The Rogue or Sleaze provisions of the Employment Act

First Published: 2000-06-30

Two different organizations of developed countries, the OECD and the G-7 Group, are attacking the offshore banking industry of the Bahamas. The country is categorized as a “rogue state” and a “sleazy tax haven”. A New York Times columnist asserts that “Island nations are poor and have to be less scrupulous about how they attract capital” and “Tropical climates and corruption often go hand in hand.” The Clinton Administration, despite its own well-earned reputation for sleaziness and illegality, waxes eloquent about legislation that will “limit the capacity of drug dealers, terrorists, organized criminals and corrupt foreign officials to launder their ill-gotten gains through safe havens.”

This is very serious and Sir William Allen and Mr. Julian Francis have responded. They point out that in the case of the Bahamas this criticism is unjustified. Furthermore, the Government will take action quickly to reduce money laundering. The truth of the matter is that the developed nations now find it in their mutual political interest, and with little adverse risk to themselves, to beat up on smaller nations to cover up their own failures.

For example, Western Europe has become less competitive in the global economy because of expensive social welfare programs, costly and inflexible labour systems and high tax rates. The OECD countries seek to limit competition from other countries by getting less-developed countries to adopt their labour laws and to cooperate in their efforts to reduce the tax evasion and the capital flight of their own citizens. The French want the tax burden to be “fairly shared” and their citizens are “voting with their feet”. The failure of the French government at home is being transferred to its competitors. And… the French Finance Minister Laurent Fabius discussed a ban on all financial transactions between the rogue states and banks and brokerage houses elsewhere. It-s politically correct. It-s passing the blame.

Sir William and Mr. Francis have to deal with this threat to the country-s prosperity. And… they will be handicapped in their work by the proposed “Rogue” or “Sleaze” provisions in the Employment Act. Part XI says that-

It is a crime for an employer to require a candidate for employment “to furnish a set of his fingerprints or take a lie detector test” or to require any employee “to take any form of mechanical, electrical or computer testing or screening” to establish his truthfulness.

The reason for not allowing businessmen to use reasonable modern techniques to protect their assets against the bad guys… the thieves… is that the Government and public opinion are solidly against it. Thieving is so widely tolerated and accepted that now its protection will become part of the legal code. Specifically, banks and trust companies will loose tools and techniques to protect their assets and meet their legal obligations to the Bahamian Government.

Embedding the protection of thieves in the law will simply make more difficult the task of escaping from the “rogue state” and “sleazy tax haven” group.

Furthermore, thieving adds greatly to the cost of doing business and limits both entrepreneurial and economic growth. One should note that historically not only individuals but whole people-s have moved from the backwaters of the world to the forefront of civilization by doing things differently… by adopting the attitudes and skills of more advanced peoples. For instance, Japan in the 19th century was forcefully opened to the west and a painful awareness of their own backwardness spread through the country. Through dedicated work and study the Japanese overcame their backwardness. But, it should be noted that in this process they remained uniquely Japanese. (See Dr. Thomas Sowell, Forbes Global Business & Finance, October 5, 1998)

The move to a greater Bahamian civilization is possible only if the country makes the adaptations necessary to achieve progress. This requires political leadership and courage rather than pandering to the country-s worst instincts. As a first step the Rogue or Sleaze provisions should be stricken from the Employment Act.

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