West Indies Oil Company (WIOC); The Genesis of Economic Plunder

Part 1 

West Indies Oil Company (WIOC): The Genesis of Economic Plunder

By Kwame Nkosi Romeo

Great numbers are restless

Many bitterly

Some have no work, brother, and some are hungry

Some of us are hanging on by the very skin of we teeth

Is we to be blamed for it

- Cry for Change by King Short Short

The Greek philosopher Plato linked income tax avoidance to the political corruption of democracy based on greed and selfishness, which are typically the ethos of the Antigua Labour Party (ALP) government:

"Where there is an income tax, the just man will pay more and the unjust less on the same amount of income." 

Such evil policy continues to exploit the black population, not only in Africa but in the Caribbean, led by corrupt black leaders. For example, about a decade ago, Action Aid UK exposed Associated Britsh Foods Group (ABF) tax avoidance in Zambia. ABF, a significant supplier of sugar in Zambia, ".....generated profits of $123 million but paid "virtually no corporate tax in Zambia."

In conjunction, millions moved to tax havens along with a $47.6 million 'management fee' from Britsh Food Group's Irish subsidiary. (Sweet Nothings -The human cost of a British sugar giant avoiding taxes in Southern Africa- ActionAid)

Justifiably, Chris Jordan, a tax specialist with Action Aid, cited another example. That Zambia trader Caroline Muchanga, who lives next to the sugar plantation, had paid more corporation tax in some years than the giant company, while her children go to bed hungry at night. The prevalence of undernourishment is a regular occurrence according to a UN article, Closing Africa's wealth gap: ".... 10 of the world's 19 most unequal countries are in sub-Saharan Africa".

Additionally, the United Nations Economic Commission for Africa (UNECA) calls attention to the crisis of Africa's underdevelopment, linking it to the losses of $100 billion in tax evasion annually, the low tax to GDP, and political business collusion. 

Similarly, the tradition of the ALP connects to the West Indies Oil Company (WIOC) practice of empowering the few. WIOC does not pay any meaningful taxes but enjoys the privileges of the perpetual concession granted by the ALP since 1961. There was a general public distrust of the arrangement; moreover, the misuse of public office for private gain was blatant, in addition to the undeniable corruption when Bruce Rappaport acquired WIOC for $600,000 instead of the US$6,600,000 million value. 

This ripoff of public ownership in 1980 and ALP exploitation of Antigua and Barbuda resources continued after the country became an independent nation on November 1, 1981. ALP politicians exchanged national property for a kickback, and Deputy Prime Minister Lester Bird assured the crooked outcome while the country became pauperized.

Except for the Progressive Labour Movement (PLM) government elected from February 11, 1971, to February 18, 1976, no other Premier nor Prime Minister sought to renegotiate the odious deal signed by the ALP in March 1961. According to the Wikileaks Cable on June 3, 1975, Premier George H. Walter insisted on restructuring the concession agreement to include a Throughput Tax and other payments on petroleum products:

"....Walter has repeatedly pressured WIO to renegotiate the concession agreement in 1974..." 

The ALP undermines the Walter progressive tax initiative in favor of WIOC and against the public interest. ALP was elected again in 1976, and their plan to continuously plunder the public treasury was unchanged until their election loss in 2004. Throughout ALP's 28 years of ruthless tenure was the looming specter of WIOC and corruption. This ghost of crime soared with the rise of Lester Bird from Deputy Prime Minister to Prime Minister in 1994!

The misdeed was apparent; Deputy Prime Minister Lester Bird ignored Finance Minister Molwyn Joseph's evidence-based assertion in 1993 of Rappaport withholding more than US$50 million in taxes between 1983-1993, robbing the treasury of much-needed revenue. 

1995 - 2002 revealed dark secrets about Antigua's power generation. Antigua megawatt (MW) 418.8 and Gigawatt hours (GWh) 1,587.8 usage amounted to 3,836.1 m barrels of oil compared to St. Lucia MW 448.2 and GWh 1,958.1 utilizing 2,638.5 m barrels. Antigua used 1,197.6 m or 31.22% more barrels of oil for less megawatt (MW) and GWh capacity than St.Lucia. 

Within that period, Cost, Insurance, and Freight (CIF) totaled US$327,954,000 m for 11,161.800 m barrels of petroleum products. 10,721,400 m barrels accounted for 96.05% of oil usage in the following category: 3,836.000 m barrels used in power generation and 6,885,400 m barrels of fuel used in transportation. 

The more oil used to produce electricity increases, the more money is deposited in politicians' offshore accounts. (ESM317 OECS Energy Issues and Options Report 317/06 February 2006).

Less than a decade after Joseph's disclosure of twinning concession to corruption, Tim Hector's descriptive analysis of WIOC profiteering in 2001 is a related example of ALP pervasive malfeasance: "West Indies Oil Company's profits are estimated at a maximum of US$15 or EC$40.5 million per annum! Antigua and Barbuda got a measly $3.2 million per annum in taxes and other revenue from West Indies Oil. The people of Antigua and Barbuda were the phantoms at the Phantom of the Opera staged by West Indies Oil".

[Outlet 2001] 

With Tim's revelation, the crisis was too much to overlook; Bird imposed a levy of US$0.037 ($EC0 .10 cents) on each imperial gallon of petroleum products beginning in 2001. This long-delayed paltry tax addition came 26 years after Sir George Walter's throughput levy statement. (Antigua and Barbuda 2001 Budget Statement)

However, Bird failed to disclose what happened to the secret US$0.05 collected in 1976. During this hush-hush era, devious Ambassador Ronald Michael Sanders's company, Silicone, deposited a WIOC payment of US$34,000 monthly to a specific MP's account. Sanders embezzled $12,000 monthly, with two senior ministers receiving $12,000 and $10,000. (Corruption recording - Caribarena tapes)

Whose gains were Bird protecting? Indeed, not the public but vested interest!

Bird approved the US$0.037 (EC$0.10) to imperial gallon rather than US gallons and, in the process, secured US$ 0.259 (EC$0.70) on every barrel of oil imported into Antigua and Barbuda. Indeed, this inventive enrichment was the payment to those already fleecing the treasury of US$34,000 monthly, so the misuse of public office for private gain continued to affect people's livelihood further. These payoffs were in exchange for WIOC concessions dictated by Bird into the Laws of Antigua and Barbuda Chapter 327: The Petroleum Industry (Encouragement): free of any import and export taxes, tonnage taxes, custom duties, etc. 

Decades of ALP chronic corruption schemes increased the prevalence of poverty; for example, in 2000, undernourishment was 40%, failure to meet Millennium Development Goals (MDG) -71%, and a Gini-coefficient of 0.53.

In the fiscal year 2001, Prime Minister Lester Bird accused Corporate Antigua of not paying adequate taxes, stressing of the 491 registered companies, 330 did not pay any corporate tax, 16 accounted for 80% or EC$34.32 m (US$12,711,111 m) of total taxes on businesses of EC$42.9 million (US$15,888,889m). (2002 Budget Statement "Consolidating our gains: Investing in our future." Delivered by Lester B. Bird, Prime Minister and Minister of Finance Friday, March 22, 2001)

As a result, youth unemployment data in 2003 was 3.3 compared to the OECS ratio of 2.8, declaring Antigua and Barbuda's average data from 1993 to 2003 as the highest! Subsequently, the Caribbean Trade and Investment Report 2005 cites World Bank sources confirming these continual anomalies in 2003, "...suggest that Haiti, St. Vincent & the Grenadines and Antigua and Barbuda had the highest level of inequality, far higher than the Caribbean wide score of 0.38."

To be continued...