When Koos Sneek was in the opposition, this is what he wrote. The public via Statianews urges Koos Sneek to do what he asked the former government to do. Open the discussion. (picture Statia Diveshop by Natasja Vuik)
(Statianews, September 2011) I am following most of the comments that are being posted through Statia News on the proposed NuStar expansion plan. In particular the latest comments made by Mr. Kenneth Cuvalay and Mr. Tom Morgan did get my attention and I feel the need to give my opinion on a few issues.
Mr. Cuvalay is right when he states that NuStar is a multi-million dolllar company with a responsibility towards its shareholders. It is the responsibility of any business to make money and to be profitable. This responsibility, by the way, the company also has towards its employees who depend on it for their livelihood and for the community in which it is established. And Statia for that matter is not unique. Many cities rely on big companies which have chosen their territory to establish their business and depend on those companies where it comes to their economies and jobs. There is usually quite some competition between cities or states when it comes to attracting investment to their territory. I am certain that also in our region there are islands that envy small Statia for having a company of the size of NuStar and the expansion plans they have.
When I came to live on the island in 1987 there were only 1800 people living on Statia. That number has doubled for the largest part through the presence of the oil terminal. Housing developments in Concordia, Princess and lately in White Hook would not have been there without the presence of the terminal. Most if not all businesses on the island directly or indirectly are benefiting from the presence of the terminal. More than 50% of government revenue comes directly from taxes paid by the terminal.
When I read his article I cannot but notice that the practices Mr. Cuvalay is accusing NuStar of, he himself is using as well such as marginalizing, half truths or incorrect information. This is a pity. I am of the opinion that objective criticism has to be taken into consideration to enable us to make the right decision. It is however unfortunate that, to be able to get a point across, one apparently resorts using similar tactics as what one accuse the other party of. I want to highlight a few of these points.
To elaborate about the price the original owners of the terminal have paid for the land, is of no significance in a discussion about the expansion of the Nustar operations.
Nustar enjoys special tax agreements, that is true. The tax agreements made in the past were between The Netherlands Antilles and the oil terminal. Only at the last agreement signed in 2004 the local government has played a, still, subordinate role. This agreement resulted however in a substantial improvement of revenues for the island. Could the agreement have been better? I may think so, especially if the local government was allowed to have a bigger say and had received the support for this.
The claim that no anchorage fees are paid is not true. Besides other tax incomes, the harbor fees are the largest source of income for the Statia government and almost all revenue comes from anchorage fees paid by vessels that visit the island because of the oil terminal. Also these fees have been raised substantially under the latest tax agreement. Is there room for improvement? I believe so.
The claim made by Mr. Cuvalay that cheap labor is one of the benefits that keeps the terminal here is incorrect. The salaries paid by NuStar are substantially higher than average and are among the highest in the Caribbean. The only islands that can compete with this are Cayman Islands and Aruba.
The absence of unions is another benefit Mr. Cuvalay brings to the table. I believe he underestimates the role of the unions at the terminal and apparently is not aware of their important and decisive role in collective labor agreements for terminal personnel.
I agree with Mr. Cuvalay when he says that NuStar is not going to pack and leave the island in the event the expansion will not be allowed. Although Statia is very important for them, they have as he correctly states many more facilities and therefore also alternate possibilities to invest their moneys. The main loser in my opinion will be the island as we are missing a great opportunity to improve our economy, our infrastructure and the social circumstances of our people.
I disagree that an expansion project will only create economic activities on the short term. It is obvious that the construction itself will create an economic boost for as long as it last. But I also believe that in the long term the economic impact will be substantial. Forty extra direct jobs at the terminal means an additional thirty or forty extra jobs for the subcontractors, extra jobs for the laboratories and other ancillary businesses. More persons will have to visit the island, using hotel rooms, drive rental cars and eat in restaurants. Supermarkets and other shops will see additional revenue and need for extra employment. I can go on and on.
For government, national and local, it will mean more tax revenues and more anchorage fees. The expansion plan will allow to break open the present tax agreement and will pave the way for increased income for the island.
Tom Morgan is right. It is very important for Statia to establish what the island wants to benefit from this expansion on short as well as on long term and what are we prepared to give up for this. It is obvious that a positive decision only makes sense when what we gain is more than what we give up. This however is not always easy to calculate.
The Alaska fund seems a very nice solution for investing the revenues. The question is; does it fit our situation? Alaska most likely could afford to deposit the revenues in a fund and have full benefit somewhere in the future. For Statia this is slightly different. Our government is cash strapped and is in dire need of revenues instantly.
I remain of the opinion that the expansion should go ahead. All positive and negative effects need to be examined and the negative ones need to be mitigated and as much as possible reduced or avoided. Also the location for the expansion as well as the future jetty, a great concern to many of us, deserve serious consideration and research. Feasibility studies and impact studies by capable independent experts need to support the decision making process. There is where I see the very important role the government has to play. And I advise them once more to make sure that they surround them with this kind of support.