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St. Maarten / By Hilbert Haar – Executing the counter-part article of the executive order on foreign labor is detrimental for St. Maarten’s economy because the labor supply is strongly dependent on immigration. This is the conclusion from an advice the Social Economic Council (SER) already issued on October 22 of last year to the minister of Public Health, Social Affair and Labor, Cornelius de Weever. The minister mentioned in a statement he issued last Friday his unwillingness to compromise on the counterpart policy as the reason for taking up his seat in parliament. A day earlier, De Weever signed the coalition-agreement that UP-leader Theo Heyliger presented to Governor Holiday and he left the Democratic Party.

In spite of the negative advice from the SER, the Council of Ministers approved a counterpart-policy on August 12. The policy is currently under scrutiny of the Council of Advice.

The SER expressed serious concerns in its advice about the counterpart-policy. The executive order on foreign labor added the counterpart-policy in a separate article in 2009, but it was never seriously applied. The article describes a counterpart as “a local employee (a Dutch national residing in Sint Maarten) who will be placed next to the foreign employee and who has the potential to be trained in a certain job in order to replace the foreigner within three years.”

The article charges the Labor Department with making local employees available as counterparts for positions for which work permits have been granted. The employer must present a training plan, lasting no more than three years, to the Labor Department and has to pay the cost of the training. The counterpart “shall be compensated according to acceptable standards” the article furthermore states.

The foreigner will not get a renewal for the work permit if the counterpart has been fired without prior approval of the Labor Department, “or if, to the discretion of the Labor Department the employer fails to sufficiently train the counterpart.”

The Social Economic Council strongly advised Minister De Weever in its advice dated October 22, 2013, to revise the article about the counterpart. Pointing to non-nationals holding positions within top organizations or businesses, yet having a minimum of secondary academic education as “the” reason to effectuate the counterpart article appears to be the wrong policy to “solve” this problem,” the advice reads. “The work permit is only given after it has been established no suitable local candidate is available. In other words, managing the influx of foreign labor can be done prior to issuing a work permit.”

After examining the national ordinance on foreign labor, the SER concludes “that proper implementation and enforcement of this law, without the counterpart article 10, provides adequate safeguards to achieve its intended purpose.” The SER furthermore suggests increased enforcement of the existing legislation.

The objective of the counterpart article is to raise employment opportunities for locals, and the SER recognizes that in its advice. The constitution also contains an article about this issue that reads, “The provision of adequate employment shall be a matter of constant concern for the government.”

The council observes however that there is a need for a thorough investigation because up to now unemployment surveys only looked at gender, age and place of birth. These surveys produced no data about the unemployment of Dutch nationals or about the demand for employees in terms of type of profession, required education and skills, or to which extent local employees are able to fulfill the demand. “As long as a thorough research has not been executed, it is unwise to implement additional legislation,” the SER-advice warns.

The council notes that, if there are no qualified Dutch nationals available for certain positions, “this confirms that Sint Maarten is facing challenges in educating its nationals” or that the country is suffering from a brain drain. “In both cases one cannot expect employers to bear the additional costs, when this is a consequence of an omission on the part of the government of St. Maarten.”

Executing the counterpart-article – as seems to be this wish of Minister De Weever – “will drastically harm especially small businesses through double labor costs,” the SER-advice warns. Employers would have to pay two people for doing the same job. The measure would also have a random effect because there will not be counterparts available for all positions. “The unemployed local candidates are simply too small in number compared to the number of foreigners employed,” the advice states. “This will cause the counterpart policy to have an unpredictable effect on the cost of doing business, while it will most certainly lead to unfair competition. This will negatively and unpredictably affect profit margins and could easily cause companies to go out of business, thus damaging our economy.”

The advice notes that, based on the 2011 census, the unemployment rate is 11.5 percent; youth unemployment (ages 15-24) is 27.7 percent. Another government publication (Economic Outlook 2012-2013) showed that 21 percent of all employees are born on St. Maarten, 13 percent are born on other Caribbean islands and 66 percent are from elsewhere. These data support the notion that St. Maarten’s economy is heavily depending on foreign labor.