"Features that are not common to all the region's territories and might retard a common approach, are numerous. Bermuda stands apart from the others in that it has been administered as a separate British Territory, with a legislature of its own, since 1620.. .the present Constitution of Bermuda...provides for a high degree of responsible internal self-government and is the most advanced in the region.'' (Elizabeth Davies, `The Legal Status of British Dependent Territories: The West Indies and North Atlantic Region' (1995) pp16-17.) Any response to the White Paper at this stage, without the benefit of debate in the House of Commons and further clarification in the British Government's specific intent, is essentially a case of first blush impressions.

It is clear that the document represents the British Government's blueprint for future legislation, policy and practice with respect to its overseas territories. Of the overseas territories ("OT's''), Bermuda is the clear leader in two respects. Firstly we have had full internal self-government with a written constitution containing a Bill of Fundamental Rights and Freedoms for over 30 years. Most of the other OT's either have less autonomy than we do, or have comparatively recently achieved a similar status to Bermuda.

Secondly, in terms of size, we have nearly twice the population of the next largest OT, Cayman Islands, and more than three times the population of 70 percent of Britain's ten populated dependencies.

The main broad question raised by the offer of full British Citizenship together with free movements rights throughout the European Community (EC), in return for Bermuda being obligated to comply with the UK's international treaty obligations, including EC standards of financial regulation, is this: Is Bermuda being offered an opportunity to step forward or backwards in terms of constitutional development? The White Paper enunciates four guiding principles which will govern the relationship between Britain and her OT's in the future; (1) self-determination (we can choose independence whenever we want to); (2) obligations on both sides (UK will encourage OT's sustainable development and look after their interests internationally. OT's must adhere to the highest standards of good government and honour the UK's international obligations); (3) OT's must exercise as much control over their own affairs as possible; (4) help will be offered by the UK where it is needed.

The main benefit offered by the White Paper is British Citizenship, with greater study and employment opportunities abroad for young Bermudians, not to mention enhanced travel opportunities for all Bermudians. In addition, Britain offers assistance with respect to anti-drug trafficking activities and environmental protection. Compelling Bermuda to adhere to international human rights standards should also be welcome, save perhaps for those who would like to see a return to mediaeval-style unification of church and state, a non-starter in a multi-ethnic multi-faith society such as ours.

The major concern must be the clear risk that the UK, whose traditional neglect of Bermuda has left us free to develop an economy far more vibrant than Britain's own, will now seek to dictate how we regulate our offshore financial services industry, something both it and the EC are clearly unqualified to do. This will not be as a result of Britain's desire to meddle, but rather as a result of the EC's desire to regulate financial activities in its members' OT's which it considers have an impact on European concerns. It is a desire which would be legitimised by the fact that the OT citizens in question enjoyed the citizenship of an EC member state and the right to move freely through Europe.

It is true that Bermuda, if independent, would have to establish cooperative relationships of inter-dependence and comply with international financial regulatory standards relating to, for example, money-laundering. As a sovereign state, however, we could participate in the formation of these standards (there does not appear to be any currently established international financial regulatory rules which are of any significant concern). Under the present status quo, not to mention under the new relationship with Britain foreshadowed by the White Paper, Bermuda is bound by the UK's commitment, referred to in paragraph 5.23 of the White Paper "not to introduce harmful tax measures and to re-examine laws and practices with a view to eliminating existing harmful tax measures. Member states, with associated or dependent territories are committed...to ensuring the principles of the Code (Code of Conduct for Business Taxation of December 1, 1997) are adopted in those territories''.

Through its membership of the EC, OECD and G7, the UK is obliged to scrutinise the tax regimes of OT's including Bermuda. There does not at present appear to be any global regulatory regime which could have a similar impact on Bermuda as a sovereign nation. Independent offshore tax centres like Bahamas and Barbados will not be troubled by these developments, and may indeed attract new business which is driven away from European OT's by the overreaching nature of EC G7 and OECD harmful tax regulations. It is admittedly possible though, that even if Bermuda were independent, indirect pressures to conform with EC/OECD/G7 demands could still be brought to bear.

While these economic concerns are real, they are not necessarily immediate and they are somewhat difficult to quantify. We can accept the deal on offer and if problems indeed arise still pursue Independence later. It is a remote possibility that Bermuda could negotiate a special status similar to the associated statehood enjoyed by New Zealand's Cook Islands and Niue: they enjoy the benefits of New Zealand citizenship and defence protection, but have some responsibility for their own external affairs. In addition, there is the small matter of social cohesion and national unity. The Pitt Royal Commission Report in 1978 recommended Independence for Bermuda as a means of promoting national unity. Will the new deal for OT's benefit us socially and culturally? The broad question that we really have to answer is whether we wish to enter the new millennium by tying tighter the colonial apron strings, or whether we should continue our present natural momentum towards greater autonomy. If Independence is to be seriously pursued, it is essential that Government work calmly towards building a broad-based consensus to ensure the widest possible support from Bermudians of all political and cultural persuasions, an approach which should also guarantee the continued confidence of the vital international business community.

Ian Kawaley is an associate attorney with Milligan-Whyte and Smith whose special interests include Constitutional and international commercial law. The views expressed above are his own and should not be construed as reflecting the views of any entity or organisation.

Ian Kawaley