What Part Of “Hovensa Doesn’t Legally Owe Us Anything” Don’t We Understand?
What is the Hovensa refinery required to provide to the Virgin Islands now that it has shut down its operations?
Nothing.
What provisions are there in the Third Extension Agreement that define any compensation Hovensa owes the Virgin Islands if it decides to stop refining oil?
None.
It’s not a lease. It’s not a contract. It’s an agreement. And that agreement does not speak to any of the issues that the Senators insisted on asking repeatedly today in their hearing with refinery officials. All it really says is that as long as the refinery operates, it will benefit from certain tax and other benefits awarded to it by the Virgin Islands.
So the bottom line is this. Hovensa is going to store the products that other facilities refine. Some 1,100 full time and between 700-900 contract employees will be out of work.
And, according to Commissioner of Labor Albert Bryan, the unemployment rate on St. Croix will rocket to 18%.
And what can the Virgin Islands government do about it? Not a blessed thing.
There were times when it was embarrassing to listen. It was as if the Senators were being deliberately obtuse about the simple fact that the Agreement does not bind Hovensa to a blessed thing. And those who were there representing the refinery repeated it over and over again.
When asked why Hovensa did not owe the Territory “compensation” now that it has changed its business model, former Hovensa VP and now contractor Alex Moorhead responded to a line of questioning from Sen. Nellie O’Reilly.
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Many more questions beat on this same dead horse. Sen. Terrence Nelson grilled Atty. George Dudley about whether he felt the requirements of the agreement had been met.
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There was also confusion about the relationship between Hovensa, LLC and its parent company, Hess Oil. Hovensa Oil Virgin Islands Corporation (HOVIC) is a wholly owned subsidiary of Hess Oil. It operated in partnership with Pedevesa VI, a subsidiary of the Venezuelan government owned Pedevesa, with a 50/50 split in the ownership of Hovensa.
But despite numerous attempts to define the corporate relationship to the senators, questions continued to be asked that the representatives could not answer. Finally, in response to questions first raised by O’Reilly and continued by Sen. President Ronald Russell, Moorhead tried once again to explain.
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But still, it wasn’t enough. And finally, when the question was raised again by Nelson, Dudley and Brian Lever, Hovensa President and CEO, made their point once again.
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And Sen. Louis Hill, after telling us he wasn’t so good with this “financial” stuff, used his time to restate the obvious.
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When the refinery announced last week that it would be ceasing operations next month, reducing its business to a storage facility, the Territory came to a standstill. Although information has been apparent for some time that this was coming, no contingency plans had been made and now the prospect of 1,100 plus employees out of work, and the impact on their families, and the businesses that depended on the refinery for their livelihood has put our elected officials into a tailspin.
And while we understand while this is a shock to an already staggering economic system, and that the refinery may indeed have a moral obligation to assist in the transition their departure will make, there is no contractural obligation, as the agreement is silent on the manner in which the company must operate.
And we all know what trouble we get into around here when the word “moral” comes into the conversation.
What we have here is one more poorly negotiated contract that neglected any basic protections for the Territory, and gave away the advantage to the Company.
So we recommend that the government get to the table with Hovensa, and see what can be worked out. There is much to discuss. What are the details of the employee severance and outplacement packages the refinery is offering? What are the arrangements being made with the labor unions to meet the contract provisions that exist when a company makes this type of a decision?
How are we going to deal with the spike in unemployment, in a system where Labor is already borrowing to meet the current financial demands of the unemployed, with more government terminations on the horizon in addition to the impact of the Hovensa employees? We heard Bryan talk about retraining – retrain people to do what? Where are the jobs they’re going to be trained for?
Is anyone really looking into what this is going to do to Human Services and the other agencies, like the hospitals, who are going to feel the impact of this situation sooner than later?
And what about the Water and Power Authority (WAPA)? The day of the announcement we heard from WAPA Executive Director Hugo Hodge that contingency plans were in place and that the utility – you know, the one that left St. Thomas without water for a month – was prepared to deal with the crisis.
Well what are those plans? And what can we really expect to happen to the cost of energy now that the sole supplier is pulling the plug?
And by the way – might there be a couple of environmental issues you need to discuss before those who ran the refinery leave the area for good?
These are the issues we need for our elected officials to address, not the futile, non-productive badgering we heard from our Senators today.
We leave you with perhaps the most curious analogy spoken today, offered by Nelson.
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Well that, Sen. Nelson, is why you don’t lie down with a man without a guarantee, and expect him to assume the responsibility without a little encouragement.
Do what the women usually have to do. If you think you can prove “Daddy Hovensa” is responsible, take him to court.
De Jongh 2014 if he was able to run, and would get re-elected.
De Jongh 2014 if he was able to break out of jail then run with the same voting machines in place, he would get re-elected.
Alex Moorhead, an ancestral native Virgin Islander, should be ashamed of how he has helped Hess to take advantage of St. Croix and the entire Virgin Islands. He made the deciding vote in the senate for the Hess deal back in the 70s, and then immediately took a VP job with them. Granted, the other politicians made it easy for them, but Moorhead should’ve at least have a conscience and some love for St. Croix. I hope he’s happy with all the Hess money that he sold out his homeland and people for.
How can you blame Alex Moorhead for helping Hess take advantage of St. Croix and the entire Virgin Islands? Mr. Moorhead hasn’t broken any laws. Hess/Hovensa was smart enough to hire him and Mr. Moorhead has earned and continues to earn every dollar he makes. Don’t come with this ancestral native Virgin Islander nonsense. Mr. Moorhead didn’t sell himself out for anyone.! Come better than that. You obviously born in the 80′s or 90′s and don’t know Alexander Moorhead or what his grandfather, C.R.T. Brow or the Moorhead family stand/ stood for (since you want to talk about ancestral native Virgin Islanders.)
It is VERY interesting to note that various MLS listing showed a deinite trend increase during the last couple of months of 2011. I think that judging from the people I know- they had forewarning….(No AM is not one of them)
I STILL SAY this is part of a larger plan….Ronnie Rascal and the 14 Guru’s of Doom should play close attention…
You’re right! He didn’t sell himself out. He sold out St. Croix and the Virgin Islands!! And don’t give me any nonsense about his grandfather or Brow, that is so off topic. When it comes to Hess pollution and cancer, Moorhead’s response was where’s the data to prove it. When it came to the underground spillage of oil, he gives some other legal mumble jumbo. Now that Hess leaving, his response is there’s nothing in the argument to hold Hess responsible.
Granted, he’s correct on these issues, but he’s just as liable as the inept govt and senate. As far as I have seen, Moorhead has been nothing but the Hess Uncle Tom. He’s been the local face of Hess for the last 30 yrs. Hess has never cared about St. Croix. Recently, they have been held accountable for their poisoning and pollution of St.Croix. Data was now being recorded, like Moorhead suggested and Hess’s response was to shut down shop, not to fix their issues. It was cheaper to shutdown than to run a clean operation.
In my opinion, Alex Moorhead’s legacy will be as the man who sold out Ay-AY. He might as well change he name to Alex Hess.
Yes, Alex Moorhead will be living quite comfortably with all his Hess money, while everybody else suck salt with no jobs, high food/gas prices, and LEAC. Thank you Alex Moorhead!! You’re a Crucian patriarch and a Virgin Islands hero! Smh…….
What I suppose is more galling to Virgin Islanders than his having voted for
the Hess Refinery (as did other Crucian senators),is the fact that Senator Moorehead didn’t see fit to resign from his position with the company when
it became evident it was far more interested in reducing its operating expenses & posting a profit,than that of rectfying the plant’s not meeting the EPA’s clean air/pollution standards.His ‘bottom line’ was/is making a living.
His defenders will say that he chose to “retire” and be retained as a paid “consultant”……smh.
Maybe we can turn the Hess houses into low income housing since we will have so many needing it!
To the person who claims I was “the deciding vote in the Senate for the Hess deal back in the 70s, and then immediately took a VP job with them,” your statement is completely false. I was not a member of the Legislature when the 1965 Agreement between the GVI and HOVIC was ratified, or when the 1st Extension Agreement, the Restated 2nd Extension Agreement, or the 3rd Extension Agreement was ratified by the Legislature.
When the 1965 Agreement was ratified, I was still in college completing my studies for a BA degree. I served in the Legislature from 1971 through 1976, and I was not hired by HOVIC until 4 years later. When the 1st, 2nd, and 3rd Extension Agreements were ratified in 1981, 1990, and 1998 respectively, I was employed by HOVIC. I was hired by HOVIC as Personnel Manager in June of 1980, later promoted to Director of Human Resources, and then in 1990 to VP of Human Resources. As spokesman, I always represented HOVIC, and later HOVENSA, truthfully and with full consideration of the interest of the GVI and the welfare of the residents of VI, which has always been my home.
Alex Moorhead
Mr. Moorehead i understand your disclaimer to the vote and the extension agreements. But over the years I listened to your brother’s talk show and have always wondered why he has never taken you to task for how HOVIC and HOVENSA has treated the people of the VI, more specificly St. Croix. Can you see senator R. David, Senator L. Hill or Senator D. Jones being employed in your position and your brother or this community not dragging them on the carpet for their allegiance to the refinery and not to the people of the VI? Yes, i understand that you and your family are from here and you have to enjoy the fruits of your native land, but at the expense of the vast majority of your own? And yes, you represent the refinery truthfully, but yes, you could make the case for your people more forcefully. But the problem in the VI is that we have double standards. No responsibility is placed on your shoulder, but if it was an outsider ( specificly from the East caribbean) you would be hearing how he/she doesnt love the VI how he/she only come here to fill his/her pockets. Finally, living here over 40 years I do not recall you doing anything for the interest and welfare of the residents of the virgin islands while you represented the oil refinery.
well’ well’ well…here we go again; let’s blame tom, dick, and harry…yeah, why the hell not….why now and not when it really mattered,huh? save ur energy to what’s ahead, for what’s in the past is past…RECALL…WIND UP AND LET’S GO FOR IT…WHAT TO DO FROM HERE IS THE REAL QUESTION PEOPLE!
Hovensa brought great prosperity to the island over many years, employing a large percentage of the population. We benefited from the taxes they paid as well as their employees. The VI benefited from Hovensa, and Hovensa benefited from being on St. Croix. That’s how all business decisions are made. Unfortunately it wasn’t financially viable for them to stay on island any more. We have two choices now; sit around and blame each other or pick ourselves up and create something out of the beauty. There are calls for big companies to come in, but that seems more like a band aid than a solution. We need some new ideas, to bring new money to the island.
We could invest in our university and make a premiere study abroad destination for college students. After some years if it gets some stature it could attract students from across the country for full time. This brings in new money, and will employ new skilled professionals.
The VI Government could set up startup grants to help people looking to start a business on the island. This money could be used by locals to start businesses and employ other people.
I think the power of the VI is within the small businesses of the islands, not by bringing in some large corporation.
Instead of a increase in the gross receipts tax, I wonder if anyone has considered a sales tax. This would be a tax that is shared by everyone, even tourists.
I have been wondering why deJoke says we lose real property tax from the closing. Are they giving the land back? Why won’t we get property tax off all that property Hovensa has?
Just asking ’cause it don’t make sense to me.
Guava,deJoke is just that.He’s not the guru he thinks he is.As long as somebody or some business owns the property,taxes are due and payable…..
unless there is a legal waiver.
Hess / Hovensa has been carrying St. Croix for the last 40 years and owes us nothing! The people who have been bitching and complaining about the plant will now see just how important that refinery has been to this island. The government has had 40 years to diversify St. Croix’s economy and has failed miserably. Unless you live in a mango tree and can live off the land you will feel the affects of this cascading for years.
Please permit me to correct you: St. Croix has carried Hess/Hovensa for the last 40 years.
And yes, we will feel the effects.
I for one have never had an anti-Hess perspective as some Virgin Islanders, but you must admit that our government’s 2-cents-a-barrel arrangement was too little.
It was Paiewonsky while as governor who brought Hess to St. Croix. He had a clear economic picture for these islands.
DeJongh on the other hand has just told the St. Croix Chamber of Commerce that he does not have a clear economy picture for St. Croix. He deferred to seeing a wide blank canvas on which he wants others to draw an economic picture for St. Croix’s economy after Hovensa closes.
Is that economic leadership: A wide blank canvas?
Instead of deJongh reading about the Machination of Machiavelli’s THE PRINCE, he ought to get a copy and read MEMOIRS OF A GOVERNOR by Paiewonsky, a former governor of these islands.
How about the health of the residents living around HOVESA, they carried HOVENSA too, because if “we” did have empirical data, the people would be compensated for their exposure to deadly toxins since HESS’s refining of petroleum products.