Trinidad and Tobago
Trinidad and Tobago (TT) is a high-income developing country because of its GDP per capita of over USD16,126 and an annual GDP of USD22.1 billion (2017). It has the largest economy in the English-speaking Caribbean and is the third most populous country with 1.4 million inhabitants. Some of the positive aspects of TT’s investment climate include TT’s stable democratic political system, its educated and English-speaking workforce, and well-capitalized and profitable commercial banking system and insurance industry. In addition, investors have noted that there is an established rule of law and respect for contracts, substantively fair independent judicial system that is substantively fair, and lack of domestic competition in certain sectors. As such, TT’s investment climate is generally open and most investment barriers have been eliminated.
Major issues that have been reported affecting companies are an ongoing foreign exchange shortage that delays payments to foreign firms, inefficient and complicated government bureaucracy, violent crime, poor work ethic in the labor force, and widespread perception of corruption among public officials. Some foreign investors have seen the decision-making process for tenders and the subsequent awarding of contracts turn opaque without warning, especially when their company’s interests compete with those of well-connected local firms. TT has an undiversified economy and lacks economies of scale, so it depends on imports.
Despite its challenges, TT is buffered by significant foreign reserves providing approximately eight months of import cover, and a sovereign wealth fund, both of which are denominated in U.S. dollars. It is also the world’s largest exporter of ammonia and methanol and is the sixth-largest exporter of liquefied natural gas (LNG).
There have been no new improvements in the investment climate. In spite of this, foreign direct investment has increased over the past 12 months, primarily in the energy sector, indicating a return to competitiveness in that industry.
Energy exploration and production drive TT’s economy; this sector has historically attracted the most foreign direct investment. The energy sector usually accounts for approximately almost half of GDP and 80 percent of export earnings. After declines in energy production and prices caused TT to enter a three-year recession in 2015, the Trinidad and Tobago Central Bank in March 2018 noted that “growth prospects for the T&T economy have improved over the short to medium term owing to an upturn . . . in natural gas production from several new projects.”
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||78 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||105 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||96 of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, stock positions)||2017||$6,372||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||$15,340||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Toward Foreign Direct Investment
The Government of Trinidad and Tobago (GOTT) desires foreign direct investment and has traditionally welcomed U.S. investors. The Embassy is familiar with cases where the GOTT did not follow through as expected on assurances made to U.S. firms, due to either a lack of capacity or allegations of corruption.
Foreign ownership of companies is permitted under the Foreign Investment Act and there are no laws that discriminate against foreign investors by prohibiting, limiting, or conditioning foreign investment in any economic sectors. Approval of a Foreign Investment Application by the Ministry of Finance is required in certain cases. Some U.S. firms have encountered difficulty at this stage.
TT has an Investment Promotion Agency, known as InvesTT, whose role is to attract and facilitate business investment throughout the decision-making process, easing the process of setting up a business and providing after-care services once the business is established. The U.S. Embassy of TT is not aware of any formal investment retention strategies.
Limits on Foreign Control and Right to Private Ownership and Establishment
Both foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity. Under the Foreign Investment Act of 1990, a foreign investor is permitted to own 100 percent of the share capital in a private company but a license is required to own more than a 30 percent of a public company.
The Foreign Investment Act limits foreign ownership of land to one acre for residential purposes and five acres for trade purposes without a license. In the past, the government generally granted waivers on corporate equity and land ownership restrictions. License applications are subject to review and approval by the Ministry of Finance (in Trinidad) or the Tobago House of Assembly (in Tobago).
The U.S. Embassy of TT is not aware of any sector-specific restrictions to U.S. investors; however, U.S. companies occasionally complain that corruption and nepotism results in obstacles to completion of contracts or steers contracts to local competitors. TT maintains an investment screening mechanism for specific projects that have been submitted for the purpose of accessing sector-specific incentives, for example in the tourism industry.
Other Investment Policy Reviews
The government has not undergone any third-party investment policy reviews in the past three years.
The government’s business facilitation efforts focus primarily on investor services (helping deal with rules and procedures) through its investment promotion agency and trying to make the rules more transparent and predictable overall. However, more work needs to be done to achieve efficient administrative procedures and dispute resolution. Trinidad and Tobago is ranked 158 out of 190 countries for registering property, 174 out of 190 countries for enforcing contracts, and 166 out of 190 for payment of taxes, representing a deterioration of indicators that reflect a difficulty of doing business.
The business registration website is: https://www.ttbizlink.gov.tt/tntcmn/faces/pnu/PnuIndex.jsf
The Global Enterprise Registration Network (GER) gives the TT business websites a below-average score of 3 out of 10 for its single electronic window and 4.5 out of 10 for providing information on how to register a business. The inability to make online payments, submit certificates online, and engage in simultaneous requests are the three main reasons for the low score. A feedback mechanism allowing users to communicate with authorities is a strength of the TT business registration website. According to GER, two areas for improvement are:
- Development of an online payment portal
- Provision of online certificates
Business registration requires completion of seven procedures over a period of 10 days. The agencies with which a company must typically register include:
- Companies registry
- The OfficeWorks Limited
- Board of Inland Revenue
- National Insurance Board
- Value Added Tax (VAT Office, Board of Inland Revenue
The host government does not promote nor incentivize outward investment, and does not restrict domestic investors from investing abroad.
2. Bilateral Investment Agreements and Taxation Treaties
TT has 12 bilateral investment agreements and 9 treaties with investment provisions.
A bilateral investment treaty (BIT) between the United States and TT came into force in 1996. The BIT requires that foreign investments in most sectors receive treatment no less favorable than that accorded to domestic investments (national treatment).
A bilateral taxation treaty came into force in 1970: https://www.irs.gov/pub/irs-trty/trinidad.pdf . The Trinidad and Tobago government is in the process of modernizing its tax collection regime with the establishment of a revenue authority. There are no ongoing systemic tax disputes between the government and foreign investors or other taxation issues of concern to U.S. investors.
3. Legal Regime
Transparency of the Regulatory System
Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. Post is not aware of any informal regulatory processes managed by non-governmental organizations or private sector associations.
Rule-making and regulatory authority exist within the ministries and regulatory agencies at the national level. The process for development of regulations involves the establishment of a committee comprised of stakeholders from public sector agencies, private sector firms and civil society. The committee is responsible for developing proposed regulations and may sometimes use independent studies as the basis for proposals.
Accounting, legal, and regulatory procedures are transparent and consistent with international norms. IFRS standards are required for domestic public companies. Proposed laws and regulations are often published in draft form for public comment, though there is no legal obligation to do so. The government solicits private sector and business community comments on proposed legislation.
Draft bills and regulations are often made public via a unified website managed by the government or printed in an official gazette or journal. The content is usually the actual draft text which is also published in daily press, e.g., in newspaper advertisements. Please find additional information at www.news.gov.tt/content/e-gazette# , www.ric.org.tt , and www.ttparliament.org .
The Embassy of TT is not aware of oversight or enforcement mechanism that ensure the government follows administrative processes. Online locations where key regulatory actions or summaries are published on www.legalaffairs.gov.tt/ and www.laws.gov.tt .
No regulatory systems including enforcement reforms have been adopted since the last report. Regulatory reform efforts announced in prior years have not been fully implemented.
Generally, regulatory reforms are linked to making systems easier and more transparent while ensuring accountability.
Regulations are generally developed by a ministry-led committee tasked with oversight of the process. The committee will include various stakeholders. Post is not aware of regulatory enforcement mechanisms. The enforcement process is not legally reviewable or otherwise made accountable to the public. Ministries and regulatory agencies do not conduct impact assessment of proposed regulations nor is impact of existing regulations regularly assessed. Public finances and debt obligations are publicly available on the Central Bank website.
International Regulatory Considerations
Trinidad and Tobago is not part of a regional economic block. Legal, regulatory, and accounting systems are consistent with international norms. Proposed laws and regulations are often published in draft form for public comment, though there is no legal obligation to do so. The government solicits private sector and business community comments on proposed legislation.
The Government notifies all draft technical regulations to the WTO committee on Technical Barriers to Trade (TBT). Trinidad and Tobago is a signatory to the Trade Facilitation Agreement since 2015.
Legal System and Judicial Independence
TT’s legal system is based on English Common law. Contracts can be legally enforced through the court system, which is deemed to be backlogged. TT has a parliamentary democracy modeled on the English system.
There are few specialized courts, making the resolution of legal claims time consuming, according to several companies. An Industrial Court exclusively handles cases relating to labor practices but also suffers from severe backlogs. Civil cases of less than USD2,250 are heard by the Magistrate’s Court. Matters exceeding that amount are heard in the High Court of Justice, which can grant equitable relief. There is no court or division of a court dedicated solely to hearing commercial cases.
TT’s judicial system is independent, competent, and procedurally and substantively fair. Regulations and enforcement actions are appealable. Decisions may be appealed to the TT Court of Appeal. The United Kingdom Privy Council Judicial Committee is the final court of appeal.
Laws and Regulations on Foreign Direct Investment
TT’s judicial system respects the sanctity of contracts and generally provides a level playing field for foreign investors involved in court matters. Due to the backlog of cases, however, there can be major delays in the process. It is imperative that foreign investors seek competent local legal counsel. Some U.S. companies are hesitant to pursue legal remedies, preferring to attempt good faith negotiations in order to avoid an acrimonious relationship that could harm their interests in the country’s small, tight-knit business community.
No major laws or regulations have come out in the past year related to foreign investment or commerce. The major laws and regulations, and judicial decisions affecting incoming foreign investment, are the following:
- Foreign Investment Act
- Occupational Safety and Health Act
- Minimum Wage Act
- Retrenchment and Severance Benefits Act
There is no “one-stop-shop” website for investment providing relevant laws, rules, and procedures. Useful websites to help navigate foreign investment laws, rules, and procedures are: http://www.legalaffairs.gov.tt , https://www.rgd.legalaffairs.gov.tt , and http://www.tradeind.gov.tt
Competition and Anti-Trust Laws
The Intellectual Property Act of 2000 covers unfair competition, misleading the public, discrediting another’s enterprise and activities, and disclosure of secret information. The Act identifies which agencies review transactions for competition-related concerns. Enforcement of the law is a concern as the procedure for reviewing competition related concerns is lengthy.
The Fair Trading Commission, established in 2014, has the responsibility for promoting and maintaining fair competition in the domestic market. It investigates the various forms of anti-competitive business conduct set out in the Fair Trading Act.
There were no significant competition cases over the past year.
Expropriation and Compensation
The government can legally expropriate property based on the internal needs of the country and only after due process including adequate compensation, generally based on market value. Various pieces of TT legislation make provisions for compulsory licensing in the interest of public health or intellectual property rights. This would allow for the legal expropriation of products based on non-compliance with licensing requirements.
The Embassy is not aware of any direct or indirect expropriation actions since the 1980s. All prior expropriations were compensated to the satisfaction of the parties involved. There is no indication of policy shifts that might lead to the implementation of expropriations in the near future. Claimants did not allege a lack of due process in prior expropriation cases.
ICSID Convention and New York Convention
TT is a party to the International Centre for the Settlement of Investment Disputes (ICSID Convention). TT has ratified the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York convention).
Local courts recognize and can enforce foreign arbitral awards according to chapter 20 of the Arbitration (Foreign Arbitral Awards) Act 1996. The 1958 New York convention allows the enforcement of arbitral awards in international arbitration proceedings. TT’s Judgments Extension Act Chap 5:02 grants the reciprocal enforcement in TT of Judgments of the United Kingdom and other Commonwealth countries. It provides a system of registration to facilitate the direct enforcement of money judgments. A foreign judgment that emanates from a jurisdiction which does not fall within the schedule of countries listed in the Judgments Extension Act will be enforceable in Trinidad and Tobago once the following criteria are satisfied:
- The courts of Trinidad & Tobago recognize the jurisdictional competence of the foreign Court;
- The foreign judgment is for a definite sum of money;
- The foreign judgment is final and conclusive; and
- There is no defense to the recognition of the foreign judgment
Investor-State Dispute Settlement
The bilateral investment treaty between the United States and TT allows for alternative dispute resolution measures, including binding arbitration. Investment disputes are not common in TT. The U.S. Embassy of TT is not aware of any claims by U.S. investors under the agreement.
Post is only aware of one investment dispute involving a U.S. company in the past ten years. Trinidad and Tobago follows English common law, widely considered efficient in response to foreign arbitral awards. Post is not aware of any investment disputes that have been tried in TT courts. There is no history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
The bilateral investment treaty between the United States and TT allows for alternative dispute resolution measures, including binding arbitration. There is a domestic dispute resolution center that offers arbitration services. The Embassy is not aware of any instances where local courts were required to enforce foreign arbitration awards.
The Embassy is aware of only one investment dispute involving SOEs that occurred in 2001. Investors have reported that lack of court automation, delays in case management and a lack of capacity cause tremendous backlogs. Dispute resolution for investment/commercial issues takes approximately 1,340 days (3.6 years), according to the World Bank. This includes filing, trial, judgment, and enforcement. Alternative dispute resolution is often a preferred route because of shorter timeframes.
The Bankruptcy and Insolvency Act of 2006 was proclaimed in 2014. A dramatic improvement, it introduced a formal mechanism for rehabilitation, established a public office responsible for the general administration of insolvency proceedings, and clarified the rules on appointment of trustees.
In 2018, the World Bank ranked TT at 77 of 190 countries for resolving insolvency in its Ease of Doing Business Index. This reflects TT’s recovery rate (cents on the dollar) which is worse than the regional average, and cost as a percentage of estate.
In terms of the insolvency framework index, TT is ranked well above the regional average, almost on par with OECD high income countries. Bankruptcy is not criminalized in TT.
4. Industrial Policies
Foreign and local investors are generally treated equally with respect to incentives like exemption from import duties and customs duties, tax credits and deferrals, cash refunds, carry-over of losses and access to loans. Additional information is available on the following websites:
Foreign Trade Zones/Free Ports/Trade Facilitation
The Free Zones Act of 1988 (last amended in 1997) established the TT Free Zones Company (TTFZ) to promote export development and encourage both foreign and local investment projects in a relatively bureaucracy-free, duty-free, and tax-free environment. There are currently 16 approved enterprises located in eight free zones. The majority are located within a multiple-user site in D’Abadie, Trinidad, but any suitable area in TT can be designated as a free zone by the minister of trade and industry.
Free zone enterprises are exempt from customs duties on capital goods, parts, and raw materials for use in the construction and equipping of premises and in connection with the approved activity; import and export licensing requirements; land and building taxes; work permit fees; foreign currency and property ownership restrictions; capital gains and taxes; withholding taxes on distribution of profits and corporation taxes or levies on sales or profits; VAT on goods supplied to a free zone; and duty on vehicles for use only within the free zone.
A corporation tax exemption for entities that qualify for free zone status is also in force. Application to carry out an approved activity in an existing free zone area is made on specified forms to the TTFZ.
Free Zone activities that qualify for approval include manufacturing for export, international trading in products, services for export, and development and management of free zones. Activities that may be carried on in a Free Zone but do not qualify as approved activities include exploration and production activities involving petroleum, natural gas, or petrochemicals. Foreign owned firms have the same investment opportunities as Trinidad and Tobago entities. For more information, please review the following website: http://ttfzco.com/
Performance and Data Localization Requirements
The government of TT does not mandate—although it strongly encourages, through negotiable incentives—projects that generate employment and foreign exchange; provide training and/or technology transfer; boost exports or reduce imports; have local content; and generally contribute to the welfare of the country.
TT’s bilateral investment treaty with the United States specifies that a company making an investment may engage top managerial personnel of its choice, regardless of nationality. Several foreign firms have encountered inconsistencies in the issuance of long-term work permits beyond top management. These generally fall into three categories:
- A permit is not granted to an official of a company that is competing with a local firm;
- A permit is not granted because TT officials believe the firm should instead hire a TT national;
- TT authorities threaten not to renew a permit because a foreign firm has not done enough to train and promote a TT national into the position
Some companies report employee shortages due to the inability to find qualified job applicants who are TT citizens. Some executives of smaller companies have found that their work permits are only approved if they form joint ventures with local firms or set up formal training programs. Foreigners entering TT to engage in legitimate trade or occupation may do so without a work permit for a single period not to exceed thirty days within a twelve consecutive month period. To engage in legitimate work for any period in excess of thirty days, a work permit must be obtained from the Ministry of National Security through the proposed employer. This system has created logistical challenges for companies involved in large industrial and energy projects that frequently need technicians for periods longer than thirty days.
There are no government/authority-imposed conditions on permission to invest. There are no forced localization requirements. Foreign investment is, however, screened for potential environmental impact. The government encourages joint ventures between foreign and local corporations. Corporate partners in a joint venture are governed by a joint-venture partnership agreement.
There are no enforcement procedures for performance requirements. Investment incentives are given on approved projects. There are no requirements for foreign IT providers to turn over source code and/or provide access to encryption.
There are no measurements that prevent or unduly impede companies from freely transmitting customer or other business-related data outside the economy. Data protection legislation that aims to protect an individual’s right to privacy and the right to maintain sensitive personal information as private and personal has not been proclaimed into law. There are no rules on local data storage within Trinidad and Tobago.
5. Protection of Property Rights
Trinidad and Tobago ranks 158 out of 190 countries in the 2018 World Bank rankings for Ease of Registering Property, reflecting a greater number of procedures, time required, and costs when compared to the regional average.
Property rights are protected under the constitution and common-law practice. Mortgages and liens exist. Secured interests in property are recognized and enforced; however, TT has a dual system of land titles, the old common law system and the registered land title system governed by the Real Property Act of 1946. 75-80 percent of land in TT remains under the more complicated common law system, which is not reliable for recording secured interests.
The Foreign Investment Act of 1990 governs the acquisition of any interest in land by foreign investors. It states that foreign investors wishing to acquire land larger than five acres must obtain a license.
Foreign investors have complained that is not clear what proportion of land does not have clear title due to inefficiencies in the TT’s system. TT has initiated the process of digitizing property records in order to make their property registration system quicker and more efficient. The government does not make a defined effort to identify property owners and register land titles. Individuals use law firms to conduct identification of property owners. The Registration of Titles to Land Bill was amended in November 2017 but it is not clear that the changes will result in a substantive improvement to the title registration system.
Property ownership can revert to squatters if they can prove exclusive possession of another’s land, without permission, for at least 16 years in the case of private lands and 30 years on State lands.
Intellectual Property Rights
The Government of Trinidad and Tobago is supportive of intellectual property rights (IPR) internationally and is a signatory to several international agreements on IPR. The legal structure is strong. However, several companies have reported that enforcement is generally weak and thatinfringement on rights and theft is moderate.
No new IP related laws or regulations have been enacted. Trinidad and Tobago does not track seizures of counterfeit goods, so it is very difficult to assess accurately the prevalence of counterfeit goods in the local market. Customs officers have ex officio authority to detain counterfeit goods but need input from the rights holder to pursue a case.
TT is not listed in the United States Trade Representative’s Special 301 Watch List for 2019. TT is not listed in the notorious market report for 2019.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .
6. Financial Sector
Capital Markets and Portfolio Investment
In general, the government welcomes foreign portfolio investment.TT has its own stock market, and has an established regulatory framework to encourage and facilitate portfolio investment. There is sufficient liquidity in the markets to enter and exit sizable positions. Existing policies facilitate the free flow of financial resources into the product and factor markets.
The government and central bank respect IMF article VIII by refraining from restrictions on payment and transfers for current international transactions; however, shortages of foreign exchange can cause delays in obtaining funds for transfer. A full range of credit instruments is available to the private sector. There are no restrictions on borrowing by foreign investors. Local credit is expensive by U.S. standards due to high commercial bank reserve requirements, but businesses can negotiate for low rates.
Money and Banking System
Banking services enjoy a high level of penetration within urban areas while rural areas have significantly lower levels. The banking sector is considered healthy, as it is well capitalized and liquid. Despite cutbacks in both the public and private sector arising from TT’s recession, lending growth has increased steadily.
In 2017, the Central Bank estimated non-performing loans at 2.9 percent, down from a high of 6.3 percent in 2011. The legal, regulatory, and accounting systems governing credit markets are, on the whole, effective and transparent, although TT needs stricter regulation of the insurance industry. In 2012, the government amended its Securities Act in hopes of supporting fair and efficient capital markets. The estimated total assets of TT’s banks in 2018 is approximately USD20.7 billion. The five largest banks’ assets are estimated at USD8.4 billion.
TT has a central bank system. Foreign banks are allowed to establish operations in TT provided they obtain a license from the Central Bank. At present, there are foreign banks from the United States, Canada, Jamaica, and India operating in TT. The country has lost correspondent banking relationships over the past three years. There are no restrictions on a foreigner’s ability to establish a bank account.
Foreign Exchange and Remittances
While there are no formal restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, businesses continue to report a cumbersome bureaucratic process and a minimum three-month delay in accessing foreign exchange. Some companies claim exchanging TT for U.S. dollars can take three to nine months.
Funds associated with any form of investment can be freely converted into any world currency pending availability.
Trinidad and Tobago adopted a floating exchange rate regime in 1993, which means the value of the TT dollar appreciates or depreciates in response to changes in supply and demand conditions in the foreign exchange market and the intervention policy of the central bank. The currency is unofficially pegged to the U.S. dollar.
There are no recent changes or plans to change investment remittance policies that tighten or relax access to foreign exchange for investment remittances.
While there are no official time limitations on remittances, timeliness of remittances will depend on foreign currency availability.
Sovereign Wealth Funds
TT established its sovereign wealth fund (SWF), also known as the Heritage and Stabilization Fund (HSF) in 2007 as the country’s sole sovereign wealth fund. At present, the value of the fund is approximately USD5.8 billion. The fund invests in U.S. short duration fixed income, U.S. core domestic fixed income, U.S. core domestic equities, and non-U.S. core international equities.
The SWF follows the voluntary code of good practices known as the Santiago Principles. TT participates in the IMF-hosted International Working Group on Sovereign Wealth Funds. The 2007 legislation prohibits domestic or petroleum-related investments.
7. State-Owned Enterprises
TT has 55 state-owned enterprises (SOEs), comprised of 43 wholly owned companies, eight majority-owned, and four in which the government has a minority share. SOEs are active in sectors like energy, manufacturing, agriculture, tourism, financial services, transportation, and communication. Information on the total assets of SOE’s, total net income of SOE’s and number of people employed by SOE’s is not available. The Investments Division of the Ministry of Finance also has the responsibility to appoint directors to the board of state enterprises. SOEs are often informally or explicitly obligated to consult with government officials before making major business decisions. According to TT’s constitution, the government is entitled to:
- exercise control directly or indirectly over the affairs of the enterprise
- appoint a majority of directors of the board of directors of the enterprise
- hold at least 50 per cent of the ordinary share capital of the enterprise
A published list of SOEs for 2019 can be found here: https://www.finance.gov.tt/state-enterprises-investment-programme-2019/ . In sectors that are open to both the private sector and foreign competition, SOEs are sometimes favored for government contracts.
TT does not have a privatization program in place, but the government has issued initial public offerings on various state-owned companies in order to obtain revenue, primarily in the finance and energy sectors. Foreign investors can participate in the initial public offerings.
The purchase of initial public offering shares on past occasions was open to the public, easy to understand, non-discriminatory and transparent. Please consult https://ngc.co.tt/media/news/ngl-initial-public-offering-brokerage-details/ for additional information.
8. Responsible Business Conduct
There is general awareness of expectations of, and standards for, responsible business conduct (RBC) obligations to proactively conduct due diligence to ensure businesses are doing no harm, including with regards to environmental, social, and governance issues.
The government has not put forward a clear definition of responsible business conduct, nor does it have specific policies to promote and encourage it. TT is in the process of operationalizing legislation related to new public procurement, which factors RBC into its procurement decisions.
There have not been any high-profile, controversial instances of corporate impact on human rights.
TT has laws to ensure protection of labor rights, consumer protection, and environmental protection. Foreign investors have, however, complained that enforcement is lacking due to staffing shortages, capacity issues, and a bureaucratic judiciary.
Government, in collaboration with civil society, created the TT Corporate Governance Code that incorporates governance, accounting, and executive compensation standards to protect shareholders. The Code, however, is not mandatory. GOTT also updated legislation for the financial sector that would encourage responsible business conduct. The Caribbean Corporate Governance Institute is a not-for-profit organization headquartered in Trinidad and Tobago that freely advocates for responsible business conduct and improved corporate governance practices in the Caribbean.
The Government does not encourage adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.
As a member of the EITI, GOTT agreed to publicly declare annually all revenues received from companies engaged in the extractive industries (oil and gas upstream activities, initially) and the companies, in turn, agreed to publicly declare monies paid to GOTT. Multinational companies operating in Trinidad and Tobago may adhere to the Voluntary Principles on Security and Human Rights.
Various pieces of legislation address corruption of public officials:
The Integrity in Public Life Act requires public officials to disclose assets upon taking office and at the end of tenure.
The Freedom of Information Act gives members of the public a general right (with specified exceptions) of access to official documents of public authorities. The intention of the Act was to address the public’s concerns of corruption and to promote a system of open and good governance. In compliance with the Act, designated officers have been appointed in each ministry and statutory authority to process the applications for information.
The Police Complaints Authority Act establishes a mechanism for complaints against police officers in relation to, among other things, police misconduct and police corruption.
The Prevention of Corruption Act provides for certain offenses and punishment of corruption in public office.
The laws are non-discriminatory in their infrequent application.
The laws do not extend to family members of officials or to political parties. TT’s rank in the Corruption Perception Index has trended downward since 2001. The press actively reports on allegations of waste, fraud, or abuse of public resources. Successive governments have been elected on mandates to stop corruption.
TT does not have laws or regulations to counter conflicts of interest in awarding contracts or government procurement. The Government has been a party to the development of corporate governance standards (non-binding) to encourage private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.
Some private companies, particularly the larger ones, use internal controls and compliance programs to detect and prevent bribery of government officials, though this is not a requirement by the government.
Trinidad and Tobago is an adherent to the UN Anticorruption Convention. There are no protections for NGOs involved in investigating corruption, but investigations are not feared since corrupt actors are not punished.
U.S. firms have identified corruption as an obstacle to FDI, specifically in government procurement since businesses complain of the lack of transparency in TT’s procurement processes. Nevertheless, a number of U.S. companies have secured government service contracts in recent years.
Resources to Report Corruption
Contact at government agency responsible for combating corruption:
Name: Mr. Justice Melville Baird
The Integrity Commission
P.O. Box 1253, Port of Spain
The Integrity Commission of Trinidad and Tobago
Level 14, Tower D, International Waterfront Centre
1 A Wrightson Road, Port of Spain
Contact at “watchdog” organization:
Name: Mr. Dion Abdool
Trinidad and Tobago Transparency Institute (local chapter of Transparency International)
Unit 4-12, Building 7
Fernandes Industrial Centre, Laventille
10. Political and Security Environment
While non-violent demonstrations occur on occasion, widespread civil disorder is not typical. There have been no serious incidents of political violence since a coup attempt in 1990. There are no examples over the past ten years, of damage to projects and/or installations. The environment in Trinidad and Tobago has become increasingly insecure, with certain areas of critical crime levels.
11. Labor Policies and Practices
In 2017, Trinidad and Tobago’s labor force contracted by 0.7 percent, representing the fourth such decline since 2014. The unemployment rate was 4.8 percent, but it is artificially low due to government make-work programs that absorb excess labor. TT’s three-year recession resulted in a number of layoffs and plant closures that will be reflected in future statistics. The labor market offers a high proportion of skilled and experienced workers, and the educational level of the population is among the top 10 in North America, according to the Human Development Index, though there is a gap between official literacy statistics and functional literacy. The youth unemployment rate (15-24 years of age) is above the national average at 11.25 percent.
Agricultural employment accounts for 3.6 percent of total employment while employment in services accounts for over 60 percent of total employment. The informal economy contributes approximately 30 percent to GDP. Trinidad and Tobago’s workforce is composed not only of nationals of Trinidad and Tobago, but nationals of 11 other CARICOM countries as part of the free movement of skills and/or labor without the need to obtain a work permit.
Trinidad and Tobago is a net importer of expatriate labor including doctors, nurses, construction workers, and extractive industry specialists. There are surpluses of accountants, and attorneys, while there are shortages of unskilled workers for the hospitality, retail, and agriculture sectors. Government subsidizes tertiary-level education for citizens whose income falls within a minimum range.
There is no government policy requiring hiring of nationals, though it is encouraged. There are no restrictions on employers adjusting employment to respond to fluctuating market conditions, via severance. Labor laws differentiate between layoffs and firing. The Retrenchment and Severance Benefits Act is the legislation providing guidance on who is entitled to receive what based on specific circumstances. Severance pay is usually only paid to workers who have been made redundant or retirees. An employer is not required to pay severance to workers if everyone is severed, owing to the fact that the business is being closed down; however, the employer must pay severance if only a portion of the workforce is being made redundant. Unemployment insurance does not exist for workers who have been laid off for economic reasons, but programs designed to help job seekers get employed as quickly as possible are available.
Foreign investors have noted that tt is not common for labor laws to be waived in order to attract or retain investment. There are no different labor law provisions for special economic zones, trade zones, free ports, or the economy as a whole.
Collective bargaining is common with approximately 15 percent of the population covered by collective bargaining agreements. Government workers including civil servants, police officers, firefighters, military personnel, and staff in several state-owned enterprises are covered by collective bargaining agreements. Unions are also quite active in the energy, steel, and telecommunications industries. In TT collective bargaining takes place between company and recognized majority union rather than on an industry wide basis. The government as an employer also bargains collectively. The process of collective bargaining is regulated by the Industrial Relations Act. There are close to 30 active labor unions in TT and they are independent both legally and in practice.
The Industrial Relations Act (IRA) is the main piece of legislation governing labor relations in TT. It provides for dispute resolution through an industrial court in instances where the issue cannot be resolved at the collective bargaining table or through conciliation efforts by the Ministry of Labor.
There was no strike in the past year that posed an investment risk. The ILO has not identified any compliance gaps in law or practice regarding international labor standards that may pose a reputational risk to investors. The government does not have a labor inspectorate system to identify and remediate labor violations; however, the labor relations court investigates and prosecutes unfair labor practices, such as harassment and/or dismissal of union members.
There are no new labor related laws or regulations enacted in 2018.
12. OPIC and Other Investment Insurance Programs
The Overseas Private Investment Corporation (OPIC) provides financial products like loans and guaranties, political risk insurance, and support for investment funds to help American businesses expand into emerging markets like TT. OPIC has a bilateral agreement with Trinidad and Tobago.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
|Host Country Statistical Source*||USG or International Statistical Source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|Host Country Gross Domestic Product (GDP) ($M USD)||2018||23344||2017||22079||www.worldbank.org/en/country|
|Foreign Direct Investment||Host Country Statistical Source*||USG or International Statistical Source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in partner country ($M USD, stock positions)||N/A||2017||6372||BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data|
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||N/A||BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data|
|Total inbound stock of FDI as % host GDP||N/A||2017||9.3%||UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx|
* Source for Host Country Data: Central Bank of Trinidad and Tobago; Central Statistical Office D Suppressed to avoid disclosure of data on individual companies.
Table 3: Sources and Destination of FDI
Foreign direct investment position data are not available for Trinidad and Tobago.
Table 4: Sources of Portfolio Investment
Portfolio investment data are not available for Trinidad and Tobago.
14. Contact for More Information
Economic and Commercial Officer
15 Queen’s Park West
Port of Spain, Trinidad
Telephone: +1 (868) 622-6371