Haiti wants to reform its energy sector. So police showed up to arrest power providers

In this 2015 file photo, an electoral worker prepares election ballots by lamplight due to the electricity not working at the polling station in the Petion-Ville suburb of Port-au-Prince, Haiti, Sunday, Oct. 25, 2015. Ricardo Arduengo AP

By Jacqueline Charles, Miami Herald, Dec. 15, 2019

A former Haitian government prosecutor is calling the attempted arrest of the widow of late Haitian President René Préval and the director of an independent power provider, illegal and harassment.

“There is nothing technical here. It’s all political,” said Jean Danton Léger, an ex chief prosecutor who currently represents the company Société Générale d’Énergie SA (Sogener), one of three independent power providers in Haïti that produces then sells electricity to state-owned Electricité d’Haïti (EDH) under a 2005 contract.

Léger confirmed that on Saturday hooded Haiti National Police officers with the judicial police unit showed up at the home of the late president in search of his widow, Elisabeth Débrosse Préval, the chief financial officer of Sogener. Police also went to the home of the mother of his client Dimitri Vorbe, Sogener’s vice president and executive director.

“This was an attempt to arrest them,” Léger said.

Neither Débrosse Préval nor Vorbe was home, and security guards at the late president’s house refused to let the police in. In both instances, Léger said, police showed up without the presence of a judge, and despite lawyers’ legal filings in the case that should have blocked the arrest warrants issued by the chief prosecutor from being executed.

Haiti National Police spokesman Michel-Ange Louis-Jeune did not respond to a Miami Herald inquiry about why police showed up at the two residences, and whether the warrants are legal.

“There are no laws that are being respected here,” said Léger, adding that in addition to freezing his clients’ bank accounts, the government also had all of the authorized judges recused to prevent them from issuing a ruling in favor of the company and then went to the same courts to seek a ruling in the case. “We are not the only ones with electricity contracts with the state so why are we the only ones being pursued? There is something else the state is seeking to settle here.”

Two other private companies, E-Power and Haytrac, that have concurrently provided power to EDH under similar terms as Sogener, have not been similarly targeted and continue to operate.

The legal saga between Sogener and the Haitian state has raised a number of questions about what is legal and what isn’t in Haiti’s already dysfunctional, and usually slow-moving judicial system. It is also raising concerns about how far the country’s authorities will go to make an arrest and to silence political opponents.

In this 2015 file photo, an electoral worker prepares election ballots by lamplight due to the electricity not working at the polling station in the Petion-Ville suburb of Port-au-Prince, Haiti, Sunday, Oct. 25, 2015. Ricardo Arduengo AP

Jude Fabre Bretous, a Port-au-Prince lawyer who studied international trade and business law at New York’s Fordham University’s LLM program, said he finds the judicial system’s wranglings in the case to be very troubling.

It is common practice for the prosecutor’s office to invite the accused to be heard by an officer in charge to see if the legal complaints are serious enough to warrant a thorough investigation by a judge. Should the accused not show, then the case can be forwarded to the judge who is the only one legally authorized to issue an arrest warrant, Bretous said.

Sogener officials and others were invited but did not show, choosing instead to respond in a letter through their lawyers. Rather than send the case to an investigative judge, the chief prosecutor issued arrest warrants, which Bretrous said he’s isn’t legally authorized to do.

Also, the chief magistrate of the court had an obligation to also see if the arrest warrant is valid based on the time frame of the alleged crimes that were committed.

“The chief magistrate, has not done his work. I don’t know for what reason,” said Bretous, who isn’t involved in the case.

He added that individual liberties, which are guaranteed under the constitution are being trampled on and that means “everyone has an interest in what’s happening.”

“Tomorrow it can be me, it could be you or someone else who is threatened,” he said.

Haitian President Jovenel Moïse, who has been casting himself as a reformer amid the country’s deepening political and economic crisis, is accused of bending the justice system to settle a political score and break the opposition against him.

Vorbe, with nearly 151,000 followers on Twitter, is a vocal opponent of Moïse and a supporter of some of his chief nemeses, including opposition Sen. Antonio “Don Kato” Cheramy who last month publicly announced that his U.S. visa had been revoked.

On Sunday, members of Préval’s “political family,” which Cheramy and Vorbe are part of, blasted the arrest attempt. In a statement to the press, René Monplaisir, the national coordinator of the Haitian Popular Sector, accused Moïse and his PHTK political party of trying to soil the late president’s image and using the commercial dispute with Sogener to try and force Préval’s allies to negotiate with them on the formation of a new government.

Moïse, who has been without a legal government since March, recently declared his plans to form a new government with members of the opposition before the end of the year.

“The Haitian Popular Sector reiterates the refusal of the political family of President René Préval to negotiate with the PHTK power,” said Monplaisir, a longtime supporter of Préval, the only president to have served two full presidential terms in Haiti’s history. “On the contrary it reiterates its solidarity with the Haitian people and with the opposition.”

Prior to the legal wrangling, Vorbe explained that while Sogener owed $192 million to the government’s then PetroCaribe fuel importer, the government in turn, owed Sogener $204 million.

The government, rather than pay Sogener for fuel as per its contract, used the credit provided for fuel imports from Venezuela to make fuel available to Sogener and then deducted that fuel from the gross bill due the company.

After Moïse accused Sogener of over-billing the state and “selling blackout,” in reference to the chronic blackouts that occur in the country, the Haitian state last month abruptly canceled Sogener’s 14-year-old contract managing one of EDH’s power generation plants, Varreux, in Port-au-Prince.

Days later, the state filed a criminal complaint accusing Sogener of over-billing, forgery and other crimes. It was the first time, Sogener lawyers said, the company had even heard such a complaint even though the government has 15 days under the contract to contest each monthly billing.

The state also obtained a court order and seized the equipment inside the Varreux plant where four of the 34 engines belonged to the state and the others were purchased by Sogener as part of a $70 million-plus investment, lawyers said.

Under the contract, EDH’s broken down motors, rebuilt by Sogener, and the new ones are to be turned over to the state at the end of the contract in 2025. Should Haiti opt to cancel beforehand, the contract requires;the government to pay Sogener back all of its investment plus 15 percent, said attorneys, adding there was no due process in the government’s decision.

With the commercial dispute quickly turning into a criminal matter, warrants were then issued for the arrest of Vorbe, Débrosse Préval, other Sogener personalities and former members of Préval’s government including the ex-head of EDH, Serge Raphael, and former Public Works Minister Frantz Verella and Finance Minister Daniel Dorsainvil, who had negotiated Haiti’s $1.2 billion debt relief package prior to the 2010 earthquake.

In 2007, the ministers had agreed to amendments to Sogener’s 2005 power generation contract at the request of EDH, which wanted to increase its power supply to the population. The amendments were later forwarded by the government to the World Bank, which signed off on in a letter issued by the Bank’s regional director for the Caribbean, Caroline Antsey. Copies were issued to several Préval government officials as well as an executive director representing Haiti on the Bank’s board.

Verella in a radio interview on Radio Kiskeya said under the amendments in the contract, Sogener’s price per kilowatt was reduced.

In other Haitian media interviews, lawyers hired by the state have accused Sogener of paying large bribes to the late president and his wife. No evidence has been presented to support the claim and Sogener’s lawyers have denied the accusations.

Débrosse Préval was married to the late president from 2009 until his death in March 2017. She joined Sogener in 2002 when it first began selling electricity to the government, and resigned from the company during her marriage.

In October, the government through spokesman Eddy Jackson Alexis announced that it was taking steps to improve distribution of electricity in Haiti based on the recommendations of the Steering Committee of the Energy Sector Reform.

Officials and their lawyers have defended their decisions in the Sogener case, saying the law gives them the right to pursue the company, which is being accused of corruption. The drama has provided some much needed oxygen to Moïse, who recently faced a nearly three month lockdown of the country amid continued calls for his resignation. It has also ignited emotions among Haitians who have been litigating the saga in social media.

Public opinion is divided between those who see a legitimate action by the government to reclaim its property from private operators, and others who see a political agenda.

“The government condemns an attempt to obstruct justice, in a system in which the strong place themselves above the law, and recalls that the interest of the Haitian people is the only motive for action being taken, according to legal channels, in order to solve the problem of energy for the benefit of the Haitian population,” the government’s communication office said in a recent statement.

The issue of power generation has become a hallmark of Moise’s embattled presidency, with him early on putting Haiti’s energy woes on the backs of the independent power providers and not EDH as he promised to bring around the clock electricity to Haiti. He has since declared that reforming the electricity sector is a key goal, and the government’s regulator, ANARSE, has been actively issuing bids for private providers. One bid is seeking operators for the northern electrical network in Cap-Haitien using solar power or natural gas.

Reforming energy and changing its landscape has also been a pursuit of the U.S., which so far has not publicly weighed in. The U.S. and other donors have said that the $200 million a year Haiti provides in subsidies to EDH is not sustainable. The company’s operating losses have long been a concern among Haitians and donors, who have unsuccessfully tried for years to get Haiti to reform the electricity sector.

According to a World Bank report, EDH’s average cost of generating electricity is about $0.30/kWh. More than 80 percent of its power generation, however, comes from expensive, imported fossil fuel, and most of the power was produced by four independent power providers, including until last year, a Korean company imposed by Venezuela under the PetroCaribe agreement.

Donors say too few Haitians have access to power and the country is too dependent on expensive fossil fuels, which moreover makes Haiti, according to the World Bank, vulnerable to fluctuations in the global oil market, directly impacting the cost of electricity. They have also pushed for the private power providers’ contracts to be renegotiated, challenging some of the incentives and structure and lack of transparency for the public around the agreements.

According to export.gov, Haiti has a daily unmet residential and commercial electricity demand of about 500 Megawatts a day. The country has an installed capacity of 250 to 400 Megawatts but only produces about 60 percent of that due to equipment that’s broken and in need of repairs, all of which are in the hands of EDH.

But the issue, say critics and observers of what’s happening, is not the contracts, or how to reform EDH. It is the way in which the Moïse administration has decided to address the issue, and the message it’s sending to potential or current investors. It also sets a dangerous precedent for anyone serving in government.

For instance, they note that the Moïse administration has not gone after either of the other two power providers, nor any relevant ministers and EDH directors who served under either former President Michel Martelly or Moïse’s own administration.

After the arrest warrants were issued, three of Haiti’s largest private sector associations — the Chamber of Commerce and Industry of Haiti, the Haitian Manufacturing Association and the Haitian French Chamber of Commerce — issued a statement expressing “alarm,” at the Haitian state’s decisions regarded the contracts, and the chief prosecutor acting as judge and jury through legal filings the government had taken.

“Respect for contractual agreements is one of the cornerstones of the rule of law in which free enterprise prevails,” they wrote. “The non-respect of contracts by the state, the weaponizing of justice for political ends, public authorities using arbitrary and illegal methods, are unequivocal signals of an authoritarian temptation and an incipient tyranny.”

 

Posted Dec. 22, 2019