Senate Approves Legislation to Establish National Natural Disaster Reserve Fund

The Senate approved legislation that will facilitate the establishment of the National Natural Disaster Reserve Fund (NNDRF), during its recent sitting at Gordon House.

Leader of Government Business in the Upper House and Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, piloted the Financial Administration and Audit (Amendment) Act, 2024, which paves the way for the Fund’s establishment.

The NNDRF’s creation is aimed at buttressing and strengthening the Government’s disaster risk management framework, given Jamaica’s vulnerabilities.

Its fiscal resources are intended to treat with disasters that severely affect the economy and lead to a fiscal impact of 1.5 per cent or more of GDP, whether through revenue loss, increased expenditure or both.

The legislation, among other things, identifies the sources of funding for the NNDRF and the conditions under which withdrawals may be made from it.

Minister Johnson Smith said through the NNDRF, the Government is moving to strengthen Jamaica’s disaster risk management framework and continue development of more prudent expenditure in disaster resilience and recovery.

“Jamaica is located in the second-most climate-vulnerable region in the world, and it doesn’t take a named storm to cause significant damage… that destroys farmlands, destroys bridges, cuts off communities and destroys road networks significantly,” she said.

The Minister informed that between 1990 and 2020, Jamaica sustained damage valued $705 billion from natural hazards, including 16 major hurricanes and several flood events.

She added that the cost associated with weather events will trend higher due to the effects of climate change.

Senator Johnson Smith noted that the Government continues to implement effective disaster-risk preparedness, management and resilience strategies, including fiscal buffers.

She said the Fund will enable the Administration to respond to the impact of disasters, noting that it is not meant to replace or displace the role of the National Disaster Fund, which was established under the Disaster Risk Management Act to support mitigation preparedness, rapid early response and recovery.

“The NNDRF is another layer and it, in fact, promotes a risk-layered approach to managing disaster relief and it seeks to build a stronger fiscal buffer as we move to greater incorporation of disaster-risk analysis in public-sector investments and planning. So it’s in this context… and recognising the disruptive impact of the disasters that the provisions establishing the NNDRF are linked to section 48C (2) of the Financial Administration and Audit Act, which allows for the suspension of the fiscal rules under certain circumstances,” the Minister outlined.

She further explained that the Bill defines ‘disaster’ as any occurrence set out in Section 48C (2) of the Financial Administration and Audit Act.

This includes public disasters, circumstances of severe economic crisis and periods of public emergency, among others.

“These are the circumstances which can trigger suspension of the fiscal rules, and the measures that we are seeking to implement under this Bill are important, therefore, for creating the fiscal buffer for the country,” she said.

Other contributors to the debate were Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Senator the Hon. Matthew Samuda, and colleague Government members – Charles Sinclair and Sherene Golding Campbell.

Opposition members making their contributions were Peter Bunting, Sophia Fraser Binns and Damion Crawford.

The legislation was previously approved in the House of Representatives.