A new law to force companies to hire and promote black Bermudians could speed up job losses in the international business sector, a senior industry source has claimed.

The Workforce Equity Act 2007 will give the Commission for Unity and Racial Equality (CURE) powers to fine companies up to $50,000 if they block the progress of the Island's largest racial group.

Firms of 40 or more employees will be forced to set up policies to ensure black Bermudians achieve "a degree of representation in each occupational group in the employers' workforce that reflects their representation in the Bermuda labour force".

This week London-based trade publications have been full of stories claiming senior executives were so concerned about Bermuda's political climate and work permit problems they were reviewing their exit strategies.

The reports were dismissed by Premier Ewart Brown as scaremongering but have been backed up by Robin Spencer-Arscott, chair of the Bermuda-based World Insurance Forum.

Speaking on conditions of anonymity another leading business figure told The Royal Gazette yesterday that the CURE proposals would hasten the stampede.

He said: "The reaction is cumulative - to what appears to be just one thing after another.

"We move from work permit term limits to Goodwill Plus to CURE and it is fair to say the mood is pretty dark in terms of this. It basically amounts to finger-pointing without any evidence that the companies are doing anything wrong.

"We keep telling them we have an education system which simply doesn't provide the people to hire and all the statistics they provide, whether they relate 'income to colour' or 'income to nationality', none of them seem to relate 'income to expertise'. It is a struggle."

It's understood business leaders will be meeting with the Premier and other Government leaders next week to press their concerns.

The industry insider added: "I think there is going to be some tough and straight talking ahead and I have a feeling everyone is going to be a lot less reticent in the days and weeks.

"A lot of jobs will leave. It will start with the work permit jobs being outsourced but every work permit job that gets outsourced a job that will typically fall to a Bermudian will get outsourced as well. It is definitely happening right now. It is not as if I am being prophetic."

He said outsourcing to Canada had always happened.

"Someone told me that for every supervisor he can't hire here he has got to ship six jobs that the supervisor would have looked after to somewhere else.

"The very big companies are prepared to put up with a significant amount of pain because of the substantial amount of benefits that Bermuda brings but in order to ease that, if everything gets too difficult, people will simply outsource jobs and in the long term we will see the sort of jobs which go to Bermudians no longer exist."

However another senior figure in the reinsurance world told The Royal Gazette that the clamour coming from the overseas doomsday merchants should be regarded with suspicion.

He said: "You have to look at people's motivations. Jurisdictions outside Bermuda are aggressivly promoting to companies in Bermuda to come over. People have a motivation to tarnish Bermuda's reputation."

The draft CURE bill, which is now being reviewed by employers, gives Government powers to review and copy company records as they investigate compliance.

Employers will be:

■ forced to analyse their workforce to see where black bermudians are and then identify and eliminate any potential barriers to upward mobility.

■ prepare an employment equity plan that specifies short-term policies (between one and three years) to boost the hiring, training, retention and promotion of black Bermudians.

■ create a timetable of goals set each year if there is a need to improve the demographics of the workforce.

■ prepare a report on employment fairness to be ready by June 1 each year detailing steps taken and meetings with unions or employees representatives about what had been done.

CURE's compliance officers will be given powers to go anywhere, other than someone's home, in their investigations and examine or take copies of records.

Companies which have broken the law will be forced to sign an agreement to change their ways and if they don't they risk fines of up to $50,000 although this can be overturned in Supreme Court on appeal.

Community and Cultural Affairs Minister Wayne Perinchief said earlier this summer that Government could "no longer leave the issue of imbalance and under-representation of blacks in the workplace to good will".

And he said there is an element of racism in the maintenance of the white male in middle and upper management.

Many in business were reluctant to comment on the details of the CURE law until they had studied the details.

Association of Bermuda International Companies David Ezekiel said: "It is tough for us to comment until we have had a chance to look at it in detail."

Asked for an initial reaction he said: "It is not so much of an initial reaction becausee have been working with them for a while in terms of what we think is going to be there. It is now just a question of taking a look at it and seeing whether what is there ties in to what we thought would be.

"We have had a Government relations committee working with the ministry and the CURE people for some time on the new initiatives they are putting in place."

Yesterday's story provoked a lot of email reaction. One reader wrote: "Regarding your article on "New law proposed to boost black Bermudians at work" - how exactly does one qualify as being a black Bermudian? Is it a blood type? I am wondering if I qualify - I am Bermudian but have never done much of a family tree."

Another reader, Peter Card, said he had worked in two large exempt companies in Bermuda over the last 25 years and from his experiences from both sides of the managerial divide he could honestly say that never was a candidate's race, or gender, considered as a criteria for hiring or promotion.

He said if the Act is saying that companies must give preference to black candidates those hires would be coming into a situation where managers will never have the confidence in them to allow them to succeed.

Mr. Card added: "Further, companies will lose confidence in their local workforce, and we will see even more applications for non-Bermudians or with our exempt companies, more work being moved off Island. Both of these effects will actually lead to a decline of the successful black male."

And another reader sent this email: "What is going on with the Bermuda government? They seem to be doing their best to drive business off the island."