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AG Says 'Letter of Clarification' on Hovensa is Enforceable

The Fourth Amendment Agreement with Hovensa and the related Letter of Clarification that are awaiting action in the Senate will, if enacted, be enforceable under the law, Attorney General Vincent Frazer said in an opinion released Saturday by Government House.

"Upon due consideration of applicable principles of contract law, I conclude that the terms of the Clarification Letter are enforceable against Hovensa, HOVIC, and PDVSA VI in any future interpretation or enforcement of the Fourth Amendment" if the measure is adopted by the Legislature," Frazer wrote in his opinion, which can be seen here.

The three-page legal opinion outlines the rules of law that govern contracts and concludes that the clarifications set forth in the letter are binding upon, and enforceable against, its signatories, who represent all three affiliated companies.

Gov. John deJongh Jr. reiterated on Saturday that the Attorney General’s opinion confirms that the Letter of Clarification is a valid and legal document that committed the owners of the refinery to the negotiated terms with the confirmations recommended by the 30th Legislature.

"I believe that the combination of the Fourth Amendment and the Letter of Clarification addresses the concerns of the senators in this first step towards the sale of the refinery," the governor said, adding, "We should not lose focus that the senators will have a second opportunity to express their concerns and wishes with a potential purchaser. It is now time for us to identify a purchaser, return the facility to a job creator rather than a monument of what failed, and begin a new chapter in our economic progress. The majority of the people of this community, more silent than I like, are anxious for positive action so we can move on."

The Fourth Amendment Agreement, which outlined the sale of the Hovensa refinery among other stipulations, was negotiated by the governor and members of his administration and submitted to the Legislature for ratification in July of this year. The Legislature rejected it Aug. 7 after voicing a number of concerns with the agreement.

Following several exploratory conversations between members of the Legislature and the governor, the Legislature adopted a resolution Oct. 1 that contained recommendations for a revised Fourth Amendment Agreement.

Those recommendations have been agreed to and specified in a Clarification Letter from Hovensa, signed and dated by its owners Oct. 16. The Fourth Amendment Agreement and the Clarification Letter were resubmitted to the Legislature Oct. 17, with the governor requesting the senators take action on the measure during the legislative session of Oct. 23.

However, the senators postponed consideration of the "Clarified Fourth Amendment" until Nov. 4 to allow them more time to analyze the document and to facilitate public hearings on the matter.

This week deJongh expressed his disappointment in the Legislature’s decision to postpone the vote on the critical Fourth Amendment Agreement and Clarification Letter. He explained that "there is interest out there in purchasing the refinery and I believe we should move forward in a measured but expedited manner to work with the bankers on the details of the sale. As soon as the measure is passed by the Legislature, the sale process can begin and I assure the people of the Virgin Islands that the government will be involved in this very important process."

The refinery sits on 2,000 acres in the center of St. Croix, and "it is imperative that it be utilized to create needed employment for island residents and generate income for suppliers, local businesses and other purveyors," deJongh said.

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