VZCZCXYZ0000
RR RUEHWEB

DE RUEHWN #0649/01 3032107
ZNR UUUUU ZZH
R 292107Z OCT 08
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC 6848
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHDG/AMEMBASSY SANTO DOMINGO 5952

UNCLAS BRIDGETOWN 000649 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/CBA - DENNIS WINSTEAD 
STATE ALSO FOR WHA/CAR - JON MITHCELL 
COMMERCE FOR ADVOCACY CENTER 
SANTO DOMINGO FOR FCS 
 
E.O. 12958: N/A 
TAGS: EINV KTDB ETRD PGOV SENV XL
SUBJECT: U.S. INVESTOR AT WIT'S END IN DOMINICA 
 
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SUMMARY 
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¶1. (SBU) AGGPIT Caribbean, L.L.C. (incorporated at 14900 
Intracoastal Drive, New Orleans, LA  70129), a startup quarry 
investment into Dominica, is facing difficulties in obtaining the 
final permits needed to start operations and has requested U.S. 
government assistance.  This US $1 million investment is one of the 
largest new investments into Dominica, and could provide badly 
needed jobs and diversified exports to this small island nation, 
while improving the current health, safety, and environmental 
protection standards currently employed by existing producers. 
Aggpit believes the government's foot dragging may be partly a 
result of well-intentioned but poorly informed environmentalists, 
but also partly a blackballing effort by French quarry operators 
with existing operations.  We have helped the government produce 
model legislation for the mining sector, and are working with Aggpit 
and the Dominican government to try to resolve the problem, but 
after eight months of waiting, senior management at Aggpit is close 
to pulling the plug on the investment.  End Summary 
 
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GOVT, CIVIL SOCIETY SLOW-ROLL U.S. INVESTMENT 
--------------------------------------------- 
 
¶2. (SBU) When Aggpit's local director, Amcit Sam Holland, first 
approached the Government of Dominica regarding opening a quarry in 
Dominica in Spring of 2007, he was warmly welcomed and encouraged to 
invest in Dominica by the Prime Minister and senior government 
officials.  His corporation has now invested almost US $1 million 
and has acquired the land, hired staff, and obtained the license to 
buy and develop the site.  However, they still need a permit to 
begin operations. 
 
¶3. (U) The permit has been held up for the last eight months. 
Government ministers have told Holland that they want to wait until 
Parliament passes an updated quarry and mining act.  USAID, through 
its COTS program, has provided some US $40,000 to draft and prepare 
a model law.  That draft has been completed and is awaiting final 
approval by the parliament. 
 
¶4. (U) The government has been under pressure from some 
environmental groups to delay granting any new licenses until the 
proper legislation has been approved.  Local environmentalists have 
been active on similar issues in the past, most recently getting the 
government to reverse a decision to build a Venezuelan-backed oil 
refinery on the west coast of the island.  Environmentalists believe 
any extractive or heavy industrial investments into the country 
could detract from Dominica's efforts to become an environmental 
tourism leader in the Caribbean (Dominica markets itself as "the 
nature island.")  These groups also complain that existing quarries 
have been allowed to develop without proper oversight or regulation, 
resulting in visible scarring of the landscape and an increase in 
aerial pollutants on the island. 
 
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AN "UNSEEN HAND"? 
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¶5.  (SBU)  Perhaps more problematically, Holland believes existing 
local quarry businesses, many of whom are French owned joint 
ventures, have been putting pressure on the government to delay 
granting a license to Sam's company, in hopes of driving him out of 
business.  He notes, too, that local companies may be attempting to 
stifle passage of the new Mining Law, which would create model 
regulatory standards for the industry - and many local companies 
would not make the grade under the new standards.  Holland has 
assured us that Aggpit Corporation is committed to the highest 
environmental standards in the industry, and that his corporation is 
willing to follow any updated changes to the law.  Aggpit's 
investors, meanwhile, are threatening to pull out of the project 
altogether and leave Dominica if the permit is not issued soon.  The 
board of directors will be in Dominica the week of November 3rd to 
make a final decision whether to continue with the project or cancel 
the investment. 
 
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COMMENT 
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¶6. (SBU) This case illustrates some of the pitfalls facing foreign 
investors in the Eastern Caribbean, where entrenched local interests 
often can prevent foreign competitors from entering the market 
through informal veto power over applications and permits.  This 
investment, and the new regulatory regulation we helped Dominica 
prepare, would both be good for that country, helping it to 
diversify exports, create jobs, and improve environmental and health 
and safety standards that some less scrupulous foreign investors are 
currently skirting.  The Ambassador will call Prime Minister Skerrit 
to encourage Dominica to pass the pending legislation, issue 
Aggpit's permit, and get this investment back on track. 
 
OURISMAN