An­drea Perez-Sobers
Se­nior Re­porter
an­drea.perez-sobers@guardian.co.tt

The de­ci­sion by ma­jor­i­ty state-owned Caribbean Air­lines Ltd (CAL) to stop serv­ing Blue Wa­ters bot­tled wa­ter on its flights has prompt­ed con­cerns from an­a­lysts and busi­ness lead­ers that the is­sue now ex­tends be­yond a sin­gle com­pa­ny and could af­fect in­vestor con­fi­dence in Trinidad and To­ba­go.

While ex­perts do not be­lieve the loss of CAL’s con­tract is sig­nif­i­cant enough to ma­te­ri­al­ly af­fect Blue Wa­ters’ fi­nan­cial po­si­tion, they ar­gue the wider im­pli­ca­tions cen­tre on due process, the rule of law and the mes­sage be­ing sent to lo­cal and for­eign in­vestors.

The move came af­ter ex­ec­u­tive chair­man Do­minic Hadeed and Blue Wa­ters, his wife and her rel­a­tive were de­tained on June 24, un­der Pre­ven­tive De­ten­tion Or­ders (PDOs) is­sued by the Min­is­ter of Home­land Se­cu­ri­ty.

None of them has been charged with any of­fence.

CAL dis­con­tin­ued serv­ing Blue Wa­ters bot­tled wa­ter last Wednes­day af­ter more than 15 years, re­plac­ing it with Dasani-brand­ed wa­ter, which is dis­trib­uted by a sub­sidiary of the Co­ca Co­la cor­po­ra­tion. Guardian Me­dia un­der­stands the air­line spends hun­dreds of thou­sands of dol­lars an­nu­al­ly on bot­tled wa­ter, with pay­ment records show­ing ex­pen­di­ture of about $460,000 in 2024.

In­vestor con­fi­dence at stake

In­ter­na­tion­al re­la­tions spe­cial­ist Pro­fes­sor Andy Knight said the con­tro­ver­sy has evolved in­to a broad­er is­sue about con­fi­dence in T&T’s in­sti­tu­tions.
“In my opin­ion, the is­sue is no longer just about Blue Wa­ters. It is about con­fi­dence in T&T’s gov­ern­ing in­sti­tu­tions,” he said.
“No busi­ness will be able to op­er­ate in an en­vi­ron­ment where they are un­cer­tain whether due process will be re­spect­ed.”
Knight warned the de­vel­op­ments could dam­age the coun­try’s in­ter­na­tion­al rep­u­ta­tion at a time when at­tract­ing in­vest­ment re­mains a na­tion­al pri­or­i­ty.
“This is now a case that gives the Gov­ern­ment a black eye in­ter­na­tion­al­ly. In­vestors will think twice about putting re­sources in a coun­try that is so un­pre­dictable in terms of the util­i­sa­tion of its pow­er.”
He said both do­mes­tic and for­eign in­vestors must have con­fi­dence that dis­putes will be han­dled through trans­par­ent le­gal pro­ce­dures rather than po­lit­i­cal in­flu­ence.
“When busi­ness­es per­ceive politi­cians are us­ing po­lit­i­cal pow­er with­out prop­er ju­di­cial over­sight, based on ru­mours and whis­pers rather than ver­i­fi­able facts, they will think twice about in­vest­ing in the coun­try.”

Knight said the sit­u­a­tion in­creas­es what econ­o­mists de­scribe as a “po­lit­i­cal risk pre­mi­um,” mak­ing in­vest­ment more ex­pen­sive over time.
“What the Gov­ern­ment is sig­nalling to busi­ness­es now is that there is a big risk in in­vest­ing in this coun­try. Econ­o­mists call this ‘po­lit­i­cal risk pre­mi­um.’ In the long run this makes bor­row­ing much more ex­pen­sive, and this will dis­cour­age new in­vest­ment.”

He ar­gued that the im­pli­ca­tions stretch be­yond Blue Wa­ters it­self.
“Oth­er com­pa­nies will be­gin ask­ing, ‘If this can hap­pen to Blue Wa­ters, one of the largest com­pa­nies in T&T, be­fore that mat­ter is ad­ju­di­cat­ed in the courts, then will it al­so hap­pen to us?”

Knight said con­fi­dence in the rule of law is fun­da­men­tal to at­tract­ing in­vest­ment.
“If a gov­ern­ment isn’t ad­her­ing to the rule of law, why would in­vestors want to take the risk of op­er­at­ing in such a fick­le and un­pre­dictable en­vi­ron­ment?”

He al­so ques­tioned the use of emer­gency pow­ers in the mat­ter.
“There is some­thing very con­cern­ing when a gov­ern­ment de­cides to use emer­gency pow­ers as a cov­er for car­ry­ing out what might be con­strued as po­lit­i­cal witch hunts. Where is the due process?”

Knight said busi­ness­es al­ways have the op­tion of in­vest­ing else­where if con­fi­dence in a ju­ris­dic­tion de­clines.
“Com­pa­nies can vote with their feet and mon­ey. Why would any com­pa­ny want to in­vest in T&T if the gov­ern­ment de­cides to act in this way?”

He added that gov­ern­ments have every right to in­ves­ti­gate al­le­ga­tions of wrong­do­ing, but the man­ner in which in­ves­ti­ga­tions are con­duct­ed is equal­ly im­por­tant.

“The main is­sue is whether those in­ves­ti­ga­tions are be­ing car­ried out in a trans­par­ent fash­ion, in a way that re­in­forces con­fi­dence in the rule of law rather than rais­es ques­tions about that process. This par­tic­u­lar case is rais­ing doubts in the minds of ob­servers, and I would imag­ine in the minds of own­ers of busi­ness­es, about what ap­pears to be a lack of due process.”

Fi­nan­cial im­pact ex­pect­ed to be lim­it­ed

For­mer Re­pub­lic Bank ex­ec­u­tive di­rec­tor and for­mer In­ter-Amer­i­can De­vel­op­ment Bank ex­ec­u­tive di­rec­tor Robert Le Hunte be­lieves that los­ing CAL’s busi­ness is un­like­ly to sig­nif­i­cant­ly af­fect Blue Wa­ters, giv­en the com­pa­ny’s di­ver­si­fied cus­tomer base and re­gion­al ex­ports.
“Every­where you go through­out the Caribbean you see Blue Wa­ters,” he said.
Le Hunte de­scribed Do­minic Hadeed as an ex­pe­ri­enced busi­ness­man and said com­pa­nies of that size rarely de­pend on a sin­gle cus­tomer.
“I would doubt that any savvy busi­ness per­son will have their whole busi­ness de­pen­dent on one ma­jor con­tract.”
While ac­knowl­edg­ing the CAL con­tract pro­vid­ed vis­i­bil­i­ty for the brand, he said it was un­like­ly to have a ma­te­r­i­al fi­nan­cial im­pact.
“I don’t think any busi­nessper­son will have their busi­ness run in such a man­ner that los­ing one cus­tomer will have the im­pact of putting the com­pa­ny un­der stress.”
Le Hunte not­ed that Blue Wa­ters’ prod­ucts are sold di­rect­ly to con­sumers through­out T&T and across the wider Caribbean.
“The prod­uct is very con­sumer-ori­ent­ed, and it is used by a num­ber of con­sumers through­out the coun­try and the wider Caribbean.”
Even if ad­di­tion­al state en­ti­ties were to dis­con­tin­ue pur­chas­ing Blue Wa­ters prod­ucts, he be­lieves the com­pa­ny’s broad cus­tomer base would cush­ion the im­pact.
“Any time you lose busi­ness, you have a neg­a­tive im­pact on your bot­tom line. But I don’t see it as hav­ing a ma­te­r­i­al im­pact on the com­pa­ny’s busi­ness sim­ply be­cause of the na­ture of the prod­uct that is be­ing sold and the ac­cep­tance of the prod­uct in the mar­ket.”
He al­so point­ed to the im­por­tance of ex­ports.
“The goal of ex­port-ori­ent­ed com­pa­nies is to not have de­pen­dence on the T&T mar­ket alone. I am con­fi­dent that a fair amount of Blue Wa­ters’ in­come prob­a­bly comes from ex­port­ing that wa­ter to oth­er parts of the Caribbean and oth­er mar­kets in the re­gion.”
Le Hunte, how­ev­er, ques­tioned the tim­ing of the air­line’s de­ci­sion.
“I think the ac­tions might be con­sid­ered a lit­tle bit pre­ma­ture at best, but that is up to the Gov­ern­ment.”

Due process con­cerns

Econ­o­mist Mar­i­ano Browne said the is­sue rais­es im­por­tant ques­tions about the dis­tinc­tion be­tween in­di­vid­u­als and the com­pa­nies they own.
“This is the dif­fer­ence be­tween a cor­po­rate en­ti­ty and an in­di­vid­ual. So far, we have noth­ing proven. Noth­ing.”
“We have ac­cu­sa­tions, and we have a PDO. No­body has been charged with any­thing.”
Browne said the de­ci­sion ef­fec­tive­ly pe­nalis­es a cor­po­ra­tion be­cause of its con­nec­tion to in­di­vid­u­als who have not been con­vict­ed of any of­fence.
“What ef­fec­tive­ly that amounts to is a de­ci­sion which pe­nalis­es a cor­po­ra­tion be­cause it’s con­nect­ed to a per­son.”
He main­tained that sanc­tions should on­ly fol­low es­tab­lished wrong­do­ing.
“You take ac­tions against com­pa­nies or in­di­vid­u­als when they’re proven guilty of some­thing, not when they’re held un­der a PDO and you have no charges.”
Browne added that cor­po­rate en­ti­ties should be treat­ed sep­a­rate­ly from their own­ers.
“You have to sep­a­rate the cor­po­rate per­son­al­i­ties from the in­di­vid­ual.”
Like Le Hunte, Browne does not ex­pect the air­line’s de­ci­sion to have a ma­jor eco­nom­ic ef­fect on Blue Wa­ters.
“I don’t think it has that much eco­nom­ic im­pact.”
Blue Wa­ters has op­er­at­ed for 27 years and is the coun­try’s dom­i­nant bot­tled wa­ter brand. In ad­di­tion to the lo­cal mar­ket, the com­pa­ny ex­ports to An­tigua, Bar­ba­dos, Do­mini­ca, Grena­da, Montser­rat, St Kitts and Nevis, St Lu­cia, St Mar­tin and St Thomas, giv­ing it a sub­stan­tial re­gion­al foot­print be­yond Trinidad and To­ba­go.