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Tuesday, November 28, 2023


Lack of support from the Senate was cited Wednesday night as a major stumbling block to the successful operation of the Industrial Development Program. Stiff competition and lack of understanding in the community about how the program works were named as two other impediments to drawing more economic development to the territory.
In a public meeting called to offer information to the community about what the Industrial Development Commission is and does, IDC director Frandelle Gerard called the Senate's most recent attempt at legislation to revise the IDC "unreadable." Referring to the legislation as the "Jones-Cole Bill, " Gerard said it was written by a man from the Cayman Islands who was not familiar with U.S. laws.
However, she said several other proposals have been made at the Legislature to change IDC laws to allow the use of fines and fees to fund two new compliance officers for the program. But "as sexy as that is at the Legislature, they haven't done it."
She said if the program were allowed to impose those fees or fines the entire program could be funded.
She and others in the sparse audience noted there was not one senator present at the meeting.
Gwen-Marie Moolenaar, vice-president of Institutional Advancement for the University of the Virgin Islands, echoed Gerard saying that some senators are quick to bash the IDC, but "The people who can change the law haven't done so."
The IDC has a budget of $500,000, 75 percent of which is earmarked for personnel, consisting of two employees on St. Thomas and four on St. Croix, including Gerard.
Gerard pointed out that there are other international jurisdictions with similar and in many cases better benefits. The advantage the V.I. has is that it is under the U.S. flag and is convenient to other international destinations, she said.
Nadine Marchena, assistant director of the IDC cautioned, "We have to be careful when we talk about overhauling the IDC program. These companies can pick up and move easily."
She pointed out one of the current IDC beneficiaries, of which there are 70, moved here from Puerto Rico when the laws changed there. There are small companies that employ over 100 people that could be forced out of the territory if the laws were to change.
Marchena said few people in the community are aware of the kinds of businesses receiving benefits. As an example she pointed out that Brow Soda on St. Croix makes plastic gallon jugs.
"And yet, people import them."
One of the major complaints made about the program is lack of compliance enforcement, according to Margarita Benjamin, the IDC's only compliance officer.
The obvious lack of personnel is only part of the problem with compliance, however. IDC employees and suppliers are unwilling to file formal complaints for fear of reprisal, Benjamin said. Also, the way the law is written, once an investigation is turned over to another agency such as the Internal Revenue Bureau, the findings of that agency cannot be disclosed, so there is no way to continue an investigation.
"We need our own auditor," Benjamin said.
Gerard noted the program had flaws, including the use of an elementary level cost/benefit factor in measuring eligibility. Another flaw is that the contributions made by beneficiaries to civic and charitable organizations is voluntary.
Though some beneficiaries have committed to supporting the university in the hope of producing, in particular, technologically adept employees, Moolenaar said, "Of 68 beneficiaries (last year) only 13 gave support to UVI in amounts ranging from $1,500 to $25,000." She pointed out that the $25,000 came from V.I. Rum Industries, a local company.
Though there is no law governing donations to local non-profits, during the discussion period the commission makes certain recommendations to the applicants about what their contributions to the community should be.
Benjamin said most IDC certificates state that $2,500 be given for each employee who is not a local resident. It is a requirement that 80 percent of the all beneficiaries' employees be V.I. residents – meaning they have resided here for one year.
Randolph Allen, who was approved in July to fill the vacant labor representative slot on the commission, said another problem is the term of the commissioners, which is three years. By the time a commissioner gets comfortable with the program and the beneficiaries his or her term expires, he said.
In answer to a question posed by Central Labor Council President Luis "Tito" Morales about why the beneficiaries seem to automatically receive extensions when their benefit terms expire, Allen said, "They know the drill. They will come in and say 'we will have to lay off people,' and they know we don't have enough personnel to assure compliance."
It is basically voluntary compliance, Allen said.
Benjamin added, "We bring in new companies but we have no way to monitor the program."
Marchena, whose duties include marketing the program said she would volunteer to put her marketing efforts on hold until the compliance part of the program was in proper order.
Wednesday night's meeting was billed as the first of many. The next one will be held at 5:30 p.m. Thursday Nov. 30 at Gertrude's on St. Croix.

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