Caribbean States Warn Against Direct Rule of British Virgin Islands

Photo: Commonwealth Office. The BVI flag flies over a government building.
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Former colonies condemn ‘retrograde’ proposal that UK override local democracy to tackle corruption

Weeks after a UK report said the territory was riddled with corruption, the BVI premier was arrested in the US on drug-smuggling charges. Photograph: Gabriella N Baez/Reuters
Diplomatic editor

Seven Caribbean states have condemned as “retrograde” the potential imposition of direct rule from London on the British Virgin Islands (BVI) amid allegations of corruption and the arrest of the former BVI premier last week in a drug-smuggling sting operation.

The British Foreign Office minister Amanda Milling was greeted with street protests on Monday as she met BVI politicians and civil society to discuss the possible move to press ahead with direct rule as recommended by a commission of inquiry report last week.

The commission, headed by a retired British judge, Sir Gary Hickinbottom, found that corruption and misgovernment was so rife that a partial suspension of the constitution and closure of the national assembly for two years was required.

But the proposal has been firmly opposed by BVI politicians, including the acting premier, Natalio Wheatley, who took office after his predecessor Andrew Fahie, 51, was arrested on drug-running charges in Miami last week.

On Tuesday, the seven-strong Organisation of East Caribbean States (OECS) issued a firm warning against the move, saying in a statement: “It is ill-advised to impose direct colonial rule and the history of such imposition in the Caribbean has never delivered the desired result.

“The OECS concurs with the elected representatives of the people of the BVI that abolition of parliament with direct rule from London represents a retrograde step in the evolution of the democratic process that is inconsistent with the United Nations proclamation of human rights to be free of colonial rule.

“The historical responsibility for strengthening governance in the BVI must rest on the shoulders of the elected representatives and the people of the BVI themselves. That ultimately will be the guarantee of good governance and full, transparent accountability.

“The UN declaration on granting independence to colonial countries and peoples – resolution 1514 of 1960 – is an international commitment to which Britain is itself bound.”

The British foreign secretary, Liz Truss, will have to balance the political turbulence of the former colonial power taking complete charge of the overseas territory against the commission’s clear assessment that the island’s governance has over many years become riddled with corruption.

The demonstrations on Monday were a test of whether BVI society believes the arrest of Fahie and the damning findings in the report make it necessary for the UK government to take control while a full review of the BVI constitution is undertaken.

The BVI governor, John Rankin, has not yet expressed a view on whether the commission of inquiry recommendations should be implemented, but the commission was established by the governor’s predecessor and it would be striking if its unequivocal chief recommendation was rejected by the British government.

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Fahie, who is being held in a Miami prison pending a bail hearing, has demanded his immediate release on the basis that as prime minister he can claim diplomatic immunity to arrest and detention. He was arrested on Thursday after he met agents from the US Drug Enforcement Administration who were posing as Mexican drug traffickers and allegedly agreeing to take $700,000 in return for waving through a cocaine shipment on its way to the US.

Fahie’s lawyers have filed a claim in the Southern District of Florida that diplomatic immunity is conferred on him by virtue of his election as BVI prime minister in February 2019.

Christopher Malcolm, a former BVI attorney general, said that the BVI constitution does not describe the BVI as a distinct state. He added: “BVI leaders have no diplomatic status or diplomatic passport. Fahie and his lawyers are clutching at a straw that cannot carry his weight.”

If the UK government does impose direct rule, ministers in Whitehall will oversee the introduction of a public register of beneficial ownership of shares on the islands – something the Fahie government has been reluctant to introduce. The BVI is one of the world’s major tax havens and nearly half of the companies named in the recent Pandora Papers investigation were registered in the BVI.

The Hickinbottom report reveals the extent to which the BVI government is dependent on financial services for its income. Nearly 55% of the BVI total government budget of £360m in 2020 was provided by fees from financial services.

The commission also found that “Since November 2020, the Royal Virgin Islands police force has recovered over 3.6 tons of cocaine, with an estimated street value higher than the annual BVI GDP. It is thought that huge quantities of drugs pass through the BVI undetected. There is also substantial evidence that, despite efforts such as those described briefly above, BVI companies are regularly used in the laundering of colossal amounts of illicit funds”.

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