Feb. 28, 2002 — If a local senator's effort to revoke Hovensa refinery tax benefits is successful, the territory's largest employer could shut down, according to a company vice president.
Sen. Alicia "Chucky" Hansen earlier this week alleged that a maintenance contractor for Hovensa, Wyatt V.I., is not hiring local residents for supervisory positions. Hansen maintains that is a violation of an agreement between the V.I. government and the company.
But Hovensa Vice President Alex Moorhead "categorically denied" that the company has violated the Third Extension and Amendment Agreement, which was approved by the 22nd Legislature in 1998. He said specific language in the agreement mandating the hiring and promotion of qualified Virgin Islanders pertains to the refinery's $535 million coker project, which is being managed by subcontractor Bechtel International.
Wyatt, Moorhead said, is not involved in the coker project. He noted that discrimination charges against Wyatt and Hovensa have been lodged with local and federal agencies, although Hovensa "has played no role in Wyatt's hiring of employees."
"If Wyatt has discriminated against local residents in hiring persons for certain supervisory and managerial positions as has been alleged, Hovensa would neither defend nor condone such actions," Moorhead said.
While Hovensa has distanced itself from Hansen's allegations regarding Wyatt's hiring practices, Moorhead was adamant that the senator's call for the revocation of tax exemptions could result in the closure of the refinery, the largest in the Western Hemisphere.
"Sen. Hansen must be aware that Hovensa would not be a viable business if it had to pay certain taxes and fees, such as custom duties on imported crude oil and gross receipts taxes on exports," Moorhead said.
Those benefits are essential, he said, because Hovensa's competitors are either not subject to similar burdens or pay lower import duties. Mainland companies also have access to less expensive electricity and water, Moorhead said.
"Sen. Hansen is in effect proposing legislation to close the refinery without due process to Hovensa and without cause," he said.
Considering the poor economy, particularly on St. Croix where Hovensa is the single largest employer, Moorhead said it was "incredible that the senator has proposed such an action without proposing any alternative source of employment for over 2,500 employees of Hovensa and various independent contractors who are currently employed at the refinery in highly paid jobs."
