Thursday, 23 November 2017: Grenlec is strongly objecting to legislation proposed by the Government of Grenada requiring the Company to pay five percent (5%) of Grenlec’s pre-tax profits to a Government-controlled “Social Fund” controlled by the Minister and a Minister-appointed committee. If enacted, this new law will effectively eliminate the Grenlec Community Partnership Initiative (GCPI), which has invested more than $22 million in communities since 1994.
The new “Social Fund” to be imposed on Grenlec was approved by the House of Representatives on 15 November. It has yet to be debated by the Senate, which meets on Friday, 24 November. This new legislation raises some very serious questions about Government’s motivations and intent.
· Why would Government want to eliminate the GCPI?
Currently, the GCPI is a well-managed, respected and voluntary donation programme valued by many community organisations for its non-partisan grants and contributions. It supports education, health, social services and infrastructural projects throughout Grenada, Carriacou, and Petite Martinique. Every year, Grenlec’s shareholders give 5% of the Company’s pre-tax profits to the GCPI. This year, Grenlec and the GCPI were honoured with the 2017 Corporate Social Responsibility Award by the Grenada Chamber of Industry & Commerce for its longstanding work and contributions.
The GCPI was originally proposed by WRB Enterprises as part of its offer to purchase shares in Grenlec in 1993. “Giving back to the communities we serve is fundamental to the way WRB Enterprises has done business for over 50 years,” says G. Robert Blanchard, Chairman of Grenlec’s Board of Directors.
· What is the true purpose of the “Social Fund”?
This new legislation takes 5% of Grenlec’s pre-tax profits, the same amount that Grenlec currently invests in community programmes, and sends it directly to Government. The legislation gives the Minister for Public Utilities and a Minister-appointed committee the sole power to manage these funds. “Grenlec’s contributions will go from directly serving community organisations in a non-partisan manner to one that is subject to political influence,” says Collin Cover, General Manager of Grenlec. “Grenlec is puzzled by the reason for the change.”
· Why does the newly proposed ‘Social Fund’ only apply to Grenlec?
While Grenlec’s GCPI programme has always been voluntary, the 2016 Electricity Supply Act mandates that every electricity licensee spend at least 5% of its pre-tax profits on corporate responsibility initiatives, but allows these funds to be self-managed by the licensees. However, in the newly proposed legislation, this was eliminated and replaced with a Government-controlled “Social Fund” that applies ONLY to Grenlec. In fact, no other Grenadian business or industry is being taxed with a “Social Fund.”
“We hope the Government can address these serious questions about the newly proposed ‘Social Fund’ and reconsider the proposed legislation. It sends an ominous message to the people and businesses of Grenada in that Government can seize the funds of any business, at any time, without prior knowledge or discussion,” concludes Mr. Cover.