Leaving the Privy Council could hit foreign direct investment

BY RICHARD BROWNE Business Editor browner@jamaicaobserver.com

Tuesday, February 17, 2015

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LOSING the Judicial Committee of the Privy Council (JCPC) as its final court could have a detrimental effect on Jamaica's attempts to attract increased foreign direct investment (FDI), according to Ismail Erturk, an expert in corporate and international finance and a senior lecturer at Manchester Business School (MBS) in Britain.


Pulling out of the JCPC "will have negative impact both for existing and future FDI", Erturk said.


The JCPC is Jamaica's final court, but there is a move to replace it with the regional Caribbean Court of Justice (CCJ).


"The legal system is extremely important in attracting foreign investment," Erturk said, although "other infrastructure like human resources, transport, telecom, cheap energy, political stability, law and order are important too. But losing the Privy Council would nevertheless be harmful."


An established court such as the JCPC would "definitely" be viewed more favourably by potential investors than a new court such as the Caribbean Court of Justice, Erturk said.


"All major city states like Singapore and Dubai benefit from the British legal system although these are stable and rich countries," Erturk said in a written response to the Jamaica Observer.


A move away from the Privy Council could also impact current investors.


"I am not sure how the current investors will react. It would definitely influence their long-term plans," said Erturk, who has taught corporate finance to MBS students in Jamaica.


"I think Jamaica needs to sound out the key FDI companies in the island and also commission a report that evaluates the costs and benefits," Erturk said.


But most importantly, Jamaica also needs to improve all the areas considered by foreign investors, he added.


"Attracting FDI is a holistic and co-ordinated approach, but the legal system is a major pillar," he explained.


While judges from outside of England can sit on the JCPC, it is not known if any Jamaican judge has done so.


"I do not have a definitive list of judges from the Caribbean region eligible to sit; though I can confirm that no judges from the Caribbean region have sat on the JCPC since at least 2009 (when it was co-located with the new UK Supreme Court)," said Ben Wilson, head of communications for the Supreme Court of the United Kingdom, in an e-mailed response.


As it stands, only a very small number of judges are covered under the statute heading "another enactment". But changes to the make-up of the judges who can sit on the JCPC are currently being considered in London.


"We are currently discussing with the Privy Council Office and others the feasibility of considering any change in the current statutory position, so that a wider group of senior judges could be invited to sit in appropriate cases," Wilson said.


Like the CCJ, the JCPC is also willing to sit overseas.


"Members of the board are very willing to consider sitting in one of the JCPC jurisdictions," Wilson said.


To do so, the JCPC must "receive an official invitation from the chief judge and the Government of the country or territory concerned", and "the full costs of the JCPC are covered by the host country/territory, ie travel, accommodation and other relevant costs", Wilson said. There must also be "sufficient work to justify such a visit".


"On the latter point, the board is quite happy to hear cases from other nearby countries/territories if that other country is happy for this to happen," Wilson said.


The JCPC heard a total of 36 cases for the period April 1, 2012 to March 31, 2013.


 

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