Published On: Wed, Feb 12th, 2020

SHTA Calls for Immediate Revocation of New Permit Policy

New Government Administration Building, update

PHILIPBURG — The Sint Maarten Hospitality and Trade Association (SHTA) calls for an immediate revocation of the new “Policy on issuance of Labor Permits“, as was published last Friday February 7th in the National Gazette.

The policy change is meant to decrease unemployment and underemployment of residents. SHTA fully aligns with the Ministry on this ambition, but stands vehemently against the policy. The SHTA’S objections to the change in policy are supported by The Sint Maarten Timeshare Association (SMTA), the Sint Maarten Marine Trades Association (SMMTA) and the Indian Merchants Association (IMA) in this protest.

The association stresses it will only exacerbate the challenges of the still ailing economy. It calls for government to first consult with one of the many advisory bodies established for such purposes and the private sector associations before issuing a decree of this extent.  All would have directly pointed to the many adverse effects of this new policy. It reminds the Minister that it has the Social Economic Council (SER) and the Ministry of VSA’s own Tripartite Committee to consult on matters with great impact like Friday’s decree.

The policy seeks to establish a “National Employment Service Center” that will provide candidates; sit in on job interviews with the candidates, and possibly compel employers to discuss reasons for rejecting a candidate. An arbitrary decision is then made on the granting of a work permit for foreign labor.

With the new policy, government seems to sit in the chair of the employer/investor and run their HR department, without bearing any risk or responsibility, and intruding in the privacy of application talks. As per the policy, government can repeat this process if the result is not to their liking, with seemingly unending iterations. Besides not providing a clear route to a work permit, this new process puts an extremely long lead time in employer’s hiring decisions when swift action may be needed to sustain the employer’s operations, and also leaves room for graft.

No distinction is made regarding skills or education levels, nor are policy details on the length of the added process shared.  There is no guarantee that the participant member of the National Employment Service Center would even have the knowledge to evaluate whether a person is qualified for some of the jobs that normally require foreign labor, let alone have a reasonable understanding of the company’s needs and culture for which it is interviewing.

SHTA warns that among other things the rigidity in our labor market is pointed to repeatedly as a hindrance to growth in Sint Maarten economic reports by every international monitoring body.  It is also a point SHTA has been stressing since well before Irma as a cause of the lack of economic growth and the restriction of upward mobility amongst our labor force. (shta.com/vision-2025). Instead of easing restrictions, the new policy brings additional rigidity, cost, time and bureaucracy into the process.

The policy creates additional impediments for a private sector that has not received any assistance for recovery, unlike the wake of hurricanes Luis and Lenny; where the recovery of the private sector and thus the job market was paramount within the process.  This policy will cause employers to hire less and investors to invest less, resulting in a net loss of jobs. Reduction of Foreign Direct Investments (FDI) will be another indirect effect.

Next to an economic impact, a societal one will occur. As per the Ministry’s own numbers, 7% of last year’s permits were issued to Teachers and Nurses; 2 job categories that are in global shortage, and long known to be insufficiently available on Sint Maarten. For an overburdened educational and care system, the new policy will make it more difficult to hire qualified and experienced personnel, bringing the quality of education and care down with it.

Just as interesting, most work permits granted last year (25%) were for the adult entertainment sector. SHTA would like to know if this industry is going to be forced to follow the same new labor rules keeping a list of locals qualified for the job, and having a government employee sitting in on the interviews. In addition, SHTA wonders if this policy applies for government when it lacks specific expertise.

The government’s decision to further restrict the labor market is against every international advice received to stimulate the economy and increase jobs. In 2019, 12% of the permits were granted to the construction sector; just under 5% were issued in the hospitality sector, hospitality being the largest industry on St. Maarten.  This is a miniscule number compared to the number of jobs the Hospitality sector creates; and are usually reserved for specific functions or senior positions. Both sectors are likely to suffer from the impact of this policy.

Last but not least the policy will form an additional burden for an overburdened and financially insecure government, and will remain without achieving the desired effect. SHTA refers to earlier, more effective initiatives by the Labor Office in reaching the target of reducing unemployment, and suggests to restart those while revoking this policy directly. Most importantly, it asks government to involve all stakeholders involved before implementing such widely impactful decisions to avoid further economic damage during the frail recovery process.

We urge the Minister of VSA to act without delay on this repeal.