ABIC, the Association of Bermuda International Companies, the organisation that represents 133 international sector companies with a physical presence on the island, moved boldly into the Independence debate this week.

In a three-page letter to Premier Alex Scott, ABIC requested a referendum on the matter ? and according to previously unreported minutes of the Fifth Overseas Territories Consultative Council meeting in London in December, 2003, the British took the position a referendum should indeed be used to decide the question of Independence for Bermuda before the Premier told UK Overseas Territories Minister Bill Rammell he disagreed and backed a General Election on the issue.

Mr. Rammell has subsequently backed down from his argument that a referendum should be used to decide the question of Independence in Bermuda and at a meeting of the Consultative Council this summer said the UK had "no position" on whether a plebiscite or a General Election was the ideal mechanism for determining sovereignty.

He has said the UK will report back to the Consultative Council later this year to clarify the British position.

Premier Scott told the December meeting that "the Governor still had more power than Bermudians would like", that "no one in Bermuda wanted Independence unless pushed", but that "the way the relationship (with the UK) was being managed did not put (the Premier) in charge as might be expected."

The ABIC letter was signed by Chairman David Ezekiel, head of captive manager IAS, and Gavin Arton, chairman of ABIC's Government Relations Committee, and XL's Senior Vice President and Global Director of Corporate Social Responsibility. They highlighted their assertion that, "Independence is both an economic and an emotional issue.

"As such, it should be thoroughly debated and decided by the majority of Bermudians. The form of vote in the process is paramount. Independence should not be forced on a reluctant population. Referenda have been successfully used by many other jurisdictions, most recently by a number of EU countries before joining that union.

"The alternative of using a single issue General Election is unattractive, given the distraction of individual candidates' popularity (or lack of) and the potential influence of 'Party Politics' on the outcome. Similarly, a Parliamentary vote would not necessarily be representative of the majority's wishes."

However, the UN's 2004 Working Paper on Bermuda, a very detailed 14-page review of the island's constitutional, political, economic and social situation, reported in some detail on the discussions at the Overseas Territories Consultative Council Meeting in London in December 2003.

In a section headed "Future Political Status of the Territory", the UN reported that during that meeting, "The Parliamentary Under Secretary (Bill Rammell) stated that the United Kingdom's position on Independence remained as set out in the White Paper, namely, the Overseas Territories were free to pursue it should they so wish.

"He also said that the 'Bermuda Model' was a pre-Independence constitution. In response, the Premier of Bermuda noted that he had never heard Bermuda's constitution described as a pre-Independence constitution before.

"(Premier Scott) disagreed with the United Kingdom Minister (Bill Rammell) about the idea of a referendum for proposed change. It had always been his party's position that Independence should come about after an election, not a referendum. According to the Premier, the United Kingdom would have to respect the local government of the day, not a minority group which might have money but no electoral support."

Premier Scott was not referring to ABIC when he made that last comment, but ABIC's letter leads off with what could be seen as a veiled threat to the Premier about the direct economic and indirect political clout of its members.

"ABIC and its member companies do not have a vote," wrote Mr. Ezekiel and Mr. Arton, "but a majority of our employees being Bermudian do . . . Collectively, we employ directly and indirectly a large number of the island's residents. We utilise of the island's services, from taxis to hotels, gas stations, grocery stores, landscaping firms, retail shops and restaurants."

leading international lights reminded the Premier that Bermuda's economy is, for all constructive purposes, mostly ABIC's economy, and that some of their member companies have "individual corporate resources exceeding those of Bermuda as a country".

They wrote that "international business, represented by our membership, is by far the largest contributor to the Bermuda economy". The most recent reported ratio of contributions to the economy by international business and tourism is 77:23.

Addressing the cost of doing business in Bermuda, ABIC complained that "the current payroll tax is a de facto income tax on employees", that "company taxes are noticeable, are as real estate taxes and import duties", and reminded the Premier that "Bermuda is not a low-cost environment in which to do business".

The recently reported on the significant decrease in corporate taxes in other jurisdictions, particularly in Ireland, Luxembourg and the Netherlands. Some of these competitors now boast corporate tax rates in single digits and the low double digits.

ABIC warned that "the 'cost' of Independence must be thoroughly examined and explained. Increased taxes to pay for Independence would weaken the appeal of Bermuda as a business base and potentially increase the attractiveness of other jurisdictions".

In a lengthy list of "concerns to be addressed", including a system of checks and balances, control of the Regiment and Police, renegotiation of treaties, the entire tax and regulatory system, immigration, work permits, and passports, ABIC stressed that after the question of a referendum, "the next most important (concern) surrounds the legal and judicial system".

"It is essential that stability be maintained in this area," the ABIC heads advised. "Clarity on who would appoint the Judiciary, rights of appeal to the Privy Council or other body, overall governance structure and corporate and individual rights must be determined in advance."

According to the UN report on the December 2003 London meeting, the Premier seems to be in no doubt who will be responsible for these matters. What the international sector sees as "checks and balances" on untrammelled power, with responsibility for security, external affairs and the judiciary in the hands of a presumably benign and unbiased representative of the UK, in the form of the Governor, the Premier sees as an obstacle to the centralisation of power in his hands. He also managed to find fault with Mr. Rammell's congratulation on his appointment.

"The discussion of the future status of Bermuda during the reporting period revolved around the degree of self-government under the constitution and the responsibility of the ruling party for the decision on the change of status of the Territory.

"At present, Bermuda enjoys a wider degree of self-government than other British Territories. At the same time, the role of the Governor and the extent of United Kingdom involvement in local affairs remain issues under discussion," the UN reported.

"During the meeting of the Overseas Territories Consultative Council in December 2003, (the Premier) acknowledged that the 'Bermuda (constitutional) Model' had much to recommend it, but it was not problem-free.

"He considered that the reference to good government, in the congratulatory letter on his appointment from the Parliamentary Under Secretary of State (Bill Rammell), had taken on a new meaning and led him to question who was really in charge.

"He had been surprised to learn that in some Territories, Governors still chaired the Executive Council . . . he had argued strongly against the presence of Governors (at those London meetings), as had his predecessor, but they were present. His colleagues should know that the Governor still had more power than Bermudians would like."

The Premier complained that the Governor exercised his responsibility in the appointment of Chief Justice Richard Ground.

"At the end of 2003, the United Kingdom appointed an English Chief Justice recommended by the Governor of Bermuda," reported the UN, "rather than a Bermudian candidate supported by (the Premier), who took a public stand on the issue, saying that when the United Kingdom ignored the views of the elected Government, that showed that there was no real partnership between London and the Territory. The Opposition (UBP) supported the Governor's candidate."

Referring to the appointment of Chief Justice Ground during the London meeting, the UN paper reported that the Premier said: "For the past 35 years, (the Premier of the day's) advice had been heeded, but not on that occasion. Bermuda wanted real consultation, otherwise the partnership was hollow."

For the first time in its report, the UN quoted the Premier directly, again giving its source as the Report of the Proceedings, December 8-10, 2003, of the Fifth Overseas Territories Consultative Council.

"The Premier turned to the issue of the status of the territory, saying that 'no one in Bermuda wanted Independence unless pushed: Independence was an aspiration, but not too fast'. The way that the relationship was being managed did not put the Premier in charge as might be expected and, unless he was mistaken, it seemed that the United Kingdom wanted to 'claw back over'."

If those rather contradictory statements don't offer sufficient clarification to ABIC, it may be surprised to learn that, according to the UN's reading of the Government's position, the question of Independence is effectively settled.

"It is the position of the PLP leadership that by electing the party to power, the people of Bermuda gave their support to the PLP programme as a whole, including the transition to Independence."

However, the UN concluded this section of their working paper by reporting that, "At the end of 2003, following the controversy surrounding the appointment of the Chief Justice, the issue of Independence was revived.

"In December 2003, the Premier remarked that the United Kingdom's decision concerning the Chief Justice had not brought the question of Independence as a priority agenda of his Government. However, at the beginning of 2004, Independence became an issue of discussion in the press. The Premier called for a wide debate. The need to start the process of examining the issue of Independence seriously received support from the leaders of the major parties."

the subsequent section, headed "Position of the Administering Power", the UN reported that, in his closing remarks to the London meeting, Parliamentary Under Secretary Bill Rammell, "referring to the role of Governors and constitutional reform, said that it was based on the principle of partnership. The concept of free association advanced by the UN Special Committee of 24 (on Decolonisation) would not be inconsistent with that if it meant mutual acceptance by both sides, because the United Kingdom Government had responsibilities to protect.

"But if it meant, as he sensed some territorial Governments were arguing, that some Territories would draw up their own constitutions free of outside interference, the United Kingdom would not agree with that.

"The Under Secretary went on to add that his Government valued its relationship with the Territories. It would not wish to force them into Independence, although it would respond positively, where that would be an option (i.e. not Gibraltar) if that was the clear and constitutionally expressed wish of the people.

"The UK respected the fact that for some territories, that might be a long-term objective. He stressed, however, that while the Territories retained a link with the United Kingdom, their governance should be in partnership with it."

Although Mr. Rammell was unable to respond by press-time to a question asking if he continued to favour a referendum to test the popularity of independence, the Foreign and Commonwealth Office responded to e-mail questions posed last week by the

whether the FCO has a preferred "model" for Dependent Territories acquiring Independence, the respondent wrote, ". . . each Overseas Territory is unique. In conjunction with any territory whose people had clearly and constitutionally expressed their wish to move to Independence (where that was an option), the UK would work out the steps required to move to Independence."

That answer may not shed much light, given that it does not suggest any action by the UK until after the people have "clearly and constitutionally expressed their wish", but the respondent repeated that answer when asked if "the FCO or the UK Government takes note of polls, and if not, how else would they assess the preferences of the population?"

When asked, in the context of Independence being decided by a General Election, what would happen in circumstances where both political parties in such an election favoured Independence, the respondent answered, "This is a hypothetical case", and again repeated the "clear and constitutionally expressed wish of the people" mantra.

Asked whether the UN had been asked to remove Bermuda from its list of territories still awaiting self-determination, the respondent answered: "No formal request has been made to remove Bermuda from the Committee of 24 list of territories. However, the C24 has expressed an interest in visiting Bermuda."

Opposition leader Dr. Grant Gibbons said the position of the United Bermuda Party was well known.

"Both the UK Government and the UN have said that any decision should be the clearly and freely expressed will of the people, and the only way to properly isolate that decision is to have a referendum, otherwise, if decided by a General Election, the issue gets mixed up in all of the other political and emotional issues of the day.

"I also think that it's important for Mr. Rammell and others to note that Mr. Scott won a very bare majority of the people's vote, and I think that it's important for Mr. Rammell and others to speak to all of the parties if he is going to proceed to make a decision about the process."

The ABIC letter complained that, for the international sector, "there are almost no positives in any move towards independence, and a number of potential negatives".

Mr. Ezekiel and Mr. Arton concluded with a two-part request of the Premier: "A full and frank debate before any decision, and then an inclusionary process which will allow Bermudians to make this decision themselves by way of a referendum."

The Cabinet Office did not respond to questions to the Premier by press time.