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  • The flag of Puerto Rico flies outside the Capitol building in San Juan, Puerto Rico May 4, 2017.

    The flag of Puerto Rico flies outside the Capitol building in San Juan, Puerto Rico May 4, 2017. | Photo: Reuters

Published 25 April 2018

If Puerto Rican leaders refuse to implement the plan's measures, the board could sue to enforce them, sparking more litigation over the details of Puerto Rico's path to solvency.

Several labor unions and social organizations from Puerto Rico challenged the Promesa bill that imposed a Federal Oversight Board on the territory at a U.S. court on Wednesday.

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They claim the bill is violating the Declaration of Independence as well as the first, fifth and 14th amendment of the U.S. Constitution, asking a U.S. district court in San Juan to declare the bill “illegal, null and unconstitutional.”

“The powers allocated to the board are dispossessing Puerto Rico's people of a few civilian and human rights, as well as the opportunity to govern themselves in the framework of a democratic society,” said lawyer Roberto Maldonado in a press conference in the Faculty of Law in the Inter-American University in the San Juan.

Puerto Rico's federal oversight board approved last Thursday a fiscal turnaround plan that includes pension cuts and labor reforms that Governor Ricardo Rossello has vowed to defy, portending the latest potential court battle over the U.S. territory's future.

At a hearing in San Juan, broadcast via the internet, the seven-member board voted 6-1 to certify a plan that forecasts US$6.7 billion in debt payment ability for Puerto Rico through 2023. Board member Ana Matosantos was the lone dissenter.

The governor has opposed labor and pension reforms, insisting the board lacks the authority to impose steps that would require legislation.

Puerto Rico filed the biggest government bankruptcy in U.S. history last year, owing US$71.5 billion of bonds and $50 billion in pension obligations. It then suffered catastrophic damage from September's Hurricane Maria.

"We will not propose any bill that reduces vacation and/or sick leave," Rossello said in a written statement on Thursday, adding that it was "wrong and immoral to reduce the benefits" of public worker pensions.


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