Co-op accuses govt of broken promises

The Barbados Sustainable Energy Co-operative (Co-op Energy) has accused the government of reneging on key commitments in the sugar industry divestment deal, leaving the $16m investment plan in limbo and threatening the industry’s future.

In a press statement issued on Wednesday, Lieutenant Colonel Trevor Browne, the cooperative’s chairman, accused the government of making significant alterations to the memorandum of understanding (MOU) signed in May 2023 and failing to meet agreed-upon obligations.

Lt. Col. Browne’s statement came on the heels of a dispute over ownership.  Minister of Agriculture Indar Weir and Browne have conflicting statements about who is managing the industry.

Co-op Energy insists the government remains in control, while the government maintains that Co-op Energy is responsible – despite the cooperative failing to meet its financial commitment of at least $4m as part of a $16m investment agreement.

But Lt. Col. Browne’s statement revealed the series of changes that transpired since the initial agreement.

“On 18 December 2023, the Barbados Agricultural Management Company (BAMC) severed all staff, closed its sugar operations, and began the handover process,” said Browne in the statement. But, he noted, the process had been marred by government-backed alterations to key terms of the MOU.

The changes included the government’s decision to retain a 25 per cent stake in the new operation, instead of fully divesting as originally agreed, Browne said. Moreover, Browne said, the employee share offer, designed to allow sugar workers a stake in the new entity under a worker/owner model, was put on hold, denying them representation on the boards of the new companies.

Co-op Energy was set to take control of the sugar industry in January 2024 following BAMC’s divestment. Two new companies were established – Barbados Energy and Sugar Company (BESCO) Ltd to manage the factory and Agricultural Business Company (ABC) Ltd to oversee 4 500 acres of farmland. In a landmark move, workers were promised a 20 per cent  stake in ownership.

Additionally, two members of the BAMC board, the chairman and deputy chair, would now represent the retained 25 per cent interest of the government and sit on the boards of the new companies, according to Browne.

Furthermore, Lt. Col. Browne pointed out the government’s failure to provide the independent management and financial reports that were stipulated in the MOU. Instead, Co-op Energy was pressured into making substantial financial commitments without the necessary information to assess the risks properly, he asserted.

“We are still awaiting critical financial and operational reports,” Browne said in the statement, “and these are necessary for the co-op movement to attract potential credit union investors and evaluate their investment options responsibly.”

He argued that without full financial disclosure, including past failures and how they will be addressed, it would be irresponsible for any cooperative to move forward with such an investment.

Lt. Col. Browne continued to outline the agreed-upon process for the divestment, which had been outlined in the MOU.

“This process includes the offer of sale, provisional acceptance, verification of the asset’s value and legal status, final agreement on terms, and the transfer of ownership,” he explained.

Despite the understanding, Co-op Energy’s directors have found themselves at an impasse, with their involvement in operations stalled since June 2024.

In light of the government’s continued failure to respond to numerous written requests from Co-op Energy, Lt. Col. Browne stated that the situation had reached a “Catch-22”, effectively stalling progress on the handover and leaving the cooperative in a state of uncertainty.

“We are not willing to buy a pig in a bag,” the Co-op Energy chairman declared. “While we are prepared to purchase the agreed-upon shares at a fair market price, sound business practice requires that we perform the necessary due diligence to determine the true value of these assets, as stipulated in the MOU.”

Barbados TODAY sought to reach the Minister of Agriculture, Indar Weir, for further comment but was redirected to the government’s Senior Economic Advisor, Ambassador Dr Clyde Mascoll, who declined to comment on the matter.

On Tuesday, Weir said: “My stance remains. The period for their investment has passed and that must be addressed immediately. Finding excuses to prolong this investment situation is unacceptable and nothing will change until their financial obligation is met.”

Lt. Col. Browne said: “With our international co-op partners, we are fully convinced of the project’s viability, provided that it is managed on a professional and business basis, and that it is free of the various influences that previously plagued the industry.

“However we continue to await government’s response, and we continue to wish for a proper, timely and reasonable conclusion to this matter.” 

(SZB)