The latest chapter in the Bermuda Cement Company saga demonstrates the utter muddle that the Government is in over black economic empowerment.

Government does not have a formal policy on empowerment, but it has allowed

different Ministries and quangos to operate their own informal, ad hoc policies on the issue.

Former Telecommunications and E-Commerce Minister Renee Webb quite openly operated such a policy in her Ministry, Premier Alex Scott, after years of denying it, finally admitted that the granting of the new Berkeley project to Pro-Active was done on the basis that it was a black-owned company. And now the West End Development Company has said it wants the ownership of the privately held Bermuda Cement Company to broaden its ownership if it wishes its bid for the property ? which chairman David Burch has admitted was clearly the best of the three submitted ? to be successful.

Government never made clear in requests for proposals or tender documents in the above cases that black ownership was a prerequisite for a successful bid. Instead it was made clear informally, either at the interview stage (when the Cement Company in fact proposed it), on the floor of the House in Ms Webb?s case, or, in the Berkeley case, not at all.

Leaving aside the merits and demerits of an empowerment policy, this ad hoc approach is a recipe for disaster. It sets no goals or time lines, it means that no bidder knows where he or she stands, it fails to set acceptable levels of ownership and it may well be in breach of the Human Rights Act, which bars discrimination on the basis of race in the absence of a formal programme of affirmative action.

In the case of the Bermuda Cement Company, there also seems to have been a deliberate misreading of the facts. Lt. Col. Burch has stated that the rent charged for the plant ($48,000 a year or $4,000 a month) is ridiculously low for a?multi-million dollar business?. But this ignores the fact that all BCC does is rent the land itself and not the buildings and equipment, all of which the company paid for.

There is a suggestion that it is now being punished for its success. It is not at all clear that other Wedco commercial tenants are being held to the same standards; given the relative lack of success the Corporation has had and continues to have attracting and keeping tenants, one would imagine the quango would take anyone who can pay the rent.This sends the message that Wedco, and by extension Government, is only interested in implementing affirmative action for businesses where someone else has already done the hard work and has made it a success.

No one would deny that Wedco is entitled to a fair market rent for the property and since Lt. Col. Burch has admitted that BCC was far and away the best bidder, it is egregious for Wedco to have dragged out these negotiations while a business?s future and the fates of its employees hangs in the balance. It is an indictment that it has taken a strike to get Wedco back to the bargaining table. Even before Lt. Col. Burch became chairman and needed time to get up to speed, these negotiations had taken too long and had raised questions about the competence of Wedco?s leadership.

It is also inarguable that whites hold a disproportionate share of the Island?s wealth and that any Government should implement policies that will redress that imbalance. Clearly the easiest and quickest way for the Government to bring about changes is through Government contracts and the like. The question is whether it is the best way. It can be argued that an affirmative action programme which gives preferences to black Bermudians can accomplish that, and relatively quickly. But it clearly contains flaws. The idea is surely not to create a group of Government-dependent businesses, but that is what has happened elsewhere: when the Government contracts stop, so does the company. Those who felt Pro-Active ?should not have been allowed to fail? are guilty of this thinking. What use is a business that requires the backing of an entire Government to accomplish the job it is being paid by Government to do?

Secondly since the best bidder will not always be getting Government contracts, there may be a decline in service and a rise in costs to the taxpayer.

The greatest risk is that the programme only empowers the few who are particularly close to Government, rather than the many people who really need the help. The other approach, which should reduce the above risks, would be to operate a colour-blind policy that simply gave contracts to the best bidder and had in place bars that stopped large and well established businesses from outmuscling fledgling companies. But the problem is that it may work too slowly. What?s undeniable is that the current approach has failed. This kind of stealth approach has all of the flaws of other affirmative action programmes and far fewer benefits. The lack of transparency makes it easy to assume (with some justice) that it is designed to reward Progressive Labour Party cronies under the camouflage of empowerment while destroying the Island?s credibility as a fair place to do business.

Given the Premier?s own record on the issue, he may not be the ideal person to lead a review of the issue. But a total revamp is desperately needed.