Staunch Limited, one of two preferred bidders on the Affordable Housing Initiative redevelopment project for the site off Eastern Avenue, might be employing illegal workers, the Auditor General stated in his recently released Special Report.
Chief Immigration Officer Franz Manderson confirmed Tuesday his department was conducting an investigation into the matter.
‘All I can say is we are involved in an active investigation about this and there is a lot more to be done,’ he said.
If convicted, both the employer of an illegal employee and the employee could face penalties of up to $15,000 and a year imprisonment.
However, former Community Services Minister Frank McField asserts the workers are not illegal because they are covered by a decision made in Cabinet.
The Special Report, based on the Auditor General Dan Duguay’s forensic audit of the National Housing and Community Development Trust, stated that six of Staunch’s listed employees were visitors with no right to work in the country.
Staunch listed others as government employees.
‘…Our review of 15 current employees of Staunch Limited indicated that nine of them were registered as government employees,’ the report stated.
The investigation by the Auditor General concluded, based on variety of records, the people in question are not government employees.
The Auditor General reported on an arrangement made with another AHI contractor.
‘When Vetromeccaniche was awarded the Affordable Housing Initiative (contract) to build 200 homes in 2003, it wished to bring in Cuban labourers to do the work,’ the report stated.
‘However, it did not obtain work permits for these employees. Rather, the Cabinet exempted them from requirements for work permits and informed Immigration of this situation.’
The report states that these employees were registered in the Immigration computer as work permit exempt.
Staunch Limited part owner Dag Egeberg told the Auditor General that his company had used Vetro workers in the early stages of the project to rebuild some of the hurricane damaged AHI homes.
Later, other workers were brought in by Staunch to do work for the NHCDT projects awarded it, the Auditor General stated.
‘However, the Chief Immigration Officer informs me that he has not received any similar exemption to the one issued by the Cabinet for Vetro for Staunch Limited,’ the report states.
Mr. McField disagrees with the Auditor General.
‘The decision made in Cabinet (for the work permit exemption) was for the Affordable Housing Initiative, not just Vetro,’ he said.
Mr. McField likened the work permit exemption situation to one for exemptions in import duties for materials to be used on the AHI project.
Some contractors in Cayman have questioned why Cuban labourers should get these exemptions at all.
It has been suggested that one reason Staunch could bid lower than other Cayman contractors is because it uses inexpensive Cuban labour.
Staunch’s Mr. Egeberg disagreed with that claim during an interview before the Auditor General’s report came out.
‘Our prices are not based on using a Cuban workforce,’ he said. ‘We will use local labour if we can get it.’
Nevertheless, Mr. Egeberg said that Staunch would like to use some Cuban labourers if it needed to.
The cost to do so works out about CI$8 to $9 per hour, very similar to other labourers here, he said.
‘We have to pay US$1,500 per month for them, and we have to supply them with transportation, housing, medical and communications. The transportation includes the cost of getting them here and then once they’re here.’
Of the $1,500, the Cuban worker gets US$700 for himself, with the balance going to the Cuban government, Mr. Egeberg said.
The Cuban worker’s family still gets its regular government stipend while the worker is away, Mr. Egeberg added.
Cubans are sent to work under this system to many different countries, including places in Europe, he added.
‘In Cuba, a construction worker can only make US$20 per month, plus a lot of benefits,’ Mr. Egeberg said. ‘Cubans are fighting to get these positions.’
One advantage to using Cubans labourers, Mr. Egeberg said, is that they do not create an immigration problem.
‘They come here and they leave,’ he said, explaining that under Cuban rules, they only get a six-month contract that is renewable for up to 11 months maximum.’
Chief Immigration Officer Mr. Manderson confirmed that most of the Staunch workers under investigation were Cuban nationals.
Staunch completed part of its contracted work from the NHCDT.
Staunch work was stopped by the Planning Department on two other contracts.
Despite the work stoppage, Mr. Manderson said, to the best of his knowledge, the Cuban labourers were still in the Cayman Islands.