LoGB Press Briefing Statements
Media Briefing Notes, Leader of Government Business, Hon. D. Kurt Tibbetts, JP
Thursday, 4th December 2008
The Caribbean Catastrophe Risk Insurance Facility
The Cayman Islands is one of 16 participating countries in the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and is covered under the programme for catastrophic hurricane and earthquake events. In respect of hurricanes, the CCRIF provides the Cayman Islands with coverage for hurricanes: the coverage is triggered based on the weighted average wind speed across the three islands.
The primary purpose of the CCRIF is to provide the Government with a cash payout within 14 days of the occurrence of a catastrophic natural hazard to assist with the recovery and redevelopment of the country after such an event. The CCRIF is currently designed to respond to country-wide catastrophic events and the policy looks at each country from a macro-level - meaning that it is possible for there to be an event which affects one area of a country and for it not to actually trigger a pay-out as the losses are localised and not extensive enough to have a catastrophic impact on the entire country.
For the Cayman Islands, the CCRIF is part of an overall diversified catastrophe risk management strategy to provide the country with a high degree of protection from the financial risks associated with our exposure to natural catastrophe hazards. Currently the government is using a combination of risk transfer, retention and reduction methodologies to help manage these risks.
The main financial risk transfer mechanism used by the Government is its Property Insurance Programme which provides all-risk insurance coverage against physical loss of major Government buildings and assets. Even with such a comprehensive insurance programme in place, it is impossible to provide total financial risk transfer for Government's assets as not all assets are insurable: these uninsurable assets include roads, seawalls, and small docks and piers.
In addition to uninsurable assets, there are other large uninsurable financial risks such as removal and disposal of debris, provision of emergency relief services, housing assistance and other such social responsibilities that the Government would be called upon to assist with in the aftermath of a major catastrophe (the experience of Hurricane Ivan in 2004). The coverage provided by the CCRIF is designed to help fund these types of extraordinary expenses associated with natural catastrophes.
After a disaster, the Government can reprioritise its current year budget and make budgetary reallocations to address the losses. In the case of Paloma, this is what has happened and the situation is being closely monitored and adjustments will be made, as necessary.
CCRIF - Hurricane Paloma Report
In the case of Hurricane Paloma, the report from the CCRIF has indicated that the weighted average wind speed across the three Islands was insufficient to trigger a payout. This is primarily due to the fact that Grand Cayman which is home to over 95% of the population and is the centre for economic and Government activity in the Cayman Islands, experienced winds which were significantly less than those on Cayman Brac and Little Cayman.
The Portfolio of Finance and Economics has been in contact with CCRIF officials since the afternoon of the 8th November and has had extensive dialogue with those officials to ensure that all of the correct protocols are followed and that the calculations are verified. In line with the terms of the CCRIF policy, the CCRIF has made its assessments following Paloma and issued its Event Briefing on the afternoon of 21 November 2008 - which stated that the Cayman Islands would not be receiving a payout in respect of hurricane Paloma. The results of this assessment are currently being audited by the accounting firm of PriceWaterhouseCoopers (PWC) in line with the CCRIF policy and it is expected that the PWC report will be issued within the next few days.
CCRIF - Next Steps
The Cabinet will be meeting with officials from the CCRIF next week to discuss the CCRIF and possible enhancements to the programme coverage. A further statement will be made after the Cabinet has had the opportunity to meet with the CCRIF officials.
I wanted to take a moment to advise you that Government has been working on the Strategic Policy Statement or SPS as we call it, for the forthcoming fiscal year 2009-2001.
As many of you know, the SPS is the product of the first phase of Government's annual budgeting process and provides a summary of the broad and specific outcomes and policies of Government's proposed budget.
It also includes economic forecasts, financial targets, expenditure allocation for each ministry/portfolio and an explanation of how financial targets accord with the principles of responsible financial management.
We are working towards presenting the 2009-2010 SPS to the Legislative Assembly on Wednesday, 10 December. So by this time next week, we will be able to have a detailed discussion about its contents and what they will mean for the people of the Cayman Islands.
That said, I can tell you at this point that the strategic planning discussions to date within Government as part of the development of the SPS have been productive and at the same time, challenging.
Productive because all of us within Government have been forced to take a forward look against a backdrop of poor global economic conditions and adjust our fiscal policy in to help see the country through these turbulent waters.
And challenging, because have had to closely examine and evaluate our growth and development plans moving forward - particularly our aggressive programme of capital expenditures - while maintaining our statutory requirements of not running a deficit and compliance with various debt ratios, among other measures.
We are well on our way to achieving this balance and look forward to providing more information after we have fully completed and released the SPS next week.
Cumber Avenue Residents
In the story of the impact of Hurricane Paloma, alongside the severe damage to Cayman Brac, what is much less well-known, is that right in central Bodden Town, there was also serious damage and losses. The wider public needs to know this story as well; they need to know that the Cayman Islands Government has acted vigorously to provide relief in this area.
It seems that over the past week, there have been efforts to create the contrary belief - as if the situation is being neglected. I wish to not only accurately inform the public, but to robustly refute the allegations that the elected representatives, or civil servants have been guilty of neglect.
We all know that with freedom of speech, like any other freedom, comes a responsibility, including accuracy, and fairness; let us remember to put this into practice - without which, we all too easily fall into abuse of our freedoms, at the expense of others.
Shortly after the Hurricane I as Leader of Government Business, accompanied by all the Bodden Town Members of the Legislative Assembly, with the Chief Officer, and the Chief Financial Officer of the Ministry of Health and Human Services and also the Minister for Works, Hon. Arden McLean, JP conducted an inspection tour of the area.
Our findings were that due to extensive flooding caused by the Hurricane, many residents of Cumber Avenue would require assistance with clean-up and repairs to their damaged homes, loss of furniture and appliances. The decision was made to provide a comprehensive package of clean-up and relief.
With Cabinet support for this approach, a multidisciplinary team of experts representing the Public Health Department, Department of Environmental Health and the Department of Children and Family Services, conducted a thorough assessment of the affected area.
Through this inter-agency collaboration, the following assistance has been provided to date, in order to improve the living conditions of Cumber Avenue residents:
- Cleaning and indoor disinfection of over twenty houses;
- Provision of cases of bleach to assist with the clean-up effort;
- Rodent control and garbage collection;
- Clearing of septic tanks;
- Provision of information on how to avoid mould growth, proper disinfection of cistern water, avoidance of food spoilage and rodent and fly control;
- Removal of bulk waste;
- Purchasing new furniture, such as beds, to replace the residents' damaged items; and
- Providing supportive counselling to families to help them deal with their trauma, and their losses.
- Some residents have been relocated, and their rents paid, until their houses are habitable.
The relief work is ongoing as I speak.
As the Leader of Government Business, and on behalf of the Representatives for the District of Bodden Town, I would like to extend a heartfelt thanks to all the civil servants who have worked tirelessly, and will continue to work, to address the needs of the Cumber Avenue residents. Their dedication and commitment to the people of the Cayman Islands is truly invaluable and deserving of recognition.
The efforts already made here, and the work that is ongoing, demonstrate the true spirit of public service. I commend all concerned, and I categorically refute any impression that may have been created that there has not been a, sympathetic, and constructive response to the whole situation.
I would like to take this opportunity to once again say a big thank you to all of those Civil Servants and all contributors who are diligently working to assist our Cayman Brac neighbours.
Sister Islands Import Duty Concessions
Consistent with the decision made following the passage of Hurricane Ivan to grant concessions which assisted hurricane recovery efforts, on Tuesday Cabinet approved import duty concessions for Cayman Brac and Little Cayman on furniture and appliances, such as stoves, refrigerators, washers, dryers, dishwashers, microwaves and toasters.
The normal duty rate on these items of 20% will be waived, effective 1 December 2008 through to 31 May 2009. These concessions are available to individuals as well as to businesses. At that time we will review the waiver to see if an extension is needed.
For further information contact: Bina Mani