Utilities law written without advice of utility companies

A utility pole fire caused power outages in George Town Friday. - PHOTO: KELSEY JUKAM

Legal drafters penning an 82-page law to create a unified regulatory office for Cayman’s utility providers did not solicit opinions from the half-dozen affected companies, instead they only consulted their controlling agencies.

Additionally, it appears that officials at the Ministry of Planning, Lands, Agriculture, Housing and Infrastructure sought little advice from water providers, the privately held Cayman Water Company and government’s Water Authority-Cayman.

The omission left complex questions unresolved regarding WA-C’s position as both regulator and competitor to CWC, although on Wednesday last week, government promised to address lingering uncertainty at the first sitting of the Legislative Assembly in 2017.

In a four-page, Sept. 30 letter to the ministry, CWC CEO and President Rick McTaggart pointed out that he had never been consulted about the URCO law. He underlined half-a-dozen major flaws that rendered the legislation inadequate, he said, and called for it to be withdrawn and rewritten.However, the proposed law left out CWC and the WA-C, nor has governing legislation regarding water providers – The Water (Production and Supply) Law, 2011; The Wastewater Collection and Treatment Law, 2011; and the Water Authority Law – been replaced.The ministry placed the proposed legislation creating the Utility Regulation and Competition Office, before the assembly, which resumed sitting Oct. 4. Affiliated legislation would abolish the Electricity Regulatory Authority, the Information and Communications Technology Authority and the Petroleum Inspectorate, replacing them with a nine-member “URCO” board, to oversee all utilities.

Last week, Cayman’s other utility providers joined Mr. McTaggart, lamenting that they too had not been consulted over the drafting of the bill.

“This is just part of the problem,” Mr. McTaggart said, voicing general concerns. “They did not let us know. It’s almost as though we are not a ‘stakeholder’ in this.

“They did not let us know. It’s almost as though we are not a ‘stakeholder’ in this.”

“We were expecting the bill, yes,” he said, “but we received nothing about it, and this is essential legislation that will govern regulation for years.” He said he first saw the proposed law after its Sept. 12 publication in the weekly Government Gazette.

Less clear was the response of WA-C Director Gelia Frederick-van Genderen, who said “the Water Authority is aware of the [URCO bill] and provided feedback to the Ministry of Planning, Lands, Agriculture, Housing & Infrastructure in early October 2016.”

She declined to elaborate, but drafters completed the legislation well before its Sept. 12 publication.

A spokesperson for Flow, Cayman’s top telecommunications provider, said no one had approached the company.

“We were never consulted,” said Head of Marketing and Sales Support Julie Hutton. “We were sent a copy of the law for our information, but were not asked for our views or feedback on this new legislation.”

A Digicel representative, requesting anonymity, said: “No, we had not been consulted when it was actually drafted. We saw it before it went to the LA, but we were never consulted.”
It appears, however, that the government sought advice from oversight agencies.

Alee Fa’amoe, managing director of telecommunications regulator ICTA, said the ministry had “communicated with the affected regulatory agencies.”

ICTA, he said, had been “invited to participate in the development of the legal framework which ultimately became the URCO Bill,” and the authority had “briefed our licensees at a very high level.”

“I cannot speak to how or if other regulators briefed their licensees,” he said, “but consultation by the ministry goes without saying. We have been working together with the ministry to prepare for the merger for the better part of a year now.”

Duke Munroe, chief petroleum inspector at the Petroleum Inspectorate, was “absolutely” involved, he said, “because it’s an integrated approach.”

“As the existing agency, we would have been [involved], and the ministry is in the driver’s seat,” he said. “When you look at the legislation, it comes on the heels of a comprehensive overhaul. We’d have been surprised at anything else.”

Fuel retailers Sol and Rubis were not approached.

Joel Maes, Rubis managing director, said “no, we have not been consulted,” but quickly added “we had not expected to be. Our governing body is the Petroleum Inspectorate, and we were not involved with the legislation as it was drafted. Mr. Munroe is our focal point and we work with him – and that is fine, so we were not surprised,” he said.

“We were never consulted,” said Head of Marketing and Sales Support Julie Hutton. “We were sent a copy of the law for our information, but were not asked for our views or feedback on this new legislation.”

Alan Neesome, manager for Sol, said “we weren’t consulted on URCO,” but did advise on the Dangerous Substance Handling and Storage Amendment Law, which abolished the Petroleum Inspectorate.

Finally, ERA Managing Director Charles Farrington said the ministry had sought his counsel on the bill, and he had shared that with CUC.

“[The] ministry consulted us fully as the legislation was being developed,” Mr. Farrington said. “We kept CUC [Caribbean Utilities Company] apprised of the timing and assured them that they would get an opportunity to review before the legislation became law.

“They were provided with the drafts as soon as they became public. They have since been able to engage the ministry in dialogue. My understanding is that the engagement has been satisfactory and productive,” he said.

CUC echoed Mr. Farrington’s remarks, saying the company had seen the legislation only after it went to the Legislative Assembly.

“CUC was made aware by the Ministry of PLAHI last year that they intended to create a new, overarching regulatory body which would assume the regulatory functions of the ERA without materially changing CUC’s licenses,” said a company spokesperson, requesting anonymity.

“CUC did not participate in the drafting process, and received the draft legislation when it was sent to the Legislative Assembly,” the person said.

On Oct. 12, Minister Kurt Tibbetts said the companies would have a statutory 21 days to register their opinions after the introduction of the URCO bill, although he did not say how the submissions might affect the law.

“The ministry … believes that in establishing the office and embarking on the program of regulatory reform, the regulatory arrangements should reflect current best international practices, provide for increased transparency and heightened responsiveness to all stakeholders,” Mr. Tibbetts said, acknowledging, however, the lack of dialogue with affected companies.

“The ministry notes the concern about the ‘absence of consultation’ with the industry in the legislative process,” he said. “While it would be reasonable to assert that the consultation did not take place prior to the bills being gazetted, the ministry is using the 21-day period (statutorily provided for consultation) diligently and has considered and responded to all inputs received, of which there have been a few.”

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  1. I think we should ask ourselves the question , why would the politicians do this
    sorts of bills without consulting with all interested parties including the public ? Could it be possible that they wanted to make sure that the MINISTER is in the driver seat at all times . Can you imagine every piece of legislation be done over with the MINISTER in the driver’s seat

    I think that this kind BAD behavior by politicians needs to be addressed seriously because the more they do the worse it would get . This is how corruption explode and stay in control of the MINISTER .

    DO we ever want a minister with all the power ? Look at what’s happening in Haiti with the people there , that is how the ministers and politicians helps them .

  2. Several modern countries have centralized utility regulators or Fair Trading Boards, so nothing new here. It appears from the comments that the Ministry consulted with multiple existing regulators in compiling the various existing regulations under one central authority. None of the private owners have said that they object to the provisions of the new Law, which in my view is the real test that ought to be applied.

    In any event of all the existing regulators currently report to the Minister don’t they? What makes a centralized authority so different?