QUARRY CONNDRUMS IN DOMINICA

C O N F I D E N T I A L BRIDGETOWN 000067

SIPDIS

SIPDIS

DEPT FOR EEB/ESC/IEC/ENR-KOPP

E.O. 12958: DECL: 01/30/2018
TAGS: EMIN EAID ETRD EINV PGOVDO XL
SUBJECT: QUARRY CONNDRUMS IN DOMINICA

Classified By: DCM O.P. Garza for reasons 1.4(b) and (d).




1. (SBU) SUMMARY: The Government of the Commonwealth of
Dominica (GOCD) is attempting to revamp the quarry industry.
Currently, the quarry industry is unregulated, leading to
critical environmental degradation and undercharged royalties
on land use. The quarry industry, along with the proposed
oil refinery, could put a dent in Dominica's image as the
"nature isle." With assistance from USAID, the GOCD is
developing a new regulatory code and economic assessment with
aims at making the industry more professional. END SUMMARY.


2. (SBU) The quarry industry in Dominica has become a major
sector, given the high-quality stone and aggregate on the
volcanic island. There are 15 firms, primarily domestic and
French, currently operating. On July 18, 2007, the GOCD
issued a permit to Aggpit, the first American-owned quarry
operation in Dominica. Aggpit, a USD 1 million investment
and projected 75-year operation on 170 acres (expandable to
570),is expecting to receive its operating license in
February.


3. (U) Currently, the industry is unregulated with no
environmental norms or standards. This has caused great
concern among the general public as Dominica continues to
export its reputation as a "nature isle" and major ecotourism
destination. To rectify, the GOCD developed a draft code
late last year that, according to a number of experts, is far
from amply regulating the industry. USAID is assisting
revise and develop the legislation, which is now with the
operators for review. When complete, the new code should
establish environmental, operating, and inspection standards.


4. (C) In addition to a lack of regulations, Reginald
Austrie, Minister of Housing, Lands, and Telecommunications,
confided in USAID that the government had no economic
analysis of the industry and had no idea what to charge in
royalties for use of the land. According to Austrie, the
government charges too little to cover the costs of sending
public works staff out to assist with any problems arising at
or due to the quarries. USAID plans to assist the GOCD
perform an economic analysis of the sector and develop new
standards for royalties.


5. (SBU) COMMENT: Although successful mining of aggregate, a
basic construction input, in Dominica could help ease the
over-demanded, under-supplied industry throughout the
Americas, the environmental impact could take a crucial toll
on the budding ecotourism sector in Dominica. Environmental
groups, the political opposition, and members of the general
public have already voiced concern over Venezuela's proposed
oil refinery and its potential effect on tourism investments.
Additional growth in the quarry sector could further
promulgate these fears. Current USAID assistance is crucial
to help Dominica appreciate the economic benefits of this
industry while protecting the island from any further
environmental damage quarry operation could cause.
OURISMAN