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Working with the fauna, flora and geology on the Rock

Sponsored post: Gibraltar, with its fascinating, ancient past, is moving towards a strong and confident future.

There was one precise moment, some six million years ago, when some movement or other of the earth’s crust caused a break in a natural dam that created one of the planet’s biggest ever cascades, as the Atlantic broke into the basin that was to fill up to become the Mediterranean, just a few kilometres south from where I’m writing these lines. The Strait of Gibraltar had begun.

For anyone interested in the natural environment, Gibraltar’s geographical location is ideal. At the extreme southern end of the Iberian Peninsula, mere kilometres from Africa, overlooking the Herculean Straits, themselves a passageway for migratory whales and dolphins, turtles and tuna, it is a focus for tens of thousand of migratory birds of many species.

Its cliffs and hillsides are home to unique species of plants and invertebrates, with more than 600 species of plants and 700 species of beetles so far recorded: an impressive expression of biodiversity. This is all to be found in a small area - a peninsula of just around seven square kilometres.

While in recent months international attention has been focused mainly on Gibraltar’s relationship with Spain, ironically, some allege, rekindled by the laying of an artificial reef intended precisely to improve biodiversity, what may have gone relatively unnoticed is the commitment that Her Majesty’s Government of Gibraltar has not only to protect and enhance the natural environment, but to take a leading role in wider environmental issues and work towards a green economy and a carbonneutral community.

This was one of the key commitments of the Gibraltar Socialist Labour Party/ Liberal Alliance that came to power just under two years ago after close on 16 years in opposition.

So strong is this “green” commitment, that it went beyond our shores and attracted the attention of America’s former vice-president, Al Gore. He joined together with one of Barack Obama’s environmental team and 2012 campaign managers, Juan Verde, and both became key speakers in a major environmental conference and trade fair held in Gibraltar less than a year after the current government came into office.

One of the biggest challenges, aside from the restoration of marine habitats, overexploited and damaged in the recent past, is the replacing of three aged diesel power plants with state-of-the-art alternatives including renewable energy sources. Renewable technologies are welcome in Gibraltar, and the government is currently engaging with established and new providers and facilitating the opportunity of developing these on the Rock.

Gibraltar is changing. It has taken off on a huge leap from what some would describe as a 1980s time-warp into the second decade of the 21st century. The government is putting the management of waste and sewage plants out to tender, with environmental considerations and non-polluting technology being the top criteria for selection; recycling is being increased (would you believe cardboard and plastic could not be recycled in Gibraltar until the present government introduced it in December 2012?); the government fleet of vehicles, including public transport, is being replaced with hybrid and electric technology; and there are financial incentives to import “green” products.

The government has introduced a green procurement policy, which follows EU Green Public Procurement policy, with weighting in the tender process being increased for environmental performance; The plan includes LEDs and solar-powered lights replacing other lighting devices in public areas, with financial incentives by way of soft loans to private estates to introduce these. Solar thermal installations are being placed in public buildings, including hospitals, and photovoltaic arrays to allow solar power rather than the more carbonnegative alternatives are in the planning stages – on rooftops and other built-up sites – in order to protect green areas.

Land is a commodity in short supply in Gibraltar, but amazingly, development and the environment are progressing hand in hand, not least thanks to the new, open and public planning process. This has resulted in new housing, car parking, luxury flats, sewage treatment and waste disposal works, and a power station, progressing at the same time as an expansion of protected natural areas, growth of beaches, enhanced visitor facilities in the Upper Rock Nature Reserve, and a new, wooded city park with fountains and bandstand adjacent to the town centre. And Gibraltar’s social needs are being met – a new hospital ward was planned and opened within three months of the election, and new homes and a day centre for dementia and the frail elderly are under construction.

In addition, government support for conservation and research into natural history and heritage are taking Gibraltar to the forefront of many academic disciplines. The famous Barbary macaques, apart from being a major tourist attraction, form part of an ecological research project which is among the most extensive on non-human primates. Spectacular bird migration too, attracts researchers as well as tourists. Archaeology and palaeontological research are regularly presenting new discoveries on the human history and notably on the ecology of the Neanderthals.

Monitoring in caves is providing new information on the history of the earth’s climate and on ancient landscapes. And the government in Gibraltar is supporting the 2015 United Kingdom bid for designation of the Gorham’s Cave complex, carved into the sea cliffs on the secluded south-eastern coast of the Rock, as a Unesco World Heritage Site. Interest from universities, museums and other academic institutions around the world is significant, and is being encouraged.

On the legislative side, all current European directives have been transposed into Gibraltar law – another achievement of the present administration – and this of course includes all the environmental ones. In addition, the use of ISO14001 and Eco-Management and Audit Scheme standards are being encouraged, and increasingly the public sector is requiring these types of qualifications in the tender process. These all provide a number of important safeguards, by ensuring good environmental quality for residents and visitors and ensuring the highest standards from businesses, in matters environmental – as well as in matters financial.

Much of the Gibraltar government’s environmental programme is set out in a brief, but punchy and comprehensive Environmental Action and Management Plan. This sets clear targets and commits the government to engage with the private sector through the Gibraltar Federation of Small Businesses and the Chamber of Commerce. The idea is to encourage them to showcase their application of green practices and products, and provide for the establishment of a green business network, and green business certification, standards and awards.

Gibraltar is vibrant in its environmental surge, and ready to welcome investors including those who either bring green technology, green services, or have sound green credentials.

The Rock has a status and an image that far exceeds what one might expect from its physical size, though not from its imposing geology. Coupled with a hugely pleasant environment, a diversity of activity – in which solid academic standing meets con siderable commercial success – and with a unique history and a social resilience that have seen it survive sieges in four successive centuries, the jurisdiction looks to the future with confidence and with growing regional importance. As it has been since prehistory, it is the perfect setting – for so many things.

 

John Cortes MP

Photo: Getty
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Gibraltar - impact of Brexit

Last week our editor took a general overview of some of the scenarios for Gibraltar if Britain were to leave the Euro. This week, as the atmosphere in the British Conservative Party becomes ever more toxic, Michael Castiel, partner at Hassans lawyers on the Rock, goes into more detail (this piece written before the Iain Duncan Smith resignation and subsequent arguments happened).

However unlikely it may prove, the prospect of Britain's withdrawal from the EU sends shivers through Gibraltar's financial services, gaming and tourism industries, which are at the core of Gibraltar’s economy. For, if Britain leaves the EU, Gibraltar goes too, and, should Brexit occur, it is Gibraltar’s relationship with the UK that as in the past, largely will shape Gibraltar's future.

Gibraltar joined the European Union in 1973 as part of the UK. While rights to freedom of services across borders of EU member states apply between Gibraltar and the rest of the EU, because Gibraltar is not a separate member state (and is in fact part of the UK Member State) those rights do not apply between Gibraltar and the UK. Instead a bilateral agreement, formalised almost two decades ago, gives Gibraltar's financial service companies the equivalent EU passporting rights into the UK. Accordingly and pursuant to such agreement, where EU rights in banking, insurance and other financial services are concerned, the UK treats Gibraltar as if it is a separate member state.

This reliance on the special relationship with the UK is recognised by both the Government and the Opposition in Gibraltar, and when the territory (which in this instance as part of the UK electorate) goes to the polls on 23 June, the vote to remain in the EU is likely to be overwhelming. This may have symbolic significance but realistically seems unlikely to influence the outcome. In actual terms, although some non-EU jurisdictions use Gibraltar and its EU passporting rights as a stepping stone into Europe, almost 80% of Gibraltar’s business dealings are with the UK.

But whether or not Britain maintains the 'special relationship' with Gibraltar, if Brexit becomes a reality, other factors will come into play, with the ever-present Spanish Government’s historic sovereignty claim over Gibraltar topping the list.

Recently Spain's caretaker Foreign Minister Jose Maria Margallo went on record that if the UK voted to leave the EU he would immediately 'raise with the UK the question of Gibraltar.' If this was to come about it could take one or more of several different forms, ranging from a complete closure of the border between Spain and Gibraltar, demanding that Gibraltar passport-holders obtain costly visas to visit or transit Spain, imposing more stringent border controls, or a frontier toll on motorists driving into or out of Gibraltar. The latter idea was in fact floated by the Spanish Government three years ago, but dropped when the EU Commission indicated that any such toll would contravene EU law.

Here, again, imponderables come into play, for much will depend on which political parties will form the next Spanish government. A Spanish government headed by the right wing PP party is likely to take a less accommodating attitude towards Gibraltar (the Foreign Minister having recently indicated that in case of Brexit the Spanish Government may opportunistically push once again for a joint sovereignty deal with the UK over Gibraltar) whereas a left of centre coalition will likely adopt a more pragmatic and cooperative relationship with Gibraltar in the event of EU exit.

The most significant changes to Gibraltar's post-Brexit operation as an international finance centre are likely to be in the sphere of tax, and while Gibraltar has always met its obligations in relation to the relevant EU rules and Directives, it has also been slightly uncomfortable with aspects of the EU's moves towards harmonisation of corporate taxes across member states.

Although it was formed as a free market alliance, since its inception fiscal matters have been at the root of the EU, but Gibraltar's 'special relationship' with Britain has allowed considerable latitude in relation to what taxes it imposes or those it doesn't. However, as is the case with other member states, Gibraltar has increasingly found in recent years its fiscal sovereignty eroded and its latitude on tax matters severely curtailed.

As in Britain, Gibraltar has benefitted from several EU Directives introduced to harmonise and support the freedom of establishment, particularly the Parent-Subsidiary Directive which prohibits withholding taxes on cross-border intra-group interest dividend and royalty payments made within the EU.

As a stepping stone for foreign direct investment, should Brexit come about EU subsidiaries could no longer rely on these Directives to allow tax-free dividend or interest payments to their holding companies based in Gibraltar. In the case of the UK, bilateral double tax treaties will no doubt mitigate the impact of the non-application of any tax related Directives. Gibraltar, however, is not currently a party to any bilateral double tax treaties. Accordingly, Gibraltar would either have to seek from the UK the extension of all or some of the UK’s bilateral tax treaties to Gibraltar (subject of course to the agreement by the relevant counterparties) or it would need to negotiate its own network of bilateral double tax treaties with a whole series of EU and non EU Member States. To say the least, neither of these options would be straightforward to implement at short notice and would need the wholehearted support of the British Government

Whilst Gibraltar’s economy is likely to be adversely affected should Brexit occur, there may be some potential benefits. An EU exit would result in fewer regulations and possibly may provide Gibraltar with greater exposure to emerging economies.

From a tax perspective, an EU exit would probably enable Gibraltar to introduce tax rules and incentives that are contrary to EU tax laws and would provide the Gibraltar Government more freedom to adopt competitive tax regimes that may be considered contrary to EU state aid rules. How possible or effective any such strategy would be is doubtful given the OECD driven anti-tax avoidance climate affecting all reputable jurisdictions whether within or outside the EU.

In this as well as other possible change much will hinge on any post-Brexit relationship with the UK - an issue which the Gibraltar Government addressed recently in a paper sent to Westminster's Foreign Affairs Committee. It stressed not only that 'EU membership has been an important factor in the development of Gibraltar’s economy' but also the importance of 'clarity as to the rights the British Government will protect and defend for Gibraltar in the context of its own negotiations.' 

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