The Tortuga

Freeport Project
Robert H. Meier

During the past few years, news releases have been periodically Tortuga lies six miles dff the northern coast of Haiti
appearing which have interested a growing number o f in the Windward Passage. It is only 30 minutes by
international businessmen. American entrepreneur Don light plane to the Haitian capital, Port-au-Prince. It is
Pierson has been engaged in developing the Haitian island three hours by air from New York, only one from
of Tortuga into a modern freeport with a complete Miami.
absence of all taxes and traditional economic controls.
..
Intrigued, like many others, I investigated the project and The island i s 23 miles long and 4% miles a t i t s widest
spent a week in Haiti visiting with Mr. Pierson and his point giving it an area of approximately 60 square
staff to find out about their progress. I also took a trip miles. There is a large ridge running the length of the
to the island itself where heavy construction is now being island creating a turtle-like profile for which it was
undertaken. For the reader who finds the Tortuga freeport named (after the Spanish word for "turtle") by
project sufficiently interesting to warrant further investigation Columbus. The island i s divided into two distinct
I have provided addresses at the end of the article to facilitate areas, one half being quite arid, the remainder tending
inquiries.[1],[2J I should like to thank Mr. Pierson and to be lush and tropical. The arid portion is being
his associates for the cooperation and numerous courtesies developed first, as the flatter terrain expedites i n i t i a l
shown me. construction efforts, including a new jetport to
replace the current runway which handles planes up
Robert H. Meier t o the size of a DC-3.
Port-au-Prince
'1 September 1972 The waters surrounding the island are crystal clear, so
that from the air the terrain, beaches, and coral reefs
present an impressive sight. The island's environment
remains largely undisturbed by the construction and
Pierson stressed that a great deal of effort was going
into preserving the ecological balance.

There are an estimated 10,000 natives living on the

island mainly in small huts on the southern shore.
Farming and fishing are the primary livelihoods, but
the freeport project offers immense potential for
future employment. This labor force has already been
used in building the current runway and Pierson
intends to employ these people in the future when-
ever possible.

Aside from the freeport development, the natives

have had little contact with the outside world.
Aerial view of Tortuga construction site showing
Pierson is now building a 150-seat elementary school
airstrip, roads, living quarters on beach, and which is due for completion by the end of the year
construction equipment. and which will be donated to the island community.

24 reason december 1972

Tortuga has a colorful history. It was an early base Don Pierson of DuPont Caribbean with AI Celcer,
for pirate activities in the Caribbean. The term owner of Tortuga Air.
"buccaneer" is said to have originated on the island
to refer to t h e pirates who hid in the island's caves
between 'raids on Spanish ships. More recently it has of 1967.
served as a jumping off point for Haitians trying to
smuggle themselves into the Bahamas t o find employ- Dupont Caribbean Inc. was founded by Pierson t o
ment. develop the island and in December of 1970 a unique
convention between Haiti and the corporation was
BACKGROUND signed creating a freeport economy on the island of
Tortuga for a 99 year period. The government of
The story of the present freeport development began Haiti received an interest in the corporation for their
in England in 1963 when Don Pierson started two concessions.
offshore radio stations, Radio England and Britain
Radio, that broadcast an all-day programming of Specifically, the convention creates a freeport author-
news, weather and music to the mainland. The ity to be controlled by Dupont Caribbean. The
stations were well received: the larger advertising authority in turn will completely control the econom-
accounts included General Motors, Ford, Kent Cigar- ic life of the island and have the sole power to grant
ets and Lever Brothers. In spite of their popularity in IicensBs for operations on Tortuga, start corporations,
England the stations' activities were terminated in or issue permits of various types. According to the
1968 with the passing of the Marine Offences Act convention, however, the island itself will be com-
which made it iliegal to supply, work with, or pletely tax-free. Absent will be such common eco-
otherwise aid an offshore radio station-with the nomic burdens as corporate, personal income, capital
threat of criminal penalties for violators. gains, sales, excise, ad valorem, social security, prop-
erty, import, export, and special levy taxes.
Anticipating the Marine Offences Act; Pierson mailed
inquiries to all the foreign embassies in Washington I ND IVI DUAL LICENSES
offering the services of his floating radio stations.
Haiti was among the eleven countries replying, Considering the immense potential advantages of
although they later turned down the offer. conducting business on the island, I asked Pierson and
George R. Todd, a management consultant working
Shortly after the meetings on the radio stations, the on the project, about the costs involved in actually
Haitian government began to put out inquiries for a setting up a small business there. They were reluctant
foreign organization that would be interested in to state specific figures since each licensing request is
developing the island of Tortuga along the freeport subject t o individual negotiation but they did offer
concept of the Bahamas. Remembering Pierson's the following figures as a rough sort of guideline,
energetic, if unorthdox, approach to business prob- stressing that they could significantly change a t any
lems, the Haitian ambassador in Washington called on time. For an individual architect or engineer the
him for advice. From this encounter came the first initial licensing fee would probably be "in the
negotiations between Haiti and Pierson in December neighborhood of" $1000 for a license of "average"

december 1972 reason 25

duration. Most licenses of this type will tentatively
run from three to ten years. Beyond this fee the
licensee would pay the freeport authority a flat 5% of
their gross income per year. Such a fee would provide
additional operating revenue for Dupont Caribbean.
Beyond these two figures a company or individual
would only encounter his normal business expenses
such as raw materials, wages, and the like.

There is a large range in the types of licenses available

including the free-market provision of various
"municipal" services, although it would seem that the
number of organizations that could be incorporated
for tax purposes would be essentially unlimited.
There are about 200 licenses now available and
Pierson reports that the response has been great.
Every effort i s being made to insure the integrity of
those allowed into the economic environment of the
island.

LEASEHOLD LAND Supplies on the beach at the Tortuga construction

site.
In addition to the freeport authority, Dupont Carib-
bean received 99-year leasehold rights to approxi-
mately 75% of the island with the right of reassign- FINANCIAL NEWS
ment. The remaining 25% is reserved as the property
of the native inhabitants. Free access to all the beach As examples of the interest being generated in the
areas is being preserved for everyone on the island. project Pierson cited several recent developments. He
The extensive block of leasehold land, about 45 said that he had received a "staggering sum" from one
square miles, was released to the company in Novem- corporation for a letter of intent that will allow the
ber 1971. It is from this land that assignments will company t o use about 1,200 acres of land to build a
take place for construction of offices, factories, 50-100 million dollar petrochemical plant on Tor-
banks, resorts and other projects. tuga. In addition, an offer has been received from
Merrill Lynch, Pierce, Fenner & Smith, I nc., to place
some 3 million dollars in debt securities for additional
financing contingent upon Dupont Caribbean's con-
senting to have a public stock offering within 15
months. Pierson indicated no final decision on the
matter but he did mention an increasing demand for a
.public stock offering. The convention with Haiti
requires that stock be offered on the international
markets a t an indeterminate future date, but no
decision has yet been reached on when that will be.

CURRENT DEVELOPMENTS

The first major assignment of leasehold land was

made in April 1971, allocating a portion of the
western tip of the island to Translinear Inc., a Texas
development firm. After mapping and other prepara-
tory work was done, this section b f the island entered
the operational stage in August. The construction
work for the Translinear project is being carried out
by Indian River Construction Company of Jackson-
ville, Florida, and every effort is being made t o
employ local native labor.

Tortuga Airport and Beech 18 owned by Tortuga Air.

26 reason december 1972

On 4 August 1972 the first shipment of heavy Pierson views the logical end of the freeport develop-
equipment was unloaded on the island-house trailers, ment as a vast complex of commercial activity.
tractors, graders, well-digging rigs, and similar equip- Beyond the obvious attraction of tourism, gambling,
ment are in use. Among the priority projects are a and truly tax-free shopping and consumption, there
hotel/restaurant to house investors and company are essential Iy unI imited possibi I ities: retirement Iiv-
officials visiting the island. This will later be enlarged ing, condominiums , companies incorporating for tax
to serve tourists. A primary road system and improve- benefits, all types of manufacturing, international
ments on the 4,000 foot landing strip also have high banking services; service as a flag of convenience for
priority. shipping companies such as those that now register in
Liberia or Panama. In addition there are a host of
Even though the island is still in the early stages of business operations already located in the islands that
development an airline has already been established. could profitably move to Tortuga especially when
Called Tortuga Air, it is owned and operated by AI you consider the nearly untapped labor supply of
Celcer. The airline is currently flying heavy-duty twin Tortuga and Haiti.
engine planes and a helicopter which was shipped in
with the first load of heavy equipment and assembled
on the island. Tortuga Air is currently awaiting the
arrival of a new jet helicopter. Access by airline has
greatly facilitated communication between the island
and Port-au-Prince where Dupont Caribbean has i t s
Career opportunity
temporary headquarters. While the plane trip is a
pleasant 30-minute flight, the alternative is a six-hour
in business for
ride over rough Haitian roads followed by a boat trip
across the channel. With expected improvements in
HARD-WORKING
the road system, the deepwater port potential of the
island, and the current policy of off-loading heavy
LIBERTARIAN
equipment directly from landing barges, any trans- A profit-oriented advertising agency, owned and
portation problems seem close to being permanently operated by libertarians, offers a career opportunity for
a meticulous, hard-working man or woman. Prior busi-
solved. ness or sales experience helpful but not necessary. We
will teach you the business from the bottom up. You
OBSERVATIONS would start work with a combination of media buying,
traffic control, bookkeeping, graphics design, produc-
tion, typing, filing, light correspondence, errands or
With the operational stage of the freeport project research. Starting salary lean but livable.
now seriously underway, the ultimate potential of the
We make money helping our clients sell their
island becomes even easier to envision. I t s natural products. Our advertising aims directly at a prospect’s
advantages include a strategic location in the Carib- self interest, then demonstrates a product’s benefits logi-
bean, ample space for virtually any endeavor, a host cally, factually and forcefully. We measure the sales
country eagerly looking for economic growth, and- results of each advertisement. This means we can and
do scientifically test different product benefits, head-
most important-a 99-year tax-free environment. lines, subheads, copy, pictures, layouts, offers, coupons,
Possibility for success is increased even further by the sizes of advertisements, publications, other media, posi-
fact that other traditional freeport/tourism areas are tions, times of the week, month or year, and frequency,
being progressively crippled by growth in taxes to one to improve the profitability of the advertising.
degree or another; nearly everywhere else the myopia We are growing rapidly. When new positions open
up, we try to promote our own people. For instance:
of economic nationalism is breeding an increasingly our former secretary is now Media Vice President; one
hostile environment for business or tourism, let alone of our former bookkeepers is now a full-time copywriter;
any vestiges of a freeport system. An excellent another former bookkeeper/copywriter is now our Presi-
example of this degeneration can be found in the dent. So you can advance as far as your accomplish-
ments take you-in management, media or copywriting.
so-called Freeport of the Grand Bahamas where the
import duty on watches and jewelry has grown to a To succeed with this career, you MUST be ambi-
tious, self-motivating, honest, competent, responsible-
range of 27-30%. Tortuga, on the contrary, can never and thrive on hard work. This business is not for nine-
have any a t all, making the relative advantages ’ to-fivers.

obvious. Add t o this the surliness of the natives in If you believe you can succeed in this career, tell
many traditional Caribbean tourist areas, along with us how we will profit mutually by working together.
the growing number of racial incidents directed Simply write in detail to Jim Powell, Buzzell, Powell,
Rosenthal, Inc., 14 Sweetfield Circle, Yonkers, New
against whites in these other areas and you have the York 10704.Your reply will be held in strict confidence.
formula for the unique success of Tortuga. Please mention where you read this advertisement.

december 1972 reason 27

 Temporary living
quarters on
I_' * 1 Tortuga.

Although this type of growth does require time, Pier- growth as well and the government is obviously aware
son estimates that in two years the island will have of this fact.
5,000 new non-Haitian residents engaged in all types
of commercial activity. The l i s t of cruise ships inter- Seemingly, the freeport project could not have come
ested in making port calls is growing steadily and a t a better time. Since the death of Dr. Francois
it is estimated that after the same two years an average (Papa Doc) Duvalier in 1971, his son, Jean-Claude,
of nearly 20,000 tourists a month will visit the island. has been installed as "president for life." With the
change has come a more nearly open society; although
THE GOVERNMENT still depressed, the Haitian economy is also starting to
show signs of growth. In the last two years an esti-
The obvious question generated by this information is mated 200 new businesses have set up operations
whether the Haitian government a t some future date there, creating approximately 10,000 new jobs. The
would attempt t o tamper with the freeport of Tor- recently-created quickie divorce industry exposes
tuga, by either repudiating or forcibly altering their many new people to the country every week, some of
convention with Dupont Caribbean in the hopes of whom stay on for extended visits and even t o set up
generating tax income in addition t o their current businesses there.
financial interest, or by nationalizing all or part of the
activities on the island. The whole project quite Haiti may be ripe for many types of progress, partic-
obviously is possible only because of the contractual ularly after the isolation that began with Papa Doc's
forebearance of the Haitian government, yet the flow- regime. One hopes that the government's new pledge
ering of a vital multi-faceted economy on their for- t o increase economic growth i s based on an under-
merly undeveloped island would be a tempting plum standing of the dynamism of the free market, and will
indeed. I questioned Pierson about these possibilities remain firm as time passes.
and he replied by emphasizing that the Haitian gov-
ernment realized full well that the ultimate success of NOTES AND REFERENCES
Tortuga rested upon keeping the confidence of the
[ l ] For further information on the Tortuga project:
world business community by maintaining the laissez Dupont Caribbean, Inc.
-faire environment of the island. Tampering with the Eastland, Texas.
agreement could only result in a serious disservice t o
everyone concerned and Haiti would have by far the [2] For general information on the Haitian economy:
most to lose. It should be noted that Pierson has been U. S. Embassy
dealing with the Haitian government and people on Commercial Secretary
Port-au-Prince
an intimate basis for over four years now and seems Haiti
fully satisified with the credibility of the government. (Request their publication titled "Economic Trends" dated
August, 1972.)
In concluding a discussion of this matter it should
also be stated that the success of Tortuga will have Robert H. Meier is currently completing his bachelor's
tremendous implications for the whole country. As degree program in finance at Northern Illinois Univer-
more and more people are drawn t o the freeport, the sity in De Kalb. He is active in the lllinois Libertarian
spotlight will also fall on the mainland. The freeport's Party and is a member o f the Libertarian Party
success could be a significant factor in the mainland's National Executive Committee.

28 reason december 1972

the nation builders' \e
&TU99
John L. Snare

Several "new country" projects have been making Of the ideologically-inspired groups, one i s inactive
news in recent months. A number of efforts have (Preform), another has recently suspended publica-
been initiated to establish communities, resorts, or tion of i t s newsletter (Operation Atlantis), while the
freeports free of the restrictions imposed by tradi- third (Mike Oliver's project) is not only active, but
tional, established governments. All of these face appears t o be making a breakthrough.
formidable problems from both external and internal
sources. Yet a t least two of these ventures are not Of the commercially-oriented projects, Taluga
only still alive but showing vigor. appears to be stalled for need of interim financing,
while the very recent Tortuga project of Dupont
The implications of a new libertarian "nation" Caribbean, Inc., appears t o be moving rapidly, though
without coercive government are breath-taking. Such not without signs of trouble.
a community, i f once established and sustained t o the
takeoff point, might show economic and social PREFORM WAS THE FIRST
growth never equalled before in history. Such a new
community might also become linked to parallel Preform (also Free Isles) was initiated by some
economies in established nations. Floating cities in inspired and energetic young persons in Santa Monica
deep water with l i t t l e or no problem of conflict with and the general Los Angeles area in 1963 and
present national territories appear possible; the tech- continued actively into 1965. Seeing no hope of the
nology exists, but as usual-the major problems are United States becoming truly free any time in the
social, political, and economic. A critical factor seems near future, these libertarians set about planning a
to be getting enough capital and skills into a new country with laissez-fairecapitalism. The story is
community to attract large numbers of persons and recorded in the PREFORM-INFORM NEWS-
develop adequate markets; a few families establishing LETTER, which evolved into the present-day VONU-
residence in shallow-water structures or in boats LIFE.
would hardly have any significant effect, even if they
were free. Tackled problems of establishing a new country. The
primary purpose of Preform was to conduct research
Two kinds of projects are described herein: those in and formulate plans for attaining the new-country
which freedom is the major goal; and those that are goal. There were numerous meetings, discussions,
commercial or profit-seeking, in which greater free- writings, and reports, with considerable participation
dom i s only a means to greater profit. The latter but limited funds. Many important and basic prob-
group is not to be ignored; because of their careful, lems were tackled; the record shows impressive
practical, hardnosed approach, with perhaps less thought and effort. Presentation tapes were prepared
wishful thinking and emotional involvement, they for use in places far from Los Angeles. Factors to be
may have a greater chance of success, and one of considered in site studies were described, and general
them may incidentally discover the idea that profits areas were considered (sites in or near North America,
will be greater in a libertarian society. Also, the latter Central America, northern South America, or the
group probably will find financing less difficult than Caribbean). Methods by which territory could be
the first group will. obtained were discussed.

december 1972 reason 29