Wikileaks Cable shows BNE was fearful of nationalization

We've reported periodically on US diplomatic cables dumped online by Wikileaks tonight in one cable, Wikileaks exposes the perception over the investment climate in Belize. And while the ninth amendment targeted public utilities to be enshrined in the constitution, rumblings in probably the most lucrative industry had long feared the Barrow administration's intent on nationalization. A summary of a Wikileaks correspondence between the U.S. State Department and the U.S. embassy in Belmopan touched on the fears of the oil sector. It said "A windfall profit tax on oil production is coming to Belize. The only questions are how much of a bite it will take and how much of a disincentive it will be to U.S. investors. While the Prime Minister and government say they are consulting and taking industry concerns into account, the U.S. firm behind the sole oil producer in the country is talking of de facto nationalization of its investment." And why would Belize Natural Energy fear the government even before plans were made public for the B.E.L. and B.T.L. nationalizations? The release goes on to say "In addition to a financial beating, the GOB is taking a political beating after winning office in February, 2008 on a platform that included promises to reduce energy and food prices." And most people remember the infamous dollar tax that would be placed on fuel. The Wikileaks cable goes on to say that a Colorado firm, CHx, which is a major investor in BNE had expressed concern to the U.S. embassy over de facto nationalization of their investment, should the tax pass as initially drafted. The Embassy noted that it spoke to both governments regarding the long-term implications for investor confidence since both the tourism and energy sector rely on U.S. investors. The embassy also suggests it has gone to bat for BNE numerous times on other issues in the past. But it recognized BNE's shortcomings and said that though it believes BNE is a good corporate citizen, at times its management had operated on the assumption that it is easier to ask forgiveness than permission, which has created a perception with some that the firm is arrogant and flouts the rules.

Channel 5