MercoPress. South Atlantic News Agency

Falklands state of the nation: economic challenges but also hopes of a productive relationship with Argentina

Governor Colin Roberts CVO addresses the Legislative Assembly with the annual report on the state of the nation

Completion of the oil exploration round and the failure of the 2016 Illex fishery, indicate a slowing of the economy and will reduce Government revenues.

Commodity prices are likely to remain low for some time and “we await with some concern the outcome of the UK’s EU Referendum on 23 June”.

The UK Government is working hard to build a productive relationship with the administration of President Macri.

Evaluating the feasibility and desirability of transferring the Illex fishery to the Individual Transferable Rights (ITQ) system.

Mineral Resources will refocus from regulating exploration activity towards working with Premier Oil to progress development planning for the Sea Lion field.

The tourism industry showed growth both in land-based and cruise tourists this past season, making a significant contribution to the economy

Plans for improvements to the air terminal facilities at Mount Pleasant – to increase capacity and transform the passenger experience.

Efforts will continue to secure additional connectivity to and from the Islands – in partnership with FIDC.

A key priority will be to work with partners and the UK Government to secure a second commercial air link between the Falklands and South America.

There is an equally ambitious program of 26 Bills proposed by the Government for consideration in the next 12 months.

The Community Development Scheme has also been increasingly successful in providing financial assistance to Islanders undertaking training

The Falkland Islands finances remain robust despite a future of domestic and overseas challenges, but on the other hand recent developments in Argentina have opened hopes for a productive, closer relationship with the South American continent, said Governor Colin Roberts in his annual speech on the state of the nation.

 This however, underlined Governor Roberts does not imply any erosion of the UK's government commitment in support of the Falklands' right to determine their own political and economic future, and for the Islands to plan for the long term.

Following a detailed report on the performance of the different sectors that make up the Falklands economy, the wide range of quality services offered by the Islands government, Governor Roberts underlines the values that distinguish Falkland Islanders and their achievements: democracy, transparency, fairness, generosity, adaptability, creativity and resilience.

And based on these values and successes, the Falklands will continue to struggle to be recognized as a people, prosperous, self-sufficient and playing its full part as a valued member of the international community.

Follows Governor Colin Roberts CVO to the elected Legislative Assembly:

This Address gives an overview of the position of the Falkland Islands in 2016, assesses the challenges ahead and summarizes the main areas of Government focus over the year to come.

The Falkland Islands economy has performed well in recent years, driven largely by the benefits of oil exploration and previous strong years in the fisheries. With the completion of the exploration round we are already seeing a slowing of the economy, which, together with the failure of the 2016 Illex fishery, will reduce Government revenues.

The snapshot of Government finances today shows a robust position, with a moderate fiscal deficit planned for 2016-17 underpinned by strong reserves. But the mid to long term picture is less clear. Without the windfall impacts of oil production, a deficit at this level will be hard to sustain. The demography shows an ageing population that, without careful planning and timely action, will struggle to maintain the current level of public services.

The external picture remains mixed and with considerable uncertainties. The global economy, including key markets for this country, continues to experience low growth. Commodity prices are likely to remain low for some time. We await with some concern the outcome of the UK’s EU Referendum on 23 June.

On the other hand developments in Argentina provide grounds to hope that we may see new openings in our links with South America. The UK Government is working hard to build a productive relationship with the administration of President Macri. The Prime Minister has made clear that this will not be at the cost of the Falkland Islands and has reaffirmed the Government’s unwavering commitment to the right of the people of the Falkland Islands to determine their own political and economic future. The firm support of the UK Government continues to provide the security and reassurance to allow Government, businesses and families to plan for the long term.

Against this background it is timely to reflect on progress to deliver the Islands Plan, the manifesto of this Assembly. Much has been achieved, but much remains to be done. Whether or not we achieve oil production in the period ahead, the next few years are a crucial opportunity to strengthen the economic bases and foster the development of strong Falkland Islands businesses linked to the regional and global economy. This is necessary to ensure the long term prosperity and self-sufficiency of this country.

It is time for the Government and private sector to come together and renew our efforts to improve our connectivity, promote investment and develop our workforce. There are important opportunities. Regional markets are increasingly open to partnerships with the Falklands; there are many opportunities for growth in the Tourism Development Strategy; and the UK Government can offer much in the way of support. A good example of this is the Defense Secretary’s initiative to promote new business opportunities between the Ministry of Defense and Falklands businesses, opening a new phase in the long and successful partnership between our civilian and military communities.

Key areas of Government activity

I now turn to the key areas of Government activity in the year ahead. First the economy. Our fisheries continue to be a mainstay of our economy. The Government’s task is to ensure that the wider economy derives the maximum benefit from this resource. We are currently undertaking a policy review to evaluate the feasibility and desirability of transferring the Illex fishery to the Individual Transferable Rights (ITQ) system. This process will involve widespread consultation.

At the same time we are strengthening measures to ensure enforcement of our Fisheries regime and continuing our efforts to ensure that thousands of fishermen working in our waters benefit from the protections we can provide for their safety and welfare. We also look to the new Government in Argentina to resume the exchange of scientific fisheries data which will enable us better to manage our stocks.

The Agriculture Department will continue its work to support our farming community. It will engage with farmers to review the heavy emphasis of recent years in using genetic gain to lower the wool micron, and consider whether further improvements can be made through management and efficiency measures.

The Government will continue to help rural businesses develop and thrive so that Camp continues to be at the heart of national life.

On hydrocarbons, exploration drilling operations with the Eirik Raude concluded in February 2016, and the demobilization of equipment and materials should be completed before the end of June. During the 2016/17 financial year, it is not currently expected that there will be further exploratory drilling operations. The Department of Mineral Resources will therefore refocus from regulating exploration activity towards working with Premier Oil to progress development planning for the Sea Lion field.

We have received and are reviewing a draft Field Development Plan covering the first phase of the Sea Lion development. The operator has entered the detailed Front End Engineering & Design (or FEED) process with their chosen major subcontractors. This process will continue to around the end of the 2016 calendar year, as all parties move towards the goal of Premier taking a project sanction decision on the Sea Lion development in mid-2017.

During the financial year a number of other major elements critical to the final Sea Lion development approval will be brought forward for discussion with FIG. This includes submission of a final Environmental Impact Statement covering offshore, inshore and onshore elements of the project. The consultation, review and assessment of this, the first development EIS, will represent a significant amount of work in the coming financial year. Discussions also continue on the oil export concept to be used for the Sea Lion development. These matters will continue to occupy not only the Department of Mineral Resources but also Natural Resources and Environmental Planning.

The approach of FIG to regulating the offshore industry has been one of continual improvement to ensure that the regulatory regime is fit for purpose and protects the interests and environment of the Falkland Islands. As part of this process there are currently detailed pieces of review work underway in core areas such as environmental legislation and offshore safety legislation, with a view to adopting additional measures that refine the already high standards applied to offshore activity, reflecting recent advances in other benchmark regulatory regimes such as the UK North Sea.

A further objective is to provide the necessary fiscal and licensing framework to ensure that the Falkland Islands are an attractive place for investment by the oil industry. As part of this, proposals to ease the current global challenges faced by the oil industry are being progressed, and have been welcomed by licensees.

A new Tourism Development Strategy

The tourism industry showed growth both in land-based and cruise tourists this past season, making a significant contribution to the economy. We have agreed a new Tourism Development Strategy (TDS) for the Falkland Islands. This sets out the strategic direction of the sector for the period 2016-2023. It will be a priority for the Government to build the necessary partnership with the private sector, here and in the international industry, to see that this Strategy is delivered.

Over the next 12 months, work will be focused on creating and implementing a new digital marketing strategy, product development for both overnight and cruise tourism and also capital investments in such areas as Gypsy Cove facilities and the Jetty Visitor Centre carpark.

Mr Speaker, a comprehensive approach to all sectors of the economy will be brought together in the Government’s new Economic Development Strategy.

Public Services offered by FIG

I shall now address the more public services offered to the community by FIG, beginning with Health and Social Services.

Over the coming year the Department will continue to provide core services, such as: Acute and A & E services, quality inpatient care and the visiting specialist program at KEMH as well as family support and safeguarding.

Areas for particular development over the coming year will include the Older People’s Services Program. ExCo have approved and supported the development of the new model of care that will include rehabilitation, prevention and actively supporting vulnerable adults and older people to maintain their independence. Work continues to build both the necessary team to deliver this in practice and the new building which will offer Extra Care apartments, nursed beds and a range of assessment and rehabilitation to meet people’s needs.

The team will continue to offer Family Support and Safeguarding to children and adults– since the public awareness campaign in the past year, social services have responded to an increased level of need within the community. In parallel with this, a framework for developing improved safeguarding legislation and services has been developed and offered to other Overseas Territories as a useful model for remote communities. This has attracted favorable comment from the UK Government and Parliament.

Much of the other developmental work to be undertaken by the health service will focus on public health and looking to prevent issues becoming problems. For example, this will include preventive dental strategies, continuation of the stop smoking service, streamlined but robust immigration medicals and extended primary care services.

To support this the hospital will benefit from significant capital investment over the coming year.

Falklands students in Australia, New Zealand, Singapore and Canada

In relation to education, both schools in Stanley now have a full staffing complement and pupils are making good progress.

Management at the secondary school has been re-organized, the curriculum has been overhauled and a follow up visit from the 2014 school inspector found that standards have risen across the board and that the correct procedures and strategies are in place to maintain this in 2017 and beyond.

The same inspection found that IJS continued to improve this year and particularly stressed the high standards in Camp Education. These improvements will continue into the coming year with additional training for staff already planned and refurbishments arranged for Camp Schools where necessary through the Department’s partnerships with Landholdings and privately owned farms.

Internationally, the new academic year will see Falkland Islands students completing their further and higher education studies not only in the UK, but in countries as far afield as Australia, New Zealand, Singapore and Canada.

The Education Department is further developing these links with partner organizations around the world and has hosted visits to the Islands from School and University leaders from across South America. At the same time, staff from the Islands have attended the Latin American Head teacher’s conference in Chile and undertaken exchange visits to revitalize the islands traditional education links in Montevideo.

EXCO decisions taken to revitalize the Training centre in 2016 should start to take effect within the next year as PWD begin renovating the building and as the newly established staff start their roles. This will bring a higher standard of service, closer links with business and a greater range of training opportunities for islanders as well as creating more attractive and relevant Apprenticeship opportunities.

The Community Development Scheme has also been increasingly successful in providing financial assistance to Islanders undertaking training with its highest ever expenditure in the last financial year. 2016/17 will see this further increase as the scheme increasingly works in partnership with business, the Training Centre and the Human Resources Department.

Public Works and Housing

In the area of public works, infrastructure remains high on the priority list with works planned for phase 5 of Sapper Hill, continued refurbishment of Ross Road, new footpaths Linking Murray heights South and pedestrian access along the bypass as well as works to provide additional industrial infrastructure in the Kiel Canal area.

Housing development is also continuing with the current phase due for completion in early 2017 and a further phase to follow on later in the year.

Camp Road improvement works will continue on both the east and the west with works taking place on the North Arm road, Shallow Harbour road and North Camp track as well as continued capping to the Port Howard to Fox Bay road. Works will continue on the MPA road and the long term review will also take place during this financial year.

The high speed generator solution for the power station is being progressed and it is hoped that it will be installed and commissioned over the summer period. The feasibility study on the existing power station is due in July following which the next phase of work including detailed design and procurement will get underway.

Continuing improvements are planned to the water network including some additional works to the Murrel Dam site.

The quarry continues to make improvements to its service, ensuring delivery of the products required for both FIG and the private sector.

Mr. Speaker, the Government is proud of the range and quality of our public services which are admired and envied by our many visitors from the region.

Improved air terminal and plans for additional connectivity

The Central Services Directorate will lead on a number of key projects. It will be developing plans for improvements to the air terminal facilities at Mount Pleasant – to increase capacity and transform the passenger experience. This will involve market testing and stakeholder engagement through calendar year 2016; followed we expect by a competitive tendering process in the first part of calendar year 2017.

At the same time, efforts will continue to secure additional connectivity to and from the Islands – in partnership with FIDC. A key priority will be to work with partners and the UK Government to secure a second commercial air link between the Falklands and South America.

FIG and Stanley Services remain committed to refurbishing the fuel depot at Fox Bay. The new modern facility will include diesel, petrol, kerosene and bottled gas available to residents and visitors to West Falkland.

In relation to FIGAS, following the review of aviation services conducted in 2015, we plan a number of modifications and improvements to the FIGAS fleet that will ensure ongoing airworthiness of the aircraft. This work will commence in 2016/17. We look forward to welcoming the new fire appliance at Stanley Airport and, in addition, a rolling program of upgrades to fire appliances at Camp airstrips will begin.

On Telecoms, following the commercial negotiations with Sure, consumers can look forward to a number of service improvements over the next period. There will be a substantial increase in data allowances and line speed in January 2017 and the roll out of mobile data and increased mobile voice coverage during 2017 throughout 2016/17, the Policy Unit will be working across departments to deliver a number of key projects. In October they will lead on the 2016 Island-wide Census. This is an important piece of research and will help shape a range of government policy and service provision over the coming years.

The Government attaches particular importance to the development of a robust framework of policies and legislation in the area of the Environment. In the long term the unique natural environment of the Falklands and its surrounding waters is our most precious asset. We are committed to protecting it and to demonstrating this commitment to the international community, especially those who consume our products and wish to visit our country. The next year will see a focus on implementation of the Biodiversity Strategy, particularly in relation to bio-security and invasive species prevention and mitigation. We also plan that next year the United Nations Convention on Biological Diversity will be extended to the Islands.. The Government has been developing proposals for a Waste Management Strategy and aims to begin implementation in the next 12 months.

The Royal Falkland Islands Police continue to meet their departmental objectives. They are involved in a number of developments, such as the construction of the new prison extension, acquiring and displaying a new Police and Emergency Services Radio System and training cadre of Authorised Firearms Officers.

The Fire & Rescue Service, besides its usual service to the community, will continue to work with the Department of Agriculture and Rural Business Association (RBA) to determine the best way forward for farmers to deal with camp fires.

Contingency planning for major incidents and civil emergencies

The Government will continue to update its contingency planning to prepare for major incidents and civil emergencies, carrying out exercises, including with the Ministry of Defense. This will include ensuring that the lessons learned from the Le Boreal incident in November 2015 are absorbed and written into our emergency procedures. We will also review the roles of our Emergency Services to ensure that they are all tasked and trained to provide the services most needed by the community. The Customs and Immigration Service will continue to provide its core services over the coming year. This includes collecting revenue from a diverse range of sources such as: Customs Import Duties, Customs Services and Harbor Dues, the provision of Immigration related services, Passenger Levy and Embarkation Tax.

The Service appreciates the excellent relationship it has long enjoyed with the Joint Service Provost Security Unit (JSPSU) at MPA whose officers regularly provide invaluable assistance and support in respect of maintaining a good standard of control at our borders. To this end, the JSPSU have continued to ensure there is a drugs search dog capability available as a deterrent to anyone contemplating importing illegal drugs to our Islands. Officers regularly undertake physical examinations of passenger’s baggage and goods arriving as cargo or in the mail. During the year to date, 47 seizures of goods have been effected with a further 51 consignments having been retained at the border for further examination or for duty to be paid prior to release.

In regard to the maritime ports aspect of our borders, the Government is continuing to trial an electronic clearance system for shipping. Once the trial has been completed, it is envisaged that the arrangement will be extended on a phased basis to all shipping categories during the next and the following financial year. This initiative should provide enhanced controls and create efficiencies in regard to the movement of vessels and goods and the arrival and departure of persons via our sea ports.

Following on from the independent review of immigration and the consultation exercise that was conducted in 2015, revised policies have been agreed and the necessary supporting legislation is currently being drafted. During the next financial year it is also intended to modernize immigration data collection systems which will include the introduction of the use of machine readable passport reader hardware at our borders.

The Human Resources team now have a full establishment and are leading on the FIG-wide Staff Survey carried out October to November 2015.. There were a range of issues arising from that survey which the leadership of the public service is committed to addressing – not least the issue of better corporate communications. ExCo yesterday considered detailed proposals for responding to the issues raised and agreed next steps. It is also evident that recruitment across a number of Government Departments remains a challenge, and the HR team will continue to play a role in looking to help departments address this, whilst ensuring that salary budgets are not exceeded.

Legislative Program: 26 bills to be considered in next 12 months

Mr Speaker, I now turn to the Government’s Legislative Program. This year has seen significant progress in the legislative drafting program which supports the Islands Plan. Last year 17 Bills were drafted, and passed into law, together with 26 pieces of supporting legislation. There is an equally ambitious program of 26 Bills proposed by the Government for consideration in the next 12 months.

The next year will see the commencement of the Crimes Ordinance and the Criminal Procedure and Evidence Ordinance supported by the Criminal Procedure and Evidence Rules. This is a major piece of work and for implementation requires extensive training across a number of Government Departments.

An Animal (Welfare and Protection) Bill 2016 will also be brought forward by the Government for approval by Legislative Assembly. This legislation will give effect to the policy to promote the welfare and protection of animals, and to crimes against animals. This legislation is required as a number of requirements relating to the welfare and protection of animals were previously only addressed by old legislation from the end of the 19th century which will cease to apply when the new Crimes Ordinance 2014 comes into force.

Maritime Authority for the Falklands

Of great importance to the economic welfare of the Islands is the Maritime and Harbors Bill, which will establish the Maritime Authority for the Falkland Islands. This Bill has passed through a 2 year genesis, and will clearly reflect the Islands commitment to ensuring our international obligations are recognized. This Bill is a major piece of legislation which extends and modernizes Falklands Maritime and Harbor Law. To give some idea of magnitude the latest draft of the Bill has 336 sections, 15 schedules and runs to 339 pages.

The Islands investment in our children and the human rights of our citizens will be enhanced by the new Education Bill, and the proposed Prison Bill.

The Electoral Bill will equip the Falkland Islands with a transparent, fair and democratic process which will support the Islands right to self-determination and ensure we continue to be a beacon of good governance in the wider region. These are fundamental building blocks which enable these Islands to show the clear democratic will of the people to the international community.

The safety and welfare of individuals will be enhanced by the continuation of work on the Family Law reform proposals, Road Traffic proposals and the clarification of our Firearms Ordinance.

The security of the islands and future labor supply and economic growth will be supported by the new Immigration bill which through a careful 2 year process will be critical to the future economic, social and community development of these islands.

2016 will also see the commencement of work on the Employment Law revision program which will result in proposed new legislation.

Meanwhile the important work of the Law Commissioner will continue as we modernize our legislation and ensure it is accessible to all, in the community here as well as overseas.

Enhancement of Public Relations

This Government embarks on a new financial year with a very ambitious legislative program and I commend the Assembly for the thoroughness and dedication with which it pursues this work.

I am also pleased that Government plans to enhance its Public Relations activity so that its challenges and achievements can be better appreciated and understood.

Mr Speaker, this Address properly focuses on the work of the Government. But it would be wrong not to highlight the health and vibrancy of this country as shown in the wealth of cultural and sporting activity supported by our citizens and businesses. Of particular note are the extensive charitable projects in which so many are involved and which raise large sums of money for good causes in the Falklands and elsewhere in the world. Our per capita charitable donations are one of the highest in the world.

We can look forward to the year ahead confident that we can meet any challenges, continuing to display the values which distinguish this country: democracy, transparency, fairness, generosity, adaptability, creativity and resilience.

In this way we will achieve our ambition to be recognized as a people, prosperous, self-sufficient and playing our full part as a valued member of the international community.