September 10, 2004

Pressure, too much pressure

I'm no lawyer, I don't even play one on TV. I'm just, as someone accurately described me in an email yesterday, an 'opinionated UBP white boy' - all true I might add. I like that description actually, there's some beauty in it's all-encompassing brevity.

But I read the article today, about the potential for an injunction to be served by Union Asset Holdings (UAH) on Government to stop the resumption of work on the Berkeley site, and a couple of things peaked my interest. So I bounced a little off someone who is a lawyer (but doesn't play one on TV) and I'm not entirely alone in my suspicions here (at least on the next point).

The frst thing that jumped out at me was the following statement from UAH's letter:

"We are advised that it is highly arguable that UAH has the right to insist on completing the construction works under its own aegis and supervision. Counsel has told us that these rights stem from the fact that, as Surety, UAH has undertaken and assumed up to the amount stated in the Performance Bond the ultimate responsibility for the costs of completion beyond that which has been agreed between you and the Contractor,"

What seemed a huge leap was the implication in that statement that UAH in essence is entitled to run the project from here on out. At least that's what I would read into 'aegis and supervision". Now I don't know what is scarier. The idea that the Government is now managing the project as Mr. De Vent recently asserted or the idea that Derrick Burgess might try and take over the show. The pro-bono legal opinion I received suggested that this assertion by UAH is a dubious claim at best.

The additional point of interest in that quote is the impression it leaves that UAH believes it is likely on the hook for the $6.8M surety payout on the performance bond. While we're yet to have clarity on that from the Government side, Pro Active's legal advisor Julian Hall suggested it was unlikely to be called in due to the early termination of the contract:

"He added that the performance bond in effect an insurance policy which could pay out up to $6.8 million was not an issue due to the Government's early termination of the contract. However, he conceded that it would be an issue if the Government proved that termination of the contract had been justified."

Next in line of interesting bits is this missive:

And the letter reminds the Minister that UAH is a wholly owned subsidiary of the Bermuda Industrial Union which represents all of the Pro-Active's former site workers.

What's that got to do with anything, from a legal perspective that is? That line was in there to apply political not legal pressure I would think. UAH's responsibility is entirely separate from the BIU's. Although I'll admit it was always too close to comfort.

From the beginning everything in this project was a little incestuous; the PLP being the political arm of the BIU who put up the bond, then claimed the site was a union only site and represents the workers as well as having provided cash flow to Pro Active. Everything had to go off perfectly to avoid the type of scenario that is unfolding today with former allies seemingly at war.

The final thing that caught my interest was the following paragraph:

"Yet in breach of our rights as Surety, you appear from all the statements made publicly and on the Government's behalf to have engaged an alternative Contractor and/or to have embarked on a course for the completion of the project which in no way takes into account our views and input. UAH has simply not been invited to participate. Instead you have repeatedly stonewalled us and insisted upon the exercise of a power which, frankly, you do not possess. These are grave matters for us."

The key phrase from that would be: " no way takes into account our views and input. UAH has simply not been invited to participate."

This seemed to me to be in stark contrast to something I heard Randy Horton say in his Labour Day speech, as well as in the fence-mending speeches the Premier, Dr. Brown and others have engaged in over the past week or so.

So I went back and this is what Randy Horton said at Labour Day:

"While all has not been smooth sailing, let us not forget the untold story of daily consultation and cooperation amongst unions, employers and Government.

"We now have a Government that does not see unions as the enemy but rather as an integral part of the tri-partite social partnership that the International Labour Organisation promotes."


"Honest dissent and airing of legitimate grievances are hallmarks of a sound democracy. While we might not always agree, we should not forget that now for the first time in our Island's history under this PLP Government, the union movement is listened to with respect and understanding," Mr. Horton said.

So which one is it? It appears the Union doesn't think it is being consulted. Despite the protests and pleas to keep this in the family it would seem that what we're asked to believe and what is actually occurring are two very different things.

Posted by Christian S. Dunleavy