with criticism from the Coalition for Competitive Insurance Rates (CCIR), which argues that the proposals would drive up consumer insurance rates by reducing competition and critical US insurance capacity. CCIR, an organization made up of businesses, consumer advocates, and insurance industry groups such as the Association of Bermuda Insurers and Reinsurers (ABIR), sent a letter to the chairmen and ranking members of the Senate Finance Committee and House Ways and Means Committee detailing the negative consequences of this proposal. “Consumers in states like Florida rely on a global reinsurance market to protect their homes and businesses,” said Bill Newton, executive director of the Florida Consumer Action Network. “Especially in these challenging economic times, we need to make sure that Americans can afford to conduct business and protect their families. Rep Neal’s legislation chooses to benefit a few large, profitable companies while putting average Americans at risk. Now is certainly not the time to make access to insurance more costly.” Nearly two-thirds of all reinsurance coverage required to protect US consumers and businesses is provided by non-US reinsurance companies or their affiliates. A study conducted in 2009 and updated in 2010 by researchers at the Brattle Group, a Cambridge, Massachusetts based economic consulting firm demonstrated that the proposed legislation would cost consumers more than $11 billion per year and would reduce US reinsurance capacity by 20 percent. The effects of these cost increases would be felt most in disaster-prone states like California, Florida, Louisiana and Texas. “On the heels of Hurricane Irene’s devastation in my state, anything which has the impact of driving up insurance rates and reducing reinsurance capacity for hurricane-prone states is unacceptable. Accordingly, I must raise my objection to Congressmen Neal’s legislation,” said North Carolina Insurance Commissioner Wayne Goodwin. “Ultimately, anyone in favour of consumer protection must oppose this measure.” Nancy McLernon, president and CEO of the Organization for International Investment said: “The choice to single out foreign-based insurers and reinsurers is a particularly bad one at a time when we are looking to create jobs in the US.” said. “The bill sends an unfortunate, but clear message to global companies that they cannot count on being treated in a fair and equitable fashion when doing business here.”

October 16.  The unemployment rate among Bermudians is greater than the national average, it was reported yesterday. And Bermuda continues to experience weak population growth and a graying population, according to the preliminary results of the 2010 Census. In May 2010, the Island’s unemployment rate was six percent, while for Bermudians it was eight percent and is now expected to be higher. Joined by senior officials of the Department of Statistics, then-Premier Paula Cox released selected data to the public at a press conference yesterday afternoon. “The 2010 Census counted 2,581 persons unemployed with our official unemployment rate standing at six percent at May 20th 2010,” the Premier announced. She reminded the assembled press that Government had “implemented a number of initiatives to increase employment opportunities for our people,” including workforce development programme aimed at retraining Bermudians. “The number of jobs in our economy still exceeds the number of Bermudians in our workforce; and certainly we have to continue to be committed to ensuring that Bermudians become qualified to fill these jobs.” The Premier did not mention the unemployment rate for Bermudians in her prepared statement, but the preliminary report which was handed out by officials makes the distinction clear. “The unemployment rate for Bermudians jumped from three percent in 2000 to eight percent in 2010,” the report notes. “This rate outpaced the unemployment rate of six percent measured for the entire population, essentially due to the fact that non-Bermudians are recruited to work in positions not generally filled by Bermudians.” The statement reasoned that non-Bermudian workers were most likely to repatriate or emigrate to another country. Premier Cox also highlighted the fact that the number of new residential units since the last Census ten years earlier exceeds the increase in Bermuda’s population by 38 percent. She touted the statistic as “an excellent indicator of progress” which “reflects the collective efforts in assisting to provide housing for our people”. She noted that, at 64,186 persons, the Island’s resident population, not including the homeless and institutionalized, was three percent higher than it was during the last Census. “From the data it is evident that Bermuda’s population is growing at a very slow rate than that experienced in the past... but definitely in alignment with our expectations, considering Bermuda has a declining birth rate and a below-replacement fertility level.” The Premier added the proportion of seniors has increased to 14 percent from 11 percent, while the number of children under five years old remained at six percent. “The Government is committed to providing for our seniors as we recognize the steady growth of our elderly population,” she continued. “As you recall, earlier this year, the Ministry of Health held a Conference on Ageing, and really that was to help us craft a national strategic plan for the support of our senior population.” The number of homeless people was recorded at 82, while the number of institutionalized people, at 801, was 100 less than in 2000. Data collection for the 2010 Census was delayed by a lack of enumerators. But the Statistics Department reported yesterday that the release of the Preliminary results “has been done in record time,” taking just 18 months since the official launch of Census Day, as compared to two and a half years for the two previous censuses. The response rate, at 92 percent, was also declared respectable when compared to other jurisdictions.

2011 Bermuda Pilot Rescue boatOctober 21. Gladding-Hearn Shipbuilding, Duclos Corporation, of Somerset, MA, has delivered a new pilot/rescue boat to the Bermuda Department of Marine and Ports Services to replace the Saint David, built by the shipyard in 1986. Designed by C. Raymond Hunt Associates and classed to Lloyds Register, the high-speed, all-aluminum vessel measures 61 feet over-all, with an 18-foot beam and a 6-foot draft. Designed and built to serve as a pilot boat, the vessel is equipped for offshore search and rescue missions as well, with a rescue-well recessed into the transom, a tow bitt, space for a 12-foot inflatable tender, and accommodations for a stokes litter-basket stretcher. The boat's main propulsion comes from twin 12 cylinder MTU-12V2000M70 diesel engines, each producing a conservative 1055 Bhp at 2100 rpm, giving the new boat a top speed of about 29 knots. The engines connect to ZF Marine NiBrAl propellers through ZF2050A gear boxes. A Northern Lights 20 kW generator provides service power. The boat features wide side-decks, inverted front windows, and large boarding areas on the main deck. The wheelhouse, mounted aft of amidships on a flush deck, provides the pilots with additional comfort and safety at high speeds offshore and increased visibility of the boarding areas. At the shear is a heavy-duty 10" D rubber fender, in addition to five diagonal rubber side-strakes to protect the topsides. Interior accommodations feature HVAC, six Llebroc recliners, cushioned settee large enough to accommodate an injured person, dinette, galley, and enclosed head. Sound level in the wheelhouse is about 76 decibels at full speed.

October 21.  Personnel for a local European Space Agency (ESA) tracking station have been given the same legal immunities as diplomatic consuls, according to Government. An ESA station is currently being set up on the Island to monitor the launch of a Soyuz rocket, due to set off this December, from Kourou in French Guiana. A spokeswoman for the Ministry of Environment, Planning and Infrastructure said the local ESA tracking station will receive and send on telemetry data from the rocket once it loses contact with Kourou, and before it makes contact with another tracking station in Canada. According to an October 14 notice in the Official Gazette, four ESA staff posted to the Island are to be given immunity from suit and legal process. Bermuda granted the immunities under the Consular Relations Act of 1971. The spokeswoman said: “ESA has requested that Bermuda allow them to set up their Transportable Station on the Island and the Foreign and Commonwealth Office (FCO), as required, has consented to Bermuda making bilateral agreements with them on their requested mission project.” France’s four space centers around the world will monitor the launch and tracking of the rocket. Other scientific missions may follow the Soyuz take-off, and continue to use Bermuda-based tracking facilities.

October 21.  Fund administrators have dramatically downsized in Bermuda as companies including Citco and Citigroup cut jobs and relocate staff to Canada where it’s cheaper and there’s a larger labour pool. Top executives in the fund administration industry expressed concern about the trend of firms cutting jobs in Bermuda while expanding in Halifax and Toronto and in the US. They warned the exodus is likely to continue with at least one other fund administrator poised to cut staff in Bermuda. One top fund administration executive said the once booming sector had gone from 1,000-plus to just 150 staff in the last five years. Executives said while some factors were out of the Island’s control, Bermuda needed to be more welcoming to international business or risk further erosion of the industry. However, not all the fund administrators we spoke to were cutting staff in Bermuda and some saw the downsizing of Citco and Citi as an opportunity to pick up clients who still wanted to be serviced out of Bermuda. Those who had no plans to cut back had strong personal ties to Bermuda. Citigroup sent shock waves through the community when it announced last month it was cutting 105 jobs at Citi Hedge Fund Services as the company relocated to the US and Canada. Fund administrator Butterfield Fulcrum axed 10 staff from its Bermuda office last August after reviewing the distribution of work at its operational centres - but said it is now hiring in Bermuda again and was here for the long-term. And Citco Fund Services announced this week it was cutting 15 to 20 jobs in what the company said was a “reorganisation” of its Bermuda office. An employment ad in Wednesday’s newspaper said it all though that ad did not reappear the next day. Announcing “Citco Halifax is Growing”, the ad touted the natural beauty, “sparkling coves” and “charm of port city Halifax”. “With over 200 employees currently, the Halifax location is slated for significant growth in 2012,” the ad said, noting there were career opportunities in operations, back office, corporate actions and trust, connectivity and training. A number of fund administrators have expanded or opened offices in Canada recently after aggressive marketing for their business by cities such as Halifax and Toronto. Among them Goldman Sachs Administration Services whose decision to open a hedge-fund administration office follows the on the heels of a similar move in 2006 by UBS. A Goldman Sachs executive told a hedge fund magazine: “We believe that Toronto offers an ideal mix of attributes for us. The business culture and time zone are favorable, there’s a large pool of talented workers and the communications infrastructure is first-rate.” Meridian Fund Services, which has a Bermuda office, has also opened a lower-cost servicing centre in Halifax. “We have lost our edge as being the jurisdiction of choice for funds and are now losing our reputation as being the jurisdiction of choice for offshore fund administration,” said Ede Conyers, executive director and chief executive officer of ISIS Fund Services. “Unfortunately there is downsizing going on and I think it can be expected that trend will continue.” ISIS employs 14 in its Bermuda office and five in its North Carolina office. Ms Conyers added ISIS was “happy and proud” to be headquartered in Bermuda, as the Island still had many strengths, including strong corporate governance and good infrastructure, and rather than downsizing in Bermuda is looking to grow their operation here. However, Ms Conyers added she was Bermudian, therefore has strong ties here. She said she could understand why other fund administrators were not growing their Bermuda offices. She said the trend actually began a number of years ago when Bank of Bermuda/HSBC started moving its fund accounting business and other operations to the US. “Large organisations have been looking to centralize as much as possible and have been downsizing for quite some time. It’s only become more public now. They are looking at operating costs and obviously immigration plays a factor. If it’s difficult to do business in a jurisdiction and it’s expensive then a business obviously looks at why it needs to be there. Halifax has been very aggressive in wooing business and offering incentives in the last few years. Meanwhile, Bermuda has not appeared to be as welcoming.” Business Bermuda chief executive officer Cheryl Packwood said the organization continued to support having no term limits on work permits. “We are concerned this is the beginning of a trend. We know there is concern in that sector and I know costs are a concern as well as work permits and term limits, and other factors,” Ms Packwood said. “We continue to believe strongly the Government needs to revisit term limits and remove them. We are in a different time period. We need to protect Bermudians but in the grand scale if jobs are leaving it is hurting Bermudians.” The long-time chief executive of a Bermuda-based fund administrator, which opened an office in Halifax four years ago, told us term limits on work permits had definitely had an impact on the industry. The CEO, who declined to be named, said: “It’s not just the term limits, it’s also to get a work permit processed at all it takes forever. When we needed to replace an accountant it took six to nine months and when we wanted to promote someone and announce it to the clients, we were required to advertise it! At the end of the day there is just not enough understanding and support by the Government.” He pointed out the majority of his staff were Bermudian. He added: “It’s not just the cost of having staff here it’s the taxes on top of it and the productivity level can be low.” Peter Hughes, group managing director of Apex Fund Services said he has lived in Bermuda for 15 years and still sees the Island as a great place to do business. He said the recent downsizing is concerning, but could be an opportunity for his privately-owned company to grow its business in Bermuda and add talented staff. “I think the Government has taken steps in the right direction, but it remains to be seen how it affects the downsizing that’s been going on. The industry tries to recruit locally but we need to still be able to be the best in terms of providing a global service.” Apex employs 25 staff in Bermuda. Another top fund administration executive, who did not want to be named, said while his company had no immediate plans to cut staff, it had gone from 75 staff two years ago to about 60 today through natural attrition. He said he believed the actions by Citco and Citigroup “were purely about cost-cutting”, however, he said work permit limits create “uncertainty for us even if you get exemptions”. Butterfield Fulcrum Group and FORS principal shareholder Tim Calveley, who is the spouse of a Bermudian, said the fund administrator had a strong allegiance to Bermuda and was “here to stay”. He said the company had 40 staff in Bermuda and currently has four open positions and expects to add several more jobs by the end of the year, after winning a major new client. He added: “On the back of recent moves by other administrators we are actively looking for clients who may have been forced to have an administration change and still want to be serviced out of Bermuda. Some clients don’t want to be moved.” Mr Calveley said he had no concerns with Immigration or the work permit process and tried to maintain a close working relationship with the Department. BFG still has a big presence in Canada though, employing 65 staff in its Halifax office and 65 in its Waterloo, Ontario office. Those offices were opened before the ownership change and in an article two years ago in a Canadian trade magazine Steve Slessor, managing director of the company’s office in Waterloo, was quoted as saying the decision to open offices in Canada was motivated by capacity constraints and staffing issues in the traditional offshore jurisdictions of Bermuda and the Caribbean islands. “It is hard enough to recruit and retain qualified staff without having to worry about having work permits being revoked by the Government. If you have high levels of staff turnover that inevitably impacts on client service levels,” he was quoted as saying. The article was also revealing about Citco’s reasons for growing its offices in Canada over the past few years, quoting Kieran Conroy, managing director of Citco Fund Services (Canada), as saying: “The move to Canada has been very successful for Citco. The Toronto office has supported our growth over the years and we have been very happy with the quality of staff we are able to locate here.”

October 25. Top level international business executives often those that bring in the most money to the Island have been leaving Bermuda in droves over the past year as companies have been letting go of staff or moving jobs overseas. That is according to relocation services firm Corporate Concierge Bermuda Ltd, which has seen for the first time in its four-year history more departures than arrivals to the Island in 2011. Most of those directly affected are from re/insurance companies and cite Government’s stringent immigration policy as the number one reason for their going, followed by the high cost of doing business and accommodation and the fear of crime, the company said. Despite many of these departures going unrecorded, the effects are already being felt throughout the community with almost everyone impacted from taxis, buses, grocery stores, shops, restaurants, bars, hotels and guest houses to landlords and schools. Over the past 12 months one company has moved its entire accounting department and another firm has relocated its legal department of 15 staff overseas, according to Corporate Concierge. Sylvia Jones, managing director of Corporate Concierge, and Vaughan Sullivan, executive concierge, were prompted to speak out about the silent exodus following a conversation with one of the service providers they use on behalf of their clients who said they had noticed a trend of more people leaving than coming to Bermuda’s shores. “We just felt that people need to realize the scale of what is happening.  “A lot of us are concerned about when it will stop we don’t know what will happen and how far away that end point is,” said Ms Jones. Ms Sullivan said that said that for every person who left the Island a landlord may be missing out on his rent, service providers had one less electric, telephone or cable bill payment coming in, one less car or bike was being sold, had to be maintained or needed insurance and the grocery stores had one less customer. She said that the knock-on effect was also felt within the local employment market as senior executives left with their personal assistant’s position and immediate team often no longer required in Bermuda a lot of which had been occupied by Bermudians. As a result, Ms Sullivan said that while many locals who had been let go received good compensation packages, they would struggle to find work in a saturated jobs market with even some of those who were lucky enough to get work with another company having their spending power greatly reduced after moving from an international to a local firm and thus struggle to pay their mortgage and make ends meet. She said the trickle-down effect of the departures was similarly been seen in private schools who were hurting from the number of top level executives with families who had left. Ms Jones said that due to the increasing number of people leaving, her company had decided to focus on its departure service. “We have primarily for the last four years focused on the top executives coming in to Bermuda and those are now the same people who are moving out. These are not recorded as jobs lost a whole accounting department and a legal department have gone overseas and the companies affected to our knowledge do not plan on replacing those in Bermuda because it is cheaper to operate overseas.” Ms Sullivan said that Government’s “belligerence” towards international businesses had proved to be a sticking point with many companies with it taking anything up to six months for a CEO or general counsel to obtain a work permit and in some cases a middle management applicant receiving their permit before a top end executive despite submitting their applications at the same time. The next hurdle would be for those granted a temporary work permit being unable to bring their spouse and children to the country to settle with many questioning whether the rigid immigration policy meant it was really worth coming to Bermuda in the first place. For the company concerned it can also be a lengthy and costly business, and for those looking to move their whole operation to the Island the current policy was very restrictive in its terms, she said. Ms Jones said that she had also witnesses a slow down in hiring with many companies put in place a hiring freeze as they consider their next move. She said that her experience was that the departures of senior executives were being made from at least six to eight top re/insurance companies with anything from one to 12 people leaving each firm with the US, Ireland and Switzerland among the main destinations. For every one executive level job lost, another three which supported that role also went. “There has to be a reality check for people now to realize that now is the time to reverse this trend or bring now business to Bermuda before it gets too late and it is getting really close to that,” said Ms Jones. Ms Sullivan said that landlords were having to drop their rents for executive accommodations by on average $2,000 to $3,000 per month, meaning that their income was reduced by about $24,000 to $36,000 per year, as companies told their management to reduce costs by moving into lower rated rentals, as well as slashing school fees, golf club memberships and other relocation costs. Additionally landscaping and pool maintenance firms were being forced to reduce staff or has gone out of business altogether as the landlords cut back on the frequency of service as a result, she said. From a hospitality perspective, Ms Sullivan said that companies were flying their executives in for meetings and they would often leave the same day rather than the traditional two or three-day stay when they would make use of the hotels, restaurants and golf courses. On the flipside, Ms Jones said that Corporate Concierge, whose clientele includes re/insurance companies, hedge funds and capital management firms, had seen one or two new small companies come in to set up offices of two to three staff and those that did choose to come often had the pick of office space and were able to negotiate the rent down. However, Ms Sullivan said that poor customer service and laissez-faire attitude had on occasion put some clients off with one in particular deciding to settle for secondary office space having originally set out to secure prime space due to his experience of the level of service he received. “You would hope that because there are less people here that the quality of customer service would improve,” said Ms Jones. “In some cases there has been an improvement on the part of the service provider, but we have to see that happen across the board. People coming here are international and have high standards and expectations that the quality of service will match those, but that is not always afforded to them in Bermuda. We need to offer top-notch service to the people that we are dealing with because they are the ones who are sustaining the economy.” Crime was another big issue deterring executives and their families from being based in Bermuda and according to Ms Jones it is the number one question from those candidates who come over on a pre-assignment visit to see the place. One top executive, she said, had been witness to a crime and once exposed to such there is always the danger that that fear would spread within their organization and start people questioning whether it was safe to be in Bermuda as the nature of the crime became more brazen. 

November. Bermuda Air Medivac, Bermuda’s air ambulance service founded in 2004, stopped operating. The service was dealt a double blow by a declining number of patients and competition from cheaper US services. The air ambulance aircraft made 500 trips to take sick people for specialist medical help overseas before it folded. Patients ranged from head injury and stroke victims to cardiac cases.

2011. November 2. Wages are continuing to rise in Bermuda and non-Bermudians are earning considerably more than locals. Government’s Labour Market Indicators, published yesterday, shows that the median gross earnings were $57,915 in late August last year, up 2.6 percent from 2009. For the second successive year, women fared better than men, with medium pay of $58,341 compared to the $57,559 earned by men. The median earnings of Bermudians were $55,264, while those of non-Bermudian spouses totaled $67,091 and other non-Bermudians, $69,738. The most popular occupation for men was mason (609 posts held) followed by chef de partie / cook (524) and finance (456). For women executive secretary / personal assistant was the most popular occupation, with 897 posts, 739 of them filled by Bermudians. This was followed by registered nurse (471) and retail sales clerk (430). Among Bermudian men, the most popular occupations were heavy-truck driver (399), semi-skilled construction laborer (365) and security officer (356). The unemployment rate was put at six percent, based on the findings of the 2010 Census.

2011. November 9. Bermuda still retains and may well be gaining some competitive advantage over its many of its rivals and is now effectively the world’s number one capital centre for wholesale capital for risks within the insurance industry. That is according to Michael Butt, chairman of Axis Capital Holdings Ltd, who was part of a panel with former XL CEO Brian O’Hara, at the Bermuda Re/insurance 2011 conference organized by PricewaterhouseCoopers (PwC) and Standard & Poor’s (S&P) Ratings Services which was held at the Fairmont Hamilton yesterday. The pair talked about a number of issues including from the management of risk and growth in an unpredictable economic environment such as the challenges facing the re/insurance sector and balancing the interests of stakeholders in an increasingly regulated environment. “Bermuda is now effectively the world’s capital centre for wholesale capital for wholesale risks within our business,” said Mr Butt. “Both our insurance and reinsurance businesses are capital intensive and need global support and I believe that Bermuda is by far the best means for that.” Mr Butt said he believed that capital would flow back to the Island in the form of sidecars and other vehicles in the wake of the next big event. He said that the market had evolved with the ability of companies to move their management across the globe not just those in Bermuda but also in other parts of the world. Mr O’Hara said that at the outset of Bermuda’s insurance market CEOs were required to live on the Island but now more companies had redomiciled to Ireland and Switzerland and had more staff based in the US. “I wouldn’t react too much because senior executives may have moved to other places. What is important is that we still have an underwriting culture and pool of expertise that is very strong in chosen lines and should continue to be so and to be a competitive force in the future and a spawning ground of new lines of business or and expansion of those.” Mr Butt had earlier given an overview of capital management in a softening market, saying that he thought companies would be equipping themselves with sufficient capital to take advantage of a turn in the market. On the issue of diversification, he said that while the industry as a whole had been following that route for some time, it had resulted overall in more losses than income in terms of the exposure to catastrophes in Asia over the past few months. Diversification could be attractive, particularly from a shareholders’ point of view, but it had to be available at the right price. On modeling, Mr Butt said that there was no doubt that the sector had improved significantly over the past ten years, however every time there was a major event the faults became apparent. From the perspective of a chairman, he said that most boards and management teams were spending more time dealing with the issues of enterprise risk management and subsequently Solvency II and as a result the industry was healthier for it. In favour of more geographically diverse boards in line with the global nature of the business, especially given that 70 percent of the world’s growth in the future is expected to come from new and emerging markets, Mr Butt said he preferred a division of power between the chairman and CEO and admitted that it was becoming increasingly hard to find relevant people with the knowledge who could add value to the board. Mr O’Hara said that the right skill sets and timing were key for those companies seeking diversification and where the make-up of the board was concerned in the case of a combined chairman and CEO role, a lead director was essential to maintaining the right balance of power. The conference had opened with oversights from Caroline Foulger, insurance leader with PwC Bermuda, David Law, global insurance leader at PwC, Peter Dunkerley, director of insurance and reinsurance at PwC Bermuda. The opening panel discussion on mergers and acquisitions featured moderator Laline Carvalho, director of S&P, and panelists Bill Babcock, CFO at PartnerRe Ltd, Marty Becker, CEO of Alterra Capital Holdings Ltd, and Robert Fleischer, managing director of Willis Capital Markets and Advisory.

2011. November 15. Media Council of Bermuda has not received a single official complaint in the first ten months of its existence. The self-regulating watchdog was launched in early February by industry members in response to Government plans to introduce a state-controlled body to handle complaints from the public. But chairman Christian Luthi admitted yesterday the council had not been “that busy” since then, with just six matters brought to its attention and none leading to a formal complaint. An advertising campaign will be launched this week to raise the council’s profile among the public, though lawyer Mr Luthi said the aim wasn’t to drum up more grievances. “We are not into making work for ourselves that isn’t there,” he said. “It’s to make sure that people are aware and continue to be aware of the Media Council and its function. When this whole thing started, we didn’t know what to expect in terms of complaints. We didn’t know how active it would be. We do want to ensure that the public continues to be aware that the council exists and that there is this route for resolution of their complaints.” Former Premier Ewart Brown’s plan for a legislated council was revealed in 2008, when he said it would create a code of ethics for news reporting that could protect the public from irresponsible journalism while protecting freedom of expression. But when the legislation was tabled in May 2010, it prompted an outcry from international press freedom organizations and local critics, who claimed it would lead to censorship. A Government spokesman said the watchdog was needed because “although there have been many complaints from the public in the past, there has been no attempt on behalf of the media to form a mechanism to address such complaints.” Industry members urged Government to give them time to form their own body and create their own code, leading Dr Brown to shelve the proposed law in July last year. Mr Luthi said: “There’s no question that there was a public perception that some form of media regulatory body was necessary. This is purely anecdotal, but you hear complaints about the press and yet we haven’t seen them coming to the council. I think the most disappointing thing of all is to have members of the public complain about the press and press standards but not do anything about it.” He suggested journalistic standards and accountability had improved since the introduction of the council’s code of practice, which 20 media outlets have agreed to abide by. “My information has been that they are more ready to recognize if they haven’t complied with the code and take steps to deal with the complaint directly. I think that the members, so far as I can tell, do their best to adhere to the standards of the code. On the whole, I think standards are pretty good.” Meredith Ebbin, the council’s executive officer, said several alleged breaches of the code had been reported since February but the complainants had not lodged official complaints. “People have taken their complaint directly to the media outlet and the matter has been resolved, usually by way of an apology, a correction, or a clarification, to the satisfaction of both parties.” She said the council’s media working group, which established the organization, believed the mere existence of the watchdog and the code had led to improvements in reporting. “An aggrieved person has something tangible on which to base his or her complaint and the media outlet is less able to wiggle out of making an apology.” Bermuda Sun editor Tony McWilliam, chairman of the media working group, said: “One of the goals from the outset was to heighten the accountability of the media and I’ve been made aware of a number of situations over the past ten months in which informal complaints have been made against various outlets but have subsequently been resolved quickly. The outcomes might have been less satisfactory had it not been for the existence of the code and the council. The upshot is that Bermudians are now better served by the media.” The outlets to have signed up to the code are: The Royal Gazette, bermuda.com, Bermudabiographies.com, Bermuda Broadcasting Company, Bermuda Media, Bermuda Sports Network, Bermuda Sun, Bermuda Wired, Bermudian Publishing Company, Bermynet, Bernews, BlackAndCoke.com, Breezeblog, DeFontes Broadcasting Company, Inter-Island Communications, Islandstats.com, LookTV, LTT Broadcasting Company, VATV and the Worker’s Voice.

2011. There were 504 Class 3 companies with total capital and surplus of more than $66.7 billion at year-end, with the firms writing more than $42 billion in gross premiums and representing about 34 percent of the total number of active insurance companies in the jurisdiction. In terms of SPIs, Bermuda Premier and Minister of Finance Ms Paula Cox recommended that an SPI's minimum share capital be set at $1, the margin of solvency requirement will require that the asset of an SPI exceed its liabilities, an SPI will only be permitted to write 'special purpose business', and will be allowed to fund its insurance liabilities through a debt issuance or some other form of financing approved by the Authority. Furthermore, she added that a recent study published by Swiss Re indicated that the Insurance Linked Securities market was worth $38 billion in 2007 and is projected to grow to $200 billion in 2013 and $600 billion in 2017.

2011. The Body Shop had been in Bermuda for 25 years until this one when retailer Ellen Brown closed down the store in the Washington Mall.

2011. Death in Bermuda at the age of 89 of Geoffrey (Dickie) Bird. He had served in the Royal Navy as a carrier-based pilot but is perhaps best known as the engineer who oversaw the renovation of the former Hamilton Princess Hotel and constructed the Bird Cage on Front Street. He was born in England and after serving in the Second World War moved to Bermuda where he lived for more than half a century prior to his death.  The legacy of the Marion Bermuda Race was due in large part to him as the co-founder.  A plaque bearing a photo and his name as the late Royal Hamilton Amateur Dinghy Club (RHADC) Commodore and his counterpart David Kingery (Beverly Yacht Club) are at their clubs. They met at the RHADC and from that friendship sprang the Marion Bermuda Race that was first held in 1977. Mr Bird’s 34ft yacht Water Gipsy was in that inaugural Marion Bermuda Race. Unfortunately, Mr Bird’s yacht collided with another boat (Salty Dog) and was forced to retire.

2011. December 15. Opposition MPs said it was no surprise a vehicle licence exemption for seniors had been abused, costing Government $17 million in lost revenue. Those aged 65 and above who own a car have not had to pay to licence their vehicle since 2007 but the policy is now likely to be reversed, according to a pre-Budget report released by Premier Paula Cox on Monday. The report revealed that the number of cars licensed to seniors has risen by 26 percent in the last five years, with a 358 percent increase in the largest category of car (class H). “This blanket tax expenditure, while popular, has been very open to abuse,” the report stated. “This tax expenditure has cost the Government $17 million since its inception. The Government will examine this tax expenditure with a view to putting into place a provision that assists seniors in need and is less open to abuse.” Shadow Transport Minister Patricia Gordon-Pamplin described the policy as a “typical pre-election promise that was not thought through. It may have sounded good to garner votes in 2007 but now it is time to pay the piper. It is not surprising that Government once again finds itself having to roll back promises made, once they evaluated the practical application of the policy. It is proof positive that you cannot buy votes with taxpayer money.” It is understood some motorists aged under 65 are abusing the system by registering their cars to an elderly relative to avoid licence fees. One Bermuda Alliance MP Mrs Gordon-Pamplin said: “I have not seen many seniors driving class H vehicles and, as that class of vehicle is on the upper end of the cost spectrum, one would question whether the policy made any sense.” She said her party colleague Louise Jackson “called for a means test before giving away the shop but the Government ignored her. Her position is now totally vindicated, albeit $17 million later.  Mrs Jackson, the Opposition’s spokeswoman on seniors, said she hoped Government would now means test the exemption for cars above class C. “The lower classes perhaps ought to be exempt,” she said. “Once you are into larger, luxury cars, it’s a different story and you have to ask if the exemption is justified.” Government did not respond to a request for further comment before press time last night. Car licence fees at a glance. Class A: up to 138in = $281.05.  Class B: exceeds 138in to 144in = $386.90. Class C: exceeds 144in to 150in = $547.50. Class D: exceeds 150in to 156in = $675.25. Class E: exceeds 156in to 162in = $945.35.  Class F: exceeds 162in to 166in = $1,095.00. Class G: exceeds 166in to 169in = $1,273.85.  Class H: exceeds 169in to 175in = $1,551.25.

2011. December 22. The president of the Bermuda Stock Exchange sounded the opening siren at the Toronto Stock Exchange yesterday morning in celebration of BSX’s largest foreign investment to date. The owner and operator of Canada’s Toronto Stock Exchange, TMX Group, has become one of the largest shareholders in the BSX with the purchase of a 16 percent stake. TMX’s CEO, Tom Kloet, will be joining the BSX board of directors. The Toronto Stock Exchange is the seventh largest in the world and TMX Group’s investment in BSX is its second overseas transaction, the first being in Australia last month. The news was widely reported with Greg Wojciechowski, president and CEO of the BSX and Mr Kloet speaking to international media on the venture. Mr Wojciechowski said: “This is one of the larger milestones for the BSX. This underscores the value that’s seen in the Bermuda market. They have a whole new level of experience that the BSX can leverage. The board of BSX is looking at how the Exchange is going to develop going forward. This is a culmination of strategic decisions that are yielding real commercial transactions. There are niche opportunities for the capital market space and we have continued to develop our platform in Bermuda to be ready to support niche markets,” citing the listing of insurance-linked securities as one example. "We think the BSX is the important stock exchange in that region,” added Mr Kloet to Financial Times. “One of the key things is their [BSX’s] positioning with equities and their offshore presence. We have infrastructure that they can’t necessarily afford. We will run into people in our London office who are looking for an offshore listing location and now we are going to be promoting that. I think it will help the BSX.” Created in 1971, the BSX states it has grown to become the world’s largest offshore, fully electronic securities exchange. The news comes on the heels of increased financial activity between Bermuda and Canada, including the signing of a Tax Information Exchange Agreement (TIEA) in July and Bermuda gaining recognition as a Designated Stock Exchange under Canada’s Income Tax Act, which went into effect in late October. The BSX has been recognised by leading stock markets, including The London Stock Exchange, US SEC and the World Federation of Exchanges, among others. The significance of the designation for the BSX is that it opens the door for Canadians to invest some of their tax-deferred retirement plans and other investments in BSX-listed securities, which could translate into greater liquidity of BSX-listed stocks. In 2005, the Canadian Government removed the foreign content limit on tax-deferred retirement plans prompting an increasing number of Canadian investors to look to foreign securities listed on foreign exchanges to enhance their returns and diversify the investments held in their Canadian Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs). TMX Group operates offices across Canada (Montreal, Calgary and Vancouver), in key US markets (Houston, Boston and Chicago) as well as in London and Beijing. It is the target of a $3.66 billion bid by a group of Canada’s biggest financial institutions, Maple Group Acquisition Corp. The move would, according to Reuters Canada, bring most of the country’s major exchanges under one roof.

2011. December 28. The hunt for low-cost healthcare has led one campaigner to a UK provider which she believes could treat Bermudians, including the elderly, at a substantially lower cost than in the US. Searching for treatment for Bermuda’s war veterans and their families led Royal British Legion caseworker Carol Everson to Spire International. Locals can refer themselves to Spire International, but with no age cap on the treatment offered, Ms Everson said the company could prove highly suitable for senior patients. In particular, elderly clients with veterans’ pensions say their bills are easier to deal with in the UK rather than at US hospitals. Ms Everson cautioned: “I’m not trying to get people to run off to England. Government’s latest report on Bermuda’s healthcare costs identifies overseas treatment as the top culprit in the Island’s spending. Spire could be a good alternative source of overseas treatment where treatment isn’t available here in Bermuda.” Ms Everson shared an e-mail exchange with Spire International, in which a company representative notes that Bermudian patients often travel to the US, which has “the advantage of being nearer but as we know can be very expensive and there is uncertainty over the final bill”. For example, according to quotes supplied by Spire International, a hip replacement operation at one of the company’s clinics could cost between $9,989 to $13,000. Ms Everson believes that, as British Overseas Territories citizens, Bermudians may qualify for lower cost treatment in UK hospitals if they can withstand taking a longer journey to receive it. With so many healthcare providers available overseas, sourcing a good deal for Bermudians has taken her no small amount of sleuthing. “It started off as an enquiry for an elderly local client who had receiving dialysis,” she said. The client, who requested not to be named, required irradiated human plasma from donated blood the only treatment available for his condition. “The cost to their insurance company was $20,000 a month, and the client was being asked to provide $4,000 a month, which was impossible for him to pay, and would be for many people,” Ms Everson said. “Dialysis is what’s keeping him alive. During the course of my research into the plasma, I found that other countries could provide plasma at a far lower cost than in Bermuda. We were able to find a cheaper supply in Canada, and because there is no generic form of plasma available, and we were able to prove there was no generic, and we were able to get those costs temporarily waived.” With a certificate from the Department of Public Health, the plasma could be imported duty free to the Island. A further search, however, uncovered possibly cheaper UK sources for irradiated plasma through Spire International. “Spire has a network of 37 private hospitals in the UK,” Ms Everson said. “They have an international division, they offer cardiac treatment, cancer treatment services, radiotherapy, oncology, all major surgeries, and they consider their prices to be substantially lower than US prices. I have a war veteran client who just came back from prostate surgery in the Lahey Clinic. We used money from our poppy appeal to have him airlifted for emergency surgery. Aside from dealing with the other expenses, which came to $144,000, his family had to pay medical bills of $4,000 up front, including $700 for medication, which they had to pay while he was in Lahey. Spire, by contrast, would give them one bill for everything all hospital costs.” Spire has indicated that it would be interested in taking Bermuda patients. Those seeking treatment would need to be fit to travel to the UK by air. Seeking UK treatment, however, avoids emergency airlifts, which have cut off ages of 75 for the Lady Cubitt Compassionate Association, and 80 for Government insurance. Health Minister Zane DeSilva confirmed that he was aware of Spire International, and reported talks with Ms Everson had been “positive to date.” Mr DeSilva said: “Of course, if there is a savings for the people of Bermuda and to the healthcare system as a whole, we will certainly explore this option. But, due diligence must be completed first before any decision is made. If anyone has any ideas with regard to reducing healthcare costs in Bermuda, my door is always open.” A Ministry of Health spokesman said that details on Spire International’s services had been passed on to the Bermuda Hospitals Board. “The Ministry of Health encourages people to seek treatment locally in the first instance, and then recommends that they work closely with their health service provider when selecting overseas care,” the spokesman said. Suggestions to the Ministry of Health should be submitted as a formal proposal for research. Michelle Jackson, Vice President of Group Insurance for local insurers Argus Group, confirmed that the company has begun its own investigation of Spire International with the hope of establishing a relationship. “I hadn’t heard of Spire prior to my conversation with Ms Everson,” she said. “I got our overseas network people to start checking up. Argus uses a management care company called CMN to handle its handle these kinds of negotiations and assessment. It’s a bit of work to see if they can negotiate better rates as well as quality. It’s a situation where we want to make we’re not just getting a great deal, but also sending people to quality facilities.” Useful website: www.spirehealthcare.com.

2011. December 28.Vereran tells of huge hospitalization expense.  At the age of 86, Bermudian veteran Kenneth Dunkley is part of a dwindling number of locals who joined the armed forces in the Second World War. After enduring gruelling surgery at a US clinic, Mr Dunkley counts himself lucky to be alive. But family members question if the cost and complication of his treatment at the Lahey Clinic might have been avoided if he could have been sent to the UK instead. The Devonshire senior is no stranger to matters of life and death: seventy years ago, following the Japanese attack on the US at Pearl Harbor in Hawaii, he signed up to join the Royal Navy. “I was young and I’d never been around guns, and I didn’t know the danger,” Mr Dunkley recalled. “I was just 16-years-old.” Getting a job as a saloon steward aboard the HMS Suma, Mr Dunkley learned fast about war: the ship took a German torpedo to its stern while out on patrol in the Atlantic. Later in the war, he took a job as the leading hand aboard the “liberty ships” that ferries crew from land to ships offshore. “I got blown up twice,” Mr Dunkley recalled. Both incidents occurred during fuelling of the boats. Over the past summer, Mr Dunkley’s brush with mortality was of a strictly medical nature. Bleeding internally from his prostate, he was kept in King Edward VII Memorial Hospital for two weeks while doctors evaluated his condition. “While I was there, they notified my doctor on the Sunday,” Mr Dunkley recalled. “The doctor came to see me on the Monday, and they operated on Tuesday. But I was in terrible pain. I would not wish that on anybody.” Complications from blood clots led to an argument with hospital staff as to whether or not Mr Dunkley’s condition could be treated in Bermuda, his daughter Lillian said. “They wanted him to take a commercial flight to the US, and we said no,” said Ms Dunkley. Ultimately, the Royal British Legion paid for Mr Dunkley to be airlifted for emergency treatment at the Lahey Clinic in Massachusetts. His family credits the surgery with saving his life. Although his war veteran’s insurance covered Mr Dunkley’s treatment afterwards, meeting upfront payments proved highly stressful, Ms Dunkley said. “I had to use money that I felt, if things were organized differently, I wouldn’t have had to pick into,” she said. “Payment was really complicated. As a person with a small income, it was a lot for me. There was so much confusion with the war veteran process in the States. They didn’t know what was going on. My father couldn’t use his war veteran’s card. It’s a whole different thing in the States. So I think for veterans to get treated in England, it would be a lot easier.” By the time Mr Dunkley was sent overseas, his condition was so grave that he required immediate care. A veteran seeking UK treatment would have to be fit enough to take a commercial flight to receive it. For the Dunkley family, any cheaper alternative coupled with the possibility of less bureaucracy owing to Bermuda’s historical link to the UK would be worth investigating. “I feel that our seniors should be looked after much better than they are,” Ms Dunkley said. “The system’s got to change.”

2012

Celebration of the 400th anniversary of the deliberate first permanent settlement of Bermuda.

January 11. Two local package service companies are mounting a defence against a potential duty hike on all personal imports by rallying its customer base to speak out against the proposal. Steven Thomson, President of Mailboxes Unlimited, sent an e-mail to thousands of his customers on Friday asking for support to stop a possible rise in duty on goods he ships in to 35 percent. Tom Nelmes, chief operating officer of BEST Shipping, is planning on sending out an e-mail to his 4,000 customers today. As reported by The Royal Gazette last month, the couriers are reacting to Premier Paula Cox’s Pre-Budget Statement in which she said Government was considering “harmonising duty for personal imports”, potentially looking at making the duty rate on personal imports shipped in by air or freight, more in line with the airport rate of 35 percent. Currently duties range from five percent to 33.5 percent depending on the item. In an “urgent” e-mail to approximately 9,000 customers, Mr Thomson, whose company acts a middle man between vendors and consumers, asked for those who were concerned about the proposal to contact the Premier or their MP, call into local radio talk shows, write Letters to the Editor, and attend any open forum on the matter to ensure their voices are heard. While he stressed in his e-mail that at this stage, the tax idea was only a proposal, Mr Thomson said to customers: “The Premier, in recent interviews, has made it clear that she intends to discuss, in open forums throughout Bermuda, the potential to increase duty rates on all imported personal items to 35 percent as has been implemented at the airport. Increasing duty by over 500 percent in some instances (clothing is currently 6.5 percent) would be destructive to both residents and Bermuda as a whole.” According to Mr Thomson, response to his e-mail plea was immediate and en masse. “I got return e-mails from people right away,” he said. “One that stuck a chord with me said ‘Yes we need to fight. I am a full size person and there is not much in Bermuda for people like me. I think it is a big injustice to our country. Everything is made easier for outsiders to buy Bermuda but for Bermudians, we are foreigners in our own land. It is not right’.” In her Pre-Budget Statement the Premier said: “There are different rates of duty that are assessed to individuals who import items for personal use. At the airport the rate is 35 percent however via other methods of import, the rates vary from five percent to 33.5 percent. Because of the inconsistent duty rates across methods of import, Government efforts to support local business are not as effective as intended. Therefore the Government will examine changes to duty rates for personal imports.” Mr Nelmes, of BEST, said he has “no problem” with Government raising duty charges on things such as luxury items, but rather with the “blanket coverage” of taxes that has been proposed. I have a major problem with the protectionist type of mentality that restricts the freedom of choice. It’s choice that is being put on the line here. People in the community should in an uproar about this.” The issue is becoming a vocal struggle between couriers and retailers, with Paula Clarke, chairman of the Bermuda Chamber of Commerce’s retail division, saying that the couriers were the biggest single threat to the livelihood of brick and mortar retailers. “The argument is being made that if you shop in Bermuda, the majority of your money is staying in Bermuda,” said Mr Thomson. “That’s a fallacy because the store that you bought it from has to bring the item in from away. Nothing is made here. So what is the difference if you order it online and you bring it in through a company like Mailboxes, BEST, FedEx, DHL or IBC where we pay import duties, we hire Bermudians, we pay office rent and we pay corporation taxes? In fact, we pay more than the retailers because we pay full payroll taxes where they (retailers) have been granted payroll tax relief. Why destroy the shipping companies? The law of unintended consequences is going to come into play here.” Mr Nelmes added: “It’s clothing and apparel that is the largest group of undeclared items at the airport; this proposal will force the man on the street to become a thief and a liar. Why should we do that?” Mr Thomson also questioned whether the retailers and Government are fighting the inevitable. “Are we really going to try and fight online shopping?” he asked. “Why don’t retailers try to get creative, like Gorham's is doing, and offer customers both (local and online options)? We are talking about every method of importing things into Bermuda from ocean to air to couriers,” he added. “If this is all purportedly to help the retailers, two things will happen: one there will be a big backlash against the retailers and the second is it will injure the shipping companies.” Mr Nelmes had strong words for retailers: “Any retailer that stands up and supports this could go out of business because Bermuda will boycott them.” The men said that a shipping and courier committee is currently being formed in the Chamber of Commerce in order to better have the industry’s voice heard.

January 26. Bermudians need to lose their sense of entitlement and wake up to the economic crisis rocking the Island, former Premier Sir John Swan told a public forum yesterday. Repeating his call for a big conversation on the economy, Sir John said Bermuda will plunge into worse financial turmoil if Government doesn’t fix its relationship with international business and Bermudians don’t improve their attitudes. Policies over work permits and land licenses are hurting international business, he said, while foreigners are made to feel so unwelcome from the moment they arrive at the airport, many don’t want to come back. Speaking at a Chamber of Commerce panel discussion at Fairmont Hamilton, Sir John said: “The biggest threat I see is a lack of information, communication and assessment, in a non-partisan way, of where Bermuda is. “You can’t run a business without partnership. Government needs to have a good relationship with business and the community, but that process is not taking place. Everyone feels they are entitled to something because they are Bermudian. Well everyone who is non-Bermudian is slowly pulling the plug on Bermuda.” Remarking that many Bermudians believe they should get jobs over non-Bermudians whether they’re qualified or not, Sir John warned: “Are we going to raise the noise level enough that international business decides ‘we are not going to argue with you any more’? Most are going to pack up and leave Bermuda.” Sir John said visitors are often grilled at the airport as they are told of the disproportionately high tax they must pay on arrival, claiming: “It makes them feel as though they are being interrogated.” This is often followed by impoliteness from the taxi drivers taking them to their hotels, he said. “They get to the airport and are not treated with the courtesy they get in their own country. We are not very pleasant people. We used to be very pleasant; we are not any more. We are not pleasant to tourists or international business.” He also spoke on Government’s land policy, which requires Bermudians with non-Bermudian spouses to obtain licenses to buy property. “First of all, we should recognize we are all human beings. The Bermudian married to a foreigner should not be discriminated against as a result of that marriage,” he said. “Our law allows them to get married and stay in Bermuda. We should not be saying to them, you are no longer a Bermudian. That’s not right. What’s worse is even if that Bermudian wants to put property in their own name, they say you can’t do that. That’s against the Human Rights Act. I suspect anyone who took it to court and got as far as the British court, they would laugh at it.” Fellow panelists Larry Burchall, the political commentator, and Bermuda College economist Craig Simmons gave the audience of about 200 people figures illustrating the Island’s decreasing population and expatriate community, and expressed concern at the growing debt level. Sir John said on top of private debt of $5 billion and public debt of $1 billion, Bermuda faces further financial woes because of under funded pensions, a Sinking Fund which has not been kept up, and costs incurred by the hospital rebuild. “We are in a crisis. We need to have a conversation about that,” he said. Recalling the Big Conversation on race by former Premier Ewart Brown and consultant Rolfe Commissiong, Sir John said: “I don’t know where that took us, but while we were having that conversation we were convincing other people to pack up and leave Bermuda.” Mr Burchall said Bermudians need to understand tourism has been replaced by international business as the key pillar of the economy. "We have to get Bermudians as involved, as supportive of Business Bermuda as they were Tourism Bermuda. That requires a huge psychological shift; it will be done against the racial legacies of the past and the present. They are here 365 days a year. Under the older regime, they came, we smiled for five days and they went back home. We have to adjust. We Bermudians have to do something.” He said Bermuda should replace its system of heavy taxing at ports, imposed during the Victoria era, with Value Added Tax on goods. Mr Simmons suggested one way of helping the Island prosper financially would be to move towards renewable energy.

January 27. The Royal Gazette’s A Right To Know: Giving People Power campaign, launched four years ago in January 2008, called on Government to open up to the public all quangos, including the Bermuda Land Development Corporation (BLDC). We asked that these taxpayer-funded entities, of which there are more than 100 on the Island, be made to hold their meetings in public and publish regular minutes. That hasn’t happened yet, despite the passing of public access to information and good governance legislation in Parliament and a commitment from Premier Paula Cox to ensure transparency and accountability in Government.

February 3. Legislators are today being urged to reject proposed changes to the Human Rights Act in favour of amendments which bring Bermuda’s human rights regime in line with international standards. The amendments to be debated today do not go far enough to create a truly independent Human Rights Commission, according to the Centre for Justice. “Until such time as the Human Rights Commission can be truly independent of Government it cannot, according to the Paris Principles and the Commonwealth Secretariat, claim to be a legitimate and genuine national human rights institution,” said Venous Memari, Managing Director of the Centre for Justice. “They should send it back for further amendments.” Families Minister Glenn Blakeney, who has responsibility for human rights, will today attempt to pilot changes to the legislation intended to improve the administration and functioning of Bermuda’s human rights regime. In a press release issued when the bill was tabled in December last year, Minister Blakeney claimed that the proposed measures would bring the Human Rights Commission in line with international standards, a claim he is expected to repeat when he introduces the bill to his House colleagues this morning. But Ms Memari insists that the changes will ensure that the HRC continues to “be an extended arm of Government as it will lack independence.” The proposals, she said, fall “woefully short of international baseline standards with respect to the independence of a legitimate and genuine human rights commission, specifically the Paris Principles. According to the Paris Principles and Best Practice Guidelines established by the Commonwealth Secretariat, independence is the cornerstone to the effective functioning of a national human rights institution and good governance. In order for a national human rights institution to be effective and maintain public confidence, it must be independent and be seen to be independent of Government and the political process and not subject to pressure or influence from those who might have a stake in the national institution’s community activities and educational programmes that are designed to promote equal treatment of all members of the community.” Among other administrative changes, Minister Blakeney’s bill proposes to remove the Minister from adjudication of cases and replace the Board of Inquiry with Human Rights Tribunals composed of a small number of Commissioners. Currently, if unable to settle a complaint, the Human Rights Commission will ask the Minister to refer the matter to a Board of Inquiry. But under the proposed changes, complaints that are not resolved within the nine month period will be referred to the tribunal by the Executive Officer. That, says Ms Memari, is a “most welcome change.” Minister Blakeney’s bill also proposes a new system for selecting Commissioners. Commissioners would be selected by a five member Selection and Appointment Committee via a recruitment process. That committee would be headed by the Minister’s appointee who selects two members from the general public. Another two members of the selection committee would be selected by the Opposition and the ruling party. The recruitment process for Commissioners, to include advertisements, direct invitation and an application and interview process, is also prescribed by the new bill. “What is the likely independence of the Committee in light of the fact that the Head is selected by Government and the Head appoints two members of the public?” asked Ms Memari. “Also the criteria for the selection of the commissioners will be prescribed by the Minister in consultation with the Executive Officer and the department responsible for human affairs.  Ms Memari also noted that the bill retains provisions which maintain political control of the Human Rights Commission. “The commission will continue to be responsible to the Minister for the administration of the Act,” she told The Royal Gazette. “Guidelines prepared by the Commission under section 14B (which may not have the force of law but may be received in evidence) and codes of practice (with respect to elimination of racial discrimination in the field of employment and the promotion of equality of opportunity in that field between persons of different racial groups) cannot be published without the prior approval of the Minister. Annual reports must still be submitted to the Minister rather than directly tabled in Parliament.” The Centre for Justice is also raising the alarm over a new clause which allows the Executive Officer to discontinue an investigation under certain circumstances but does not allow a right of appeal.

February 7, 2012. A former home of the US Consul General has been put up for sale with a $45 million price tag. The luxurious Chelston, built between 1939 and 1941 for California oil baron Carbon Petroleum Dubbs, was conveyed to the US Government in 1964 and served as the official residence of the US Consul General for more than 30 years. During that time, it housed guests including US President George Bush, Vice President Dan Quayle, Senators John Kerry, Edward Kennedy and Chris Dodd, General Colin Powell, former Secretary of State Henry Kissinger and actress Brooke Shields. It was also known locally for hosting an annual July 4 celebration, which sometimes drew more than 3,000 people to the 14-acre property. However the US sold the property to a US businessman in 1999 for around $15 million. The estate features a 10,000 square foot main house overlooking Grape Bay and boasts 15 bedrooms and 19 baths, including three guest cottages and a staff cottage. It also includes a well-equipped home cinema, a nearly Olympic size swimming pool, a croquet lawn and a wood-burning pizza oven. A section of the official listing for the site reads: “Exemplifying understated elegance and incorporating the best of traditional Bermuda design, the main house, on three levels, is light-filled and spacious. “High ‘Bermuda tray’ ceilings, floor-to-ceiling windows, multiple sets of French doors, generous room proportions and a general consistency of finishes throughout the estate are Chelston’s hallmarks.”

February 21. The Arthur Morris Group yesterday announced longtime partner Craig Christensen was retiring from the firm as a partner to focus on the proposed Morgan’s Point development. In a statement from the firm, Mr Christensen said: “I am sad to be leaving Arthur Morris, Christensen & Co, which I have seen grow into Bermuda’s largest independent audit firm employing a large number of Bermudians. I’m very proud of the reputation the firm has in the local and international community. My retirement from the firm will allow me to concentrate fully on the Morgan’s Point project and the promotion of Bermuda to overseas investors which is hugely important to our country in today’s economic environment. I wish my fellow partners the best in their future endeavors with the Arthur Morris Group of Companies.” Mr Christensen’s Southlands Ltd plans a $1.8 billion Morgan’s Point resort. He and partner Nelson Hunt say the resort will include an 80-room boutique hotel, a harbour surrounded by shops and restaurants and a 365-room, five-star hotel.

2012. February. Coral Beach Club Members were presented with an extraordinary plan to sell them the club facilities for some $28 million. As part of the “equity conversion” plan members would have to make an investment of $35,000 (resident) or $20,000 (non-resident) and take on at least $5.5 million in debt owed by the club's US operator, Brickman in return would set aside in escrow $11 million for a capital improvement programme to make badly needed upgrades to the club facilities - and also $3 million to redo its guest rooms, which Brickman would retain. Brickman came up with the idea to sell the club facilities to the membership after scrapping a plan to redevelop the property as a five-star Four Seasons 150-room resort and residences. Brickman, which had gotten as far as winning in-principle approval on appeal for the project - which it had worked on since 2007, blamed the global economic slowdown for backing off it. Brickman's existing mortgage on the club amounts to $5.5 million, which it wants members to assume as part of the deal. Furthermore, members will not have any expectation of profiting from their equity investments of $20,000 to $40,000. New clubhouse windows, bathrooms, furnishings and chairs, improving the beach hut and rooms, adding air conditioning and a pool, a new television and replacing the squash court floors, has been estimated to cost $11 million. Developers Brickman Holdings of New York effectively bought the property in January 2008. (More precisely, Brickman Associates, part of the group, holds a 200-year lease on the prime 26-acre beachfront property. In March 2010, Four Seasons Resort and Hotel gave its name publicly to the redevelopment of Coral Beach Club for the first time. A joint statement from Brickman and Four Seasons said construction on the initial phase was expected to have begun in 2010. It was never built, in April 2009 Plans for a Four Seasons Hotel 150-room five-star hotel and fractional resort here were scuttled by planning officials after objections galore. The 150-room hotel was to be accompanied by a spa, fitness centre, tennis courts, pools and a conference centre. The Horizons nine-hole golf course was to disappear and the resort would also have brought major changes to South Road, with new access points and a pedestrian underpass tunnel near the entrance to Coral Beach. If approved, South Road would also have undergone a reconfiguration, to straighten a bend at "two well-known traffic accident spots". An access road would have also linked the resort to Tribe Road Five. On appeal, a modified plan was approved in June 2009 to develop a 150-room hotel and 80 fractional units. Instead of closing in 2009 as hoped to make way for redevelopment the property remained open for business.

February 26.  The shipping industry and consumers alike will be hit hard by Government’s decision to charge 25 percent duty on all goods imported for personal use, according to three of the Island’s couriers. They criticized Premier Paula Cox’s announcement in her Budget statement yesterday that the duty rate would be “harmonised at all ports of entry” to 25 percent, while Bermuda Chamber of Commerce welcomed the move. The change is expected to mean a leap in the duty rate payable on items imported from abroad such as clothing, shoes, cameras and vitamins, from April 1. The rate for clothing is currently 6.5 percent, shoes are ten percent, cameras are 8.5 percent and vitamins are 15 percent. The rate should decrease for televisions, radios and car parts, which are currently charged at 33.5 percent. Steve Thomson, president of Mailboxes, said: “This is an extremely unpopular move by the Government to increase duty for personal items, specifically because the people of Bermuda are going to have their choice limited now. This will push the cost of items up. For an individual who wants to buy a pair of shoes or pair of pants where they couldn’t find [them] here, they are the ones being penalized and punished. The object is to force consumers into the local shops. Now that they don’t have competition, it will give them free reign to increase their prices.” Chris Heslop, general manager of FedEx, said the increase wouldn’t be huge for the majority of imports, such as toys, computers, software, MP3 players and devices like iPads, which are currently charged at 22.25 percent. But he added: “For certain items currently in the 6.5 percent and 8.5 percent range, it is a significant increase, which I think is the wrong thing to do to stimulate the economy during the economic downturn. Unfortunately, importers are at a further disadvantage to people shopping overseas and bringing it in with them via the airport, as we also have to pay the 1.25 percent wharfage tax and package tax. I don’t think that this increase will have any benefit on retailers and it is just another way for the Premier to raise taxes under the pretence of saving jobs.” Tom Nelmes, CEO of BEST Shipping, said: “I don’t think the Government has had the right level of consultancy. I appreciate that working in Government is not easy but they haven’t consulted all the stakeholders, including our industry and that’s a shame. Small businesses would also feel the pinch. I think this will irreparably harm the small business in Bermuda in ways they haven’t thought through.” Couriers have been fighting against the potential for a duty hike since the Premier’s pre-Budget statement came out in December. A petition against the proposal attracted more than 3,000 signatures and was delivered to Finance Minister Ms Cox in January. The Chamber of Commerce said yesterday the 25 percent harmonization was expected and many retailers would be “cautiously optimistic” about it. Peter Everson, head of the Chamber’s Economics Advisory Committee, said: “This decision simply corrects a long-standing anomaly and brings Bermuda into line with internationally accepted tax practices.” Government confirmed yesterday that the duty increase would take effect on April 1, with legislation needing to be passed first. It said goods arriving here on April 1 and after would attract the new rate. In November, the duty rate for people bringing in items at the airport rose temporarily to 35 percent and the duty-free allowance was set at $100 per household. Yesterday’s Budget returned the airport rate to 25 percent and increased the duty-free allowance to $200 per person, from April 1. Duty will rise on cigarettes and tobacco that day, with Ms Cox explaining the increase would yield Government additional customs revenue of about $1 million. The rate will go up per cigarette by two cents (from 18 cents to 20 cents), meaning consumers should expect to pay an extra 40 cents on a pack of 20. Ms Cox said apart from changes to land tax and car licenses for seniors (see separate story) most other tax rates would not change in 2012/13. She added: “The biennial adjustment of government fees will be increased by about three percent for most fees and the anticipated yield is an additional $4 to 5 million. There will not be an increase in bus and ferry fares and all other tax rates will remain the same as they are now through 2012/13.”

February 28.  A long-planned new luxury hotel and condo development in Hamilton could get off the ground this year. Ted Adams III, a principal with US-based Unified Resorts, said he has the financing in place for the proposed new St Regis hotel and residences at Par-La-Ville Road car park. “We hope to break ground later this year. I cannot provide you with a detailed update except to say that with Starwood’s full support, we are working diligently in bringing the St Regis Bermuda to Hamilton. We hope to break ground later this year. I cannot comment on the financial arrangements because of confidentiality agreements. The necessary project financing has been committed.” Back in 2009, Starwood Hotels & Resorts Worldwide had announced plans to open a new St Regis hotel in Bermuda, marking the debut of Starwood and the St Regis brand on the Island. No cost for the resort was given, but estimates have ranged from $50 million up to $200 million for such a project. The terms and length of the developer’s lease on the Corporation of Hamilton property were not known. Asked how given the global economic climate, he was able to secure financing, Mr Adams said: “We have sound fundamentals including: the best location on a progressive island; the Number 1 luxury brand in the world; a vibrant international business community that demands a five star business hotel; an experienced Development Team; a highly educated and skilled local workforce; and, significant support and encouragement from the Bermuda Government.” The St Regis Bermuda and The Residences at The St Regis Bermuda was scheduled to open next year, in 2013. Ultra-high-end St Regis condos in other cities around the world usually sell for millions of dollars, for example, the San Francisco and Atlanta St Regis Residences sell for about $1.5 million and up, while in Singapore they start at several million. If the hotel is built, Starwood has said it would be “the first major luxury hotel to open in downtown Hamilton in more than 50 years. The St Regis Bermuda will feature approximately 140 exquisitely appointed guest rooms and suites, approximately 80 exclusive, serviced residences, a RemRe Spa, signature restaurant, a wine bar, library, and a rooftop conservatory,” Starwood has said in its original release. “Owned by Par La Ville Hotel and Residences, Ltd, a partnership between Virginia-based Unified Resorts, Ltd and New York-based Sagewood Investments, LLC, The St Regis Bermuda will offer unparalleled luxury, highly personalized service and refined elegance at one of the world’s best addresses.” In her Budget speech last Friday, Premier Paula Cox had said Bermuda had “attracted renewed interest from investors in hotel developments. Recent negotiations spearheaded by the Minister of Business Development and Tourism with a developer and the Bermuda Industrial Union provides reason for cautious optimism that ground will be broken on a luxury brand hotel this year.” At his news conference, Tourism Minister Wayne Furbert had said: “We are 99.9 percent there, as the developer says, and so we hope to make that announcement, hopefully in the next month or so.” Government did not name the development it was referring to and declined to provide further details when asked about it yesterday. One potential issue is that the Corporation of Hamilton last February had filed a writ against the developers of the planned St Regis hotel. Mayor Charles Gosling declined to comment at the time. Donal Smith, vice-president of the development company for the St Regis also declined to comment. Shortly before retiring in October 2010, former Premier Ewart Brown said the Corporation was holding up the development, but did not expand. The hotel has “in principle” planning approval to build nine storeys on the Church Street side and ten storeys on the Par-la-Ville side, with three levels of underground parking. In addition to the hotel rooms the development was granted permission for 80 residences. This month, the city’s only major resort, the Fairmont Hamilton Princess, told the Bermuda Sun it was looking for an equity partner to “fast track” a $50 million project to expand and upgrade facilities, including adding dozens of marina slips. The hotel was listed on an international real estate website by owner Global Hospitality Investments in order to attract new investment.

March 1. TeleBermuda International (TBI) helped Wedco turn the whole of Dockyard into a Wi-Fi hotspot. Instead of incurring costly roaming charges to surf and e-mail, anyone visiting Dockyard, including Bermuda residents, can now sign up for TBi Wi-Fi starting at $3 for one hour, up to $29.99 monthly. The new TBi Wi-Fi zone will be welcomed by the tens of thousands of cruise passengers and crew who visit Dockyard in the summer. Up until now, to access the web they have had to go to internet cafes or pay the high cost of cellphone roaming or using cruise ship satellite internet service. Wedco chairman Walter Lister said yesterday the new “value-ad” TBi service was like an internet ring around Dockyard and was “a first” for Bermuda. Any Wi-Fi enabled device such as a smart phone, tablet, personal computer or digital audio player, can connect to the network via seamless access points installed throughout Dockyard. The service is available throughout the Dockyard. Wedco said it would also use the network to support surveillance throughout the area, enhancing security for visitors and businesses. “At Wedco we are continually looking for new ways to enhance our tourism product and make Dockyard a first class destination for locals and tourists,” Mr Lister said. “The addition of Wi-Fi, at globally competitive prices, positions us to be able to provide cutting edge technologies for all visitors within Dockyard.” TBi president and COO Gregory Swan said the rates were the lowest available and he was excited about the value the new service brought to Dockyard. “Dockyard is the perfect place to shop, have a good meal, relax, and surf the web. Wi-Fi Network Access is becoming increasingly popular as people are demanding alternatives to traditional internet connectivity. TBi is very pleased to have had the opportunity to partner with Wedco on this initiative.” The pricing is as follows: $3 for 1 hour; $9.99 for 24 hours; $14.99 for 72 hours; $29.99 for basic monthly. TBi said to have the service all you need to do is turn on your device and enable Wi-Fi connection, look for the TBi Wi-Fi Zone network and connect, then proceed to the Wi-Fi hotspot login page.

March 2. Bermuda's Commercial Court: The first five years. Five years ago, the Supreme Court of Bermuda set up The Commercial Court. It has enhanced the island’s legal infrastructure and enabled Bermuda to become a leading offshore jurisdiction for the resolution of commercial disputes. The Royal Gazette asked Supreme Court Judge Ian Kawaley, who in April will be sworn in as Bermuda’s next Chief Justice, to discuss the genesis of the Court and what he believes it has achieved. The Commercial Court, a Division of the Supreme Court of Bermuda, was born on January 1, 2006 when the Rules of the Supreme Court Amendment Rules 1985 enacted by Chief Justice Richard Ground came into force. Members of Bermuda’s Commercial Bar had for many years called for a specialist commercial court. Official support for such an innovation came in March 2004 from the Justice Review Committee set up by then Attorney-General Larry Mussenden and chaired by Justice Norma Wade-Miller. However, under section 62 of the Supreme Court Act 1905 the Chief Justice is empowered to make Rules regulating the practice of the Court, and Chief Justice Ground took the necessary steps to ensure that the Commercial Court became a reality. Many leading financial centres have specialist commercial courts designed to deliver speedy and commercially sensible decisions in a way which encourages international businesses to do business with the domicile in question. Bermuda was possibly the first offshore financial centre to establish such a court, although it has now been emulated by BVI and Cayman. What has the record of Bermuda’s Commercial Court been over its first five years? Jurisdiction of the Court. What types of matter are eligible for being commenced or transferred into the Commercial List created by Order 72 of the Rules of the Supreme Court is very broadly defined. Typical cases include contractual disputes between companies, winding-up proceedings, shareholder disputes and arbitration-related applications. Although applications in relation to trusts are not technically considered to be ‘commercial’ matters, in practice such matters are ordinarily dealt with by a commercial judge. Court staff and premises. Throughout the five-year period in question (and thereafter), there have been at least two designated Commercial Judges. In May 2008, an informal Commercial Court Consultative Committee was formed comprising representatives of ABIC, BIBA (Business Bermuda’s predecessor organisation) and four members of the Commercial Bar. The object of this Committee was to provide a vehicle through which the Commercial Court could be kept apprised of any concerns about the quality of its service provision by Court users. The lack of appropriate accommodation was identified as the main problem at this time. It was resolved to tackle the absence of suitable Court premises by way of representations to Government. In July 2010, dedicated premises were opened for the Commercial Court. Output of the Court. One measure of the output of the Commercial Court is to analyse quantitatively the speed of decision-making and the extent to which the Court’s decisions have been upheld on appeal. Statistics compiled by the Court and based solely on those significant cases in which considered judgments have been prepared and published indicate that for the five-year period 2006 to 2010: (1) the average time for delivering judgments was 14.43 days, and (2) an average of 86.66 % of the Court’s appealed decisions were subsequently upheld on appeal. The volume of the work processed by the Court is difficult to assess as a significant number of cases are disposed of without a contested hearing resulting in a considered judgment. However, the number of cases commenced in the Commercial List has ranged from 73 in 2006, down to a low of 45 in 2008 and up to a high of 108 in 2010. (There were 75 Commercial List filings in 2011, the second-highest number of filings since the Court was established in 2006).These figures do not include trust cases or de facto commercial cases which were commenced either before or after 2006 but were not formally filed in or transferred into the Commercial List. Also noteworthy are the various Practice Directions issued by the Chief Justice to regulate the conduct of commercial cases. On May 25, 2006, a Practice Direction on Civil Procedure was issued setting new case management powers designed to streamline the progress of heavy commercial cases through the courts. On October 1, 2007, Guidelines for Court-to-Court Communications in Cross-border (Insolvency) Cases were published, followed by Guidelines Applicable to Schemes of Arrangement under Section 99 of the Companies Act 1981 on October 8, 2007. Finally, on June 13, 2008, the need for advocates to wear wigs and gowns in open court matters in the Commercial Court was abolished to better reflect a modern business-like approach to commercial dispute resolution. A more qualitative measure of the Commercial Court’s output may be found in the views of those who use the Court. Two examples should suffice. Alex Potts then of Conyers Dill & Pearman in an April 2009 article entitled ‘Commercial and Trust Litigation and the Commercial Court in Bermuda’ contended that: “…as a result of a number of developments over the past three years in particular, Bermuda has a serious claim to be one of the leading offshore jurisdictions for the resolution of commercial and trust disputes, consistent with its status as a leading centre for international business , and a jurisdiction celebrating its 400th birthday.” Kiernan Bell of Appleby, writing the Bermuda Chapter in ‘The Dispute Resolution Review’ 3rd edition (2011) stated in more matter of fact terms: “Bermuda now has a Commercial Division of the Supreme Court. Commercial cases are allocated to specialist commercial judges, thus ensuring that commercial matters are dealt with by judges with the appropriate expertise and are dealt with expeditiously.” Conclusion. As Chief Justice Richard Ground prepares to end his tenure in Bermuda, the importance of his contribution to the main pillar of Bermuda’s economy and the standing of Bermuda’s legal system through the establishment of the Commercial Court cannot be overstated. He has ensured that the Court, over its first five years, has made a strong start. The Commercial Court is now an integral part of Bermuda’s legal infrastructure and it is hoped and expected that its performance will be consolidated in the years to come.

March 2.  HSBC Bank of Bermuda Ltd made net income of $152 million, the bank revealed yesterday. Although that was down 38 percent from 2010, the underlying performance, which strips out the impact of parts of the business being sold off, showed a three percent improvement on the previous year. CEO Philip Butterfield described 2011 as a “generally resilient” year for the bank, but added that the signs of the slow economy were evident in the bank’s results. Underlying operating income rose to $423 million, up six percent on 2010, while underlying operating expenses fell four percent to $231 million. HSBC Bermuda’s loan book grew by 11 percent to $3.6 billion, while customer accounts rocketed 33 percent to $3.2 billion. The bank’s total assets grew 26 percent year over year to $14.9 billion by the end of 2011. The bank’s results showed more signs of people struggling to meet loan repayments in the tough economic circumstances. Loan impairment charges more than trebled to $37.8 million, from $10.7 million in 2010. Total allowances as a percentage of loans and advances to customers rose significantly to 1.3 percent from 0.6 percent. In an interview with The Royal Gazette, Mr Butterfield said the bank was clearly seeing the negative effects of unemployment in the community. “Peak employment was more than 40,000 and now we’re down to about 38,000. Most of the jobs no longer here were higher-paying roles. Given that our economy works as a result of a cascade effect, this has had a significant knock-on impact. We see that in the number of people having great difficulty in meeting their obligations. We have seen an increase in loan impairment charges in our residential and commercial lending portfolios. This is all reflective of the shrinking economy. What we are also seeing is an increasing level of engagement between our customers and our staff. We don’t want to be in the business of foreclosure, that’s a last resort. The earlier the customer lets us know they’re having difficulties, the better the situation is likely to end up. There was pessimism over the economy in the short term and optimism for the longer term, adding that the bank had a cautious outlook for at least the next 24 months. I think it will be at least two years before we start to see sustained, positive growth. I also think that when we do see growth, it will not be like the good old days, it will be markedly different. So we all have to manage our expectations. Our organization has been working to become more efficient, to do more with less. Other businesses are taking on the same challenge. We would hope that Government would embrace the same idea and find ways to become more efficient.” Deputy CEO Richard Moseley said that historically low interest rates were having a significant impact on the Bermuda economy through their dampening effect on insurance companies’ investment returns. A rise in interest rates could therefore provide a boost. Mr Moseley added that customers were seeing the value of diversification in their investments, as opposed to simply buying a second property. HSBC was investing in training more staff in financial planning skills to meet these needs. “We have made good progress in wealth management, having distributed $75 million of structured products to our individual clients who are looking for principal secured opportunities. We have also assisted our Bermuda insurance customers with management of their non-US dollar catastrophe claims by providing value added foreign exchange advice and foreign currency accounts. We continue to segment our approach across the businesses, and have seen significant revenue growth in corporate banking relationships as we provide a greater range of banking services through focused relationship management. During this difficult time, we are working ever more closely with our customers to help them navigate the changing market landscape and secure lasting partnerships.” HSBC has welcomed Government’s proposal, announced in last month’s Budget statement, to remove the stamp duty of 0.1 percent, levied when a borrower switches lenders. Chief financial officer Michael Schrum said: “We think it’s great to see switching costs reducing. The way we see ourselves in the marketplace, this is good news for us.” HSBC Bank Bermuda Ltd has reduced its headcount by more than a quarter over the past seven years. Chief executive officer Philip Butterfield said yesterday that the bank now employed 750 people, down from the 1,050 in 2004, when HSBC bought the former Bank of Bermuda. He added that the number of work permit holders employed at the bank was now 57, down from more than 250 in 2004. Therefore the proportion of Bermudians in the workforce has risen substantially. Mr Butterfield said the reductions were a result of increased efficiency in the bank, some through technological advances. Also, many roles were now more knowledge-based, which was why the bank put a heavy emphasis on education of its staff. He said an increasing number of Bermudians were being sent on secondments overseas, working for other parts of the HSBC group, and staff were given opportunities to expand their knowledge and expertise through training. “My mantra is that if you think you know all you need to know, then don’t get out bed in the morning,” said Mr Butterfield.

March 5. Corporation of Hamilton said it has no existing agreement with the US developer who said this week he had financing in place and hoped to break ground later this year on a hotel and ultra-high-end condos off Par-La-Ville Road. Despite what Unified Resorts principal Ted Adams III said, the Corporation said the company had not met its agreed obligations and deadlines, and failed to even put forward a construction plan for the proposed development. Meanwhile, Starwood Hotels & Resorts Worldwide, which attached its name to the development in 2009 with much fanfare, now refuses to say whether or not it‘s still involved as the brand partner. Starwood had said a St Regis hotel and luxury residences, owned by Par La Ville Hotel and Residences Ltd, would offer “unparalleled luxury” and open next year, in 2013. Par La Ville Hotel and Residences Ltd is a partnership between Unified Resorts and New York-based Sagewood Investments; local businessman Donal Smith is a partner and shareholder in the company. However, appearing to back away from the deal, all a Starwood spokesman would say was: “Due to confidentiality agreements we are unable to comment on the status of this particular project, but we can confirm that Starwood continues to view Bermuda as a very attractive market, particularly for our ultra luxury St Regis brand.” When pressed whether or not St Regis was still on board as the brand partner, the Starwood spokesman refused to comment further. In a statement to The Royal Gazette, the Development Committee of the Corporation of Hamilton said: “The Corporation was very surprised to see the article in the paper on the development of the St Regis hotel. Par La Ville Hotel and Residences Ltd have consistently failed to meet various obligations under the development agreements entered into with the Corporation of Hamilton, in particular they have failed to provide the Corporation with a proper completed construction contract for the development works, which the Corporation should have had no later than 1 July 2010. So far as the Corporation is concerned there is no existing agreement between Par La Ville Hotel and Residences Ltd and the matter is, as Par La Ville Hotel and Residences Ltd is well aware, currently before the Court. The Corporation cannot go into any greater detail other than that, save to say that it expects the matter to be resolved in the next two months.” The Corporation of Hamilton filed a write last February against Par La Ville Hotel and Residences Ltd. Insisting he had financing and was ready to break ground, Mr Adams told the Gazette last week: “We have sound fundamentals including: the best location on a progressive Island; the number one luxury brand in the world; a vibrant international business community that demands a five-star business hotel; an experienced Development Team; a highly educated and skilled local workforce; and, significant support and encouragement from the Bermuda Government.” The Par La Ville hotel was one of several proposed hotel developments that was touted as the start of a “platinum period for tourism” by former Premier Ewart Brown, who had said he expected the Island would have three or four new five-star hotels by 2011. But one by one, nearly all of those proposed developments fell through due to lack of financing, and none has actually broken ground. Developer Carl Bazarian said last week he is still working on his proposed Park Hyatt resort in St George’s, though there’s no date for breaking ground. And developer Craig Christensen of Southlands Ltd continues to work on the proposed $1.8 billion Morgan’s Point resort.

2012. March 6.  Standard Premium Rates (SPR) for health insurance will rise by 7.7 percent, or around $19 per month according to draft regulations approved in the House of Assembly. While Health Minister Zane DeSilva said the increase was lowered through the capping of expenditure, Opposition MPs said they were left “shooting in the dark” because of a lack of information. Speaking on the Draft Health Insurance Standard Hospital Benefit Regulations, Mr DeSilva told the House that the minimum insurance rate would increase from $252.27 per month to $271.61 per month. He explained that an annual actuarial report had suggested a nearly 19 percent increase, which would have resulted in monthly bills of $299.42, but given the current economic climate the Ministry fought for a way to lower that. By capping some expenses, he said the Ministry was able to produce a significantly lower increase that would be sustainable. Responding to the legislation, OBA Minister Louise Jackson said the opposition had no access to the actuarial report, leaving them in a difficult position. “We’re left shooting in the dark,” she said. “We are listening to the Minister, but we’re not seeing anything.” She also noted that the $19 increase could still cause hardship for some, saying: “Most people are really struggling to get their health insurance paid. A rise of $19 may not be much for some people, but it’s very hard for others.” Fellow opposition MP Dr Grant Gibbons meanwhile expressed concern that by limiting cost increases Government could be causing even higher bills down the line as redevelopments at King Edward VII Memorial Hospital continue. “What we really want to hear is that this Minister is actually going after cost increases instead of just having a cap on it,” he said. The rate, which has increased by more that 12.6 every year between 2004 and 2010, increased by 6.8 percent last year. The rate covers the minimum healthcare package, the standard hospital benefit. All employers in Bermuda are legally required to provide this level of health insurance to employees and non-working spouses and to cover at least half the cost of the insurance. Most employers offer benefits well in excess of the minimum, and all insurance companies offer more than just the minimum benefits, but it is up to the individual insurance company how much they charge for coverage above the minimal level.

March 9. Legislators have agreed to extend a passenger cabin tax waiver for cruise ships docking in Hamilton and St George. Cabin tax will continue to be collected at Dockyard where most of the cruise ships arrive, Premier and Finance Minister Paula Cox said in her introduction of the Miscellaneous Taxes Amendment Act 2012. “In addition, the Cruise Passenger Tax will continue to be collected at all three ports, Hamilton, St George’s and Dockyard,” she added. The Premier said that the waiver is intended to entice smaller ships to come to Bermuda. “This move has proven successful in attracting small ships such as Holland America Line’s Veendam and other luxury and Premium brand ships calling in Bermuda on occasion.” Ms Cox added that the waiver amounted to some $2 million in foregone revenues from 2009 to 2012 but $6.4 million was collected in Cruise Passenger Taxes for ships docking in Hamilton and St George. “For the three year period extending from 2009 to 2011, cruise passengers and crew members on cruise ships docking in Hamilton and St George’s contributed approximately $18 million to Bermuda’s economy, including purchases made while on-Island and shore excursions booked by cruise passengers. The waiver policy had been “critical” in getting the Norwegian Majesty to St George in 2009 and the Veendam to Bermuda in 2010-2012. It is likely that had we not waived the Cabin Tax both Norwegian Cruise Line and Holland America Line would have either reduced the number of calls, or not visited Bermuda at all. We have also experienced an increase in the number of occasional callers, including some that overnight in Bermuda. Many of these are luxury cruise lines, and cruise line executives have provided us feedback that waiving the Cabin Tax was a factor in their decision to deploy the ships here.” The measure passed without objection.

March. With 42 months gone since in August 2008 the old Club Med Hotel in St. George's was imploded, the The Park Hyatt Resort (St George’s) Act 2008 was signed but nothing has been done, the property was in serious breach of the deadline. There was a formal complaint. Bermuda was promised development would have commenced in 2011 at the very latest. Developer Carl Bazarian was awarded in 2008 a 262-year lease to build a resort at the site but had defaulted. The lease stipulated a “construction period” mean “a period not exceeding forty-eight (48) months commencing from the date of completion of the demolition under Article 6 of the MDA (master development agreement). St George’s was desperately in need of an economic revival and a new hotel would definitely have helped change that.

2012. March 25.  Costs at the Island’s post offices will increase as of April 1, according to Minister of Economy Trade and Industry Patrice Minors. Post Box rental fees, Express Mail Service fees and Customs Clearance and processing fees are all set to rise, while new fees will be put in place for redirecting overseas mail and holding mail at the post office. Speaking on the fee increases, Ms Minors said: “The pro bono provision of postal services by Bermuda Post Office is no longer sustainable in the face of its spiraling annual deficit. The levying of fees on postal services has precedence in the standard practices of other postal administrations within the Universal Postal Union (UPU) of which Bermuda is a member country through the UK. The US Postal Service and the British Royal Mail are examples of UPU member countries that levy fees on postal services to cover their operating costs.” The changes include:

March 26. A new standard duty rate of 25 percent will take effect on April 1 for non-business goods. But a statement released by Government on Friday added that “special” rates of duty, including zero-rates; higher rates (33.5 percent, 75 percent and 150 percent); and specific rates (for example for litres of alcohol), will remain unchanged. The standard 25 percent duty rate and the special rates will be paid for goods imported by personal taxpayers, while the duty rates specified in the First Schedule to the 2012 Customs Tariff will be paid for business goods. Businesses will be able to apply for generally lower duty rates in the Customs Tariff by specifying customs procedure code (CPC) 4000, which applies to goods eligible for business end-use relief on their Bermuda Customs declaration. For the purposes of CPC 4000, “business” means: A business carried on for profit (i.e. the supply of goods or services for valuable consideration); A public authority in the performance of its functions (eg Government of Bermuda, Government boards or commissions, quangos, municipalities etc); or A registered charity in the performance of its functions. See Customs website, www.customs.gov.bm. Any questions on the standard rate, special rates or business end-use relief may be sent to customs@gov.bm

March 25. A standardized 25 percent duty rate on imported personal goods was approved by Senators last night. Personal duty free allowance for goods brought in through the airport will also increase from $100 to $200 per person under the Customs Tariff Amendment Act. Meanwhile temporary measures restricting the allowance to one claim per household will be abolished. Government hopes the new rate on personal goods will encourage people to shop locally. However courier companies complained it will make life more difficult for Bermudians, especially the construction industry, as homeowners will be charged more on building supplies.

March 31. New import duty rates go into effect this weekend. As of Sunday, a standard rate of 25 percent will be charged for such items as clothes, jewellery, electronics and household furniture and appliances. The duty for wine and champagne will be $2.63 per litre; spirits $9.66 for the same amount. The duty stands at 33.5 percent for such items as batteries, generators, air conditioners and vehicle parts. Smokers hoping to cut costs by purchasing cartons of cigarettes abroad, will have to pay $40 per carton of 200 cigarettes. The rates apply to all goods that accompany returning residents. Reading materials, corrective eye glasses, computer software and prescription drugs remain duty-free. In addition, every returning resident is allowed a duty-free allowance of $200 on accompanied goods; visitors are allowed to bring gifts not exceeding $30 in value. All passengers are allowed one litre of spirits, one litre of wine, .5kg of tobacco, 50 cigars and 200 cigarettes duty-free. The rates were released as a public reminder by Collector of Customs Winifred Fostine-DeSilva.

April 5.  The combined total of annual employee compensation in Bermuda’s international business sector topped $1 billion for the first time in 2011, according to figures compiled by Government. The sector’s employment income last year totaled $1.025 billion, representing a 10.1 percent increase from 2010’s total of $932.2 million. In total, Bermuda’s employment income totaled $3.137 billion, up 1.7 percent from the year before, despite hundreds of reported job losses. The numbers show that the approximately 11 percent of the Island’s workforce with international business jobs earn almost a third of Bermuda’s total employment compensation. The figures are based on data from the Office of the Tax Commissioner. A spokesman for the Department of Statistics said the figures represented all types of compensation, including bonuses and housing allowance. What makes the international business double-digit increase all the more remarkable is that it follows a 9.4 percent increase in compensation for this sector in 2010 and comes despite a decrease in the number of employees working in international business in recent years. Government figures showed that the number of international business workers fell 6.9 percent in 2009 and 3.2 percent in 2010. The last reported number of international business employees was 4,287 in 2010, as reported by the Department of Statistics. Another notable increase came in the hotels and restaurants sector, which produced 20.2 percent more employment income year over year, rising to $71.6 million in 2011, up from $59.6 million a year earlier. The fourth quarter saw hospitality workers earn $24.8 million, up 56 percent from the same period a year earlier and the highest quarterly compensation earned in this sector for three years. The banking, insurance and real estate sector generated employment income of $338.2 million, up 1.8 percent from 2010, while business services experienced a 0.4 percent fall to $308.6 million. On the downside, the construction industry suffered the biggest fall among the sectors, with a 22 percent drop in employment income to $122.2 million. This marked a third successive year of contraction in this sector, following a 5.7 percent decrease in 2009 and a 13.9 percent fall in 2010. At its peak, construction employment income was $193.2 million in 2008, a time when several major office buildings were being erected. That figure had declined by $71 million, or more than a third, by 2011. Public administration and defence employment income fell for a second successive year, falling two percent to $432 million, following a 0.5 percent fall in 2010. The wholesale and retail sector recorded a third consecutive year of declining compensation. A fall of 3.9 percent in 2011 saw the sector’s workers earn $204.3 million.

April 10.  The Bermuda Government yesterday confirmed what The Royal Gazette has been reporting for months now hundreds of people in Bermuda have lost their jobs. Nearly 700 people in all lost their jobs in Bermuda last year, according to the Government, marking the third straight year of job losses for the Island. The vast majority of those made redundant were expatriates. According to the annual Bermuda Job Market report, released by the Department of Statistics yesterday, there were 698 fewer jobs in 2011 than there were in 2010, a decline of two percent. The report said the number of filled positions reported in 2011 was 37,399 compared to 38,097 in 2010. Of those 698 people who lost jobs, 691 were non-Bermudians and 60 were Bermudian, offset by spouses of Bermudians who gained 30 jobs and permanent resident certificate holders who gained 23 jobs. “My initial reaction is that this survey further exemplifies the need to change gears,” said Buddy Rego, President of the Bermuda Chamber of Commerce. “Relax employment restrictions, give incentive to the business community to create new business and job opportunities.” After reading the report, Doug Soares, a partner at Expertise, Bermuda’s largest management consulting and outsourcing company, said employees in the private sector seem hardest hit. “The level of austerity felt by private-sector employees has not yet been felt by Government employees. For the 12 months ending August 2011, Public Administration shed only 12 jobs and increased compensation by 1.5 percent over the annual inflation rate. The Government seems committed to preserving the size of the public service. This is only sustainable for as long as we continue adding to the public debt. Government has instituted a hiring freeze so downsizing will occur but too slowly to avoid the eventual need for reductions in the public sector payroll. At some point, job losses or reduction in hours of work, pay or benefits, or a combination thereof, will be required to match payroll costs with shrinking tax receipts.” The Government’s report is based on a census of all businesses on the Island. The survey was conducted during the week of August 28 to September 3, 2011. Mr Soares said unemployment figures are likely to get worse before they get better. “It is important to note that the statistics published in the 2012 employment brief are already dated. They represent a snapshot of the job count in August 2011,” Mr Soares said. “So the question is, has the unemployment situation gotten better or worse over the past seven months? Unfortunately, the answer is worse.” The hardest hit sector was construction, which shed 493 jobs, a fall of 16 percent. Also hard hit were real estate, which lost 14 percent of its workforce due to a slumping housing market. The number of jobs in international business dropped five percent from 4,287 in 2010 to 4,077 in 2011, down 210 jobs. Mr Soares points out that in some sectors, the losses might not get too much worse but for others, there could be greater issue at hand. “For example, job losses in construction have slowed in recent months,” he said. “What is not well understood by the average Bermudian is the cause of the job losses. It is widely presumed that all job losses are caused by the recession. Not so. For example, while a construction job is lost due to a lack of demand for building in the economy, most international business job losses are actually job relocations. This means that the job is just moving from Bermuda to another jurisdiction. So the question should be: what must we as a jurisdiction to retain international business job in Bermuda?” One of a handful of sectors not cutting positions was the hotel industry, which added 131 jobs last year. Restaurants, cafes and bars added 53 jobs. And 270 positions were added in education, healthcare and social work. Those who managed to stay employed are likely earning more money. The median annual salary for jobholders in companies with ten or more employees increased three percent from $57,915 to $59,364. For the third year in a row, women, on average, earned more than men. The median annual income for women was $59,677 and for men, it was $59,081. The report points out that the increase in women’s earnings exceeding those of men is attributable to the decline in construction jobs, primarily held by men. Of all the jobs lost in 2011, male workers held 90 percent of them. There was no change in the number of jobs filled by black workers however, there were significant job losses among workers who classified themselves as white, mixed and other races. The highest average salary was in the international business sector at $111,938 while the lowest averages were in the retail ($42,000), hotel ($35,898) and restaurant ($35,664) sectors. Non-Bermudians with no spousal ties to Bermudians were heavily employed in the professionals occupation group. Positions in that category include actuaries (123 jobs), lawyers (103) and certified accountants (490). They were also some of the better jobs with median salaries of $189,263 for actuaries, $184,902 for lawyers and $98,229 for certified accountants. Other positions with large numbers of work permit holders, which also paid above the national median salary included junior accountants (174 jobs, $96,346), secondary school teachers, (153 jobs, $85,500) and registered nurses (490 jobs $67,598).

2012. April 17.  Health Minister Zane DeSilva has reported on the “aggressive time frame” for putting in place Bermuda’s National Health Plan (NHP). The plan is designed to provide residents with universal access to healthcare by 2014. In a Ministerial Statement before the House of Assembly, the Minister listed deadlines for the various task groups overseen by the plan’s steering committee. The Benefit Design Task Group has created “draft options for health benefit packages”, Mr DeSilva said, with the aim of getting the most out of the Island’s minimum mandated insurance plan, the Standard Hospital Benefit. Those options are now being priced by the Finance and Reimbursement Task Group, through actuaries Morneau Shepell. “A draft consultation report with costed financial options will be completed in the autumn, and the final report will be submitted to the steering committee by the end of the year,” Mr DeSilva said. In tandem with this, an Overseas Care Task Group is seeking more efficient options for treatment abroad. Overseas care has shown the greatest rise in expenditure each year, Mr DeSilva told the House. Next, the Long-Term Care Task Group, dealing with health strategies for the chronically ill and disabled — from children to seniors — is to present its findings to the steering committee before the end of this summer. Overall, this group has a four-year time frame in which to put its goals in place. Meanwhile, a Health IT Task Group, Mr DeSilva said, is to develop “an integrated health IT system that will increase quality care and efficiency through the creation of an electronic health record.” It is currently engaged in an online survey. The Bermuda Hospitals Board has also recruited William Flatman as project director to develop its Electronic Medical/Patient Record initiative. Mr DeSilva also addressed the health promotion targets of the Well Bermuda Strategy, which is being implemented by a Prevention Task Group. It is to report on its progress this June to the steering committee. Useful website: www.nhp.bm.

April 19.  Bermuda Government yesterday confirmed what The Royal Gazette has been reporting for months now, hundreds of people in Bermuda have lost their jobs. Nearly 700 people in all lost their jobs in Bermuda last year, according to the Government, marking the third straight year of job losses for the Island. The vast majority of those made redundant were expatriates. According to the annual Bermuda Job Market report, released by the Department of Statistics yesterday, there were 698 fewer jobs in 2011 than there were in 2010, a decline of two percent. The report said the number of filled positions reported in 2011 was 37,399 compared to 38,097 in 2010. Of those 698 people who lost jobs, 691 were non-Bermudians and 60 were Bermudian, offset by spouses of Bermudians who gained 30 jobs and permanent resident certificate holders who gained 23 jobs. “My initial reaction is that this survey further exemplifies the need to change gears,” said Buddy Rego, President of the Bermuda Chamber of Commerce. “Relax employment restrictions, give incentive to the business community to create new business and job opportunities.” After reading the report, Doug Soares, a partner at Expertise, Bermuda’s largest management consulting and outsourcing company, said employees in the private sector seem hardest hit. “The level of austerity felt by private-sector employees has not yet been felt by Government employees. For the 12 months ending August 2011, Public Administration shed only 12 jobs and increased compensation by 1.5 percent over the annual inflation rate,” he said. “The Government seems committed to preserving the size of the public service. This is only sustainable for as long as we continue adding to the public debt. Government has instituted a hiring freeze so downsizing will occur but too slowly to avoid the eventual need for reductions in the public sector payroll. At some point, job losses or reduction in hours of work, pay or benefits, or a combination thereof, will be required to match payroll costs with shrinking tax receipts.” The Government’s report is based on a census of all businesses on the Island. The survey was conducted during the week of August 28 to September 3, 2011. Mr Soares said unemployment figures are likely to get worse before they get better. “It is important to note that the statistics published in the 2012 employment brief are already dated. They represent a snapshot of the job count in August 2011,” Mr Soares said. “So the question is, has the unemployment situation gotten better or worse over the past seven months? Unfortunately, the answer is worse.” The hardest hit sector was construction, which shed 493 jobs, a fall of 16 percent. Also hard hit were real estate, which lost 14 percent of its workforce due to a slumping housing market. The number of jobs in international business dropped five percent from 4,287 in 2010 to 4,077 in 2011, down 210 jobs. Mr Soares points out that in some sectors, the losses might not get too much worse but for others, there could be greater issue at hand. “For example, job losses in construction have slowed in recent months,” he said. “What is not well understood by the average Bermudian is the cause of the job losses. It is widely presumed that all job losses are caused by the recession. Not so. For example, while a construction job is lost due to a lack of demand for building in the economy, most international business job losses are actually job relocations. This means that the job is just moving from Bermuda to another jurisdiction. So the question should be: what must we as a jurisdiction to retain international business job in Bermuda?” One of a handful of sectors not cutting positions was the hotel industry, which added 131 jobs last year. Restaurants, cafes and bars added 53 jobs. And 270 positions were added in education, healthcare and social work. Those who managed to stay employed are likely earning more money. The median annual salary for jobholders in companies with ten or more employees increased three percent from $57,915 to $59,364. For the third year in a row, women, on average, earned more than men. The median annual income for women was $59,677 and for men, it was $59,081. The report points out that the increase in women’s earnings exceeding those of men is attributable to the decline in construction jobs, primarily held by men. Of all the jobs lost in 2011, male workers held 90 percent of them. There was no change in the number of jobs filled by black workers however, there were significant job losses among workers who classified themselves as white, mixed and other races. The highest average salary was in the international business sector at $111,938 while the lowest averages were in the retail ($42,000), hotel ($35,898) and restaurant ($35,664) sectors. Non-Bermudians with no spousal ties to Bermudians were heavily employed in the professionals occupation group. Positions in that category include actuaries (123 jobs), lawyers (103) and certified accountants (490). They were also some of the better jobs with median salaries of $189,263 for actuaries, $184,902 for lawyers and $98,229 for certified accountants. Other positions with large numbers of work permit holders, which also paid above the national median salary included junior accountants (174 jobs, $96,346), secondary school teachers, (153 jobs, $85,500) and registered nurses (490 jobs $67,598).

2012. April 24.  Less than a week after the Bermuda Government’s Department of Statistics released its latest unemployment figures, business leaders on the Island are making a call to action, saying the government needs to make changes to create a more “business friendly” Bermuda. The Government’s report revealed 698 jobs were lost last year and 691 of them were positions held by expatriates. On the same day we reported on those figures, this newspaper also reported that Saltus Grammar School had cut five positions, citing a drop in enrolment numbers due to expats leaving the Island as the reason. Now, in an exclusive to The Royal Gazette, The Bermuda Employers’ Council (BEC) has released the results of a survey that finds the vast majority of employers in Bermuda are not at all optimistic about the economy. The survey found 71 percent of its members believe the recession will go on into 2013 or 2014. The BEC is Bermuda’s largest employer organization dealing with trade union and human resource matters. Keith Jensen, the organization's President said the majority of their members are pessimistic about recovery and are hesitant to invest and hire in Bermuda, “Almost 60 percent of our members see the economy becoming somewhat or much worse with the remainder believing it will be about the same as a year ago. Consequently, conditions for making major capital investments, which helps to drive employment, are somewhat worse or much worse than a year ago.” Two out of the top four concerns for businesses, the survey found, are immigration-related issues: keeping people employed, keeping/attracting business to the Island, work permits and immigration policies. Mr Jensen said a majority of BEC members in the survey suggested changes to work permit and immigration policies and the relaxation of term limits were priority matters that Government should address. Other changes they said they would like to see the Government make included ensuring friendlier business climate, (i.e. attracting and keeping business in Bermuda), lowering taxes and cutting Government spending. The concerns of BEC members and the changes called for are echoed by the Bermuda Chamber of Commerce, Construction Association of Bermuda and leaders of the opposition party. “This is a very interesting survey that not only serves to highlight what we, at the Chamber, have been seeing and commenting on for some time,” said Diane Newman, co-chair of the Bermuda Chamber of Commerce’s Economics Advisory Committee. “Certainly, the latest Government Employment Report released this week, underlines the situation we have here with large numbers of jobs leaving the Island and, as a result, fewer local jobs in the economy. The latest employment survey underlines the correlation between work permits and local jobs. For every five work permits lost, one job in Bermuda ceases to exist, so for every 500 guest worker jobs that are lost, translates into 100 local jobs lost. Expatriates create jobs for Bermudians, they don’t take jobs from Bermudians. Bermuda needs to take immediate steps to “regrow” the international business sector and attract more foreign job creators. “We understand that since 2008, insurance and reinsurance has grown around the world, but shrunk in Bermuda. Government needs to embark on immigration reforms by abolishing term limits on work permits, streamlining the immigration process and adopting policies that tie expatriate workers to the island for the long term. Similarly, it could reduce the costs of employing skilled foreign workers for local businesses by doing away with term limits, which simply result in employers having to ‘churn’ workers, bringing in new expats to replace departing ones.” “Treating immigration as a political tool, by making international business feel uncomfortable here, has caused, and continues to cause that sector of the economy to shrink,” said Shadow Finance Minister, Bob Richards “When international business downsizes or leaves Bermuda, it reduces the number of Bermudian jobs, both directly and indirectly. Over 60 percent of jobs in the international insurance sector are held by Bermudians. In addition, non-Bermudians working in international business are heavy consumers of goods and services in Bermuda. To put it bluntly, when they leave and stop buying here, Bermudians are thrown out of work.” Hardest hit by lob losses last year was the construction industry, which saw 493 jobs cut. It’s the second year in a row jobs in the sector have declined by 400 or more jobs, a total loss of 1,100 jobs or 30 percent of the construction workforce since its peak in 2008. The BEC’s survey finds demand for employees remains weak in construction and the also hard-hit retail, hotel and restaurant industries. “The fact that construction is one of the hardest hit sectors of the economy is not a surprise given what is going on in the community, which is why construction is generally considered a leading indicator of the economy,” said Charles Dunstan, president of the Construction Association of Bermuda. Mr Dunstan said there’s a trickle-down effect when guest workers lose their jobs, one that is reflected in the construction industry. “The largest loss over the past three years has been guest workers. This loss represents less rents to Bermudian landlords, less business for restaurants, less tax revenue, and less money in the local economy generally,” Mr Dunstan said. “The specific effect on construction is less investment by homeowners, government and businesses in property development, i.e. less construction. Maintaining and growing our international business sector is key to this investment.”

April 24. The Bermuda Captive Owners Association is resurrecting itself (after first being formed in 2005 but went dormant some time thereafter) and is actively trying to recruit new members. The once-dormant group is starting a new marketing and re-branding campaign under the direction of William Montanez, chairman of BCOA. Mr Montanez, an American, who is also on the Board of Directors for the Risk and Insurance Management Society (RIMS), oversees his own captive in Bermuda as the director, risk management for the US company, Ace Hardware Corporation. The group currently has around 20 members, which represents a fraction of Bermuda’s 862 captives on the Island. “Main thrust, for now, is to expand the influence of captive owners,” said Mr Montanez. “We have had a lot of interests in Bermuda but haven’t had a lot of participation.” The group is behind the Bermuda Captive Conference in June but has been largely inactive until recently. Speaking from the 48th annual RIMS conference, Mr Montanez said that BCOA is actively working with the Bermuda Insurance Managers Association (BIMA) to resurrect their membership base. “Actively working with BIMA, trying to forge a relationship to generate new members,” he said. “We are actively soliciting members to become engaged in moving forward initiatives of BCOA, which is advocacy of their own interests.”

May 14. The multimillionaire owner of Lantana is speaking out against a local bank after two attempts to buy Newstead Belmont Hills golf club and fractional resort fell through at the last minute. New York-based investor Lawrence Doyle said: "I have bought and sold $100 million worth of real estate in Florida, New York and North Carolina and I have never had a bank behave that way. And it was not like there was any other bidder for Newstead. I raised my offer against nothing." Butterfield put Newstead in receivership last January. Mr Doyle stressed his criticisms were not with the entire bank, but more with the particular negotiator/s he dealt with at Butterfield. Mr Doyle said he had felt Newstead, with its golf course, two restaurants and ferry stop, would be a "good strategic fit" to Lantana once he redevelops the waterfront Somerset resort, which he eventually plans to do as the economy and tourism turn around  Mr Doyle, a former money manager, started a real estate investment company specifically to buy post-financial crisis properties. He said his firm Katierich Asset Management LLC recently purchased two golf courses in North Carolina, 385 apartment units in New Orleans, 285 units in North Carolina, and more than 50 units in NYC. Mr Doyle said he went through two rounds of negotiations with the receivers Ernst and Young and Butterfield was kept apprised and both his offers had been accepted. In the first case, he said, his offer was accepted, financing was in place and a sale was ready to go through, however, "The bank negotiator came back and said they wanted more money." Having gone so far in the negotiation, Mr Doyle said he was very upset by the eleventh-hour set back, but after a period he came back to the table and upped his offer in the region of a $1 million. "They asked me 'can you close by Tuesday?', I said yes, I can put the money down in escrow by Tuesday," Mr Doyle said. "But then they came back again ... saying they needed time to negotiate with (a financial entity/partner). I guess they just do not want to sell it." He said it was suggested there was a several-hundred-thousand-dollar shortfall that needed to be made up, and he then did not hear back from the negotiators. In response to Mr Doyle’s comments, a Butterfield spokesperson said: ”We cannot offer comment on the particulars of any discussions we have had regarding the property. It continues to operate under the professional management of the receivers with a view to selling it as a going concern. As we have stated in the past, our objective is to preserve the value of the asset for the benefit of all stakeholders.” Mr Doyle said his goal with Newstead would have been to aggressively sell the remaining unsold units and then operate it. He said he was not as pessimistic as some developers about Bermuda. "You just need to get rid of the product and inventory (unsold and receivership) that's out there and things will start moving again,” he said. “A lot of property is moving in Miami again. I think the banks should not be holding onto product. If it's sold it helps out everybody in the industry." It’s understood from sources that Newstead cost about $70 million to build, and a previous group came close to buying it for less than $15 million. Newstead's shock receivership came several months after Pink Beach Club was also put in receivership. Pink Beach remains unsold. Other closed resort properties like the former Sonesta Beach site on the South Shore, are also up for sale. Mr Doyle said despite the experience with Butterfield and Newstead, "I am not walking away from Lantana. We will see what happens in the next 12-24 months." He added the Bermuda Government, in his experience with Lantana, had been highly supportive of his development plans and he had nothing but positive views of the Tourism Department. "When things turn around they will turn around quick," he said. "Once Bermuda gets rid of its inventory you will discover there are more buyers out there." Mr Doyle was due to begin construction on a beach club last summer as part of his planned $100 million redevelopment of Lantana which would see around 28 luxury units built on the former cottage colony property. The project was put on hold after Newstead was put in receivership. Mr Doyle bought Lantana after coming across it several years ago when he came to the Island on a cruise for his mother's 80th birthday. Despite being very run down and overgrown, having closed a decade ago, Mr. Doyle said he liked the property, after being shown around by agent Rego Sotheby's, and saw its potential.

May 16.  Three local vendors have won Government’s tyre contract in a move saving taxpayers $170,000, Premier Paula Cox revealed today. The Procurement Office reached out to companies who may have been unaware that the contract had been put out to tender, but offer good value for money, Ms Cox told a press conference. Discount Tyre & Wheel, Affordable Tyre and Bermuda Tyre Company scooped the award, which is just over $1 million, to supply tyres for Bermuda Police Service, the Public Transport Board, Bermuda Fire Service and Public Works. Ms Cox said individual Government departments previously paid differing amounts for their tyres; under the new system tyres will be supplied to all departments as part of the same deal. The Premier told the media: “The award of this contract, which is valid until March 2013, will realize a savings of $170,000, while, at the same time, meeting the Government’s commitment to spread its purchasing power.”

May 18, 2012. Britain will not urge Bermuda to go Independent because that would be patronizing, according to outgoing Governor Sir Richard Gozney. And in one of his final interviews before ending his diplomatic career, the Governor warned Bermuda not to get complacent about the economy. The wide ranging discussion had its lighter moments. Sir Richard admitted, almost, that he wasn’t exactly fond of wearing the ceremonial garb of a colonial Governor. “You feel you’re going to take off in a strong wind,” he said when asked what it was like wearing a feathered hat. His predecessor, Sir John Vereker, had discussed with then Premier Ewart Brown, the possibility of ditching the uniform as he ended his tenure. But Dr Brown had gone to his Cabinet and insisted it should be worn. “I’m a servant of Bermuda. Bermuda’s paying not only my salary and for this house and I’ll go along,” Sir Richard said. Asked if he liked wearing the uniform, he said: “‘Like’s’ quite a strong word, isn’t it? I’m content wearing that uniform if Bermuda wants me to wear it.” Sir John took his plumed hat and ceremonial uniform with him when he left. Sir Richard was issued a new one. He agreed that being a Governor of one of the world’s last remaining colonies felt a bit odd. “It’s bound to. In the 21st Century. No one’s holding onto bits of Overseas Territories because they want to. At least I hope they aren’t in this day and age. But we, unlike one or two other European countries, are not going to shed them if they don’t want to leave the fold. The Portuguese shoved theirs off when the dictator Salazar died in the mid-seventies and poor Mozambique, poor Angola and poor East Timor went into civil war — each of them as a result. So we will say, those territories are small and for reasons of small size and for whatever other reasons, if and for as long as they want to retain the British link then we will do our bit to maintain it. It costs next to nothing. And it’s a legacy of history. It’s a responsibility of history and we accept it. We’ll do it wholeheartedly. We won’t be curmudgeonly or graceless about it.” He repeated Whitehall’s long held policy to support the wishes of Bermudians should a majority signal clearly that they want to became a sovereign nation. “But we’re not going to force that issue either way. Because we don’t think that’s a grown up way of dealing with a very grown up situation,” he said. “Bermuda is a fully grown up country which can decide for itself how it wants that future to be. And so, in the meantime — of course, it’s an unusual position to have an overseas territory or colony. But we accept that we will do our small part in making those small territories run for as long as people want the status quo to continue.” He said self determination “can include a determination to keep yourself in the fold of a bigger country — or linked to a bigger country.” Asked why Britain does not simply tell Bermuda that it is old enough to take the sovereignty option, he said: “Because that would be patronizing. “We won’t patronize Bermuda. We’ll say ‘Bermuda, you’re grown up. You take that decision’. All we’ll ask is if you decide to go independent, we’ll need an unambiguous signal that that is the case.” The arrival of the four Uighurs — the former Guantanamo detainees who were brought to Bermuda by former Premier Ewart Brown without consulting Britain or his Cabinet — was the most challenging aspect of his tenure as Governor, he said. “It made me scratch my head more than other things,” he said. “Because of that double effect of breaching the Constitution and landing four men here who can’t be given travel documents to go elsewhere.” Britain and the US are still in talks over the fate of the Uighurs, he said. Turning to his most enjoyable experience he said: “It’s hard to beat non-mariners. It is quite a magic afternoon.” On his final message to Bermuda, he said: “I wish Bermuda every success in finding the next pot of gold. Whether it’s going to be fish farming — the Chinese in those fancy restaurants in Shanghai and Hong Kong would pay ridiculous sums of money for what they regard as really special fish — I’m sure those fish would grow in netted tanks out on the reefs somewhere. Or whether it’s the mineralisation of the sea bed around here. There’s no oil but people have been down and found some quite interesting mineralisation. Financial services are not growing but they’re not shrinking much. And tourism is strongly cyclical but may be coming back a bit. So, I’m not saying that people need to find the next crock of gold within the next year or two years. But the fragility and vulnerability of small countries is essentially based on just a couple of industries and that’s the case in Bermuda. So one’s always on the look out for the next serious piece of diversification.” Asked if he agreed with those who feel that the economy may be on a permanent decline, he said he did not think that was likely “as long as people are not complacent. Economies have tired because of complacency. That didn’t hack it in the 19th century, the 20th century and it certainly won’t work in the 21st century. Because someone’s going to come up and snap your ankles and take whatever business away from you. Because there are a lot of countries which are far more worldly than they used to be and most of the markets — whether they are for tourism or financial services, almost everything else other than oil and gas in the ground — are mobile. So as long as people here, as in other such well-to-do small countries, don’t rest on their laurels I see no reason why Bermuda shouldn’t thrive.” Richard Gozney leaves for his homeland on Sunday. The new Governor, George Fergusson, is scheduled to arrive on Tuesday.

May 21. Leading Bermuda-based international insurers have urged Government to act to encourage companies to locate their senior executives on the Island after their Bermuda-based staff numbers fell for a fourth successive year. The Association of Bermuda Insurers and Reinsurers (ABIR) said a survey of its member companies showed a clear correlation between the number of senior staff leaving and employment opportunities for Bermudians. Wayne Furbert, the Minister of Business Development and Tourism, yesterday said Government is considering recommendations made by ABIR to streamline Immigration processes. The five ABIR members who historically have had the largest Bermuda-based workforces have cut staff numbers on the Island by almost a quarter over the past four years. Over the same period the number of Bermudian citizens (including spouses of Bermudians and permanent residents) on their payrolls fell by one-fifth. The figures are revealed in ABIR’s seventh annual Economic Impact Survey, released today, which estimates that the body’s 22 member companies last year contributed almost $1 billion to the Bermuda economy directly and much more indirectly. ABIR chairman Constantine (Dinos) Iordanou said ten-year work permits for “job creators” was a good start, but suggested more action was needed to halt the loss of industry jobs. “We appreciate the action the Government has taken with regard to the Job Creators’ Act,” said Mr Iordanou, who is also the chairman and CEO of Arch Capital. “Accelerated action by the Government to encourage ABIR members to locate senior executives here in Bermuda would be helpful. As the numbers from our survey demonstrate, there is a direct correlation between these senior executives being in Bermuda and employment opportunities for Bermudians.” The survey found that ABIR companies employed 1,666 people in 2011, down 30 from the end of 2010 and down 116 from the group’s peak employment in 2007. More than two-thirds were Bermudian citizens. Salary and benefits paid out to these employees totaled around $698 million last year. Some 45 employees left Bermuda to work elsewhere for their companies. Of the larger number who left Bermuda for a variety of reasons, 51 were in executive, senior or middle management positions. Mr Iordanou said the key finding of the survey was that ABIR companies’ Bermuda workforce shrank for the fourth consecutive year. “Most worrisome is that the five ABIR members with historically the largest number of employees in Bermuda have reduced their employment during that time by an average of 23 percent. For these same companies, their average reduction in Bermudian employees is 19.6 percent. This trend is worrisome for Bermuda’s economy because: 1) it means fewer jobs in Bermuda; 2) lower payroll tax revenues; 3) less compounding economic activity from these highly compensated executives; 4) fewer meetings filling up hotels and restaurants.” The ABIR survey was delivered to Government last week. Mr Furbert yesterday described international re/insurers as “a critical component of Bermuda’s economy. We need to keep these companies and jobs here. We value their contribution to the Bermuda economy. The employment of non-Bermudian employees in the management ranks is expected and essential for the success of these companies. We applaud the ABIR members for their commitment to Bermuda and the fact that nearly 67 percent of their employees here are Bermudians, spouses of Bermudians or PRCs. ABIR has recommended to us some changes that will streamline Immigration processes for these workers and the Government is considering those recommendations. We’ve made significant changes in the last year and we expect that those changes will bear fruit. We welcome additional ideas.” Despite the shrinking workforce and the fact that many ABIR firms lost money on paying their share of claims from $105 billion of global insured catastrophe losses last year, the insurers spent more money in Bermuda. ABIR members estimated they spent nearly $86 million in Bermuda on legal, accounting, actuarial, temporary services, up by around $5 million from 2010. They forked out $28.3 million in Bermuda on hotels, airfare, restaurants, taxis and catering in 2011, up seven percent over 2010 expenditures of $26.6 million. Nearly $121 million was spent on construction, real estate and housing costs in Bermuda by ABIR companies, up from $116 million in 2010. The group also contributed more than $12 million to Bermuda charities last year, up from $10.6 million in the previous year.

May 23. Businesses demand work permit reform to stem major job losses. The wish list below is by organization. 

The industry groups above and below have joined the chorus for “radical” immigration reform in the wake of the Association of Bermuda’s Insurers and Reinsurers’ (ABIR) economic impact survey — some calling for the elimination of term limits, a hassle-free immigration process, PRC for job creators and their families, and the right to own property. ABIR’s survey showed a correlation between the number of senior staff leaving the Island and declining job opportunities for Bermudians. Minister of Economy, Trade and Industry Patrice Minors, has weighed in, assuring international business that her Ministry is undergoing an internal work permit review and she is seeking to strike “the right balance” to ensure companies get the resources they need while ensuring qualified Bermudians obtain jobs. The Bermuda Chamber of Commerce, Association of Bermuda International Companies (ABIC), reinsurance law firm Attride-Stirling & Wolonieki, employment agency Expertise and the OBA have all publicly voiced their concern over ABIR’s survey and are urging Government to act immediately to attract and retain international business.  The Chamber, which called on Government in early April for “major” immigration reform, including a moratorium on term limits, permanent residency certificates for job makers and their families and PRC holders having the right to buy property, also voiced their concern about ABIR’s survey. “The fact that employment in the international business sector has been in decline since 2007 is borne out by the Chamber’s own research, and by job statistics kept by Government,” said Chamber president Ronnie Viera. “There is no question that the growth of the local economy, and the number of jobs available to Bermudians, is directly correlated to the success of international business.” Joanne MacPhee, the executive director of the Chamber added that while Government “dabbles” in immigration reform, Bermuda is “losing more and more key job creators. What those who do not currently support immigration reform need to understand, is that even major changes in immigration will not change the situation immediately, it will take time to rebuild the confidence lost in the Bermuda product. People need to understand that we are not talking about giving the Island away. At best there are probably only a few dozen who would immediate benefit from radical immigration reform and these are families that are already here. They currently rent, drive a car and have children in the private school system; giving them long-term residency and the opportunity to settle in Bermuda would have little to no impact on our infrastructure, but it could most certainly have a very positive impact on our economy.” George Hutchings, chairman of ABIC called for changes to be implemented “immediately” and that data from their group shows that more than 60 percent of the jobs in international business are held by Bermudians. He added that those were the jobs being lost as senior staff, roles and functions in the sector leave Bermuda. The group has submitted a letter to Minister Minors laying out their immigration suggestions. He said that ABIC supports all of ABIR’s recommendations. "To begin to stem the tide of job losses these changes must be implemented immediately. Our ABIC member surveys confirm that immigration reform and a business friendly environment are key to retain and attract business. “ Senior partner Rod Attride-Stirling at law firm Attride-Stirling & Wolonieki, which specializes in corporate and commercial law, commented that many Bermuda-based companies have seen their workforce grow, but the workforce growth is overseas where they don’t have “so many bureaucratic hurdles. We need to do more to get these jobs to stay in Bermuda, and to ensure that the both the people working in the industry and the contributions they make are appreciated,” he said. “The Bermuda Government’s Job Creators Act is a great start and an example of the type of creative thinking that is needed. We need to look actively at what else we can all do.” In a Letter to the Editor to this newspaper, Doug Soares, the founder of HR and employment consultancy Expertise, said he has a “front row” seat as jobs leave Bermuda, describing the resulting hardship for Bermudians heartbreaking. In the short term, all Government will have to do is grant exceptions and exemptions to work permit and term limit policies for international business executives,” he said. “The policies are set up to allow this but, in recent times, Government has made it more difficult for international businesses. So they simply relocate jobs overseas. The mindset that Government’s ability to protect Bermudians in a global economy is “limited and diminishing” has to change. Government needs to explain that the world has changed,” he said. “When the current policy was designed, the economy was almost entirely local and we did not have the internet. This meant that our Government could easily protect us from foreigners trying to take our jobs. All we had to do is stop them at the border. But now the majority of jobs in Bermuda are part of the global economy and technology has enabled foreigners to do ‘our’ jobs from their own country. So if our current work permit policy says that the foreign CFO of an international company will not be issued a work permit for any reason, the company simply moves the job overseas. Not only do we lose the potential for that job to be done by a Bermudian in the future, we lose the income of that CFO’s family in terms of payroll tax and local company services.” Ms Minors, whose ministry is responsible for work permit matters, said in a statement yesterday: “I want to assure both the local and international business sectors that we are seeking to strike the right balance in these tough times between ensuring that companies are afforded the resources that they need, and ensuring that Bermudians that are available for employment obtain a job for which they are suitably qualified. I announced some weeks back that we are sensitive to the needs of our business organizations and in that respect, I did confirm that an internal work permit policy review is underway this would include the reorganization of our work permit section. As a result of the review, there are number of initiatives that we are considering that we will share directly with relevant stakeholders. The recommendations, once approved by Cabinet will be included in the existing work permit policies.” Shadow Minister of Finance Bob Richards said that the OBA was “not surprised” at ABIR’s survey results, saying their position was that the current term limit policy was the “most destructive” to international business. He added that his party has publicly stated that they are in favour of suspending term limits for two years, revamping the immigration process, crack down on abuse in the immigration system (tailoring job descriptions to one specific candidate), retraining immigration and airport officials to be more welcoming and cut down on the caveats associated with incentives for job creators. “It [immigration process] just takes up too much time and there is too much uncertainty — we need to eliminate the hassle factor,” he said, adding that term limits have caused “entire teams” of people to move out of Bermuda. The public, however, seems divided as online comments made regarding Monday’s ABIR story show readers sitting on both sides of the fence. On having more relaxed immigration laws, blogger ‘Al Eastmond’ said: “In other words I see it as putting up a sign BERMUDA FOR SALE. If Bermuda had vast land resources this would not be an issue but the Island is only 21 square miles. And to these companies that are joining the chant I would say that this is akin to walking into somebody’s house and declaring that you will stay as long as you like and eventually will be considered part of the family.” In response to what some believe is a arduous immigration process, blogger ‘navin johnson’ said: “The CEOs are exempt but everyone else sweats out the renewal process and are made to go through hoops in a very drawn out and frustrating process ... and the balance is not so delicate.......do not bother coming to me and asking what I need to run my business time and time and time again and then fail to listen to anything I suggest.....just give me the permits I need and allow me to run my business as I have nothing to prove to you as shown by the statistics that I WANT and do employ Bermudians.”

May 28. A housing development in the West End was again the subject of debate in the House of Assembly as opposition members said taxpayers will be stuck with the bill. Launching a lively debate in the House of Assembly on Friday, Mark Pettingill of the One Bermuda Alliance (OBA) claimed a US-based company was quietly selected to build the prefabricated buildings that are intended to replace the ageing Albert and Victoria Rows.  While the OBA criticized the tendering and financial aspects of the project, saying it would leave to major shortfalls for Government, members of the Progressive Labour Party (PLP) adamantly defended the project as a way to affordably replace the 140-year-old buildings with new housing while creating more than 100 jobs. Government have said the $36 million project will be financed by Wedco, and paid for by the rent of the units and sale of other units on Boaz Island. Government will provide a shortfall guarantee, but Public Works Minister Michael Weeks said it was not anticipated that the shortfall will be activated. Estates Minister and MP for the area Michael Scott said that new units to replace the existing housing is desperately needed and long overdue. “The housing is in a horrible state of repair and needs to be replaced now. It needed to be replaced in 2004,” he said. “It was in that state of condition for years.” Despite the buildings being prefabricated, Mr Scott said the project would create many jobs, both in the actual construction of the housing units, but the expansion of the infrastructure. The nature of the project, he said, will also provide Bermudian construction workers the opportunity to learn and develop new skills while making the development more affordable. “The cost is brought down by the fact that the construction method is much less expensive than bricks,” Mr Scott said. “If you were to use traditional construction methods, there is no way you could replace that housing there in Dockyard at this price. There is no effort to put this project, or to have it put the Government, in the position of funding where we cannot afford it. It will be supported and financed by the rents of the many tenants and there will be sales of other units on Boaz Island.” While he also said the units would replace existing ones, not add additional housing units to the market, but Mr Pettingill responded that while 100 units were being built as part of the project, there are only 48 units on Victoria and Albert Rows, resulting in an additional 52 units. Shadow Health Minister Zane DeSilva said he grew up in the housing units, and that they were in need of serious work decades ago. “These houses were built in the 1870s,” Mr DeSilva said. “They should have been fixed 30, 40 years ago. 50 years ago. They were renovated in 1979, and if [the opposition] were in power, they would have renovated them again. Anybody that’s been in Bermuda for a period of time knows that if you renovate, especially in an old Bermuda home, the type of things you can run into.” He noted a personal renovation project that, while originally priced at $25,000, wound up costing around $48,000. Mr DeSilva then asked where the residents of the units would be moved to while renovations were underway. Mr Pettingill responded that there are currently nine empty units at the Victoria and Albert Rows. Others in the House shouted “Grand Atlantic.” The Health Minister replied: “Those units are for sale. Let’s not say we are going to stick them in Grand Atlantic. That’s not going to work.” While Mr Pettingill had said residents were concerned about the increased rents, Mr DeSilva said that Mr Weeks had met with the residents recently to discuss the project. “He said that he met with the tenants, and all but one were very, very happy that this project is finally going and excited to move into the new homes,” Mr DeSilva said. “Regardless of the amount of the rents that we will be asking for these units, the residents are excited to get these new units.” Regarding Mr Pettingill’s claim that the US company involved would be paid first, Mr DeSilva said that any company that imports goods from the US pays the company sending the goods first. Shadow Finance Minister Bob Richards said that the project is destined to cause a Government shortfall, saying that 11 current tenants at Victoria and Albert Rows pay no rent whatsoever. “We have people who cannot afford to pay these very modest rents who are being promised to be put in new units with double or triple the rent,” he said. “That burden will go to the Government because they will go to financial aid. There will be shortfalls.” While the sale of other units on Boaz Island is also expected to help finance the project, Mr Richards said: “We have built new units 300 yards from my house that cannot be sold with 100 percent financing.” He also questioned how the US company hired to build the prefabricated units was selected, asking if it had been put out to tender. He asked: “Was this company chosen because somebody knew somebody in this company? Did it just fall from the sky? If a local company did this, there would be a much more stimulating effect than if we bring in all the materials prefab from the US. There is a lot of value being exported to the US by this model.” Mr Richards then suggested that the residents of Victoria and Albert Rows could be matched with private properties for rent, with Government covering the difference. “That is one solution to this problem that the Government doesn’t seem to want to comment on.” PLP MP and Wedco Chairman Walter Lister said the opposition was merely attacking the project for political gain, and because the PLP was working to improve the quality of life for the residents. “We are trying to improve the quality of life for Bermudians and the OBA are upset about that. They are envious because we are trying to do it to help people improve their quality of life. This project is going to have a lot of opposition because we are trying to help people. I don’t know where this sinister sort of thing comes from. I believe the opposition are trying to scuttle this idea because of political advantage. Why can’t you address the positive side of the issue. Government has been working on the matter for years, and that the Government had looked overseas for assistance. We did go overseas and we thought we had a deal going and we didn’t, but we know we have to shop around.” Kim Swan, who was elected under the United Bermuda Party banner, meanwhile said that it would be a mistake for Bermuda to not prepare itself for when the economy improves, noting the effect the last economic boom had on rents. “People didn’t start leaving Bermuda and going to the UK when the recession came in the early 90s,” Mr Swan said. “They left because they couldn’t afford Bermuda when it was prosperous. We need to put people first because we have every confidence that this country will get itself back.” Shadow Transport Minister Patricia Gordon-Pamplin expressed concern about building more houses when the issue of demand and supply has, in her view, not been addressed. “At what point in time is there any consideration for the demand?” she inquired. She suggested the development would affect prices of existing houses, and was prompted by the fact that a general election is drawing near. She later retracted that remark after Government backbencher and Wedco Chairman Walter Lister said the plans have been worked on for 24 months. “If the plans have been two years in the making I accept that and therefore I apologize,” she said. Deputy Premier Derrick Burgess said the developers wanted to build a marina first but he said he told them: “Guys, (build) some houses first, and (then) we can talk about the marina. I said the houses must be built first and they are carrying that out.” He said he had already brought a paper to the House explaining what the rents would be and public meetings were held about the project with residents.

June 26. Morgan’s Point developer Craig Christensen wants to attract younger tourists to Bermuda by building a luxury resort beyond our wildest dreams. "I believe the former base land on the Southampton and Sandys border could be turned into an attraction to compete with the Atlantis in the Bahamas, which features hotels, a spa, a casino, water park and a marina. I’ve been there [Atlantis] twice in recent months. I think what you can visualize is that what Atlantis did for the Bahamas, we’ve got to look at what Morgan’s Point can do for Bermuda. I’m not saying copy Atlantis but they have some concepts which are worthy to look at. The sizing and intensity of the development provides for the excitement of the resort. They do attract the age group that I think is significant, which is [the] 25 to 45-year-old market, who are spending money and use the facilities extensively.” He cited other overseas hotels he’d recently visited and been impressed with, including Palm Beach’s Breakers and Fontainebleau and Hard Rock in Miami. Of the latter, he said: “You go in there and it’s vibrant. The restaurants have got TVs in them, the bars are lit with lights, it’s reasonably loud, it’s visually stimulating. You’re creating a vision, you are creating things for the younger crowd who want that extra stimulation and that restaurant turns into a nightclub through the night. Same thing with the steak house etc. You can only create that vibrancy with the intensity of the development, with people there, rooftop bars, these types of things. They don’t cost a lot, we just need to figure out how to do it. That, to me, is the focus that Bermuda should be looking at: the up-and-coming vibrant crowd.” He and fellow Morgan’s Point directors Nelson Hunt and Brian Duperreault have already said they have a $2 billion vision for the former base land, which they formally swapped with Government for the Southlands estate in Warwick at a signing ceremony at Cabinet yesterday. “There’s interest in really trying to take Morgan’s Point and squarely put Bermuda on the map, beyond our wildest dreams,” said Mr Christensen. “Really to make Bermuda a focal point once again for tourism and put Bermuda back on the boil.” He said the scale of the development had expanded since the public was given a glimpse of the plans in June last year and that Morgan’s Point Ltd was “reviewing” its position with overseas development partners John Ryan and Egbert Perry. The ultimate development partners will be primarily dependent on the requirements of the lenders. I’ve got to look at things in the best interests of the project and in the best interests of Bermuda. In that regard, we’ve got some different visions for Morgan’s Point, in certain areas, that may be different than the original plan that we shared with Government. The point is really taking the development of Morgan’s Point from what we currently have, which is really good, to absolutely stunning.” In February 2010, Government said the developers had indicated the resort was likely to be a Ritz-Carlton, due to Mr Ryan’s relationship with the five-star brand. Mr Ryan said later that year that “deep negotiations” were ongoing with three major hotel chains. Mr Christensen said discussions continued with “hotel brands” though he wasn’t prepared to say which ones. “It is generally unwise and not cost-effective to do that,” he said. “Like giving somebody a blank cheque, in essence.” He said he and his partners were “absolutely” confident they could secure funding for the resort, despite the tough economic times. “There’s a major difference that Morgan’s Point has over most of the other developments,” he said. “First of all, we are not dealing with leased land and that’s really, really tough to fund. At least with freehold land, like we’ve got, we’ve got true security [so] that people can feel comfortable in terms of lending. “And, two, Morgan’s Point is really uniquely placed in Bermuda for a resort, which is distinctively different than your traditional resorts, which have been located primarily on beach lands in most places in the world.” The water surrounding Morgan’s Point was its best feature, he said, making it accessible by boat to Hamilton and providing the opportunity for a world-class marina and activities such as jet skiing, sailing, snorkeling and scuba diving. “We have the best scuba diving in the world [but] we’ve completely underutilized our water asset to our advantage from a tourism perspective. We’ve had interest in putting up capital. We have identified equity sources. We have equity in Morgan’s Point and we are very fortunate in that respect over, I think, other developments.” Mr Christensen said building was unlikely to start this year as detailed plans still needed to be completed and contracted bids invited. But he said other work could be done and he was keen to get the marina built “quickly” in order for boats to be able to dock there. One idea he’s considering could vastly extend the resort’s tourism season, he believes. He explained: “How do we deal with keeping people warmer at night [to] extend our seasons? Wind control is probably the most critical thing and that’s a design issue. We need to] harness it for protection, for people to enjoy outside, because it’s actually pretty comfortable outside in Bermuda if you find you can get out of the wind. How you design and get out of the wind is critical to the development of the future, in my opinion. I think you can go much longer [than May to November]. I had lunch in Montreal in zero degrees Celsius and was comfortable sitting outside. How do you do that without using a space heater and they didn’t use a space heater. What I’m saying is, it’s totally solvable for Bermuda. It’s not necessarily expensive. You’ve got to figure out: how do you reduce your electricity costs?” When the Morgan’s Point Act was passed in Parliament last year, the proposed development was described as including three hotels with more than 450 rooms, condominiums and residences, a par 71 golf course, a marina, retail shopping, a spa and restaurants. Mr Christensen said all of Bermuda would benefit from the five-star facility as guests would spend money outside the resort. “I think you have to create the intensity at the resort to begin with, without a doubt, so it can be self sufficient,” he said. “But the uniqueness of Bermuda is that when you come to Bermuda, Bermuda’s your playground, not just your resort. You have all-inclusive resorts but I just don’t see all-inclusive as something that we want to promote because people can get up and easily leave their resort to experience other parts of Bermuda in a relatively safe environment, unlike most places in the world. I think we’ve got a huge advantage there. You want to a) get it going in your resort first but b) you would love to see it get vibrant in other locations so that people can enjoy different experiences.”

June 25. Government finally signed over the former base land at Morgan’s Point to three developers who plan to build a $2 billion luxury resort there. The deal, which has been in the pipeline since 2007, was completed and means the pristine Southlands estate in Warwick is now public property. Bermudian businessmen Craig Christensen, Nelson Hunt and Brian Duperreault agreed to swap 37 pristine acres at Southlands for 80 acres of brownfield land at Morgan’s Point on the Southampton/Sandys border. The trio plan to build three hotels, condominiums, restaurants and a spa, among other facilities, on their new plot, as well as lease another 140 acres from Government for a par 71 golf course. Then-Government Estates Minister Michael Scott told a press conference at Cabinet that the Morgan’s Point development was “one of the most ambitious” projects in the hotel and hospitality industry in Bermuda’s history. He said the “multifaceted” scheme would create “remarkable opportunities” for Bermudians. Mr Christensen said: “This land swap represents the beginning of a new chapter and a great deal of work lies ahead. We have a responsibility to deliver to Bermuda this significant development for the benefit of Bermuda and future generations of Bermudians. We look forward to meeting that challenge by working with the Government of Bermuda to deliver an outstanding development that all Bermudians can be proud of for many years to come.” He and Mr Hunt signed the final paperwork and exchanged documents with Mr Scott in front of the assembled media. Until the June 2012 deal, like the former Fort Bell/USAAF/Kindley AFB/USNAS complex, this former base had been owned by - and was the responsibility of - the Bermuda Land Development Company, a Bermuda Government-owned entity.

July 7.  Cruise ship visitors are raiding Ireland Island South’s Bottle Beach and removing buckets of sea glass, according to West End residents. One resident admitted taking a handful of pieces of glass from the spot and said visitors are coming to the beach en masse and stripping it of its titular glass. “Today I was sitting on a bench outside and was horrified to see two cruise ship passengers walking along with enormous plastic bags filled up to the brim with sea glass,” she told The Royal Gazette. “I was told of two tourists who went to the beach with five-gallon buckets and filled them up and took them back to the ship. I am so angry I could spit. I am appalled. You are not allowed to take sand, shells, coral or sea fans out of Bermuda. Why allow sea glass? Once the sea glass has all gone, that’s it. It’s too terrible.” She said that when she was a child, things such as conch shells and sand dollars were in abundance around the Island, but over the years those numbers have dwindled, and she feared the same could be true with sea glass. Sea glass, which is weathered smooth by the ocean, can be found on beaches throughout the Island but is particularly common on a few smaller beaches, such as Bottle Beach. It is sometimes used to make jewellery and various decorations. The Ministry of Public Works, responsible for the Island’s parks, and the Ministry of Tourism were both contacted for this story. Neither commented by press time.

July 6. Some Bermuda public companies will be allowed to apply for relief from the 60-40 rule on foreign ownership, under new legislation tabled in the House of Assembly on Friday. The Companies Amendment Act 2012 will permit certain firms to apply for a licence access more capital from overseas than the current 60 percent Bermudian ownership requirement allows. Business Development and Tourism Minister Wayne Furbert said the amendment aimed to provide “an alternative process by which local companies in certain specific categories may source foreign capital, free of the foreign investment restrictions referred to, on a timely basis that will be more commercially attractive”. Only public companies listed on the Bermuda Stock Exchange, or another designated exchange, in a “prescribed industry” will be eligible to apply for relief from the 60-40 rule. Prescribed industries listed in the bill are telecommunications, energy, insurance, hotel operations, banking and international transportation services (ship or aircraft). The new rules will open the door to overseas investors to buy more shares of BSX-listed companies like Ascendant Group Ltd, KeyTech Ltd, BF&M Ltd and Argus Group Holdings. Mr Furbert told MPs that the amendment aimed “to attract foreign capital investment to Bermuda for the purpose of improving liquidity in the local market for the production of products and services.”

July 25. Mailboxes Unlimited argued yesterday that it qualifies for relief under the new legislation that raises duty to 25 percent for imported goods that are not for business use. Lawyer Alan Dunch argued in Supreme Court before Chief Justice Ian Kawaley yesterday that Mailboxes fits the definition of a business and an importer, thus it qualifies for “business end-user relief” under “Customs Procedure Code 4000” --- even if that’s not what Government actually intended with the legislation. “It may be that they have to rewrite CPC 4000,” he said. Earlier this year in an effort to “harmonise” duty, Government raised the duty rate to 25 percent on all goods imported for personal use via all ports if entry. Goods imported for business use remained subject to generally lower duty rates. Mailboxes provides a US address for customers buying for personal or business use online, consolidates their purchases and has a courier ship them in to its Bermuda premises. Mailboxes also hit out at a “sudden” change “with no explanation” in Customs procedure, requiring one Customs Declaration form per item shipped in, whereas before, only one form was required per consolidated shipment and the paperwork and duty calculation could be completed before hand, allowing for streamlined, quick delivery. Mr Dunch said Mailboxes faced significant delivery delays and higher labour costs as a result of the new procedure. However, Collector of Customs Lucinda Pearman testified that the procedure was “not really a change” and was “not CPC 4000 driven.” "It’s just Mailboxes was one of the last companies to get with the procedure," she said. She said other companies similar to Mailboxes had all complied with the procedure “with no problem. She told the court the new procedure was necessary to prevent against importation of drugs and guns and provide Customs with a clearer picture of goods being imported. Crown counsel Martin Johnson argued despite what the definition may be written as in the Act, Mailboxes was not really an importer, because an importer buys and then sells goods for a profit. But Mr Dunch said the Collector of Customs herself had acknowledged in a letter that Mailboxes was an importer, although she later “curiously changed her tune” saying that Mailboxes was not an importer of goods nor seller, rather a shipper. Mr Dunch gave examples of how as the Act stands, Boyle’s can bring in a pair of shoes specially ordered for a customer and still qualify for business end-user relief, while Gorham’s offers internet access in-store for people to order their own goods and bring them in and also get business end-user relief. Mailboxes owner Steve Thomson earlier this month filed a writ against the Collector of Customs over amendments to the Customs Tariff Act 1970 and the Customs Procedure Code 4000, as part of his case to be entitled to “business end user relief.”

July 26. Bermuda's Work Permit and Residency policies are hampering our recovery. So said the Hon. Sir John Swan, former Member of Parliament, Cabinet Minister and Premier, one of Bermuda's most successful-ever business leaders. "Bermuda is still very appealing to existing and start-up companies as a place to do business. Bermuda's climate is second to none, our standard of living is still relatively high, crime is low compared to other Caribbean islands and our proximity to major US business centres is unmatched. So why are many companies setting up in other jurisdictions? Recently, I have been told by several heads of international companies who wanted to domicile their company here in Bermuda that the main reasons that have discouraged them from doing so is our work permit and residency policies. Decisions in today's high-paced business world must be made in days and not months in order to keep the business competitive and profitable. Recently, an announcement was made that work permits are now going to be turned around in four weeks instead of ten weeks.

How can a business in the real world wait four to ten weeks to make a decision?

A company may now apply to obtain concessions for work permit exemptions for their employees under the Incentives for Job Makers Act provided the following criteria are met:

The above are just the criteria that a company and employee must meet in order to make an application. They must then submit various pieces of documentation to support the application including the fees. The cost for a work permit exemption is $20,000 per applicant. In comparison, companies who set up in the newly created special economic zone in Cayman, Cayman Enterprise City, are entitled to numerous benefits such as 50-year direct tax exemption, ten-day streamlined set-ups and are exempt from import duties and work permit requirements.

Included in the Incentives for Job Makers Act is a provision where an applicant can obtain a Permanent Residency Certificate (PRC) in Bermuda in which the following criteria must first be met:

After the criteria is met, applicants for the PRC who are already exempt from a work permit and have made an invaluable contribution to the economy of Bermuda are still made to produce documentation and pay an outrageous fee as follows:

The Government of St Kitts & Nevis has been offering full citizenship since 1984 to investors who make a qualifying purchase in an approved project. This helps to stimulate the economy in many sectors and keeps the country's infrastructure current. Presently an investment of $400,000 in a hotel project can qualify an individual for full citizenship. International Business and their employees make a significantly larger contribution to Bermuda's economy than $400,000 and both still have to jump through hoops and pay an exorbitant fee in order to have only residency status. It borders on being ridiculous. I agree and understand that some of the documentation is necessary but asking the head of an international company to get two sponsor letters from Bermudians to attest to their character (after they have probably appeared in numerous newspaper articles and attended functions with the Governor and Premier) and another letter from their own company, probably signed by the applicant, indicating that they have been resident in Bermuda after they have invested millions of dollars in Bermuda's economy, produced jobs for Bermudians and given money to charitable organizations can be viewed as an insult. We should have the decency as good hosts to extend some courtesy to them as they have extended to Bermuda. We think that we are giving companies options when it comes to work permits and residency but the policies are so restrictive and complicated and the process so arduous that it is no wonder that companies are throwing their hands up in disgust and running to more welcoming, low red tape jurisdictions where they can be open for business in a matter of days and not months and made to feel that their contribution is appreciated." 

2012. July 31. Anxieties linger in the healthcare industry, over tomorrow’s deadline for the end of upfront charges on the insured portion of a doctor or dentist’s service. Bermuda Dental Association head Chris Allington told The Royal Gazette: “I think there is a lot of trepidation still. People are concerned because of the uncertainty.” His own dental practice dropped the upfront payment practice back in April, Dr Allington said, and a number of practices have been content with receiving payment from insurers all along. But as of August 1, according to the legislation technically known as the Health Insurance (Health Service Providers and Insurers) (Claims) Regulations 2012, the practice will no longer be allowed. “We are going to have some confusion,” he charged. For Dr Allington, the uncertainty lies principally with the new regulations’ stipulation that insurers pay up on electronically-submitted claims within 30 days of receipt. "Providers are not required to file their claims electronically. From the providers’ perspective, all along, we have been asking for insurers to give us their real-time results of what they cover. Insurance coverage has not always been made available to us. Some insurers are doing a good job trying to comply by August 1, and others still won’t have that information available. They’ve made an effort, but it’s still not available online. We have had meetings with all four of the big insurers to find out what state they’re at. A couple are a little bit behind. We still don’t have all the information as easily accessible as we would like. It’s encouraging to see that this legislation has insurers moving in the right direction, in providing the real-time information that we need. Colonial and BF&M have made significant upgrades in their websites. But I believe insurers in general don’t feel they have been given enough time.” Medical specialists are liable to be the worst-hit in the switch, he predicted. “Specialists are going to have a lot more difficulties than the dental practices, because of the complexities of their coding system.” But healthcare providers in general face a one-sided deal, he said, since claims can still be made on paper — but insurers are not beholden to a 30-day payment in that event. “We can’t submit it electronically if they don’t provide the information,” Dr Allington said. “The reality is, with this legislation, insurers get off. If they don’t turn around their paper claims in 30 days, we don’t have any recourse.” Dr Allington said he did not anticipate a sudden wave of customers once the upfront payments are struck down — a position echoed by Argus CEO Allison Hill. “We do not anticipate a sharp rise in claims with the August 1 ban on upfront payments,” Ms Hill said. “We are committed to working with providers and patients alike to ensure a smooth transition of this law.” Physician Femi Bada, a critic of the regulations when they were rolled out in March, continued to call the legislation a rushed job. “It’s a very short period of time to get all these stakeholders to go from manual to electronic,” he said. “Many insurance companies have not got all their acts together.” However, Dr Bada said he expected the switch to encourage struggling patients to attend doctors and dentists. “I think most people who are working may be able to afford it, whereas an older person going to a specialist for treatment of cataracts would have a serious difficulty,” he said. “They may be told to come back two weeks later for a follow up, and not go. There’s where this legislation comes from. And we have never said that we were for upfront payments.” Dr Bada said that even at the eve of the deadline, “there is nothing concrete as regards electronic payments. For example, I have been asking Government Health Insurance to give me the system they are using, and I still don’t know.” Following the implementation of the regulations, he said, “the first few weeks are going to be interesting.” Along with rules for providers and insurers, the Bermuda Health Council (BHeC) has the job of granting exemptions to providers. Providers may also request the ability to charge for the insured portion at the time of service. Payment times can be varied with BHeC approval, and the organization also has the power to penalize companies which fail to obey the rules. Asked if there had been many requests for exemption, BHeC CEO Jennifer Attride Stirling said the number to date had been “manageable.” “BHeC has been working with providers and insurers in preparation for August 1, and we have seen a huge amount of good will on both sides to make the legislation work. Insurers have given much more information about their coverage and eligibility, and providers have more clarity about the claims process. Overall, the claims filing procedure hasn’t changed — the same information will be needed from August 1 as has been needed for years in order to process a claim swiftly. August will be a transition period and we will monitor how things are going and continue to work with providers and insurers to facilitate the process.” She said the regulations had made for “a very busy period for insurers, providers and the Health Council”, adding that “the policy direction and its spirit is understood by most stakeholders.” Asked for a top misconception on the regulations, she said: “It’s important that patients be understand the difference between co-pays and the full charge. In addition, appliances are excluded from the regulations — so providers can still charge upfront for things like glasses and crowns. These have to be custom-ordered for each patient, so providers are not expected to absorb the cost.” Further information is available online, at the Council’s website, www.bhec.bm.

2012. August 2. Royal Gazette editorial. "Healthcare is expensive and getting more so, according to a report issued last week. According to the national health accounts issued by the Bermuda Health Council, we spend $678 million on healthcare each year. That’s 10.8 percent of gross domestic product, which means that we spend one out of every ten dollars we earn on health. That compares to 8.8 percent of GDP in 2005, so the increase is substantial. To put it another way, each person in Bermuda spends an average of $10,750 on healthcare each year. In 2005, we spent around $6,200 each on healthcare, so we now spend 73 percent more on healthcare than we did seven years ago. That means the cost of healthcare has risen much faster than almost anything else. In a masterful understatement, the report concludes: “Against the backdrop of a decline in nominal GDP, a decline in government revenues, and an average change in the Consumer Price Index during 2011 of 2.7 percent; the pace of growth in healthcare financing and expenditure may present challenges with respect to sustainability and affordability.” What the report does not explain is why healthcare costs rise faster than seemingly anything else. The first step in controlling costs increases is to understand what’s causing them. There are several obvious causes. One is the increasing size of the elderly population. People are living longer as a result of medical advances, and as they age, they need more medical care. A second cause is the increasing availability of high-tech equipment, much of it diagnostic, such as MRIs. There is a trend in medicine for this kind of equipment to be used heavily, and sometimes unnecessarily, when it is available. Patients demand it. Physicians order it, “just to be sure.” And the owners of the equipment encourage its use, in order to recover their investment. The account also reveal some other trends. A peculiarity of Bermuda healthcare is the need for overseas healthcare for treatments that cannot be done in Bermuda. That is compounded by a lack of confidence in local healthcare providers (often based on sometimes horrendous anecdotal evidence) which means patients opt to be treated abroad for ailments which could and should be dealt with in Bermuda. Traditionally, these treatments are more expensive abroad, especially in the US. The accounts reveal that the cost of overseas healthcare surged by around 50 percent in 2009 from $62 million a year to $90 million and has risen somewhat by then. This is largely a result of funding for FutureCare. Similarly, in 2010, the cost of administration in the Department of Health almost doubled. This may have been an accounting change, but it needs explanation. Expenditure on the Bermuda Hospitals Board has risen by 85 percent between 2005 and 2011. Insurers say this has largely been due to the change in the way the BHB bills, which has seen charges for individual procedures soar. As a result premiums surged as well. What is disturbing about the latter point is that the BHB billing change should have resulted in a decline in spending elsewhere, for example in the taxpayer-funded subsidies to the hospitals. But this did not happen. Physicians and prescriptions drug costs are often blamed for the rise in healthcare costs, perhaps because this is where patients find themselves paying out of their own pockets. But the accounts show that this is not the case. Payments to physicians, dentists and for prescription drugs are the three areas where spending has increased the least. The top three areas where healthcare costs have risen the most between 2005 and 2011 in percentage terms are administration of the Ministry of Health (186 percent), overseas care (128 percent) and health insurance administration (93 percent). In dollar terms, the expenditure by the Hospitals Board was the highest, rising almost $150 million to almost $300 million in just seven years. With the exception of overseas care, that suggests Bermuda does not have a healthcare cost problem; it has an administration problem."

August 9. The Bermuda Challenge has a new champion, after determined mariner Chris Fertig reached the Island in record time from New York harbour. Mr Fertig was turned back on last year’s attempt by bad weather, but arrived victorious in St George’s just after 8am yesterday, after crossing nearly 800 miles of ocean. He beat the 2002 record of 22 hours and 23 minutes, by a healthy margin of 44 minutes, in a 37-foot craft. “A lot of people have tried, and Neil Burnie held the record for ten years,” said Peppercorn Marine proprietor John Trimingham, who met the arriving boat. “These guys have nicked a good piece of time off the record. There will be triers in the future. It’s a good test for the technology.” Founded in 1996, the Bermuda Challenge is an endurance trial set for powerboats. Mr Fertig set off on Saturday, in a Statement Marine 37 powered by twin diesel engines. The Virginia Beach native, a general manager for Maersk Line, had aimed to knock two hours off the record last year.

August. A hike in pension contributions took a little more out of pay cheques, effective this month. According to Department of Social Insurance, the new weekly rate has increased from $60.80 to $64.14 — divided equally between employer and employee at $32.07 each. Bermuda Employers Council President Keith Jensen said called even small increases unwelcome during a recession. “It’s a concern not only to business but to staff,” he said — especially in cases of reduced hours, reduced wages or fewer household members working. Consequently, everyone looks to see what they can do to minimise expense, or cut out some expense so they can cover this one.” The increase is in accordance with the Contributory Pensions (Amendment of Contributions and Benefits) Order 2011. The new rate went into effect on August 6.

August 14. Visitors to Hamilton will no longer have to incur costly roaming charges to send an e-mail or post a picture of Bermuda on their Facebook. TeleBermuda International (TBi) has helped the City of Hamilton turn the whole city into a Wi-Fi hot spot. The service officially launched yesterday. Instead of getting a shocking cell phone bill up on their return, tourists can now log on to the new citywide Wi-Fi network. To access the network, users should select “WiFiZone by TBi” under their available Wi-Fi networks. Once on the network, they’ll be prompted to go to the TBi website where they can pay by credit card to use the network. Visitors and residents alike can access the network at a rate of $3 for an hour, $9.99 for the day, $14.99 for 3 days or $29.99 for a month. For those not wanting to pay with a credit card, vouchers will be available for purchase at City Hall. Soon, they’ll be available at retailers throughout the city. “In today’s busy and ever demanding technological environment, the City wanted to be able to offer the service so anyone who has a need to quickly and easily respond to e-mail messages and visit websites as required, can do so securely from any public area,” said Hamilton Mayor Graeme Outerbridge. “Seamless internet access has gone from being a nice to have, to a requirement for busy people in the city, including our visitors.” “TBi is very pleased to power the new Hamilton Wi-Fi network which provides a new way for locals and visitors to connect to the internet through Hamilton’s public areas.” said Gregory Swan, president and CEO of TBi. “Customers on the go can enjoy a convenient connection from their Wi-Fi enabled laptops, tablets or smartphone devices.” This isn’t the first Wi-Fi partnership for TBi. Back in March, the company, teamed up with Wedco to turn the whole of Dockyard into a Wi-Fi hot spot. The new TBi Wi-Fi zones will be welcomed by the tens of thousands of cruise passengers and crew who visit Bermuda in the summer. Up until now, to access the web they have had to go to internet cafes or pay the high cost of cell phone roaming or using cruise ship satellite internet service.

2012. August 14. Obstetricians in Bermuda have faced some of the highest malpractice insurance premiums in order to offer their services. In fact obstetric care was in jeopardy of becoming exorbitantly expensive had the Bermuda Hospitals Board (BHB) not come to the rescue. Premiums for private obstetricians have steadily increased from about $28,000 12 years ago to about $200,000 today. While we tend not to consider ourselves a litigious community, medical professionals do face lawsuits in Bermuda. Malpractice insurance is therefore a must and all practicing local physicians do have at least one policy to cover them in this area. Many use the Medical Protection Society (MPS) in the UK for this purpose. MPS is not an insurance company. It is described on its website as “a discretionary, mutual, non-profit organization”. It has no shareholders, which it says enables it to make decisions which support good practice in the medical and dental professions, and are not simply made for “financial expediency”. About four years ago, malpractice insurance with MPS rose significantly for local obstetricians causing them to actively seek alternatives. MPS was charging over $100,000 a year for a premium with plans to increase that premium over four or five years to a whopping $350,000 to $400,000 a year. That’s significantly higher than most other medical professionals have to pay (although cosmetic surgeons pay a premium of $110,420 a year). The MPS rates for 2012 reveal physicians in “super-high risk” categories of neurosurgery, plastic and reconstructive surgery and spinal surgery, pay a yearly premium of $44,180. Doctors in the “very high risk category” which includes bariatric surgery, gynaecology, hand surgery, trauma and orthopedic surgery, pay a yearly premium of $31,960. Part of the reason premiums are so high for obstetricians is that people can sue up to the age of 21 for problems that may have happened during pregnancy and/or delivery. This long-time period increases the risk of a suit happening. On average 800 babies are delivered on Island each year. But local obstetricians have said this volume is not enough for them to have been able to absorb the increased cost. “Local obstetricians were seriously having to consider ceasing their local service,” said Dale Wilmot chief of obstetrics for the BHB. “The only other alternative would have been to increase fees to a level that would be prohibitive for most people.” Practitioners said they contacted insurance companies locally and overseas in a bid to find a new provider, but this was not fruitful. Talks with Government and former Health Minister Nelson Bascome were undertaken in an effort to satisfy MPS on a reduction of risk. Local practitioners said they encouraged Government to amend some laws in an effort to meet demands of MPS. In the end, King Edward VII Memorial Hospital’s chief of staff, Donald Thomas, offered the best solution. Local obstetricians became employees of KEMH and received malpractice insurance under their umbrella through local insurer, Kitson & Company. Dr Wilmot explained further: “Local obstetricians joined BHB as employees so that we could maintain an obstetric service in Bermuda. Although this development was driven by the malpractice insurance, there are benefits to service consistency and patient safety possible with local obstetricians working as an employed team.”

August 16. Bermuda could regain its place as a tourism industry leader within the next three years, according to veteran hotelier Mike Winfield. But the single most important factor for a successful rebirth is everyone working together. Mr Winfield, who retires as President of Cambridge Beaches today, spoke to The Royal Gazette about his hopes for the future of Bermuda tourism and his disappointments. The tourism board member praised the new Bermuda tourism plan as a road map that can lead to a tourism renaissance. “But it is going to require enormous investments, time and most importantly everybody working together to achieve what needs to be done,” Mr Winfield said. “In the past we’ve had plans where some have signed on and some haven’t. Now the momentum has to be maintained and it’s all hands on deck.” Asked how long it will take for Bermuda to regain its stature as a leading destination, he said: “It’s subject to so many ifs. But I think if we could all focus, a period of two or three years should see us emerging again dominantly.” But he noted that the latest tourism plan called for infrastructural development which requires substantial financing. As to his hopes for Bermuda’s new brand, to be unveiled this evening, Mr Winfield said he was looking for a “sharp, defined image that separates Bermuda from the rest and clearly defines Bermuda’s unique selling points.” He said: “It’s important that we are not just another beach in a picture.” With almost 40 years in the hospitality business — the last 30 of which were spent at Cambridge Beaches — Mr Winfield has had a front row view of the industry’s peak and decline. He counts the industrial climate of the 1990s as among the most disappointing days. “It was a very difficult situation between labour and management which set us back enormously.” And he also laments that Bermuda neglected the industry with the advent of the international business sector. “The switch from tourism to international business has had long-standing implications,” Mr Winfield said. Tourism had long been Bermuda’s mainstay and “a lot of attention and focus was put on it,” he said. Until, that is, international business became the “sexy new business” for Bermuda. “Bermuda is probably one of the most challenging jurisdictions to run a hotel in,” Mr Winfield continued. “And we needed constant help. We needed to be in partnership constantly. And there were times when we haven’t been. We’ve been at odds with governments.” The September 11, 2001 attacks on the United States and a hurricane that followed consolidated the industry’s woes. But, ultimately, Mr Winfield says, Bermuda failed to be consistent in its branding. “The hotel industry is as guilty as everyone. The hotel industry failed to invest at levels needed to stay competitive. Now after three or four years of desperately trying to compete in this shark infested period of competition it has been even more difficult.” The challenge for resorts today is evolving to keep up with clients’ preferences, he added. “The aspirations of today’s client are different from the aspirations of yesterday’s clients. And if you don’t, as a resort, change to meet those aspirations, you die.” Cambridge Beaches made it through the difficult years under Mr Winfield’s stewardship. He credits the “team of excellence who has shared my passion and vision.” “I know they will continue to serve the resort well,” he said in the release announcing his retirement. “It is also a sense of real pride to me that the majority of our team are Bermudians; Cambridge is truly the Bermudian resort, manned, managed and owned, predominantly by Bermudians.” The press statement announcing his departure made a point of mentioning that he will remain a shareholder of the resort. Mr Winfield has no plans to ride off into the sunset, never to be heard from again. He remains an active member of the Tourism Board and wants to contribute to Bermuda in other capacities. Just what role he will play is as yet uncertain. “I hope to spend a few months considering my options, talking to many wise friends and looking for opportunities that will bring challenge and excitement. I shall of course remain in touch, with and be available to, my associates at Cambridge,” he said. He ruled out a return to the political fray — he was a Cabinet Minister and Senator under the United Bermuda Party, when asked. “If I even mention the word politics to my wife, I think I would find myself living somewhere else,” he said. “That does not mean I have lost interest in Bermuda. I want to be focused on non-partisan work in the best interests of Bermuda as a whole.” That should come as no surprise to fellow hotelier David Dodwell who noted last night that Mr Winfield “always put Bermuda on the same level as Cambridge Beaches when it came to marketing. He made sure that he promoted the destination equally as forcefully as his hotel.” John Harvey, President of the Bermuda Hotel Association noted that Mr Winfield is a former Chairman and President of the BHA. “During the last four decades there have been very few hoteliers who have been passionate and attentive to the needs of our fragile industry and Bermuda especially when there has been a need to focus on branding, selling and promoting our island home. He has been unselfish in his many contributions and his knowledge and professionalism is unmatched. He is a valuable asset to Bermuda’s Tourism and it is my hope that he will continue to give his guidance.”

2012. August 22.  More police officers will be trained to carry firearms, according to the Bermuda Police Service's pledges for the coming year. With guns, gangs, drugs and violence continuing as the force's four key priorities, greater CCTV surveillance and an enhanced partnership with gang-fighting agencies are among the force's plans in coming years. Unveiling the service's Strategic Plan for 2012 to 2015, Police Commissioner Michael DeSilva called the checklist “ambitious”, but said it was necessarily so. “Bermuda remains in a state of economic recession, the pressures of which could fuel increases in burglaries, robberies, vehicle thefts, fraud and other acquisitive crimes. Government funding is limited and is being stretched across a broad spectrum of competing demands. And the Police Service — like every Government department — is contending with financial, operational and organizational challenges.” Producing the three-year plan was itself one the recommendations made earlier this year by Her Majesty's Inspectorate of Constabularies (HMIC). And, in its Annual Policing Plan, Bermuda Police further vowed to employ intelligence and tip-offs against gun, drug and gang crime, and to target perpetrators of serious crimes with DNA profiling. The force's yearly list of goals, first launched in January 2010, is now linked to the financial year, and the latest report reflects plans moving forward from April of this year. The two strategy documents were made public yesterday through the service's website [see below]. Short-term, police patrols will be used to “deny criminals use of the Island's roads”, while over the next three years, surveillance upgrades could include number plate recognition and the ShotSpotter system to speed up gun crime deterrence. An information and intelligence-based Covert Policing Strategy — recently alluded to by Assistant Commissioner David Mirfield — is also among long-term goals. In several nods to the effects of the economic downturn, a rise in burglaries is anticipated. Meanwhile, among the three-year plan's more mundane items, a Collision Policy was mentioned, to avoid police attending certain non-injury road accidents. Bermuda Police are looking into forming a single emergency centre for 911 calls by 2015, and getting a new Records Management System automated and compatible with anticipated Public Access to Information (PATI) legislation Many of the plan's points echo recommendations presented in March by the HMIC report, which called on the force to modernize. Carrying on the HMIC's call for more local recruits, Bermuda Police also committed to diversify staff. Describing the latest annual plan as a “bite sized activity list”, the document adds: “It also helps the public know what to expect from us and to monitor our performance against what we say we are going to do.” Useful website: www.bps.bm.

August 23.  Mailboxes Unlimited won its battle with Government yesterday over customers having to pay a new higher 25-percent duty rate for goods imported to the Island through the company. In a judgment handed down yesterday, Chief Justice Ian Kawaley ruled Mailboxes was a business and thus was entitled to so-called business end-use relief under a new law. As a result of the ruling, Government will have to pay half of Mailboxes’ court costs. Mailboxes owner Steve Thomson, who was represented by Alan Dunch, said he felt “vindicated” by the ruling. “Our driving motivation has always been to serve our customers to the best of our ability and keep costs as low as possible,” he said. “This decision will help our business and our customers in that process.” Premier and Finance Minister Paula Cox, commenting last night, said the Ministry will “carefully review the judgment and make any necessary changes in line with the judgment.” She noted the Court had ruled in favour of the Crown in refusing the other two declarations sought by Mailboxes, including its order that it be allowed to return to using one BCD per shipment. In an effort to “harmonise” duty rates, Government’s new legislation had raised duty to a flat 25 percent rate for all imported goods for personal use while goods imported for business use remained subject to generally lower duty rates, such as 6.5 percent for clothing and 8.5 percent for camera equipment. Mailboxes provides a US address for customers buying online for personal or business use, consolidates their purchases and has a courier ship them in to its Bermuda offices. The Collector of Customs contended Mailboxes was merely a shipper not a business, or importer, thus did not qualify for “business end-use relief” under “Customs Procedure Code 4000” . But the Chief Justice ruled “the interpretation contended for by the Crown would not just deprive the Applicant (Mailboxes) of business end-use relief. It would potentially deprive a wide array of businesses which the Customs Department itself has previously suggested are intended to benefit from CPC 4000 from entitlement to relief impacting on their tax burden in a significant way during a period of economic recession.” Mr Kawaley further said: “The main difficulty with the Respondent’s argument, as Mr Dunch pointed out, is that it flies in the face of the plain words of CPC 4000. CPC 4000 does not, as it easily might, limit the relief to a specific class of importers such as retailers. Nor indeed does the legislation exclude importers bringing in goods on behalf of third parties as opposed to on their own behalf. It expressly applies to ‘all importers’.” Mr Thomson said he remained concerned about delays in getting his customers’ goods cleared due to a new system requiring one Customs declaration for per item, rather than one BCD per shipment of consolidated goods required under the old system. He said it used to take hours to deliver landed goods, but under the new system they can take weeks to clear. Mailboxes had sought an order that it be allowed to use one BCD per shipment, but it appears the Chief Justice ruled that the Collector of Customs needed to deal with that point outside of the Court. The Chief Justice said in his judgment: “Businesses and the Collector have a shared interest in devising procedures which are sufficiently transparent to meet fiscal and public safety concerns while avoiding bureaucracy which is inconsistent with commercial efficiency. Ideally any problems which arise should be resolved through negotiation in the first instance. In the second instance they should be resolved through the review and statutory appeal procedure - assuming it is functional.” Mr Thomson said he looked forward to meeting with the Collector in the coming days to “iron out” the BCD issue and “determine how we best proceed in light of the Court’s ruling." In a response last night, Premier Cox said: “The Court today released its judgment on a case involving Mailboxes Unlimited Ltd. -v- Collector of Customs which sought three declarations against Government, inter alia, as to whether or not Mailboxes were entitled to the business end-relief provided by the Customs Procedure Code 4000 (CPC 4000) contained in the Tariff Act 1970. The relief was available to all importers who operated a business of importation for profit. The intent of the law was to maintain the same rate of tax for businesses and to have a different rate for private use. It was difficult to separate the two when one Courier imports goods for both business and private use. The Court recognized the difficulty and held that Mailboxes carried on a business of importation of goods irrespective of whether or not the goods were consigned for business or private use and that they were entitled to the lower rate of tax. The Court ruled in favour of the Crown in refusing the other two declarations sought. The main policy objective for the amendment was to assist the retail sector through duty relief and to provide an incentive to on-Island shopping. Revenue impact should not be material. This was never designed to be a major revenue raiser, even though any additional revenue is welcome.”

August 27.  Bermuda College (BC) will be signing a second agreement with Georgia State University (GSU), providing on-island baccalaureate degrees to Bermuda residents in the areas of Finance and/or Risk Management and Insurance. BC first partnered with GSU two years ago (2011) allowing qualifying BC students to enter into the junior year at GSU and pay discounted (instate) fees for a baccalaureate degree in business. The College says the new agreement that will be signed on Monday, September 9, will allow BC students who have earned at least 60 credit hours and who have been accepted into the Robinson College of Business at GSU to take online evening classes at GSU via simulcast to earn the Bachelor of Business Administration degree with specialisation in either Finance or Risk Management and Insurance. Barry Wood, director of External Relations for the Department of Risk Management and Insurance at GSU, will be at the signing on September 9.

August 29. Nuclear power is not a suitable alternative energy source for Bermuda and wind farms are questionable — the Island should be looking more to the sun and importing natural gas while cutting down on its own electricity usage. This according to the new president and CEO of Ascendant Group Walt Higgins, who has been a US energy industry leader and nuclear engineer. But even solar panels, solar thermal energy and introducing natural gas aren’t without significant challenges, he said. It’s estimated it would cost hundreds of millions of dollars to transport liquid natural gas and build an LNG terminal and infrastructure in Bermuda. Meanwhile, solar energy would require substantial investment and space — seven to 10 acres per megawatt — and output is intermittent. To address our future energy needs and environmental concerns Belco’s so-called New Energy Equation calls for a combination of replacement of its engines over time to ensure that base load is met efficiently and reliably, as well as power generated from renewable sources and demand-side management — technical, organizational and behavioral solutions to cut electricity consumption and demand. In fact, the Equation calls for 20 percent of Bermuda’s power to come from renewable sources by 2020, while Government’s Energy White Paper calls for 30 percent from renewable sources by 2020, therefore, somewhere between 70 to 80 percent of power will be generated by base load engines when the 2020 targets are met. So where will that energy from renewable sources come from, on an isolated 21-square-mile Island, in the midst of recession, with a population of about 64,000 people, thus making it tough to achieve economies of scale? Currently, we are nearly 100-percent dependent on imported oil. Belco uses around one million barrels of fuel annually, its total fuel costs were some $122 million in 2011. Bermuda’s volume of electricity consumption in 2010 was nearly 651 million kilowatt hours (kWh), slightly lower than the 656 million kWh consumed in 2009. We asked Mr Higgins and two Belco officials what they believed the best options for Bermuda were when it came to alternative energy sources and renewables. The answers below were provided collectively by Mr Higgins, Belco assistant vice-president, Engineering Roger Todd and Belco senior vice-president, Engineering, Environment and Occupational Health and Safety Michael Daniel. What do you feel are the best alternative energy options for Bermuda? Walt Higgins: “Introduction of natural gas as an alternative fuel to enable higher efficiency plant and reduce greenhouse gas emissions, in support of the (Government) Energy White Paper. Solar thermal water heating, most easily achieved during major renovations or new construction. Commercial scale solar photovoltaic (solar PV). Significant penetration of solar PV would provide a measure of peak ‘shaving’, as peak demand is driven by air conditioning loads in the summer. Not really alternative energy, but a lot can be done with demand side management (ie on the customer side of the meter) to better utilize the plant we have.” What are the pros and cons of Solar Thermal Water Heating for Bermuda? (Solar water heating systems use panels to collect free heat from the sun to warm domestic hot water, mostly for indoor water heaters or for pools.) (Mr Higgins, Mr Todd, Mr Daniel): Pros: High-efficiency method of water heating. Reduces fossil fuel dependency and greenhouse gas emissions Not subject to electricity or fuel pricing. Low maintenance. Mature technology. Prices are reducing as production increases, resulting in shorter payback periods than a few years ago. Cons: Retrofitting can be difficult, therefore, best achieved during major renovations or new construction. Capital cost required to install the system, but good return on investment. What are the pros and cons of Solar Photovoltaic (PV) for Bermuda? (Mr Higgins, Mr Todd, Mr Daniel): Pros: Reduces fossil fuel dependency and greenhouse gas emissions. Not subject to the fluctuations in fuel pricing. Low maintenance (if no battery storage). Mature technology. Prices are reducing as production increases, resulting in shorter pay back periods than a few years ago. Cons: Requires substantial space seven to 10 acres per megawatt (MW). Therefore opportunity in Bermuda is limited primarily to rooftops. High capital investment. Typically $7,000 to $10,000 per kilowatt (kW), depending on the size of the installation. Output is intermittent as it relies on the intensity and duration of sunlight. It is not suitable for base load power production. Conventional power generation or battery storage is required as backup to provide firm capacity. If battery storage is utilized, maintenance, replacement and disposal of batteries are required on a shorter life cycle than PV system. Battery storage will also increase the capital cost and reduce the return on investment (ROI). What are the pros and cons of Wind Farms for Bermuda? (Mr Higgins, Mr Todd, Mr Daniel): Pros: No fuel costs. Reduced greenhouse emissions in support of the Energy White Paper. Cons: Requires substantial space, therefore only possible offshore in Bermuda. Offshore solution has higher capital and operating and maintenance cost, therefore wind farms are often heavily subsidized. Significant transmission infrastructure requirements and backup generation. Highly variable output dependent on intensity and duration of wind — not suitable for base load power production. Noise and aesthetics. What are pros and cons of Ocean Energy for Bermuda? (Mr Higgins, Mr Todd, Mr Daniel): Pros: No fuel costs or emissions. Ocean energy is fairly reliable (or so research has shown so far). Cons: Technology is in research & development (R&D) and not yet in commercial production/operation. Unforeseen operations and maintenance challenges as with any new technology. What are the pros and cons of Nuclear Energy? (Mr Higgins, Mr Todd, Mr Daniel): Pros: Lower emissions than traditional fossil fuel power generation Typically lower electricity cost than oil-based generation. Cons: Not available on a scale appropriate for Bermuda. Traditional nuclear plants too large for Bermuda, greater than 500MW but typical capacity is 1300MW. (For comparison — Belco’s maximum generation capacity is 162MW). Smaller Nuclear Pebble Bed Reactors are still in R&D phase. High capital cost. Nuclear waste, regulation, safety. Due to the worldwide sentiment with regards to nuclear this is not a likely option. What are the pros and cons of Natural Gas in Bermuda? (Mr Higgins, Mr Todd, Mr Daniel): Pros: Natural gas is the cheapest fossil fuel, less expensive than heavy fuel oil, diesel and propane. Natural gas is the cleanest fossil fuel. When compared to diesel there is a 25 percent carbon dioxide (CO2) reduction, 85 percent nitrogen oxide (NOx) reduction, 99 percent sulphur oxide (SOx) reduction and 99 percent reduction in particles. Natural gas is in abundance with proven reserves of over 100 years in the US alone. Belco’s existing and planned generators are capable of running on Liquefied Natural Gas (LNG). Cons: Natural gas would need to be transported to Bermuda in its liquid form or as LNG. An LNG terminal would need to be constructed to receive, cryogenically store and re-gasify the LNG for distribution. LNG terminals and associated infrastructure have a high capital cost.

September 7.  The announcement that Government schools are rushing to fill 23 teacher vacancies this month was branded “an annual and recurring problem” by the Opposition One Bermuda Alliance. Education Shadow Minister Grant Gibbons said: “While some last minute resignations or retirements are to be expected, parents were being told a similar story last year in September: that red tape and hiring delays would mean teacher shortages in a number of specialist areas.” Out of a total of 901 positions, 23 have been left empty — although Education Minister Dame Jennifer Smith has said Government expects to have 21 filled during September. She attributed most of the gaps to “last minute decisions” by teachers to retire or move on. “It’s not clear from the Minister’s statement whether existing teachers will have to cover classes and prepare lessons outside their normal areas to address the shortages — or whether substitutes will be made available given the government’s budgetary problems.  Neither approach is ideal and raises the possibility that the quality of the students’ education could suffer in the first few critical weeks of school.” Bermuda Union of Teachers leader Mike Charles said he knew of many teachers who had gone overseas, especially in science and maths. However, he added, the BUT didn’t anticipate other teachers being moved out of their specialist subjects to fill the gap. “It used to happen, but we haven’t had any complaints about that in quite a while. Schools themselves would be remiss if they tried to encourage that kind of thing.” Mr Charles said the new Cambridge Curriculum in public schools made it especially unlikely for teachers to be moved outside their specialty. Overseas teachers are expected to fill the majority of vacancies over the coming weeks.

2012. September. Report on the global reinsurance market by ratings agency AM Best. The report, which bases its rankings on the amount of gross premiums written by reinsurers in 2011, rates ninth-placed PartnerRe as the largest Bermuda-based reinsurer with gross premiums written of $4.6 billion, with Everest Re close behind in 11th place on $4.28 billion. The figure of 15 includes only groups whose holding companies are based in Bermuda. It doesn’t include companies such as Ace, XL, Flagstone Re and Allied World Assurance Company, who all make the top 50 and have substantial underwriting operations on the island. The report, entitled ‘Reinsurers show resilience under weight of catastrophes, economic woes’, also suggests that Bermuda reinsurers shouldered more of the burden of insured losses from last year’s high incidence of natural disasters than their European rivals. Bermuda reinsurers’ underwriting results have been propped up in recent years by the release of reserves set aside for prior-year events. There have been increased efforts by the US reinsurance lobby, notably from the Reinsurance Association of America, for the US Government to enact tax changes and add that a shift in tax policy could prompt an exodus of companies out of Bermuda. For various reasons, some Bermuda-domiciled companies already have moved their headquarters to Ireland or Switzerland, which have established tax treaties with the United States. Taxes may be higher than in Bermuda, but they’re lower than in the United States, and less subject to change. A shift in US tax policy toward Bermuda could prompt a further exodus. In recent years, Flagstone Re and Allied World moved their corporate domiciles from Bermuda to Luxembourg and Switzerland, respectively, while others, whose operational headquarters were in Bermuda, such as Ace and XL, have also shifted their base to Europe. Over the past year, Bermuda has become home to start-ups backed by US hedge funds, including Third Point Re, SAC Re and PaCRe.  Bermuda remains attractive even to newcomers, such as the hedge funds that are a growing source of capital to the reinsurance market. These investment vehicles, like generations of reinsurers before them, are looking to Bermuda as a haven to avoid paying US tax rates on their insurance-related income. Unofficial reports abound of hedge funds holding discussions with Bermuda-based companies over various reinsurance vehicles to be based on the Island.

2012. September. Bermuda re-insurers make up about 36 percent of the global reinsurance market based on property/casualty net premiums earned, according to credit rating agency AM Best Co. Best's special report on global reinsurance. Bermuda market’s major US-listed re/insurers bounced back strongly to reap more than $4 billion of net income in the first quarter of this year. This represents a dramatic swing from the $2.67 billion net loss the group of 17 companies recorded in 2011, when most were hit by claims from an earthquake in New Zealand and a tsunami in Japan. For the Bermuda market a relatively quiet first quarter, in terms of catastrophe activity, came as a welcome relief after last year’s losses, which were not only driven by heavy claims from natural disasters, but also by low interest rates which squeezed investment income. The change of fortune is also shown by the companies’ combined ratios, a measure indicating the proportion of premium dollars spent on claims and expenses. A figure lower than 100 percent indicates underwriting profitability and the average combined ratio for the group in this year’s first quarter was 89.4 percent, a stark contrast from last year’s dismal 149.5 percent. In fact, all except Platinum and Argo Group managed a sub-100 combined ratio this year. Last year, only Maiden Holdings, which has little exposure to catastrophe business, came in under 100. By far the biggest generator of profits was Ace Ltd, which earned nearly $1 billion, compared to a $250 million profit in the same period of 2011. Ace has evolved from its Bermuda roots into a truly global insurer, with its holding company now based in Switzerland. Some companies produced almost a mirror image of their results from the same period last year. Everest Re, for example, made a profit of $304.7 million, compared to a loss of $315.9 million last year, while Montpelier Re posted net income of $107.1 million, compared to its 2011 first-quarter loss of $104.3 million. Only Ace, Alterra, Arch Capital, Allied World and Maiden Holdings managed to make a profit in the first quarter of both years.

September 21, 2012. Bermuda Used in $4.5 billion tax avoidance scheme. Also Royal Gazette. WASHINGTON (Reuters) — Microsoft Corp and Hewlett-Packard Co have pushed back against claims by a US Senate panel that they used offshore units and loopholes to shield billions of dollars in profits from US taxes. Calling tax avoidance rampant in the technology sector, the Senate’s Permanent Subcommittee on Investigations said tech companies used intellectual property, royalties and license fees in overseas tax havens to skirt taxes. The panel subpoenaed internal documents from the companies and interviewed Microsoft and HP officials to compile its report, which uses the companies as case studies. “The tax practices and gimmicks range from egregious to dubious validity,” Democratic Senator Carl Levin, chairman of the panel, said at a news conference. Officials at HP and Microsoft strongly denied any wrongdoing, noted tax officials had not objected to the structures and said there were valid reasons for tax planning. Senator Tom Coburn, the top Republican on the panel, signed onto the new report but blamed Congress. “Tax avoidance is not illegal. Congress has created this situation,” Coburn said, criticizing the complex tax code and the 35 percent corporate tax rate, among of the world’s highest, though few companies pay that statutory rate. The subcommittee said that from 2009 to 2011, Microsoft shifted $21 billion offshore, almost half its US retail sales revenue, saving up to $4.5 billion in taxes on goods sold in the United States. This was accomplished, the report said, by aggressive transfer pricing, where companies value intra-company movement of assets. Corporate units must use a fair market price to value transfers, but critics say they are manipulated to minimize tax. The report also said the software giant shifts royalty revenue to units in low-tax nations, such as Singapore and Ireland, avoiding billions of dollars of US tax. Levin said one Microsoft Singapore unit was legally headquartered in Bermuda and had no employees. Levin asked Microsoft’s tax vice president, William Sample, if the reason was to cut its tax bill. “Yes, that is correct,” Sample said. Sample also said several offshore units employ hundreds of workers, which Levin noted was a tiny fraction of its workforce. Internal Revenue Service officials are not allowed to comment on specific taxpayers, but Chief Counsel William Wilkins said enforcing transfer pricing law “has been the IRS’s most significant international enforcement challenge.” US companies have at least $1.5 trillion in profits sitting offshore. Most say they are keeping them there to avoid US tax. Of the top 10 companies with the biggest offshore cash balances, five are in the technology sector. “The high-tech industry is probably the No. 1 user of these offshore entities to transfer intellectual property,” Levin said. The panel said Hewlett-Packard funded US operations with a stream of intra-company loans, using an exception in the law for short-term loans, to avoid billions of dollars in taxes. Levin said more than 90 percent of HP’s cash was sitting offshore, as opposed to about 65 percent of revenue coming from countries outside the United States. An HP spokesman said in a statement that the hearing was a politically motivated attack. “We are disappointed to see what appears to be a politically motivated attack on one of America’s largest employers,” HP spokesman Michael Thacker said before the hearing. Lester Ezrati, an HP tax vice president, said HP used cash faster in the United States for valid reasons including that certain payments like pensions must be made with US cash. “HP has an overall strategy to minimize expenses and that is what generates where the cash is located,” and “one of those expenses is taxes,” Ezrati said. Under tax law, foreign profits are subject to US tax when they are “repatriated,” or brought into the United States, usually in the form of a dividend. One internal document released by the panel suggested that HP routinely brought money into the US without paying US tax. An HP presentation noted that “without planning, repatriation of foreign earnings could lead to tax payments.” Loans by the foreign units to a related US entity are considered a dividend for tax purposes but there is an exception for loans that are repaid within 30 days, according to the committee’s tax experts. HP set up a complicated series of short-term loans starting in 2008 to these businesses that were continuous without gaps, to get around that provision, the panel found. Big companies have lobbied for a tax holiday to let them bring offshore profits into the United States at a reduced tax rate, arguing that the profits are trapped offshore. That effort has fallen flat amid reports suggesting such a program would cost the government significant revenue and not produce US jobs. The report on transfer pricing “mocks the notion that profits of US multinationals are ‘locked-up’ or ‘trapped’ offshore,” Levin said. The subcommittee also criticized accounting giant Ernst & Young for blessing HP’s practices. Ernst & Young partner Beth Carr said that the firm stands firmly behind its auditing for HP.

September 28. Tourism Minister Wayne Furbert this morning admitted he had made a mistake over the future of the Park Hyatt resort in St George’s. On TV last night he said the contract with developer Carl Bazarian had been terminated. But in a statement this morning he said: “Yesterday, when I spoke on ZBM news, I misspoke when I said that government has terminated the Park Hyatt agreement. What I meant to say, is that the time period for the agreement has expired and that the agreement has lapsed. We are fully committed to a hotel in St George’s. Mr Bazarian and his team are traveling to Bermuda and we will be meeting with him next week.”

October 2. Australian television pioneer Reg Grundy has put his huge Tucker’s Town estate up for sale for just over $38.2 million. Behind former US consul general’s residence Chelston in Paget, Idolwood Lagoon Estate is one of the most expensive homes ever listed in Bermuda. Chelston is listed with Christie’s local affiliate John Sinclair for $45 million. Mr Grundy’s palatial Idolwood Lagoon Estate is set on the waterfront on 4.25 acres and has a 10,000 square-foot main house, three cottages and its own beach, dock, tennis court and four garages. The home and grounds featured extensively during Mr Grundy’s interview a few years ago with Australian TV host Tracy Grimshaw. He and wife Joy invited her exclusively into their sprawling Bermuda home and grounds. Mr Grundy, the man behind the Restless Years, Young Doctors, Sons and Daughters, Neighbours and Sale of the Century, had not given a major interview in decades. His home is listed with Rego Sotheby’s International Realty, and agent Margaret Young. She declined to comment on the listing or reason for the estate being put up for sale. Rego’s website describes the estate as having a main residence which was completely rebuilt in 1997 includes five bedrooms with ensuite bathrooms, a study with half bathroom. “As well as a spacious two-storey entrance hall, grand living room, formal dining room, kitchen, family room and two-storey library, two of the guest bedrooms have their own living room, dining area and kitchenette,” the listing says. “Summer Cottage is a self contained guest cottage with studio kitchen and patio overlooking the lagoon. Little Moss Cottage has 2 bedrooms ensuite, living room with open plan kitchen and outdoor terrace as well as a studio annex with bedroom, kitchenette and bathroom. Mayfield Cottage is currently used as an office but has the ability to be three bedrooms with one ensuite and two half baths with entrance hall, kitchen and living room and a terrace overlooking Castle Harbour. Adding to its desirability are four garages, gym, tennis court, an extensive orchard, nature trails with ravines, two docks and moorings.” Mr Grundy, now nearly 90 years old, often ventured out from Idolwood Lagoon Estate to photograph his beloved Bermuda longtails. He published a book of photographs in 2005, “The Wildlife of Reg Grundy” and has exhibited his photos of longtails at local galleries. They are also displayed at LF Wade International Airport.

October 4.  Developer Carl Bazarian said yesterday that construction on a new Park Hyatt resort at the old Club Med site in St George’s could finally begin by the end of the year as part of revised plans and a renewed commitment to the project. Mr Bazarian told The Royal Gazette a new plan is being worked on with the Hyatt corporation that will see just a hotel and amenities built on the site as part of a first phase. The hotel could be open by early 2015, he said. Back in the US last night, Mr Bazarian said phase one would include the proposed Nick Faldo golf course as well as a spa and meeting space. He said the new hotel would have 130 to 150 rooms. Original plans for the resort called for a 100-room hotel, more than 100 residences, and approximately 30 fractional units. His announcement yesterday followed a series of meetings in Bermuda this week with Government officials. Hyatt officials were also on the Island. Mr Bazarian also met with St George’s Mayor Kenneth Bascome. “As we mentioned last week, we have been working on ways of addressing the challenges in Bermuda when it comes to the high cost of developing a luxury hotel, the pace of its construction and the efficiency of its operation. In this worldwide real estate recession, we are working with Hyatt on a game plan that is a stand-alone hotel without any reliance on real estate sales in phase one which will accelerate project construction. We expect this could deliver even more luxury hotel keys for St George’s on a cost-effective design basis. This week we also met with our Bermuda construction manager to review the costs for a stand-alone hotel phase one approach. These are the areas where hotels new and old have had challenges in Bermuda and I think we have come to a plan that addresses each of these challenges and creates a truly sustainable destination resort for St George’s and Bermuda. We met early on with Mayor Bascome to apprise him of the new approach in order for him to inform the St George’s community. It was an open and constructive meeting. We also met with Government this week to update them on our plans and everyone seems supportive and excited about the direction we are heading in. Hyatt is also with us this week and is as committed to the project as ever. I am confident we will begin the permitting process by late October and, depending upon the approval process and permitting, we will start construction on the resort by the end of the year. If all goes as planned, we would have the hotel open and running by early 2015. We appreciate the patience of everyone in St George’s and Bermuda — we know these are hard times and appreciate the tremendous responsibility of development of this precious Bermuda asset.” Mr Bazarian’s latest statement on the proposed resort comes after Tourism Minister Wayne Furbert last week took back a remark made on TV news that the contract with the developer had been terminated. Mr Furbert said after: “What I meant to say is that the time period for the agreement has expired and that the agreement has lapsed. We are fully committed to a hotel in St George’s.” A spokesman for the Tourism Minister said he had “no comment’ on Mr Bazarian’s announcement yesterday. UBP St George’s MP Kim Swan last night charged that the “PLP Government has abrogated its responsibility” over the Hyatt deal. “The people of Bermuda must be asking themselves who is running Bermuda,” Mr Swan said. “Especially after developer Mr Carl Bazarian, who is already in breach of his lease, and fresh on the heels of the Minister of Tourism's statement that he mistakingly stated that Mr Bazarian's lease had been terminated, can fly to Bermuda and make an announcement about a scaled down plan for the Park Hyatt development without showing any plans to the public or without any reference to the lease of 125 acres of public lands for 262 years and without a "Dickie Bird" from the Government.” Mr Swan added his colleague Charles Swan has identified that Mr Bazarian is in breach of his lease, but continues to be met with Government silence. “It is important to remind the public that the PLP Government were not willing to table and debate the lease in the House of Assembly in 2008 as urged by the United Bermuda Party. The lease is separate. It is distinctly different to the Park Hyatt Act which was passed in Parliament in 2008. For the developer to be making an announcement and speak on the Bermuda Government's disposition on the matter, whilst the Government continue to remain silent, is totally unacceptable. We are less than three months before the Premier must call an election and the PLP Government allowing Mr Bazarian to speak for them is totally unacceptable.” The old Club Med hotel on the site was demolished in 2008 to make way for the proposed Park Hyatt. Mr Bascome said this week that it may be time for Government “to put some pressure on Mr Bazarian to prove that he is committed to build or look to enter into a contract with other parties to get it built.” He was speaking after the Bermuda Environmental Sustainability Taskforce last month claimed the terms of the agreement between Bermuda and Mr Bazarian on the construction of the proposed Park Hyatt resort had not been adhered to “given that construction was to have begun by August 2012”. But the Bazarian group hit back, saying: “Any suggestion that we are falling short on our responsibility of delivering a luxury hotel to St George’s is categorically inaccurate.” Park Hyatt, after signing on to manage the resort, announced in October 2010 that it was investing a “significant” amount into the then $300 million development, in officially agreeing to become an “equity stakeholder” in the project.

2012. October 4. A new report reveals that Bermuda's international companies provide nearly $1 trillion of direct investment in the global economy. Business Bermuda's 2012 Economic Impact Report, published yesterday, showed that Bermuda's holding companies provided $939 billion of inward and outward direct investment for the world economy. It also shows that the Island's two-way trade with the rest of the world totaled $80 billion in 2010. In addition, Bermuda's multinational companies generated an additional $100 billion of direct sales in ten major markets surveyed through its subsidiaries in the manufacturing and financial services sectors. The report also concludes that Bermuda's businesses provide 600,000 jobs in the world economy. The US remains the Island's largest trading partner. Bermuda is the eighth largest investor in the US, with a direct investment position of $55 billion — more than the entire Caribbean, Singapore and Hong Kong taken altogether. Asia is the fastest growing trading partner for Bermuda. Trade with China, including Hong Kong, and Singapore grew 200 percent between 2004 and 2011. Bermuda holds $20 billion of investment from China and Singapore — up from $1 billion in 2000. Meanwhile, Bermuda emerged as one of the top 20 trading partners of the European Union. Dr Charles Ludolph, a US-based economist who conducted the study on Business Bermuda's behalf, said: “The study captures the four economic roles that Bermuda plays in the world economy. “Bermuda's financial sector and regulatory governance provides financial stability in a time of volatile global capital flows. Second, Bermuda is stepping up from its regional strength in providing a needed capital market for the US in insurance and reinsurance and expanding into Asia and other markets. Bermuda is finding a new role as an investment domicile for Asia. And perhaps most important, Bermuda continues to support US international business competitiveness with company law and regulation that meets the security needs of business but is responsive enough to lower costs in a tough international competitive environment.” Business Bermuda also revealed the results of its annual Top-of-Mind Awareness Study, which showed that awareness and understanding of Bermuda in international business is high overall in key markets around the world. Sloane & Company, in partnership with regional firms, conducted 250 telephone interviews among a representative sample of Bermuda's traditional base of clients in North America, London, Europe, Asia and the Gulf including lawyers, accountants, financial services and re/insurance executives between August 1 and August 30, 2012. One finding was that Bermuda faces challenge in reinvigorating the discussion about its international business offerings as familiarity breeds complacency. Since the 2011 study, there was a ten percent increase in overall awareness in Asia to more than 95 percent and an 18 percent increase to 78 percent in the number of people who indicated they were very familiar with Bermuda in the Gulf. One issue that emerged is that Bermuda's sophistication and reputation for substance are “double-edged” swords. Respondents highlighted that Bermuda is great for complicated international business transactions and the most-established hedge funds as they enter the reinsurance market. However, when lawyers are looking at jurisdictions for the most basic, small and emerging hedge funds other jurisdictions appear to have a simpler and more efficient approach. In addition, the lingering effects of the economic crisis in Europe and North America remain a concern for the financial community and have caused investors and others to be more cautious. While not as significant as previous years, there are some concerns about the impact on tax and regulatory environments impacting offshore based on the outcome of the US Presidential election in 2012. Business Bermuda CEO Cheryl Packwood said: “This research is very helpful in guiding our marketing efforts and providing a benchmark for our progress. The news out of Asia and the Gulf is heartening and confirms that we are investing time and energy and that is making a difference. We are also pleased with the research out of the US, UK and Europe as it shows we have not lost any ground in highly competitive markets and it gives us some clear indications on the issues we need to address.”

October 9. Bermuda has the second highest salary for expatriates — just behind Singapore, one of the Island’s main competitors. According to HSBC’s fifth annual Expat Explorer survey, Bermuda ranked second overall in Economics League table, as well as whether expats feel the Island is a wealth hot spot, and ranked first in disposable income. Expat Economic findings reveal how economic situations differ for expats around the world and how countries compare with one another. The survey is the largest survey of expatriates around the world, interviewing 5,300 expatriates from 100 countries, across the globe, including Bermuda, making it the largest ever sample to date. A sample size of 30 or more respondents was needed from each country to be included in the results and as such, only 30 countries qualified. The Island ranked in the middle of the pack for overall experience (15th spot), with Cayman Islands (1), Singapore (4), Switzerland (7), Bahrain (11) and Hong Kong (12) ranking higher. Bermuda ranked 14th for the ease with which expats can set up here and ranked in the ninth spot for quality of life which fell from fifth in 2010. Bermuda was not included in the 2011 survey due to lack of participants. Bermuda ranked close to the bottom of the pile, in the 29th spot, for the ease at which expatriates integrate into the local community. Bermuda also ranked in the top ten for the local weather, commute to work, work/life balance, social life and sports. Meanwhile, the Island ranked close to the bottom regarding access to quality healthcare, organizing schools for children, access to shops, availability of entertainment and finding accommodation. “This is the fifth year we’ve run the Expat Explorer survey and the quality and depth of the findings continue to provide a wealth of information for the expat community,” said Dean Blackburn, head of HSBC Expat. “Not only is our online interactive tool a valuable and trusted resource for expats, the insights also help us as a business offer advice to those looking to grow and protect their wealth while living or working abroad.” The survey revealed that Southeast Asia has come to the fore as a leading destination for expat earning potential. Four additional countries in the region also make the top ten, including Thailand (3), Hong Kong (4), China (7) and Vietnam (10). Expatriates in Southeast Asia continue to benefit from increased earnings with Singapore holding the largest proportion of wealthy expats of any country. More than half (54 percent) of Singapore-based expatriates who took part in the Expat Explorer survey earn more than $200,000 per year, compared to a global survey average of only seven percent.

October 13.  It used to be that most people in Bermuda had a vegetable garden out back that they used to sustain the household. Nowadays, many barely have space for a potted plant, let alone an entire garden. The Bermuda National Trust is looking to fix this, at least in part, by offering community garden allotments at Tivoli on Middle Road, Warwick. The property was donated by Gloria Higgs back in 1984. It is also known as the Tivoli North Nature Reserve. Space alongside the road has been cleared and is waiting to be turned into approximately 20 allotments of 20ft X 10ft. The plots will cost $110 a year, $30 of which goes to a BNT membership. The only caveat is that anything planted has to be organic. There will also be an orchard on the site producing a variety of fruit bearing plants including figs, guava and avocados. The garden will officially open the first week of November. BNT conservation officer David Outerbridge expected that one of the challenges people would face would be finding the time to commit to the garden, but if they do find the time, it will be worth it.  “The rewards are numerous, though,” he said. “If you have ever grown your own food, you know it is an incredibly rewarding experience. Farming was always important to us until things changed in Bermuda. These are our roots in Bermuda and it is nice to reconnect with our roots. We were a farming culture. That is what we came from. The BNT is all about preserving culture and the natural heritage.” The Ross Blackie Talbot Foundation raised $30,000 for the project in its final fundraising year. The money will go towards the ongoing maintenance of the property. “They have been enormously generous,” said Mr Outerbridge. A number of volunteer groups have also helped by creating and clearing the space over the last couple of months. Staff from XL Group cut down the hedge alongside the road and also erected bluebird boxes; Aon Group helped remove invasive seedlings and built a fence. “[This garden] is a grand scale idea for a project and it will take time,” said Mr Outerbridge. “Its limitations are up to the people themselves. As much as people put in, they will get out. We are hoping to have a volunteer day at the end of October to lay out all the allotments to deposit mulch in the pathways. In the next couple of weeks I will be building compost bins and getting everything ready for the permaculture class.” The property has sat fallow for about a year. It was previously used to grow sweet potatoes and has also had livestock on it. There is a shed on the site, and the BNT plan to soon install a well and traditional hand pump. There will be workshops to help people get started. One of the first, on permaculture, will be given by Frankie McIntosh. “Permaculture is a permanent form of agriculture,” said Mr Outerbridge. “It was developed by a Tasmanian, Bill Mollison. It is about utilizing ecosystems through permanent forests of fruit trees and native and endemic trees. Everything fulfills a role in the ecosystem. The basis of it is to retain soil and water on the land. There are plants that create biomass and create food and others that provide structure for the forest.” Mr Outerbridge, who has a home garden and helped family members start theirs, said this was something near and dear to his heart. At the State University of New York Purchase College he studied anthropology, focusing on traditional uses of plants. He carried out fieldwork in Hawaii. “Hawaii culture is very interesting in terms of traditional use of plants,” he said. “They are a very sustainable culture. They use plants for everything.” There are two other community allotment gardens in Bermuda with one of the most well known in Paget near the Foot of the Lane. “So far I have a lot of people interested, although we are only just going public,” said Mr Outerbridge. “We want to see how it is received and see if people are really interested. We think they will be but we have never done anything like it. I know the Paget garden has been well used over the years. There will be small growing pains, as there is with any project. We want it to be organic and sometimes that can be labour-intensive. There will be a lot of learning in the first couple of years and then we can expand.”

October 17. Par-La-Ville Hotel & Residences, the company behind the proposed St Regis hotel in Hamilton, is suing a major Chinese investment bank. The Royal Gazette also revealed that Donal Smith is no longer with Par-La-Ville Hotel & Residences; and the new president of the company is Michael MacLean, managing director of M&M Construction. Local firm M&M worked on Rosemont City Place, the Hamptons, and major projects at the Tucker’s Point resort. Mr MacLean told us yesterday the writ has “no bearing on the current financial structure we have or the financial partners we have”. He added that the action taking place with the company and Citic will not affect the hotel being developed or push back the schedule. He declined to comment on the reason for the writ. Par-La-Ville Hotel & Residences’ US-based principal Ted Adams, of Unified Resorts, also declined to comment. The writ filed in the Bermuda Supreme Court against Hong-Kong-based Citic Securities International, a subsidiary of China’s largest listed brokerage, as such: Par-La-Ville Hotel & Residences Ltd vs Citic Securities International Company Ltd, October 10, (law firm) Conyers Dill & Pearman Ltd. Donal Smith declined to comment on the writ or reason for his departure from the company. He was its co-founder and vice-president. Some observers had expressed concerns about a conflict of interest since Mr Smith was also deputy mayor for the City of Hamilton, which owns the Par-La-Ville Road site for the proposed hotel. Tourism Minister Wayne Furbert had no comment on the matter either. Last week Hamilton Mayor Graeme Outerbridge said that developers were “meeting the obligations” of an “extended lease”. This after the previous City leaders and Mr Adams had signed new agreements and a ground lease for the Par-la-Ville site after project deadlines in the previous contracts were missed. Those agreements were said to include strict deadlines for a St Regis hotel, the specifics of which were not released. Those deadlines, though apparently expired. Mr Smith had insisted in August that financing for the Par-La-Ville project was in place, and that the project would break ground this year. The St Regis project has “in principle” planning approval to build nine storeys on the Church Street side and ten storeys on the Par-la-Ville side, with three levels of underground parking. In addition to 140 hotel rooms the luxury development was granted permission for 80 St Regis residences. Plans for a hotel at the Par-la-Ville were first announced in 2007 with Ritz Carlton attached. Starwood was named as a new partner in 2009, when it was stated the hotel would open in 2013.

2012. October 19. Up to 60 jobs are on the line as Coral Beach Club faces an increasingly uncertain future after members turned down a plan by the operator to sell them the resort’s facilities for $28 million. There are concerns the exclusive beach and tennis club could close at the end of next month, be sold, or that it could even be handed back to the mortgagee, Swedbank. New York-based Brickman Properties, which acquired a 200-year-lease on the club and operates it, had said it would collect membership dues only through November this year by which time it had hoped its equity conversion plan would have gone through. Brickman has said it’s no longer interested in redeveloping the property as a five-start resort. A group of senior members of the club have banded together to try to keep it open and have presented an alternative ownership proposal to Brickman. But a letter this week updating the members on their efforts said Brickman refused to discuss the new proposal with them, however, they were “continuing to work towards ensuring that CBC will remain open beyond 30th November”. An official with Brickman told The Royal Gazette this week the company had no comment on what’s happening with the club at this stage. Club sources told us a large percentage of members rejected paying up to $35,000 each to Brickman as part of an equity conversion plan giving them ownership of just the facilities and not the 138 rooms/cottages, or much of prime oceanfront property, on which Brickman holds a lease. As part of the equity conversion, around 1,500 local and overseas members of the club were asked to also take on at least $5.5 million in debt owed by Brickman. Coral Beach Club management told us yesterday they had “no idea” what would happen to the club after November and were “carrying on business as usual”, booking guests, events and parties beyond next month. The resort employs some 60 full and part-time staff. A tourist, who works for a major US association, said he stayed at the resort last month with his wife as a non-member and got the sense staff were concerned when he brought up articles he had read about the club’s future. “I asked several non-senior staff members if they knew what was going to happen, but they said they didn’t and it clearly made them uncomfortable, so I dropped it,” he said. “One waiter added that they were told they would get word at the end of the month (September).” He added that when he was taking some pictures in the main building, a woman who worked there “asked if I was taking some last pictures”. The steering committee of the Informal Group of CBC Members said this week in a letter to members, which we obtained: “Since our last communication to CBC Members dated 5th July, we have been working hard to assess and develop plans for the survival and possible Members’ acquisition of CBC.” The committee said members had donated more than $75,000 towards legal and other professional costs being incurred as part of the effort, which includes: “We have revised and correlated a master contact list for Members, analyzed Members’ responses and considered Members’ ideas and suggestions for the future of CBC. “We have communicated and negotiated with BP3 (Brickman Properties 3 Ltd) on Members’ responses to the original ‘equity offer’ and considered the terms of a potential revised offer from BP3. We have analyzed the current financial statements of CBC and formulated a budget for the period 2013 to 2015. We have targeted and valued renovations needing immediate attention and other renovations that will be required over the next three years as available funds dictate. We have reviewed the current lease between BP3 and Horizons Ltd, the terms of the original mortgage secured over the property and Swedbank’s role as current mortgagee. We have agreed on an alternative proposal to BP3’s revised terms. Our proposal provides for complete CBC ownership and control by Members. However, to finalize our proposal we need further information and access to other documents, including a ‘Definitive Agreement’, which is referred to in the Lease and which we expect contains obligations that would be critical to any purchaser of CBC, including potential protection for its continued operation. We recently invited BP3 to meet with us to discuss revised terms, but our request for a meeting was turned down. We were simply invited to submit a counter offer in writing. We have been asked to confirm rumors relating to the handing over of CBC by BP3 to Swedbank. Whilst we do not have information to confirm or deny this, we would expect and trust that the interested parties would make any change in ownership known to the Members at an appropriate time. Despite BP3’s apparent lack of interest in discussing revised terms with us, we are continuing to work towards ensuring that CBC will remain open beyond 30th November. We intend to request an extension of Membership for a further period to allow negotiations to continue and to keep CBC an open and vibrant club with the help of the excellent and committed staff whom we all appreciate so much. Finally, we continue to believe that the future success of CBC depends on the Members being in a position to act quickly in a coordinated and financially feasible manner and will be looking to the Members to support and achieve this.” The committee includes Francis Carter, Anthony Gorham, Elliott Rogers, Teresa Chatfield, Richard Keane, Steven Rees Davies, Jeff Conyers and Judith Howe Tucker.

November 2. Alterations to the tune of $4.6 million are planned for Bermuda’s airport. The eight-month project is to begin this year, as much of the Ferry Reach skyline now presents obstacles to aircraft under tighter global regulations. Explained LF Wade International Airport general manager Aaron Adderley: “Objects now defined as obstacles include the hilltops, trees and houses in the approach zone.” The rules are set by the International Civil Aviation Organisation (ICAO). As a result, planes descending to the 9,753ft strip technically known as Runway 1-2 will have to make a slightly steeper approach to allow sufficient clearance and the markings and lights on it will have to be moved 587ft forward. Florida-based HR Pruitt has been hired for the job, but Mr Adderley said local companies should pick up significant business from the project, which will require the old markings to be scrubbed off and new paint and asphalt to be laid down. The entire runway was last resurfaced in 2003, although part of the runway’s 1-2 portion got repainted in 2007 along with the “apron”, where aircraft park. The project is known technically as visual slope segment penetration, or VSSP. Explained Mr Adderley: “One of those alphabet soup acronyms within aviation.” He continued: “In addition to moving the runway marking, we also have to relocate the edge lights. We will add central lane lighting, which right now we don’t have, that will also enable aircraft to land here in Bermuda when the visibility is low, for example if there’s a thunderstorm cell overhead. With this additional lighting, we can accommodate aircraft in more inclement weather conditions.” Precision approach procedure indicators, which give pilots guidance on their vertical approach, will also have to be moved. Mr Adderley said Bermuda’s airport faces special challenges in the tight space that it occupies. Under the Bermuda Plan, any East End development application must go before the Department of Airport Operations as well as Planning, to ensure no obstacles are presented. “Even though this project requires overseas expertise, there is a significant opportunity for local companies to participate,” Mr Adderley said, adding: “I’m happy to say that this particular company has a record of completing projects on time and under budget.” Airport engineering manager Wendell Burchall said the work will take place between 10pm and 6am to avoid disrupting air travel. About 52 personnel will be required for the task, although numbers out on the runway will vary as the job progresses. LF Wade International Airport has a single active runway, known as 1-2-3-0. Runway 1-2, the portion where aircraft come in over Ferry Reach, has the same amount of asphalt surfacing as 100km of Bermuda’s twin-lane roads. There are also 100km of markings on the 150ft by 9,753ft runway, which is about to undergo changes under new international regulations. LF Wade Airport Bermuda  runway was last resurfaced in 2003. The runway itself dates back to the 1940s, when it was laid down by US forces. Bermuda’s runways are still laid out in the ‘A’ shape characteristic of military facilities, but only the main strip is in use. That leaves the “finger” for fire department exercises, the parking of military aircraft — and future developments such as a proposed solar energy plant. A third strip is known as Taxi Way Bravo, which connects the runway to the “apron” in front of the airport buildings. In order to give adequate clearance for aircraft landing over Ferry Reach, their angle of approach is to be adjusted by two-tenths of a degree — enough for the “threshold” and other landing markings to be moved forward more than 500ft. The alterations, which are required of Bermuda under international standards, will have no effect on take-offs. April 2013 has been set as the final deadline for the project to start, but work is set to begin before the end of this year. 

Bermuda stamps 2012

Bermuda stamps 2012

2012. November. Government announced the removal of the requirement to file prospectuses for listed companies. Then-Minister of Business Development and Tourism Wayne Furbert approved an amendment to the Companies Act 1981 to remove the current requirement that certain companies file a prospectus with the Bermuda Registrar of Companies. This is applicable to companies whose shares are listed on an exchange deemed an appointed stock exchange by the Minister of Business Development and Tourism; or the prospectus is otherwise accepted by a competent regulatory authority appointed by the Minister. This amendment to the Companies Act was proposed by a consortium of Bermuda stakeholders working through the Business Bermuda Legislative Change Committee who provided a wide range of recommended amendments in 2011. The proposed amendments are intended to respond to changed economic circumstances with the international business environment with the specific intent of removing inefficiency. This is very welcome news for the international business sector. The Legislative Change Committee was instrumental as a stakeholder in bringing about this amendment. This removal of an unnecessary step makes the process of doing business in Bermuda even more attractive and that is good for the industry as a whole. The Government began adopting many of the recommendations of the Legislative Change Committee in late 2011 with the passing of the Companies Amendment (No. 2) Act 2011 and this decision is an extension of that reformation process. This proposed amendment is consistent with the Ministry of Business Development and Tourism’s mandate to expand the economy, create jobs, and increase revenue through continued promotion and development of Bermuda as a first-tier international financial centre.

December 24, 2012.  UK Overseas Territories Minister Mark Simmonds has congratulated Craig Cannonier for his appointment as Premier in the wake of last week’s general election. “I welcome the appointment of Premier Craig Cannonier, JP, MP, leader of One Bermuda Alliance. Bermuda is the oldest and most populous Overseas Territory with strong constitutional connections to the UK, going back 400 years,” Mr Simmonds said in a statement on Friday. “When I spoke to Premier Cannonier today (20 December) to congratulate him, I stressed that I look forward to working with the Premier and his Government on a wide range of issues highlighted in the UK’s White Paper on the Overseas Territories. I would also like to thank former Premier and Finance Minister Paula Cox MP for the valuable contribution she made to Bermuda politics during her term in office, both domestically and internationally. I wish her every success for the future.” The UK’s White Paper on the Overseas Territories was released in June this year. It sets out three broad goals — to deepen engagement between the Territories and the UK, to help the Territories “strengthen good governance, financial management and economic planning” and “to improve the quality and range of support to the Territories”, according to former Overseas Territories Minister Henry Bellingham.

2013

January 3. Bermuda could have another Premier in nine months when Craig Cannonier’s first term as Leader of the One Bermuda Alliance expires. Mr Cannonier was elected to serve a two-year term as leader of the Island’s newest political party in September 2011. The OBA constitution specifies that the term can be extended by a two-thirds majority vote of the party’s executive committee “to enable the Leader to stay in post in order to fight a general election.” That means, barring a decision to seek a fresh mandate from the electorate, the OBA will have to organize a leadership conference by mid-September this year. Mr Cannonier made history by being the first person to be elected leader of the Opposition who was not an MP. But the party’s Constitution, which came into effect after the 2011 leadership election, now restricts candidates for Leader to MPs. Early indications are that Mr Cannonier will not be challenged, come September. Finance Minister Bob Richards who had thrown his hat in the ring in 2011 — famously referring to Mr Cannonier as a “colt” — told this newspaper that he would not be doing so in September. “I’m not interested,” he said. “I’ve got a job and I don’t have time for foolishness.” Senator Michael Fahy, now Home Affairs Minister, said he does not expect Mr Cannonier to be challenged. “I would be very surprised if he was challenged,” Sen Fahy said. The Deputy Leader position, currently held by Michael Dunkley, as well as other party offices, will also be up for election in September. Should Mr Cannonier be challenged for his position, and loses, his tenure as Bermuda’s Premier would be the shortest in the country’s history — beating by about a year the current record holder, David Saul, who served from August 25, 1995 to March 27, 1997.

2013. January. Bermuda Health Disparities Report published by Bermuda Health Council. See http://www.bhec.bm/wp-content/uploads/2013/01/Health-Disparities-Report-2013-Final1.pdf.

2013. January 15.  George Wardman has broken his silence over fears for the future of the Coral Beach Club, said to be facing imminent receivership. In a letter to CBC’s some 1,100 members, he sought to reassure that the private beach and tennis club would continue to operate if it is put into receivership. “We think we should warn you that the Club is rumored to soon be mentioned in a ‘receivership action’,” Mr Wardman said in his letter Monday. I want to assure you that the property, the buildings, the courts, the beach and all the rights to them are still intact and not affected by this. This is intended to be the orderly handover from the earlier tenant (Brickman) to their lender (Swedbank).” New York-based Brickman has said it wants out of its lease, saying it’s no longer interested in developing the property as a five-star resort. CBC members rejected Brickman’s plan to sell them the resort’s facilities for $28 million, leading to concerns the club could close, be sold to another party, or handed back to mortgagee Swedbank. Officials from the Swedish bank flew to Bermuda last month to meet with Brickman and CBC staff. A group of concerned members and at least one New York-based firm are among potential buyers for the club. In his letter Monday, Mr Wardman further said: “It has been indeed a long while since we felt we should bother you about plans for the combined Horizons & Coral Beach Properties. There has been much confusion and uncertainty, you have been remarkably patient and I am afraid that the journey is not over yet. As the Chairman of an inactive Board of Governors but still charged with running the membership issues for the Club, we want to help explain. We think we should warn you that the Club is rumored to soon be mentioned in a ‘receivership action’. I want to assure you that the property, the buildings, the courts, the beach and all the rights to them are still intact and not affected by this. This is intended to be the orderly handover from the earlier tenant (Brickman) to their lender (Swedbank). Members of the Club have, all along, been protected by several provisions in the lease and the negotiating documents. These covenants still apply, to use $500 words. You will already know that there are a number of suitors who want to find a way to preserve the Club and its availability for your recreation. You can be the first to know that the Landlords, in particular the Wardman’s, are just as eager to find a sensible and realistic solution. Our favorite hope is that the Club will become part of a caring family who will nurture it into the future without thought of undue reward and with congenial enjoyment as its principal goal. This project has faced many challenges but you may be sure that the no one has given up. At the end of the day we are certain there will be a Coral Beach Club to withstand the test of another 65 years. Indeed, your Board of Governors will meet soon to consider recent new applications, a positive portent.” The current lease payments are for annual rental payments of $1 million for the Horizon lease and $1 million for the CBC lease for the next 45 years of the lease, and thereafter drop to $125,000 for each property for the next 150 years of the original 200-year leases which commenced in 2008.

January 24. Young educated Bermudians have been leaving the Island in droves to seek employment in other countries, according to the Department of Statistics. The Island’s political parties, the civil servants union and the business community have all expressed concern at the news — with the Opposition Progressive Labour Party pledging to cooperate with the Government in getting Bermudians to return or stay home to develop their careers. In a first of a kind analytical brief, the Department reports that 1,121 persons emigrated from Bermuda between 2000 and 2010. Seventy percent of the emigrants were Bermudian, while 27 percent were non-Bermudian and employment was the main reason cited as to why they were leaving the Island. Nearly half of the Bermudians (47 percent) leaving left for reasons of employment. But “family” was cited by 25 percent of the emigrants as a reason for leaving, and another 18 percent of respondents indicated that a range of other factors which prompted their departure, including affordability, retirement, “to exercise the right of free establishment”, and crime. With a median age of 28 the emigrants were also a fairly young group. Fifty-three percent of the Bermudian emigrants were degree holders, 83 percent of whom were under the age of 35. The analysis was based on data collected during the 2010 Census. The US and the UK were destinations of choice for the emigrants. About a third of the emigrants were professionals, while another 19 percent were service and sales workers. The data also shows that the emigration, at 41 percent, was highest between 2007 and 2009. But a greater proportion of non-Bermudians (55 percent) left the Island during this period than Bermudians (36 percent). “The brief also highlights the impact of the loss of skilled human resources or ‘the brain drain’, as a result of persons leaving the island to reside overseas,” a Department of Statistics release stated this afternoon. “This is the first time a census has collected information on Bermuda’s former residents who have emigrated abroad.” The brief concludes: “The data shows that emigrants 16 years and older were most likely to have degrees, resulting in brain drain.” A Government spokesperson said that the statistics “reinforces the Premier’s concerns regarding the amount of people who have left the Island, which is why one of the main objectives of this government is job creation.” And One Bermuda Alliance chairman Thad Hollis said that the party and its leader were well aware that the Island was facing a brain drain. “The brain drain was one of the reasons our leader Craig Cannonier chose to use his swearing in ceremony at Government House the day after the election to urge Bermudians living abroad to ‘come back to us …. to build the better Bermuda we know we can build,’” he said in an e-mailed statement. “Mr Cannonier, as new Premier, issued the call because Bermuda needs its ‘best and brightest’ now more than ever. One of the most disturbing statistics released today was the high percentage of young Bermudian degree holders who had left the Island for opportunities abroad. That one statistic — 83% of emigrant degree holders were under 35 of age — underscores the seriousness of the ‘brain drain’ threat to Bermuda’s long-term well-being. Our focus going forward is to maximize the skills and talent of Bermudians in a collective effort to make the Island work better for all our people. As new Premier Cannonier said at his swearing-in ceremony: “Let this be the start of Bermuda’s renaissance.” The Opposition PLP said that the “brain drain” statistics were “concerning” but not “entirely surprising. With the impact of the worldwide global recession, many young Bermudians have left to find alternate employment in the US and the UK. Whether they have been successful in their search is another story, however, the bottom line is that these are Bermudians who have felt the need to leave their homeland for other territories, and that is concerning. We implore the Government to consider ways that we can encourage Bermudian young people to return to Bermuda and/or stay in Bermuda and develop their careers. There is no easy solution to this problem, however as the Opposition, we pledge our assistance and cooperation in this awesome task. We also encourage the business community to step up and provide entry level and apprentice level opportunities for young Bermudians. There are many young Bermudians who are abroad in universities or trade schools. They need to feel that there are opportunities for them in their land of birth. We must also ensure that young Bermudians are given adequate preparation so they are qualified and capable of competing in the labour market." Kevin Grant, president of the Bermuda Public Services Union, said that he was alarmed that 70 percent of the emigrants were Bermudians and at the proportion of them who were under the age of 35. Mr Grant noted that 36 percent of the unemployed were between the ages of 16 to 24. But he speculated that the emigration data could also be related to gang activity which has seen a number of young black males relocating in the UK. “However, it cannot be denied that there are a large number of our young Bermudians who are going to college, completing their studies getting degrees, (and many of them master degrees) coming back home to Bermuda and cannot find a job. Bermuda at this time could be experiencing what I would call ‘youth flight’ whereby young, qualified professionals have to leave their home countries to seek better opportunities. So surely when we consider the suspension of term limits or the elimination of them all together, Government must seek to achieve a balance whereby our young qualified Bermudian workers are given equal opportunity. Having our young workers leave the country can lead to serious ramifications in the long run.” But the loss of jobs has been “accelerating since 2008 — the sixth full year since (six-year) work permit term limits were introduced,” said Diane Newman, Chamber Economics Committee chairperson. “The study released today illustrates clearly that educated people — the sort of people who we need to have in the workforce in order to attract business investment to the Island, and the sort of people who would create new businesses themselves — are going elsewhere. This is a major concern,” she said. “Another concern is the age of the people who are leaving. It illustrates that entry-level jobs are disappearing for educated young Bermudians. ABIC chairman George Hutchings has said that accounting is the only profession where a young Bermudian graduate can be confident of finding entry-level work now. “It also should raise concerns about the state of our government and other pension plans. Without young workers to pay into them, these plans could come up short when the current cohort of older workers begin to retire.” The Bermuda Employers Council also appeared to blame emigration of non Bermudians on the former Government’s term limits policy. “Emigration by non-Bermudians appears to coincide with the setting in of the reality of the former Government’s term limits policy which compounded problems in the recession that came afterwards. It was predicted that persons would not stay in Bermuda with the uncertainty of their future and many moved on with their families,” said BEC president Keith Jensen. "It was very disappointing to see Bermudian professionals move away when employment opportunities were amply available prior to the onslaught of the economic recession. On the other hand, it shows the extent of opportunities and the demand for Bermudians and non-Bermudians professionals in the global workforce. Work experience abroad does place Bermudians in a good position if they return to the Island. The number of non-professional Bermudians leaving for employment shows how some countries welcome our citizens for jobs in their countries. It will be useful in due course to compare this emigration data with the turnover of work permit holders, which we understood was much higher in a six-year period.”

2013. February 4.  As Coral Beach Club moves closer to being placed in receivership by mortgagee Swedbank, members’ bid to buy it has hit major hurdles. It is understood one of the stumbling blocks is that Swedbank will only sell the two leases for CBC and the Horizons property as a package, and not separately. New York-based Brickman purchased the CBC and Horizons leases from ultimate owners, George Wardman’s company, with a loan which ended up being held by Sweden’s Swedbank. As part of the lease purchase, Brickman also agreed to annual rental payments of $1 million for the Horizon lease and $1 million for the CBC lease for the next 45 years of the lease, and thereafter, $125,000 for each property for the next 150 years of the original 200-year leases, which commenced in 2008. It is understood a reduction in that rent payment was given for a period. It has emerged that what were characterized as “lowball” offers by other parties have been made for the Club, but they were not accepted by Swedbank. Further troubling news for the beach and tennis club is that membership has dropped sharply, from around 1,800 members (including 600 in Bermuda) several years ago to around 1,232 this year. Dues are a major source of revenue for the club. Following a meeting last week, the Members CBC Steering Committee said its goal remained “preserving our club for the membership”. However, the committee admitted that the “road is a longer and more complex one than was envisaged at the start”. Another major stumbling block, member sources said, are conditions in the Brickman lease agreement that are not clear at this stage. Members at last week’s meeting said they felt that they could not put any offer on the table to buy the club at this time, though they still hoped to assist in keeping the club going for the sake of members and staff once it is placed in receivership.

February 8. Speech from the Throne.  On the Occasion of the Convening of the Bermuda Legislature. See http://www.gov.bm/portal/server.pt/gateway/PTARGS_0_2_12295_311_1794_43/http%3B/ptpublisher.gov.bm%3B7087/publishedcontent/publish/gov__top_level__org__house_/whats_happening3/4270_ts_02_2013_final_portal.pdf.

February 15.  Former PLP leadership candidate Terry Lister this morning told the House of Assembly that he is quitting the party to stand as an independent. Mr Lister, who lost to Paula Cox for the leadership of the party, won re-election to the House at the election last December for Sandys South. He told the House that the past few years had been "extremely difficult" and "less than satisfying". He told MPs he had been asked to the leader of the PLP, but had lost to Marc Bean. He also complained of poor treatment by the Party. "I will no longer stand as a PLP MP, but I will stand for Bermuda," he said. Mr Lister said he turned down an offer to be Shadow Finance Minister, but said he would serve in other positions and was surprised to hear the shadow team had been selected before he even got a reply. The development reduces the number of PLP seats to 16 and comes on the heels of Randolph Horton's election to the position of Speaker of the House. Mr Lister was first elected to parliament in 1998 and held a number of Cabinet positions and twice ran for the leadership of the party. He is said to have become disenchanted at the results of the last leadership contest to replace Paula Cox after she lost her seat in the December 17 general election. Mr Lister had been the party's parliamentary group's choice for leader, but the delegates thought otherwise and elected Marc Bean by a landslide. Last night, the PLP would not comment on the reports of Mr Lister's resignation, referring this newspaper to Mr Lister himself.

2013. February 15. A Supreme Court hearing expected to put Coral Beach Club in receivership by mortgagee Swedbank was postponed yesterday. Swedbank AB New York Branch versus Brickman Properties was due to be heard in Commercial Court at 11am, but it is understood it was cancelled due to legal issues over documents. With the receivership looming, Coral Beach’s future as a private club remains unclear. New York-based Brickman purchased the CBC and Horizons leases from ultimate owners, George Wardman’s company, with a loan which ended up being held by Sweden’s Swedbank. As part of the lease purchase, Brickman also agreed to annual rental payments of $1 million for the Horizon lease and $1 million for the CBC lease for the next 45 years of the lease. A group of members has been looking at buying the club, but it is understood Swedbank will only sell the two leases as a package.

2013. February 22. KPMG Advisory was named Joint Receivers to the Coral Beach & Tennis Club and Horizons. Together with the mortgage holder, Swedbank AB New York Branch (Swedbank), and their agents, the Joint Receivers are currently taking steps to find a suitable purchaser for both the Club and Horizons. “The Joint Receivers intend to continue the operations of the Club without interruption, and will continue to work with Club management, employees and suppliers to ensure as little change as possible throughout this period,” KPMG said in a statement. Mike Morrison and Charles Thresh were appointed Joint Receivers. Commenting on the implications of the appointment for Club Members, Mr Thresh said: “We understand that the past year has been a time of uncertainty for the Club. It is our hope that a new purchaser will be able to provide a prosperous future for the Club.” Creditors, suppliers and/or potential purchasers should contact Andrew Shailer on +1 441 294 2628, by fax on +1 441 295 8280 or by email at andrewshailer@kpmg.bm.

2013. February 27.  Membership in Coral Beach Club is “safer” and its future is “looking better” after KPMG was appointed as receivers. This from George Wardman, landlord and chairman of the Board of Governors. He told members in a letter on Monday: “You will have received by now a letter from Charles Thresh concerning KPMG’s appointment as Receivers. It was not unexpected. I think the letter capably and accurately reflects the current situation. “I want to reassure you that your continued membership in the Club is safer now. Having a resolution of the uncertainty can only help to find a sensible and agreeable solution. Indeed, there are rumours of several possible outcomes. It is all looking better.” In any case, the powerful forces of economic good sense work in your favour. While it is early days, even a distant Swedish Bank seems likely to respond to the inescapable conclusion that your Membership is the life of the Coral Beach Club and it would be foolish indeed to abandon that. These are not foolish people. My experience so far (and of others that I respect) seems to suggest that the Club is currently delivering good quality in every department. This is great credit to the staff. If you still wanted to continue your Membership but had been understandably sitting on the fence, you may now wish to take another look in light of a more secure future. I say again: ‘This project has faced many challenges but you may be sure that the no one has given up. At the end of the day we are certain there will be a Coral Beach Club to withstand the test of another 65 years.’” On Friday it was announced KPMG Advisory has been named Joint Receivers to the Coral Beach & Tennis Club and Horizons. KPMG said together with the mortgage holder, Swedbank AB New York Branch (Swedbank), and their agents, the Joint Receivers are currently taking steps to find a suitable purchaser for both the Club and Horizons. “The Joint Receivers intend to continue the operations of the Club without interruption, and will continue to work with Club management, employees and suppliers to ensure as little change as possible throughout this period,” KPMG said in a statement.

2013. February 28. A number of struggling Caribbean islands are selling citizenship to generate revenue, and it is a trend that appears likely to grow. However, Bermuda would do better to model itself on ‘super powers’ such as the US, UK and Canada, and attract high-value residents to live on and invest in the Island and, in return, open up the opportunity for them to be considered for permanent residency and possible eventual citizenship. So says former Premier Sir John Swan, who has previously presented the idea as one of a number of ways that Bermuda might go about rejuvenating its economy. He is aware of the Caribbean trend, but favors the more rigid programmes adopted by countries like the US. Caribbean islands selling citizenship to generate revenue was highlighted last week in an overseas news article, which revealed a foreigner can qualify for citizenship in the Dominica Republic for $100,000, while someone donating $250,000 to a fund for retired sugar workers can gain citizenship of St Kitts and Nevis (alternatively they can receive citizenship with a $400,000 minimum real estate investment). There is no obligation for the new citizens to ever visit or live on the islands. For some applicants the attraction is simply to gain a more widely recognised second passport for hassle-free travel. A St Kitts passport, for example, provides visa-free travel to 139 countries, including all of the European Union. Antigua and Barbuda is in the process of launching its own citizenship programme to generate money, while the island of Grenada has hinted it might revive its citizenship-for-sale programme. Sir John said the model adopted by Dominica and St Kitts is not what he suggests for Bermuda. He favours a system that attracts substantial investment and intellectual capital, which in turn would lead to employment and business opportunities for Bermuda. “What I had in mind was a policy close to the practice in the United States, Canada and the United Kingdom. I have suggested repeatedly that we need to attract high-value residents who live and invest in Bermuda. Those who qualify would initially be considered for permanent residency and in time citizenship,” he said. The US programme allows visas for individuals who invest $1 million in a US business employing at least 10 people, or $500,000 in designated economically depressed areas. The investor is then able to seek permanent residency after two years and citizenship after five. Other countries such as the UK, Canada and Australia have similar citizenship programmes, although the demand has been so great in Canada that it closed its programme to new applications last summer. Favoring the system used by these countries, Sir John said: “The common denominator among the super powers like the United States, Canada and the United Kingdom is that they simply want to attract substantial investment and intellectual capital that would lead to employment and business opportunities. Our aims are similar to those of the super powers.”

March 1. A fleet of new buses and a high-speed catamaran providing a ferry service between St. George’s and Dockyard are two ways in which Government plans to improve public transport on the Island. Tourism and Transport Minister Shawn Crockwell announced the developments at a press conference yesterday detailing the Ministries’ budgets for the next year. Mr Crockwell said the ten new buses will cost the Department of Transport $3 million and will provide “increased lift during the peak period of the season.” He added that no new buses had been purchased by Government since 2009 and as a result, older vehicles were being subjected to stress. Pointing out that the Department of Public Transport saw its slice of the Government revenue pie increase by seven percent to $20.9 million, Mr Crockwell said: “This additional funding is provided to ensure the required maintenance schedules are maintained with a resulting improved reliability of service. East end residents should find it easier to travel with the introduction of a new ferry service to Dockyard in the summer. There has been great pressure on the Department of Marine and Ports to provide additional service to the east end during the busy cruise ship season.  It is planned to provide such service this year, using a dedicated, large, high-speed catamaran ferry chartered from overseas. The 400-passenger ferry lift between Dockyard and St George’s will allow the local ferry fleet service to focus on the Dockyard to Hamilton service, as well as the morning and evening commuter service.” Government hopes to pick up an extra $2 million in revenue from increases in bus and ferry passes, which will go up by 25 percent — the first increase since 2004. A one-day pass currently costing $12 for all zones will go up to $15, while a weekly pass will now cost $56.25 from $45 previously. But Mr Crockwell said there will be no increase in the cost of a monthly pass in an effort to lessen the impact of increases on Bermudians. Residents who use public transport regularly are more likely to by monthly passes than daily or weekly tickets, which are purchased mainly by visitors, the Minister noted. Turning to the Tourism portfolio, Mr Crockwell said: "The Ministry’s budget had been slashed by 30 percent in the last five years and has taken another hit of five percent this year. The Ministry has a purse of $27.2 million, the lion’s share of which will be spent on advertising and marketing Bermuda overseas. The Department of Tourism and the Tourism Board have and continue to work closely with our on-Island and overseas partners to ensure Bermuda gets the best value and return on investments for our planned sales and marketing initiatives, product offering and events scheduled for the next fiscal year. The establishment of a Tourism Authority is a high priority for our Ministry and we will hold a product development conference in order to seek initiatives and ideas from the public and will identify the most attractive and sustainable concepts. You will certainly be hearing more about this event in the very near future.” The Ministry will be investing $3.2 million in sports marketing — an increase of 54 percent on last year — and Government golf courses are to be given a grant of $850,000.

March 5.  Bermuda insurance veteran, and former United Bermuda Party Minister, Gerald Simons has been appointed as the new chairman of the Board of Directors of the Bermuda Monetary Authority (BMA). Mr Simons, who has more than 40 years experience in the sector, most of which were spent at The Argus Group, succeeds Alan Cossar, who stepped down from the post at the end of last year. Mr Simons, the former CEO of Argus Insurance, retired from the company in May of last year. The BMA also announced that Anthony Joaquin has been appointed as Deputy Chairman of the Authority’s board. Mr Joaquin replaces Darren Johnston, who has also stepped down after serving one of the longest periods of tenure on the BMA Board. Jeremy Cox, CEO of the BMA and executive member of the board, acknowledged the contributions of the retiring board members saying, “We wish to sincerely thank Alan and Darren for their invaluable input and expertise. Alan has been Chairman during one of the most challenging periods in the BMA's history, and Darren has completed one of the longest periods of tenure on the BMA Board, a total of 17 years. I think I speak for all staff at the Authority in acknowledging their unwavering support and selfless service. They have both contributed significantly to the organization.” Both Mr Simons and Mr Joaquin will build on their previous years of service as board members in their new roles. “As we transition to new board leadership, we are delighted that Gerald and Tony have agreed to take on the Chairmanship and Deputy Chairmanship respectively. We are very much looking forward to their continued valuable contributions, along with the directors who will also continue their terms of service and the two new board appointees,” said Mr Cox. The two new appointees are veteran insurance professional Fiona Luck and entrepreneur Alan Marshall, who each bring extensive business experience that complements the strength of the board, the BMA said in a statement. With these changes the BMA Board is composed of the following members: Gerald Simons (Chairman), Anthony Joaquin (Deputy Chairman), Walter Bell, Fiona Luck, Alan Marshall, Lynda Milligan-Whyte, Barclay Simmons, Ronald Simmons, Tracey Tepper and Jeremy Cox.

March 6. Eddy DeMello died at the age of 75. Music promoter and businessman, owner of Music Box on Reid Street. He recorded many Bermuda musicians and organized many music concerts and musical events on the Island. He also worked tirelessly on behalf of the Island’s Portuguese community and was president of the Vasco da Gama Club for 17 years. He received numerous Bermuda honors for his work and was also recognised by the Queen and Portuguese government. Mr DeMello’s wife, Elsie, said he was diagnosed with liver cancer in 2008 and died peacefully at home. “He put up a brave fight and had a real will to live which he never gave up until the end. He was a man who wore many hats and always wanted to keep busy. But he was also incredibly kind. He would give you the shirt off his back.” Mrs DeMello recalled how staff at the Music Box would always try and prevent Mr DeMello from serving customers because he was always giving discounts to clients who couldn’t quite afford their purchases. “He was generous to a fault but never talked about that side of things,” Mrs DeMello said. Mr DeMello was born in the Azores in 1937, but came to Bermuda in 1949 at the age of 11. He attended Dellwood School for a few years but, as the oldest of four children, had to go out to work while still a teenager to support the family. A love of music soon landed him a job at the Music Box, which was then located on Queen Street. He bought the business in the 1970s, turning it into one of the most popular music retailers on the Island. Mr DeMello was also highly successful as a promoter, bringing many top-of-the-bill recording stars to Bermuda, including Charlie Pride, Mahalia Jackson, Ray Charles, Stevie Wonder, and Amalia Rodrigues. For more than a decade DeMello Productions organized an annual concert by soca legend Byron Lee. Former Culture Minister Dale Butler said that Mr DeMello did more than anyone to promote culture of all kinds on the Island. Pointing out that Mr DeMello had already been inducted into the Cultural Hall of Fame, Mr Butler added: “That man needs a monument in his honour because he is a national hero. His emphasis was on what it means to be a decent human being. He wasn’t interested in black or white or where you were from or anything. He just wanted to work with anyone, as long as it was for the betterment of Bermuda. Obviously he was very interested in Portuguese culture but he also had a love for Bermudian culture I don’t think I ever saw him wearing long pants. He was an outstanding promoter and a truly outstanding citizen. His passing is a big, big loss for Bermuda.” Never one to forget his roots, Mr DeMello worked tirelessly to keep alive Portuguese traditions and promote Azorian culture here. His interpreting skills were often called upon to assist Portuguese nationals struggling to deal with officialdom. He served on the Portuguese Cultural Centre Committee and was also a member of the Committee for Long Term Residents. Vasco da Gama Club and all of its members were deeply saddened. His passing will be a large loss in the Portuguese-Bermudian community of Bermuda.  In 1979, Mr DeMello’s work was recognised by Portugal when he was made Knight Commander of the Order of Prince Henry for his contribution to the Portuguese community. He received the Queen’s Certificate and Badge of Honour twice the first time in 1988 for his work with the Portuguese community and the second time in 2006 for service to the Bermuda Independence Commission. He was presented with a Bermuda Arts Council Lifetime Achievement Award in 2004 for his contribution to the arts and last year he received a Senior Citizen Community Service Award from the Bermuda Government. As well as his wife, Mr DeMello leaves his son, Duane, sister Mary, brothers William and Joseph and a granddaughter.

March 13. Spring Break 2013 looks set to exceed the numbers recorded last year with 200 college students currently in Bermuda for week three. The total for this week alone is just 50 short of the estimated 250 students who visited during the entire period last year. Tourism Minister Shawn Crockwell said the visiting students represent groups from Yale, Duke and Cornell Universities in addition to other schools of higher learning in the US and Canada. The first week saw an estimated 80 students on-island, of which half were non-residents, followed by another 100 college students during the second week. Said Mr Crockwell: “Last year we hosted approximately 250 students for Spring Break and we are certainly on track to exceed that number this year. From all accounts the students have had a great time and we will look to build on this momentum next year and hope that some students who visited this year come back again and bring their friends.” Activities include an Island Party Bus Tour, the Spring Break Cruise and the Tom Moore’s Jungle/Cave Tour, with several activities on tap at night at Cosmopolitan, Docksider's and Cairo. The Department of Tourism will post footage of all the Spring Break events held this year on YouTube in early April.

March 13.  Developer Gilbert Lopes is testing the waters for a new condominium complex on the South Shore through media advertisements. Looking to gauge the public’s interest in purchasing a one-bedroom condo, the advert, which started running in the Royal Gazette newspaper on Monday, highlights the low cost of the units, between $310,000 to $340,000. The proposal for 51 one-bedroom units just east of the Grand Atlantic development hasn’t been submitted for planning approval. Neither has the application to amend the current sustainable development order (SDO) attached to the property from 47 two- and three-bedroom units to a one-bedroom complex. “The idea is just to see what’s out there first before we waste a lot of money,” said Mr Lopes to The Royal Gazette. The plans have been redrawn — which Mr Lopes says reduces the current plan’s footprint by two thirds — and are ready for submittal. Set back from the cliff face, the proposed units would consist of around 800 square feet and be built in three, two-storey blocks. Most units will not have a sea view though should the proposal move forward, there will be private beach access. The complex, which is being designed by architects Benevides & Associates, is not intended to be a part of a low cost housing programme. Mr Lopes added that the pricing was as low as he could go in order to build the complex and was hoping that price range would be attractive to potential buyers. His hope is also to work with financiers to get approval for a ‘rent-to-buy’ scheme. So far, the advertisement has generated a few callers but the viability of the project really depends on the interest he gets. “We’ve done a lot of the prep work but we want to know what way the market is,” said Mr Lopes. “If I end up running the ad for a week and we get nothing then forget it, it doesn’t make sense — we’ll sit on it.” He added that he was concerned that any mention of the Grand Atlantic in association with the potential new condo complex could scare away potential interested parties. Mr Lopes purchased the land on the South Shore and began building the Grand Atlantic complex in 2010 on behalf of the Government. It was a joint housing project and hotel development, with 125 housing units announced for the site along with a 100-room hotel. The first housing units were completed in late 2011, and last year Government announced that 100 percent financing for the units was available, but as of last October only one unit had sold. The hotel phase of the project has been put off indefinitely.

March 14. Bus and ferry fares to rise by nearly 25%. A planned increase in the cost of traveling on public transport has stepped up a gear, with the tabling of two Bills in the House of Assembly. The Omnibus and Ferry Services Fares Amendment Regulations raise some bus and ferry fares by around 25 percent. A one-day adult pass currently costing $12 for all zones will go up to $15, while a weekly pass will cost $56 from $45 previously. And bus passengers paying cash will soon have to pay $4.50 for a 14-zone journey, an increase of 50 cents. The cost of other multi-day passes will also increase under the amendments, but Government says it hopes the hikes — the first since 2004, will have little impact on residents. The cost of monthly and quarterly passes — which are purchased mainly by residents rather than visitors — is to remain the same at $55 and $135 respectively. Government hopes the increases will boost its revenue by an additional $2 million this year.

March 15. Land tax will be increased for the Island’s most expensive homes, according to legislation approved in the House of Assembly. The Land Tax Amendment Act increases taxes for properties with an annual rental value of between $90,001 and $110,000 from 9.6 percent to 19.2 percent. Taxes on properties with an ARV of more than $120,001 will rise from 19.2 percent to 23 percent. Land taxes on all other properties will remain unchanged. The increase comes into effect on July 1. Finance Minister Bob Richards said the legislation would only affect a small percentage of homeowners and raise millions in revenue for the Government. “This is fair,” Mr Richards said. “Those who live in the most expensive homes should pay more land tax than others.” Shadow Finance Minister David Burt said he was pleasantly surprised, saying there were “a few more places” to look in order to find similarly progressive revenue sources. Mr Richards responded: “Hope springs eternal.”

2013. March 19.  Bermuda’s National Health Plan (NHP) has been put “on hold” pending a review of the ambitious programme. It had been expected that the plan would provide universal healthcare for residents by next year. However, a Health Ministry spokeswoman yesterday said that the NHP was under review because parts of it “do not fit in with the Government’s views.”. Meanwhile Shadow Health Minister Zane DeSilva insisted that the plan had “been scrapped.” A search by this newspaper found the NHP’s website, Facebook page and e-mail address had been discontinued. Sources close to the plan told The Royal Gazette they doubted Government intended to pursue it. Mr DeSilva described the decision to get rid of the plan as “a social injustice to the people of this Country. Legislation has been tabled for an increase in hospital fees and the Standard Health Benefit. We’re looking at an increase across-the-board, of about 20 percent on the Standard Health Benefit. You know the insurance companies will put five to ten percent for administration on top of that; our people are going to be hit hard come April 1. I’m not saying the same thing wouldn’t have happened under the Progressive Labour Party but it shows what’s really at stake if they do away with the NHP. There were 72 people who devoted thousands of hours of their time to this. I don’t mind if they rename it, rework it or make it better. I’d be the first to stand up and give congratulations for any improvement whatsoever. I can’t believe they are dropping it when health costs in this Country are soaring.” Government last night insisted the plan hadn’t been scrapped. “Contrary to Opposition suggestions that the National Health Plan has been set aside, the Minister of Health and Seniors reiterated as she has said in previous public statements that the National Health Plan is on hold. “There are certain aspects of the plan that do not fit in with the Government’s views, but the full plan is still under review. The team who worked on the National Health Plan will, in the coming days, make a full presentation on the plan and the reports from the Benefit Design Task Group and the Finance and Reimbursement Task Group. From there, the Government can begin to make decisions on which parts of the plan will be retained and which parts will be used as a foundation for other solutions.” Age Concern executive director Claudette Fleming was one of those who helped draft the NHP. “Tremendous amount of stakeholder hours were undertaken by credible local and international professionals with respect to the background work” for its eventual development, she said. “I sincerely hope that this information can be used in some meaningful way to improve the significant challenges of containing healthcare costs and providing quality healthcare services for the benefit of the Island’s residents.” In her Budget brief earlier this month, Health Minister Patricia Gordon-Pamplin told MPs that there were “many facets of healthcare that needed to be addressed as a precursor to implementing anything that resembled a cogent and equitable plan.” She said universal coverage “could not be implemented against the backdrop of a fundamentally dysfunctional system” and that the system would have to be fixed before “sugar-coating our needs with an overarching plan that could become unwieldy and expensive.”

2013. March 26.  Food and liquor sales jumped last year helping to push the annual gross turnover in the Island’s retail sector to $1 billion. There was a $5 million increase in total retail sales receipts compared to 2011, according to the Quarterly Bulletin of Statistics. The main contributors to the higher level of retail sales in Bermuda last year were liquor and food store sales, which increased 8.2 percent and 5.8 percent, respectively. In the fourth quarter of 2012 alone, liquor and food experienced increases in sales value of 4.9 percent and 6.7 percent, respectively. Total retail sales for the fourth quarter of 2012 were estimated at $268.5 million. This represented a $0.4 million decrease year-over-year. Retailers of building materials, apparel stores and all other store types experienced lower sales activity in the fourth quarter of 2012, the bulletin showed. Motor vehicle dealers registered a 14.1 percent jump in gross receipts. Sales receipts for service stations rose 3.8 percent. Sales of building materials fell 28.5 percent year over year. This decline was due to the near completion of major commercial construction projects such as the redevelopment of the King Edward VII Memorial Hospital, combined with a decrease in sales related to residential construction. Sales activity for apparel stores dipped 5.3 percent and for all other store types by 4.9 percent.

April 1. Sin taxes rise from today. The new ten percent import duty hike on cigarettes and alcoholic beverages goes into effect as a result of the Customs Tariff Amendment Act 2013. The tax hike was implemented as a result of the new Budget in February to raise an estimated $2 million in revenue. Duty alone on Cigarettes will go up from $40 to $44 per carton. For alcoholic beverages, beer will go from $0.90 per liter to $0.99 per liter, wines will go up from $2.63 to $2.89 per liter. Rum, vodka, gin, whiskies and liqueurs will go up from $25.15 per liter to $26.57, and passengers arriving at the LF Wade International Airport will have a fixed duty rate on spirits of $10.63 per liter. A Customs spokesperson said: “The flat rate for spirits imported in passengers’ baggage makes it easier for arriving travelers to declare and pay duty on liquor. Our airport staff will not have to know the alcohol content of your rum or whisky to collect the right duty.” Meanwhile, another Government spokesperson said further provisions of the 2013 Amendment Act will “make improvements to the structure of the Customs Tariff Act 1970. The current complex duty charging provisions are to be made simpler by replacing the 25 percent ‘standard rate’ and associated business end-use relief with a streamlined charging provision which simply imposes duty at the rate specified in the Customs Tariff on all imported goods — whether intended for personal use or for a business purpose. This year’s amendments to the Customs Tariff Act 1970 also include measures designed to encourage certain types of business for the development of Bermuda by expanding the scope of the surcharge on duty suspended goods using the mechanism of a business temporary importation duty relief. The scope of the surcharge provisions is to be expanded to include not just bonded warehousing under the Revenue Act 1898; but also other duty suspension arrangements, such as — storage in a regulated shop under the Bermuda Airport (Duty Free Sales) Act 1997; storage in bond under the Bonding of Precious Stones Act 1952; and the new business temporary importation relief .” There are two surcharge rates for goods removed from the bond that will be rationalized to a median rate of 3.75 percent. Items listed for business temporary importation relief the surcharge will be calculated based on their “deemed customs value” as set out in the Customs Tariff Act 1970. And in both cases, it will be payable in addition to any duty due upon the discharge of duty suspensions.  A Government spokesman said: "The new business temporary importation relief is designed to encourage sustainable development by real economic growth. It allows the duty free importation of goods for business use, including use of goods as inventory, subject to the payment of duty and the surcharge on diversion to home use or export. For traditional business it facilitates greater inventory and larger scope of goods and services. For new business it allows for entry to market with reduced initial investment cost. But the new business temporary importation relief will not come into effect right away. “It will be activated by the Minister’s Order in due course to allow Customs and commercial importers the time to make the necessary programming adjustments to their respective automated systems,” a Government spokesperson said. For more information e-mail customs@gov.bm.

April 5.  Bermuda’s junior swimmers returned home to a heroes’ welcome from the Carifta Swimming Championships in Jamaica last night. And not even a late arrival from Miami and the loss of half the team’s luggage, which was misplaced en route to Bermuda, could dampen the spirits of the team members on their arrival at LF Wade Airport. Present to greet the team was Sports Minister Wayne Scott who traveled to Jamaica earlier in the week to personally lend his support. Team Bermuda scooped seven medals at this year’s regional championships, including three gold. They also set 63 personal bests in the pool and established 18 national age group records for added measure. Warwick Academy duo Madelyn Moore and Jesse Washington accounted for all of Bermuda’s medals. Moore, Bermuda’s top performer in the Caribbean, won gold medals in the girls 11-12 50 meters freestyle and 50 meters backstroke, silver in the 100 meters backstroke and bronze in the 100 meters freestyle. She also set two national age group records in the 50 meters backstroke (32:84) and 100 meters backstroke (1:14.10) and finished as the high point swimmer in her respective age group. Washington won the gold medal in the boys 13-14 100 meters freestyle, bronze in the 100 meters butterfly and silver in the 50 meters freestyle. He also set national age group records in the 50 meters freestyle (25:21), 100 meters freestyle (54:71), 50 meters butterfly (27:02) and 200 meters freestyle (2:02.83) and swam a personal best (1:01.17) in the 100 meters butterfly.

April 26.  Hamilton's weekly Harbour Nights street fair promises to be bigger and better than ever before after organizers decided to give the flagging event a major make over this season. Plans to expand the Front Street festival to include Queen Street and Reid Street have already been unveiled by the Chamber of Commerce. And the organization now says the event has been given the backing of 90 percent of City retailers, who pledge to open their doors for late-night shopping when the first Harbour Nights kicks off next Wednesday evening. Stores will be promoting 'Made in Bermuda' products that can be found only on the Island, giving visitors a uniquely Bermudian shopping experience. In another drive to liven up the event, the Chamber is seeking to obtain a licence to allow alcohol to be served from several 'pop up' vendors, enabling visitors to stroll through the pedestrianised streets with a cup of their favorite beverage. Other changes include the creation of three entertainment zones, replacing the once central stage at the Flagpole, while the Island's singers and musicians are encouraged to entertain the crowds at designated busker spots. The facelift marks a major turnaround for Harbour Nights, which was in danger of being scrapped last year. Chamber of Commerce Executive Director Joanne MacPhee said that, following consultation with its members, the Chamber realized that the 20-year-old event needed a major overhaul” after becoming worn and shabby. “We asked ourselves if it had run its course and the response we got back was yes, in its current format. But given its rich history and importance to the summer season, it was agreed that it was more than worth saving. We all agreed we needed to build on what makes the event original and 'authentically Bermudian. We had allowed vendors to stray from the 'Made in or made for Bermuda' mandate and in doing so lowered the overall tone and quality of the event.” Mrs MacPhee said she was confident the changes will breathe new life into the event, giving it more of a carnival atmosphere. But she stressed the fair would still remain a family-friendly occasion. Should a liquor licence be granted, sales of alcohol will be heavily regulated, with trained staff from already-established bars and restaurants manning up to five stalls dotted throughout the pedestrianised zone. Drinkers will have to produce identification to obtain a wristband allowing them to buy alcohol. Mrs MacPhee said: “The new route alone will open up the entire City Centre and bring life and much needed vitality to Hamilton. The return to an authentic Bermudian vibe will enhance the visitor experience. But it's still going to be very much a family event — we don't want it becoming like Bourbon Street,” she added, referring to the notorious avenue in New Orleans favored by rowdy revelers who party through the night. Mrs MacPhee, who is also a member of the Tourism Board, said that she had consulted with retailers located in the newly expanded Harbour Nights footprint and was thrilled with their renewed enthusiasm for the event. “Basically we now have 90 percent buy-in from retailers in the city centre — pretty much the whole city centre will be open. Participating stores will be displaying 'Open For Harbour Nights' stickers in their windows. Most of our retailers had a horrible fourth quarter in 2012 due in great part to Government's decision to call an election in December. They, along with our restaurants, need a boost to kick the season into high gear so they can recoup some of their losses. We certainly hope that Harbour Nights plays its part to stimulate economic activity. Anything which enhances the visitor experience is good for Bermuda, we are in the business of tourism and it is vital that we remember and act on that premise. Today's great experience is tomorrow's return visitor. Organizers decided to change entertainment arrangements because the previous format — where musical performances on a large single stage at the Flagpole were amplified across the length of Front Street — was too in your face. Three smaller stages spread out across the venue would allow for a wider range of musical entertainment. I urge locals to support the occasion. The event's slogan is 'Where Bermudians and visitors connect' and this speaks again to the issue of authenticity. Visitors come to Bermuda looking for that special something only we can share, so it is absolutely imperative that locals, as well as our visitors embrace and enjoy Harbour Nights.” Last night Tourism Board Chairman David Dodwell applauded the development, saying it would encourage hotel guests and cruise visitors to spend a night on the town and help revive Hamilton's appeal as a venue to spend an evening. “It's a brilliant idea. I think the Chamber should be applauded because it has taken advice from two entities — its customers, and those who wanted to participate. They've then looked at how they can do things differently and to see how they could raise the bar. The event could be a “stepping stone” to making Hamilton a magnate for visitors looking to be entertained in the evenings. At the moment we're talking about one night a week, but I think, in conjunction with the new waterfront, what we should be aiming for is making Hamilton an anchor that can attract visitors seven nights a week, and so anything we do to help that is a step in the right direction.” Starting from next week, Harbour Nights will run from 7pm to 10pm every Wednesday.

May 3. The last surviving member of an elite group of black airmen who served with the Royal Air Force during the Second World War has died. Philip Lamb died at King Edward VII Memorial early yesterday morning. He was 90. Mr Lamb, who was from St David’s, joined the Bermuda Militia Artillery at the age of 17 in 1940, shortly after the outbreak of the Second World War. After three years of service on the Island, he was selected by the RAF and trained to become a member of a ground crew team. Following his training in Canada, Mr Lamb was shipped out to England at the end of 1944. “I guess it was because I was daring,” Mr Lamb said in a 2004 interview with The Royal Gazette. “I had no fear and I was anxious to get away from Bermuda, although everyone was getting killed, maimed and everything else.“ Mr Lamb rose to the rank of Leading Aircraftsman and during his time in England survived a number of air raids by the German Luftwaffe. In March 1945, in one of the last raids the Germans made on England, Mr Lamb received leg injuries when the building in which he was sheltering was bombed. As a result, the war veteran suffered pain in his back and legs for the rest of his life. After the war ended in May 1945, Mr Lamb was given what was perhaps his most dangerous assignment — flying over France and Germany in search of unexploded mines that had to be detonated. After almost eight years in uniform, Mr Lamb studied engineering in Canada before returning to Bermuda. And just two years ago his military record was finally recognised when the RAF presented him with a medal for his efforts during the war. Former Bermuda Regiment Commanding Officer Lt Col Eddie Lamb, a distant relative of Mr Lamb, described “Uncle Hunky” as a hero, icon and inspiration, who was well known and popular in St David’s. “It was a great shock to hear the news, it’s very, very sad,” Lt Col Lamb said. “Despite his advanced years, Uncle Hunky was in very good spirits and a picture of health when I last saw him. He was very well respected in the St David’s community and in my eyes he was a hero and an icon for what he did in the service of the country. I was always very proud to be linked to him. Growing up, he always showed me great kindness and as I became older and learned more about him, I got to respect him more and more. He was also a very colourful, larger-than-life character, very strong and robust.” Lt Col Lamb added that, when in command of the Bermuda Regiment, he would invite Mr Lamb and other war veterans to Warwick Camp to speak to recruits. “He would regale us with tales of his exploits during the war and he always had a glint in his eye,” Lt Col Lamb said.

2013. May 7. Wayne Smith has been named the Island’s new Postmaster General. He has served as Acting Postmaster General since 2011. Mr Smith rose to the rank of Major in the Bermuda Regiment, where he served for 22 years until his retirement in 2008. He then held a variety of posts within the Civil Service and the private sector. Part of his role as Postmaster General will be to “lead the reinvention and restructuring of the Bermuda Post Office”, a Government spokeswoman said. George Outerbridge served as Postmaster General prior to Mr Smith’s appointment.

2013. May 14.  Although tomorrow’s arrival of thousands of cruise passengers is seen as a boost to a flagging tourism industry, questions have been raised over whether Bermuda’s infrastructure is capable of handling so many visitors at one time. Government has been working around the clock getting required upgrades to Heritage Wharf completed in time for the arrival of the Breakaway liner. It has also been forced to charter a ferry for the summer to provide backup for its fleet of unreliable public ferries, which will play an essential role transferring passengers from the west end to Hamilton and St George’s. And to add to the logistical headache of catering to more than 7,000 visitors, taxi drivers have expressed concerns that a yet-to-be tested road network at Dockyard will hinder their ability to serve passengers effectively. In 2011 the Island’s transport network was branded “a joke” by visitors who were stranded at Dockyard because of a lack of transport. And Chamber of Commerce President Ronnie Viera yesterday said that ferrying visitors around the Island was “a challenge”. “Everyone involved in transportation really has to work together to do this successfully and if there are any issues, work to resolve them quickly,” Mr Viera said. Sinclair Samuels of Marine & Ports said he was not aware that the charter ferry had arrived, even though Government announced three months ago that Millennium had been booked to cover the Dockyard/St George’s run. “We still have some concerns and I’m not confident that we will be able to handle the load — we are adopting a wait-and-see approach,” Mr Samuels said. Concrete was still being poured at Heritage Wharf yesterday, and Public Works Minister Trevor Moniz has acknowledged that the facility won’t be fully complete by tomorrow morning. But he did express confidence that the essential components of the wharf will be in place to allow Breakaway to dock. The Ministry failed to respond to a Royal Gazette request for a last-minute progress report last night. Transport and Tourism Minister Shawn Crockwell is also optimistic that services will run smoothly. Last night he said: “The staff in the Ministry of Tourism Development and Transport are putting the final touches in place for the arrival of the Breakaway. The Department of Public Transportation and Department of Marine and Ports are both ready for the expected visitors and a much improved transportation arrangement in Dockyard involving buses, ferries, taxis, mini buses, train and tour boats is helping get more visitors where they want to go more expediently.” Taxi industry chief Derek Young said that drivers will be put to the test by the high demand, but added that “all hands will be on deck to accommodate passengers. I’m certain there will be some issues when having to wait for a taxi, which happens worldwide, but we plan to raise the bar when providing transportation needs for our visitors and locals,’ the Bermuda Taxi Owners/Operators Association President said. “I want to emphasize that this is a first-time event so it will come with some issues and problems. But Bermuda’s taxi ambassadors will be putting their best foot forward. Patience will be the name of the game.”

2013. May 16. Moody's Investors Services has just downgraded Bermuda's rating by another notch as it reiterated its concerns about Government's mounting debt and lack of an economic recovery. Moody's lowered Bermuda to Aa3, three notches below the top triple-A level, and said the outlook is negative, reflecting uncertainty about Government's debt trajectory over the medium term. The move ends a review for a potential cut that began April 3 when Moody’s put Bermuda on a downgrade watch. The ratings agency said then that the review was prompted by the Island’s steep rise in government debt and its ongoing recession since the global financial crisis. That review came about a week after Standard & Poor's Ratings Services lowered its outlook on Bermuda to negative from stable, citing its prolonged economic downturn and weakened financial performance. S&P had Bermuda at double-A-minus, also three notches below the top rating. Moody's expects Bermuda's weaker economic trends will continue through this year, with moderate growth returning next year. Moody's also expects a long-term decline in the tourism industry and says less dynamic growth in the insurance sector may limit future growth. The outlook could return to stable if the economy begins to grow and the government can contain its rising debt. However, a further potential downgrade could be prompted by continued economic weakening or a lack of significant government spending policy measures. In response to Moody’s rating action, the Ministry of Finance today said it recognised that continuing government deficits and weak economic growth could put Bermuda’s sovereign rating at risk of a downgrade by one notch. “We note however, that in so doing, Moody’s affirmed that our rating is supported by very high per capita income, strong institutions, and our still moderate level of government debt in relation to similarly rated sovereigns,” the Ministry of Finance said in a statement. While the ratings adjustment was not positive, the Ministry of Finance also noted that the adjusted rating remains in the top tier of the ratings matrix. “At Aa3, our sovereign bond rating is only three notches below the highest rating of Aaa. Moody’s continues to endorse the Island’s institutional strength and the Island’s very high per capita income. Government remains optimistic about future prospects for growth and will continue to press ahead with our Jobs and Economic Turnaround Plan which involves providing balance between responsible economic growth and disciplined financial management.”

May 22. Foreign Account Tax Compliant Act (FACTA). See http://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_ActIts impact on Bermuda's insurance, funds and banking industries. More than 250 local industry professionals were told “now is the time to take action in preparation for FATCA”, during KPMG’s second FATCA forum, held earlier this week at the Fairmont Hamilton Princess. Building on the topics raised during the 2012 FATCA forum, the interactive session again asked the question “Are you ready for FATCA?” and delivered the message that as we approach the looming FATCA threshold dates, it is clear that FATCA is not going away. Discussion covered a wide range of topics, including FATCA from a global perspective; Bermuda’s response to FATCA; the Intergovernmental Agreement (IGA) models; FATCA’s potential impacts on business in Bermuda; and the cost of compliance and impact on customers, investors and counterparties. Describing why KPMG in Bermuda felt it was important to run a second FACTA forum for Bermuda professionals, KPMG managing director Charles Thresh, said; “This US legislation will have far-reaching consequences for the financial industry worldwide and Bermuda is no exception. If companies haven’t yet started planning for FATCA, it is not too late to become compliant, but the window is closing and the time to do so is now.” A key component of the panel portion was discussions around the IGA models, with particular interest on the differences between Models 1 & 2, the potential benefits and impacts of a Model 2 IGA, and the potential impact of FATCA on Bermuda’s insurance, funds, trust and banking industries. Additional analysis was also sought around the final FATCA regulations, as issued January 17, 2013, and a high degree of interest was shown around the compliance timeline, strongly echoing last year’s forum. In the wake of the timeline discussion, consensus again reflected that the time for Bermuda companies to act on FATCA is now. Describing the global implications of planning and preparation, David Neuenhaus, KPMG global FATCA lead partner said; “How companies transition to FATCA compliance will have a significant impact on their relationships with their customers, investors, counterparties and services providers. Companies who are early adopters of a robust compliance programme will have the competitive advantage — so a timely response is key.” This year’s forum was led by Charles Thresh, Managing Director of KPMG Advisory, Bermuda with keynote address provided by KPMG Global’s David Neuenhaus and Daniel Dzenkowski, and additional local market insights from KPMG FATCA team members including Catherine Sheridan Moore, James Berry and Will McCallum. In addition, valuable industry insights were provided by Kiernan Bell, managing partner, Appleby; Alison Morrison managing director, Oyster Consulting; Peter Pearman, partner CD&P; and Lyndon Quinn of HSBC.

2013. May 27. Legislation to tax Bermuda reinsurers has been resurrected in the US Congress. The offshore reinsurance tax debate has been revived with the introduction there of two new bills. Two American lawmakers have reintroduced legislation that would end a tax break they say favors foreign insurers — including those based in Bermuda — over US insurers. Congressman Richard Neal, the ranking Democrat on the House Ways and Means Select Revenue Subcommittee and Senator Robert Menendez, a Democrat on the Senate Finance Committee, introduced bills in both the House and the Senate last week aimed at preventing non-US based insurers operating in the US from reducing their US tax bill by reinsuring with their non-US affiliates. “Many foreign-based insurance companies are using affiliate reinsurance to shift their US reserves into tax havens overseas, thereby avoiding US tax on their investment income,” Congressman Neal said. “This provides these companies with a significant unfair competitive advantage over US based companies, which must pay tax on their investment income. That is why I am filing legislation to end the Bermuda reinsurance loophole. Ending this unintended tax subsidy for foreign insurance companies will stop the capital flight at the expense of American taxpayers and restore competitive balance for domestic companies. It simply reinforces my efforts to combat offshore tax avoidance,” the congressman added. The legislation closely resembles legislation Congressman Neal first introduced in the House in 2008 and again in 2009. It was later reintroduced in 2010 with the added sponsorship of Sen Menendez. But the legislation failed, as have Congressman Neal’s other efforts to close what he, and a number of US insurers, see as a loophole that allows reinsurers, mainly based in Bermuda, to dodge US taxes. A similar proposal is included in President Barack Obama’s 2014 budget. Under current law, property and casualty insurers are allowed a deduction for premiums paid for reinsurance — that is, insurance for insurance companies — if the reinsurer is an affiliate not based in the US.In essence, the Neal-Menendez legislation defers the tax deduction for premiums paid to an offshore affiliate until the insured event occurs. That effectively restricts any benefit a company would gain by shifting reserves and associated investment income overseas and is modelled after the Obama administration’s budget proposal. The Coalition for a Domestic Insurance Industry, led by US insurers, WR Berkley and Chubb said in a statement that the bills’ sponsors worked with tax experts at the Treasury Department and the Joint Tax committee in drafting the bill. “We urge Congress to swiftly adopt the proposed legislation. Congress never intended to give a preference to foreign-controlled insurers over their domestic competitors,” said WR Berkley, chairman and CEO of WR Berkley Corporation. "Closing unintended loopholes to recover lost revenue is one of the best ways to offset the cost of needed tax reform. The increasing trend of foreign insurance companies moving profits made in America offshore and sticking Americans with the bill is incredibly troubling,” said Sen Menendez. “This legislation will staunch the flow of capital overseas, protect American jobs, and reduce deficits by shutting down a tax loophole that provides a huge unintended subsidy to foreign companies at the expense of both their US competitors and American taxpayers. "But opponents contend the bill would do serious damage to the US property and casualty insurance markets, while also violating international commitments made to trading partners. A group representing the reinsurance industry, the Coalition for Competitive Insurance Rates (CCIR), is objecting to the proposed legislation, arguing that it would increase costs and limit coverage availability for American consumers. “The legislation introduced closely mirrors thinking we have seen time and again from the Obama Administration and Congress,” said Bill Newton, executive director of the Florida Consumer Action Network. “Our concerns remain the same: instituting a tax on foreign affiliate reinsurance would only result in a more limited US domestic insurance capacity and more expensive insurance coverage, a major threat to homeowners and small businesses whether they are in Florida, Massachusetts, New Jersey or elsewhere, but particularly those in states that are historically susceptible to natural disaster." Approximately two-thirds of all reinsurance coverage currently required to protect American homes and businesses is provided by non-US reinsurance companies. In Florida, less than ten percent of that reinsurance comes from US companies — with the rest coming from foreign affiliates — 62 percent of them right here in Bermuda. Estimated losses from Hurricane Sandy currently stand at more than $19 billion and may reach $25 billion. International insurance companies are expected to cover nearly 50 percent of the losses caused by the storm, the CCIR says. “This legislation would shift the financial burden of rebuilding following a disaster onto already strained domestic insurers and their policyholders,” said James Donelon, the Louisiana commissioner of insurance. “As we enter the 2013 tornado and hurricane seasons, we need Congress and the President working on legislation to aid rebuild efforts, not hinder them with avoidable economic challenges.” Carolyn Shaw, Risk and Insurance Management Society (RIMS) board liaison to the society’s external affairs committee international reinsurers are essential to the US insurance markets — able to fill gaps in coverage while domestic insurers are coping with an influx of claims following a disaster. “This short-sighted legislation fails to realise that if organisations are forced to abandon their offshore counterparts, the financial burden would fall on government and policyholders — an alternative that could shatter this country’s economic vitality,” Ms Shaw said. RIMS president John Phelps says the use of foreign reinsurance by domestic carriers is an “efficient mechanism to pool risks, diversify exposures, reduce the volatility of losses, and as a result, enhance availability of coverage and reduce prices for consumers.” He says the proposed legislation would make critical types of coverage, scarce for American companies and consumers. “Throughout the recent series of natural catastrophic events, and the terrorist attacks on 9/11, foreign reinsurers have filled gaps in coverage where domestic insurers either discontinued or severely curtailed coverage or significantly increased rates,” Mr Phelps said. In an economic impact study of the Neal-Menendez bill, the Brattle Group, an economic consulting firm, found that the proposed tax would reduce the net supply of reinsurance in the US by 20 percent — which would raise rates. The Association of Bermuda Insurers and Reinsurers (ABIR), which represents 22 of the world’s largest international re/insurers is a member of the CCIR. Brad Kading, ABIR’s president and executive director, has been lobbying on Capitol Hill against the Neal Bill for more than six years now. He says the proposed legislation would take away reinsurers’ ability to diversify and spread risk. “Affiliate reinsurance is a fundamental component of insurance group operations,” Mr Kading said. “US and non-US insurers use affiliate reinsurance to spread risk and match capital with risk — this helps generate capacity to meet client needs. You can’t do business without it.” RJ Lehmann, a fellow with the R Street Institute, a non-profit policy research organisation, says in the end, the legislation would only benefit a small group of US insurance companies at the expense of American consumers. “This is a protectionist measure that serves the interests of certain large domestic insurance companies by discouraging foreign-based competitors from devoting their capital to US risks. It also is simply bad policy, in that it would tend to concentrate US risks within the United States, rather than allowing the global reinsurance system to spread them throughout the globe." Mr Lehmann also added that the legislation appears to violate the United States’ commitment under the General Agreement on Trade in Services not to subject companies to more punitive or burdensome taxation based solely on where the company is based.

2013. June 4. Tax loophole legislation fears from USA in Bermuda. The Association of Bermuda Insurers and Reinsurers (ABIR) expressed concern in a leading re/insurance publication that legislation in the USA to close a so-called tax loophole that favors Bermuda-based insurers could pass without warning. “The threat is some middle-of-the-night, last-minute deal,” said Bradley L Kading, president of the Association of Bermuda Insurers and Reinsurers, which opposes the measure. “That's what we've always been waiting for.” He was commenting on the reinsurance tax loophole legislation in the US being revived. Business Insurance reported at the weekend: “The Legislation that would change the tax treatment of reinsurance ceded to non-US affiliates of domestic insurers is unlikely to be enacted as a stand-alone measure, but might pass as part of a larger budget or tax reform bill, insurance industry sources say. Companion bills introduced by Rep Richard Neal, Democrat-Massachusetts, and Sen Bob Menendez, Democrat-New Jersey, would disallow tax deductions for reinsurance premiums ceded to affiliates in jurisdictions not subject to US tax law. The measure has been introduced and failed in previous sessions.” The publication noted President Barack Obama included a similar provision in his 2013 budget, estimating that it would raise $6.2 billion in revenue over 10 years. “Several US insurers supporting the legislation argue that it closes an unfair tax loophole, while a wider group of opponents — including many multinational insurance groups and the Risk & Insurance Management Society Inc claim that it will reduce market capacity and raise costs for policyholders,” Business Insurance said. “While several sources say the measure likely has too much opposition to pass on its own, opponents say it may be rolled into a tax reform bill now being drafted by the House Ways and Means Committee, or into a larger budget bill.”

June 4. Increasing political pressure may force more captives to move onshore posing a threat to Bermuda — that’s according to a recent report published by Intelligent Insurer. The article interviews Clive O’Connell, a partner at law firm Goldberg Segalla Global, who says we could see more captives move onshore in the coming months. “There are lots of reasons why companies set up in Bermuda and why they move away. At present, there is a lot of governmental pressure on both sides of the Atlantic against what might be perceived as tax havens. Some companies are taking a very strict view on that,” Mr O’Connell told Intelligent Insurer. The concern surrounding offshore captives comes as officials in New York State continue to investigate the use of captives by some insurance and reinsurance companies. The New York Department of Financial Services, led by Benjamin Lawsky, began its investigation last July, requesting information about the arrangements from about 80 life insurers in the state. Mr Lawsky said in a speech last month that offshore captives reduce the amount of reserves insurers hold to pay future claims and threaten the stability of the entire insurance system. Just two week ago, MetLife Inc announced it would merge its offshore captive reinsurance unit (based in Cayman) with three of the parent company’s US subsidiaries — a move lauded by New York state regulators. The merger “proactively addresses recent regulatory concerns about the use of captive reinsurers,” New York-based MetLife said in a presentation to investors. It could also help the company be in a “better position to deal with Dodd-Frank derivative collateral requirements.” “The New York Department of Financial Services’ industry inquiry regarding captives was an important factor in our taking a closer look at our offshore reinsurance subsidiary,” MetLife CEO Steve Kandarian said the presentation. Mr O’Connell says the MetLife move could be the first of many offshore exits. “Over the coming months insurers are going to look at the arrangements that they’ve made in order to ensure that they are acting within the arm of the law and socially acceptable parameters,” he said. Because this is an issue unique to life insurers engaged in regulatory arbitrage, it might not have too significant of an impact on Bermuda, which has long been considered a base for non-life insurance and reinsurance companies. The Island did however see a surge in interest from the life sector last year with three times as many new long-term insurance registrations in 2012 as in 2011. “The Bermuda insurance market continues to have a robust Long-Term (life insurance) sector,” a spokesperson for the Bermuda Monetary Authority (BMA) said. “This is reflected in the Long-Term sector’s consistent performance, writing over $34 billion in gross premiums and holding substantial amounts of both assets and capital and surplus.” At the end of 2012, 176 Long-Term firms were registered in Bermuda,” the spokesperson added. “This total included nine new Long-Term firms which had registered in 2012 — up from three registrations recorded in 2011.” According to the BMA, Bermuda also remains the largest domicile in terms of active captives — a total of 856 as of the end of last year, with $20 billion in gross premiums written. While this is an issue affecting life insurers and their captives, with other legislation looming, such as the Neal Bill, some in the industry feel other insurers could follow in the footsteps of MetLife. The controversial bill in the US Congress would deny tax deductions for reinsurance premiums paid to foreign affiliates by domestic insurers. Some say insurers moving onshore could encourage support for Congressman Richard Neal’s proposed plan, but Mr O’Connell told Intelligent Insurer he doesn’t believe that to be the case. “In some ways, if companies start doing this off their own volition then there’s no need,” he said. “Politically, there’s a growing momentum among governments to try and regulate global businesses on a national scale, but this is a difficult thing to do.”

June 7, 2013. This year marks the last for Bermuda’s old-style horizontal-print bank notes, which cease to be legal tender come January 1, 2014. Starting June 30, the vertical note series introduced in 2009 is to replace the “legacy” notes of $2, $5, $10, $20, $50 and $100 over the course of the year. As old currency gets taken out of circulation, members of the public can exchange them for fresh notes at their own bank or credit union. Banks will also switch notes for visitors — up to a cut-off date to be set by each institution. ATMs and retailers will continue to dispense legacy tender — but the amount of old notes will steadily decrease. Although the old notes will no longer be accepted in stores after the start of 2014, they will still be accepted by banks for exchange. The Bermuda Monetary Authority yesterday announced the launch of an Island-wide public awareness campaign on the switch. However, neither the BMA nor retailers will be exchanging the legacy banknotes for the public. For details, visit the Authority’s website at www.bma.bm.

2013. June 11.  Bermuda’s health financing is a staggeringly complex arrangement — especially for a comparatively small jurisdiction. “The input we’ve had from our advisers, who have experience of different health systems around the world, is that this is more complicated than what exists in other jurisdictions. In particular, for a population of our size, it’s highly complicated,” said Jennifer Attride-Stirling, CEO of the Bermuda Health Council. As part of our ongoing series on the Island’s rising healthcare costs, The Royal Gazette explores the structure of Bermuda’s financing. The Island’s Standard Hospital Benefit (SHB) package serves as the base of the system — covering much of the population, plus a substantial range of hospital services. The SHB deals with most of the local spending, plus a third of what we spend overseas. Currently, residents pay a $326 monthly premium for the basic SHB package — but a breakdown of who pays for what shows Government picking up a hefty portion of the bill, for seniors in particular. 1. Dimensions of health coverage.  “In order to understand how health insurance coverage is organized on the Island, we can represent it as a cube — an illustration scheme developed by the World Health Organization,” said Dr Attride-Stirling. “A health system with universal coverage for everybody would fill the whole cube: all of the population, all of the costs, all medically necessary services. Each country fills the cube in different ways. For Bermuda, at the base of the cube is the Standard Hospital Benefit (SHB), which covers most of the population. It includes Government’s subsidies. The SHB covers all hospitalization costs — but out of medically necessary services, it covers about a third. Government’s Health Insurance Plan (HIP) covers a little bit more of the population and a few more services. FutureCare covers a sliver of the population because it’s designed for seniors, and it’s more generous than HIP. Then, under Supplemental Benefits, we have the standard medical cover that most employers provide. There are other systems such as the Canadian, UK and French systems that cover significantly more. This illustration shows how the SHB plays a role in relation to the whole of Bermuda’s coverage.” 2 and 3: The Standard Hospital Benefit — and how much Government pays.  “The breakdown of Standard Health Benefit (SHB) claims by age graphically illustrates how we incur more health costs as we get older,” Dr Attride-Stirling said. "In bar-charts, the red portion of the bars covers the long hospital stays, or the Continuing Care Unit costs. We can see that red proportion growing sharply as the population gets older. There’s a spike in the zero to four years category. There are birth costs and neonatal care, which then drops off. It’s around the age 50 to 54 that the costs start to go up.” A comparison of the two charts reveals how “Government subsidies cover a huge amount of the bill,” she added. “You can also see how the subsidies are designed for youth and the aged. It also covers the indigent. When you look at the difference between the two charts, you can really see how Government is taking the hit for those claims, under our current system. People naturally complain about their premiums being high, but you can imagine what they’d be without the subsidies. It’s easier to understand when you see just how much the Government actually spends.” Useful website: www.bhec.bm.

2013. June 13.  Bermuda’s retailers want the freedom to open on public holidays, and are lobbying the Government to make those changes to the 1947 Public Holiday Act. “The Public Holiday Act is very outdated,” said Paula Clarke, who in addition to her position as chief executive officer at Gibbons Company, is also chairman of the retail division of the Chamber of Commerce. “Basically, what we’re saying is the Public Holiday Act 1947 needs revision — because it is outdated. We need to get with the rest of the world. As things stand, retailers with floor space of 2500 square feet or above are restricted to opening between 1pm and 6pm on any public holiday, except for Christmas Day and Good Friday,” she explained. The Chamber of Commerce has put out a public appeal for feedback from the community. In a recent open editorial, executive director Joanne MacPhee stated: “In the coming weeks the Bermuda Chamber of Commerce will be undertaking a robust community consultation process to ascertain the public’s response to our lobbying efforts to amend the current legislation. To be clear, we are advocating for two precise changes to the Act: 1) Sunday should not be deemed by law to be a Public Holiday, and 2) that no business should be restricted from trading based on the size of their premises.” Ms Clarke said: “We want to engage with the public as a full consultation process, so we can get feedback from all the stakeholders and the general public. “Comments, positive or negative, are welcome. Obviously, we are hoping for participation from the general public, because customers want to have the opportunity and freedom to shop whenever they want. And retailers feel that they should have the right to open on public holidays — except of course Christmas Day and Good Friday — should they feel they need to. This really is in response to the demands from the customers.  We understand that Saturdays are engaged with sports for children and housekeeping, that sort of thing, and the only time they have to shop as a family is on a Sunday, but they become frustrated because there aren’t enough businesses open to make the journey into Hamilton a full shopping experience. It’s up to the businesses when they want to open, but if you have a cruise ship in port, and it’s leaving Dockyard at 2pm, then people have to be back on board by 1pm, say, and the last day of shopping is a Sunday, then we can’t even open on that day. Those visitors are also looking for Sunday and public holiday store openings. In past years they would arrive in Hamilton on Sunday, and there would be nothing to do — so they would go back to Dockyard feeling disappointed because nothing was open or available. We need to offer a level of service which exists anywhere else in the world — you expect to shop seven days a week. We’ve reached a point in retail where we need Bermuda to be competitive and relevant in today’s retail industry. The law needs to be flexible.  We should have the right to open our business whenever we feel it is appropriate — we need to be nimble and flexible so we can give the service that the customer expects.” Smaller stores do have greater flexibility to open on public holidays, and Ms Clarke said a relaxation of restrictions pertaining to the larger shops should be beneficial to those smaller retailers. “The larger stores will help the smaller retailers because of that critical mass wanting to come into town or to a destination to shop.  Special applications can be made to the Government to open on public holidays. We have made many requests in the past for the industry for concessions, such as Good Friday last year when there was a cruise ship in St George’s. It was the only one of the season and we wanted to open on that day. We were granted special permissions to do this. In fact, on that occasion, weather forced the ship to detour away from St George’s.  But every time, it is a huge amount of time that goes into the application. We want to have the freedom and right to open when the demand is there.” Ms Clarke said under the previous government, the Department of Tourism and its Minister Wayne Furbert were supportive of retailers opening on public holidays. “Then, the election was called and everything came to a grinding halt,” she explained. “We’re going through the appropriate steps again.”

2013. June 14.  Bermuda faces a healthcare “disaster” if the Island doesn’t rein in its diabetes epidemic, a leading healthcare speaker has warned. Controversial US medical expert Robert Lustig said at least a quarter of the Island’s population has the disease. However, Bermuda’s reliance on imported food makes us unique in the battle to turn around our unhealthy diet, Dr Lustig told The Royal Gazette. “You have got a diabetes pandemic on your hands here,” Dr Lustig told audiences this week courtesy of the Bermuda Diabetes Association. As healthcare costs keep rising, the surge in expensive treatment for metabolic disease risks derailing Bermuda’s health financing. “I went into your supermarkets; and found large bags of potato chips for $1.69, while a mango cost $2.99,” the endocrinologist said. “This is exactly the pricing structure that foments diabetes.” Dr Lustig has drawn flak for insisting that the food industry has deliberately “spiked” 80 percent of US food products with toxic levels of sugar. “The best way to avoid diabetes is to eat real food,” he said, speculating that Bermuda’s disease level is “even worse” than that of the US. Obesity in Bermuda is similar to US levels, despite the Island’s relative affluence — very likely because of our “specific food environment that is generated from everything being imported”, he said — especially the importing of processed foods. Even so, you don’t have to be obese to get diabetes, he said. “My job in coming here is to debunk the last 30 years of propaganda that you’ve been fed. Twenty-five percent of Bermuda has diabetes — this is a disaster, and the sad part is that you’re all at risk.” But the Island could be a “demonstration project to the world” because food importation is potentially subject to control. “If distribution can be controlled through societal interventions, then availability of healthy, natural, appropriate foods can be increased, while processed foods can be decreased,” he said. However, Dr Lustig added that since Bermuda’s food goes through distributors, unhealthy food is promoted because it’s cheaper and easier to sell. “Where food goes from supplier straight to consumer, you see a standard supply-demand paradigm. But where there is a middleman controlling distribution, that middleman is going to chokehold that distribution to maximize profit. That means inflation of prices, and maximization of those foods which bring the most profit — processed foods, because there is no depreciation.” He called it “urgent” that Bermuda’s public get educated on the hidden sugar content of common foodstuffs like salad dressing or crackers. “Education of the populace about the role of nutrition in disease is a primary goal; this is what I was doing in Bermuda this week. Education includes alteration of the food label, and alteration of marketing practices, especially to children, who are a target of the food industry.” He also suggested a tax on processed food and a subsidy on healthy food, plus restricting access to soda and fruit juice at public venues. Government could also set “dietary guidelines and limits on nutrient content that companies have to respect.” Consumers crippled by diabetes could even explore the lawsuit option, Dr Lustig said, adding: “But not around obesity. Obesity is a loser. Diabetes is the issue, because that’s where the money goes. There are several legal theories that could be pursued. “However, I can’t say whether legal challenges could or would work in Bermuda, as I am not as familiar with your legal system.” An audience of hundreds turned up for Dr Lustig’s public talk on Tuesday — but his visit also included a private lecture to an audience including Health Minister Pat Gordon-Pamplin and Deputy Premier Michael Dunkley. Useful website: www.bermudadiabetes.org.

2013. June 15.  Former Premier Alex Scott has been appointed Commander of the British Empire, and charity founder Clem Talbot recognised as Member of the British Empire along with Raleigh Bermuda’s Michael Spurling. For Mr Scott, the accolade made for “an exhilarating fortnight”, as he was honoured for his political career at the start of the month. “I did not go into politics for recognition, so this becomes a pleasant surprise,” Mr Scott told The Royal Gazette. Initiated into politics by former Progressive Labour Party leader Frederick Wade, Mr Scott was appointed to the Senate in 1985, eventually becoming Opposition Leader in the Senate. He became an MP in 1993, and Premier ten years later. Mr Scott also served as one of the five members of the Pitt Commission investigating Bermuda’s 1977 riots. Last night he said he’d celebrate the honour with his family “as they have made a greater sacrifice than myself.” Clem Talbot took the MBE for services to the community, in recognition of fundraising through the Ross (Blackie) Talbot Foundation and Ross (Blackie) Talbot Golf Tournament. The initiative is named after Mr Talbot’s late father. “I didn’t expect this at all,” Mr Talbot said. “When I got the call from the Governor I was in between minds as to whether I should accept it, as there are far more worthy individuals than I. What I did over the last 20 years, raising almost $4 million for some 85 charities, was not for recognition. I think I will probably reflect on it quietly with my wife.” Raleigh Bermuda founder and chairman Michael Spurling was last night overseas in the UK. His work with the youth development organization earned him the Queen’s birthday honour. Mr Spurling is known for his contribution to Raleigh Bermuda and its impact on young people. A spokeswoman said he had “worked tirelessly to address the issues facing some of our most troubled youth”.

2013. June 20. Government’s charter of a $1.25 million ferry to provide backup to the public fleet during the summer has been branded a waste of taxpayer money by Marine and Ports staff. And workers are said to be furious at reports that foreign crews of the US-based Millennium are being put up at a hotel when on the Island — and are given travel expenses to fly back home at regular intervals. One Marine and Ports worker, who asked not to be named, claimed that three of Government’s six fast ferries are currently not being used at all. Two are on standby to cover periods when extra lift may be required, while a third has been in dry dock for months awaiting repairs. The source claimed that, instead of spending $1.25 million for a six-month charter, new engines could have been purchased for all six ferries at half the price, extending the life of the fleet by several years. Accusing public transport managers of applying short-term, band-aid solutions, the source said: “To get new engines for all six ferries would cost an estimated $600,000, which is much cheaper than bringing in a charter. “Even though the new Government only came in December of last year, it still had time to look into this and implement it. It only takes a matter of weeks to put in a new engine. And of course, had it done so, it would mean that all six of our ferries would now be operational for another six years or so, without them needing to be constantly repaired, which is the case at the moment. As it is, we now have three of our own ferries doing nothing. Had the money been spent on new engines, we would have all six ferries in good working order — more than enough to see us through a busy cruise ship season. And we’re going to be facing the same problem next summer. What’s Government going to do then — hire another charter for another $1.25 million?” Last month, Transport Minister Shawn Crockwell revealed that, in addition to the $1.25 million hire cost of Millennium, Government will also be spending a further $190,000 in “peripheral costs relating to crew and vessel operations and insurance.” Mr Crockwell said that this expense would be offset by savings “including $100,000 in reduced overtime and with reduction in unplanned maintenance and additional shift work.” The Marine & Ports source questioned why Government seemed prepared to spend extra taxpayer dollars on foreign crews to skipper the Millennium, rather than provide additional work for Bermudian staff. “Granted, getting the engines installed would have meant more work for our staff, but isn’t that better than spending money flying foreign workers back home to the US for a break? Our staff are struggling, we’re all struggling, and that additional cost would be spent in the local economy, helping needy Bermudian families rather than being spent overseas. We feel very angry that Government thinks it’s okay to spend money on foreign staff and justifies this cost by make savings at home — by cutting back on work for Bermudians.”

2013. June 26. A cultural revolution is needed in the Civil Service, says SAGE Commission chairman Brian Duperreault. He told Hamilton Rotary members yesterday that SAGE was surprised to find that creativity and innovation are not encouraged in the Civil Service. “One of the biggest challenges we have to face is the culture of the Bermuda Civil Service,” Mr Duperreault said. “It’s been a surprise to private sector members of the Commission to learn of the number of reports produced by civil servants that outline plans for progressive change, and the number of people who have worked hard to try to implement the recommendations in those reports. But this is not a culture that supports, encourages and rewards creativity and innovation. This is not a culture that promotes brave leadership. What we have is a lumbering organization with cumbersome bureaucracy, a vestige of a colonial mindset that can’t adapt to the 21st century because it hasn’t been given the tools to do so. In most organizations, there’s what I’d call a natural cleansing process in the way personnel are managed. You do your job well, you’re rewarded and possibly promoted. You don’t do your job well, you get some assistance for professional development, you get some coaching, and if that doesn’t work, you leave the organization to make way for someone else. But this isn’t how it works in the Civil Service. The performance process doesn’t seem to produce reasonable outcomes that support healthy, well-managed growth and development. Staff who enter the Civil Service with a zeal to make a difference are worn down by a system that thwarts progress. Their ideas are ignored. If they’re not ignored, they drift for years before they’re implemented. There is little accountability for those who do not perform to expectations. Staff who violate Public Service regulations might face a mild slap on the wrist. The chances of them being dismissed are slim to none. At the SAGE Commission, we’re beginning to believe that if we can find a way to help effect real systemic change in the Civil Service, to infuse it with a “can do” culture, we will be well on our way to creating the government Bermuda needs and can afford. We’ve been told by many civil and public servants that they desperately want the SAGE Commission to recommend a culture in government that both rewards excellence and also deals with non-performance. They want a culture that attracts, and keeps, strong performers.” Mr Duperreault went on to say that reducing personnel costs had to be done with a view to not causing more harm than good and planning for the social ramifications. And new revenue sources will have to be identified as “we can’t cut our way to economic recovery.” He called on the public not to indulge in the blame game over the Island’s fiscal crisis. “Are we going to retreat into our traditional comfort zones? Are we going to look for scapegoats to bear the brunt of what has to be done? Or are we going to reach out to each other, with mutual respect and decency, to find a way to fix our broken government?” The Commission has received 200 submissions from the public, and will submit an interim report next month. Healthcare costs and government pensions were being reviewed by the six Commission members, Mr Duperreault reported. But he said the Commission might make a separate recommendation of a healthcare review. “I’m pleased with the analysis the Commissioners have done so far on government pensions but I’m concerned about the review of healthcare costs. This type of review isn’t the same as finding ways to cut government spending. It needs the eye of professionals with specialist expertise.”

(Formation of SAGE has resulted in top civil servants are being put through their paces with an exhaustive series of questions and requests for information from the SAGE Commission. Charged with recommending ways in which Government can be more effective and efficient, the SAGE Commission turned its attention to the 70-odd department heads asking them to provide about a dozen reports on their operations. The reports include policy and legislative reviews, service delivery standards, performance benchmarks, performance system reviews, strategic reviews and plans, “inter-departmental and inter-ministerial coordination and efficiency,” and “efficiency, effectiveness and economy of programmes and services." The bosses are expected to justify and explain how they measure performance, reward good performance and think through ways in which they could be more effective and efficient, according to correspondence obtained by The Royal Gazette. Directors are being asked by the Measurement and Metrics Committee what key performance indicators are used by their departments, what makes them relevant and whether they are taken into consideration to evaluate the performance of their staff. “Is it fair to hold you accountable for the performance of your organization?” is one of the questions being asked by the Performance committee. SAGE’s privatization/outsourcing committee is expecting civil servants to tell them which of their services compete with the private sector, can be more effectively provided by the private sector and which assets are underutilized “not used at all, or are being misused or inappropriately used?" Government employees are required by law to provide information requested by the SAGE Commission).

2013. July 3. Former Premier Dame Pamela Gordon Banks and her husband have criticized the Land Valuation Department for waging a costly four-and-a-half year legal battle against them, instigated by a senior civil servant who overvalued their Gate Wood, Inglewood Lane, Paget, house. The Court of Appeal has ruled in favour of the couple, agreeing with an earlier tribunal that Chris Farrow, the Director of Land Valuation, proposed an “incorrect and unfair” annual rental value for their luxury home in Paget. The civil matter is likely to cost taxpayers hundreds of thousands of dollars in legal costs, since Government brought in a QC and junior barrister from London to argue its case, against the wishes of the Bermuda Bar Council. Dame Pamela told The Royal Gazette she and husband Andrew Banks were willing to fight the case as the outcome impacted hundreds of Bermudian homeowners. “We will never shy away from looking for justice and a just outcome,” she said, adding that they would “take it to the nth degree” to ensure justice was done. Businessman Mr Banks said the couple endured the “four-and-a-half year legal gauntlet” to “right the wrong that was inflicted upon us” and ensure it didn’t happen to others. He alleged that Mr Farrow used “bully tactics” with them and said he’d heard similar complaints about inaccurate valuations from “many, many, many people” who didn’t have the means to appeal such decisions. He also shared documents with The Yoyal Gazette showing how the Director did not pass important paperwork about their property to the Tax Commissioner’s office for a year, resulting in the couple receiving an inaccurate land tax bill for almost $215,000. The bill included $151,000 in arrears and interest, although it was the first demand they’d received. “When we heard from scores and scores of people who had [also] been mistreated we just felt like ‘we can’t let this go’,” said Mr Banks. “People continue to tell us how they were treated unfairly. We were appalled.” The couple’s argument with the Land Valuation Department began in December 2008 when Mr Farrow proposed that their newly built property should be deemed for land tax purposes as a single unit with an annual rental value of $852,000. The highest ARV given to a property in Bermuda is thought to be $1,182,000 for Golden Eye in Tucker’s Town. GateWood comprises a main three-bedroom house, a two-bedroom staff apartment and a two-bedroom guest cottage, but Mr Farrow proposed giving it just one assessment number, instead of the three it had, increasing the amount of land tax payable. The Bankses objected to the proposal and to a proposal a year later giving the property an ARV of $768,000. Two tribunals heard their objections, with the first upholding their appeal and concluding that GateWood should have three assessment numbers. The second tribunal confirmed the same and decreed that the total ARV for the three units should be $360,000. It heard evidence from a realtor that the highest market rent ever achieved on the Island was $35,000 a month, or $420,000 a year. Mr Farrow had 21 days to appeal the decisions but he took almost 14 months to challenge the first one, with the AG’s Chambers bringing in Jonathan Small QC and barrister Nathaniel Duckworth from London to make an “out of time” application. Bermuda Bar Council objected to the expensive silk and his junior coming here for the Supreme Court hearing in March last year, as its policy is that foreign counsel shouldn’t be used for “interlocutory” proceedings and foreign junior counsel shouldn’t be used at all. Bar Association president Justin Williams said the result was that at a hearing in then Chief Justice Richard Ground’s chambers, counsel for the Attorney General’s Chambers appeared with work permits for Mr Small and Mr Duckworth. “The Attorney General’s Chambers obtained the work permits directly from the Department of Immigration,” he said. “Bar Council had put in place the procedure to protect the rights and engagement of Bermudian attorneys.” Mr Farrow’s “out of time” application failed and his timely appeal of the second tribunal decision was also dismissed by Chief Justice Ian Kawaley. The judge agreed to look at the “wider public interest” issue of how residential properties are evaluated for tax purposes, with Mr Farrow giving evidence in an affidavit that there were 758 properties classified as single valuation units, despite having a main house and at least one guest house or pool house. The judge found there was no “coherent legal basis” for reclassifying high-end properties like GateWood as single units when there were “too many examples” on the Department’s valuation list of “more humble” houses with apartments and cottages being treated as separate units. The Director appealed the Chief Justice’s ruling in the Court of Appeal, where he lost again earlier this month, meaning all costs must be met by Government. Meanwhile, the appeal panel found no “pressing reason” to consider and rule on the issue of how the number of assessment units should be evaluated. Mr Justice Kawaley’s judgment could open the door for the 758 homeowners whose properties are currently classed as single units to challenge that when the Department’s next valuation list is compiled in 2014 — and be granted multiple assessment numbers. Dame Pamela, the Island’s first female premier and a former Environment Minister, said the issue was an important one as many Bermudians relied on rental incomes to pay their mortgages. The Land Valuation Department and the AG’s Chambers have failed to respond to numerous requests for comment from this newspaper since June 18 and have not shared any information on how much the case will cost taxpayers.

2013. July 5. A $1 million grant from Government has made it possible for Bermuda to stage the NatWest Island Games starting next weekend and yesterday Wayne Scott, Minister of Community and Cultural Development, declared Bermuda ready to host an exciting Games. Close to 2,000 athletes and officials will begin arriving in the Island next week for the start of the Games on July 13 and Minister Scott and Island Games committee chairman Jon Beard, urged residents to help make the Games memorable. “This is the first time the Games have ever been held outside of Europe and we are expecting close to 2,000 athletes, officials and visiting spectators to descend on our Island,” said Minister Scott as he addressed the media at the National Sports Centre North Field as work was going on behind him to install a temporary volleyball pit in front of the club pavilion. “As you can see, the National Centre has taken on a new look with the installation of sand for beach volleyball. The Bermuda Government has wholeheartedly thrown its support behind the Games. We have committed $1 million to this event and have worked in partnership with the Organizing Committee to help them achieve their goals.” Added the Minister: “My message to all residents is simple ... it’s time to roll out the red carpet and to welcome the athletes who have worked so hard and made great sacrifices to participate in these Games. Many of the athletes have been raising money for four years for this opportunity to compete. It is a tremendous sacrifice for many and we want our visitors to enjoy the Games and of course our famous Bermudian hospitality. Today I am encouraging everyone to come and support the athletes and cheer on our local competitors.” The Games have demanded tremendous co-ordination of transportation and accommodation and Beard says hosting the Games is a huge undertaking. “We are in a stunningly, exciting time with 16 Bermuda national teams all competing in one week against visitors from overseas, the vast majority of which have never been here and this is a trip of a lifetime for them and we need the community out there,” Beard urged. “We know at times we are going to be disadvantaging some people in the slowdown of traffic for the cyclists and the half marathon, but we need you out there supporting our national teams. The stadium is the only place where there is going to be a charge — there are four sports going on here (track and field, football, volleyball and swimming) — and it will be $5 for adults and free for schoolchildren.” The visiting athletes and officials will be housed in hotels (Fairmont Hamilton Princess, Fairmont Southampton and Grotto Bay) and guest houses while Warwick Camp and schools like CedarBridge, Saltus and Warwick Academy will be used as dorms. “The volunteers are doing a fantastic job, and we can always use more volunteers,” said Beard. “There is a feeling that we want to show off Bermuda and we just want it to be right and put on a Games that everybody can be proud of. This, for me, is what the National Sports Centre should be used for. There will be 300 people competing for Bermuda in one week and that’s pretty incredible. We’ve got media coming in from all of these Islands, a couple of football magazines in the UK sending people out because they think it is quite a unique event and you’ve got the Prime Minister of Faroe coming in as well as sports ministers and people want to do documentaries of the Island while they’re here. I think it is just a great opportunity to sell ourselves for what we are, great people in a lovely place.” Beard admits the Island Games is a costly undertaking for the Island. “Obviously it is costing money and we’re still knocking on some doors trying to get that, because we don’t have a sponsor for volleyball and we don’t have a sponsor for basketball, the two sports that have been in just about every Games that we’ve done,” said Beard. “Government are the biggest sponsor, and then NatWest Bank from the UK. If Government hadn’t come in at the very beginning and offered this it would have been impossible for us to put the Games on. Our budget was close to $3 million.” Public buses will be used to transport the athletes and officials, an area that has taken much planning. “Darrin Lewis (volunteer) has done a fantastic job as transport director for us and PTB have been so helpful and without them it would have been awful to try to organize,” Beard concedes.

2013. July 16. One of Bermuda’s most cherished traditions has been chosen to adorn a new set of Island stamps released this week. Gombeys are the subject of the third set of stamps issued by the Bermuda Post Office for 2013 and they are the first in a planned series focusing on folk life and arts of celebration on the Island. The brightly colored images will be seen around the world, on regular mail and by collectors who order first-day covers or sheets of stamps. “The Gombey dancers are something that are really Bermudian. They’re significant to our heritage and they have not been showcased greatly in past years,” said Stanley Taylor, Bermuda Post Office’s philatelic coordinator. He and his team have been preparing first-day covers to send out to many of the 700 to 800 subscribers who keenly follow Bermuda’s stamp releases some live as far away as Hong Kong and Australia. The stamps, and covers, will be launched on Thursday. Mr Taylor said it was pleasing to know that brightly colorful and iconic images of Bermuda would find their way to distant lands and give people a glimpse of the Island. Those who purchase the first-day covers will also receive liner notes about the Gombeys and their place in Bermuda history. And it is not only committed collectors who will be seeing the stamps: the new release will be on sale as regular stamps for customers mailing letters, parcels and postcards around the world. The Gombey stamps feature close-up details of the dancers’ costumes and dancing movements. It has not yet been decided how many parts the new folk life/art of celebration series of stamps will have, although future stamps may feature such Bermuda events as the recent Portuguese community Feast of the Holy Spirit celebration in St George. Stamp collectors can purchase first-day covers of the new Gombey stamps at the Bermuda Philatelic Bureau, in the main post office, from Thursday. The final new set of stamps for 2013 is scheduled for October and will be on the theme of Bermuda’s ‘mystery rose.’

2013. July 24. The Association of Bermuda Insurers and Reinsurers (ABIR) today released its Eighth Annual Bermuda Economic Impact Survey results. The data show that ABIR members’ directly contribute $816 million dollars to the Bermuda economy, but also shows a continuing trend of job reductions in Bermuda. ABIR believes that the aggregate spin-off economic impact of our members in Bermuda is a multiple of that direct contribution to Bermuda’s economy. “ABIR’s members represent the largest business segment in Bermuda, directly and indirectly driving the preponderance of economic activity, jobs, and government revenues,” ABIR said. “As we explained last year, though, our employee headcount is slowly declining in Bermuda as jobs have been shifted to other countries. The detrimental 2010 payroll tax increase, historical difficulties with work permits, the high cost of talent and other matters in Bermuda and extraordinary competitive pressures in our business have all contributed to this.” Mike McGavick, chair of the ABIR Board, and CEO of XL Group, said: “We’re pleased with recent actions the government has recently taken to foster a competitive business environment, including rational reforms on the work permits for the high skilled employees that we need in Bermuda. For every employee we bring to Bermuda, we can create more jobs for Bermudians. We look forward to working with the government on additional changes that may improve our ability to maintain or grow our Bermuda employee base. The trend towards consolidation (five ABIR members have been sold in the last 18 months) will continue to affect our local employment.” ABIR president Brad Kading said: “ABIR’s members employ nearly 1,600 people in Bermuda. Nearly seventy percent of those employees are Bermudian. The Bermuda Monetary Authority has done an excellent job of creating a regulatory environment that meets international standards with robust prudential supervision. More broadly, Government continues to support the high levels of transparency, cooperation, and compliance standards which are necessary to compete in the markets we serve on the global stage. These characteristics allow our members to locate their groups here. Much needs to be done to help Bermuda recover from the extraordinary recession and the government is taking important steps to boost cooperation with the US and the EU, to eliminate red tape on work permits and to encourage residency in Bermuda. We applaud their actions. The total economic contribution is a sum of: travel and entertainment expenses, our payments for business services, our charitable contributions, our real estate costs including housing reimbursement, plus the payroll, noted Bradley Kading, ABIR’s President and Executive Director. ABIR represents 21 international insurance groups all of which have essential underwriting operations in Bermuda. Eighteen ABIR members participated in the survey. Here is a summary of the data:

2013. July 26. Jones Lang LaSalle along with Rego Sotheby's International Realty and GARI Realty have been selected to market for sale the Coral Beach and Tennis Club plus Horizons and Cottages. According to Jones Lang LaSalle yesterday, the club and properties are expected to attract “significant international investor interest.” Asked what it is priced at, a spokeswoman told The Royal Gazette: “There is no set price attached at this point. It is whatever the market will bear.” She said the three firms were engaged by an international lending institution to market for sale the leasehold interest in both the Coral Beach and Tennis Club and Horizons and Cottages properties on Bermuda’s South Shore. The Rego Sotheby’s International Realty team is led by president Buddy Rego and executive vice president Penny MacIntyre. The combined team of Jones Lang LaSalle, Rego and GARI successfully marketed for sale the South Beaches site in Southampton, site of the former Sonesta Hotel, which transacted in March of this year, to the Green family. The resort and properties are set on a combined 52 acres with views and beach shoreline. “A broad marketing effort will occur within the coming weeks,” JLL said. Swedbank AB New York is the mortgage holder for the property and KPMG Advisory has been named Joint Receivers to Coral Beach. New York-based Brickman had purchased the resort plus Horizons from George Wardman’s company with a loan which ended up being held by Swedbank. As part of the lease purchase, Brickman had agreed to annual rental payments of $1 million for the Horizon lease and $1 million for the CBC lease for the next 45 years of the lease.

2013 July 27. Lawmakers yesterday removed a licensing requirement for mixed-status couples who purchase land. Government described the Bermuda Immigration and Protection Amendment Act 2013 as “housekeeping” measures. But the Opposition Progressive Labour Party — which had imposed the restrictions when in Government — opposed the move, citing the need to preserve property rights for Bermudians, lambasting Government for not providing relevant data to the House of Assembly and questioning what measures will be in place to prevent the practice of fronting. Introduced by Public Safety Minister Michael Dunkley on behalf of Home Affairs Minister Senator Fahy, the changes repealed controversial provisions forcing married couples in which one person is a non-Bermudian to get a licence before purchasing land. “In practice, married couples, where one spouse is a Bermudian, will simply be allowed to acquire property in accordance with the rules and regulations that pertain to a Bermudian with no added regulatory requirements,” said Mr Dunkley. Much of the debate centered around the rationale and history of the licensing requirement. Opposition MPs led by Shadow Home Affairs Minister Walter Roban explained that the PLP had first introduced land licensing requirements for mixed-status couples in 2007 to combat the practice of “fronting” — where a Bermudian would stand in as the owner of a property for a non-Bermudian — and because it was unclear how much land was in the hands of non-Bermudians. The 2007 law proved controversial and sparked intense lobbying with opponents claiming it discriminated against Bermudians simply because of the status of their spouse. In 2012, the measure was amended to exempt a couple’s first land purchase from the licence requirement. But Mr Dunkley told the House that the law simply deterred property purchases and created an administrative burden." With the elimination of the requirement to acquire a license for a first property the opportunity to monitor land held by restricted persons using the licensing regime is greatly diminished. The estimated number of licenses ever issued for the purchase of a second or third property under the regime is in the region of three.” He added that in the event of death or divorce of the Bermudian spouse the law already provides for the non-Bermudian to obtain a licence to hold land. “Protecting the rights of Bermudians are paramount when it comes to land,” Mr Roban. He added: “ Any Bermuda Government has a duty to protect the property rights of Bermudians now and Bermudians yet to be born.” And he said that non Bermudian spouses can apply for status after ten years of marriage in any case — a period in which they are unlikely to have paid for their first property. He said the law limits non Bermudian held land to 400 acres per parish and that it was important to know how much land is currently in non Bermudians hands. Public Works Minister Trevor Moniz said the practice of fronting had been rampant before the 2007 legislation and that some companies continued the practice today. But he warned against an “us and them” paradigm and defended the new legislation as part of an effort to boost confidence in the community. “We’re trying to do a number of things to stimulate this economy to stimulate the confidence of Bermudians and non-Bermudians. We’re trying to stimulate inward capital investment and the investment of people in this community who have money. We’re trying to open up the economy and we don’t want people to be frightened by that.” Deputy Opposition Leader Derrick Burgess reminded the House that in 2007, 37 percent of land was owned by non-Bermudians. “We should have had the figures presented to this House today on what percentage of residential property is owned by non-Bermudians, how many non-Bermudians are married to Bermudians at this point, how many non-Bermudians own property,” said Mr Burgess. “These figures would have been most helpful to us.” He warned against “opening the floodgates” without having the data and called on the Government to rise and report progress. Shadow Education Minister Walton Brown rejected the measures saying it was “aided and abetted by the real estate community” and not sensitive to the needs of the vulnerable. “This particular piece of legislation will further marginalize those who are more financially challenged. Those who have will get more. Those who find challenges in this current marketplace will continue to see those challenges in place.” And he noted that the bill could be “effectively illegal” given that the data on non-Bermudian held land was not clear. “We cannot make effective policy in the absence of good data. How do you make policy without knowing what the facts are. Simply being lobbied by the real estate community is not sufficient justification for passing this bill.” Mr Brown rejected what he said were calls by the real estate community to bring prices back to the “unsustainable” levels of 2007. “Who loses in that, Mr Speaker? The average working Bermudian.  I go back to my parents. In 1972, a bartender and a waitress were able to buy a home in this country. What bartender and what waitress today can afford to buy a home in this country? If all you’re going to do is bring forward legislation to benefit the rich, to benefit those who are your strangest lobbyist, then you’ve shirked the responsibility that was given to you on December 17.”

2013. July 29. The Pink Beach Club is to be sold — and restored as a luxury hotel by 2015. The deal, approved by MPs during Friday’s House of Assembly, comes three years after the Tucker’s Town resort was placed in receivership. Sweeping concessions were offered for the $12.5 million sale, but Government defended its bargain as crucial for sealing the deal. The South Shore hotel has “long been synonymous with the storied success of Bermuda’s tourism industry”, Tourism Minister Shawn Crockwell told the House. PBC Holdings will purchase Pink Beach, which will be managed by the international chain Capella Hotel Group, in return for tax concessions totaling $6.5 million. The tax breaks add up to $1.3 million annually, spread across five years. Mr Crockwell said the Smith’s property will be converted to a five-star resort with more than 200 employees by 2015, adding: “They will endeavor to open next May, 2014, with most of the hotel.” The Minister called on MPs to act with “the urgency of now”, saying that with the Island’s hotels full but airlines coming in at 50 percent capacity, “something is wrong.” Shadow Minister Wayne Furbert said the Opposition welcomed the deal — but other Progressive Labour Party MPs questioned some of the terms negotiated by Government. Calling the tax breaks “a serious giveaway”, independent MP Terry Lister likened the arrangement to a “50 percent off sale”, adding: “Where do I sign up? This sounds like something I want a piece of too.” Mr Lister also queried how Pink Beach had obtained a more favorable deal than concessions offered to the Fairmont Group. However, the One Bermuda Alliance’s Grant Gibbons countered that the deal represented “a match made in heaven”, since Capella Group is known for high-end resorts. Dr Gibbons said the buyers would be acquiring a property currently in receivership and needed a “sweetener up front” — but that the new hotel would bring long-term revenue to Bermuda. “Even though we have had to provide more concessions, perhaps it’s wrong to say ‘concession’ — really, it’s financial stimulus.” In response to charges that the deal could have been negotiated better, Dr Gibbons told MPs: “One hundred percent of nothing is nothing. From our perspective, if these concessions were not given, we would not be getting anything.” PLP MP Michael Scott declared his support, telling the House that arguments over matters like entertainment spending should be left until later. “For heaven’s sake, let’s get the hotel up,” Mr Scott said, noting that concession legislation passed by the PLP was concerned solely with driving development. In response to questions from Mr Furbert, Mr Crockwell revealed that Pink Beach currently employs 35 Bermudians and eight non-Bermudians. In two years, it is estimated that the hotel will employ 192 Bermudians and 23 foreign workers, to a total of 215 — about 173 new jobs. “We need to welcome this development with open arms,” Mr Crockwell concluded. The order got unanimous approval by MPs. By press time last night, the Ministry of Tourism had declined to specify which investors made up PBC Holdings — but The Royal Gazette understands that the group isn’t linked to the Florida-based company of the same name. Who are PBC Holdings? A Butterfield Bank spokesman last night confirmed the bank had received a letter of intent for the sale of Pink Beach Club. The spokesman called the buyers, PBC Holdings, “a holding company established by a private investor group. We cannot speak for the purchasers or Capella regarding their plans or timeline for renovations to the hotel.” Capella Hotel Group has been appointed managers for Pink Beach, which is to undergo extensive renovations. Capella, founded in 2002, bills itself as a stickler for service. The company’s website lists five hotels of its own, in Germany, Mexico, Singapore and Washington, DC. Capella also specialises in hotel and spa management. The group is headed by Horst Schulze, former president of The Ritz-Carlton Hotel Company. Government MP Grant Gibbons called Mr Schulze “an absolute perfectionist” when it came to training. Under a deal approved by Parliament, the company has committed to training Bermudian employees up to a yearly amount of $346,125 for five years. Useful website: www.capellahotelgroup.com.

2013. July 29. Government had nothing to do with facilitating talks between developers Carl Bazarian and Nathan Landow over the former Club Med property, insisted Premier Craig Cannonier. Responding to questions raised during Friday’s motion to adjourn by Shadow Minister David Burt, the Premier said: “This Government has nothing to do with the two of them — Bazarian and Landow — coming together.” As reported in this newspaper on July 19, Mr Bazarian is hoping to secure investments for the new Park Hyatt Resort project from Nathan Landow — the Maryland developer who flew three cabinet Ministers in his private jet to a Washington DC meeting in what became known as “jetgate”. Mr Landow confirmed to The Royal Gazette that a joint venture was being explored but said that no decision had been made. And he revealed that both he and Mr Bazarian had submitted plans on the project. Mr Burt referred to the development as “quite shocking.” And he recalled that Mr Cannonier had insisted that no negotiations had taken place at the Washington DC meeting, and that Government had promised in its Throne Speech in February to repeal the Park Hyatt Resort Act and seek a new developer. “Now we hear instead of a repeal, that not only is the old developer still in the picture but the Premier, the Attorney General and the Minister of Tourism’s travel agent is also in the picture as well. This is shocking.” Mr Cannonier rose on a point of order to reject what he described as Mr Burt’s “insinuation.” “Mr Bazarian has the right if he wishes to, to come back and say, ‘I would like to redevelop that property’. It has nothing to do with us,” he added. But Mr Burt went on to quote this newspaper’s report in which Mr Landow said his group had presented a plan to the Government. “The Member is attempting to mislead folks. The timing of this is completely way off target to what he is insinuating.” In February, Government confirmed that it had no plans to invite Mr Bazarian back to the island to thrash out a new agreement. Instead, Government said it would get Parliament to repeal the Act which gave the developer a 262-year lease on the site, making the termination final But in mid March, E Michael Jones, a representative for Mr Bazarian, said that the developer was still in talks with officials — and was hoping to meet with Government. On March 20, Premier Cannonier, Tourism Minister Shawn Crockwell and Attorney General Mark Pettingill were flown to a five hour Washington DC meeting with Mr Landow and his associates in Mr Landow’s private jet, staying two nights at Mr Landow’s expense. The trip sparked intense criticism from the Opposition Party which said it violated the Ministerial Code of Conduct. Government defended itself, saying the meeting was for informational purposes only, and no negotiations had taken place.

2013. August 7. A veteran leader of Bermuda’s international re/insurance industry called on Government to enact bolder reforms to prevent further loss of job creators. John Charman, chairman and chief executive officer of Endurance Specialty Holdings Ltd, said if executives continued to be treated like “second-class citizens”, then they would “vote with their feet.” While Mr Charman felt the One Bermuda Alliance (OBA) Government had made some good moves since being elected last December, he said the Island’s leaders needed to make more substantive changes to improve the business environment in the economic interests of all residents. “The time for trimming around the edge has long gone,” Mr Charman told The Royal Gazette. “Business expects.” While he did not specifically outline the policy changes that he would like to see, he did refer to a 2012 study by the Association of Bermuda Insurers and Reinsurers (ABIR), which showed that the five ABIR members who had traditionally had the largest Bermuda-based workforces had cut staff numbers by almost a quarter in the space of four years, as dozens of executives had left or been relocated. “We simply cannot afford to lose those people who create both jobs and prosperity,” Mr Charman said. “As I have said many times before, I do not want to be treated like a second-class citizen — if executives continue to be treated like second-class citizens, then they will vote with their feet.” When a C-suite executive relocates, other jobs are often lost to Bermuda, as entire teams relocate with them, and the support staff who worked with them are no longer needed on the Island. Many executives have privately stated that Immigration rules that create doubt over their length of stay on the Island and restrictions on property ownership do not give them a sense of belonging in the community — even when they are the co-builders of a companies that employ significant numbers and contribute strongly to the economy. Mr Charman founded Axis Capital Holdings Ltd in 2001 and led the company for more than a decade before he was ousted by the company’s board last year in a disagreement over his responsibilities as chairman. He was unveiled as the new man at the helm of Endurance in late May, having invested some $30 million of his family’s money in the company. Mr Charman is a strong supporter of Bermuda and has a home on the Island. He urged Government to act now to reinvigorate the international business sector. “For a number of reasons, I think the Bermuda market has been on the back foot for about three years,” he said. “Among those reasons are the global financial crisis, regulatory pressures and domestic political pressure. At the end of the day, Bermuda, its Government and its people either want to resolve or ameliorate these issues or they won’t. International business will react accordingly. It’s not for us to dictate what government policy is or does. But if there’s one thing that is as sure as night follows day, it’s that international business will continue to react to the business environment here. My personal view is that the Government is trying its best, having been dealt a very bad hand by the previous administration. My advice to them would be that you can’t be all things to all people. They were elected to lead. They should absolutely show their leadership qualities and they will be judged accordingly. They have significantly changed the direction and emphasis of government, but they still have so much more to do. There has to be fundamental and substantive change.” Mr Charman hopes to see a more proactive approach to enable Bermuda to compete more strongly against rival jurisdictions. “I think Bermuda is as well placed for growth today as it ever has been,” he said. “But it takes Government and business to work together to recognize opportunity and to seize it. Instead of sitting back, we have to understand that life is not about waiting for business to come to us. We have to go out there and show that we deserve to be a very important factor in the global economy. Otherwise, we’ll wither on the vine. And that is not what I, or my business, are going to do.” As a Briton who started out in the Lloyd’s market, where he built his reputation in the industry, Mr Charman watched with interest June’s events when Premier Craig Cannonier, along with other British Overseas Territories leaders, met UK Prime Minister David Cameron in London. Mr Cameron apparently stressed the need for more transparency, in no uncertain terms. Mr Charman accused the British Government of hypocrisy. “It looks from afar as if there is a substantial amount of hypocrisy being demonstrated by the UK Government in their relationships with Overseas Territories, as they have had for some time an aggressive marketing campaign for high net-worth individuals from all sorts of rather dubious jurisdictions who are now located — and to all intents and purposes tax-sheltered — in London,” he said. “All these individuals appear to have had to do was pay a rather paltry sum and be free of most oversight. This holier-than-thou attitude of the UK Government rings a bit hollow to me. So I commend the Premier of Bermuda in standing up and demanding transparency and fairness. In Bermuda we should be very proud of the fact that we have high standards of transparency and I see no reason to apologies for that. The standards of disclosure in Bermuda are very strong. My long-standing personal and corporate experience of Bermuda has been that it is among the highest standards practiced internationally in this regard.” Another major international challenge for Bermuda is the threat of legislation in the US that could damage the prospects for the Island’s insurance industry, such as the Neal bill, which would impose greater US tax obligations on some Bermuda-based re/insurance groups with US subsidiaries, for example. Mr Charman encouraged Government to tackle the issue head on. “I think the Bermuda Government needs to upgrade and modernize its trading relationship with the United States,” he said. “Bermuda needs to have some kind of all-embracing agreement on goods and services with the US, because it needs to be open, transparent and we need to move on. Otherwise we’re going to end up with an outdated and confused situation, which could become highly sensitive for the future. Government has a responsibility to deal with this. The best way to deal with an issue is to go headlong at it and get it dealt with." He used Switzerland as an example of the potential benefits of such an approach. “Switzerland has had problems with the high net-worth individuals who have failed to declare their assets to the US Government and have apparently been shielded by Swiss banks,” he said. “The Swiss are now in the thick of renegotiating their trading relationships and tax treaties with the US. And once it’s done, then they’ll be able to continue their business activity while the US will go and focus on somebody else — probably Bermuda.”

2013. August 17. Tighter security, faster internet and a continuing push for academic excellence are top priorities for the year ahead at Saltus, said new Head Teacher Claire Charlemagne. Saltus's first female head also looks forward to strong push for professional development among staff through the schools partnership with the National College for Teaching and Leadership in the UK. Ms Charlemagne said the appointment of a woman to the top management role sends a powerful statement about the school. "It's making history, but it feels very natural. Sometimes people ask me things like what are you going to do for the girls? And the answer is nothing that I wouldn't do for the boys. It's about providing for the needs of our students, whatever they might be. I can be a good role model for our female students, but beyond that I should be judged solely by whether my leadership is effective or not." After 11 years at the school, including head of Modern Languages and Deputy Head under former Head Teacher Ted Staunton, Ms Charlemagne knows the school well. " My passion is the students, their achievements and making sure these fantastic children that come to us achieve what they are capable of, and more." The secondary departments exam results improved under her predecessor, from a GCSE pass rate of 76 percent in 2009 to 89 percent last year. The declining enrolment of the recessions onset is no longer of concern: Saltus has 948 students for this September. Ms Charlemagne said: "Ted Staunton made a conscious effort to right-size the school,  We had grown too big our ideal number is anything between 900 and a maximum of 960. The school has become much more selective of its students. That's not necessarily in terms of academic ability, but our admissions process is much more rigorous to make sure that Saltus is the absolute right fit, that were fully able to provide for students needs. Saltus had made a concerted effort to cater to students with special learning needs although the former Centre for Learning is now called the Academic Support Services, and there has been a deliberate step away from using separate classrooms to teach students with different needs. Two additional posts have been added to that department, using existing teachers qualified to give academic support where needed. As well as keeping abreast of the times with the appointment of Director of Educational Technology Jane Hizer, Saltus has enhanced security, with extra security cameras, a new front gate and a full-time security guard. I see my role as continuing along the path were already on. We've still got four years to go in our five-year strategic plan. The overarching goals are set. My focus is on teaching and learning."

2013. August 19.  Government debt continues on an easy uphill climb, revenues were weaker than expected last year and the economy is limping along, according to the latest Government report. But the Finance Ministry manages a glimmer of optimism in its just released fiscal performance update and economic review. A total of 226 new Bermudian hires were recorded for the second quarter of this year. Their employers will benefit from the Government's two-year payroll tax holiday policy initiative announced in the Budget. And, reports the Finance Ministry, the first six months of 2013 saw 470 new international companies and partnerships registered in Bermuda, a 13.5 percent increase over the 414 registrations in 2012. Another positive sign, Government says, was a 0.5 percent increase in employment income in the first quarter of 2013, to $883.3 million compared to the same period a year ago. And, primarily driven by the redevelopment of the King Edward Memorial Hospital, activity in the construction sector in the first quarter doubled from an estimated value of work put in place of $23.2 million in 2012 to $46.0 million in 2013. But there is no expectation that the economy will begin to grow again before next year.  Overall, the Ministry of Finance anticipates that Bermuda's GDP will be flat to negative 0.75 percent in 2013, the report states. Higher costs for food, healthcare, overseas travel and accommodations have ensured a two percent inflation rate, and consumer spending in retail outlets between January and June is down $1.2 million or 0.2 percent to $514.0 million. Of that amount, approximately $487.2 million was spent locally while $26.8 million was spent overseas. The first quarter of 2013 also saw a 4.5 percent decline in the number of visitors to the Island. While air visitors declined by one percent, the decline in cruise visitors was more drastic at 45.4 percent, due to the fact that ships coming to the Island in 2012 had a much greater capacity. Total visitor spending was down by 4.5 percent settling, at $34.1 million. Bermuda's banks saw a 4.9 percent decrease in assets and gave out 7.7 percent less loans and advances in the first quarter of 2013 than the same period a year earlier. The Finance Ministry also gave highlights of the unaudited accounts of the Consolidated Fund. Fiscal 2012/13 $877.1 million in total revenue, down $37.1 million (4.1 percent) from the previous year's revenue ($914.2 million). Revenues were also below the original budget estimates by approximately $32.5 million (3.6%), primarily due to weak Customs Duty collections which were $28.8 million below budget estimates, the report states. The most significant generators of revenues for fiscal 2012/13 were Payroll Taxes, accounting for $339.2 million and Customs Duty, accounting for $171.2 million. But current expenses, excluding debt service for fiscal 2012/13, at $974.7 million, were down 1.6 percent, while total capital account cash expenditure at $63 million was $3.5 million higher than the previous year. Government paid out $81.5 million in interest on long term debt,  $31.5 million from the Consolidated Fund and $50 million from the Sinking Fund. Net Public Debt, which excludes guarantees and is net of the Sinking Fund, increased by $240.9 million (2012 ? $234.0 million) during fiscal 2012/13 standing at $1.477 billion (2012 ? $1.236 billion) at the end of the year. This represents a 19.6% increase from fiscal 2011/12. Revenues for the current fiscal year so far total $208.7 million ? $0.3 million higher than the first quarter of last year and on track with estimates. But current spending, at $247.3 million is $3 million lower than last year but above budget. First quarter capital expenditures were $17.7 million, roughly $9.5 million higher than in June 2012 -primarily due to expenditures related to the Heritage Wharf project. Total current and capital spending to date, excluding debt service, is $6.2 million higher than last year's spend. Government has spent $33.2 million in servicing the debt in the first quarter, $23.8 million was interest payments, while $9.4 million went into the Sinking Fund. Interest expenses are $15 million higher than 2012. This is principally due to a portion of the 2012 interest expense being paid from the Sinking Fund in 2012,? according to the report. On June 30, 2013, central Government gross debt, excluding guarantees, stood at $1.683 billion, while net debt was $1.586 billion. Government is aiming for $871.2 million in total revenue for its $1.1 billion budget this fiscal year. Capital spending is budgeted at $84.6 million. 

2013. August 19.  An American couple took the plunge when they visited Bermuda to get married this week — by taking part in a spot of cliff-jumping after their wedding ceremony. Matthew Pelletier, 36, and Kim Turgeon, 35, from Portland, Maine, arrived aboard the cruise ship Norwegian Breakaway on Wednesday along with almost 40 wedding guests. Software development manager Mr Pelletier and his bride, who works in export operations, then tied the knot at The Reefs Hotel on Thursday evening. And if getting married wasn’t nerve-racking enough, the newlyweds decided to tackle another butterfly-inducing experience on their first full day as man and wife — by taking a 25ft leap of faith from rocks off Horseshoe Bay dressed in their full wedding ceremony finery on Friday morning. Having taken one big step into marital bliss, the couple showed no fear as they calmly held hands and took their second big step — this time into maritime bliss — and were cheered on by delighted crowds as they emerged from the water. The couple left Bermuda aboard Breakaway on Friday evening, arriving in New York yesterday evening. Back on dry land, Mr Pelletier last night told The Gazette that the decision to take the plunge had nothing to do with the Bermuda summertime tradition of cliff-jumping. Instead, the couple were continuing a family tradition of testing the waters during wedding ceremonies. “I’m not sure how it started, but we have a history of ending up in the water at weddings — believe it or not, we live near the water in Portland, Maine,” he said. The couple, who became engaged last September, had tried to come out to Bermuda on previous occasions but had been thwarted by bad weather. “We wanted a tropical location and Bermuda is so convenient as most of our family is in the northeast,” Mr Pelletier said. “We tried to go a couple times previously, earlier and later in the year, and got unlucky with the weather.” And he confirmed that last week’s regular downpours were the only cause for jitters on their big day. But that once the clouds had lifted, the ceremony — and their plunge into the ocean — went ahead just swimmingly. “The only nerve-racking part of our entire time in Bermuda was the weather the morning of the wedding. It started out foggy and rainy but ended up perfect for the wedding — complete with an amazing sunset. We absolutely love Bermuda.”

2013. August 27. SAGE Commission Chairman Brian Duperreault has defended its recommendation that Government implement its mandatory retirement age policy saying it would have the least economic impact on pension age civil servants and make room for others to move up Governments career ladder. The recommendation caused some concern at seniors advocacy group AGE Concern which warned that it could have unintended consequences and would retard the progress of human rights in Bermuda. But Mr Duppereault said the recommendation should be placed in its proper context as a short term issue to address a cost problem. "It's no statement that we think everyone should retire at 65. It's a context statement that says mandatory retirement at 65 is the policy of the government, we are saying adhere to that policy." Government has indicated its intention to ban age discrimination in the workplace, and is researching the impact of the change on pensions and retirement. It has already relaxed the mandatory retirement policy for public school teachers who can now work until 70 with the consent of the head of the Civil Service in line with the policy for civil servants. But in a cost-cutting deal with all public workers, Government is offering an incentive programme for early retirement targeted at the close to 500 public sector workers between 60 and 64. "If the policy should be changed, then address the policy. All we said was that's your policy, so stick to it," Mr Duperreault said. But he agreed that the financial impact of the recommendation was not a big amount. "It's just one suggestion among many for short term action, that's all this was." Mr Duppereault said the Commission did the necessary analysis but he was unwilling to provide concrete figures such as the financial impact of implementing the policy and its also unclear how many currently employed civil servants are 65 or over. Some high profile Government employees in their sixties are civil service head, Donald Scott, Assistant Cabinet Secretary Judith Hall-Bean, and Ellen Kate Horton who retired but was taken on again as a consultant. "This one has the least impact economically on the people who will be leaving the service because they have a pension," he said. "That's a reasonable thing to do. I don't think its contradictory." Mr Duperreault said he appreciated that the issue had stimulated discussion about Bermudas ageing population. "We are getting older. It's putting a big strain on our pensions. We have fewer and fewer younger people in our workforce. Our system is the young support the old. There are fewer young to support the old. There has to be certainly a dialogue about what this means to us as a community, and how we address pensions. So this question of living longer and working longer is I think very important to us. And is particularly important with respect to the pension obligation we have."

2013. September 11. The Bermuda Hospitals Board could be in debt by $200 million within five years if nothing is done to curb healthcare costs, according to the board’s chairman. Speaking at a meeting of the Hamilton Rotary Club, Jonathan Brewin issued fresh warnings that the scale of the financial problem facing the board “should concern us all” and that changes to the healthcare system are “necessary and unavoidable.” Mr Brewin began his presentation by outlining a series of increased costs that the BHB was facing, including the withdrawal of a Government subsidy to pay for the $14 million-a-year Continuing Care Unit, construction costs for a soon-to-be-completed acute care wing, an increased cost base because of higher patient demand for services, and a new $650,000-a-year administrative bill to pay for work permit applications. “More money will be going out and, as the Board discovered in the month it was appointed, even less money was going to be coming in. Accepting the status quo is like sitting down in a leaky boat and not realizing that we don’t have long before we go under. We will sink if we do not swim.” Painting a grim picture of the state of health funding on the Island, Mr Brewin acknowledged that “the road ahead looks hard, steep and painful”, and that “we have a tough challenge.” But he also stressed that solutions could be found, and that the BHB was working in partnership with the wider community “to assist in developing a financial sustainability plan. We certainly are standing at a moment in history. Change is necessary and unavoidable, and our challenge is to ensure we work with community and overseas providers, the Ministry, insurers and the people who use and pay for our services to make healthcare more affordable and effective. We have a tough challenge, but it is widely recognised that the rising cost of healthcare is unsustainable and liable to damage our country, our businesses and residents if we do not address it. This brings many more people to the table, looking for solutions and seeking to cooperate and coexist, rather than compete, in order to ensure people in Bermuda can continue to access the right services at the right time at a price they can afford.” Mr Brewin added that a Financial Sustainability Steering Committee, comprising board members, community members and hospital leadership is already meeting, and subcommittees focusing on strategic, operational and structural sustainability are being established. “We are working hard to establish a new dialogue with all our partners in healthcare — community physicians, overseas affiliates, patients, insurers, the Ministry of Health and Seniors and the Bermuda Health Council — to ensure collaboration as we proceed to address urgently needed change in the overall healthcare system. Our aspiration is to build a safe, high quality healthcare system that always puts the patient, those who are less fortunate than ourselves, at its heart. If we want new hotels, new tourism services and new international business partners to regard Bermuda as a good place to conduct business, we need to address healthcare." Mr Brewin was joined by BHB chief executive officer Venetta Symonds, who reiterated the need for reform, but pointed out that patients and doctors could help bring down costs. “The chairman has spoken about involvement in BHB governance and strategic planning, but this must also take place at the bedside, and in the doctor’s office. People in the community also need to get more involved in their care and educate themselves on healthcare practices that are high quality and safe. However, we are absolutely clear on one thing — even though our most pressing challenge is financial, our most important and non-negotiable focus is on the integrity, safety and quality of healthcare services, and we will work with all our stakeholders, all the community, to achieve this.”

September 17. Multinational footwear giant Nike reportedly has $7 billion of profits parked offshore with 12 subsidiaries in Bermuda. “What is fun about this is that Nike apparently named its tax shelters after its shoes,” according to a Forbes contributor. Writing on the Forbes Tax Analysts blog, David Brunori says according to the Citizens for Tax Justice, ten of the Bermuda subsidiaries are actually named after Nike shoes: Air Max Limited, Nike Cortez, Nike Flight, Nike Force, Nike Huarache, Nike Jump Ltd, Nike Lavadome, Nike Pegasus, Nike Tailwind and Nike Waffle. “Yes, Nike has a shoe named the Waffle — which was designed on a real waffle iron.  Nike is very aggressive when it comes to sheltering profits overseas. My friends at the Citizens for Tax Justice released a report blasting the apparel giant for keeping many subsidiaries overseas for the sole purpose of avoiding US taxation. But having foreign subsidiaries for the purpose of minimizing tax burdens is neither illegal nor immoral. In fact, it’s really no different than any of you taking your home mortgage interest or charitable deductions. Nike’s savings are just bigger. Rational people — and corporations are people too — will always try to keep more of their own money in their pockets. I have no problem with anyone minimizing their tax burdens legally.”

2013. September 20.  The Wall Street Journal (WSJ) is reporting that Bermuda is struggling to attract the super rich — individuals such as Ross Perot and Michael Bloomberg — the demographic who have been the foundation of the island’s economic success. Headlined “Bermuda’s Search for New Wealth — Long a paradise for billionaires such as Ross Perot and Michael Bloomberg, can the quiet island of Bermuda attract the stupendously rich of today?” the story, written by Jose de Cordoba, describes stagnation in the high level real estate market. He looks at one of Bermuda’s few contemporary homes boasting a disco and other amenities including a private beach as one multimillion executive property that has sat on the market for a year. More than 50 of these homes were sold between 2007 and 2011, including the proudly named Castle Point ($21.5 million) and the slightly more modest Tradewinds ($11.5 million). Last year, there were 34 properties on the market that the island’s quirky and restrictive system allowed foreigners to buy. Of these, just one went into contract, in what was one of Bermuda’s worst real-estate years on record. And things have only started to pick up this year.” Mr de Cordoba writes that: “ ... after decades of reigning as a supreme destination for some of the world’s elite, Bermuda is having a tough time competing for the patronage of the stupendously rich, creating a classic tug of war over old and new money. The island, an easy two or three-hour jet jaunt from the US coastline, still attracts such billionaires as Ross Perot and Michael Bloomberg, who maintain homes here. But government officials and business leaders say they are worried that the mores of high-end tourism are changing, along with the wealthy themselves, and that this magical archipelago must now fight to follow the money.” The WSJ reporter stated “ ... the geography of money is changing — and at an unaccustomed velocity. According to an annual survey of global wealth by Boston Consulting Group, private wealth in the “new world,” primarily the Asia Pacific region, jumped around 12 percent last year alone, or more than double the rate of growth in the “old world,” including North America and Western Europe. “This new breed of nouveau riche tends to favour a lifestyle of supernova toys, with private elevators hauling sports cars into their living rooms and bar drinks costing thousands of dollars each. They like their homes to be modern, their nightlife late and their clothes as shiny as their jewellery. All of which has very little to do with sleepy Bermuda, whose nightlife shuts down at the stroke of 10 during the week and whose hotels haven’t quite caught up with the concept of in-room infinity pools or 24-hour butler service.” He said Bermuda is “ ... a place steeped in conservative traditions. Change does not come easy.” In this setting, the rich seem to get lost amid a population that could care less about them and local papers that ignore their comings and goings. “Bermuda is very unassuming,” says Neal Churchill, a private banker with Butterfield Bank (UK) Ltd., who lived here for three years and was back for a visit from Monaco. “You can mingle with wealthy people and not know it.” Pink from the sun as he sips a cup of tea at a hotel pool, Churchill says homes are the only status symbol here. “There is no showing off here,” he says. “There are no flashy cars, no super yachts in the harbour.” Drinking a rum punch on the terrace of the Mid Ocean Club, Nir Sadeh, chairman of the club’s membership committee who also heads private banking at Butterfield, concurs. “It’s not flashy,” he says. “You have people walking down the street in shorts who are worth billions.” The problem is this happens to be the polar opposite of what today’s new generation of global wealth wants. The 30-year-old Russian billionaire zigzagging around city streets in his new Lamborghini. The Chinese “whale” gambler giddy from another run of luck at the Baccarat tables in Macau. Bermuda doesn’t expect, or want, to attract all of this kind of wealth. But its government officials are staring down some awful declines in the country’s second-largest industry, tourism, that reflect Bermuda’s staleness. At its peak in 1980, Bermuda welcomed some 500,000 plane-arriving tourists a year, and counted on some 12,000 hotel beds, says Shawn Crockwell, the island’s Minister of Tourism. Last year, the island received about half that number by air, and had only 2,500 hotel beds to offer them. About 60 percent of last year’s tourists were low-spending visitors who arrived on the island on cruise ships. The remaining 40 percent arrive by air, a figure that continues to decline. “We need to reverse that ratio,” says Crockwell.” Reporting the Island’s $1.4 billion debt load, he said: “In response, the newly installed government, run by the One Bermuda Alliance party, thinks one solution is to send more positive signals to the international money elite, the people and firms who create the jobs and the lifestyle that spurs a stale economy. “I didn’t think the business community was feeling the love,” says Bermuda’s new premier, Craig Cannonier.” The WSJ reporter added: “Certainly, Bermudians will agree that the island, wrapped tightly in protectionism and red tape, has tended to irradiate a certain feeling of unfriendliness toward non-islanders. With just 69,000 souls jammed into its 21 square miles, the island has long feared that foreigners would push locals aside. So the country has done everything from setting time limits on how long non-residents could live here (six years) to at one point banning Bermudians from selling any real estate to outsiders. In an interview, Cannonier, a bearlike US-educated gas-station owner, says he is trying to put his foot down on a lot of this, quickly ending the residency limits. Members of his cabinet say it was a big move. “You would find that even if a top executive had term limits waived, there were term limits imposed on the nanny,” says Michael Fahy, Bermuda’s minister of home affairs. “If you are saying your nanny has to leave, then why stay?” “The rich are also getting a break on real estate now. Since 1926, Bermuda has imposed restrictions on purchases of land by non-Bermudians. Eventually, non-Bermudians were allowed to purchase only the most expensive of houses — those that have an annual rental value in the six-figure range. Today, that works out to homes worth about $3.5 million and up. What’s more, foreigners had to pay a 25 percent license fee on home buys, which can drive even a billionaire a little batty. The high-rental rule remains, but Cannonier has temporarily cut the tax on real-estate sales to eight percent of the purchase price, which then increases to 12.5 percent after 18 months. For now, a $4 million home no longer requires an extra $1 million, which MacIntyre, the realtor, says is “a very welcome change of pace. " But even government boosters say moves like these can only go so far in creating the kind of full-service playground the rich can so easily find elsewhere now. The island, for example, likes to boast that it has more golf per square mile than anywhere in the world. That’s fine, except that today’s rich — fitter and more active — want other options for high-end recreation, including celebrity trainers and yoga instructors working out of space-age gyms. In the Caribbean, it is possible to find a host of new private-jet airports, compared with Bermuda’s one commercial facility. And once upon a time, it was charming that the country limited residents to one puny car per household, a policy dating back to when Mark Twain and Woodrow Wilson teamed up to help get motor vehicles banned for decades. But it is not exactly comfortable for today’s stretch-limo crowd, which has to make do with the island’s sparse supply of Mercedes-Benzes, which are available to rent by the hour. “From a corporate standpoint — and the island is keenly aware of how many wealthy executives encamp here when business flourishes — Bermuda doesn’t even rate as an especially great tax haven. Sure it lacks taxes, but its conservative ethos requires a far more careful company-registration process than many newer and hotter resort countries have. Feeling the heat, the government two years ago extended the date that companies have before their tax-exempt status expires. Officials in Bermuda also argue that their island country maintains a programme for registering offshore companies that is respected around the world. Still, the number of tax-exempt companies in Bermuda has hovered around 12,000 over the past 15 years. In the Cayman Islands, by comparison, the number has nearly doubled in 10 years to more than 75,000.” The WSJ reporter asked: “How far into the fast lane will the island go to up its new-rich appeal, or will it just disappear someday off the high-end radar, like so many ships in the Bermuda Triangle? For some, the country’s best step may be just to concoct yet one more Bermuda miracle: a middle ground, way out here in the middle of the Atlantic Ocean, where East meets West, where new money finds enough razzle dazzle but old money can still enjoy the very anonymity and British DNA they have so long cherished.”

2013. September 23.  Warwick’s Southlands estate is to be turned into a national park and could open to the public as early as next spring. The 37-acre site is to be the beneficiary of a fundraiser on October 18, to be held at the Bermuda National Trust headquarters in Waterville, Paget — the first of several events aimed at covering Southlands’ restoration costs. The site, which is roughly the size of the Botanical Gardens, sparked a furore in 2007 when Government obtained a special development order to build a resort there. Ultimately, developers Craig Christensen, Brian Duperreault and Nelson Hunt agreed to a land swap deal with Government and took 80 acres at Morgan’s Point, Southampton. The conversion of Southlands into a park will go before MPs in the House of Assembly in “a couple of months”, Junior Environment Minister Alexis Swan announced this morning, flanked by Deputy Premier Michael Dunkley and members of the group Friends of Southlands. Senator Swan said the group had been formed after concerns expressed by area residents that the site was being neglected. Government reiterated its commitment to turn Southlands into a park in the latest Throne Speech. “This is just the first step in a multi-stage project to restore this beautiful jewel in Bermuda’s landscape,” said Sen Swan of next month’s international wine and cheese tasting, which will charge $75 per person for general admission and $125 for patron tickets. Friends of Southlands spokeswoman Connie Frith-Black said there would also be a drive for volunteers to come to Southlands on Monday, October 21 through Wednesday, October 23, to assist the Department of Parks in cleaning up the estate. There will be an open house on Saturday, October 26, with tours conducted by former Government Conservation Officer David Wingate. Workmen have already removed litter and rubble dumped illegally at Southlands — but the site has to be cleared of overgrown vegetation. Environmentalist Stuart Hayward, head of the Bermuda Environmental Sustainability Task Force (BEST) thanked Friends of Southlands for backing the project. “BEST has a special attachment to Southlands,” Mr Hayward said. “It was here that BEST cut its teeth in our role as environmental activists.” Southlands proved controversial for former Premier Ewart Brown when the proposal to develop the site provoked a storm of protest from BEST and others. Environmentalists protested again in 2010 when developers accused Government of delaying the Morgan’s Point land swap deal. There is no exact figure yet for the cost of turning Southlands into a park or for the first round of cleanup and restoration at the site.

2013. September 24. BlackBerry has agreed to sell itself for $4.7 billion to a group led by largest shareholder, Fairfax Financial Holdings Ltd. BlackBerry said yesterday that a letter of intent has been signed and its shareholders will receive $9 in cash for each share. Fairfax was in the news in mid-August for a complex deal to buy and then sell American Safety's Bermuda subsidiary, American Safety Reinsurance, Ltd to Catalina. The terms were not released. Fairfax Financial Holdings Limited, a financial services holding company based in Toronto, which has a Bermuda arm, currently holds ten percent of BlackBerry. Fairfax head Prem Watsa is a former board member who owns ten percent of BlackBerry. Watsa stepped down when BlackBerry announced it was considering a sale last month. Watsa is one of Canada's best-known value investors and the billionaire founder of Fairfax Financial Holdings Ltd. He has been compared to Warren Buffett because of his investing approach. BlackBerry founder Mike Lazaridis recruited Watsa to join the company's board when Lazaridis and Jim Balsillie stepped aside as its co-CEOs in January, 2012. Trading of the company's stock was halted ahead of the news. BlackBerry shares plunged after the company announced Friday a loss of nearly $1 billion and layoffs of 4,500 workers. The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers before Apple's iPhone debuted in 2007. "We believe this transaction will open an exciting new private chapter for BlackBerry its customers, carriers and employees," Watsa said in a statement. "We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company. BlackBerry said its board of directors approved the terms of the letter of intent. The statement said BlackBerry and Fairfax will negotiate and execute a definitive transaction agreement by November 4. Watsa said in April that he's a big supporter of current CEO Thorsten Heins and called his promotion the right decision in early 2012. He also said he's excited about the company's new BlackBerry 10 operating system. This year's launch of BlackBerry 10, its revamped operating system, and fancier devices, the touchscreen Z10 and Q10 for keyboard loyalists, was supposed to rejuvenate the brand and lure customers. But the much-delayed phones have failed to turn the company around. At their peak in the autumn of 2009, BlackBerry's smartphones enjoyed global market share of over 20 percent, says Mike Walkley, an analyst with Canaccord Genuity. Their piece of the pie has since evaporated to just 1.5 percent. BlackBerry said on Friday it will lay off 4,500 employees, or 40 percent of its global workforce.

2013. September 28. House of Assembly passes Tourism Authority Act. After a marathon debate, Bermuda's legislators last night passed legislation that forms the framework of a new Tourism Authority. Presenting the bill for debate, Tourism Minister Shawn Crockwell stressed the importance of revitalizing the Island's tourism industry in order to boost the local economy. He said that the previous administration had made positive steps, noting the National Tourism Plan, and said that while the Tourism Board was flawed by a lack of autonomy, it was a step in the right direction. However he said efforts have been hampered by political interference and the steady change of minister, noting that he is the fourth Tourism Minister in as many years. Mr Crockwell explained that the Tourism Authority Act would dissolve both the Department of Tourism and the Tourism Board and replace it with a single entity with significantly reduced need to seek the approval of the Government or Minister of the day. "The authority will be managed independently. It will be a modern, leading tourism enterprise. It will be dynamic, entrepreneurial and vibrant. The authority will be the singular voice that restores Bermuda as a world class tourist destination." Mr Crockwell also addressed public concern about the transition from the Department of Tourism and the Tourism Authority, promising that there would be no mass layoffs. "Should employees not transfer to the Tourism Authority, employment opportunities will be made available within government ministries and departments. My Ministry is currently and will continue to work closely with the Department of Human Resources and the Bermuda Public Service Union to ensure that the transitional process is inclusive and transparent. The Ministry fully understands and is cognizant of the staff's concerns, apprehensions and anxiety, and we will do our upmost to provide a smooth transition." Earlier, Shadow Minister of Tourism Wayne Furbert raised what he termed the age old issue of political interference. His main bone of contention was that under the new framework, the Minister has the right to pick the Chairman? He asked the House to consider the implications, most importantly the issue of influence on the part of the Minister of the head of the new board. He questioned the board's independence. He also questioned the Minister's assertion that the board will be totally funded in three years. But his biggest concern centred around the list of requirements in the advertisement posted this week for potential candidates to become chief executive officer of the new authority. Will the successful candidate be a Bermudian? Undaunted, Mr Crockwell responded: "We will be seeking the best person for this position. If that person is a Bermudian, then that's even more fantastic." The CEO will be put in place by January 1. Mr Crockwell also told MPs the authority's board, which would comprise eight members, did not have space for statutory members such as the head of the Bermuda Industrial Union to be put in place. Opposition MPs took strong exception to the authority's power to lease land or make investments under its own power, but Mr Crockwell maintained that the authority was bound by the stipulation that its actions remain within its mission objectives of promoting Bermudian tourism. Under fierce criticism across the aisle of a $5 fee for members of the public to check a register of board member's interests, the fee was dropped. Mr Crockwell also rebutted criticism from the Progressive Labour Party that the autonomy granted to the board's spending would lead to cronyism. "It needs to operate like a corporation. It will be receiving public funds, and this is the risk involved. But in order to engage in commercial activity, to be swift and agile and get the job done, it has to do that without having to seek approval for everything. I don't anticipate any malfeasance in the Tourism Authority at all."

2013. October 3. Efforts to curb the prevalence of non-communicable diseases will begin in earnest next month with the commencement of Bermuda's first standardized national health survey. Chronic, preventable diseases contribute the greatest proportion of the total burden of disease in Latin America and the Caribbean, including Bermuda, said Health and Seniors Minister Patricia Gordon-Pamplin yesterday, announcing the start of the STEPs to a Well Bermuda survey. By implementing a simple, standardized method for collecting, analyzing and disseminating data for chronic disease risk factors, healthcare providers will have access to information on the prevalence of various health conditions and physical and biochemical characteristics of a population. The survey will also provide data on the relationship between the risk factors and selected conditions, and social determinants of health, said the Health and Seniors Minister. "Effective action to prevent and control these diseases depends on timely access to accurate and reliable information about the prevalence of these diseases and their associated risk factors. This information is vital to both informing where resources should best be targeted and also for monitoring and evaluating the impact of any actions taken. The objective of the STEPs survey the Pan American Health Organisations standardized methodology is to control epidemics of chronic diseases and avert these epidemics wherever possible and to control them as quickly as possible where they are already present," said Minister Gordon-Pamplin. The Minister added: "The basis of chronic disease prevention is the identification of the major common risk factors as the risk factors of today are the diseases of tomorrow." A total of 2,656 households have been selected using simple random sampling, while interviews will be conducted from October through December.

2013. October 4. The book "Peace, Prudence and Prosperity; a history of Bermuda from 1919 to 1939" was published abroad by Jonathan Land Evans. 140 pages. Beautiful, British and business-friendly, the jewel-like Atlantic archipelago of Bermuda was one of the 20th Century's great success-stories. This book examines Bermuda between the two World Wars, touching on most aspects of local life, with particular emphasis on its tourism economy, physical and social development, and public affairs. It also discusses the early days of offshore business, the decline of agriculture, the march of technology, and the island's prominent role in the arts and in marine science, as well as Bermuda's special place in the affections of its many well-to-do American devotees. Darker aspects of life, such as racism and crime, are also examined. The book is carefully indexed and extensively footnoted (mostly to original source-materials of the period).

2013. October 7. Companies that play recorded music as part of their business operation could be hit with fresh fees or risk breaching copyright laws. And the new tariff could even apply to schools and charities that broadcast music, according to a lobby group seeking to get laws standardized. According to the Bermuda Music Users Group (BMUG), Island organizations are coming under fresh scrutiny from the UK's Performance Rights Society (PRS), whose mandate is to ensure that recording artists around the world are paid a commission on their work whenever it is broadcast. The PRS imposes a licence fee on companies that play recorded music, with revenues then being forwarded to musicians. Scott Pearman, of the BMUG, said that, under copyright legislation, even small businesses that play music for the benefit of staff or customers would be vulnerable to the charge. Almost every Bermuda business or organization is potentially impacted including Government, broadcasters, event promoters, restaurants, hotels, shops, charities, schools and even churches, Mr Pearman said. As an example, he said that a barber shop owner who had a radio playing on the premises while serving customers, would need to get a PRS licence. The PRS would argue that either the shops staff or customers are enjoying listening to the radio and as a result, the owner is gaining commercially from it, Mr Pearman said. Similarly, a hotel or guest house that played recorded music in a foyer or elevator, would also have to obtain a licence. Mr Pearman added that, although the PRS had always had the right to levy charges, Bermuda had apparently been off its radar for more than a decade. But recently a number of Island businesses had been approached by the organization and broadcasters were not the only targets. It is looking like a major campaign and they are looking to have someone on the ground here, Mr Pearman said. In the UK, PRS is understood to charge around $1,000 for a licence, which has to be renewed every year. But Mr Pearman said there appears to be no standard rate in Bermuda, and instead, individual companies appear to be negotiating separate terms. The message has been inconsistent, Mr Pearman said. It appears the PRS may be trying to get the best deal with the first company and then get everyone else to follow suite, Mr Pearman said. BMUG would like to see if businesses in Bermuda are interested in coming together as a collective to establish a set rate.  Mr Pearman stressed that the organization was not anti-musician and pointed out that, even if local radio stations played recordings only by Bermudian artists, they would not gain financially. "If we're going to be forced to pay a UK tariff we want to ensure that there's a direct benefit to Bermuda musicians.  But the total play list of Island stations pales into comparison to the 50 or more stations that they have in London alone, so we're not going to get a Bermudian on the top of the play list. It's only the top 200 artists on the play list that will benefit, and that means that money is going to be going out of the country and not coming back." BMUG will be holding a meeting to discuss the matter at 5.30pm tonight at the Chamber of Commerce office in Hamilton. "The purpose of the meeting will be to discuss the impact of the Performance Rights Society of the UK entering the Bermuda market and implementing UK music licensing rates on Bermuda businesses and organisations that use music for public performance or the enjoyment of their customers or staff, " Mr Pearman said. The BMUG meeting will provide a forum for music users in Bermuda to gain additional information on PRS, register their experiences, concerns and discuss options with respect to a collective response.

2013. October 7. Former Bermuda Premier David Saul's collection of Bermuda banknotes raised around 300,000 ($481,000) at auction in London, with the proceeds going to charity. The collection, amassed by Dr Saul over 40 years, included notes dating back to the late 19th century and early 20th century some hand signed by the Bermuda Monetary Authority signatories whose names were on the notes. The former finance minister said: It was quite apparent that all those determined to bid had already made up their minds on what they wanted, and how much they were willing to spend. Hence, the bidding moved at a very smart pace, with only a relatively small group of some two dozen in the room, but a good deal of activity on both the telephone and the internet. One of the more popular items was a 1941 brown 5 note, which he said was withdrawn from circulation after a short period because it was too similar to the five shilling note already in use. He said: "Businesses were being ripped off by customers, My collection had the first ever printed: it was number 0000001 and in uncirculated condition. It was well known by collectors around the globe, and fetched the fantastic winning bid of 38,000 [$61,000]." He said all of the 291 lots were moved within two hours, raising around 300,000 after expenses, and he credited the work of Spink's currency auctioneer Barnaby Faull for the successful auction. Dr Saul previously told The Royal Gazette that he made the decision to auction his collection because his children were not interested in inheriting it and he didn't want to leave his wife with the job of selling it if he were to die before her. He said that the money raised by the auction would go towards various charities and organisations, including the King Edward VII Memorial Hospital. Barnaby Faull, from Spink's, says in the foreword to the catalogue: "From the classic George V to the award-winning designs of the most recent issues, Bermuda banknotes cannot fail to enhance any Commonwealth collection. This is a unique opportunity to obtain notes from the finest collection of its kind."

money 1927 Bermuda pound note

One of the notes from Dr. Saul's collection

2013. October 9. The head of the new Bermuda Tourism Authority revealed yesterday there had been a “high level of high-quality interest” in the recently advertised post of chief executive officer. David Dodwell, the authority’s chairman designate, would not reveal the salary for the position, other than to say it would be “market driven.” He said those interested in applying had until October 15 to do so. The CEO position is the only one so far advertised for the authority, which will officially come into being on a date yet to be decided. At that point, the authority will replace the Bermuda Department of Tourism (BDOT) — and Department staff will have to apply for positions within the new organization. Those who are unsuccessful will be offered other civil service roles. Mr Dodwell issued a press release yesterday praising the successful passage of the Tourism Authority Act through Parliament and noting the “long road ahead” for him and his team. “The Bermuda Tourism Authority team all appreciate the work that has gone into passing the authority bill through both Houses of Parliament. We now await assent by HE the Governor and the Minister posting the date the authority goes live in the official Gazette. We have started working through a transition plan. What we are working towards now is what the date [for going live] is likely to be. It will take up until the end of March next year to be finalized. By the end of March, we will have made all of the decisions." The hotelier, whose role is voluntary, said the Department’s budget would continue until the end of the financial year, as would the budget of the Bermuda Tourism Board, which will also cease to exist. He said much work had already gone into forming the authority but it was “going to take us some time” to finalize the structure, define new positions and conduct interviews.  “As we work through this process, the team at the BDOT will continue to undertake their normal work and any enquiries you may have in regards to Tourism should be addressed, as normal, to the Department of Tourism. The team there will be able to steer enquires through to the authority as we evolve. We are aware that there may be those who have received sponsorship of events and/or activities from the Department of Tourism in the past. While the process for consideration will be changing in the future, any and all applications should, at this stage, be made in the normal manner.” The former politician pledged to issue further statements in the near future, adding: “We remain committed to being as open and as forthright as we can be. Clearly, there has to be change. We have been clear on that already and we will be explaining that change in the coming weeks. All of us are now part of Bermuda’s tourism team. Everyone needs to represent Bermuda as best they can as they interact in any way with our visitors. Many long hours have been invested in creating the Bermuda Tourism Authority but the investment of time and effort really only now begins. We have a long road ahead of us — some might say a steep hill to climb — but we are determined to make that climb. We are focused on bringing tourism back, on bringing new jobs for Bermudians, new revenues for Bermuda and new opportunity for all. We need now to join together to be part of the solution.” The creation of the authority will mean a less hands-on role for Tourism Minister Shawn Crockwell and Mr Dodwell praised the MP for being “bold and courageous” in pushing through the legislation. He said the idea was to have "professionals running the authority and a Minister as a champion for tourism in this country. He’s doing himself out of the current job and taking much more of an oversight role. He’ll continue to be the Minister and we need a Tourism Minister for oversight. He will be a support to me and I will be a support to him.”

2013. October 9.  Two top Foreign Office officials have paid a flying visit to Bermuda to familiarize themselves with the Islands business environment. And Tim Colley and Marilia Astle took time to meet with Chamber of Commerce members who stressed that Bermuda was not a tax haven, as it has been portrayed in sections of the UK media in recent times. The meeting also led to an invitation to the Chamber to send representatives to the UK Overseas Territories business, trade and investment forum, to be held in London next month. Joanne MacPhee, executive director of the Chamber of Commerce, said: "They were very interested in the Chambers position on the local economy and keen to receive an update on our current lobbying efforts. Our meeting was brief, but we were able to summarize a number of initiatives and report on a broad range of issues related to business in Bermuda. The issue of recent negative press in the UK was discussed and it is hoped that in the coming months the Bermuda Business Development Corporation will seek to address these issues head on and begin to generate positive press about our competitive advantages and favorable status as a transparent and well-regulated offshore jurisdiction that and the fact that Bermuda is very much open for business."  Deputy Governor David Arkley said the two Foreign Office diplomats had special responsibilities for the Overseas Territories in the Caribbean and Bermuda. Ms Astle, who has just taken over as team leader for the Caribbean Overseas Territories and Bermuda, was on her first visit to the island. Mr Arkley said: "It was a fact-finding mission just to get to know Bermuda. They will be looking after Bermuda in the London context and so it was a familiarization visit." The visit came after Bermuda hit the headlines again in a row over a tax avoidance scheme used by internet giants Google, which channels money through the Republic of Ireland to the Island in order to minimise its UK tax bill. Google last year only paid 2.6 percent tax in the US on sales worth $8.1 billion because it channeled most of its overseas profits through Bermuda, which has no corporate income tax. Previous revelations about Google's tax arrangements have led UK parliamentarians to denounce them as immoral and led to demands that the Island change its laws. Google said it follows tax rules in all the countries it operates in and pays little tax in the UK became its profits are not generated by UK employees. The UK arm of the firm, as well as other European operations, are designated as providers of marketing services to Google Ireland. But Google declares little profit in Ireland because it sends nearly all the cash it gets to the Bermuda affiliate, in the form of licence fees for use of Google intellectual property. The scheme although legal has attracted criticism in the recession-hit UK and led to the Island being branded as a tax haven. Mr Arkley said: "I would characterize this as something we are aware of and we have raised with the Bermuda Government. The characterization that comes out in the UK media is not always accurate. I know its something that Prime Minister David Cameron has made statements on and that's a more accurate portrayal of the UK government's position than that which appears in the newspapers in the UK."

2013. October 10.  The Island's healthcare spending held steady last year, after several years of sharp increases. According to the Bermuda Health Council, Bermudians spent $678.4 million on healthcare the same as they did in 2011. The organization's latest National Health Accounts, for the fiscal year ending 2012, showed the Island's health expenditure amounting to 12.2 percent of Gross Domestic Product. That portion increased from the previous years 11.8 percent, due to the contraction of the Island's economy. The report attributed the level spending to an interplay of multiple factors including the reduced insured headcount, cuts in Governments health spending, claims management by payers, and the effects of a Memorandum of Understanding that capped the revenue of King Edward VII Memorial Hospital. The Island continues to spend more per person than comparable Organization for Economic Cooperation and Development (OECD) countries, with a lower life expectancy. The report shows countries such as Israel, Korea, Greece, Slovenia and Portugal spending less than half the amount paid out by Bermuda residents, but with a higher life expectancy. However, the trend remains worse for the US which leads the OECD in terms of spending. Bermuda's healthcare expenditure was split equally between the private and public sectors. Private sector funding rose by three percent from 2011, which public sector funding dropped six percent. Overall, Bermuda Hospitals Board accounted for 44 percent of the Island's expenditure, while 13 percent went into overseas care a drop of seven percent from the 2011 figures. Health spending per person added up to $10,562, the BHeC said.

2013. October 10.  Senior Japanese bankers were in Bermuda yesterday as Butterfield Fulcrum Group (BFG) was officially rebranded Mitsubishi UFJ Fund Services. It is the first time the Mitsubishi financial group has made a wholly owned acquisitions of a non-Japanese business. "Our acquisition of BFG is a strategic move into the alternative fund administration business, " said Tasuo Wakabayashi, president of Mitsubishi UFJ Trust & Banking Corporation. He cut the ribbon at yesterdays ceremony and presented the Bermuda office with a painting of Mount Fuji. Mr Wakabayashi added: "We will be expanding our reach and breadth of services rapidly. Clients can look forward to the addition of numerous new services including banking, custody, trust, foreign exchange and securities lending." Mitsubishi UFJ Trust and Banking Corporations (MUTB) said the acquisition of BFG was completed on September 20. Established in 1927, MUTB is a wholly owned subsidiary of Mitsubishi UFJ Financial Group (MUFG), the second largest global bank holding company ranked by assets. Butterfield Fulcrum will become the global alternative asset administration platform of MUTB. And the senior management team, as well as all management and staff in all Butterfield Fulcrum offices will remain with the company, MUTB said. Butterfield Fulcrum employs around 40 staff in Bermuda and has offices on Burnaby Street. It has been rebranded as Mitsubishi UFJ Fund Services to reflect its new position in Japan's MUFG. "We will grow from strength to strength within the MUTB family, " said Glenn Henderson, now the CEO of Mitsubishi UFJ Fund Services. " The additional services we will be offering will allow us to continue our focus on excellent client service, expanded functionality and cutting-edge technology." Mr Henderson and Tim Calveley, deputy CEO, acquired Butterfield Fulcrum in 2011 in partnership with private equity firm BV Investment Partners. The acquisition included FORS Ltd. Butterfield Fulcrum was part owned by Butterfield Bank and private equity firm 3i Group. The company services more than $100 billion of client assets across 850 funds and has seven offices in six countries.

2013. October 12. Premier Craig Cannonier has not ruled out future cuts in the Civil Service as the Island struggles to recover from recession. Mr Cannonier said: "As we move forward, we certainly cant make any promises in that area. The realities are out there, but we will always look out for people first." Both parties ruled out Civil Service redundancies in the run-up to last year's General Election. Speaking yesterday Mr Cannonier said: "Certainly, we could have come in and slashed, but there probably would have been unintended and unenviable consequences of that. That was why Government's first priority was to attract new business to Bermuda and boost tourism figures to create more jobs for Bermudians. We need to look first at incentives for job creators to come here. In the end, if someone is made redundant or doesn't have a job, they need somewhere to go. We will have to make tough decisions in 2014, that's why we had a SAGE Commission to look at where we can cut back without losing manpower. The independent SAGE Commission set up to look at reducing the cost of Government will report at the end of the month and may suggest Civil Service cuts. But Mr Cannonier declined to comment on how Government would deal with its recommendations. He said: "We will cross that point when we look at the SAGE report. We certainly cannot have the agreements we have with the unions all over the place. There are some unions, one particular union, that has unlimited paid sick time. One union has negotiated three weeks paid sick time. These are some of the recommendations that will come out of the SAGE Commission we will act on. We will look at the realities of where we are and we will make decisions in the best interests of the country. We need to be making decisions that are right for the people of this country we have got to do what is right for the country as a whole. When you start isolating different sectors and saying its politically dangerous we cant afford that any more. There are too many people suffering because we have made political decisions and not made decisions based on what's best for the country. Mr Cannonier added that Bermuda faced a declining birth rate, while many Bermudians had emigrated and residents had left the Island, which totaled 7000, maybe more people. He said that if 2,000 expatriates who had left spent a conservative figure of $1,500 a week on goods and services, the Island had lost a staggering $3 million a week and more than $150 million a year. "There will be fewer jobs if we don't get more people in the country. We want Bermudians coming back and those job creators coming back and investing and circulating these dollars in the country so we can get the Gross Domestic Product in the right direction. Every time we bring in a job creator, that's two Bermudians who get hired. We needed to stop the bleeding and put in place policies that would restore the country." Mr Cannonier said that when the OBA took power last December, they inherited a situation where no one knew exactly how many Civil Servants were on the payroll, and a huge $1.45 billion in debt. He added that, a few months later, the Governments financial situation was so dire, it came close to being unable to pay the Civil Service. And he said: "Financially, we can't afford to do anything right now we can't even afford to assist those in need because there is no money." Mr Cannonier was speaking after a Parliamentary session extended by four sittings came to an end and he said the next one would likely be extended to fit in new legislation. "Government legislative highlights included ending the controversial term limits policy for work permit holders, giving investors more security through the Job Creators Act and reducing or eliminating taxes on new Bermudian hires. Government had worked with cruise ship lines to hire Bermudians for on-board positions was also an important initiative. These are important objectives we had to embark on to show we are building a better Bermuda and getting people back to work. The new independent Tourism Authority was designed to bring back accountability in how the Island is sold abroad. We spent millions of dollars on tourism, but we have continued to fail year after year. That's unacceptable. I believe that, as the Premier of this country, we have to be accountable to each other. Future priorities included getting a hotel in St Georges and incentives for existing hotels to upgrade their facilities."

2013. October 12.  Internet giant Google has revealed its Dutch arm funneled nearly $12 billion to Bermuda to avoid paying tax on its profits. The latest figures show that Google Netherlands Holding, raked in $1.6 billion from its Irish sister company and $315 million from Singapore. Most of the money was then channeled to Google Ireland Holdings, a Bermuda-based firm. The scheme reduced Google’s effective corporate tax rate to five percent — most of which is paid in Ireland, which has relatively low tax rates. The figures were revealed in the latest filings by one of Google’s Dutch subsidiaries and means that royalty payments paid to Bermuda — where the firm holds its non-US intellectual property — have doubled over the past three years. Google’s tax arrangements — although legal — have been condemned in the UK and other European countries and prompted politicians to look at a crackdown on corporate profit shifting. Google, based in the US, uses differences between the US and Irish tax codes, which means it is seen as an Irish company by US tax authorities, but as a Bermudian firm by the Irish taxman. Google last year only paid 2.6 percent tax in the US on sales worth $8.1 billion — because it channeled most of its overseas profits through Bermuda, which has no corporate income tax. The UK arm of the firm, as well as other European operations, are designated as providers of marketing services to Google Ireland. But Google declares little profit in Ireland because it sends nearly all the cash it gets to the Bermuda arm in the form of licence fees for intellectual property. Westminster MP Margaret Hodge, the chairman of the Public Accounts Committee, said Google’s tactics were “evil” and said the firm was “devious, calculating and unethical.” Google has insisted it follows the tax laws in all the countries it operates in and pays little tax in the UK because it profits are not generated by UK employees.

2013. October 17. List of Newly-registered charities and de-listed former charities published. The latest roster registered charities in Bermuda shows 11 new names: ABC Football School; Bermuda Rowing Association; Bermuda Urban Park Association; Clara Mohammed School, IPTSA;  Melange; Raleigh International Bermuda (RIB); Ride the Wave Bermuda; The Bermuda Reading Association; The Lorraine Rest Home Amenities Committee; Transforming Arts Association and Ministry;  Youth Entrepreneurship Initiative of Bermuda . Twelve organisations have lost charitable status, as authorities review financial records in advance of tighter regulations for the Islands third sector. A further 13 charities have expired, according to the latest figures. Struck from the register is the Berkeley Institute Alumni Association, which last handed in financial statements five years ago. That charity is dormant and had no financial activity to report, according to a spokesman for the school. The Alumni Association has not been active for in excess of ten years, so they made the decision to allow its registration as a charity to lapse, the spokesman said. Also terminated was the Bermuda Hospice Trust, which has never supplied financial statements to Government. Bermuda Martial Arts Federation, which last submitted accounts for April 30, 2005, was taken off the list by the Commission. Other charities, which were due for re-registration and have dropped off the latest lists, are: Bermuda Pacers (accounted for up until October, 2011), Bermuda Physiotherapy Association (to August, 2012); Bible Broadcasting Network of Bermuda, a new charity; Bsmart Development Foundation (accounted to December, 2011) l Caledonian society of Bermuda (to March, 2012), and Child Watch (to March, 2012). The Denton Hurdle Memorial Scholarship Fund, which last sent in financials in June, 1993, has been closed by the Commission. Dynamic Debaters and Learners, a new charity, has not renewed its registration. Cancelled was the group Friends of Bermuda Cathedral, which has never sent its financial statements to the Registry General and which a member of staff at the office of the Anglican Cathedral said had ceased functioning. Jewish Community of Bermuda and Jiketsu Martial Productions Foundation both appear to have let their registration lapse. Also struck from the register were: Key Women of Bermuda, which submitted at the end of 2001; Kiwanis Club of Sandys, which submitted on September 30, 2007; Omega Phi Psi Fraternity, Incorporated, which submitted at the end of 2004; Operation Respect, which last submitted in October, 2001; Parents Anonymous of Bermuda, which submitted on March 31, 2008; The Smith Quintuplets Charity Fund which last submitted on December 31, 2000, and Special Olympics Bermuda, which last submitted on August 31, 2008. Orbis Founders Philanthropies was not renewed, as was the group Phenomenal People, the Tuleeni Charitable Trust, and the Touch the World Foundation. Including the lists 11 recent additions (see side article), this brings the Islands total number of registered charities registered in the Island to 363. However, more could be deregistered as the Charities Commission winds up its survey of financial statements a job expected to take around six more weeks. Not all charities that have fallen behind have been cut from the register. The Bermuda Police Benevolent Fund, whose most recent financials filed with the Registry General are from December 31, 2009, have been given extra time. A spokesman said the service was working on completing the required financial records, and expects to submit them very shortly. Others, like the Bermuda Fencing Federation which last filed on December 31, 2004 have been inactive, but are planning to start back up. This list was compiled from records compiled by the Registry General's office.

2013. October 31. The St John Ambulance service is so short of funds that it can no longer provide medical support at public events unless it is guaranteed a donation. The charity is on hand to provide emergency medical treatment and an ambulance service at many public events free of charge, with medical professionals volunteering their time and expertise. It costs $250 just to get an ambulance on the road and as a result the organization is hemorrhaging funds. While organisations that ask the service to attend their events will often make a donation, that rarely covers the charity's basic expenses. Yesterday St John Ambulance Commissioner Stephen Gunn said that the service was in dire financial straits, and that in future it will only be able to cover a public event if it can be assured that it will receive a donation in return. Mr Gunn said that only two of the charity's five ambulances were roadworthy and that these were often loaned out to King Edward VII Memorial Hospital, which is struggling to maintain its own fleet of ambulances. Last week The Royal Gazette reported that the hospitals four ambulances, which are just four years old, are being decommissioned because of repeated mechanical failure and the Bermuda Hospitals Board is having to rely on St John Ambulance to provide emergency backup. Mr Gunn said: "St John Ambulance is a charity organization, and like many other charities in Bermuda, we are suffering from lack of finances.  All of our medical staff are volunteers, and therefore they donate all of their time to St John. We have doctors, nurses, EMTs, advanced medic responders and first-aiders, and each of them work for free. However, the cost for putting an ambulance on the road is a minimum of $250 each time. This includes supplies, licensing and insurance for the vehicle as well as liability insurance and upkeep of the vehicles. Our two newest ambulances are now 9 and 12 years old but they spend most of the time supporting the hospital. Of the other three, one is essentially too large to be used as a response vehicle and was purchased/donated to act as a medical mobile base. Another was selected as a handicap transportation vehicle, which can accommodate wheelchairs and multiple stretchers, but the hydraulic lift is broken and I can't afford to fix it. The last one is defective to the point of being on blocks in the back yard and is beyond repair. The organization has additional expenses, such as the running of its Point Finger Road office, and has also had to chase organisations down for a promised payment after the fact, which has led to additional costs. For many years St John ambulance has asked for donations to cover community events, and many times we are given a donation.  However, many times we are not. St John Ambulance has supported events, that have lasted more than a week, ten hours a day with multiple ambulances, for less than a $300 total donation. Knowing the need for, and likelihood of, requiring medical assistance, we have traditionally volunteered without remuneration. Unfortunately we are not able to continue like this, and must ask for something in return. Mr Gunn acknowledged that many organisations that used St John Ambulance were charities which were themselves struggling financially. He pointed out that the organization did not expect to be paid the full cost of covering an event and that it would not charge for its services, but some financial compensation was necessary. "We ask for your help, it doesn't have to be much but it does have to be something. If one organization donates money for their event and another does not, whom should we support? St John Ambulance does not charge for attendance at events, we ask for a donation to cover our costs, and provide a figure as to what those costs would be for us. There is no other medical service in Bermuda capable of providing the care that we provide at community events at the weekly constant rate that we provide them. We are asking for the community's help to keep our organization alive. We are asking for sponsors and event organizers to understand that, without financial support, we have no fleet, and no supplies, and with no fleet or supplies we will not be able to attend events."

2013. November 5. The former chairman of Bermuda-headquartered drinks giant Bacardi has died, the company announced on Monday. Manuel Jorge Cutillas, the first chairman of the group of Bacardi firms that formed Bacardi Ltd in 1992, was 81. Facundo L. Bacardi, the present chairman, said: "The Bacardi family and employees are deeply saddened at the passing of Manuel Jorge one of the icons of our company. Manuel Jorge through his drive and leadership helped shape the global company that we have today. His pursuit of growth for the company took Bacardi from solely being a rum company to a diverse portfolio of premium brands which established us as a global player. His dedication to the dynamic Bacardi culture of passion, excellence and entrepreneurial spirit will be greatly missed." Mr Cutillas, a fifth generation Bacardi family member, was the great-great grandson of Don Facundo Bacardi Masso, who founded the rum firm in Santiago de Cuba. He was cited as a driving force in the formation of Bacardi Ltd, which brought together five separate companies based in several countries into a single firm based in Bermuda which became the largest privately-held spirits company in the world. He also played a key role in the firms first acquisition outside their own rum brand in 1993 the Martini & Rossi group, famous for its vermouths. It also added wines, cognac, Scotch whisky and liqueur to its brands, doubling the size of Bacardi Ltd. Mr Cuillas, who retired to the Bahamas, died on Friday while on vacation in Panama. He is survived by his wife and son. Mr Cutillas worked for Bacardi for 45 years, before retiring in 2000. He was President and chief executive of the then stand-alone Bermuda-based arm of the firm from 1992-97. He was a Maestro de Ron master blender an honour given to only a handful of experts in the company's 151 years in the business. Mr Cutillas started his career with Bacardi in 1955 as a chemical engineer in Santiago de Cuba. The firm was forced to flee Cuba after the Communist takeover in 1959 led by Fidel Castro.

2013. November 7. The new Tourism Authority could be self-funding within two years, saving Government millions of dollars. The organization, which should be up and running by next March, will take over the management of the industry from Government's Department of Tourism in order to take politics out of the sector and put it in the hands of independent experts. Critics have argued that Government will still be able to influence the authority if it controls funding. Government spends around $30 million of its budget on the Tourism Ministry each year. But speaking at the World Travel Market conference in London, Mr Dodwell said he hoped the entity will be self funding within two years, freeing up millions of taxpayer dollars. He pointed out that taxes currently paid to Government by hoteliers will be channeled to the authority, which could eventually become an asset-holder in tourism products by investing cash into new enterprises. Then it will be partially funded by a separate tax a Tourism Authority tax on hotel occupancy. "But my goal is to self fund within two years. We want to be completely out of Government.  We're looking at ways creative ways to be able to raise funding. For example, the entity will be able to borrow money, lend money, invest, and I see the day when the authority will be an asset holder of certain entities in Bermuda." Mr Dodwell added that the authority could invest in tourism subsidiary businesses such as golf courses or transport products, but ruled out hotels. "One of the things we're going to try to do is stand up young product suppliers with tourism ideas that may not have the capital. They may have their own capital, they may have bank capital and we want to be the entity that gets them to the next level and then gets out of the way." He said the idea of the authority borrowing, lending and investing was unique and that Bermuda was leading the way in how jurisdictions manage the sector. He also praised Tourism Minister Shawn Crockwell for being very bold and courageous for relinquishing control of the industry and putting it in the hands of an independent authority "It's creating a greater private sector involvement and it eliminates political interference.  I think it is different and I have had a few phone calls from other Caribbean countries that want to see the legislation and see how it works. I've been told it's leading legislation but as destinations become more competitive it won't be leading for very long. Somebody will look at us just as we looked at other jurisdictions to see what the strengths were and what the weaknesses were. I believe it is a first time approach to the depth that were taking it to get people involved."

2013. November 8. Bermudian war veteran Philip Lamb, who died earlier this year, is being honoured in a new exhibition at the Royal Air Force (RAF) Museum in London. The exhibition entitled "Pilots of the Caribbean" opened earlier this month and recognizes volunteers of African heritage in the RAF throughout the British Empire at the time of the Second World War, but most particularly from the Caribbean. Mr Lamb, known affectionately to his friends and family as Uncle Hunky died at age 90, in May of this year. He was the last of the four black Bermudians who served in the RAF during the Second World War. He joined the Bermuda Military Artillery (BMA) when he was 17, but after three years of drilling in the BMA camp in St David's, he became bored. He wanted to travel and put his training into action. He volunteered for the RAF along with Bermudians Randolph Richardson, Reuben Alias and Melvin Chesterfield Raynor. He completed his training in Moncton, New Brunswick. He arrived on a troopship in Liverpool, England, just before Christmas 1944. Although the war was almost over the air raids continued. Three months after arriving in England, he was injured during an air raid on an aerodrome in one of the last air raids of the war. He was hospitalized and spent ten days laying next to another patient who was a German prisoner of war. "The loss of other young men was one of the toughest things to deal with," he said in a 2004 interview. "I had a buddy from Canada who got killed. He took up the muster and he became a pilot in the last part of the war. He must have been around 22 or 23 years old. After they made that raid on us I got the news that Keith (his friend) was shot down and killed. I took it hard. He was like a brother." Mr Lamb rose to the rank of Leading Aircraftsman. After the war he could have returned home immediately, but volunteered, instead, for several clean up jobs. He traveled all over Europe, the United Kingdom and Germany breaking down equipment. He found he had a lot of free time on his hands, and so volunteered to go on patrol torpedo (PT) boats to look for and blow up mines. "It was a fast boat, he said. I stayed on it for six weeks, but it was too scary. All you had to do is strike one of those things and you were history." Mr Lamb finally returned to Bermuda after seven years and eight months of continuous service. He went to Canada to study diesel engineering, and then held various jobs and posts, over the years, including customs officer and immigration officer. Unfortunately, he lost his medals with the passage of time. Andrew Bermingham, author of Bermuda Military Rarities Revisited, was a long time friend of Mr Lamb. "I was very saddened when he passed away", said Mr Bermingham. "I met him first in 1984 when there was a tribute to veterans made by the Community and Cultural affairs Historical Heartbeats Committee at Commissioners House. I orchestrated that event. One of the people invited was Philip Lamb. It was a Saturday afternoon, and Mr Lamb was the only person present who did not have any medals pinned to his chest. He got up, with a tear in his eye, and said he lost his medals. They are long gone, he said." Mr Bermingham made contact with authorities in the United Kingdom and Mr Lamb was later presented with a replacement set of his lost medals. When Mr Lamb died earlier this year, he had a well attended funeral at the Chapel of Ease in St David's, and was featured in an obituary in the London-based Independent newspaper. This caught the attention of the RAF Museum in London. "It is a wonderful museum built in tribute to that service," said Mr Bermingham. Pilots of the Caribbean will be open at the London branch of the museum until the summer of 2014 when it will be moved to the Cosford branch. "I have seen previews of the exhibit," said Mr Bermingham. "It is very touching. It shows pictures of his funeral at the Chapel of Ease in St David's, his medals and his cap and a photograph of him with his other airman friends."

2013. November 8. Throne Speech highlights. 

2013. November 9.  Lower energy costs for consumers could be in the pipeline after Government pledged yesterday to open up the energy market to more competition. And the move could also make the Island more attractive to outside investors by lowering the cost of doing business in Bermuda. But a spokeswoman for BELCO which currently enjoys a monopoly position on electricity power urged caution in opening up the market. She said: "Movements toward competition in the electric utility industry need to be undertaken very thoughtfully to avoid bad outcomes for reliability and price." BELCO intends to continue to work very closely with Government on these matters. Delivering the Governments legislative programme for the new Parliamentary year in the Throne Speech, Governor George Fergusson said: "The high cost of energy is an important factor for residents and business alike and it is an issue that companies and developers consider when looking at the Island as a potential domicile." Following the successful launch of the Regulatory Authority in January of 2013, the Ministry of Economic Development will move the regulation of energy to this independent body. This move will involve changes to the Energy Act 2009 and the Regulatory Authority Act 2011. One of the aims of this initiative is to help lower the cost of energy for consumers. The Bermuda Energy Working Group has been formed and comprises a diverse group of energy professionals, independent engineers, non-governmental organisations and interested members of the public, working in collaboration to provide advice and guidance to the Department of Energy. One of their primary tasks is to develop equitable interconnection agreements for independent power producers to contribute to the production of electricity, a development that can lead to price competition, diversified energy production, increased use of renewable energy sources and the opportunity for lower-cost fuels such as natural gas. The BELCO spokeswoman said: BELCO is aware of all of these matters and is actively participating and working with Government on these topics.

2013. November 9.  The days of conscription appear numbered after the One Bermuda Alliance made a Throne Speech pledge to eliminate it during this legislative session. But the OBA was accused of delaying the issue by blocking the Progressive Labour Party's Abolition of Conscription Act, tabled shortly after Governor George Fergusson finished reading the Speech yesterday. In an exchange of statements, Public Safety Minister Michael Dunkley and PLP Leader Marc Bean took issue with what they viewed as a lack of a collaborative approach on the matter. In the House of Assembly, the PLP's Bill was defeated by 19 votes to 14, with all OBA members voting against it. Mr Marc Bean said in a statement: "In an effort to do things differently, embrace the spirit of collaboration and change the toxic environment in Parliament, we attempted to bring forward legislation that would move Bermuda forward. Without even reading or considering the text of the legislation, the OBA blocked the PLP's Bill to end conscription. We believe that conscription must end. The OBA says that they believe in ending conscription and that they also believe in collaboration. Together we could have collaborated on something we agree on, ending conscription without delay and moving Bermuda forward. Unfortunately it was not to be. The OBA should have worked with us but instead they stifled debate and conscription will be with us for the foreseeable future." Mr Dunkerley responded: "Tabling legislation is end of the process not the first step. Collaboration means working together to achieve common ends. If the Opposition was serious about working together to end conscription they would have shared this Bill in advance of today's session of the House. They didn't and this Government will not go along with whatever is tabled without fully considering the effects on the public and the Regiment. Timelines pulled out of the air and without regard to the operational responsibilities of the Regiment could be damaging to the organization and disadvantage the very people we're all supposed to be representing." The promise to eliminate conscription is contained in today's Speech from Throne as well as an undertaking to table amendments to the Defence Act 1965 to address disciplinary practices within the regiment. The Minister added: "This Government is serious about collaboration but working together is not a game or subject to political stunts. Working together means having the courage to step away from the adversarial system under which we operate and engage each other in meaningful dialogue to produce work that reflects well on us as representatives of the people." Anti-conscription campaigner Larry Marshall condemned the OBA for voting down the Bill, saying he was skeptical of the ruling party's Throne Speech promise. In the Speech, the OBA stated: "During this legislative session, the Government will introduce amendments to the Defence Act 1965 to eliminate conscription. Additionally, further amendments to the Act will provide for a revised legal and disciplinary system for the Bermuda Regiment in accordance with EU standards for the modern military." Mr Marshall, spokesman for campaign group Bermudians Against the Draft, said: "I was appalled at Minister Dunkley objecting to a Bill he had not even seen. You have a situation where the Opposition is trying to do the right thing and the ruling Government is blocking them. In November 2011, when Mr Dunkley was the Shadow Minister, he had complained conscription was past its sell-by date. If conscription is past its sell-by date two years ago, then what is it now? Of the OBA's Throne Speech pledge, should have been done months ago to ensure the 2014 Boot Camp consisted entirely of volunteers. By the time it comes around, they will have had 13 months to make the transition from conscription to a voluntary organization." And while Mr Marshall noted the PLP failed to end conscription in its 14 years in power, he said: "I would prefer not to dwell on the past, but they have a new leader who has come out in the past and stated publicly conscription is wrong, the 21st Century slavery, and needs to be abolished." Regiment Commanding Officer Lt Col Michael Foster-Brown said that the Regiment was a modern employer. It's a matter of the legislation keeping up with the Regiment's own desire to keep pace with international best practice. The Regiment works hard to ensure a fair, safe and rewarding working environment for our soldiers. Many such measures are already in place or underway we just need the appropriate legislation to reflect these changes. The decision to end conscription is a political one, which we will work hard to implement. It's not, however, something that can happen overnight without undermining the Regiments capability as Bermuda's Insurance policy. Detailed discussion has been underway with Government about the need for an orderly transition with a gradual phasing out of conscription, with the last conscripts potentially balloted in 2015 and those serving being obliged to complete their mandated service. But this plan was reliant on achieving a year-on-year doubling of the number of volunteers to reach the required annual intake of 100 new troops. Volunteers cost more to attract and Bermuda has some unique demographic challenges, with the Regiment requiring a relatively high proportion of our eligible youth. We have made a comprehensive recommendation to Government for the extra funding that will be required for recruiting initiatives, retention bonuses and increased spending on advertising. A US National Guard a part-time volunteer force pays bonuses of up to $20,000 to recruit personnel. The Regiment will never be able to match anything like that, but it gives an indication of the scale of effort required in other developed countries to maintain all volunteer reserve forces. Nearly half the Regiment's current strength was made up by volunteers despite the bulk of them having originally been conscripted. Those that try it, like it. The challenge, however, will be to transmit their enthusiasm for soldiering and service to those who have not been obliged to try it first through conscription."

2013. November 13. A Government move to regulate the importation of expensive new healthcare gadgetry to the Island has been welcomed as a step toward reducing Bermuda’s escalating healthcare costs. The latest Throne Speech declared upcoming changes to the law would introduce controls on medical technology that has “contributed significantly” to rising costs. Unnecessary and expensive diagnostic testing has come under fire for fuelling the Island’s rampant growth in expenditure. “The Health Technology Reviews have been developed as part of the wider discussion on healthcare costs,” said Bermuda Health Council (BHeC) CEO Jennifer Attride-Stirling. “This particular initiative will introduce controls over what technology is allowed to come into our health system and what is not Bear in mind, the issue of appropriate capacity levels is not something particular to Bermuda — we are special in a lot of ways but not necessarily in this. It’s a worldwide pattern. When you have a lot of medical technology in the system, it’s going to get used. Who would invest in equipment and have it sit idly by and not generate a return on that investment?” Rather than lowering costs through increased competition, Dr Attride-Stirling said greater availability in healthcare inevitably translated into “increasing utilization — and, therefore, increasing costs.” “The per unit costs may vary with competition, but the amount used increases and the system as a whole spends more on healthcare,” she said. Changes to the law won’t cut down on overuse, Dr Attride-Stirling added — but will introduce limits when the Island’s technological capacity becomes too great. “In Bermuda, we have this issue, alongside other small island states: we are in the middle of the ocean and we’re isolated, and this can create diseconomies of scale. Our level of need is not going to vary much year on year, but what happens if equipment fails? We have to have some level of redundancy when it comes to some medical equipment. But in this context, we have to be especially mindful in how we manage our capacity. Anywhere in the world where you have excess capacity, it will be used. And as my friend and colleague Marc Roberts of the Harvard School of Public Health says, the only thing worse than unused, unnecessary capacity, is used, unnecessary capacity.” Residents and their insurers won’t see a quick drop in medical costs once the changes go into effect, Dr Attride-Stirling pointed out. “It’s not an initiative that can reduce existing capacity — what’s here is here, and addressing its utilization requires other measures,” she said. “What this will do is control what comes in from the time the legislation goes through. After that point, equipment will have to go through this review process, to make an assessment about whether the health system needs that extra capacity.”

2013. November 14. Just-released economic data shows that difficult conditions are persisting through 2013, Minister of Finance Bob Richards said in a public release of information about Bermuda's financial state. The data showed that Government revenues tracked higher than Budget estimates during the first half of the fiscal year through September 2013, but public spending was also tracking 2.3 percent higher than projections. Mr Richards added: ... "there are some positive signs that certain sectors of the economy are improving as we move towards the end of the year. The Ministry expects that the corrective measures outlined in the 2013/2014 Budget Statement, as well as other future initiatives, will result in improved economic conditions in the medium-term." The Ministry of Finance release of the economic numbers stated: In accordance with Governments commitment to effecting ongoing improvements in transparency and its reporting on the fiscal and economic affairs of the country the Ministry of Finance today (Thursday) reported on the 2013/14 first half fiscal performance and provided a midyear economic review 2013. The Ministry's press release stated that 2013/14 first quarter fiscal performance headline numbers for the 2013/14 national budget were: a revenue target of $871.2 million; current expenditure of $1.1 billion, including debt service; capital expenditure of $84.6 million; and a borrowing requirement of $331.6 million (equal to the projected deficit). Revenues for the six months ending September 2013 are $436.8 million; this is $7.6 million (1.8 percent) higher than in September 2012. They stated: "The primary reason for this increase is due to stronger Customs duty collections and this increase resulted in additional revenue of $10.5 million. Payroll taxes to date are approximately $2.6 million above 2012 collections while land tax collections are $3.2 million higher than 2012. These increases more than offset reductions in aircraft registration fees, telecommunication fees and all other fees. Revenues are tracking above budget estimates.  The primary reason for this growth relates to strength in the collection of customs duty and payroll tax. Custom duties are tracking six percent above budget estimates, while payroll tax is tracking two percent above budget estimates. Current expenditures, excluding debt service, for the first six months ending September, 2013 are $487.8 million; this is $10.9 million higher than was spent during the same period last fiscal year. Government current account spending to date is higher during this fiscal year when compared to the same period last year due mainly to an increase in employer overhead as a result of the Government making its contribution to the Public Service Superannuation Fund which was suspended in 2012/13. Capital expenditures for the period ending September 2013 are $6.4 million higher than in September 2013. This is primarily due to expenditures for the Heritage Wharf. Total current and capital spending to date, excluding debt service, is $17.3 million higher than last years spend. Debt service costs for the first six months ending September 2013 are $80.3 million. This represents $42.7 million in interest payments and a $37.6 million transfer to the Government Borrowing Sinking Fund. Debt service to date is $18.5 million more than last year's period. Interest expenses are $11.6 million higher than 2012. This is principally due to a portion of the 2012 interest expense being paid from the Sinking Fund in 2012 and also due to the Governments multiyear borrowing strategy, in which $750 million was raised in July 2013. In general, current expenditures are presently tracking 2.3 percent above budget estimates. It should be noted that in certain instances expenditures are not made evenly over the year which may distort actual figures when compared to budget. Due to the ongoing difficult economic conditions, spending pressures have continued in the social areas with increased demand for financial assistance. Expenditures were above budget in the first six months of 2013 also due to spending pressures in the Ministries of Public Works and Tourism Development and Transport." For the first six months of 2013/14 Government incurred a deficit of $146.7 million. On September 30, 2013, central Government gross debt, excluding guarantees, stood at $2.25 billion, $676 million higher than the level at the end of fiscal year 2013. Net debt was $1.77 billion. The year to date (September) average Consumer Price Index was 1.8 percent and the 12 month average rate was also 1.8 percent. The primary causes of inflation during the last twelve months were increased costs of medical supplies, prescription drugs and health insurance premiums in the Health & Personal Care sector, rising food costs and higher costs for local and overseas tuition in the Education, Recreation & Reading Sector.

Key points made in the report included:

·        Imports increased by 8.7 percent in the first two quarter to register at $479.4 million.

·        Air arrivals decreased by 0.5 percent in the first two quarters while the number of cruise passengers fell by 17.6 percent over the same time period.

·        Total visitor spending was down by 2.4 percent settling at $165.1 million.

·        A total of 725 new international companies and partnerships were registered in Bermuda during the first nine months of 2013 representing a 14.7 percent increase over 2012 registrations of 632. Of the 725 newly registered companies, 15 had a physical presence in Bermuda.

·        Total value of new construction projects started fell noticeably from $59.6 million in 2012 to $17.5 million this year.

·        The estimated value of construction work put in place was $80.4 million, an increase of 29.9 percent, which was mainly due to the redevelopment of the hospital.

·        Employment income contracted slightly to $1.659 billion, a decrease of 0.8 percent.

·        Total retail sales for the first nine months of 2013 fell by 0.7 percent or $5.7 million to register at $789.4 million.

·        Bermudas Balance of Payments in the first half of 2013 recorded a surplus on the current account of $980 million, which was nearly triple the surplus of $357 million that was recorded in the first half of 2012. The investment income account was the largest contributor to the current account surplus.

Based on figures released by the Bermuda Monetary Authority, Bermudas money supply contracted by 1.4 percent year over year at the end of the second quarter. The money supply has declined mainly due to a 5.4 percent reduction in deposit liabilities. The majority of the decline in deposits was the result of lower savings balances which fell by 10.6 percent during the quarter. The Banking sector's total assets decreased by 2.1 percent at the end of June 2013. The decline was driven mainly by a 6.4 percent year over year reduction in loans and advances, total investments fell by 3.6 percent at the end of the second quarter while customer deposits grew by 17.9 percent for the same time period and the number of standard work permits at the end of September fell from 9,863 in 2012 to 9,221 in 2013, a decline of 6.5 percent. Commenting on the reports, Mr Richards said: "Economic data for the first half of this year are consistent with the expectation in the 2012 National Economic Report of Bermuda that the current difficult economic conditions will persist through 2013. However, there are some positive signs that certain sectors of the economy are improving as we move towards the end of the year. The Ministry expects that the corrective measures outlined in the 2013/2014 Budget Statement, as well as other future initiatives, will result in improved economic conditions in the medium-term. 

2013. November 19.  Ahead of the annual meeting of Overseas Territories leaders this month in London, the UK Foreign and Commonwealth Office is featuring an overseas territory on Facebook every day. Bermuda will be today's selection. The annual Overseas Territories Joint Ministerial Council brings together political leaders from the Overseas Territories and UK Ministers. It will meet on November 26 and 27, hosted by FCO Minister for the Overseas Territories, Mark Simmonds. Governor George Fergusson hopes Bermuda residents will take time out to view the new Facebook page. He said: "The discussions going on in London at the end of the month will involve topics which are important for each Overseas Territory, including Bermuda. We can learn from some of their experiences and I am sure they can certainly learn from us." The page can be found at: https://www.facebook.com/pages/The-UK-Overseas-Territories-Family/540473239364441.

2013. November 19.  The Minister of Finance for Lucerne was in Bermuda's Supreme Courts commercial litigation suite yesterday testifying in a $100 million lawsuit, pitting a Swiss arts foundation against Butterfield Trust Bermuda Limited (BTB), as the case entered its second week. Pharmaceutical billionaire and philanthropist Christof Engelhorn's Bermuda-based Art 1 Trust was providing the money for a proposed state-of-the-art musical theatre, Salle Modulable. The trust's BTB trustee, and a former minister in the Progressive Labour Party Government, Patrice Minors, stopped the funding. Now Salle Modulable Foundation is in court seeking the reinstitution of the $100 million in funding they say was committed for their project. Chief Justice Ian Kawaley, presiding over the case, unusually for a case in this jurisdiction, is wearing a business suit and not his traditional wig and gown. The multi-person legal teams are also wearing business attire for this case. The Lucerne Finance Minister Marcel Schwerzmann, whose first language is Swiss German, gave evidence in English, but with a translator in Bermuda especially for this trial on hand. Mr Schwerzmann required translations for English colloquialisms and multiple-part questions, but he translated some legislation and parts of documents into English for the court. A former Swiss Consul Leo Betschart was also in court to observe the proceedings. Consul between 1983 and 2005, he had been an executive chef in two major hotels before teaching culinary arts at the Bermuda College. Also observing the action yesterday was former Art 1 Trust trustee for BTB Graham Jack, Bermuda-based director of the Art Mentor Foundation Robert Stewart, and Rutli Stiftung's chairman Karl Reichmuth. Rutli was an intermediary organization sitting between Stiftung Salle Modulable and the Art 1 Trust. Mark Cran QC, who is representing the Bank, questioned Mr Schwerzmann vigorously about funding for the Salle Modulable operations and maintenance. The Finance Minister stated: "We had a difficulty with Salle Modulable we had the money to construct the building, but not money for operations and maintenance." Mr Cran asked Mr Schwerzmann about statements he had made that the city and canton of Lucerne would not give further funding for the operations and maintenance of Salle Modulable than 20.2 million Swiss francs. This, he said, left a funding gap of 11.3 million Swiss francs. The Finance Minister told the court: "We can reallocate funds from one organization to another organization. He said there was revenue from a National Lottery of about 20 million Swiss francs that could be used for the arts, culture and sports. You can spend this without asking Parliament. There was also an ageing theatre in Lucerne that needed major renovations which received Government funding. If the role played in the community of that theatre was moved to the new Salle Modulable, then that funding could also be reallocated to the new facility. We (the canton) pay 70 percent of the money and the city pays 30 percent of that money, he said. It was used for operational costs and for small maintenance. My function as Finance Minister is, I told them to recalculate have new ideas, to make it cheaper. We said only the canton will not advance any more money we were not willing to discuss about that until we had better calculations. The result was he first time I've seen a construction project so well calculated." The case continued with a discussion of the costs of construction, and a funding gap between the 120 Million Swiss francs from the Art 1 Foundation and the final price tag for building the facility. Mr Cran, who is with the Attride-Stirling & Woloniecki law firm, also raised the issue of the plebiscite with Mr Schwerzmann, where the people of Lucerne were to asked whether they supported the building of the new opera house in their community. He also questioned the Finance Minister about a document drafted by the Foundation detailing the project and whether it was a feasibility study, a business plan or designed to appeal to the voting public for the plebiscite. A feasibility study is an important part of the case, because of the question of whether it is a condition, and if so, if that condition was met, for the gift of 120 million Swiss francs from the Art 1 Trust to Salle Modulable. Mr Schwerzmann told the court: "In Switzerland, if the public doesn't know what the vote is about exactly, then they will say no. The whole document has a lot of important information that would be helpful to the public to decide the quality of the document is very, very good." The case is expected to continue for another five weeks.

2013. November 20.  The Bermuda Hospitals Board will consider bringing Mid-Atlantic Wellness Institute (MAWI) services to King Edward VII Memorial Hospital. The suggestion was one of several made recently by the SAGE Commission, who said the MAWI site could be sold off rather than spending $40 million to renovate the Devonshire facility. A spokeswoman for the BHB said: "The board is looking at every way it can to run more efficiently while maintaining safe, quality services. MAWI is an ageing facility and a recent review of the MAWI estate estimates that a $40 million investment would be needed over time to maintain and upgrade its infrastructure and ensure it can continue operating as a psychiatric facility. We are currently reviewing the delivery of BHB services, and our Senior Management Team and Board will certainly consider the opportunities in consolidating the two sites in more detail as part of this process." The SAGE Commission Report, released on Friday said: Duplicated services are provided at the King Edward VII Memorial Hospital and at MAWI because the two facilities are operated on two separate sites. Substantial savings would be generated from operating both facilities on one site. It also suggested the BHB examine the possibility of erecting a new building adjacent to the acute care centre already under construction to house both psychiatric services and continuing care facilities for the elderly.

2013. November 20.  Government today announced the members of a new committee established to modernize Bermuda’s labour laws. Lawyers Alan Dunch and Wendell Hollis, Bermuda Industrial Union president Chris Furbert and Bermuda Public Services Union general secretary Ed Ball will serve on the committee. Carl Neblett of the Bermuda Police Service, John Harvey of the Bermuda Hotel Association, Keith Jensen of the Bermuda Employers’ Council and past BEC president Graham Redford are also members. Home Affairs Minister Michael Fahy announced the members of the committee today. “As announced in the Throne Speech it is our intent to embark on a review of Bermuda’s labour laws this legislative year,” he said. “The Labour Law Reform Committee will look at the role that labour laws play in job creation and retention and seek to introduce a system which is fairer and more inclusive. Seven labour laws will potentially be impacted by the Review. And it is our intent to solicit the assistance of the International Labour Organization (ILO) as a part of the process. Members of the group are represented by some of our key workforce sectors, and we consider the Committee an excellent example of a collaborative approach towards addressing our current labour laws.”

2013. November 20. Too tight regulation risks stifling economic recovery, a panel of international experts said yesterday. But the Bermuda Monetary Authority won praise from panelists, which included keynote speaker Dame Amelia Fawcett, a hedge fund chief, a US Treasury Department official, and senior member of the EUs European Securities and Markets Authority (ESMA). Tim Selby, president and director of the New York Hedge Fund Roundtable, said: "One of the things that Bermuda has done better than most is embracing the marketplace and trying to find out how they can be a better and more efficient regulator." Mr Selby admitted there were bad actors in the financial sector but that an international crackdown on the world of finance and more regulation may not cure the ills that were there in the marketplace that led to the global recession. William Murden, counselor to the Assistant Secretary of the US Department of the Treasury, said the financial crisis that took hold was the biggest since the Great Depression and that trillions of dollars has been lost in the US alone, while unemployment had gone up to ten percent. He said: "I am confident Bermuda understands this ... Bermuda is on the right track and the Bermuda Monetary Authority has an excellent reputation. The Island and its financial regulator were promoting a race to the top, not a race to the bottom." Dame Amelia Fawcett, the chairman of the London-based Hedge Funds Standards Board and a non-executive member of the UK Treasury Board, added: "From a Bermuda perspective.....the fragmentation of markets and fragmentation of capital flows creates an opportunity for places like Bermuda. Although there were threats Bermuda could benefit as a place to do business as international regulations grow ever more complex." Mr Selby added: 2We have so much regulation coming from all jurisdictions regulation is not necessarily bad, but there has to be some reason to it." Gareth Murphy, Ireland-based chairman of the investment management standing committee of the ESMA, said that there needed to more harmonization on regulation but that at the moment there were a number of regimes competing with each other. And he called for a global drive to organize financial regulation because the financial services industry needs simplicity and it needs certainty. Mr Murphy said: "Until we have that way forward, we will have this hotchpotch framework of regulatory regimes." And Mr Selby said: "I'm really worried about how business is going to thrive and survive in this market. We need to remember there were relatively few bad actors, but globally, regulation is impacting everyone."

2013. November 22.  Bermuda expects to see 21,000 more cruise ship visitors in 2014 than this year, Tourism and Transport Minister Shawn Crockwell said today. Mr Crockwell said in the House of Assembly this morning that the Norwegian Breakaway will make 22 visits to the Island next year after a successful 2013 season. "Although we have not yet finished the 2013 cruise ship season, we had 292,533 cruise visitor arrivals through the end of the third quarter and are anticipating approximately 335,000 cruise ship visitors by the end of the season in December, " Mr Crockwell said. "The number of cruise calls for 2013 is anticipated to be 126. For 2014, we are anticipating a total of 132 cruise calls, bringing a total of 356,000 cruise ship visitors to Bermuda. We are also projecting that the cruise industry will contribute over $90 million to Bermuda's economy in 2014. This include fees paid to Government, expenditures made by cruise visitors and crew members while on-Island and shore excursions booked by cruise visitors, including taxi and bus tours, walking tours and water sport excursions. The Breakaway alone brought 90,000 cruise ship visitors to the Island making an economic contribution of approximately $26 million. Even though it was the largest ship to have docked in Bermuda, we accommodated the increased number of guests extremely well with both public and private transportation services operating efficiently and reliably. Also returning to Bermuda in 2014 will be Norwegian Cruise Lines Norwegian Dawn, sailing from Boston with 22 calls; Royal Caribbean's Explorer of the Seas, sailing from Cape Liberty, New Jersey with 27 calls; Royal Caribbean's Grandeur of the Seas, sailing from Baltimore with 14 calls; and Celebrity Cruises Summit, sailing from Cape Liberty with 19 calls. We are also pleased that for 2014 will have three cruise calls from Charleston, South Carolina on Royal Caribbean's Vision of the Seas, Mr Crockwell told MPs. We consider Charleston an important cruise market because cruises from there generally bring a different demographic to Bermuda, as compared to the traditional visitors from Boston and New York. Our experience has shown that cruise visitors originating from the Southeast United States have a better understanding of our unique culture and history, and often have more disposable income to spend while here." The 2014 Cruise Ship Schedule will be available from next Monday at the Department of Marine & Ports web page, SeaExpress.bm.

2013. November 22.  Bermuda needs to face the facts about itself even the ugly ones if it is to develop a culture of business development. That was the message from Bermuda Business Development Agency's (BDA) new chief executive officer Stephen Lund, who was the keynote speaker at the Association of Bermuda International Companies (ABIC) annual general meeting yesterday. Mr Lund said:  "The Island had not been in the game when it came to connecting with corporate decision makers who might bring their business here. Solutions for Bermuda's international business sector include: One: get back in the game. I don't think we've been in the game. I don't think we've been front and centre for the decision makers for the last five to 10 years. In addition, there should be a single point of contact for people who are coming to Bermuda to investigate business opportunities, and during those visits, everything must go smoothly. Its curtains if you don't have it. It only takes one slip-up to lose a deal. We've got to have our act together. This was a marathon and not a sprint, it was important to talk to companies already here about what it would take for them to add people to their employment roster. Let's try and grow the base we have, and lets also try and grow international business. We need to get Bermuda in the game we need to enhance our reputation. It's very clear to me we have to leverage the skill-sets we have in Bermuda we've got to make these connections. I'm worried if we don't do this. We need to make it happen." BDA is a new name for the Bermuda Business Development Corporation, a change that was announced about a month ago. Mr Lund worked in Bermuda early in his career, but notably was CEO of Nova Scotia Business Inc (NSBI), the Canadian maritime provinces business development agency, from its creation in 2001. He spoke to an audience of Bermuda's leading international business executives during their lunchtime meeting. Returning to Bermuda after 20 years to take on the CEO's role of the Island's equivalent agency, he said he has discovered the facts about Bermuda as an international business centre can be divided into good, bad and ugly. The ugly facts encompass international business which drives the economy is down, and that people have left the Island. The bad facts includes that Bermuda doesn't have a culture of business development. "In other countries, business development is built into their culture. A lot of the companies are doing great things, but they don't have a culture of business development. Complacency is an issue, and plans for re-growth of the international business sector are disjointed. In the good column, Bermuda has a solid reputation, the Government is supportive of international business and people like the Island. When I was in New York, the comments were: We like Bermuda, but have not seen anyone in 10 years. In London, they say: Jerseys here, twice a year." He said at BDA, he wants to expand on what NSBI did for Nova Scotia. Before he left Nova Scotia, the NSBI had just completed drawing up their second five year plan, after meeting all the goals and objectives of their first five year plan. NSBI has helped attract some of the top companies in the world including IBM, Blackberry, CITCO, Marsh and Lockheed Martin to Nova Scotia. The organization also helped generate $800 million in direct client payroll between 2007 and 2012. Mr Lund told the ABIC audience: "You've got to have a value proposition you have to have something to sell. You have to think outside the box. Today, Nova Scotia has had the fastest growth in businesses as diverse as IT and hedge fund administration, and Nova Scotia can also boast the lowest unemployment rate in Canada. Nova Scotia has just been recognised as the best jurisdiction in North America for investment.  We were proactive, very proactive, explaining the process is all about relationship management. One-on-one short meetings are far more successful than big conferences. However, the process which led to locating a business in the jurisdiction took time to build. Frontier, the biggest gaming company in the UK, has just opened a game development studio in Nova Scotia. It took four years to get. IBM also has an office in the province. That took three years of meetings and plane trips. CITCO was a three year process. A meal in New York with the top executives of Cayman-based Admiral Financial Group which provides services for some Bermuda companies led to five years of meetings and relationship building. And they brought the entire operation up to Nova Scotia. The most important thing I learned is, we had to have a real red carpet service we did it better than any place in the world.  From a to z, it is how to take care of the company we are there to take care of the customer. NSBI had their own taxi drivers who collected potential clients at the airport, and the organization also worked with the provinces hotels. We made sure the experience was second-to-none. The people who came to explore doing business in Nova Scotia could count on seeing anyone with whom they needed to have a meeting, often within 24 hours including the Premier.  Connects was an important part of their equation in the Canadian maritime province. The ConnectNS website explains: Anyone and everyone interested in growing Nova Scotia's economy can participate. If you are a proud Nova Scotian, expat or alumni, please join the ConnectNS network and stay connected to what's going on in Nova Scotia's business community and receive ideas on how you can connect opportunities to the province. In Nova Scotia this has resulted in 60 CEOS and 2,000 people signing up from all over the world. There are lots of people from Bermuda, who like or love Bermuda, but they live somewhere else."

2013. November 22. The Bermuda Digest of Statistics 2013 edition- see http://www.royalgazette.com/assets/pdf/RG1462381122.pdf - has been released today by the Department of Statistics. A compendium of more than 80 statistical tables, it provides a wealth of data about Bermuda’s social, demographic, environmental and economic conditions. Wherever possible, and space permitting, a time series have been provided for the period 2002 to 2012. The Digest has been revised and is structured into thirteen sections. Most sections include graphs and analyses to supplement the tables and identify trends in the data. Some tables from the previous edition have been removed because the data is no longer available or is in a different format. Similarly, tables have been modified or added to this edition to enhance the variety of data provided.

2013. November 22.  A further $10 million in fundraising is needed to cover a $40 million payment for Bermuda's new hospital wing before next year's impending deadline. However, Health Minister Patricia Gordon-Pamplin said she was completely optimistic and confident that the campaign by the Bermuda Hospitals Charitable Trust (BHCT) would reach its goal. BHCT launched its Why it Matters campaign in April 2011 to raise the capital due from Bermuda Hospitals Board (BHB) to project investors Paget Health Services. The money must be paid upon the completion of the new medical facility originally slated for April 1, 2014. BHB is liable for covering any shortfall in that one-off payment. Asked about backups in place for cash-strapped BHB which Chairman Jonathan Brewin has said might slip into debt by the end of the current fiscal year the Minister said: "While there is a contingency plan in effect, we are focusing on the positive, and will roll out that alternative plan should the need arise." Ms Gordon-Pamplin recently announced a slight delay in the April 1 deadline, which she said would allow the BHCT extra time to solicit donations for the cause. A spokeswoman for the Trust said the group had so far raised almost $30 million, and was confident of meeting its objectives. "At this time, we are solely focused on fundraising and will continue to rally support from companies, organisations and individuals. This is our Island and our hospital, and we all have a stake in the game." And a spokeswoman for BHB pointed out that the construction project for the $247 million hospital wing is backed by a Government guarantee. BHB Chairman, Mr Brewin said: "BHB has been very conservative in its planning to ensure both best case and worst case scenarios are prepared for. In terms of the one-off payment, we still have every confidence there will be a successful fundraising campaign where the generosity of individuals, families and companies of Bermuda are able to donate $40m. But we have potential plans should this not materialize and through careful planning and discussion with the BHCT and Government, we have a number of options to help us meet our obligations. We will continue to work closely with our partners and remain extremely grateful for all donations received. Every dollar raised helps healthcare and Bermuda." The $40 million one-off payment signals the start of an expensive year for BHB, as outlined for Wednesdays Senate by Junior Health Minister Lynne Woolridge. She said that Paget Health Services (PHS) was committed to maintaining the new hospital wing over the next three decades but added BHB will face significant payments. In the first year, the monthly payments to PHS are about $2.5 million, Senator Woolridge said. On top of this, BHB must cover general running costs such as staffing and cleaning costs which Sen Woolridge described as substantial. After the first year, 70 percent of the payments to PHS will remain fixed with the other 30 percent subject to variables such as inflation and insurance. This means there is significant pressure on BHB to manage the contract well, to ensure it is adhered to, and BHB is putting the necessary management arrangements in place, Sen Woolridge said.

2013. November 22.  Custodian Life Limited, as a class C insurer — the tier of licence for long-term insurers and reinsurers with total assets of less than $250 million — is the largest company to register in Bermuda during October. Custodian Life Limited is one of a total of seven new registrations for October, announced by the Bermuda Monetary Authority. They include MoonGate Insurance Ltd., which has registered as an agent, while another new registration, Tokio Millennium Re Ltd., has registered as a class 3B insurer, and so is required to maintain capital and surplus of $1 million. Tokio recently redomiciled to Switzerland, but stated at the time their collateralised and ILS solutions arm would remain in Bermuda Galileo Re Ltd., Silverton Re Ltd. and Fortius Re, Ltd. are all registered as a Special Purpose Insurers (SPI) and so have to meet the following criteria:

Galileo Re Ltd. (Series 2013-1) is also a SPI, and it is seeking to issue a single tranche of notes which will fully collateralize a reinsurance agreement with Catlin Insurance Company, the Bermuda insurance and reinsurance entity of Catlin Group. The deal is being marketed with a preliminary size of $175 million, according to Artemis, the catastrophe bonds, insurance-linked securities, reinsurance and weather risk transfer news and analysis online publication. Brown Water Insurance Ltd. is registered as a class 2, which according to the BMA means it is a multi-owner captive, defined as an insurance company owned by unrelated entities, and provided that it underwrites only the risks of the owners, and affiliates of the owners, and/or risks related to or arising out of the business or operations of the owners and affiliates. It may also be a single-parent and multi-owner captive writing no more than 20 percent of net premiums from risks which are not related to, or arising out of, the business or operations of their owners and affiliates. Class 2 insurers are required to maintain minimum capital and surplus of $250,000. So far 59 insurers have registered during 2013, along with 18 intermediaries: salesmen, brokers, managers and agents.

2013. November 23. Getting Bermuda's ailing economy back on track could take a few years, the chairman of the Islands international business umbrella group said yesterday. George Hutchings, who heads up the Association of Bermuda International Companies (ABIC) said: "More  than 5,000 jobs had been lost over recent years, while many people had their hours reduced and finding it hard to make ends meet. With this in mind, ABIC has been focused on a number of activities that will in the years to come be beneficial to Bermuda and to international business in the long term. ABIC members have highlighted the cost of doing business in Bermuda, immigration policy and the need for a business-friendly environment as crucial for success in the international sector. A rebound from recession depended on growing jobs in both the international and domestic sectors. Let's be realistic, there are no quick fixes to the problems that have developed over several years. Our initiatives may take a few years to be felt within the local community, but we are confident that in time Bermuda can thrive again. As I said, we are all in this together and ABIC is determined to do the things necessary to balance and serve the interests of Bermudians, while pursuing policies that enable our businesses to thrive." Mr Hutchings was speaking at ABIC's annual general meeting, held in Hamilton yesterday. He told members: "International business interests are inextricably aligned with Bermuda's. A healthy economy and social structure makes operating an international business in Bermuda easier. Airline schedules are more robust, there are more goods and services on offer to our businesses and our employers and their families, the cost of operating in Bermuda goes down, crime is likely to diminish, the list goes on. If international business is both locally and globally successful, Bermuda's economy will in all likelihood follow suit. Bermuda and the international businesses based here have been through stormy times over the past few years. As a Bermudian and an international business leader, I have to confess I've found it distressing. But we are in the this boat together and the only way to a successful future is together. Four years of economic contraction had led to levels of unemployment not seen since World War II. Much of that contraction has come as a direct result of a changing world for our businesses where we have had to make decisions to remain competitive in the global economy. As a result of both global and local pressures, international business economic contribution to the Island has shrunk and in the process it has had a significant effect on the level of employment on the Island throughout all sectors of the economy. ABIC had promoted strong relationships with Government, reforms to work permit policy and an end to term limits, as well as new incentives to attract overseas investors. ABIC had also consulted with Government on the rising cost of healthcare and continued to support scholarships for young Bermudian undergraduates with a $500,000 fund. The organization had also hosted town hall meetings on subjects like crime trends, Governments economic plans and immigration policy and carried out a major survey of its members in 2013. ABIC's mission is to promote and preserve a sound business environment for international business in Bermuda and to ensure that we continue as the business domicile of choice. We will continue to work diligently with Government to develop a business environment that will retain jobs and attract new business to the Island."

2013. November 23. A Bermuda lawyer has won an X-Factor-style competition in the Caymans for lawyers working in business turnarounds and insolvency. Alex Potts, of Hamilton's Sedgwick Chudleigh, won the rising star award against tough competition from the UK, the Caymans, the British Virgin Islands and the Bahamas. Mr Potts was one of only a few Bermuda participants to be invited to speak at the conference, organized by INSOL International, a global group of lawyers and accountants specializing in business turnarounds, restructuring and insolvency. He impressed the 250-strong audience of voters made up of top judges, QCs, accountants, lawyers and insolvency professionals from around the world with a talk and written paper on the recognition of foreign insolvency proceedings, from a Bermuda and world perspective. Mr Potts said: "I am flattered and pleased to have had the chance to present to them." Sedgwick Chudleigh partner Mark Chudleigh said: "We are very proud of Alex's success at the INSOL X-Factor and for representing Bermuda so well alongside speakers from other offshore jurisdictions." Foreign insolvency proceedings is a hot topic as it has recently been considered in the highest courts in the USA, UK and Bermuda. Sedgwick Chudleigh's legal team are regarded as specialists in the area and have appeared in a number of the leading decisions on the subject in Bermuda courts.

2013. November 25.  Minister of Finance Bob Richards today signed the UK FATCA Intergovernmental Model 2 Agreement, IGA Model 2 with the United Kingdom. Signing on behalf of the UK was the Secretary to the Exchequer, the Hon. David Gauke. A press release announcing the move quoted the Minister of Finance, who said: "The signing of IGA Model 2 is in keeping with the Government's international tax strategy which is to demonstrate our commitment to tax transparency and automatic exchange of information, and ensure Bermudas reputation as the premier international financial jurisdiction in which to do business. The significance of choosing IGA Model 2 versus IGA Model 1 means all Bermuda's financial institutions must identify all UK residents with interests in Bermuda and automatically report them to HM Treasury on an annual basis. HM Treasury will receive the information on those residents in bulk form and will be able to issue group requests for information in relation to recalcitrant clients of Bermuda financial institutions." Recalcitrant clients are persons who refuse consent to allow the financial institution to automatically share their information. Additionally, where HM Treasury initiate investigations on a person with respect to possible tax evasion, a request for information can be made under the UK Bermuda Tax Information Exchange Agreement. Utilizing this method of automatic exchange of information guarantees the rights, safeguards, and confidentiality of the information received in regards to those persons.

2013. November 25.  Minister of Finance Bob Richards today visited the Polish Embassy in London to sign a bilateral Tax Information Exchange Agreement (TIEA) with the Republic of Poland. A Ministry of Finance press release announcing the bilateral agreement quoted Mr Richards, who said: "Signing a TIEA with Poland has been a long time in the making and represents the beginning of an official exchange of information relationship with Poland upon which the Government of Bermuda hopes to build a long and fruitful partnership." The press release stated that with these bilateral treaties Bermuda establishes a direct treaty relationship, which in this case, is with the Minister of Finance for Poland. "As Poland is a member of the European Union (EU) it is crucial that Bermuda signs this TIEA; the EU has always been one of the main regions with which Bermuda has a strategic and economic relationship and Poland is one of the many countries Bermuda reinsurers do business with in Europe. The benefit of signing the Poland TIEA is that it allows for tax transparency and information exchange on a by-request basis, where previously there was no formal avenue available." Bermuda now has bilateral TIEAs with 50 percent of the members of the EU.

2013. November 25. Longtime former Royal Gazette editor David L. White died on Saturday morning at his home in Paget following a long illness. He was 79 years old. Best-known as editor of the newspaper from 1976 to 1998, Mr. White also ranked among the Islands foremost and active patrons of the visual arts as well as one of the leading individual collectors of Bermuda-related works of art. "David was a colleague, friend and mentor for many years," said Royal Gazette editorial consultant Tim Hodgson. "He was always mindful of the fact this newspaper had a special obligation to the community it serves an obligation to not just publish the facts but to publish them with candor, to publish them with clarity and to publish them in the proper perspective. He was one of the most courageous individuals I knew, shrinking from no issue and turning away from no antagonist. David routinely encouraged his reporters to pursue subjects that some of the more conservative elements in Bermuda would have preferred the Press turn a willfully blind eye to. These ranged from Pentagon plans to stockpile nuclear weapons at the US bases in Bermuda during the Cold War without the knowledge let alone the assent of the Islands government to the decriminalization of homosexual activity between consenting adults to a whole raft of environmental matters which came to the fore during the construction boom of the late 1980s and early 90s. From time to time tremendous pressure was applied to him by vested political or business interests to rein in his reporters or to spike controversial stories they were working on. He never succumbed. His commitment to Press freedoms was absolute and unwavering. So was his loyalty to his staff." Mr. Hodgson issued his condolences to Mr. White's family on behalf of the management and staff of The Royal Gazette. "David was a complex, formidably intelligent and somewhat larger-than-life character," he said. "But beneath the silken, somewhat theatrical exterior he presented to the world, he was essentially a shy individual as well as an unreconstructed romantic at heart. And he had a life-long love affair with Bermuda and its people. That affection for the Island and its well-being was reflected not just in the content and direction of The Royal Gazette during his time as editor but in his world-class art collection of Bermuda-related works which he gifted to the Bermuda National Gallery last year." The only son of Leslie Arnold White, a self-made man who owned Freeza Fresh Foods, and Stella Hollis, Mr. White was born in Paget on December 15, 1933. He grew up in Paget and later Knapton Hill, when the family moved to Smiths Parish in 1952. He was educated at Mount St. Agnes Academy in Bermuda and Vermont Academy, Saxtons River, Vermont, receiving the latter's prestigious Florence Sabin Distinguished Alumni Award in 1994. After graduation from Vermont, Mr. White enrolled at Bard College in Annandale-on Hudson, New York, where his love of the written word flourished and he was actively involved with the colleges two publications, The Bardian (as managing editor) and Communitas, serving on the editorial board. He was recognised as a John Bard Scholar and received the Fairbairn Prize, the college's highest academic award, earning a Bachelor of Arts degree with honours in history and political science. He then studied at the London School of Economics in England, before returning to Bermuda in 1956 to work full-time as a reporter on The Royal Gazette, having worked as a summer intern while a student. In 1967, he became the first Bermudian ever designated as a Commonwealth Press Union Fellow, the Commonwealth's highest educational award for journalists. He was appointed editor of the weekly Mid-Ocean News in 1968 and by the time he left to become assistant editor of The Royal Gazette in 1973, he had increased the paper's circulation from 2,500 a week to more than 10,000. He succeeded Eric Hopwood as editor of The Royal Gazette in 1976. During Mr. White's tenure, The Royal Gazette's circulation rose from 10,500 to around 17,000, as it covered some of the most turbulent events in Bermuda's modern history including the 1977 riots, the 1981 general strike and the devastating Hurricane Emily in 1987. He was also in the editor's chair for seven Bermuda general elections. As editor, Mr. White withstood often intense criticism from both Government and Opposition politicians but always backed his reporters and did not back down from defending what he regarded as right. On his retirement as editor in 1998, politicians from both parties paid tribute to him as a man of conviction and a defender of democratic principles. Indeed, in 1976 he had been awarded the Press Award of Merit by the then Opposition Progressive Labour Party for his outstanding, objective and meritorious journalistic coverage of the political life of Bermuda. He promoted free speech not only thorough the newspaper, but also through the arts as a patron of many different art forms, including painting, writing and theatre. He was among the key figures in reviving the Bermuda Musical and Dramatic Society (BMDS) in the 1960s, serving for many years as vice-president and chairman of the drama committee and helping to purchase and renovate Daylesford, a house on Dundonald and Washington Streets, which became the Daylesford Theatre. Although never a serious actor himself save for some memorable performances as the Dame in Christmas pantomimes Mr. White directed a number of successful plays, including Tiger At The Gates, A Streetcar Named Desire and The Killing of Sister George. The last was described by playwright Terrence Rattigan, a Bermuda resident at the time, as better than the West End production in London. He withdrew from active theatre work in 1976 because of his commitments as editor of the Gazette but maintained his interest in the arts as a patron and an astute collector. He built an extensive collection of historical Bermuda maps but sold it in the 1980s to finance a growing interest in paintings. In 1987 he bought a 1940 painting by the American artist Reynolds Beal of people waiting for the St. David's ferry in St. Georges and, in his own words, "I was hooked." From there he built up an extensive collection of more than 60 impressionist Bermuda landscapes by painters such as Ogden Pleissner, Prosper Senat, Adolph Treidler, and William Chadwick. In 2009, he published a book about his collection, Cross Currents Impressions of Bermuda (The David L. White Collection), with proceeds donated to the Bermuda National Gallery (BNG). The collection was featured in a special BNG exhibition, The David L. White Collection, in 2010, and in May 2012, he donated most of the collection some 62 works to the Gallery. Mr. White served as chairman of the Board of Trustees on the BNG from 1997 to 2008, overseeing five Biennial Exhibitions and more than 60 exhibitions that contributed significantly to Bermudas cultural diversity. He was particularly proud of Light Air and Colour, an exhibition of American Impressionist Paintings; Made in Bermuda; A Window on the Azores; and Living with Art, an exhibition of African-American Art. As chairman of the BNG's Collections Committee, he helped build the BNG's Permanent Collection and was instrumental in stewarding major gifts to the BNG, including the John Hinson Young II and Nelga Young Collection in 2006. When the Gallery was first opened in 1992, Mr. White donated several pieces, including an etching by American artist James Whistler and two original 1919 poster designs for the Folies Bergere. On his retirement, he presented the museum with an oil painting from his own collection by Mary Parker West of Hamilton Harbour (1876), one of the earliest known Bermudian landscapes. Outside of the arts, Mr. White was vice-president and then president (1993-1996) of the Bermuda National Trust. He spearheaded a successful $6 million fund-raising campaign to help restore Trust properties in St. Georges and later served on the Trusts National Advisory Board. He authored the Paget edition of the Trust's acclaimed Architectural Heritage series of books, and edited the editions covering Smiths Parish, Hamilton Parish, Sandys and St. Georges. He also served on the Criminal Injuries Compensation Board for 17 years and was a founding appointee to the National Alcohol and Drug Agency. He also served as president of the Bermuda TB, Cancer and Health Association. Twice married and divorced to Americans, Mr. White married Eva LaSalle in 1957 and Sarah Dey in 1972. Mr. White was made a member of the Order of the British Empire (OBE) in 1994 for service to journalism and the community, and received the Patrons Award from the Bermuda Arts Council in 2010 for his contribution to the Bermuda National Gallery. He is survived by former wife Sarah White and daughter Leslie.

2013. November 26. A summit meeting of the Overseas Territories and the UK government will focus on economic growth and job creation, the UK government said yesterday. Premier Craig Cannonier and Senator Michael Fahy, the Minister for Home Affairs, yesterday arrived in London for the meeting, held by Overseas Territories Minister Mark Simmonds. And the meeting, which starts today, will be followed for the first time by a business forum designed to promote investment opportunities in the UK's Overseas Territories. Mr Simmonds said: "Jobs and economic growth are fundamental to building safe, successful and sustainable territories." The year's joint ministerial council will focus on agreeing practical steps for the UK and Overseas Territories to work together to achieve that goal. According to the UK Foreign Office, the meeting will concentrate on economic diversification, attracting investment, vocational education and jobs. The FCO added: "There are also likely to be discussions on the environment, tax and transparency and the relationship between the Territories and the European Union." Follow-up business forum, to be held on Thursday, would bring together, for the first time, all the Overseas Territories with UK businesses and investors of all sizes to explore the numerous exciting investment opportunities available to the Territories. Mr Simmonds added: "I am delighted to welcome back the leaders from the Overseas Territories to the second joint ministerial council. We have achieved much by working in partnership towards our shared vision for the Territories as vibrant and flourishing communities in line with our 2012 white paper on the Territories." The council meeting will also discuss health, the environment, visas and passports and criminal justice issues.

2013. November 26. Bermuda's international business pumped an estimated $1.47 billion into the islands economy last year, a survey released today said. The largest single contribution was salaries, with exempt companies paying staff a total of $433 million last year pouring $47 million into Government coffers through payroll tax. Another $10 million was paid in other taxes, while rents and services amounted to more than $50 million and charities got $8 million in donations and sponsorships. A further $7.4 million was spent on entertainment in Bermuda by international business. But Association of Bermuda International Companies (ABIC) president George Hutchings said that overall spending by international business had dropped in recent years, with only training expenditure increasing. He said: "The good news is that on a per company basis the financial contribution of international business to the Bermuda economy is holding, but with some changes. Overall, payroll tax, fees, rents, etc, are all down, only training expenditure is up. Bermudians are progressing in managerial positions with a significantly greater proportion of senior management and middle management positions being held by non-work permit holders." The survey also showed there were more women than men in the international business workforce but that men outnumbered women in managerial positions. Mr Hutchings added that the survey, compared to a previous one in 2004, showed that there had been a steady increase in the number of black people in working in the international sector up from 31 per cent to 35 per cent. The survey also showed that more than 50 percent of black non-work permit employees who were promoted moved into management positions. The findings report said: "This increase continues a trend that was noticeable in previous surveys. There was also evidence of an increase in the number of black work permit holders. However, a consistent reduction in work permit recruitment has had an impact on the wider economy. The profile of international business had continued to change, with firms once exclusively based or headquartered on the Island now having offices in other jurisdictions and able to choose where to place different operations. There has been significant expansion of company operations elsewhere, with US, UK/Ireland and Europe the most favoured. The survey confirmed that more work permit holders had left international business than had joined in the last five years, with a total of 64 percent of employees in the sector now being Bermudian, spouses of Bermudians or Permanent Resident Certificate holders." A total of 40 (35 percent) of the 115 ABIC members responded to the survey, while 51 (48 percent) of ABIC CEOs responded to a separate questionnaire on their opinions and outlook.

2013. November 27.  The Bermuda Post Office (BPO) has advised the public to bring an invoice when collecting goods through the post office. As the BPO acts as an agent for HM Customs, anyone who has received a notification from the post office indicating “value required” must produce the actual invoice when collecting a package so the required duty can be paid. If an invoice is unavailable, a vendor or manufacturer-estimated retail value for the item or similar product must be provided. This can be obtained from the internet and presented in lieu of the actual invoice. Duty is not required for gifts valued at under $30 when sent from overseas. For more information on services provided by the Bermuda Post Office please visit www.bpo.bm or visit the Bermuda Post Office Facebook page.

2013. November 28.  The end is nigh for Bermudas legacy horizontal bank notes. Bermuda Monetary Authority (BMA) reminded the public today that the December 31 deadline is fast approaching. After that cut-off point, the old notes will no longer be considered legal tender but can be exchanged for new notes at banks and credit unions. The BMA cannot exchange notes and they cannot be switched at stores or other cash businesses. The switch to new banknotes was announced in June and the BMA's director of operations, Shanna Lespere, said the legacy notes had been gradually culled from circulation since, in tandem with local banks. Although the legacy notes will only be legal tender for a matter of weeks, the public has ten years to exchange them.

2013. November 28.  The cost of health and dental care helped push the cost of basic goods and services up 1.6 percent year on year, the latest Government statistics revealed today. A major factor was said to be a 9.8 percent rise in health insurance premiums and a nine percent hike in dental costs, while the total cost of health and personal care rose by 7.6 percent. The cost of food and education and recreation and reading also increased between October 2012 and last month by 5.6 percent and 4.8 percent respectively. But the rate of inflation dropped by 0,2 between September and October this year, settling at 1.6 percent higher than the US or Canada, but a percentage point lower than the UK. The news means that a basket of goods and services that cost $100 in April 2006 now costs $122.80. The Consumer Price Index (CPI) month to month figures show that the transport and vehicle sector rose 0.5 percent in October, following a 2.2 percent increase the previous month. The CPI report said the increase was largely attributed to a 1.1 percent hike in the average cost of premium fuel. In addition, air fares increased by 2.9 percent. The clothing and footwear sector jumped one percent between September and October but the average cost of accessories like jewellery and handbags went up by 4.5 percent. The cost of rent went up 0.1 percent in October, following no change the previous month, with the same increase being recorded for the rent controlled sector. Food prices in grocery stores rose fell by 0.1 percent between September and October, compared to a 0.2 percent rise between August and September. The price of tobacco and liquor remained unchanged month on month. But the cost of fuel and power fell slightly over the same period, down 0.8 percent, which followed the 0.8 percent increase logged in September.

2013. November 29.  Bermuda supports up to 100,000 jobs in the UK and trade between the two nations averages about $1.4 billon a year, according to a secret report seen by The Royal Gazette. The report given to the UK Foreign Office in the run-up to the Overseas Territories summit this week outlines the trade links between Bermuda and Britain. A report on the Island on the Foreign Office website, which used parts of the report, said: Bermudas expertise and capacity contributes directly to the UK economy from generating over 100,000 jobs on the UK mainland, more UK jobs that, for instance, of Japanese industrial investment in the country. The full report prepared for the Bermuda Ministry of Finance by a Washington-based consultancy said there were 52,500 posts backed by foreign direct investment from Bermuda, while 17,500 jobs were due to the export of services to the Island and between 10-22,000 jobs were supported from goods exported from the UK to Bermuda. The report lists the major economic sector as shipping and transport, business services and, above all, insurance and reinsurance. It added: "Most of the trade is due to an expanding relationship in insurance services trade between the UK and Bermuda that began to show up clearly in data by 2005 but had begun with investments made earlier that decade. Even during the global financial meltdown trade links remained strong, and remained at around the 1 billion ($1.63 billion) mark. Bermuda's relative economic significance with the United Kingdom compared to other developed and much larger economies grew enormously since 2000 and remained at a high level throughout the crisis." Overall, Bermuda ranks in the top 20 of the most important export markets for the United Kingdom. In fact, Bermuda accounted for 16-25 percent of the United Kingdoms cross border trade in insurance services for the last ten years and 20 percent of UK reinsurance services imports. The report said that two-way trade and investment flows between the two countries averaged about $1.4 billion between 2001 and 2011. It added: "The bulk of the UK/Bermuda economic relationship is in the export and import of financial and non-financial services including equally both cross-border trade and services delivered through UK subsidiaries of companies headquartered in Bermuda." In 2011, UK cross-border service imports to Bermuda amounted to GBP338 million ($552 million) and UK imports from Bermuda were GBP680 million ($1.1 billion). The report said that Britain exports on average around $81.7 million in manufactured goods to the Island every year, It added: "The chief UK exports are transportation equipment principally yachts, commercial ships and airplanes made or finished in the UK or Europe." Bermuda's partnership with the UK in trade in ships and jets is long-standing and based on shared commitment to regulation of air and maritime safety and strong environmental standards. The report also said that Bermudas financial services industry attracted UK investors partly due to its close links to Britain and similar legal system. It added: "First, Bermuda provides a global investment platform that attracts international capital. Second, investors from around the world view Bermuda as well regulated, primarily because as a territory of the United Kingdom, Bermuda has close legal and administrative affinity with the UK regulatory system." Financial stakeholders have recourse to UK courts and the UK Financial Services Agency has strong relations to the Bermuda Monetary Authority. Third, Bermuda's tax system is attractive to most global investors. Bermuda does not tax worldwide income and does not impose a personal or corporate tax. The upshot of this large-scale international economic activity of Bermuda as a financial entrepot benefits the United Kingdom as well as other jurisdictions. Minister of Finance Bob Richards, who was part of the delegation at the London Overseas Territories meeting, was yesterday en route back to the Island and not available for comment.

2013. December 2. Government is considering rules which would require pre-certification before medical diagnostic procedures are performed in an effort to reduce unnecessary tests. Health Minister Patricia Gordon-Pamplin said Government was currently in the consultation phase and stressed that only elective procedures would require certification, but Shadow Health Minister Zane DeSilva said such an initiative would amount to death by delay. The pre-certification is a move by the Minister of Health and the OBA Government to introduce management mechanisms for diagnostic testing and who knows how many tests, whether its X-rays, whether its ultrasounds. MRIs, CT scans. "That has yet to be seen," the Progressive Labour Party MP said. "Word is, and it's good word, is that if this legislation is passed, what it will mean is before any test can take place that your doctor may prescribe you, you have to get permission from someone else. Diagnostic tests account for only a small fraction of health costs and that Government should instead aim for bigger targets such as health insurance. With diagnostic imaging not even being two percent of the healthcare cost in this country, why are you going this way? he asked. It puts everybody at risk. Everybody. Bermudians are at risk." He also alleged that Cabinet had overruled recommendations of the Bermuda Hospitals Board and Health Council, suggestions that Ms Gordon-Pamplin said were patent nonsense. "The Health Council was tasked by me to advise me what does pre-certification look like and what do guidelines look like.  When the Health Council brought me the report regarding pre-certification versus guidelines, I weighed up the pros and cons of each and chose the situation regarding pre-certification for approval. The Cabinet overruled nothing. The Cabinet supported me. I put a position forward and the position was accepted. Government was currently engaged in the consultative process, saying: I don't make decisions or look at information in isolation. I consult with people who are in the field, hence the consultation process. I'm meeting with the doctors so I can hear first hand. There are some decisions that are too big to make in isolation and I don't want to go on that path." Ms Gordon Pamplin said, based on the information she received, that pre-certification would not apply to emergency procedures, only elective diagnostic tests, and said the system would be minimally restrictive and minimally time consuming. She also said that she was not ignoring health insurance as a major factor in the cost of healthcare on the Island, saying: "There is no stone that will be left unturned. When I hear that certain doctors are being incentivised when diagnostic testing is done, and these are comments that are coming from the staff that work with certain doctors, that gives me grave cause for concern because we have significant healthcare costs in this country, and we have to get a handle on it." PLP MP Lovitta Foggo expressed some concern that adding a certification process could increase the cost of healthcare, along with the potential impact on doctor-patient confidentiality.

2013. December 2. Two-thirds of voters want to cut Cabinet from 13 to eight Ministers, according to a new poll. Sixty-seven percent of people want Government to take up the SAGE Commissions recommendation to reduce Cabinet by five, with 26 percent preferring the current size. The survey by Mindmaps shows support for a smaller Cabinet is strongest among whites, with 75 percent voting for a reduction, compared with 64 percent of blacks. Its estimated a smaller Cabinet of eight Ministers including the Premier would save taxpayers $750,000 in salaries and benefits. However, people are more divided over the SAGE Commissions proposal to reduce the size of the Civil Service. Fifty-one percent agree with that recommendation, with 42 percent disagreeing and the rest unsure. Whites are more supportive of cutting the Civil Service, with 70 percent in favour and 24 percent against. Among blacks, 42 percent are in favour and 51 percent against. A breakdown by age shows the older generation is more welcoming of a Civil Service reduction. Among over 65s, 65 percent want cuts, compared with 41 percent of the 18 to 34 age group. Cutting both Cabinet and the Civil Service were key recommendations in the 140-page SAGE report, published on November 15 in an attempt to maximise efficiency and get to grips with Bermudas debt crisis. The document claimed the Civil Service suffered from weak leadership, and called for poor performers to be fired. It suggested early retirement schemes and pay cuts, particularly targeting the highest-paid, and farming out many areas of Government to the private sector or turning them into quangos. However, some workers have reacted angrily to the suggestion of Civil Service reductions, with a number of concerns raised at a town-hall meeting called by the Progressive Labour Party last week. Finance Minister Bob Richards, who commissioned the report, has said Government will hold a debate on its recommendations in Parliament. Mindmaps survey of 404 registered voters took place between November 17 and 24, and has a margin of error of 4.9 percent.

2013. December 2. Amendments to firearms legislation aimed at decreasing the number of feral chickens on the Island have been approved in the House of Assembly.  The Firearms Amendment No 2 Act 2013, tabled by Public Safety Minister Michael Dunkley on Friday, allows the Commissioner of Police to issue year-long licenses for firearms to be used for pest control specifically the targeting of chickens and pigeons. Under existing legislation, the Commissioner can only issue 60-day licenses. Recreational gardeners and commercial gardeners can all attest to the havoc caused by the growing number of free-roaming wild chickens and pigeons, he said. The regulated use of air rifles has proven critical in managing these pests, which are very difficult to control under any other means. The House of Assembly heard the legislation does not limit the number of licenses that can be issued, but currently there are only five licence holders. Environment Minister Sylvan Richards said the issue of feral chickens is a vexing one, with an estimated 20,000 to 30,000 chickens running loose across the Island. He said the Ministry received between four and six online requests for cullings and, since August of 2011, a total of 12,137 chickens have been killed. Progressive Labour Party MP Rolfe Commissiong, however, said the Island might be fighting a losing battle, noting an outdoor press conference held by PLP MP Michael Weeks on the issue was promptly interrupted by a group feral chickens. "The war on drugs have not been successful, and I doubt that the war against chickens will be either. I just hope that your political career is not contingent on you winning this war, because we would hate to lose you." Other MPs agreed that the feral chicken population on the Island was increasingly problematic, but Independent MP Terry Lister said the legislation would not do anything to resolve the issue, only making it more convenient for those licensed. "We need something to be done about the feral chickens, and that's not this bill," he said. Shadow Health Minister Zane DeSilva suggested paying per head for the chickens, while Opposition Leader Marc Bean suggested incorporating the birds into the Islands agricultural strategy. Progressive Labour Party MP Dennis Lister said Government must also make strides to tackle the Islands feral cat population, saying: "The cat problem is getting just as bad as the chicken problem, and worse in some areas. I think we should use the same approach on the cats, and not just the chickens and pigeons." OBA MP Suzann Holshouser, however, said the feral cat problem has been caused because, unlike dogs, there are very few controls on the ownership of the animals, saying: "Right now people feel quite happy just letting their cats go and having organisations like The Bermuda Feline Assistance Bureau deal with it." Mr Dunkley closed the debate by saying that the MPs suggestions would be taken on board.

2013. December 4. The book "A Colony at War. Bermuda in the global fight against fascism, 1939-1945" by Jonathan Land Evans, was published abroad. 450 pages. A wide-ranging study of the small but importantly-situated British colony of Bermuda during the Second World War. Includes references to and descriptions of the Battle of the Atlantic fought by the Royal Navy, Royal Canadian Navy and US Navy and their Bermuda bases, the creation of the US naval and military bases, the important Imperial Censorship station, and numerous practical issues including a union confrontation that faced British, Bermudian and American officials in this British Atlantic colony (the oldest, smallest but most affluent of the British Overseas Territories) as they sought to survive and win the war against Hitler's Germany.

2013. December 9. The updated code of conduct for Civil Servants has been released as part of the SAGE Commission’s major report into Government efficiency. The code — amended last year under former Premier Paula Cox — refocused on “values and behaviors that underpin good governance and ethical and accountable public administration” rather than conditions of employment. The document tells Civil Servants: “You should be aware that breaches of Financial Instructions are subject to disciplinary action including possible surcharge (a requirement to re-pay any losses to government from your own resources) and/or dismissal.” And it adds some breaches of Financial Instructions could be classed as criminal offences. The code warns Civil Servants that Ministers should not ask members of the public service to behave in “illegal, improper, immoral or unethical” ways.” It added that Ministers should not expect Civil Servants to follow instructions that breaches the Constitution or professional codes or rules and legislation on good government. The code also tells Civil Servants that they should not “misuse their official position, for example by using information acquired in the course of your official duties to further your private interests or those of others, especially family friends and associates.” And it warns that Civil Servants should not accept gifts which could be seen to compromise their integrity or disclose official information without permission. The code added: “You should exercise particular care to avoid using public money for your personal purposes and moreover to avoid the perception that you are doing so. Government credit cards need to be handled with particular sensitivity, especially when used in connection with official travel, on order to avoid the impression of unwarranted extravagance. You must serve the Government, whatever its political persuasion, to the best of your ability in a way which maintains political impartiality and is in line with the requirements of the code, no matter what your own political beliefs are.” And it warns against ignoring any restrictions placed on political activity outside work and that “public servants should not accept invitations to conferences or meetings convened by, or under the aegis of, party political organisations.” But it added that attendance of officials at party events when required by a Minister on Ministry business was excepted. The code also lays out a complaints procedure if Civil Servants believe they have been asked to break the rules. The document said that managers should be informed or reported to the Assistant Cabinet Secretary. If a complaint is not resolved, public sector staff can appeal to the Secretary of the Cabinet. And the code said that “whistle-blowing” legislation had been passed to protect the public service if they raise problems in the workplace covered by the code or by good governance legislation.

2013. December 9. The Island's top spectator event of the year, the Christmas Boat Parade, finished with a bang over the weekend, treating 20,000 viewers to a stunning fireworks display. A casino-themed boat decked out with slot machines, glowing dice and a Vegas-style sign advertising Hamilton, took the overall top prize. The boat, dubbed Warlock, was a labour of love by staff from Crisson Construction and Bermuda Blueprinting Ltd. Worker bee Valerie Crisson said it took a huge collaborative effort to wire up the floating gambling den. "We worked together, but the Blueprinting guys came up with the theme.  A warm, still night made for ideal conditions. We couldn't have had better weather." Some 50 boats checked in for the parade, currently held biennially. "As always, it was amazing how creative they got," organizer Norma Thomson said. "People just go way out in decorating their boats." The parade struggles to keep a good number of entrants, but Front Street and Harbour Road teemed with spectators. And, at 8.30pm, pyrotechnics launched from Whites Island lit up the skies. Meanwhile, 19 categories ensured that everybody won something for taking part. In top place for Best Commercial boat was Playmate, entered by Playmate Fishing Charters. Spirit of Bermuda won Best Sailboat, and Bermuda Pest Control's Blue Heron was the top corporate entry. The Caledonian Society of Bermuda won Best Non-profit with Naughtiness, while Bill Pitman's Sylvester took Best Powerboat under 25ft and James Boyce's Dutch Courage won the over-25 category. Best Bermuda Themed boat was Full Hott Scott, entered by Corey Masters-Brown; Jamie Chaters Megabucks won Best Community Message. Topping Most Original was Edwin Whitfield's Andrea Christine, while Friends of Black Seal got Most Humorous with Cedar; the Chewstick Foundation's Halcyon won Best Traditional Christmas theme. Twisted Tini entered by Martin Harvey took Best Contemporary. Best Crew Costumes went to Carlos Falcao's Lucky Charms, and William Knight White's Gabriella won Most Confusing. Fairmont Southampton Turtle Hill Golf Club won Best Use of Lights with Friendship, and Best Music went to Anamaria Worswick's Unholey. In the Pink Category, Peter Stableford's Just Sayin came in first, while Justin Williams's Justified was deemed Most Fun to be Aboard. The MarketPlace barge took the Children's Choice category. "We're going to redo some of the categories and ask people for suggestions for the next one," Ms Thomson said. "We'll have two years to think about it."

2013 Christmas Boat Parade

Christmas Boat Parade

2013. December 11. Premier Craig Cannonier is expected to announce his first Cabinet reshuffle when he holds a press conference this morning. Officials last night remained tight-lipped about any potential shake-up, and refused to divulge details of the announcement the Premier will make at the Cabinet Building this morning. But Government sources said that a reshuffle was both inevitable, and imminent. Immediately following its election victory last December, the One Bermuda Alliance pledged to cut public spending, and followed up on that promise by implementing a pay cut for all Cabinet Ministers. And earlier this year, Mr Cannonier said that a reduction in the size of Cabinet was almost a fait accompli. "I won't be announcing that anytime soon right now but we still are looking at how we can cut back and I'm sure that that will happen," he told The Royal Gazette in July. Last month the SAGE Commission recommended that the number of Ministers be slashed from 13 to eight. That proposal received widespread public support according to a poll in The Royal Gazette last week, with more than two thirds of voters approving the cost-saving measure.

2013. December 11. Premier Craig Cannonier has unveiled a new Cabinet line-up that reduces the number of Government Ministers from 13 to ten. At a press conference this morning, Mr Cannonier said the changes were part of a process toward better governing and greater efficiency and later added that they will save the taxpayer around $240,000. The changes take place with immediate effect. Demoted in the shuffle are Education Minister Nalton Brangman, who will now be junior Minister of Tourism in the Senate. Grant Gibbons will take over Education and also keep the Economic Development portfolio. Also out of the Cabinet is Leah Scott, the former Minister Without Portfolio. She will become the new junior Minister of Education in the House of Assembly. And Sylvan Richards has been dropped as Environment Minister. He will be the new junior Minister of Home Affairs in the lower house. In one other move, Trevor Moniz and Patricia Gordon Pamplin have traded places, with Ms Gordon-Pamplin now Minister for Public Works and Mr Moniz being handed Health. In addition, Mr Moniz will also take on the Environment Ministry. At this morning's press conference the Premier said the changes were not a fly by night decision but had been under consideration for many months with a view to producing a more efficient Government. "As Premier, it is my responsibility to lead by example and make some tough decisions from the top down.  Today, I will announce a decision that will produce a leaner, more effective and efficient Cabinet. The changes reflect recommendations made by the UK National School of Government from 2011, my own observations over the past twelve months and indeed it will fulfill part of our platform promise. We are making the tough decisions that the previous administration would not make. Today, this OBA government is fulfilling our promise. These Cabinet changes are part of a process toward better governing and greater efficiency. We've got a very busy legislative year ahead of us. We started the process of shared sacrifice and change earlier in the year when my Cabinet Ministers all took a ten percent pay cut, effectively saving the Government hundreds of thousands of dollars. Today, I would like to announce further changes for the Cabinet that will reduce the Cabinet from 13 to 10 and will take place with immediate effect and deliver further savings. The three Ministers dropped from the Cabinet were team players. I'm proud to say that their commitment to the government and the people of Bermuda remains unwavering and intact.  I welcome their continued assistance and representation in their new roles. Dr Gibbons had been given the Education portfolio so that the Ministry would have a stronger presence in the House of Assembly. Former Minister Nalton Brangman sits in the Senate. It is important to understand that the process of identifying efficiencies will be an ongoing initiative for this Government. I want people to understand that we need to get better, that we need to face up to our challenges and make the required changes. Each one of us has to also commit to making sure we do all we can to make Bermuda succeed, because the challenges confronting Bermuda are serious and real, and there should be no doubt about that." Later in the House of Assembly, Mr Cannonier told MPs said the shuffle demonstrated Governments prudent management of the public purse. Progressive Labour Party MP Lawrence Scott asked Mr Cannonier whether it was by design that all the Ministers removed were never part of the United Bermuda Party but Speaker of the House Randolph Horton dismissed the question as ridiculous. Questioned by PLP MP Rolfe Commissiong, Mr Cannonier said the decision predated recommendations by the Spending and Government Efficiency (SAGE) Commission, which last month proposed that Cabinet be reduced to just eight Ministers. The Premier said he did not foresee ever having less than ten Ministers in order to maintain an effective civil service.

2013. December 13. Bermuda's first female Deputy Governor was sworn in at a ceremony at Government House this morning. A career diplomat, Mrs. Ginny Ferson has previously worked in Mauritius, Luxembourg, South Korea and Pakistan during her more-than 25 years with the Diplomatic Service. She replaces David Arkley. A mother of two, Mrs. Ferson served as Deputy Governor of Pitcairn while she was simultaneously First Secretary at the British High Commission in Wellington, New Zealand and then British Consul-General in Auckland, New Zealand.

2013. December 13. Tax loopholes in the EU which led to Bermuda coming under fire as a tax haven are to be closed. The EU has moved to end the practice of firms moving money around member states to avoid tax a method used by internet giant Google, with billions ending up in its subsidiary in Bermuda, where there is no corporate tax. Algirdas Semeta, the EU commissioner for taxation, said: "EU tax policy is heavily focused on creating a better environment for businesses in the EU. This means breaking down tax barriers and tackling cross-border problems such as double taxation. But when our rules are abused to avoid paying any tax at all, then we need to adjust them. The latest proposals, to be introduced at the end of this month, would ensure that the spirit, as well as the letter, of our law is respected. As such, it will ensure greater revenues for national budgets and fairer competition for our businesses." Finance Minister Bob Richards was not available for comment last night. But at a summit meeting of the Overseas Territories and the UK in London earlier this year, he said that if other countries had tax loopholes, it was up to them to plug them, not Bermuda. Economics expert Peter Everson said it was important for Bermuda to be able to combat attacks on its standing as an offshore jurisdiction and that Bermuda gained little from tax arrangements like Google's. What other people say is out of our control they will say whatever they want to say and on the agenda of items for Bermuda next year is to find a unified voice to respond to this." The new rules amend the EUs Parent-Subsidiary Directive, originally set up to prevent companies based in different EU countries, but owned by the same parent organization, from being taxed twice on the same income. An EU statement said: "However, certain companies have exploited provisions in the directive and mismatches between national tax rules to avoid being taxed in any member state at all double non-taxation. The new rules will update the directives anti-abuse provision and would insist all EU states to adopt a common anti-abuse rule. This will allow them to ignore artificial arrangements used for tax avoidance purposes and ensure taxation takes place on the basis of real economic substance. The proposals would also ensure that specific tax planning arrangements like hybrid loan arrangements would not benefit from tax exemptions." At present, the Parent-Subsidiary Directive obliges EU states to give parent companies a tax exemption on dividends they get from subsidiaries in other member states. But in some EU states where subsidiaries are based classify these types of payments as tax-deductible debt repayment with the result that payments from the subsidiary to the parent are not taxed at all. The EU statement said: "Under the proposal, if a hybrid loan payment is tax deductible in the subsidiaries member state, then it must be taxed by the member state where the parent company is established. This will stop cross-border companies from planning their intra-group payments to enjoy double non-taxation." The move was sparked by fury in recession-hit Europe after it was revealed that Google minimizes tax in the UK where it pays $6 million a year on a turnover of $395 million by using its UK operation as an agent of its Irish subsidiary. The proceeds of sales made in the UK go to Ireland and commission of around 10 percent is paid back to the UK operation, which is taxable once costs have been deducted. Google Ireland then channels much of the money it makes to its Bermudian operation as a licensing fee, ensuring a large proportion of its cash ends up on the island. The process is legal under current UK tax laws. A Google spokesman said earlier this year: "We make a substantial contribution to the UK economy through local, payroll and corporate taxes. We also employ over a thousand people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK." Other firms like coffee chain Starbucks and online store Amazon also came under fire for as using tactics which are legal but branded aggressive and immoral to transfer profits across borders to minimise taxation. The EU statement said: "The issue of corporate tax avoidance is very high in the political agenda of many EU and non-EU countries and the need for action to combat this was highlighted at recent G20 and G8 meetings."

2013. December 14. The Pink Beach Club has yet to be sold, despite Government concessions approved earlier this year to support the property’s sale. However, Tourism Minister Shawn Crockwell said the Bank of Butterfield was in the “advanced stages” of negotiation with another party for the sale of the property. In July, Government passed $5.6 million in tax concessions to support the sale of the property to PBC Holding Ltd for $12.5 million. The company had said it planned to convert the Smith’s property into a five-star resort with more than 200 employees by the end of 2015. But responding to questions by Shadow Tourism Minister Wayne Furbert, Mr Crockwell told the House of Assembly that despite the concessions PBC Holding Ltd had not signed an agreement with the bank to purchase the property. However, he added: “Our ministry has been informed by the Bank that they are in the advanced stages of negotiations with another developer for the purchase of the Pink Beach Club.” Asked about the Government’s role in carrying out due diligence prior to putting forward concession orders, Mr Crockwell said: “The bank chooses the preferred developer. We were advised that their preferred developer was the developer pursuant to the development order. We were asked in negotiations to support that development with a concession order. This Government will do all it can to facilitate hotel development in this country. Caveats are contained throughout the hotel concession order. No concessions are provided until certain conditions are met, particularly the commencement of development and the like.”

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400th anniversary of establishment of first Government in Bermuda.

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