Over the past few months, we (those of us who are interested) have heard ramblings about the Security Interests in Personal Property (SIPP) Bill and its various shortcomings. But what is this SIPP Bill? How did it come about? Why is there so much fussing over what many of us would deem ‘another simple bill’? Join me in exploring these issues that have been before Parliament’s Joint Select Committee for the better part of the last five months.
The SIPP Bill is one of 12 Bills being pushed in order to achieve benchmark timelines laid down by the International Monetary Fund (IMF) under the Extended Fund Facility agreed between the lending agency and the Jamaican Government. A statement on the Office of the Prime Minister’s Website (http://opm.gov.jm) describes the Act as one“designed to implement a legal framework, by international standards to modernise and improve the availability of domestic credit to the private sector, while minimising the risks of repayment of loans”.
The Bill seeks to create and simplify the process of registration for recognition of security interests in personal property (property other than land). Additionally, the Bill wants to ensure that the public is notified of these security interests and stipulate the conditions under which these interests may become enforceable. Micro-Small and Medium Enterprises (MSME’s) will benefit by being able to use their assets as collateral for loans while at the same time creating a more secure environment for the recollection of these loans.
While this is all good and well, it seems that certain provisions under the Bill, mainly the establishment of a Central Collateral Registry are cause for concern for at least one agency, the Registrar General’s Department (RGD). The agency stands to lose revenue given the potential for the elimination of an entire unit (which accounts for about 85% of its department’s revenue and about 10% of the RGD’s overall revenue) from its Island Records Office (IRO). This especially since the Companies Office of Jamaica is being considered Central Collateral Registry. Chief Executive Officer (CEO) at the RGD Deidre English Gosse is quoted in an article in the Jamaica Observer as telling the Joint Select Committee that, “there would be a significant loss of revenue, resulting in the IRO and, by extension, the RGD, not being economically viable”.The RGD is a Type C executive agency of government, which means it finances its own operations, and any loss of revenue would lead to the need to cut staff and the reorganising and shakeup of its processes.
The RGD’s ability to carry out asset lien verification would also be affected, which the CEO described as “a service where anyone with an interest in purchasing a second-hand motor vehicle can visit the unit and conduct a search, to ensure that there is no lien on the vehicle they desire to purchase.” The RGD’s records would also be incomplete, as the safekeeping of bills of sale would now be carried out by another agency.
Up to this date, a number of issues still linger; including whether or not documents currently held by the RGD will remain with the agency, will the satisfaction of mortgage still be required, has the Chief Justice been consulted on the matter and the applicability of the bill to Powers of Attorneys and other documents as defined by the term bill of sale.
So while the deadline of tabling the bill in Parliament by August 2013 has been met, the deadline for the establishment and operation of the Central Collateral Registry which is December 2013 is fast approaching. Come on Government! You have passed two tests so far; make it three in a row!
© Odane Lennon 2013