The V.I. Legislature rejected a proposed agreement to sell and reopen the Hovensa refinery Friday.
In September, Government House announced the tentative sale of the refinery, which closed in 2012, costing the Virgin Islands economy more than 2,500 jobs. It announced Atlantic Basin Refining Inc., a recently created V.I. company, had negotiated the purchase of the refinery. On Nov. 1, Gov. John deJongh Jr. released a legislative proposal codifying the negotiated operating agreement for the refinery.
The operating agreement requires legislative ratification before the sale can be closed, because it includes legislative action on tax breaks and other issues.
Many of the senators began expressing concern about the agreement’s provisions releasing Hovensa from all liability upon the sale and about the ability of ABR to pay for cleanup if the deal falls through as soon as the question came up in a November special session called by Gov. John deJongh Jr. (See Related Links below) And those concerns remained unresolved when senators discussed their personal struggles coming to a decision before Friday’s vote.
Sen. Tregenza Roach said it bothered him that if the agreement were passed, Hovensa would be released from all legal liabilities, but, even though the sale is over, ABR has 15 months to get financing. "So we give up Hovensa and we say the new company has a responsibility to clean up Hovensa, and let’s say the company doesn’t have any money to do that cleanup, then what?" Roach asked.
Roach said he was "ever mindful" of those who strongly believe this agreement would create jobs and promote development, choking up with emotion. "But I don’t know I am willing to take this chance and commit the government and people of the Virgin Islands perhaps to 2056 on the basis of this document that is before me," he said.
Sen. Clarence Payne said he lost sleep over the vote, but the agreement concerns him.
Sen. Craig Barshinger said he would support the "narrative" given about ABR, but could not support the legislation before the Senate.
"I am in favor of the verbally expressed narrative," Barshinger said. “However, I cannot vote for (the agreement) because it does not support the ABR narrative as expressed publicly. For example, the narrative is that the agreement guarantees there will be at least 500 employees. That sounds good. But the operating agreement does not even guarantee one employee. … I wish I could vote for the narrative.”
Sen. Clifford Graham raised similar concerns as the rest of his colleagues, saying it may be difficult to sue Hovensa’s deep-pocketed owners, but it would be possible; however, if ABR defaults, it has no means to pay anything, regardless of its obligations on paper.
"A bird in the hand is better than two in the bushes. That is why I cannot support this operating agreement today,” Graham said.
Sens. Sammuel Sanes and Judi Buckley, the only two senators to vote in favor of the agreement, emphasized that the alternative to the current plan is for the facility to completely shut down and no possibility of jobs or revenue from the facility in the near future.
"If you speak to the people of St. Croix they will tell you they want something. They want economic development. They want jobs," Sanes said. "I respect everyone here, and some of us spoke passionately, from the heart on this. When this is over, I hope this illustrious body will start working on a plan b," he said.
Voting to reject the ABR agreement were Sens. Barshinger, Graham, Payne, Roach, Sens. Diane Capehart, Donald Cole, Kenneth Gittens, Alicia "Chucky" Hansen, Myron Jackson, Shawn-Michael Malone, Terrence "Positive" Nelson, Nereida "Nellie" Rivera-O’Reilly and Janette Millin Young. Voting in favor of the legislation were Buckley and Sanes.
Gov. John deJongh Jr., whose administration negotiated the ABR sales agreement on the basis of legislation approved in 2013, decried the vote in a statement Friday, saying it "now places us at a disadvantage moving forward."
"It will have immediate budgetary and other impacts,” deJongh said in a statement after the vote. “The longer term implications of a shuttered Hovensa operation, and the risks that may arise from the claims of the owners of Hovensa that they are owed millions of dollars in tax refunds, by reason of past operating losses at the refinery, are financial and legal issues that will now have to be addressed as a result of this decision by the 30th Legislature.”
