Monday, January 01, 2007The Evolution of the Legal Framework of the British Virgin Islands

StaffAn Interview with Dr. J.S. Archibald QC

BBVI: What has been the defining moment of BVI legal history over the past 50 years?

JSA: I think the most defining event in the legal history of the Virgin Islands in modern times would be the Land Reform Legislation of 20 July 1970, whereby all the different legal methods of land-owning were merged into one legal system of land registration. It involved the adjudication by law and by a tribunal in respect of each and every piece or parcel of land in the entire Territory.

It also involved the placing of each piece or parcel of land on a land register and on a national cadastral map to the extent that boundaries became certain. It also ensured that the land surveyors’ law was updated to ensure that the land adjudication and the land registration were based upon the most modern system of land surveys. When that process was complete—and it took a few years to complete the process—lending authorities like banks were able to grant loans to people on the security of their titles with certainty, as they could not have done before.

And so for the first time in the modern history of the Virgin Islands, land titles were placed on a footing which was superior to most countries in the Caribbean. The land registration system in the Virgin Islands is equal to the system in the United Kingdom, and it is recognised as such worldwide. It has given fuel to the economic development of the BVI; but for reasons of lack of knowledge of the history of the Virgin Islands and its legal system, and also because of a general ignorance of the lamentable condition in which the Virgin Islands found itself in land law prior to 1970, no sufficient appreciation has been expressed publicly or in books or literature as to what a revolution, and not mere reform, has taken place in the Virgin Islands.

BBVI: What was the impetus for the land revolution which you describe?

JSA: Confusion and under-development had bedevilled the Virgin Islands and we could not keep pace in our land, banking, and economic life, with the new people who had come into the Virgin Islands. Laurence Rockefeller had come into the Virgin Islands in the late 1950s. Many of his international friends, from Scandinavia, the United Kingdom and elsewhere had come to visit and partially reside in the Virgin Islands. And they had urged that the underdevelopment should go. The land reform would cost money and so, it was done with British funds and BVI funds.

But the impetus was the need to match our economic efforts with the reality that we had in our midst some of the leading business people, globally, coming to have, if not full residence, partial residence, in the Virgin Islands. People like Laurence Rockefeller and Percy Chubb from the United States of America, the Smedvigs of Scandinavia, and Sir Alan Cobham of England who had been knighted for creating jet refuelling in the air. We had those internationally renowned persons coming to live at least partially in the Virgin Islands. So the place had to change.

BBVI: What you seem to be describing is a situation where the law had to change to keep up with the economic realities. Is that what continued to happen after 1970?

JSA: That’s correct, because the Virgin Islands is not primarily a political country. The Virgin Islands has never really been a political country. It is an economic country. The Virgin Islands is not in essence a political country, and God hopes that it will not become that. It is an economic country; and because it is an economic country it has emerged to be a first world country. It’s not a third-world country by any means whatsoever.

BBVI: What do you mean that the BVI is not a political country, but rather an economic country?

JSA: Economics takes first place in the BVI. Politics is secondary. Politics here is mild; it’s mild and it’s good in that it does not destroy people because of their party affiliations and their allegiance to one group or another politically. Economics is the prevailing accent in public life in the BVI, and it has been so for a long time. That is why we have attained just about the highest per capita income in the western world right here in the Virgin Islands. And this is not an illusion. This is a reality, a fact.

BBVI: Does that mean that the BVI is a country that values wealth over its political or cultural identity?

JSA: The BVI is a country that values land, because land ownership in the Virgin Islands is a matter of culture. It is a matter of basic culture. And culture is always a huge decider in vital issues of life of an individual or country. The first thing that BVIslanders have on their minds is the ownership of land. And throughout history—this is my personal view, and it’s in the Bible too, in Genesis—land is the basis of freedom, not law. Law and Constitutions cannot give individual freedom. They may be able to help to preserve and enhance such freedom as already exists. But ownership of land is the basis of freedom. And the BVI is one country where the cultural ownership of land is deeply rooted in people’s bones and blood. And allied with that culture is the development of a person’s own self-respect and his respect for other people.

It is because the BVI has an allegiance to economics that the Territory does not have the same racial problems some other countries have. It is because of the allegiance to economics that there is not an unbridgeable gap between the rich and the poor. It is not easy to differentiate who is rich in the Virgin Islands from who is poor. The BVI is fortunate to have achieved this high economic status, but it was not achieved by luck. It was achieved by very hard work and planning by the public and private sectors of this country.

BBVI: You spoke about the combined impact of the land laws. Are there any other pieces of legislation or packages of legislation that were equally important?

JSA: No. Not at that level. This was the foundation of the emergence of the Virgin Islands economically. It was a salvation that came from within. The financial and banking strength of the Virgin Islands rested on the certain foundation of a reformed land system in which the Virgin Islander and the investor both had sufficient trust.

BBVI: You mentioned earlier that the BVI’s land system is on par with the UK and better than the rest of the Caribbean. Without going into too much detail, how is this so?

JSA: Let me explain: Antigua, Anguilla, Montserrat and St. Lucia eventually obtained the same legal system on paper. However, the administration of the system in the Virgin Islands has advanced beyond the systems in those countries because the government of the BVI spent a fortune in developing the legal system with registries, technology and trained staff to a degree unmatched throughout the Caribbean.

The laws were just not merely passed, and tribunals set up to administer them. If I am to put any equivalent development to match this land reform, I’d have to go to another matter which I speak about up and down the Caribbean. I’ve stated before judges and all kinds of audiences throughout the Caribbean and elsewhere that the BVI is the country which has put more money in proportion to its budget in the legal system than any other country in the Caribbean. There is no comparison. It is a small country which has six separate public Registries which are the pillars upon which an economic bastion has been constructed.

I’ll give you an example: the Land Registry in this country is phenomenal. It was established out of the 1970 reform of land law, to make sense of the reformation. If you want to know what your title is, you can go there and find it out within half an hour. And you can get copies the same day. When I was asked in 1989 with two other international lawyers by the University of the West Indies Justice Improvement Project and US AID to inspect and evaluate the public registries of the Caribbean all the way down south to Barbados, we discovered that the only country in the Caribbean where one could apply for title documents and get them in hand the same day was the British Virgin Islands. No other country. It still applies today. And that is what gives confidence in banking loans to people of all walks of life, without discrimination, as a vital part of the BVI economic strength.

All the things about Financial Services, yes, those things are true, but those things are secondary however much public revenue they generate. Don’t misunderstand me, they are very profound. But the land reform is the bedrock.

The Land Registry is one of six public Registries in the BVI. In all, there are the Land Registry; the Companies Registry; the Mutual Funds Registry; the Shipping Registry; the Births, Deaths and Marriages Registry; and the Supreme Court Registry for High Court, Court of Appeal and preliminary Privy Council matters. No other neighbouring country in the Eastern Caribbean has an equivalent or superior arrangement. And all these Registries are world-class, and acknowledged world-wide to be so.

These are not things that people speak of every day. They’ll make a broad brush and say Financial Services and Tourism, but get down to the nitty-gritty and it’s the land reform which is the surest foundation, coupled with the establishment of systems and growing institutions to underpin such reform.

The other vital thing for the development of the economy, and financial and legal services in this country, is this: Forty-two years ago in 1964 there was not a single Virgin Islander living in the Virgin Islands who held any university or professional qualification. Those who held such qualifications lived and worked abroad. Today there are more Virgin Islanders with qualifications per 100 living and working in their BVI home country than in any other part of the Caribbean archipelago from Cuba in the west to Guyana in the south. You go into the Civil Service here and you see a lot of youngsters. But a lot of them have successfully passed through university and college already. It has happened right under our noses. Something good attracts them to come back to the BVI and work.

BBVI: Where does that drive for education come from?

JSA: I can’t give an answer to that but it’s there; it’s like what Mallory said of the top of Mt. Everest, “it’s there.” Without these things, the law reform legislation would have been meaningless. These are the things that underpin and make real the legal system including the land reform.

BBVI: So, as you said earlier, it isn’t just passing a law: it’s building a system that supports it.

JSA: It’s when you have all these things as foundations, that you can put Financial Services and Tourism as super structures. You can’t have Financial Services without appropriate Registries. The BVI has 47 percent of the registered global offshore companies ─ 47 percent!

Look for a moment at the UK Foreign and Commonwealth Office White Paper published on 17 March 1999, entitled “Partnership for Progress and Prosperity: Britain and the Overseas Territories”. Let me read for a moment from the foreword by the Foreign Secretary The Right Honourable Robin Cook: “Britain welcomes the economic prosperity and development built up by many of the Overseas Territories. Some are among the world leaders in the financial industry. We want those Overseas Territories with financial industries to operate and regulate them to internationally accepted standards. This will enable Britain to meet its own international obligations. It will ensure that we put up a common front against fraudsters, tax evaders, money launderers, regulatory abuse and the drugs trade. And by doing so, we will be securing the future strength of the financial industries of Britain and the Overseas Territories and safeguarding the global financial system. The publication of this White Paper is a milestone in Britain’s relationship with the Overseas Territories. There is still some detail to be worked out on the proposals it contains, particularly where legislation will be needed to put its ideas into effect.”

In the appendix about the BVI, the White Paper further stated: “The financial services sector has been growing rapidly in recent years and now generates half of total government revenue. The BVI specialises in international business companies and is believed to have a dominant share of around 45 per cent of the global market for this product. By the end of 1998 there were in excess of 300,000 registrations. The BVI also offers financial services in the area of banking, insurance, trusts, mutual funds, etc.” In September 2005 my researches revealed that BVI registrations of IBCs exceed 670,000; that registration and renewal fees contributed approximately 50 per cent of the annual public revenue; and that financial services constitute the central pillar in the structure of the BVI economy with a component of approximately US$35,000 per capita income.”

Do you think this has been acheived by luck? No. It is because of the efficiency of the system: you can’t be efficient without education. And you can’t be efficient unless the people who are working in the system are properly trained and rewarded and paid, and also have a realistic hope of benefiting from its profits.

I speak like this because for more than 40 years I’ve been in this system performing at the top. It is not easy to remain at the top for 40 years. I’m not boasting about it: it’s a fact. So, I’ve seen it from the level of being in the Executive Council and the Legislative Council of the BVI since 42 years ago in 1964, when the BVI was in a poor state economically. And its progress didn’t come by luck. It came by cooperation of the people of the Virgin Islands with their leaders in an economic way.

BBVI: When you look at the present, what are the decisions that are going to have to be made in terms of the legal framework? Are there choices in the future for the Virgin Islands?

JSA: They are continually being made. The Virgin Islands is a country which is emerging, and there are incremental changes rather than dramatic changes. As I said, it’s not a political country, so it does not have to seek dramatic political changes. It is constantly changing.

Let’s take the Courts system. We knew the Virgin Islands when there were two resident lawyers here in 1964. Today there are well over 100 plus the host of visiting lawyers year-round from the UK including some of the leading QCs of London. It has happened fast. And quite apart from Government having to make decisions, the economic growth of the country will compel the Government to make decisions and meet the new needs.

For example, I am saying so for the first time, within five years time, the legal system and the legal imperatives of the Virgin Islands will require us to have, in order to service our needs properly, at least three Magistrates Courts operating daily, four resident Judges of a Supreme Court level working daily, and expanded Registries. Otherwise, we would not be able to cope with the social and economic needs of an expanding community in a prosperous and safe BVI.

At present, we have two resident Supreme Court Judges who work around the clock without a break, and sometimes a third one comes to help. And then we have an itinerant Court of Appeal sitting here more often than in other neighbouring countries: sometimes up to four or five times annually with a heavy list of commercial cases of international significance. I’m not going to make any comment on the Constitutional changes which are afoot or the proposed Commercial Court.

We are going to require more profound systems than we now have if we are to maintain and enhance the sophisticated work in which we have found ourselves involved. Our economic competition is not around the corner. Our competition is Hong Kong, Singapore, the Cayman Islands, Guernsey, Jersey, and so on. That’s our competition: economic competition. To keep up with that, and to remain a first-world country, we’ve got to expand and grow, and be disciplined, and set high moral standards for our youth.

BBVI: So again it comes down to systems.

JSA: Institutions and systems. The College of the Virgin Islands, the H. Lavity Stoutt Community College here, have helped greatly in the legal and financial systems. There are courses that students take to equip themselves to work in these Registries. There are lessons that students learn to enable them to qualify to get into law schools and universities abroad. I’m not looking at it from the traditionalist’s point of view because that is inadequate. This is a unique country. It requires unique methods and systems, and unique planning. You just don’t grow by luck at this level.

BBVI: Do you see that commitment to what you’re describing?

JSA: Yes, I see it. I see it as an effort on the part of all concerned. I also see it as an imperative because circumstances will drive us to do it.

BBVI: When you look at economic growth, what do you see as the most important areas for future economic growth?

JSA: I do professional business, and businessmen are my clients: International and Caribbean and Virgin Island businessmen. So every day I deal in business. Business in the Virgin Islands has become a matter of life and progress, and for a few, fun. Truly, to see young persons venturing out in competition with their contemporaries in this country and elsewhere with a smile on their faces and a glint in their eyes and with hope, that’s a remarkable thing. You don’t have the pessimism and the fear that exist in many places. It’s not a question of over-confidence. It is a question of realistic confidence. If you act properly and venture forth, you’re going to succeed. What is useful in the Virgin Islands is that it is now a cosmopolitan country. The BVI has made use of foreign skills, foreign expertise, and foreign cultures.

Take a simple matter of hotels. Local people on their own lands are developing their own hotels. Guest houses are a vital part of the economy. Take marinas. Local people are constructing their own marinas. And they have made use of the opportunities afforded to them by investors from abroad who imported know-how, and money, and skills.

BBVI: It seems that in the Virgin Islands people aren’t afraid of the expertise of people from outside, and that might be one of the other reasons for its success.

JSA: When you are economically positive in thinking, you’re not afraid of another man’s colour, his money, his race, his religion, or his ideas. You don’t feel any inhibition about it. You don’t believe a foreigner is coming to take away what you have. You’re glad for him to bring his skills and his expertise. You’re glad for the competition and the mix. And this is the genius of the Virgin Islands. It invites, it mixes, and it is prepared to compete.

Even in the legal profession, where I don’t think all the lawyers share my view, we should have no fear of any competition whatsoever. Let the best lawyers come in, even for limited practice. Our young lawyers will grow and be strong like them, internationally too. You can’t in a world of growth and competition shy away from the best. No. And we have proved it here in the Virgin Islands. You must encourage young people to grow in the realms of law, medicine, accountancy, surveying, banking, as architects and so on, and compete with the best in the world. It will be, I think, a loss to prevent that kind of competition on native soil. They’re not taking away a thing the BVI has because the BVI now has an opportunity to learn from them, to emulate them, to compete with them, to surpass them, and to replace them. The aim of the BVI professional must be to be at least the equal of the best in the world, for the benefit of the future status of the BVI in an economic world.

In the legal world we’ve grown because we’ve invited some of the best lawyers in the world to work here, compete here, live here. And that’s going to be good for our young lawyers. Five to ten years from now, our young lawyers won’t regret it.

That was the greatness of the young United States of America, of allowing the best to come in. You can’t grow by being sheltered. You’ve got to have the cold wind blow on you, and shiver and recover. You’ve got to learn to win and to lose. Some people don’t like to lose, but it is when you lose that you grow.
Of course there is a bottom line: that whatever happens the Virgin Islands people should ensure that constitutionally they will remain the future law-makers to guarantee the continuity of happy economic success in “this little nation” among the nations of the world.

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