Daily News Photo by SEAN McCOY Assistant U.S. Secretary of the Interior for Insular Areas Tony Babauta testifies at the Legislature.

ST. THOMAS - Assistant U.S. Secretary of the Interior Tony Babauta told members of the 28th Legislature on Thursday that he understands the unique realities of living on a tropical island under the American flag.

"I was raised thousands of miles away from here, on a similar sized island, on the other side of the world, in waters as blue as yours, surrounded by jungles just as lush," he said.

Babauta, who is from Guam, was confirmed by the U.S. Senate in September to the long-vacant undersecretary post overseeing Insular Areas at Interior. He spoke in Ottley Legislative Hall to the Committee of the Whole and then listened as senators individually outlined federal-local issues that they believe are important.

Babauta spoke about the similarities between the Caribbean and Pacific territories and also about the need to expand business opportunities in the territory, while also protecting the environment.

But he started out by saying thanks.

"As a son of one of your sister territories, I want to personally thank you as a Chamorro for the honor you bestowed on Peter Cepeda who lost his life here in the aftermath of Hurricane Hugo," Babauta said.

A Chamorro is one of the indigenous people of Guam. Cepeda was a Guam Power Authority lineman who came to the territory to help rebuild in the wake of Hurricane Hugo in 1989 and was killed in a pole accident.

Babauta said this is his fourth trip to the Virgin Islands. Although he was in the territory in October - and attended a Government House press conference on the Cruzan Rum deal and the launch ceremony for the Virgin Islands quarter - this is Babauta's first official visit as undersecretary.

"I can make this assurance to you - that as the first Pacific Islander and resident of a United States territory to serve as the Assistant Secretary for Insular Areas - you will have a strong force for change, which will engage the federal bureaucracy, the Congress and our own island leaders as we strive to improve the quality of island life," Babauta said.

He is looking forward to building relationships in the territory, he said.

"I am confident that we can work collaboratively for positive solutions to the issues we face," he said. "The great privilege I now enjoy is working at the seat of the federal government, so that together, with the Virgin Islands and other island leaders, we may begin working to advance the well-being of the people and further promote the prosperity of our islands."

Babauta outlined what he described as "critical issues we face."

They included:

- Expanding business opportunities. Babauta praised the governor and lawmakers for having "the foresight and ingenuity to anchor rum production in the V.I. for years to come."

"The agreements forged with Diageo and Fortune spirits solidify and grow a reliable revenue stream to your government's treasury that will prove essential in buying down the significant debt you carry," he said. "Those agreements will also help you to make the reinvestments in your infrastructure, in your historic towns, and in your people to remain competitive in the global market place.

Babauta said that while he hopes to see growing business opportunities in the territory, the businesses must be responsible corporate citizens, encouraging community growth and development.

- Protecting the environment.

"The insular areas are home to some of the world's unique, scenic, untapped and historic landscapes and seascapes; the beauty of our islands is immeasurable above and below our surrounding oceans," Babauta said. "We are the inheritors of a deeply rooted and rich culture, where community building, respect for Mother Earth and one another has always been at the epicenter of our concern."

He said that he believes that federal policies must reflect a similar conscience.

"Whether we are working to expand business opportunities or building partnerships to bolster tourism and to spur economic development, we must do so in a way that maintains the integrity of our lands," he said.

- Searching for viable renewable energy alternatives that reduce carbon dioxide emissions and ending dependence on foreign oil.

Babauta said his office, the U.S. Department of Energy and the territory are "embarking on the Energy Development in Island Nations project," with a goal of tailoring a plan for energy efficiency and alternative energy development to the territory needs.

Early next year, he said, he expects a memorandum of understanding between the territory, the U.S. Department of Energy and Interior to be signed.

Babauta also spoke about the need "to look to the future of our young people."

"This is where investment can yield guaranteed high returns," he said, noting that he was "fortunate" to have mentors when he was young and he wants to carry on the tradition.

He said he would like to use his influence to start a fellowship program for college students across the insular areas and would also like to increase opportunities by encouraging youth to be civically active and engaged at local and federal decision-making levels.

Babauta also spoke directly to young Virgin Islanders, telling them that as he was growing up in Guam, the farthest thing from his mind was the possibility of serving as a presidential appointee.

He encouraged young people in the territory "to seek more knowledge and ever-broadening horizons." He told them that study, hard work and accumulating knowledge would open doors for them - and encouraged them, once those doors are open, to seize as many opportunities as they can.

- Contact Joy Blackburn at 774-8772 ext. 303 or e-mail jblackburn@dailynews.com.