Jamaican govt says no compromise on Noranda bauxite levy

Jamaican government has rejected pleas to relieve St Ann-based bauxite company, Noranda, of its levy obligations in light of its declining profits. Minister of Finance and Planning Dr Peter Phillips told the House of Representatives yesterday that the Government would not compromise the 40-year-old levy to save Noranda from decline.

“Were we to accede to Noranda’s demand, the country would be realisng, in nominal terms, the same amount of taxes that we were receiving prior to the introduction of the bauxite levy in 1974. And we would be doing so while allowing the exploitation of a depleting, non-renewable resource,” Phillips said during the debate on the first supplementary estimates 2015/16, which were approved by the House of Representatives last night.

“This would be dishonouring the legacy of Michael Manley, and the generation that struggled for this. Our obligation is not to a particular company, but to the people of Jamaica,” Phillips added, pointing out as well that the Government was confident that, while doing this, it will be able to keep the “employees employed”.

The Government has insisted that Noranda pay the full bauxite levy rate of US$7.56 per tonne. But Noranda has argued for the maintaining of a concessionary regime agreed to in 2010 under the previous Government, and which was still in force up to when a London-based tribunal ruled in favour of the Government in December. The result has been much confusion about the future of the company’s operations in Jamaica, the jobs of its employees and its ties with the surrounding communities.

Noranda has received support from the Opposition Jamaica Labour Party and its trade union wing, the Bustamante Industrial Trade Union, which have both urged the Government not to let its appetite for revenue from the levy get in the way of saving the jobs and the close ties with the communities.

Opposition spokesman on finance and planning, Audley Shaw, cautioned the Government yesterday saying that it was a “very, very serious issue”, as Noranda was not only a major source of employment in St Ann, but also a good corporate citizen — actively involved in the social and cultural lives of the mining communities. Shaw said, “We cannot afford the kind of economic fallout that would happen if they vacated Jamaica.”

To this Dr Phillips reacted saying, “If we don’t collect from Noranda, or any of the other companies, what that means is either somebody else has to pay the taxes, or we have to cut expenditures.”

“It can’t be, if there are alternative operators, that we sacrifice the Jamaica taxpayer in order to be the saviour of Noranda, if they are not managing their affairs… That’s the principle that we want to establish. We are not hostile to Noranda, we are not hostile to any company. But we are not giving away the Jamaican resource,” he added.