Senator Guillaume Arnell.
MARIGOT--Senator Guillaume Arnell has given his input to the controversy surrounding the change of governance for SEMSAMAR, saying the population needs to be informed of the issues surrounding the case, and for local leaders to take into account the consequences of a change in governance. The subject is due to be voted in the Territorial Council.
SEMSAMAR, he said was originally created to meet the development needs of St. Martin, but many people have observed that the strategic orientations adopted by the Board of Directors since its inception favoured development in the overseas territories to the detriment of St. Martin.
According to his figures, SEMSAMAR with its some 20 subsidiaries has built nearly 7,799 social housing units in Guadeloupe, 364 social housing units in Martinique, 3,148 social housing units in French Guiana, and 1,101 social housing units built in St. Martin.
“In view of this observation and in the post-Irma context, it would seem that elected officials wish to refocus the governance of SEMSAMAR to invest locally, “Arnell said. “ The evolution of SEMSAMAR’s governance envisages a governance organised around a Chief Executive Officer (CEO) and General Manager who would serve both functions.”
According to Arnell, the SEMSAMAR case is a complex subject whose stakes are directly related to the St. Martin population. Since its creation in 1985, SEMSAMAR was designed as a tool for the development of the territory. It was initially devoted to construction of social housing, one of the responses to the infrastructure crisis experienced between 1982 and 1990 due to the demographic explosion (from a population of 8,000 to 30,000).
In line with its commitment, SEMSAMAR rapidly expanded and diversified its activities, via its 20 subsidiaries located in other overseas territories (Guadeloupe, Martinique and French Guiana), until it became the third largest semi-public company in France. Today, SEMSAMAR contributes to the development of these territories, to the development of their economies and job creation.
SEMSAMAR's capital is majority held by public entities (Collectivité of St. Martin 51.07 per cent), Region of Guadeloupe (14.47 per cent), CDC Habitat (13.33 per cent), the city of Basse-Terre (five per cent)). In addition, it also includes minority shareholders who are private individuals – the company Foncière de l'Anse Marcel (10 per cent), Caisse d'Épargne Provence-Alpes-Corse (4.73 per cent) and Victor Gibbs (1.4 per cent).
The governance of SEMSAMAR is based on two main bodies – a body representing shareholders and the Board of Directors whose role is to decide the company's strategic choices and to control decisions implemented by the management; a body composed of a President and a Director General whose role is to implement guidelines decided by the Board of Directors.
“In recent weeks, these manoeuvres have been criticized by a large majority of overseas elected officials. While some see it as a manoeuvre to provide a response to the post-Irma situation, others advocate that it is a manoeuvre orchestrated by the State in order to take control of SEMSAMAR, which it should be recalled has in the past been widely criticized for its governance and compensation for its executives.
“Is it really necessary and desirable to centralize the functions of President and Director in the hands of a single body to better represent the interests of the Collectivité of St. Martin?” Arnell questioned. “If the Collectivité feels that the current governance model is not sufficiently useful to its interests, it should be remembered that it is the directors who actually give the strategic orientations of the company.
“My observation is that the directors representing majority shareholders have not really been able to influence the choices made. It would therefore seem that our directors were passively content to follow the guidelines decided upon within the board of directors.
“Successive directors have only implemented the guidelines of the company given by the Board of Directors in accordance with their mandate to management. These orientations were aimed first and foremost at developing the company's profits. The development of St. Martin has thus been pushed into the background and this, it seems, is due to lack of initiative of Collectivité administrators.
“Why such a sudden rush on the part of the Collectivité to change the governance? What are the real reasons? At the end of September, the President of the Republic visited the overseas territories to assess post-Irma reconstruction. During his visit the Head of State invited SEMSAMAR to take full responsibility for the carrying out the necessary rehabilitation work before December 31, 2018.
“While the President of the Republic has assured that he wants to help SEMSAMAR fulfil its commitments, he nevertheless in return requested shareholders of SEMSAMAR waive all dividend distributions over the next three financial years. In addition, according to some, the President of the Republic also put pressure on the Collectivité to obtain the eviction of the current Director General.
“If for several years SEMSAMAR has been the subject of several control procedures involving its mode of governance and compensation of its executives, it is important to remember it is the responsibility of the judiciary to complete these procedures and to judge them.
“And, if it is appropriate to change the mode of governance at a time when there is the greatest need to refocus SEMSAMAR on St. Martin, the fact remains that this decision is solely the responsibility of the shareholders. In other words, under no circumstances should it be decided by a third party, even the State.
“Interference in the management and governance of SEMSAMAR's affairs by the State would, in my opinion, contravene the fundamental principle of freedom of expression and administration of local authorities. I invite everyone to exercise caution in the choices that will be made by not weakening SEMSAMAR in any way as it is a tool at the service of overseas territories development.”
