Liquor Law needs adjusting

I read with interest in the local press recent steps to revise the Liquor License Law.

The deficiencies that exist in the current Liquor Licensing regime have raised concerns, which I think will be of interest to all concerned and are issues that should be a part of any long term changes that are to affect the laws. With my involvement in the industry for 23 years I off the following recommendations.

The minimum number of members who are permitted to make up a quorum is three.

This could render unfair and biased decisions. I have previously submitted my concerns in writing from as far back as three administrations ago. I had pointed out then that the constitution of the board should be increased from it’s present five) members to seven, with a minimum quorum of five. The Cayman Islands is a small community and so greater care must be taken to minimise the risk that administrative decisions are free from possible bias and conflicts of interest which can arise.

It is of paramount importance to a Liquor Licensing Board that members declare any existing interest in the liquor industry. We already have a present member of the board who is a shareholder in a large liquor retail chain in the islands. There are also other members on the board who have interests in the liquor industry. Whether or not the member actually uses their position on the board to his/her advantage is irrelevant; in my view the perception of bias alone should be strong enough to disqualify the member from a position on the board. Human rights lawyers have long echoed the sentiment in the law that ‘justice must not only be done but be seen to be done’.

Section 13 of the Liquor Licensing Law should be removed and Section 15 amended. In its current form, Section 13 gives the chairman far too much power by allowing him to make unilateral decisions in relation to issues that greatly impact the community. The fact that the law calls for a subsequent ratification by the board will not necessarily prevent a potential abuse of power, especially where a board may feel constrained to disagree with the chairman, in circumstances where he/she is able to wield a certain degree of influence. This is another factor that makes it imperative that the legislators consider increasing board membership. The law already permits the chairman to call emergency sessions of the board outside of annual or quarterly meetings to issue temporary licenses where hardship or inconvenience exists. This provision can be amended to include variations. It must be remembered that although an application to vary a license must be published in the newspaper, the notice is not featured conspicuously when compared to that of an annual or quarterly meeting and therefore there is a risk that fundamental decisions can escape public scrutiny.

I wish to also refer to the fact that at the annual general meeting of the board on 13 September an applicant whose liquor license was opposed was represented in the proceedings by an attorney who practices in the same law firm as one of the sitting board members. I am in no way impugning the integrity of anyone, in fact the issue was raised at that meeting and a decision was taken to proceed because actual bias did not exist, however, what does exist is the inference of bias. Whether this is actual or not is not the point, the perception alone is sufficient to erode confidence in the decisions made by the board and further strengthens the case for an increase in the sitting members of the board so that any potential bias can be overcome. The situation was further compounded by the fact that the board was reduced to three because of the illness of one board member and the relationship of another to an applicant. A larger pool of members to draw from will ensure that fairness can be achieved without frustrating the ability of the board to carry out their functions in the event that an objection is raised.

In order for the Cayman Islands to be considered seriously by the international community as a nation committed to the preservation of basic human rights and transparency in governance, we must ensure that administrative decisions can stand up to international scrutiny. Government must look at the structure of agencies to see that they fulfil their roles with impartiality and fairness. Therefore those who are to sit on the Liquor License Board or indeed any Government board or department must not be permitted to have a direct relationship to inter-related boards or departments which are responsible in some way in the grant of a liquor license. This includes environment and health, customs (bonded warehousing) trade and business licenses etc.

The recent discussions in the press concerning the review of the Liquor Licensing Law needs to be considered carefully so that it does not create too much of a drastic shift in the status quo, which could be detrimental to the economic stability of the island as a whole. We cannot forget that one of the Islands’ mainstays is tourism, which is inextricably connected to the entertainment industry; the Government must therefore strive to strike a balance between the interests of the community while at the same time encouraging investment. The proposal to keep new establishments with liquor licenses at least 1,500 feet away from churches, schools and public beaches should not be applied to all categories of liquor licenses. Duty free package licenses are a case in point where consumption of liquor does not take place on the premises since liquor products are delivered from an off-site bonded warehouse for export. Consider also restaurants, which have licenses where no live music is allowed and only light background music is permitted. It would not be in the best interests of the community that they should be restricted by the new law since there is no reason why they could not co-exist harmoniously within the proximity of churches.

The policy of the board to impose restrictions on persons that wish to sell their licenses is not supported by the law. After all, we do not live in a communist state. Once a person goes through the proper channels to have his license transferred and satisfies the requirements under the law, what possible purpose can be served by restricting them from selling it? A case in point is Key West, Florida where the selling and transfer of liquor licenses is accepted practice especially since no new liquor licenses are granted because the area is adequately served.

In closing it needs to be stated that there is only one Liquor Licensing inspector to oversee approximately 350 liquor licenses. This is obviously unworkable. It is therefore, an ideal time for the law to be reviewed to increase the number of inspectors so that the administrative framework can have a fighting chance to work far more efficiently than it has done in the past.

The business community that has interest in the liquor industry, as well as all other stakeholders should be invited by Government to make recommendations so that the revisions to the law will benefit the whole Cayman community. The Chamber of Commerce that has numerous members in the industry should also be involved.

Robert Hamaty

CEO & President

Tortuga Rum Company Limited

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