Is The Standards Act, 2004 Really Needed?

First Published: 2004-06-19

The recent passage of a Standards Bill continues the feverish law–making era of the FNM. “Regulatory intervention” is the proper term to describe these laws.

The objective of this essay is to question the need for more regulation and draw attention to the effects on the country. The answers to the questions should cause every reader to telephone his representative and ask that it be not be passed in the Senate.

No law is a perfect solution, and there are consequences, not all of which are desirable. Before introducing more regulations to an already over regulated country, an impact study beforehand would be a rational first step.

The Standards Bill establishes a new bureaucracy, employing people to run it. The actual cost of operations like salaries, rent, utilities and so on are only part of the cost to the taxpayer. The burden of compliance is an additional cost, particularly for small businesses, and a discouragement for new enterprise and expansion of existing ones.

There is an old axiom, “If it ain’t broke, don’t fix it”. What is broken that needs fixing? It is not unreasonable for those who pay the bills to demand an explanation for all new regulations.

Does the Standards legislation meet a “needs test”? As far as we can tell the question did not get much further than a brief debate in the House.

Failing a full explanation for the need, we assume the Standards Bill is more properly described as “copycat” legislation; other countries have it, why not the Bahamas?

Copycat law was a feature of the previous administration. Wage rates rose through the nineties with the economic expansion in the tourism and financial services markets. In 2001 when the labour legislation to regulate employers and fix a minimum wage went into effect, unemployment was already growing as a consequence of September 2001 and the financial Bills of December 2000. Mr. Ingraham announced publicly that other countries have minimum wage and “so should the Bahamas”. The law was passed in spite of the proven effect that minimum wage laws reduce employment for the unskilled and first-time entrants into the job market.

Adaptation to changing economic conditions in The Bahamas ought to have been the primary consideration, not laws of other countries.

What is the effect of the Standards Bill on economic freedom and competitiveness? The Bahamas is still a sovereign country, even as it clings to its autonomy with an unraveling thread. In the long run maintaining sovereignty becomes problematical if we are unable to pay our way, burdened with debt and possible devaluation.

Economic freedom is a basic requirement for successful competitive enterprise. Why undermine it with unnecessary regulations when the economy is suffering?

Is the law in compliance with the Constitution? For example Article 26: “ No law shall make any provision which is discriminatory either of itself or in its effect”. Will the power this Act grants to a government Minister be assuredly non-discriminatory? Who monitors the Minister?

Once law is made, it will not be respected unless it is enforced. Does the country have the resources to enforce the law? Or does it further divide the community between those who believe in the rule of law and abide by the law, and those who try to get around it.

In a “real world of the Bahamas” context where law enforcement is difficult, even in criminal matters, what procedures for enforcement will be instituted to control the already law-abiding citizens? Monitoring the millions of products imported annually is obviously an enormous task. Overseeing and approving services is not only mind-boggling, it is absurd. Why add costs to products that have already met standards tests in other countries. Why add costs to services that the market already regulates quite effectively?

Or will there be a “standards police” anyway?

Some of the “economic” effects of the Standards Bill to be considered are:

– the cost to the tax payer for the operation of the bureaucracy

– does it add to the cost of the regulated product?

– does it limit the choice of products for sale to consumers?

– is the law in conflict with other established rules that regulate professional groups and other licensed bodies?

– will it lead to costly litigation because of lack of clarity?

Adding to the cost of living for every Bahamian household is irresponsible in a weakened economy, burdened with the effects of historic budget deficits that have led to rising national debt.

The country does not need this legislation, and it deserves an ignoble death in the Senate. Give it a good burial – its epitaph inscribed with the reminder “lest we forget who pays the bills”.

Help support The Nassau Institute

Leave a Reply

Your email address will not be published. Required fields are marked *