The Welsh supermarket chain, Big Food Group, which took over Booker Cash and Carry, is facing protests from debt campaigners over its attempt to claim more than 12 million pounds sterling in compensation from Guyana for the nationalisation of the sugar industry 27 years ago.
According to yesterday’s edition [ please note: link provided by LOSP web site ] of the UK Guardian, debt activists are calling on the Big Food Group to drop its case to recover the debt ahead of an arbitration hearing by the international court for the settlement of investment disputes later this month.
The Guardian said that the row was reminiscent of the furore that greeted Nestle’s recent attempts to recoup money from the government of Ethiopia. Nestle dropped its demand following a public outcry.
At issue is compensation for the nationalisation of Guy-ana’s sugar industry - then owned by Booker - in 1976.
Describing Guyana as an “impoverished” South American state, where the average income is said to be 1.50 pounds sterling a day, the article notes that Guyana has paid back about 6.2 million pounds sterling of the original 13 million pounds sterling debt but defaulted on payments in 1989 in the face of the Latin American currency crisis. With interest, the amount still owed has risen to 12.1 million pounds sterling.
Big Food Group - which took over Booker three years ago - is hoping the matter will be resolved at the London arbitration hearing, but is coming under mounting pressure to drop its claim.
Ashok Sinha of the Jubilee Debt Campaign said Guyana was one of the world’s poorest countries and was receiving debt relief on money owed to the World Bank and to countries including Britain. “It hasn’t been granted debt relief by the international community just so that Iceland can pick up a slice of the proceeds,” he was quoted as saying.
“The money from this relief needs to be spent on attacking poverty not marginally improving the Big Food Group’s bottom line.”
Big Food Group declined to comment on the campaign but sources close to the company stressed it was not taking legal action to recoup the money. It had reached agreement with Guyana to take the matter to arbitration and was aware of its responsibilities.
The sources said that Booker’s had developed the country’s sugar industry over decades and had invested money in schools and hospitals there. The nationalised assets were now thought to be worth more than 800 million pounds sterling. The Big Food Group is a merger of the Iceland Group which took over Booker Cash and Carry renaming the new entity Big Food Group.
The group has taken advantage of a bilateral investment treaty between Guyana and the United Kingdom in which Guyana consented to arbitration in cases of dispute. The final adjudication hearing of the case is fixed for March 31, and will run for four days in London before French professor Brigitte Stern, the sole arbitrator.
The Big Food Group is seeking to recover monies due on a series of unpaid promissory notes the government issued to Bookers to buy and take into public ownership Bookers’ assets in the sugar industry as well as others. Bookers was involved in shipping and stores among other businesses.
The sum of 6.8 million pounds sterling in principal is being sought as well as interests and costs of the proceedings, which when added up exceed 13 million pounds sterling.
The government has retained former attorney general Fenton Ramsahoye to represent it at the hearing.
Big Food Group has mounted the challenge in Washington before the International Centre for the Settlement of International Disputes (ICSID). The move to arbitration by the multi-billion dollar company was made in September 2001.
In January, the newspaper Wales on Sunday reported a Big Food Group official spokesman as saying that the compensation of 11 million pounds sterling the government awarded it was only a fraction of the value of the expropriated sugar assets.
These assets, the official said, were valued at 186 million pounds sterling in 2000.