September 2014 by Islands Business

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September

2014

Vol. 40, No. 9 V

Contents Business

43 Time runs out for Samoan airlineÕ s Fiji domestic bid Board decides against extension request

44 Malaysians take over PNG palm oil giant Pacific plantation yields record surge

Sports

45 Weightlifters bring home the medals in Glasgow Pacific’s athletes brace for ANZAC invasion

Viewpoint

46 The PIDF Comes of Age

Environment

47 The Pathway to the 3rd SIDS Conference in Samoa Samoa rolls out red carpet to the world: Samoa ready to host the world in largest UN conference ever to come to the Pacific P .Ñp ages 16-32. Cover photo: Samoa STA

Cover Report

16 Samoa rolls out red carpet to the world

Regular Features 6 7 12 14 44

Apia Diary We Say Whispers Pacific Update P Business Intelligence

Proud moment for donorsÕ darling

20 Clearer skies ahead for economy

Tourism agribusiness to spur resurgence T

22 Putting Samoa on the global tourist map Global event revolves around local show

24 Straight-shooting PM ready to take on the world Samoa willing to say no to China

28 Farm to tableÐC hefÕ s passion is infectious Oliver joins growing new food movement

28 Ô Samoa arrives on world cuisine stageÕ 30 Showcasing small islands enterprise Traditional artisans to display products

32 A premium offering from Samoa

Project offers land for sale to foreigners

Cover Story - PNG

34 Thirty nine years of independent Papua New Guinea 38 PNG: Happy birthday to the land of unexpected

Future depends on ability to fight crime

39 New leadership for P Pacific Islands Forum PNGÕ s Meg Taylor takes top job

Cover Story - Fiji

40 Leadership choice crucial to Fiji poll result

Politics

42 US seeks dismissal as nuke lawsuit gains support IslandersÕ Justice bill nears US$2.3 billion

Islands Business, September 2014

Managing Director/Publisher Godfrey Scoullar Group Editor-in-Chief Samisoni Pareti Group Advertising & Marketing Manager Sharron Stretton

Graphic Design Dick Lee Virendra Prasad Main Correspondents Australia Rowan Callick Nic Maclellan Davendra Sharma French Polynesia Thibault Marais Marshall Islands Giff Johnson New Zealand Dev Nadkarni Jale Moala Ruci Salato-Farrell Duncan Wilson

This special feature on Samoa and SIDS is a joint initiative of Islands Business International and the New Zealand office of Pacific Islands Trade & Invest (PT&I). It’s the first of a series of forthcoming special features focusing on the trade and investment potential of each of the member countries that will be published in Islands Business magazine in both print and online versions. PT& I is the Pacific Islands Forum Secretariat’s trade and investment facilitation office serving 14 Pacific Island Countries. Islands Business International is the publisher of the Pacific’s only remaining news and business monthly. Its flagship publication Islands Business has been in circulation since 1985 and is based in Suva, Fiji.

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Spare a Tala for grassroots wisdom The longish drive from Faleolo Airport to downtown Apia is always a great opportunity for a grassroots view of the goings on in Samoa – especially when your driver, even if loquacious, is eloquently so. Views from the street are more often than not strongly biased toward the hoi polloi but they’re straight from the heart and valid nonetheless. The cabbie barometer is one of the best tipping tools a scribe can have anywhere in the world. It’s always perceptive, even philosophical. “From New Zealand?” asks chatty cabbie. Before I even utter ‘yes’, he continues: “Lived there a few years ago. Very nice place, nice people, nice roads, nice houses, but I came back in a year.” “Too cold?” I ask. “No. Cold is okay. Too expensive – you pay for everything, for eating, drinking, you need money for everything. Not like here. In New Zealand, no money, no life, no good.” No need for money in Samoa? Not so much, he says. He lives in a nice ancestral home. There’s plenty of family, extended family and friends for support. There’s a patch to cultivate vegetables and fruit. There’s lots of fish. And it’s free. No money needed for day-to-day living. “Then how do you pay your bills?” I persist. “Sell the extra veggies and fruit by the side of the road, work a few hours, don’t work when you don’t need to, no pressure. See? Not like New Zealand.” Come to think of it, all island societies – just like indigenous peoples elsewhere in the world – have not just survived but thrived without a monetary economy for millennia. And they’ve done so sustainably, without polluting, without taking more than what they need. They’ve grown food naturally and organically, without making a fuss of it or clamouring for some sort of expensive certification. They’ve treated ailments with traditional remedies and dealt with day-to-day problems with collective wisdom. We first world slickers call that ‘subsistence living’ as though it were some lower form of existence. We desperately want to bring ‘up’ those living standards with ‘development.’ Paid for by aid and cheap loans so that they may better participate in the modern global economy. 6 Islands Business, September 2014

So that they can pay for cheap, unhealthy high fat-salt-sugar-laden processed food and drink, which their digestive systems are scarcely attuned to. All of it produced in factories that belch carbon into the air, pollute the water and use questionable chemicals to prolong shelf life. So, maybe the measurement and yardsticks of development ought to account for the harm it does to the traditional, natural lives that indigenous people have lived so well for a thousand years and more. Maybe Samoa’s Prime Minister Tuilaepa Sailele Malielegaoi, whom I met and chat with later, is right about development yardsticks being seriously flawed. The worryingly high incidence of noncommunicable diseases like type-II diabetes, a range of coronary ailments and runaway obesity rates are all consequences of development and of aligning with a modern, globalised economy. And then you find fault with ill equipped countries like Samoa, which also have inadequate human capacities to deal with these problems, of not achieving goals according to a one-size-fits-all standard that’s set by some ‘expert’ in some faraway ivory tower. As we trundle along newly resurfaced roads to welcome some 3000 visitors from every corner of the world for the region’s biggest jamboree, I ask what he thinks of the event. “Very good for Samoa. Everyone will know Samoa. We learn from them and they learn from us.” What does he think ‘they can learn from us’? With a reflective glance over the endless ocean and with an ever so slight smirk he rather haltingly says: “If everyone lives like how we have always lived, everything will be all right.” So earthy, so practical, so straight from the heart: but is the world listening? As it squabbles about how to prevent half-a-degree’s rise in temperature while fiercely arguing who will spew out less carbon, the still, small voice from the grassroots stays unheard. Apt sobriquet I quite like Samoa’s ‘model state’ sobriquet. It’s stable socially and politically, has

Apia Diary

BY DEV NADKARNI

reformed its economy slowly but surely, and has performed reasonably well in the development indices, though some might have a different view on this last bit. I often wonder what might be behind Samoa’s stolid social stability, unlike, say, that of Fiji’s, where things always seem to simmer beneath the surface. As I meander through one of Apia’s bustling markets on a crowded Saturday morning I can’t help but notice the sheer diversity in facial features. Some are decidedly oriental. Some are completely Pacific island. Some are a bit of this and a bit of that. But unlike in other multiethnic melting pots anywhere in the world, everyone is called Samoan. There is no hyphenated, double-barrel description. Like Fijian-Indian or Indo-Fijian . There are no labels like Chinese-Samoan or GermanSamoan in common parlance. Everyone is Samoan. Period. One reason might well be that unlike Fiji Samoa doesn’t have to bear the cross of British colonialist legacies. Three powers fought over its territories in history – Germany, America and Britain. Fiji was ruled solely by the British, who left behind their toxic divide-and-rule legacy in many parts of the world: Fijian versus Indian just as in India it was Hindus versus Muslims. These divisions continue to threaten havoc in Fiji, India and other former British colonies. Samoa was spared that. It’s a true melting pot. Chinese and European legacies are valued and celebrated but in the Samoan way. Absorption, accommodation and assimilation are the unique attributes of the Samoan way. But there is a new wave of immigrants and I notice them in bigger numbers during every subsequent visit. There are more Chinese coming in as businesspeople, traders, workers. Some Samoans are worried. They are unsure how this escalating influx will affect the Samoan way in the decades to come. Meanwhile, everyone is excited about hosting the biggest show the country has ever seen. No one clearly knows what it all means and what benefits it will bring Samoans in the long run.

WESAY “They must shift their focus on the effects. These are real and demonstrable. They are documented. People are living it. There is a living record. It is indisputable. It is there for everybody to see, feel, hear, experience. It is therefore not a matter for debate like the plethora of scientific theories that can be challenged with every new theory that comes along”

hat outcomes should the world’s small island states that are congregating in Samoa realistically hope for at the conclusion of the conference in early September? These island states, joined at the hip by the shared vulnerabilities of climate change, economic and ecological sustainability, isolation and poverty have been clamouring for the world’s attention to alleviate their collective plight. The problems and issues they collectively and singly face are many, but we can safely expect the issue of climate change to dominate the discourse, as it always has over the past decade. Other serious problems that may or may not be related to climate change are likely to get less billing, although in reality they may require much more urgent attention. These, in our opinion, would be food, water and energy security and economic sustainability. Climate change is for real. There is little disagreement on that, if any. All the disagreement is on its causes. The world is divided into those who believe that all climate change is anthropogenic – caused by the actions of mankind – and others who are of the firm opinion that climate change is a natural dynamic and has always been happening throughout history from the earliest times. Then there are also those who, quite reasonably, take a middle position: while it is natural, human effect has an effect on it. Most debate on what action needs to be taken on climate change has centered round the first contention – that climate change is primarily anthropogenic. This position has produced a vast body of knowledge and theory both in support and against. Thanks to the attention it has received in the global media, it has also produced factions with great vested interests. The plethora of theories that have been churned out is constantly challenged with great ferocity by opposing factions. This has created confusion enough to cause skepticism and policy paralysis among decision makers at the highest levels. This is why all those global jamborees that Confusion causes have been held so far have failed to convincskepticism and ingly agree to a way forward especially on the policy paralysis most important issues. Even on agreed matters, action has been long in coming. Billions of dollars have been committed to dealing with climate change in the vulnerable island nations such as the small island developing states, but accessing funding has been slow, fraught with bureaucratic red tape and unconscionable delays. Unfortunately, the small island states,

that are at the receiving end of the effects of climate change – man made or not – are also the victims of this policy paralysis. This is where a change of tack is required collectively from the small island states. The focus must shift from the causes of climate change to the real effects that are threatening their existence. Unfortunately small states have been caught up on the contentious and controversial anthropogenic debate – which, in the first place, is the main cause of policy paralysis. They have been raising their voice on the debate whether the rise in temperature should be contained two a degree or half a degree. There will never be an agreement on this, especially from the industrialised nations.

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WESAY Besides, the fast developing nations like those of the BRICS grouping will never agree to such conditions not least because many still see this debate as being based on unsure ground, rightly or wrongly, with controversial scientific theorising that can never really be definitely proven or unproven. For the small island states, this is like barking up the wrong tree. They will never have the full agreement of all the nations on how much they must reduce spewing greenhouse gases so the world does not warm up by more than a certain fraction of a degree in the next so many decades. Instead, they must shift their focus on the effects. These are real and demonstrable. They are documented. People are living it. There is a living record. It is indisputable. It is there for everybody to see, feel, hear, experience. It is therefore not a matter for debate like the plethora of scientific theories that can be challenged with every new theory that comes along. It is time the leaders, experts and officials of the small island states get the developed world to focus intensely on the real effects of climate change as they and their people experience it in real life than get agitated about causes based on controversial scientific theory, that can never be really proven to be free of vested interests. There are no guarantees that even if the world agrees to temperature increase by half a degree in the next so many years, that the climate will behave exactly as predicted. While we are not suggesting letting off this tack completely, because it might have its merits, what we say

is the emphasis and concentration must be infinitely more on the real effects which people are facing as we speak. The small islands must focus completely on adaptation and mitigation. They must make it imperative for the world to agree on a pathway in the determinable future for food and water security, energy self sufficiency, a guarantee of livelihoods – and most importantly, a guarantee of shelter. Healthcare, education and sustainability are also challenges that are constantly under threat because of their vulnerabilities. Much would be achieved should the leaders of the small island states be able to extract commitments on most of these concerns from the developed and industrialised countries when they congregate in Samoa. Perhaps the most important policy that must be evolved and agreed upon most urgently – which the developed world has so far treated in an ostrich-like manner – is what to do when the existence of an entire nation or a large part of it is physically threatened by an extreme, irreversible climate event. This is not a fictional idea. At the way sea levels are rising and populations around the small island states are being forced to move away from the water line, it is a question of time before flat atoll states face the real prospect of inundation. What will the world do in such a situation? Is there a plan? Is there a policy? Or will the world simply shrug it off? These are the answers the small islands states must have. And the time to have them is now. Right here in Samoa.

“Papua New Guinea’s Dame Meg Taylor, who will take the helm of the region’s most important inter-governmental organisation as Secretary General later this year, will have two women Deputies Secretary General as well. This situation is unprecedented in Pacific Island history. … It’s only ironical that the near unanimous decision was made at a meeting in Palau, which is yet to ratify CEDAW”

he Pacific Islands region has often figured at the bottom of global gender parity statistics. The region has the fewest women parliamentarians, at no time in their histories since independence more than a handful collectively. In countries like Vanuatu and Federated States of Micronesia, their tally is zero while the best they have been able to muster is just over eight per cent of elected representatives in Kiribati. There are fewer women than anywhere else holding jobs or who are in entrepreneurship in the formal sector. This is despite Pacific Island politicians’ occasional boasts about the pride of place women enjoy in Pacific culture. In fact, politicians in some Polynesian countries used this argument to justify not ratifying

8 Islands Business, September 2014

the United Nations’ Convention on the Elimination of Discrimination against Women (CEDAW) a few years ago. Ratifying the CEDAW treaty commits nations to take action to end discrimination against women and girls and affirm principles of fundamental human rights and equality for women and girls. Two Pacific Island nations still figure in the list of only seven countries in the world that are yet to ratify CEDAW – Tonga and Palau. But there are more than straws in the wind indicating change may be round the corner. Two years ago, Pacific Island leaders pledged to work toward gender parity in their island nations. Samoa passed a law ensuring ten per cent reservation for women in parliament. It finally is beginning to appear that the politicians are putting

WESAY their money where their mouths are: At this year’s Pacific Islands Forum meeting in July, the leaders announced a woman to head the Pacific Islands Forum Secretariat – the first ever time in its four decade old history. What is more, Papua New Guinea’s Dame Meg Taylor, who will take the helm of the region’s most important inter-governmental organisation as Secretary General later this year, will have two women Deputies Secretary General as well. This situation is unprecedented in Pacific Island history. It has been lauded around the world as the leaders’ genuine efforts to promote gender parity in a region where there hasn’t been much progress in the matter. It’s only ironical that the near unanimous decision was made at a meeting in Palau, which is yet to ratify CEDAW. Perhaps there is a message in it for its leaders? It is hoped that this development will set off a trend of greater women’s participation in public affairs throughout the region, rather than turning out to be a single event wonder. The ducks seem to be lining up for this to happen. Nauru elected a woman to its parliament after thirty years, while the Cook Islands saw three women being elected in its July election. Pacific Island women have been better represented in senior bureaucratic positions than they have been in Parliament for some time now. Indeed, it is heartening to see progressively greater numbers of women bureaucrats in the foreign service of Pacific Island nations taking up positions abroad. Fiji and the Solomon Islands already have women diplomats in New Zealand. There must be many like them elsewhere. While these developments are as inspirational as they are commendable and do indicate a growing positive trend, much needs to be done to improve the lot of the great multitude of women who are ill equipped to pursue these avenues because of a lack of education, poor health and the traditional view of their institutionalised place in society, which is playing subservient to the male gender. Unless changes are effected at the grassroots level, these shining examples are likely to remain few and far between. Much also lies on the shoulders of these women appointed to these exalted posts to encourage others of their gender to educate Nauru, Cook Islands elect women MPs

themselves not only in the three R’s but also knowing their rights, to excel in their work, to grow as leaders and to breach the proverbial glass ceiling as they have done. If male politicians of the region who have paid lip service to the exalted status of women in Pacific culture are serious about this belief, then they should bring no obstacles in the path of deserving and hardworking women who have set out to work in leadership roles. There is reason to believe that positive changes are indeed taking place. Though Vanuatu has no elected woman leader in its House, it has had a few elected in recent local Government election. Countries ranging from Palau and Papua New Guinea to Samoa and Tonga have enacted a range of legislation favouring women in terms of protecting them from family violence and underscoring their rights, enshrining them in law. But media reports emerging from the islands only indicate this is but the tip of the iceberg as regards the incidence of domestic violence and injustice against women. Estimates say some 75 to 80 per cent of the women in the region, especially those that are in remote locations and away from the gaze of the world, face serious domestic violence issues. Not all these are reported for fear of transgressing traditional mores and even potential reprisals from the ‘stronger’ sex. Legislation and the threat of punitive action against offenders will only go so far to alleviate the situation. The real change has to be attitudinal. It has to be a paradigm shift. That will take both time and concerted, sincere effort on the part of all sections of society, but most of all the leadership – both political and at the community levels. The blitz of media publicity that has accompanied the appointment of the first Secretary General of the Forum is welcome and will go a long way in signalling the dire need for this long overdue attitudinal change in society’s grassroots. On their part, these successful and inspirational women must organise themselves to form mechanisms within and outside of government that encourage other women from their countries and the region to emulate them and achieve. After all there is a lot to catch up on gender parity following so many decades of utter neglect and the burden of centuries old attitudes. The ball has been set rolling. Nothing should be allowed to break its momentum, which is beginning to look nothing short of impressive.

“The seasonal worker programme has proved to be a rare win-win situation for all stakeholders – the labour sending countries, the host countries, the workers themselves, the employers, farm productivity, banks and money transfer firms”

ne of the two biggest income earners for most Pacific Island countries, particularly in Polynesia, is remittances – the other being tourism. Vast numbers of Pacific Island people live and work mainly in Australia, New Zealand and the United States of America, besides

other countries around the world. Globally, remittances are growing at a clipping pace with higher rates of immigration and people travelling to work elsewhere despite countries continually raising the bar for immigrants with harder parameters to satisfy. In the Pacific Islands region, over the past Islands Business, September 2014 9

WESAY decade, one single activity has added handsomely to remittances – seasonal work. Ever since a framework for seasonal work for Pacific islanders was set up at first in New Zealand and then in Australia, increasing number of Pacific Island workers have found their way to these two countries and earned income for themselves and their home countries – income that did not exist before. New Zealand’s seasonal worker programme called the Recognised Seasonal Worker (RSE) scheme has been well regarded as being successful and currently employs more than 8000 workers from several island states. Australia, which began its Seasonal Worker Programme (SWP) two years after New Zealand, employs about half that number. After a slow start, it appears as though Australia’s initiative is now coming into its own, though it is still a long way off from realizing its full potential. For the first time since inception Australia’s SWP – which includes mainly horticulture workers from Solomon Islands, Vanuatu, Papua New Guinea, Kiribati, Nauru, Samoa, Tonga, Tuvalu and Timor Leste – met the government specified cap for seasonal workers this year. Seasonal work employers, representatives from labour sending countries, Australian Government officials and other stakeholders attended an SWP conference on the Gold Coast in August to take stock of the initiative and discuss challenges and opportunities. SWP is at the mid point of its four-year tenure with 52 enterprises employed in about 50 local government areas, mostly in the states of Queensland and Victoria. Some islands have done better than others in sending their citizens to work in Australia. For instance, Tongans comprise a disproportionate 75 per cent of Australia’s seasonal workforce pool, while Kiribati and Nauru are at the opposite end. Nauru did not send any worker this year. Unlike New Zealand, Australia’s programme faces competition from another longstanding initiative that facilitates foreigners from taking up seasonal work. The Working Holiday Makers (WHM) programme has been bringing foreign workers from mainly western countries since the 1970s to work in farms. These are mainly students who are looking at earning some extra cash while travelling through Australia. They are eligible to extend their visas for as long as two years, unlike workers in the SWP. Employers at the August conference were Seasonal worker unanimous in their opinion that the output programme of seasonal workers was far better than that of shows promise WHM. Workers in the SWP came to Australia for work and to earn a living, unlike those in the WHM programme, who are mostly looking for some extra cash. Secondly, returning SWP workers keep getting better at their work creating better efficiencies at the farms and adding to the output incrementally. This is not the case with WHM. These are statistically proven facts. Yet, though the WHM was never intended to be a labour programme in the sense that the SWP is and despite the demonstrable low efficiency as compared to the SWP, it seems to be more popular with employers at least as of now. Farm owners and managers who have employed Pacific Island seasonal workers in Australia and who spoke at the conference testified to greater outputs, better productivity and more economic efficiencies and are delighted with their experience. They want the Government to add value to it and expand it greatly but are puzzled why the uptake among employers has been slow. The obvious reason would be that the SWP being new, unlike the four-decade-old WHM, it is not widely known around the country. This means that the Australian Government has to put more effort 10 Islands Business, September 2014

REAPING FRUIT ... Pacific picker at work in an Australian orchard. Photo: teara.govt.nz

and investment in popularising SWP among horticulture enterprises nationwide. Australia would also do well to have more information exchanges with New Zealand to learn the finer points of its own successful RSE scheme. Both countries seem to have had very similar experiences with Pacific Island seasonal workers, from what was heard at the Gold Coast conference. Also both countries will have to greatly step up their respective seasonal worker programmes if they are to be in tune with what the free trade agreement PACER Plus, currently under negotiation, has laid out. According to the proposals, both countries will have to increase their intakes considerably by as much as five to ten times their present levels by the year 2025. This seems quite unlikely at the present levels at which the programmes are operating and expanding. It is almost certain that these suggested numbers will never be agreed upon for a number of reasons, but any increase in numbers will prove beneficial for all concerned. The seasonal worker programme has proved to be a rare win-win situation for all stakeholders – the labour sending countries, the host countries, the workers themselves, the employers, farm productivity, banks and money transfer firms. All stakeholders must work closely together to make the schemes work more efficiently and to build the numbers progressively. Adding value to the schemes by building up the skills of seasonal workers is an area that is gaining traction – a fact that is bound to further have a positive impact on both workers and their home countries. Seasonal work programmes are one of the very few initiatives in the past several decades in the Pacific Islands region that shows great promise of economic development in the islands and the potential for building skills and provide the wherewithal for internal investment as well as the impetus for entrepreneurship. There is some encouraging progress in this regard. Australia has a growing add-on skills initiative for seasonal workers. SWP employees are receiving training in literacy, numeracy and first aid routines. There is talk of expanding this initiative to include other gainful skills. In New Zealand, too, Government ministries are actively involved in increasingly imparting skills to seasonal workers. One of the more interesting developments is the successful joint venture project between a New Zealand employer and a former seasonal employee from Tanna in Vanuatu. The former worker and employer are now business partners in an enterprise that will export produce and virgin coconut oil to New Zealand and Australia from Vanuatu. • We Say is compiled and edited with the oversight of Samisoni Pareti.

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Whispers PNG’s Meg Taylor is the Pacific Islands Forum’s new head, the Melanesian Spearhead Group solidarity is in tatters and the whisper is that Fiji is fuming still. So much so that Fiji’s losing candidate, the able and highly experienced diplomat Ambassador Kaliopate Tavola has resigned as the MSG goodwill ambassador and Suva, we’re told is seriously re-looking at ways to eject the Forum HQ out of Fijian soil, and have it replaced by its own creation and rival, the Pacific Islands Development Forum. While Fiji’s leader has reportedly distanced himself from a local newspaper report that had accused PNG and Solomon Islands for “backstabbing” Fiji’s candidate for the much sought after office, the whisper is that the newspaper was not way off the mark. It will be interesting to see what the outcome will be when Taylor applies for her work permit, but then, everything depends on who returns to power at the end of Fiji’s general elections on 17 September.  Still on the Forum new Secretary General, Solomon Islands’ prime minister Gordon Darcy Lilo told his local scribes that his candidate for the top Forum job “lost badly” in the vote. Dr Jimmy Rodgers, the retired Director General of the SPC – Secretariat of the Pacific Community – reportedly got only one of the 14 votes cast. With the exception of Lilo, everyone else opted for PNG’s Taylor. Interestingly, the Solomon leader said he took the lobby “right to the wire” and his candidate lost because “we did not have the advantage of resources.” This local report didn’t specify as to what resources Lilo was making reference to. Proposing Dr Rodgers after the MSG had adopted Ambassador Tavola, as its joint candidate didn’t win Honiara any favours either from Suva. The whisper now is that there seems to be no appetite in the Bainimarama administration to find a speedy resolution to the tit-for -tat flight bans between the two country’s national airlines.  Bikies of a different sort have landed in the Pacific it seems. A regional meeting in Canberra recently heard that a bikie group that is under the law enforcement radar set 12 Islands Business, September 2014

Walking the talk went up a notch for these Pacific Island leaders at their annual summit held last month in the northern Pacific island of Palau. Summit host President Tommy Remengesau (right) was joined in his daily morning walk by his northern Pacific neighbour Anote Tong of Kiribati (left). Clearly worried about the high incidences of non-communicable disease in the region, Remengesau issued a personal invitation to his colleagues who attended the Forum to show their resolve to keep fit by joining him in the morning walk. Suffice to say; only two other Pacific leaders heeded the call, as well as the man who’s taken up NCD as a personal crusade, Dr Colin Tukuitonga (left), head of the Noumea-based Secretariat of the Pacific Community. Others perhaps felt 5am was a bit too early to their liking or perhaps talking the walk is way better than walking it! Photo by: Nic Maclellan

up a branch in one of the islands recently. This group going by the name of Rebels is currently under ban in Australia, since its believed to be a front for “organised criminal network.” The meeting confirms suspicions that the islands are fast becoming the “staging point” for Australian-bound hard drugs.  On the eve of Samoa’s finest hour and a mysterious bug is causing havoc. Mid August the Ministry of Health in Apia says nearly 100 people have been affected by the “mystery” virus. There have been two recorded fatalities so date. Health officials say the symptoms of acute fever and rash seem to point to an outbreak of chikungunya, but further tests are being done. Chikungunya, which is an eye infection, is said to be worse in neighbouring American Samoa. More than 300 have been affected there.  Still in the American territory, the tragic downing of the Malaysian Airlines aircraft

over Ukraine last month overshadowed a similar tragic incident when a father and son died in a plane crash in waters off Pagopago, capital of American Samoa. Babar Suleman was accompanying his 17-year old son Haris in his attempt to fly around the world in 30 days. The attempt was also a fundraiser for Citizens Foundation, a not for profit agency dedicated at constructing schools in Pakistan. Their single-engine plane reportedly crashed minutes after take off from Pagopago International Airport.  A promotional video celebrating the passing of the baton from the old to the new raised the eyebrows of one too many in Palau, not so much on what was shown but what wasn’t. The video was screened before Pacific leaders at the opening of the 45th Pacific Islands Forum at Palau’s Capitol Building with an elaborate video and musical extravaganza. A few delegates noted however that there were speeches from outgoing Forum chair, President Christopher Loeak of the Marshall Islands and incoming chair President Tommy

Whispers Remengesau Jr, but - for the first time in many years – there was nothing from outgoing Secretary General Tuiloma Neroni Slade.

Truss travelled without any media to cover the Forum, highlighting perhaps Australians’ disinterest in Pacific regional affairs.



Fiji’s race neutral laws have won an admirer in the form of New Zealand Act Leader Jamie Whyte. Embroiled in a media spat with his country’s Race Relations Commissioner Dame Susan Devoy, Whyte complained that the commissioner appeared unaware of “the process of removing race from the laws of a country.” He named countries that have gone down this road as Sweden, France and Fiji. “Race-based electoral rolls and race-based seat quotas [in Fiji] were eliminated,” said Whyte. But Labour MP and former race relations’ conciliator Rajen Prasad did not share Whyte’s enthusiastic acceptance of Fiji’s recent law changes. Prasad is a New Zealander of Fiji Indian origins.

Tony Abbott Government’s decision to abruptly end its contract for Australia Network TV has also led to a blood bath at Radio Australia. The Australian Broadcasting Corporation have lost long serving Pacific correspondent Sean Dorney, Pacific correspondent Campbell Cooney and many other journalists from Radio Australia’s English and Tok Pisin services. Its signature Pacific Beat programme has been spared the axe, but with very limited funds and staffing to maintain its regional coverage.

 Several supermarket outlets in Guam in the northwest Pacific have fell foul of anti-graft laws in the American territory. Millions of dollars of public funds allocated for what used to be the territory’s food stamp programme were allegedly pocketed by storeowners. Some of them were also accused of allowing beneficiaries to buy food items on credit, then charging interest. Press reports say at least one 15-foot boat and a homemade 15-foot trailer have been confiscated by investigators. They were said to have been bought from food stamp money. Called the SNAP programme for short, this initiative helps people with low wages to buy nutritious foods at authorised stores.  A sign of the things to come perhaps was when both prime ministers of Australia and New Zealand opted to stay away from the annual summit of Pacific Forum Leaders last month. New Zealand’s John Key was represented by his Foreign Minister Murray McCully, who decided to open up his military plane to a large group of New Zealand journalists. He also gave a lift in his plane to the Australian Broadcasting Corporation’s correspondent in New Zealand. In contrast, Australian Deputy Prime Minister Warren

 Evacuation centres are meant to be transitional, not temporary. This national disaster management office in Solomon Islands had to diplomatically stress to victims of the devastating floods that wrecked havoc in the island capital last April. In thanking those victims that have moved out of schools that are doubling up as emergency shelters, the disaster office applauded them for showing “how resilient Solomon Islanders are truly are.” “This (school) was only ever intended to be a temporary situation” authorities say, adding, “we have concerns for the safety, comfort and health of those still living in these centres.”  Australia happens to be Fiji’s and indeed most of the islands’ biggest trading partner, and yet island based business people are up and arms about the absence of a direct shipping service. Containers bound for either Brisbane or Sydney take at least 2 to 3 weeks to reach their destination because freighters throw in a New Zealand port stop between Fiji and Australia. There have been instances when containers are left behind on transhipment in Auckland port. Fiji-based exporters decry the fact that China-bound goods reach their destination first than those bound for their biggest and closest market. • Whispers is compiled by the Editor. If you have any Whispers, please contact us on editor@ibi.com.fj

Advertising & Marketing Manager Sharron Stretton Advertising Executive Abigail Covert-Sokia Islands Business International Ltd. Level III, 46 Gordon Street PO Box 12718, Suva, Fiji Islands. Tel: +679 330 3108. Fax: +679 330 1423. E-mail: Advertising: advert@ibi.com.fj Circulation & Distribution Litiana Tokona ltokona@ibi.com.fj subs@ibi.com.fj Sandiya Dass sdass@ibi.com.fj Regional magazine sales agents Pacific Cosmos – 89 Brisbane Street, Oxley Park, NSW, Australia Pacific Supplies – Rarotonga, Cook Islands Yap Cooperative Association – Colonia, YAP, Federated States of Micronesia Motibhai & Co. Ltd – Nadi Airport, Fiji Paper Power Bookshop – Town Council Bldg, Main Street, Nadi, Fiji Suva Bookshop – Greig Street, Suva, Fiji Chapter One Bookshop – Downtown Boulevard, Suva, Fiji Kays Kona Shop – Dolphin Plaza, Suva, Fiji USP Bookcentre – USP, Laucala Campus, Suva, Fiji Garden City Bookshop – Garden City, Raiwai, Suva, Fiji Bulaccino – Garden City, Raiwai, Suva, Fiji Samabula Drugstore – Samabula, Suva, Fiji Kundan Singh Supermarket – Tamavua, Suva, Fiji MH Superfresh – Tamavua, Suva, Fiji Methodist Bookstore – Stewart Street, Suva, Fiji Textbook Wholesalers – BSP Centre Suva, Fiji MHCC – Suva, Fiji 786 Supermarket – Toorak ,Suva, Fiji Hachette Pacifique – Papeete, French Polynesia Kiribati Newstar – Bairiki, Kiribati One Stop Stores – Bairiki, Kiribati Robert Reimers Enterprises – Majuro, Marshall Islands Pacific & Occidental – Yaren, Nauru South Seas Traders – Alofi, Niue Nouvelle Messageries Caledoniennes de Presse – Noumea, New Caledonia Wewak Christian Bookshop – Wewak, PNG Boroko Foodworld – Boroko, PNG UPNG Bookshop – Waigani, PNG Lucky Foodtown – Apia, Samoa Wesley Bookshop – Apia, Samoa Panatina Chemist Ltd – Honiara, Solomon Islands Officeworks Ltd – Honiara, Solomon Islands National Stationery Supplies – Honiara, Solomon Islands Friendly Islands Bookshop – Nuku’alofa, Tonga Tuvalu Air Travel, Shipping – Funafuti, Tuvalu Trade and Consultancies – Funafuti, Tuvalu Stop Press – Port Vila, Vanuatu A year’s subscription to 12 issues of Islands Business within Fiji costs $50 and includes a complimentary copy of Fiji Islands Business.

Islands Business, September 2014

Pacific Update

ON the dotted line ... Samoan Prime Minister Tuilaepa Sailele Malielagaoi ratifies the Niue Treaty Subsidiary Agreement (NTSA) with FFA Director General James Movick looking on. Photo: Nic Maclellan

Forum debates fisheries management By Nic Maclellan

t the Pacific Islands Forum, regional leaders adopted a new agreement to strengthen enforcement and surveillance over the region’s fisheries. In a ceremony during last month’s meeting in Palau, New Zealand Foreign Minister Murray McCully signed the Niue Treaty Subsidiary Agreement (NTSA), while Samoa and Vanuatu ratified their signature. With 11 countries already signed on to the treaty and three previous ratifications (Cook Islands, Nauru and Palau), the agreement now enters into force for the countries that have ratified it. The NTSA is an amendment to the 1992 Niue Treaty on Cooperation in Fisheries Surveillance and Law Enforcement, and will allow Forum countries to share powers over

14 Islands Business, September 2014

surveillance of exclusive economic zones (EEZs) and fisheries enforcement. It also approves the sharing of fisheries data and intelligence between countries, to improve law enforcement over illegal, unregulated and unreported fishing. The agreement comes as the Forum Fisheries Agency (FFA) moves to develop new management schemes for southern albacore, a prolific species of tuna that is mostly targeted by long line fishing fleets. Meeting in Tokelau last July, Forum fisheries ministers agreed to develop a proposal for the next Western and Central Pacific Fisheries Commission (WCPFC) meeting, setting catch limits for the entire stock of albacore and placing a limit on the high seas albacore fishery. In Palau, FFA director James Movick stressed that proposals on albacore man-

agement under the Atafu Declaration were similar to existing schemes for other tuna such as bigeye and skipjack. “These measures for albacore are based on similar principles,” he said. “Members have rights, and in asserting those rights collectively as the Pacific islands coastal states, we then require the other members of the WCPFC to adopt measures that are compatible with those that we have adopted in our zone.” In Palau, regional technical agencies received new funding pledges, with New Zealand announcing NZ$66 million (US$55.813m) for regional fisheries over five years and an additional $4 million (US$3.382m) for the FFA, while Australia added A$23.5 million (US$21.715m) over four years for the FFA and Secretariat of the Pacific Community. One of the major themes of the Forum was using marine protected areas as a tool for the sustainable management of ocean resources. Outgoing Secretary General Tuiloma Neroni Slade highlighted recent initiatives to create protected areas and sanctuaries under the 2010 Oceanscape Framework. “These include Kiribati’s Phoenix Islands Protected Area (one of the largest marine protected areas in the world); Tokelau, which provides sanctuary for whales, sharks and turtles within its EEZ; the declaration by the Cook Islands in 2012 to establish a marine park covering an area of over a million square kilometres; New Caledonia’s establishment of the Natural Park of the Coral Sea, a protected area covering 1.3 million square kilometres; and Palau’s effort to ban commercial fishing within 80 per cent of its EEZ.” Palauan President Tommy Remengesau Jr said current initiatives on marine protection were based both on traditional knowledge and also recent experience under the Micronesia Challenge (an initiative by northern Pacific states to conserve at least 30 per cent of near-shore marine resources and 20 per cent of terrestrial resources by 2020). “Our ancestors really didn’t know a lot about science, but they knew our oceans and our reefs would not sustain themselves if they allowed fishing throughout the whole reef,” said Remengesau. “At some point the fishermen would acknowledge that there is a drop in the fish population and a lot of stress on the reef. Then our ancestors would employ a moratorium, or a bul as we call it, and declare a no take zone on the reef.” He noted: “As we announce that Palau will create a Marine Sanctuary that practically encompasses our entire EEZ, it is not

something that we’re just innovating out of the blue. “It is based on what has worked in the past. It is based on what the Micronesia Challenge has proved to be correct and it will be Palau’s contribution to the wider Pacific conservation effort.” FFA’s James Movick was more cautious in his support for these marine zones, highlighting the need for ocean management across the whole western and central Pacific. “From a technical viewpoint, what we must do is not simply ban fishing in one place, but manage fishing across the entire region,” Movick argued. “This may include banning fishing at certain times in certain places, but simply prohibiting and closing areas can result in fishing being moved to other locations or onto the high seas where we have less effective surveillance, cooperation and control. “This is not good, sound management.” Movick stressed that there are healthy co-operation between different fisheries institutions in the region, including the FFA, the PNA Secretariat and the WCPFC, but acknowledged the diversity of interests amongst different Forum Island Countries: “There are different clusters of interests in the region,” he told Islands Business. “Not everyone participates in the skipjack, not everyone participates in the albacore. It’s just common sense that those that are the most affected should coordinate more closely on those issues, with the rest of us supporting them as best as possible.” Movick said that long-running negotiations for an Economic Partnership Agreement (EPA) between the European Union (EU) and Pacific nations are being complicated by debates over fisheries policy. He called for broader dialogue with Europe at a technical level, rather than leaving it to trade negotiators. “This dialogue between EU fisheries officials and Pacific fisheries officials is more likely to be able to resolve many of the technical issues that have arisen in the EPA process. “The ministers don’t believe that the EPA negotiations are the proper place to really resolve those issues. Bring it back to a fisheries conduit where it’s more likely to be resolved at a more objective, technical basis. “Hopefully a resolution there would be able to benefit the EPA negotiating process. “Right now, it’s getting too cluttered up with detail, which is not beneficial to the trade negotiation process or the broader fisheries management activities in the tuna commission.”

Is history repeating itself? By Alfred Sasako

oncerns over the potential for compromising regional security have reverberated far and wide with alarm bells ringing at the highest levels in Washington DC, Canberra and Wellington. They fear that cash-strapped island nations struggling to maintain basic and essential services could be sold on a few dollars, leaving their backdoors wide open to terror groups and terrorist cells intent on gaining a foothold in the region. Washington DC was so concerned that it sent its top diplomat, Secretary of State, John Kerry, to Honiara in August, with sources in Washington suggesting, he was in the Solomon Islands to demand a “please explain” from Prime Minister, Gordon Darcy Lilo, who in August was in Havana to officially open a residence embassy in Communist Cuba. The Solomon Islands and Kiribati are the only Pacific Island nations to have resident embassies. The revelation struck a raw nerve with the office of Prime Minister Lilo. His press secretary, Douglas Marau, vehemently denied the report of a please explain. Sources in Washington laughed off Marau’s denial, saying Secretary Kerry did not have to raise the matter specifically. “He (Marau) is probably truthful that the subject per se never was addressed. It did not need to be,” one Washington DC source said. “Kerry’s very presence in Honiara was enough to convey the message which is the only one of two Pacific countries with a new Cuban embassy. (Secondly, Solomon Islands) is the only Pacific country to receive a visit from the Secretary of State, who as Press Secretary Marau would know, skipped the recent Pacific Islands Forum in Palau. As we say: you connect the dots!” Secretary Kerry’s four-hour whistle stop visit to Honiara on August 13 was reminiscent of the early 80s, said to be a hugely important period for the Pacific region, particularly the four years to 1987. It started with the election of Labour in New Zealand and ended with the first Fiji coup of 1987. In between, New Zealand banned visits of nuclear ships followed by the collapse of the ANZUS Treaty, the military alliance

between Australia, New Zealand and the United States. Then there was the Kiribati fishing deal, which took everyone by surprise when it was revealed that Tarawa had signed a multimillion dollar deal with the Russians to fish within the island nation’s tuna rich 200-mile Economic Exclusive Zone (EEZ). Pressures from the United States, Australia, New Zealand and other members of the Pacific Island Forum forced Tarawa to relent and the deal was off. A number of other important events marked the 1984-1987 period for the Pacific region. For example, Vanuatu too played ball by inviting the Libyans. These moves by Pacific island nations had certainly triggered a succession of events in Washington. President Ronald Reagan, for example, acknowledged the South Pacific for the first time in a State of the Union speech. This was followed by a quick wrap up of status negotiations in Micronesia, the opening of two USAID missions in the region, two USIA offices and three separate offices dealing with Pacific affairs at the State Department (FAS, PI and ANZ). What the Solomons’ Prime Minister Lilo did in opening a mission in Communist Cuba was probably good politics to rekindle Washington’s interest in the region. But as one observer said, “Dangerous game if they (Solomon Islands government) don’t know what they are doing.” The observer said the initiative by the Solomon Islands in opening a mission in Cuba has rung “the usual alarm bells at the highest levels here (in Washington DC) and (Secretary) Kerry was out there to find out what Lilo’s intentions are.” Of the visit, sources in Washington DC said, “Open a mission in Pyongyang (North Korea) and you might get the President! Or recognize ISIL (the Islamists insurgents fighting government forces in Iraq) as a functioning government and God knows what would reverberate!,” the source said. It is customary for senior officials of the United States to meet with Leaders of Opposition, particularly in an election year. Surprisingly, Secretary Kerry skipped that altogether from his Honiara visit. The Solomon Islands will go to the polls on October 29 or the first week of November this year. Islands Business, September 2014 15

Cover Report

Samoa carpet Proud moment Cover Report & photos By Dev Nadkarni

16 Islands Business, September 2014

rolls out red to the world

Cover Report

for donorsâ&#x20AC;&#x2122; darling

Islands Business, September 2014 17

Cover Report

It’s Samoa’s biggest moment on the global stage. The third United Nations Small Islands Developing States (SIDS) Conference that gets under way on September 1 is the largest international event not just the tiny country but the entire Pacific Islands region has ever hosted. More than 3000 delegates from nearly 200 countries will meet for the four-day conference in this picture-perfect tropical paradise to deliberate on the future of low lying developing island states that share similar challenges to their sustainability – from climate change to a spectrum of other vital issues.

amoa as the venue for SIDS couldn’t have been more appropriate. The country is an excellent example of the multiple challenges that all small island states face in addition to the tyranny of distance that it shares with its Pacific neighbours. More importantly, it is an equally fine instance of how it has worked concertedly to surmount these challenges with enviable success: it has in the past year graduated from the list of Least Developed Countries (LDC). It is the first to do so in the Pacific Islands region. For more than a decade and a half, Samoa has often been described as the darling of global aid agencies. It has been stable socially and politically, unlike many of its neighbouring island states, and has done reasonably well in the UN’s human development indices. It has been successful in developing public private partnerships, particularly in the aviation, public works and telecommunication sectors and has managed its economy deftly, despite repeatedly devastated by natural disasters. Though its economy enjoyed sustained growth in the final years of the twentieth century and the early years of the present one, it slowed down considerably owing to the global financial crisis and a series of natural disasters in the past few years. But the Ministry of Finance predicts a modest upswing over the next few years. These impressive achievements have given Samoa the confidence to take up a leadership role in SIDS affairs. “If Samoa is able to utilise resources wisely to graduate out of LDC, then development partners must continue supporting SIDS, espe-

cially those that are in the LDC list, and have the confidence that they too will graduate,” says Prime Minister Tuilaepa Sailele Malielegaoi. “That is our message to the development partners.”

MAN at the helm ... Samoan Prime Minister Tuilaepa Sailele Malielagaoi.

CONFIDENT planner ... Samoa’s CEO for SIDS Coordination Faalavaau Maiava Perina Jacqueline Sila.

18 Islands Business, September 2014

Partnering successfully Partnership models work better than aid arrangements, Tuilaepa believes. That is why he says Samoa chose the event’s main theme, ‘Successful partnerships for sustainable development.’ “It is based on our own experience in Samoa with successful partnerships with development partners. The key to many of our achievements has been working partnerships with a range of development agencies across the board,” he says. The long-time Prime Minister is justifiably proud of Samoa’s selection as the venue for the event. The country of less than 200,000 residents plans to leverage this positive image and its host status to make SIDS’ voice heard across all stakeholders. Tuilaepa says, “Nations responsible for high carbon emissions must be brought to their senses and agree to take up measures recommended by the scientific community to arrest our slippage into further disasters.” The Prime Minister wants the world community to commit to a number of practical measures and initiatives at the conclusion of the conference (See accompanying interview). A massive exercise Senior Foreign Affairs official and Chief Executive Officer for SIDS coordination Faalavaau Maiava Perina Jacqueline Sila has

Cover Report been working on organising the event since early last year. “Two hundred countries, 15 presidents, heads of states, hundreds of elected representatives, private sector executives, NGOs, heads of international organisations, all will be there,” she says. Most of the United Nations’ development agencies will be represented and Secretary General Ban Ki Moon will also attend the conference. Some 108 side-events have been planned before, during and after the conference – not to mention Samoa’s annual Teuila Festival, which will coincide with the week of the event. Going by the chief executive’s calm, confident manner, preparations seem to be ticking along fine. Not having hosted an event of these proportions ever before, the country had little human capacity and experience to draw upon. With the help of a small band of international experts, a dedicated local team was built from scratch. Nearly a fourth of the Government workforce has been drafted to work on the SIDS event. “Some 1000 of the 4500 Government staff are working on the conference,” Sila says. “Not more than 20 private sector workers have been involved – these are mainly in expert areas such as IT.” Arranging accommodation has been challenging. The iconic Aggie Grey’s Hotel on Apia’s harbour is closed for refurbishment following the damage it sustained during Cyclone Evan last year and a couple of other new properties will not be ready in time for the event. Organisers therefore have had to arrange cruise vessels to accommodate some 821 guests besides finding beds in private homes. Building capacity As well as Government staff, as many sections of the wider community as possible have also been deliberately involved, Sila says. “The idea is to build capacity to be able to host such events. We want to create an enabling atmosphere with trained people for Samoa to grow into a successful MICE (Meetings, Incentives, Conferences, Exhibitions) destination. Building capacity at all levels has indeed been taken seriously. NGO Samoa Hotels Association (SHA), an independent association for all accommodation providers in Samoa, has been charged with accommodation arrangements for the 3000 visitors. With a team of four, SHA has risen to the occasion and done a commendable task of

By the book ... Alexandra Rankin, SHA Chief Executive Officer.

coordinating with its member accommodation providers, the Samoa Tourism Authority and delegates from all over the world. “The Government tasked SHA to manage rooms. The alternative would have been to hand the job to an overseas service provider that would have clipped the ticket,” says Alexandra Rankin, SHA Chief Executive Officer. SHA will instead be retaining the 15 per cent commission on bookings, “which will be ploughed back into the industry for capacity building, training and marketing,” Rankin adds. The 106-member association is, along with the tourism authority, an administrator of accommodation standards and is involved in policy development on infrastructure, partnerships and access, besides being the focal point for tourism cyclone recovery and tsunami recovery programmes. Grassroots involvement Samoans’ pride on being picked to host such an important global meet and their resolve to put up a successful and memorable event is most palpable around Apia, where most of the events will be held. Entire communities are engaged in tasks like gardening, landscaping, sprucing up and beautification, painting fences and cleaning up with equipment and implements provided by the Government has provided. Even the school holidays have been rescheduled to “free up roads and prevent traffic delays,” Sila says. Regional organisations and agencies operating in Samoa like SPREP (South Pacific Regional Environment Programme) have worked with the communities on a range of fronts. A weekly television update on the conference fronted by none less than the Prime Minister himself has been urging Samoans to do the best they can to host the world – a once in a lifetime opportunity for many. Schoolteachers have also been spreading the word to students. In line with the theme of the conference sustainability is at the core of all planning initiatives, Sila says. Many of the materials and facilities that will be used for the conference will be reusable. “It’s all about sustainability. Our traditional island lifestyles are inherently sustainable – we want that to be demonstrated on how we conduct this event for all the world to see,” she adds. “We want the visitors to take away pleasant memories of their stay in Samoa and we want them to come back.” Offering a variegated experience Samoans are leaving no stone unturned in their determination to offer visitors a memorable experience. Samoa Tourism Authority Chief Executive Officer Matatamali’i Sonja Hunter says food, arts, crafts, culture, performances, competitions, sporting events, business expos and meetings will all be a part of the mix for visitors to participate in. New venues dotted around areas of main activities as well as in downtown Apia have been readied to host the many events. The town’s tidy little marina, its impressive promenade will be centres of attraction, including a street piano, throughout the SIDS week, which will also offer a chance for visitors to participate in the colourful Teuila Festival. Events to engage spouses of high profile attendees have also been planned in great detail. Visits to locations of interest as well as to try local cuisine and have a taste of village life is being organised. For those interested in nature walks and a bit of exploring, appropriate areas have been readied and signposted, with volunteer guides at hand to share local knowledge. “For Samoans the experience of playing host to the world and organising all these events will be very valuable,” Hunter says. “It will definitely enable us to build Samoa into a destination for big regional and global meetings and conferences – not just as a venue but one brimming with culture, cuisine, music, sport, art and craft, not to mention soft adventure.” Islands Business, September 2014 19

Cover Report 5 months worth of imports,” says Benjamin Pereira, Assistant Governor of the Central Bank of Samoa. “The Samoa National Provident Fund has S$ 511million (US$216.507m) in assets with nearly S$67 million (US$28.387m) liquid,” says Karras Lui, Economic Manager at the Central Bank. The country’s time tested social and political stability and the bank’s traditional conservative policymaking regime will ensure economic stability, Pereira says. The International Monetary Fund and the World Bank are in the midst of a financial sector assessment programme. Lacklustre credit growth Remittances, tourism receipts and agriculture remain the mainstay of the economy but private bank lending tends to be sluggish with a possible lack of enough viable and bankable In for a penny, in for private sector projects. a pound ... Samoa’s “Unfavourable risk management percepCentrak Bank inspires confidence. tions and the difficulty with collaterals, particularly with customary land, are a challenge,” Pereira says. But that seems only one of the reasons for the flatness in commercial banks’ lending. More recently, the Unit Trust of Samoa (UToS) has stepped up refinancing initiatives particularly to the State Owned Enterprises (SOE) sector effectively competing with the private banks. Also, the Samoa Development Bank’s Creditline facility is influencing private banks’ credit initiatives to the agriculture, tourism and manufacturing sectors. The commercial banks’ profit driven imperatives cannot quite match the development bank’s rather more development flavoured ones. It comes as no surprise therefore that the commercial banks seem to be stepping up their efforts at Mark of confidence ... Assistant Governor Benjamin Pereira (left) and Economic Manager building up their Karras Lui. personal banking portfolios. 2.5 per cent in the three following years. Cameron Penfold, Westpac Bank Chief Replanting activity has been growing Executive in Samoa concurs on “flat credit vigorously helping the agricultural produce growth.” sector get back on its feet. He adds, though, that dialogue between Reconstruction and refurbishment of bank solicitors and the Samoa Attorney damaged tourism properties as well as a couGeneral’s office is ongoing and is hopeful ple of major new development projects are that issues around the suitability of customalso providing a lifeline to economic growth. ary land as bankable collateral will eventually “Foreign exchange reserves are at a healthy be sorted.

Clearer skies ahead for economy

Tourism, agribusiness to spur resurgence With its high dependency on tourism and agriculture, the Samoan economy is severely affected by natural disasters. In December 2012, Tropical Cyclone Evan is estimated to have caused damage of more than S$400 million (US$170m), according to Prime Minister Tuilaepa Sailele Malielegaoi, destroying tourism infrastructure and farmlands. The effect on the economy was disastrous: it contracted by half a percentage point in the financial year ended June 2013, according to the Central Bank of Samoa. A six per cent drop in tourist numbers and receipts and an estimated three per cent decrease in agricultural output are believed to have driven that contraction in the economy. Not long before the 2009 tsunami had a similar devastating effect on the economy. The financial year ended June 2014 has brought positive but modest growth. Slightly below the estimated two per cent, the economy registered 1.8 per cent. The Central Bank expects the country to build on this positive growth forecasting 2.5 per cent in 2015 to stabilise between 2.2 and 20 Islands Business, September 2014

Cover Report In the country less than a year, he says the banking environment, with four banks, is “well supplied, has good competition, is adequately regulated and well governed by the Central Bank. There is a genuine acceptance to look at change both from Government and business,” Penfold says. Winds of change In fact, Samoa has worked hard these past few years to reform customary land related issues. It passed an Act of Parliament in 2009 making unit titles possible following a long gestation. It took a while to see it being put to practical use, but well known premium accommodation provider Sinalei Resorts earlier this year launched a project utilising the provisions of the act with its upmarket Sinalei Premium Villas targeted at the global market. “We are the first to be putting the legislation to use. There might be many developers waiting in the wings watching how our project will shape up, I guess,” says Joe Annandale, Sinalei owner and copromoter of the new project (see accompanying story). ANZ Samoa Chief Executive Matthew Fisher says he has a bullish outlook. “Tourism will take off in next 12-18 months. The Aggie Greys-Starwood Group relationship and the Sheraton brand will raise standards in the tourism industry here. Besides the Lamana Group development of a 120-room property will add to the inventory,” he says. The Samoan Government is keenly following up on proposals to build aviation capacity with more connections to its source markets as well as adding new destinations. Direct flights from Chinese destinations have been on the cards for some time. Connections to the western coast of the United States are also being pursued. Meanwhile more flights have been added between Samoa and Fiji in the past couple of months. On the agricultural exports front, ANZ Samoa also inked an agreement for a programme with the Government and the Asian Development Bank called the Samoa Agribusiness Support project to boost the country’s agribusiness export sector. ICT plays enabling role Meanwhile the deregulated telecommunication sector has opened up opportunities for the information and communications technology (ICT) sector to team up with financial service providers in both expanding their geographical reach for delivering banking services and for offering new services to consumers. New laws like the National Payment System Act that came into force in April this year, also sets ground rules for electronic and digital transactions within and outside Samoa, says the Central Bank’s Karras Lui. The Government has therefore worked to swiftly to put in place laws that keep pace with the use of technology for financial transactions. Westpac Bank is leveraging technology to expand its footprint in the Samoa market. Earlier this year it launched “In Store Banking” an electronic service that facilitates bill payments, cash payments and withdrawals and printing statements with 20 machines already installed. In June it launched a new internet banking platform with which customers can directly access banking services like payments and invoices, automatic payments, saving time and boosting efficiency. “Uptake is good. Interest is great, there’s no resistance,” Penfold says. The bank’s mobile banking service rolled out in the Solomon Islands is being looked at for Samoa as well. On its part, ANZ, which has the bigger share of the Samoa market, has installed 18 automated teller machines (ATMs) and more than 350 electronic pay devices (EFTPOS) around the country. Rapid growth and a stimulating environment have helped Samoans gain wide experience in the banking sector.

The University of the South Pacific congratulates Samoa for hosting the Third International Conference on Small Island Developing States (SIDS) As the premier education institute of the Pacific, USP supports the SIDS through continuous research in areas of development for our people.

T: +679 3231000 or 3231444 E: helpdesk@student.usp.ac.fj www.usp.ac.fj www.facebook.com/USP.Team

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Islands Business, September 2014

Cover Report

MAKING a global mark ... Matatamali’i Sonja Hunter of the Samoan Tourism Authority.

Putting Samoa on the global tourist map Global event revolves around local show Samoa Tourism Authority (STA) Chief Executive Officer Matatamali’i Sonja Hunter says the SIDS event is an opportunity to showcase Samoa not only to the visiting 3000 delegates but also to television viewers around the world. “We are doing our best to leverage the invaluable media coverage and potential word of mouth publicity that the event brings to Samoa as a destination.” Hunter and her team have been working on organising the event for over a year. A comprehensive survey conducted last year revealed important insights on how visitors view the country, what they like and dislike. While the reaction of most visitors was overwhelmingly positive, it is the less flattering attributes that STA has been concentrating on. “It’s good to be told what we are good at. It is far more important to work on what we need to improve upon,” Hunter says. “After all, word of mouth is the best form of publicity and we want people to go back with the best of memories of their visit here.” STA along with other Government agencies and communities around the country have embarked on a cleanliness drive. ‘Clean 22 Islands Business, September 2014

up, shape up’ is the mantra. Samoa’s natural tropical flora, which adds vibrant colour to its landscape, has been put to delightfully aesthetic use along thoroughfares and around event areas. “Community involvement around beautification has been enthusiastic and it is wonderful to see everyone taking pride on sprucing up all the precincts,” Hunter says. “Love and pride are at the very heart of this activity.” The vexatious stray dog problem that has long plagued the country has also been dealt with. A legislation addressing the issue was passed in 2013 after years of deliberation and follow up from the tourism industry. A new pound has now been established and a couple of specialised dog control vans have been brought in from New Zealand and have been making the rounds around town. Window of opportunity Samoa has traditionally been getting almost 70 per cent of its tourists from New Zealand and Australia. Other source markets are American Samoa, the United States of America and Europe besides other Pacific

Islands. The SIDS event will for the first time bring people from the farthest corners of the world to Samoa, opening a window of opportunity to add new source markets. The STA is leaving no stone unturned to make use of this once in a lifetime window. Coinciding the SIDS conference with the regionally well-known annual Teuila cultural festival will add a big considerable Samoan and Polynesian flavour to the atmosphere around the event. “Spouses will be accompanying many of the delegates. They will be up and about around the island. Teuila will be a great event for them to immerse themselves in. We have stepped up the cultural offering considerably,” Hunter says. Over the past year, STA has coordinated and organised cuisine and customer service training and enhanced presentation skills of vendors, performers and presenters who will be participating in the festival. The festival has steadily grown into a big draw for tourists these past few years, with its many attractions of food, arts, craft, performances, beauty contests and fashion shows. This year, a barista competition among other events has been added. For the more adventurous and sporty, the Samoa Swim series, a paddling competition and other athletics events with a local flavour will be events to look forward to. There will of course be plenty of opportunities to strike bargains at shops and street vendors for all sorts of wares. Positioning the destination Sun, sea, sand and pristine environment are the primary attributes most tropical island tourist brochures most alluringly showcase. STA has thought out a game plan to set itself apart from other tropical island holiday markets adding some of Samoa’s unique qualities. “We are known and greatly appreciated for our friendliness, our social and political stability. It is something that comes through clearly in surveys,” Hunter says. “This is indeed a unique proposition that we want to focus on.” STA plans to step up its already successful move to position Samoa as a safe, friendly and peaceful family destination that has a range of attractions for everyone in the family. Food, culture, sport, wellness, soft adventure and arts and crafts are all part of the promotional mix. Add to that sustainability, environment friendliness and intensely local flavours and colours, and you have as unique a product as possible, says Hunter. “The goal is to have Samoa top of the mind as the number one family destination. We have all the ingredients naturally. We just have to do it.”

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Cover Report

TALKING straight ... Samoan Prime Minister Tuilaepa Sailele Malielagaoi.

Straight-shooting PM ready to take on the world Samoa willing to say no to China Tuilaepa Sailele Malielegaoi has been Samoa’s Prime Minister for 17 years. The frank and outspoken leader has had a long career in politics, diplomacy and public administration. Known for often setting the cat among the pigeons on sensitive regional matters, he rarely minces his words when asked for an opinion – no matter how controversial the issue. Critics have frequently accused him of high handedness for his style of getting on with the job, but few would grudge the passion and integrity he brings to his role of leading Samoa regionally and globally. In his characteristic no-holds-barred style and rare blend of passion and earthy wisdom, the Prime Minister talks to Islands Business on a range of topics and issues – SIDS, climate change, Samoa’s graduation from the LDC list, development, China and even Fiji. What does Samoa hope to achieve at SIDS? Small island states are most vulnerable to climate change. We will be the first to go under as sea levels rise. It’s not just the flat atolls, but all low-lying islands will be affected. Our people have always lived on the coast, which has facilitated access to food, transportation, 24 Islands Business, September 2014

trade and commerce. As water levels rise, this crucial habitat is threatened. The problem is everybody knows about this, yet not enough is being done about it. We want some definitive answers at this conference. What would you want these outcomes be? It’s not just sea level rise threatening habi-

tats and lifestyles. Higher sea temperatures are destroying reefs, leaching coral and killing marine life. The regularity of natural disasters that are increasingly attributed to climate change is taking a toll on food and water security, habitats, livelihoods, health and so many aspects of life. Cyclone Evan destroyed our coconut and breadfruit industry. The reality is unpleasant. The future is very bleak for SIDS. Again, we have known all this for quite a while. The only thing left now is to take decisive action – action identified by climate scientists. In recent climate change conferences, the general agreement among countries was for limiting the increase in temperature to 2 degrees. 1.5 degrees is what SIDS is asking for. This must be agreed to because there is a scientific basis for it. There has to be a concerted push for renewable energy and the transfer of appropriate technologies. Recognition of policies recommended to promote replanting of forests as well as put a stop to overfishing and overexploitation of marine resources. The nations responsible must be brought to their senses and they must agree to take up measures recommended by the scientific community to arrest slippage into further disasters. What does Samoa’s graduation from the list of Least Developed Countries (LDCs) mean? It’s as though Samoa has been punished for its success. Our economic and developmental progress was bound to lead to our growing out of the LDC list. There is a message here for development partners: If Samoa is able to utilise resources wisely to graduate out of LDC, then development partners must continue developing SIDS, which in time are also bound to graduate. This should be a good indication that more and more help should be granted to them to hasten development and build up economies – especially for the most vulnerable island countries. We are grateful that Samoa has been chosen to host the SIDS conference. Our progress and graduation from the LDC is an opportunity for SIDS, especially those in the LDC list, to convince partners that they ought to give more to these countries not only in their climate change adaptation projects but also other development projects as well. The conditions of concessions, too, should be related to their individual economic conditions. But won’t graduating from the LDC actually affect Samoa negatively? Graduation does not remove the vulnerability of Samoa. It does not mean the cyclones and natural disasters will stop and lessen. We still will have to contend with them. For example, Cyclone Evan caused destruction worth S$ 400million. Infrastruc-

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Cover Report ture, private property, agricultural farms had with the western United States via Fiji. We to be rebuilt and replanted. It comes at a big are happy that we have more flights between cost. Fortunately donors came to the rescue. Fiji and Samoa now. We are hopeful that our Despite our graduation, the window for US connection works out. When it was disconcessions will still be open for a few years. continued a few years ago by another airline, ‘Soft windows’ of international financial it was a huge blow to our fresh fish exports institutions are being successfully put to and our tourism. use, though we know that once we pay the What are your thoughts on China’s inthreshold, we can’t expect the same treatcreased involvement in Samoa? ment. Budget support from donors shows This is a question that comes up all the confidence in the country’s ability to rise time, especially from the western countries above the challenges. It is important to demand diplomats. I am not sure what the issue onstrate good governance principles in the is here. The Chinese are great development timely implementation of projects to build partners. Besides, they fill a gap after most the confidence of donor partners. western countries, especially Australia and The graduation is also a testament to the New Zealand, changed their aid models in resilience of Samoan society. Resilience is a the recent past. Those changes unfortunately great asset of the Samoan people. They have have not suited us and we have had to look emerged successfully from so many natuelsewhere in the interests of the development ral disasters –battered in 1990 by Cyclone of our own people, their living standards and Arthur, 1991 by Val, then the tsunami and finally Cyclone Evan in 2012. Living through these disasters created even greater determination in our people who saw these as part of life and that life must go on. What are Samoa’s most significant challenges and what’s the way forward? Although Samoa has done well in health, education and poverty alleviation in the development indices, we do have some major challenges. One big problem is non-communicable diseases (NCDs). They are taking a heavy toll on people’s lives and we are FINE art ... Samoan carvers show their skills in support of tourism. addressing it. Samoa is moving from donor-recipient relationships to a partnership model. We economic growth. are also actively stimulating investment by China is not some sort of monster that it helping create an enabling environment is sometimes made out to be in the western administratively. China is a major developmedia. It is a good partner – that has been ment partner now. It is involved in major our experience. Of course it asks for things infrastructure development around the in return. In any relationship there is always country. A new terminal at Faleolo, extended give and take. But it never makes unreasonrunway and apron are on the cards. There able demands. When we say no to something, is an assurance from China for a new port. they don’t press us, they just say okay and There are also our other traditional fundmove on. So these fears are unfounded. ing partners like the European Community The west must accept this reality. In fact, it who are engaged in developmental projects, must change the way it looks at Pacific Island besides Australia and New Zealand. nations. They must review their system of Tourism will continue to be the mainstay measurement of development here. It is not of the economy. We would like to diversify up to speed in the Pacific context. It’s a big the sector. Events, activities, casinos, advenproblem. For example, look how the west ture are all being looked at. As for industry, views Fiji. the recently announced Bumblebee fish What about Fiji? processing operation will create a significant When Australia and New Zealand asked number of jobs for Samoans. me what I think of Fiji, I told them very We are having encouraging discussions often the west equates us in the Pacific with with Fiji Airways about connecting Samoa 26 Islands Business, September 2014

troubled states in Africa and elsewhere. My example was this: In such states, when a dictator takes hold of a government, guns, rapes, stealing, violence happens. People abandon their jobs, schools. No one farms. Because they know people in power will steal, kill. So people simply leave, become refugees. Has this ever happened in the Pacific? It is quite unthinkable. There was no stealing, rape or violence in Fiji. There were no refugees; there was no humanitarian crisis. Then why are we in the Pacific subjected to the same yardsticks when there is a political problem? Australia and New Zealand’s measures in Fiji were ridiculous. It seems to be a disease that plagues rich countries. Anyway, it is good that it is now all coming around and good sense is prevailing. But you too have been critical of Fiji… That is correct. Whatever happened there wasn’t right. Such things have the potential to portray a negative picture of the whole region. It created a perception of instability in the region. That affected tourism for all neighbouring countries. I think it’s all changing now. Fiji must come back into the fold after the elections. It is one of us. Its promotion of PIDF (Pacific Islands Development Forum) is undermining the Pacific Islands Forum Secretariat’s role. It serves no purpose. But the west’s action on Fiji all these years was too severe. What memories do you want SIDS visitors to take back with them? We want them to have a memorable and enjoyable visit and see Samoa as a country that is peaceful, with friendly people living in harmony, a country with a stable government. A country that lives up to the expectations of the international community in meeting obligations despite small population and logistic challenges. To see for themselves what can be done even with few resources. We want to tell the donor community that if Samoa can do it so can other vulnerable nations. All they need is funding, knowhow, alternative sustainable technologies, sustainable food and water security programmes and some faith in our ability to rise to the occasion. You seem to be going on forever. What about the future? Do you have a succession plan? I have asked the caucus members of our Human Rights Protection Party to come up with a succession plan for some time now. I am yet to see one, though. When I receive one, I will have something to say then.

Cover Report

Robert Oliver sorting through freshly picked organic vegetables at the WIBDI office in Samoa. These will be delivered to hotels and restaurants participating in the farm to table project, whose chefs will follow Oliver’s traditionally inspired recipes.

Farm to table – Chef’s passion is infectious Oliver joins growing new food movement Award winning chef and author Robert Oliver is not one to rest on his laurels. The two-time winner of the world’s most prestigious cookbook awards for his Pacificthemed cookbooks (see below), the celebrity chef who grew up in Samoa and Fiji is passionate about leveraging this success for Samoa and other islands of the Pacific. “The awards have sparked a genuine global

interest in Pacific cuisines,” says Oliver, who will be showcasing some of these at a major event on the margins of the SIDS conference. “Cultures around the world take pride in their cuisines. Take French cuisine, for instance. People travel all the way there to try it out. That’s what we need to do in the Pacific – make cuisine a sought after part of our tourist offering.”

Oliver is not just a chef and author. He is also a thinker and philosopher. While talking of the importance of packaging Pacific cuisines as a part of the general allure of Pacific destinations, he also values the role of local produce, smallholding growers and their traditional methods of farming, which are inherently natural and organic. He is also deeply concerned with the alarming incidence of non-communicable diseases (NCDs) in Samoa and the Pacific. “Cuisine is about people, identity, health, nutrition, livelihoods, the economy and of course the well being of the community,” he says passionately. “Many foods have deep traditional significance, which is also related to specific stages in the life of men and women. There is a whole of list of foods that facilitate lactation, rejuvenation and so on. We are in danger of losing that knowledge.” The chef is working intensely on a project that touches all these aspects of food and cuisine. Along with the well-known Samoan NGO Women in Business Development Inc (WIBDI), he is working with a range of organic farmers to grow and supply produce to popular hotels and restaurants around Samoa. He is also working with chefs of five of these establishments to develop unique recipes inspired by traditional Pacific cuisines. “The idea is to get tourists to taste local, organic produce prepared traditionally with a twist that appeals to international palates,” he says. The ‘Farm to Table’ project is gathering steam. More establishments are joining in the run up to the SIDS events. “It’s about building enduring relationships through the value chain,” he says. “From communities, to farmers, to chefs, right through to the consumer. Ultimately it is the whole country that benefits – not just in terms of realising tourism potential but also healthy eating and cultural pride.”

‘Samoa arrives on world cuisine stage’ “I didn’t win the award. Samoa won the award,” Oliver said when his second book based on the cuisines of the Pacific islands, ‘Mea’ai Samoa: Recipes from the Heart of Polynesia’, won one of the world’s most prestigious awards earlier this year. The book, along with its associated television cooking show, Real Pasifik won the Gourmand Award for Best TV Chef Cookbook In The World 2013 at an award ceremony in Beijing. The globally sought after accolade is considered the Oscars of cookbooks, coming from the well-regarded house of Cointreau, the family that brought 28 Islands Business, September 2014

to the world the famous Cointreau liqueur, as well us the Cognacs Frapin and Rémy Martin. “It signals Samoa’s arrival on the world cuisine stage,” he says. For Oliver and the Pacific, winning this award was a bit of de ja vu. In 2010 his earlier tome titled Me’a Kai, the Pacific Island Cookbook was named the Best Cookbook of the Year at the 2010 Gourmand World Cookbook Awards in Paris. The European media called it the gastronomic upset of the year. “We’d won the big one before so this year’s award was wholly unexpected,” says the passionate chef.

The book beat 187 participating countries. Finalists were from Australia, New Zealand, South Africa, the United Kingdom and the United States of America. Winning the award a second time in such a short period of time only means there is something special about Pacific Island cuisine. Natural ingredients, simplicity of preparation and cooking processes and a range of clean, subtle flavours directly reminiscent of the origins of the ingredients – the ocean and the pristine land – have proved a winning combination for the chef and Pacific cuisine.

SAMOA. THE SACRED HEART OF THE SOUTH PACIFIC.

In the heart of the glistening Pacific lies Samoa. Touch down and you’ll discover the beating heart of Polynesia. Sure Samoa has all the mod cons you’d expect today. But it also has something completely unique. A way of life called Fa’a Samoa – the Samoan way. It’s a 3000 year tradition based on respect for family, elders, village, church and environment. It also means we welcome visitors with a genuine warmth and friendliness. So as well as the spectacular scenery, pristine beaches and crystal clear coral lagoons you’ll have an experience that’ll stay with you for a long time.

HOLIDAY THE SAMOAN WAY. www.samoa.travel

Cover Report nae says, “PCF in partnership with SBEC and SCC are setting up the SIDS Village. PCF has developed the concept of the look and feel of the SIDS village and will be providing its infrastructure from previous Pacific Showcases to beautify the area.” The foundaALL lined up .... artist’s impression of the traditional arts display village for Samoa’s SIDS conference. Photo: Supplied tion has hosted similar shows for Pacific businesses in Auckland in the recent past and has abundant experience in conducting such shows. “We are also supporting both the Private Sector Partnership Forum where we will be moderating a session and having a booth as part of the Private Sector dialogue. Pacific Islands Trade & Invest (PT&I), the Pacific Islands Forum Secretariat’s trade office will also present a case study at the event. “We are showcasing the S everal local , regional and global first ever joint venture agencies are coming together to showcase a between a New Zealand wide range of small islands enterprises – not seasonal employer and his just from Samoa but also from the Pacific former employee from Islands region and other SIDS locations – Tanna in Vanuatu,” says during the conference. Sustainable business PT&I New Zealand Actand enterprise is recognised as one of the ing Trade Commissioner main drivers of economic development and Head of Investments in climate challenged states. But a lack of Manuel Valdez. economies of scale and long distances from The United Nations their markets coupled with high costs, pose Development Programme unique challenges to small island enterprises. (UNDP), and the InterTwenty businesses from Samoa and ten national Labour Organieach from the Pacific, the Caribbean and sation (ILO) are helping the AINS regions’ small islands states will organise youth art and VILLAGE design ... Laulu Mac Leaunae HELPING the little folks ... Peseta display their wares and have representatives of the Pacific Cooperation Foundation. Margaret Malua, CEO of the Small performing arts events to answer queries. The show is being held at Business Enterprise Centre. with live demonstrations a purpose built ‘Pacific Village’ venue near of arts at the village. The one of the main conference precincts. Its enterprise that applied to be included has village will also have fales where artisans location is hard to miss, say the organisers, been left out.” Some 21 small businesses will display traditional arts like weaving and as attendees to the conference sessions will have been packed into six of Samoa’s share tattooing besides other crafts. have to pass through the village. Besides the of 20 booths. Several special needs groups around Samoa business booths, there will also be food stalls The Samoa Chamber of Commerce are part of these activities. “The theme of the and entertainment around the village. (SCC) and the SBEC are fronting Samoa’s conference is partnerships and this show is “We were inundated with inquiries from private sector representation and coordinatall about partnerships between different small businesses as soon as the show was ing the effort. The New Zealand Governstakeholders,” says Malua. announced,” says Peseta Margaret Malua, ment funded Pacific Cooperation Founda“This is a once in a life time opportunity Chief Executive of Small Business Enterprise tion (PCF) has designed the village and for many of these people and their small Centre (SBEC). The Samoan pavilion has provided materials and infrastructure for the enterprises,” says Samoa Chamber of Combeen designed in such a way, that every apbooths as well as pop up tents, banners and merce CEO Ane Moananu. People fronting plicant has been accommodated. “The Pacific buntings to bring in a festive atmosphere. their businesses at the show are being trained is all about inclusiveness,” says Malua, “no PCF Chief Executive Laulu Mac Leauain demonstration and language skills.

Showcasing small islands enterprise

Traditional artisans to display products

30 Islands Business, September 2014

Cover Report lion (US$17m) villas planned and designed with a strong development adinfluence from traditional Samoan architecjacent to the picture. Spread over 33 acres, the units, which turesque property will include all the mod cons, will be built on the southern to luxurious proportions with an option for coast of the main owners to rent out either the whole unit or island Upolu. It a part of it, while ensuring full privacy to the is the first project rented portion. to put to practical Though they will all be designed alike, use Samoa’s as yet their price tags will range from S$1.4 million untested unit title to S$1.9 million (US$593,170 - $805,017), legislation, which depending on their location on the property allows foreigners and the views. The promoters are making a to buy and own case for a seven-year average return on inland in the counvestment of 13.59 per cent. Sinalei Premium try. Resorts can provide a detailed seven-year “The idea was financial feasibility forecast, says Project Sales to put to better Executive Alise Stunnenberg. use the land we The villas will harness renewable enhave around our ergy, harvest rainwater and generate biogas, existing facility,” besides using environmentally friendly says promoter Joe materials in the construction. The complex Annandale. “We will also have common facilities like a conhave so far been venience store, a large swimming pool and a using just 20 per golf course. A medical centre may also be in cent of what we the mix, says Joe Annandale. Designed by a have.” Annandale Fiji-based architectural firm, the promoters and sister and coexpect the development to provide a conpromoter Sose Ansiderable number of young Samoan locals nandale also have with employment and a chance to learn new an opportunity to skills. The promoters hope to break ground offer the developin October this year. A formal launch of the ment to a wider villa project is planned for this month in clientele outside New Zealand with events in Auckland and the country, thanks Wellington. to the unit title legBecause of its popularity and reputation, VIEW of paradise...Samoan initiative will allow foreigners to own sites like this. islation. Sinalei is being approached by several interAn event shownational resort chains including “giants” in casing the project the business, for a range of possible busito potential inness arrangements according to the genial vestors was held and soft-spoken Annandale. “We’re hearing in Auckland and of similar arrangements elsewhere such as Wellington a couple of Sheraton’s with Aggie months ago. Auckland Grey’s. There must be based Pacific Islands Trade something special in Sa& Invest helped out with moa,” he says. the marketing collaterals Both Annandales are for the project. Interest in upbeat about the project, the project has been high which is expected to begin not only from investors preparatory groundwork but also the entire real in early October. “Why’re estate industry. you embarking on this The uber-premium vilundertaking at your age, las are aimed at Samopeople ask me,” says the ans living overseas who 68-year-old hospitality wish to combine a luxury veteran. “It’s not just pasholiday in their own space sion. It’s also the reputaOne of Samoa’s long established and with visiting their friends tion Sinalei has built over reputable boutique accommodation providand relatives in their trathe years and the comers, who built and run the popular Sinalei ditional villages as well as mitment we have shown Resorts, has embarked on an ambitious firstcorporates and even local to pursuing excellence in of-a-kind project in the country. Samoan residents. hospitality in our country. Sinalei’s promoters are planning Sinalei The project comprises PROMOTION specialist ... Joe Annandale The world is there to back Premium Resorts, an all new $S40 mil27 eco-friendly courtyard heads the new premium site project for Samoa. us. Watch this space.”

A premium offering from Samoa

Project offers land for sale to foreigners

32 Islands Business, September 2014

Cover Story

Thirty nine years of indepe By Rowan Callick

hirty nine years this month a proud independent nation, Papua New Guinea is starting at last to box its weight as a real regional force as well. At last month’s Pacific Islands Forum summit in Palau, Prime Minister Peter O’Neill highlighted that his country had committed almost 300 million kina (US$118.146m) to development in fellow island states, and held a series of talks focused on boosting trade and investment with neighbours. He said that PNG “has an obligation to be taking the lead role” in supporting regional development “when we prosper in our own country.” The 46th Forum summit will be held in Port Moresby in July 2015, coinciding with PNG’s hosting of the Pacific Games - a handy rehearsal for the even bigger and more challenging task of hosting the 2018 Asia Pacific Economic Cooperation leaders’ forum, whose members include the presidents of the USA, China and Russia. The growing regional clout of PNG, and of O’Neill personally, were also demonstrated in the appointment of the country’s candidate, Dame Meg Taylor, as the Forum’s new Secretary-General - despite being a late contender, and in competition with impressive rivals. And of course, Dame Meg’s own credentials are extraordinary, as a diplomat, a multilateral agency administrator, a lawyer, and an NGO advocate. PNG has in recent times reinforced and

Islands Business, September 2014

HOT seat ... PNG Prime Minister Peter O;Neill has been under pressure from rivals. Photo: Sam Vulum

DRUMMING up support ... dancers perform at an event to mar

developed its already strong links with its other close neighbours, with Indonesia and with Australia - including through innovative and nimble diplomacy over, for instance, Papua, and over Canberra’s almost desperate desire for access to offshore processing facilities for asylum seekers. Despite the intense criticism that the latter programme has attracted, it has largely succeeded in stemming the boats heading across dangerous waters from Indonesia - and PNG’s involvement in it, however controversial, has delivered greater respect for its

government in Canberra. At home, there have been two big developments this year. First, the production of the first liquefied natural gas headed for Japan, slightly ahead of schedule - though the US$ 19 billion budget for the ExxonMobil led PNG LNG project did have to be boosted as costs rose. During the first full year of gas production, in 2015, PNG’s gross domestic product growth is widely forecast to exceed 20 per cent, making it the fastest growing country in the world.

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ndent Papua New Guinea

k PNG’s independence anniversary. Photo: Sam Vulum

And more seems set to follow, with the consolidation of ownership of the Elk-Antelope gas fields in Gulf province under the new direction of French giant Total, alongside Oil Search, PNG’s biggest company - in which the government bought a 10 per cent stake for A$1.2 billion, a deal being investigated by the Ombudsman Commission. Oil Search also owns 29 per cent of PNG LNG. The government has gone heavily into debt ahead of the big receipts it anticipates from gas. Moody’s ratings agency has reaffirmed PNG’s B1 sovereign rating, but warned that

despite the potentially “transformative” flow of gas, the size of the growing government debt threatens a downgrade. The mining sector, which before gas funded much of the government’s spending, is in a less positive state - in part because of the slide in commodity prices as China restructures its economy, in part because of domestic uncertainties. A year ago, the parliament legislated the takeover of PNG Sustainable Development Programme, a trust that had controlled the vast Ok Tedi copper and gold mine for 11 years since BHP-Billiton quit the operation due to environmental controversies. But the company has reported a collapse in profits - from A$519 million in 2012 to A$19 million last year - since the takeover. This constitutes a major blow to the 2014 national budget, which is 13.8 per cent above 2013 and for which a high deficit, 5.9 per cent of GDP, was already planned - as noted with concern by Moody’s. As a result of the 2013 slump in earnings, shareholders - led by the national government, with 87.8 per cent - did not receive any dividends. In 2011, the government received 16 per cent of its entire income from Ok Tedi taxes, A$543 million. And last month China’s A$2.2 billion Ramu nickel mine was closed following an

attack by armed villagers in which five Chinese workers were injured, with one needing 14 stitches to a wound. The operator, Ramu NiCo, issued a statement that equipment costing millions of kina was damaged. The attack was blamed on illegal migrants to the mining area who were unhappy with the company’s recruitment policy. But Greg Anderson, the executive director of the PNG Chamber of Mines and Petroleum, has said that RamuNico has impressed and surprised observers with the quality of its community programmes. The company said that it has been attempting to hire skilled and competent workers in order to improve productivity, and has been seeking to persuade those living near the mine who are seeking jobs there, of the value of training before they start work on site. The second big development of the year in PNG, is that Prime Minister O’Neill has survived - surprisingly comfortably - a wave of governance issues that would have tipped out almost any of his predecessors. This demonstrates O’Neill’s extraordinary political survival skills - that enabled him two years ago to see off PNG’s founding father Sir Michael Somare in a bizarre, prolonged period when the country had two governments at the same time, to conquer convincingly at the mid-2012 national election, and to have accumulated and held since then, the support of more than 90 of the 111 MPs. The intensity of the controversy, the bitterness, and the number of political, public service and police casualties also indicate, though, that governance remains a core

Congratulations Papua New Guinea on 39 Years of Independence

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Cover Story problem for PNG. prominent lawyers and others. agreed to head a commission of inquiry into Earlier in his term, it appeared that the Finally, nine months ago, Paraka, the sole the affair. country’s usually in-fighting elite was preparpartner and owner of PNG’s largest law Taskforce Sweep was then disbanded ing to bury, for a time, longstanding differfirm, with 22 branches, was charged with even though legislation for the permanent, ences and jealousies. For the opportunities conspiring to defraud the state of A$28.8m. more ambitious Independent Commission for material advancement were becoming so He remains out on bail. Against Corruption has still not been fully considerable that there seemed to be room Paraka Lawyers’ core way of operating has approved by parliament. Further senior pofor all at the feast, even if those closer to the been to defend people charged with serious lice and other officials were sacked or quit. top fed first. crimes without receiving a brief, and then to O’Neill has also lost the support of key But there has in recent months been a bill the state afterwards. The owner’s extraorestablishment figures, notably former prime colossal falling-out, and the bitterness has dinary network of contacts ensured such bills minister Mekere Morauta, who was chairbecome palpable. were usually paid in full, and promptly, a very man of OK Tedi when it was taken over by O’Neill’s instinct is to bulldoze his way unusual combination in PNG. the government, and of the PNG Sustainable ahead, as he has since becoming Prime But his core relationship - with useful eleDevelopment Programme, its main shareMinister - with the rapidity and range of ments of the government - unravelled fatally. holder. He claimed that SDP did not deserve his ambition for the country ensuring, he O’Neill set up early in his term Taskforce “vicious attacks” from the government, addhad thought, that whatever administraSweep, led by young, crusading lawyer Sam ing: “We live in fear, with our mouths shut.” tive mistakes and incidental irregularities, Koim, to target administrative corruption, An eminent persons group, established to whoever the collateral reconcile Morauta with damage, the extent of O’Neill, has failed to long overdue progress, make progress. fuelled by gas cash and Still, the battle against loans, would be sufficorruption has made cient to win widespread some progress. Former applause. senior minister Paul This approach apTiensten was jailed in peared a few weeks ago April for nine years, to be unravelling, as with hard labour, for PNG’s hyperactive socorruption. But he is a cial media gave O’Neill rare exception of a top the thumbs down. But leader being convicted. he appears to have ridAt the grass roots den out this storm, at level, O’Neill remains least for now - in part popular due to his practhrough the simple tical public priorities tactic of appointing a including the abolition police chief who clearly of school fees, improvowes him considerable POLITICAL tension ... a crowd gathers during recent protests in Port Moresby. Photo: Sam Vulum ing the mostly dire govloyalty, as the person ernment health system, who elevated him unexand building overdue pectedly to the top of the police tree. and stressed that he would not stand in its infrastructure. The governance crisis started back in 2010. way, whoever it wished to pursue. Paraka was But the creation of new jobs remains An incendiary, 812-page report was completsuddenly exposed. O’Neill issued a statement crucial, as the population continues to surge ed by a commission of inquiry comprising about the scams that had been revealed by unsustainably, and PNG continues to lantwo judges and a top businessman, which the commission of inquiry: “If I have to sack guish on the UN’s Human Development revealed that a cabal of top public servants everyone including the tea boy at Finance, I Index which includes measures such as life and lawyers had hijacked PNG’s governwill do so to clear the place up.” expectancy, years of schooling, and national ment chequebook, plundering more than But after Paraka was charged, a letter income per person. A$300 million through sham compensation (which O’Neill says is a forgery) was widely In the rankings for 2013, published in late claims, within the brief period investigated. circulated in PNG’s social media. In the letJuly, PNG stood at 157th of 187 countries, slipping backwards a notch last year despite The thefts clearly did not start or end there ter, dated January 24, 2012, O’Neill instructits rapid economic growth. though. ed Treasury to pay to Paraka a similar amount If O’Neill and his inner team can locate It had taken three years to conclude the to the sum he was accused of stealing. that elusive link between economic growth report, after numerous legal battles. But Taskforce Sweep, which earlier this year and better living standards, and connect up when then prime minister Sir Michael tabled agreed the letter was a forgery, changed the two, then sustained popular support will it in parliament, lawyer Paul Paraka - named its mind following further analysis of the keep them in office whatever the shadows throughout its 812 pages - obtained a court signature. It issued an arrest warrant against over governance, or the recriminations injunction banning any publication of its O’Neill for corruption, against which he within the Port Moresby elite. findings within PNG. obtained a stay order, describing it as “a The next year, the central year of the Among 57 people recommended for politically motivated stunt.” government’s five-year term, will be vital criminal prosecution were PNG’s finance Police commissioner Tom Kulunga was in determining whether the country - and secretary and his predecessor; the former told by cabinet that day to retire, AttorneyO’Neill - will truly prosper out of its gas chief secretary; a former attorney-general General Kerenga Kua, was sacked, and widely windfall. and former solicitor-general; an MP; several respected Australian judge Warwick Andrew 36 Islands Business, September 2014

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PNG: Happy birthday to the land of unexpected Future depends on ability to fight crime By Professor Satish Chand Papua New Guinea, the largest of the economies within the island-Pacific in terms of population and gross domestic product, reaches the milestone of being 39 years since independence. For most individuals, reaching 39 years is signalled by the appearance of the first grey hairs and with it the signs of maturity. For me personally this was also the time when I realised that I could not keep pace with the football or the players on the field. PNG is different, however. It remains young and vibrant that has much to look forward to still. Here I provide a glimpse of the past to paint a picture of the unfolding present. Papua New Guinea is a nation with considerable promise and much potential. The challenge for its leaders and policymakers is to realise the potential of this young and vibrant democracy. The past Papua New Guinea has had a difficult past. Independence from Australia was attained in 1975. Some then argued that nationhood was handed to PNG too early. A few continue to lament that Australia let go of its lone colony too early, and without having prepared the nation for the challenges of the future. One informed intellectual who was involved in the transition to independence told me that Australia hardly had a choice but to offer its colony independence. There was a move within PNG for independence. And Canberra decided to offer independence on good terms with the leaders in Port Moresby rather than be pushed out. This, with the benefit of hindsight, was wise. Australia and PNG have remained on close terms and both have come to assist one another in need. PNG remains one of the largest recipients of foreign aid from Australia and is home to large foreign direct investments. Many in PNG are passionate about the Australian Rugby League (ARL) to the extent that the battle between the Blues from New South Wales and the Maroons from Queensland attracts crowds 38 Islands Business, September 2014

larger than those I see in Canberra. I once made the mistake of claiming to be a Blues fan (which I am) in a crowd of Maroon diehards and nearly paid the price for it. The land of unexpected has delivered many shocks and surprises over the past. Amongst the surprises has been an untainted record of having a thriving democracy, a vibrant press, and a respected judiciary. The shock was the short stints of political turmoils such as that when General Singirok demanded the resignation of the Chan

government on March 17, 1996 following the Sandline Affair. Then followed the constitutional crisis of December 2011 when both Sir Michael Somare and Peter O’Neill both claimed to hold the office of the prime minister. The national elections resolved this crisis in PM O’Neill’s favour and the Grand Chief joined the government. The third incident was that of June 2014 when police issued an arrest warrant against PM O’Neill accusing him of authorising fraudulent payments to a local law firm. PNG, true to its reputation of having delivered unexpected results, proved to be resilient to these turmoils. The biggest blot on the post-independence record of PNG is the decade long, bloody, and brutal civil conflict on Bougainville that started in 1988 and ended with a peace agreement signed in 1998. The war on Bougainville killed thousands – the exact numbers are not known, both from fighting and due to a collapse in the delivery of basic services including access to medicine. The

people of PNG, and the Pacific more generally, must draw lessons from this conflict as otherwise they run the risk of repeating the same blunders of the past. The present The people of PNG have witnessed unprecedented rate of growth of the economy the past decade. Real (i.e. inflation adjusted) Gross Domestic Product expanded at an unprecedented annual average rate of 5.8 percent to the decade to 2012. This has largely been due to one US$19 billion investment into a Liquefied Natural Gas (LNG) project. The roads in Port Moresby are now clogged with new vehicles, the majority flashy fourwheel drives imported from Japan. The price of homes in average suburbs has trebled in just half a decade. On the surface the Capital appears to be booming, but one only needs to scratch a little to see many emerging problems. Many ordinary folks ask of the boom and remain perplexed of the claimed benefits. My own analysis reveals that poverty in the nation as a whole has probably edged up. On a positive note, PNG has made progress on improving access to land for private enterprise. The leaders have worked hand in glove with several policymakers in passing new legislation that allows under-utilised land held by customary groups to be leased long-term for development. The new laws provide the option to customary owners to lease their land long-term. Land is wealth and the past has revealed the abuses leading to quick-rich schemes for some and to the cost of many. These risks remain though the new legislation now makes it a criminal offence to deal in land under customary title away from the community itself. And the future The challenge for the leaders then is to consolidate on the gains and address the emerging problems such as the increase in poverty. The free media, the independent judiciary, and the resilient democracy that PNG has built need to be protected. The benefits of economic growth must be spread more widely such that the poor and the rest both benefit from a rise in national output. The biggest challenge remains that of addressing crime. Port Moresby grinds to a halt at dusk, leaving both people and machines other than the rascals idle. Getting the criminals out of business while getting the rest to work remain the most urgent (and significant) of the priorities.

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New leadership for Pacific Islands Forum

Fiji government must also decide whether to rejoin the organisation, so Port Moresby - Suva relations will influence this decision in coming months. PNG’s regional influence Fiji’s Kaliopate Tavola as a was also noticecandidate for the Forum’s able in Sir Metop job. But it was clear as kere Morauta’s nominations came in - with review of the three MSG countries each 2005 Pacific Plan, nominating one of their own with Forum leadnationals - that Melanesian ers ditching the unity only goes so far. plan to adopt a With Fiji suspended from new Framework Forum meetings, there was no one in Palau to lobby HISTORIC moment ... Dame Meg Taylor will head the on Pacific Regionalism. This for the former Fiji foreign Forum Secretariat. Photo: Nic Maclellan framework is deminister, with some larger signed to analyse Forum members still conregional initiatives, with a new subcommittee cerned that he was too close to Fijian leader of the Forum Officials Committee (FOC) Voreqe Bainimarama. to scrutinise proposals and set priorities. After the Forum, the Fiji Sun newspaper The framework also aims to streamline the - which often editorialises in support of the agenda for the annual leaders meeting, with Bainimarama regime - raised concern about some decisions being delegated to ministePNG lobbying in support of Dame Meg’s rial meetings. candidacy. Following Fiji’s initiative to involve busiAt the 2013 Forum in Majuro, PNG ness and civil society alongside government Prime Minister O’Neill announced a series leaders in the Pacific Island Development of grants to smaller island states for climate Forum (PIDF), the new regional Framework adaptation, elections support and other prowill look at mechanisms to better involve grammes. This initiative was expanded this non-state representatives. Non-government year, with the PNG government announcing organisations have long been critical of the over 300 million kina (AU$129m) in grants Forum Secretariat’s failure to effectively for the seven Smaller Island States (SIS) in engage with the community sector, even as the Forum, including a proposal to establish the regional body has created opportunities an SIS Secretariat in Port Moresby. PNG for civil society to meet officials on trade and Foreign Minister Rimbink Pato was also security issues. present in Palau, as the PNG delegation held Highlighting the key theme of partnership, a series of bilateral meetings with Forum Forum leaders in Palau expanded their links island delegations. with other nations. Cuba attended its first While delegates in Koror publicly welmeeting as a Post-Forum Dialogue Partner, comed Port Moresby’s solidarity, there was also muttering in the corridors about whether while Spain and Turkey were both granted this status. New Caledonia’s delegation was this generosity will translate into policies that disappointed that the Forum communiqué benefit the entire region, given PNG’s role in did not address its bid for full membership, global climate talks as part of the Coalition of but Tokelau was upgraded from observer Rainforest Nations and its particular interests status to associate membership, reflecting in regional trade negotiations. its engagement in regional initiatives around After this month’s elections, Fiji’s return to energy and fisheries. Forum meetings will be determined by the Forum Fisheries Agency director general Forum Ministerial Contact Group (MCG), James Movick notes: “This move will bring following a report by a Multinational Obkey benefits to the Forum beyond growing servers Group co-chaired by Australia and regional representation, especially increasIndonesia. The election observers will make ing leaders’ awareness of the importance of a recommendation to the MCG on whether fisheries issues for small island states given Fiji’s suspension should be lifted in time that Tokelau is a key regional fisheries player, for the 2015 leaders meeting, to be hosted despite its small size and territorial status.” by Papua New Guinea. The newly elected

PNG’s Meg Taylor takes top job By Nic Maclellan I n the absence of A ustralia ’ s Tony Abbott and New Zealand’s John Key, and with Fiji still suspended from Forum meetings, Papua New Guinea’s push for regional leadership was highlighted at the Pacific Islands Forum in Palau. The choice of Dame Meg Taylor as the Forum’s new Secretary General – replacing Tuiloma Neroni Slade of Samoa – is one sign of PNG’s renewed influence in the region. As the leaders held their annual retreat on the island of Peleliu, PNG Prime Minister Peter O’Neill and Solomon Islands PM Gordon Darcy Lilo briefly left the meeting, to allow other leaders to debate the choice of Secretary General. Dame Meg, who has worked with the World Bank group since 1999, was chosen over Dr. Jimmie Rodgers of Solomon Islands, Kaliopate Tavola of Fiji and Tony de Brum of the Marshall Islands. The first woman to hold the post, Dame Meg will now head an all-women leadership in the Forum Secretariat, joining Deputy Secretary Generals Andie Fong Toy and Cristelle Pratt. After the decision, former SPC Director General Jimmie Rodgers congratulated Dame Meg on her appointment, telling Islands Business it was “a win-win for both the Pacific and for the Solomon Islands.” “Dame Meg is a wonderful leader for the region, and I am free to pursue other interests,” he said. “When I went back to my village after finishing at SPC, people told me they wouldn’t be unhappy if I didn’t get the Secretary General’s post - they said they had bigger things for me to do.” With the Solomon Islands moving towards national elections later this year, Dr. Rodgers may not be spending too much time fishing in coming weeks. Palau, the Marshall Islands and the Federated States of Micronesia were promoting a Micronesian for the top job. FSM’s nominated candidate Fabian Nimea was overridden at the last minute when the three Micronesian presidents endorsed Tony de Brum at their July 2014 presidential summit. In recent Melanesian Spearhead Group (MSG) summits, leaders had supported

Islands Business, September 2014 39

Leadership choice cru Cover Report

By Dennis Rounds

iji’s September 17 General Election will be decided primarily on the quality of political leadership on offer rather than on political platforms and manifestos. Media-driven interviews and general political coverage of the election campaigns has focused largely on the leadership qualities of party stewards and only sparsely on the actual individual party platforms/ manifestos. Equipped with the powerful slogan of “equal citizenry – one vote, equal value,” Fiji’s voters are now better “empowered” than ever before to choose who should lead them into the future. Unlike past elections where voters were equipped with voting rights to choose as many as two candidates to represent them – one from a Communal Constituency and the other from a prescribed list of National constituencies – the choice is now limited to just one candidate from a field of 248 (the official number of nominated candidates as of 19 August 2014). Surprisingly, with the number of registered political parties now standing at seven, the overall number of nominated candidates remains comparable to past elections. Another surprise, despite its political rise from 1985, is the decision by the Fiji Labour Party (FLP) to field just 42 candidates instead of the maximum 50. FLP leader and political veteran, Mahendra Chaudhry, who has nominated himself despite his current ineligibility to contest the 2014 elections, has shrugged the low number off as a “strategy” aimed at winning in areas where the party has traditional support. Faced with the political party options now before them, many of Fiji’s young voters face the dilemma of having to differentiate between voting for political party ideologies and manifestos and voting for political leadership/charisma. With Fiji’s new electoral system, where voters choose a number representing their preferred candidate, without the benefit of accompanying political party symbols, it’s more likely that the focus will be on party leadership rather than on political party ideologies. Evidence of this has surfaced in local media 40 Islands Business, September 2014

Rear Admiral (Retired) Voreqe Bainimarama: Bainimarama appears to be leading the pack of political party leaders. His Fiji First Party is drawing large crowds in the rural areas where he has invested much of the nation’s taxes through targeted community development. Bainimarama’s political campaign strategy has been to promote his government’s achievements and belittle any opposition as coming from “old” politicians who don’t share his vision of a “new Fiji.” Issues which continue to confront Bainimarama relate largely to long-held indigenous fears about native land security, indigenous identity and a reliance on the Fiji National Provident Fund and hefty Chinese loans to generate economic activity. There is a high probability that Bainimarama’s Fiji First Party will win the largest number of seats by a single political party. There are reservations about whether he will win enough seats to form a majority government but he could find himself in Parliament commanding the support of the largest single bloc of parliamentarians.

Marama Bale na Roko Tui Dreketi Ro Teimumu Kepa: Ro Teimumu Kepa is no political novice having served as Education Minister in the Laisenia Qaraseled government ousted by Bainimarama’s December 2006 coup. She has an impressive political record winning more than 50 percent of the primary votes in the 2001 and 2006 elections. Her new role as SODELPA leader, however, has been somewhat overshadowed by the presence and active campaigning of her former leader, Laisenia Qarase. Qarase, like Chaudhry, is disqualified from contesting the 2014 General Election because of a 2012 conviction on abuse of office charges (unrelated to his term as Prime Minister) and subsequent imprisonment. While Ro Teimumu has chosen to adopt a traditional approach to her campaigning by organizing pocket meetings in villages across the country Projections are that SODELPA will win the next largest number of seats as an individual party but insufficient to form government on its own.

polling which has focused largely on political leadership. Political parties in Fiji are struggling to gain the needed mileage through media exposure of their individual manifestos.

Much of the local media interviews with vying politicians and political party leaders have tendered to draw greater attention to what the current Bainimarama government is promoting rather than to what individual

cial to Fiji poll result

Cover Report

Mahendra Chaudhry: A wily old politician, Chaudhry is expected to remain the FLP’s main powerbroker – even from the sidelines – now that he is eliminated from the contest. Like Ro Teimumu Kepa, Chaudhry’s strategy has been to organise pocket meetings in areas where he knows the FLP has traditionally had strong support. Chaudhry was the first non iTaukei Prime Minister of Fiji, elected in 1999 but overthrown after a coup led by George Speight. Until recently Chaudhry has drawn much of his support from the cane faming community where he had much influence as secretary of the once-powerful National Farmers Union. In recent years much of his union support has been eroded. His nomination of only 42 candidates is an indication of the political strategist that he is. The question that will be answered post September 17 is whether the FLP will become a spent political force now that Chaudhry has been eliminated from the contest.

Professor Biman Prasad: Prasad is a political novice but a respected academic with the intellect to address economic issues like no other candidate in the 2014 General Election. As the new leader of the National Federation Party, Prasad has assembled what is most probably the best cross-section of candidates. Prasad has shown his commitment to inclusivity choosing lawyer Tupou Draunidalo - daughetr of the late Adi Kuini Bavadra - as party president. He has also made a conscious effort to bring young people into politics. Also on this line-up are a number of party stalwarts with strong community links. His political strategy during the campaigns has been to remind voters of the legacy left by former NFP leaders in the form of the Fiji National Provident Fund and the Agricultural Landlord and Tenants Act (ALTA) and the party’s understanding and respect for indigenous institutions. Under Prasad’s leadership the National Federation is expected to make a re-entry into representative politics but with a limited number of seats.

party manifestos offer. As expected, contentious issues which have haunted Fiji’s political past continued to dominate the local campaigns and media coverage. These include land security, a

national identity, constitutional recognition and roles for indigenous institutions and the perception among the indigenous population that their identity, as a distinct people, is under threat.

Interestingly, while ethnic polarisation will continue to have an impact on the election’s outcome, there appears to be wider acceptance in Fiji, especially so among the younger voters and increasingly among some older voters, that racial politics is on the decline. As expected, incumbent Prime Minister Rear Admiral (Retired) Voreqe Bainimarama’s new Fiji First Party (FFP)is attracting a large following with its promotion of equal citizenry and recognition of all Fiji citizens as Fijians. Bainimarama’s main political opposition, the Social Democratic Liberal Party (SODELPA) – under the stewardship of paramount chief, the Marama na Roko Tui Dreketi - Ro Teimumu Kepa, is expected to retain much of its traditional support base with its focus being the preservation of indigenous identity and entitlements . An interesting development is the possible re-emergence of the National Federation Party (NFP) as a political force under the leadership of former academic Biman Prasad. The NFP, which is Fiji’s oldest political party, appears to be making inroads into areas which were once regarded as strictly Fiji Labour Party (FLP) domain. This follows disquiet over the Fiji Labour Party leadership following the recent conviction on foreign exchange charges of its party leader. Under Fiji’s current electoral system Chaudhry, through his conviction, is disqualified from contesting the 2014 General Elections. He has insisted, however, on leading the party into the elections on the basis that his conviction is still a matter under contest before the courts. Filing FLP nominations and his own as party leader on August 18, Chaudhry declared to the local media: “The fight’s on. It’s not over yet.” The question that lingers in most minds is: “Who will replace Chaudhry as party leader now that his nomination has been rejected?” As it stands, Fiji’s political arena currently features a three-way contest between the three most prominent political party leaders - Fiji First Party’s Voreqe Bainimarama, SODELPA’s Ro Teimumu Kepa and whoever gets to lead the Fiji Labour Party. The National Federation Party, under Biman Prasad, remains the “dark horse” which could surprise punters should Chaudhry’s FLP falter in the race. Islands Business, September 2014 41

Politics

US seeks dismissal as nuke lawsuit gains support

disarmament obligations under the NPT. The U.S. government in its brief to the court, said “the remedy (the Marshall Islands) seeks is not one this court can, or should, provide. If plaintiff believes the United States has breached its treaty obligations, it may pursue the issue as a matter of foreign relations, rather than trying to manufacture a cause of action in federal court.” The U.S. said the Marshall Islands acceded to the NPT treaty in 1995 and did not file suit against have stonewalled requests the U.S. within the normal for additional compensasix-year statute of limitation funding, stating that tions. Even if the statute the first Compact approved of limitations doesn’t bar in 1986 contained a “full the lawsuit, a judgment and final” nuclear settlein favour of the Marshall ment. Islands “would risk interBut the Nuclear Claims fering with the efforts of Tribunal, established by the the Executive Branch in Compact’s compensation the foreign and military provisions, determined that arenas, where discussions personal injuries for over regarding the appropriate 2,000 Marshall Islanders steps in support of nuclear and land damage, loss of disarmament are ongoing,” use of islands, and nuclear said the Justice Departclean up claims for four ment’s response to the of the most affected atolls federal court lawsuit. amounted to over US$2.3 The first hearing is billion — far in excess of JUSTICE hunter ... Marshall Isalnds Foreign the $150 million provided Minister Tony de Brum Photo: Giff Johnson scheduled for September 12 before the court in San by the U.S. as compensaFrancisco. tion. “Disarmament is only possible with poMeanwhile, because of limitations on six litical will,” said deBrum in New York at an of the nine countries’ recognition of the ICJ, NPT preparatory meeting a few days after only three of the nine applications — against the lawsuits were filed in April. the United Kingdom, India and Pakistan — “We urge all nuclear weapons states to remain on the court’s calendar. India refused intensify efforts to address their responsibilito send officials to attend a court meeting in ties in moving toward an effective and secure June, Pakistan told the ICJ it lacked jurisdicdisarmament.” tion and the Marshall Islands application was The NPT lawsuits state unequivocally that “inadmissible,” while England agreed to a they are not seeking monetary compensabriefing schedule. tion and there appears to be no direct link The court, despite challenges to its jurisbetween the NPT lawsuits and the stalled diction, set a briefing scheduling allowing nuclear claims from the 67 nuclear tests the Marshalls and the UK, Pakistan and conducted by the U.S. at Bikini and Enwetak. India six-to-nine months to file arguments A feature published by Newsweek magaand counter arguments on the jurisdiction zine in early August said, however, that issue, with the last arguments due toward “What the lawsuit can do, its advocates hope, the middle or end of 2015, depending on is give voice and attention to a cultural cathe country. tastrophe that nuclear testing wrought over The U.S. is the only one of the nine govthe islands.” ernments facing a legal challenge within its For many Marshall Islanders directly afown court system. In late July, U.S. Justice fected by U.S. nuclear testing in their islands Department attorneys asked a federal court in the most important unanswered question is San Francisco to dismiss the Marshall Islands when will the U.S. government provide adlawsuit because they said the Marshall Islands ditional funding to meet the unpaid Nuclear failed to show that it has suffered “a concrete Claims Tribunal awards for personal injuries, injury” caused by the U.S. that an American nuclear clean up needs, hardship and loss of court can address. use of islands? The Marshall Islands wants the U.S. court How these lawsuits advance the concerns to order the U.S. government to launch of nuclear weapons testing victims in the negotiations on nuclear disarmament within Marshall Islands remains an open question. one year of a ruling that it is in breach of its

Islanders’ justice bill nears US$2.3 billion By Giff Johnson When the Marshall Islands filed legal action in late April against nine nuclear nations at the International Court of Justice and against the United States in federal district court, it simultaneously stunned the world while sparking an outpouring of media reportage and comment. The filings also surprised almost everyone in the Marshall Islands, including many political leaders. The point of the legal actions at the ICJ against the United States, North Korea, Pakistan, United Kingdom, Israel, France, Russia, China, and India and in U.S. federal court against the U.S. government is to gain court declarations that these nuclear nations are in violation of disarmament obligations of the Nuclear Non-Proliferation Treaty (NPT). The Marshall Islands and its Foreign Minister, Tony deBrum, who described himself as a “co-agent” in the filings with the U.S.based Nuclear Age Peace Foundation, have received widespread praise from the global anti-nuclear movement. The latest expression of support came in early August when the International Peace Bureau announced it will award its annual Sean MacBride Peace Prize for 2014 to the people and government of the Marshall Islands “for courageously taking the nine nuclear weapons-possessing countries to the International Court of Justice to enforce compliance with the Non-Proliferation Treaty and international customary law.” The filings have been more controversial at home. Rongelap Senator Kenneth Kedi, who represents the population most heavily affected by radioactive fallout from the 1954 Bravo hydrogen bomb test at Bikini questioned the lack of consultation by the government with leaders of nuclear-affected atolls in the country and expressed concern that the lawsuits could negatively impact Rongelap efforts aimed at addressing compensation claims. Despite Marshall Islands requests to the U.S. Congress pursuant to provisions of the Compact of Free Association treaty with Washington for additional nuclear test compensation and health care funding, the U.S. Congress has not responded in 14 years and successive executive branch administrations 42 Islands Business, September 2014

Business

Time runs out for Samoan airline’s Fiji domestic bid Board decides against extension request By Samisoni Pareti Fiji’s Air Transport Licensing Board has made a startling revelation surrounding American Samoa based airline Inter Island Airways’ much awaited entry into Fiji’s domestic air transport market. ATLB Chairman Ernest Dutta says the airline was granted a one year provisional licence in November 2012 to operate domestic flights in Fiji. Inter Island Airways licence to operate has expired since last November bringing more uncertainty around its plans to start operations in the country. Dutta says the airline has lodged a renewal for the provisional license but ALTB has decided to put this on hold until they are able to get their Air Operators Certificate (AOC) from the Civil Aviation Authority of Fiji (CAAF). He says they will issue the license if the airline can show progress in acquiring proper CAAF certification. “The Board had initially granted Inter Island Airways a provisional licence on 21st November 2012 for one year to allow the company to acquire their aircraft types and to go through the motions of obtaining technical clearance from the Civil Aviation Authority of Fiji for an Airline Operator’s Certificate,” Dutta said. “This is standard practice when issuing a new operator a provisional licence. The Board had received an application of renewal of this provisional licence but the Board has responded that it will review this application once technical formalities for the acquisition of an AOC is completed. The Board has been advised that an AOC has as yet to be issued. The Board is awaiting formal advice from this company on its future intentions and will act accordingly.” The future of Inter Island Airways (Fiji) Limited is still in doubt given their situation. However Inter Island Airways has now indicated launching its Fiji operations in mid November, yet again postponing its start date due to CAAF compliance requirements. Domestic air travel More recently concerns have been raised about the exorbitant cost of air tickets for

domestic destinations. The Consumer Council of Fiji has called on the Commerce Commission to regulate the local air travel market due to the monopoly type hold Fiji Link (formerly known as Pacific Sun) enjoys on most routes. The Commerce Commission has indicated the presence of a regulatory body for the aviation sector in the form of the Air Transport Licensing Board whose responsibility is to ensure air fares do not exceed the fare structure approved by the board. ALTB Chairman Ernest Dutta says they do not step in to regulate prices in the domestic market and any regulation of prices is done in the initial stages of fare determinations or when applications are made by the airlines. Dutta explained that national carrier Fiji Link had requested to increase its air tickets in 2011 due to the heavy losses it was incurring - $18.7 million (US$10.03m) over four years. “The ATLB operating under the Civil Aviation (Licensing of Air Services) Regulations initially approves fares filings from domestic carriers, when applying for Air Service Licences. The Board subsequently reviews applications for fare increases when these are submitted and full justifications of the increases are provided before consideration is given to such increases. In the case of Fiji Link previously operating as Pacific Sun, a range of promotional and normal fares were approved in December 2011 following application by that carrier,” Dutta said. “The promotional

fares were designed to be utilized on flights not heavily supported. In its submission the airline reported yearly losses totaling $18.7 million dollars from its start up in 2007 till 2011. The cost of introducing modern equipment and the increase in jet fuel prices of over 60% were quoted in its submission. It is also noted that during that period saw the demise of the other significant domestic carrier Air Fiji. Annual losses for the carrier (Pacific Sun) from its inception in 2007 till 2011 have driven the carrier to file a revised level of fares to cover costs of operation.” Fiji Airways Chief Executive Officer Stefan Pichler says prices for air tickets in the domestic market will not be reduced due to the high cost involved in operating these flights. “I know that domestic air fares are perceived as being expensive in some cases if you compare the two with international fares they really seem expensive. Our big problem is in domestic we lose money so in the last year our operating profit margin on the domestic network was -2% despite the fact that most cases we have not raised the fares. The fares have not been changed for the last two years,” Pichler said. “If you think Fiji Link will earn lots of money from such a high fare Fiji Link, this is not true. We lose money overall.’’

Islands Business, September 2014 43

Business

GOING nuts ... palm harvest ready for the mill and a Malaysian takeover. Photo: Sam Vulum

Malaysians take over PNG palm oil giant Pacific plantation yields record surge By SAM VULUM London Stock Exchange listed company and Papua New Guinea’s largest agribusiness, New Britain Palm Oil Limited (NPOL) will have a new owner. After two months of intense bidding exercise, Malaysian conglomerate Sime Darby Bhd was selected as the preferred bidder. It will take over the shares of current owner Kulim Malaysia. NBPOL owns 77,000ha of oil palm plantations in PNG and the Solomon Islands, 12 palm oil mills, and one refinery each in PNG and Liverpool in the United Kingdom. It is also the largest domestic sugar and beef producer in PNG, with 7,700ha of sugar cane plantations and 9,200ha of grazing pastures. It owns a seed production and palm breeding facility. Kulim announced two months ago it was seeking buyers for its 48.9% stake in NBPOL. The move follows Kulim’s unsuccessful bid to increase its stake in NBPOL last year. In August 2013, the PNG Securities Commission ruled it was ‘not in the national interest’ for it to increase its stake in NBPOL to 68.9%. In an announcement in August, Sime said that it had been selected as the preferred party to negotiate a sale of Kulim (M) Bhd’s equity interest in NBPOL that is listed in London. 44 Islands Business, September 2014

“Kulim has now entered into exclusive discussions with Sime Darby to finalise the terms of the transaction,” Sime Darby said. In a separate announcement, Kulim said that it sent a letter to NBPOL and the relevant government authorities in Papua New Guinea (PNG) to inform them of its intention to sell its entire equity stake in NBPOL to Sime Darby. Kulim said the discussions would see the terms of the transaction being finalised for a period of 60 days or longer that would be mutually agreed upon. The race for the sale of NBPOL started in May this year with Felda Global Ventures Bhd (FGV) first expressing interest to acquire the stake from Kulim. Following a competitive bidding process, seven others entered the fray for NBPOL. It included two plantation groups from Indonesia and Singapore’s Wilmar International Ltd and three plantation giants from Malaysia joining FGV. The three Malaysian companies were Sime, IOI Bhd and KLK Bhd. Kulim wanted to dispose of the stake because although it is the single largest shareholder in NBPOL with 48.97%, it is unable to exert management control over the plantation group that is a source of significant employment in PNG. NBPOL is managed by a group of professional managers that have a stake in the

company through Pacific Rim Plantations Services Pte Ltd. Pacific Rim has a 4.49% stake in NBPOL while the West New Britain Provincial Government has a 8% stake in the plantation company. Kulim had wanted to raise its stake in NBPOL by 20% to about 69% through a corporate exercise announced in July last year but that was shot down by the independent directors. Kulim finally aborted its plans after the PNG market regulator also came down hard on the Johor Corp-owned company preventing it from taking any steps to increase its stake in NBPOL. There was said to be intense negotiations between FGV, Sime Darby and Kulim. FGV was publicly seen as the front-runner for NBPOL as it was the first company to confirm its interest for the latter and was prepared to pay the price sought. “But Sime was finally chosen because it stands a better chance to get the PNG government’s approval,” said sources. Plantation yields at PNG are also better than in Malaysia, with yields that can go up to 26 to 27 tonnes per ha with an oil extraction rate of up to 24%. The company is presently publicly-listed on the London Stock Exchange and was last traded at £5.18 and has a market capitalisation of £778mil. NBPOL had risen significantly in the yearto-date (YTD) period gaining 30.77% until in August despite subdued palm oil prices throughout the YTD period. The low prices have however affected the group’s profits. NBPO announced in August a significant US$64.3 million drop in the group’s profit before tax last year. The combined effects of lower palm oil prices and lower production has seen the group’s profit before tax (excluding IAS 41 adjustments) drop significantly from US$ 81.6 million in 2012 to US$17.3 million (K39.95 million) in 2013. Group chairman Antonio Monteiro de Castro said however, the group had made good progress in reducing its US dollar based production costs and this had been coupled with a devaluation of the Kina so that they have had both dollar and kina related cost reductions. He said the group was well positioned to capitalise on an improving palm oil pricing environment with lower production costs and strong demand for sustainable and traceable palm oil products. “Our downstream business New Britain Oils (NBO) has performed well, continuing to build sales volumes of traceable and sustainable refined oil products,’’ the chairman said.

Sports

Weightlifters bring home the medals in Glasgow Pacific’s athletes brace for ANZAC invasion By Peter Rees As predicted in our January 2014 edition, weightlifters proved to be the Pacific’s most successful athletes at the 2014 Commonwealth Games. They accounted for all eight medals won in Glasgow last month. The eight medal haul was one less than the nine medals won in Delhi four years ago, but it was a solid return considering the increased level of competition some sports experienced, particularly in weightlifting. Competing nations arrived in Scotland obviously well prepared. Despite facing athletes with superior resources and funding behind them, Pacific lifters held their own.Four years ago, Samoa’s golden girl Ele Opeloge was the darling of Delhi. This time, it was hard to go past charismatic lifter David Katoatau as Glasgow’s hero. He won Kiribati’s first ever Commonwealth Games medal, coming from behind to win the gold in the men’s 105kg division. He then capped off his historic performance with a celebratory dance in front of the gaze world’s media. Katoatau was languishing in fourth place after a 148kg snatch, but he fired back with a 200kg lift in the clean and jerk to finish with a winning overall total of 348kg. “I knew after the snatch I would win the gold medal because I knew I could do it,” a jubilant Katoatau told media RISING star ... Kiribati lifter, David Katoatau wins gold in Edinburgh Photos: Peter Rees afterwards. “I am going to go back and celebrate with all my people back in Kiribati.” Papua New Guinea was recognised as a Games record also celebrating double gold in the women’s 53kg class. in weightlifting, albeit in conIt was sweet reward for the troversial circumstances. Steve veteran who started lifting Kari (men’s 94kg) won a photo back in 1996. Toua’s best finish against Australian rival, result was a sixth-place finish Simplice Ribouem on his at the 2004 Games in Athens. final attempt. “The referee The mother-of-two won a thinks that I touched my elsilver medal at the Melbourne bow on my thigh ... [but] they Commonwealth Games in saw [there] was a gap,” he 2006. Now she finally has a told media. “I was confident Commonwealth Games gold it was a good lift, because medal as a crowning achieveI felt it myself, it wasn’t a bad lift, it was a good lift.” GOLDEN smile ...... PNG’s Dika ment in a wonderful career. Samoa missed out on the gold Kari’s PNG teammate Dika Toua celebrates Photos: Peter Rees rush this time after winning Toua saw her silver medal three in 2010, but the Opeloge bumped up to gold after her family once again flew the Samoa flag high 16 year-old Nigerian opponent failed a as they did in Delhi. Samoan sisters Ele and drugs test. Toua’s total lift of 193kg was

Mary Opeloge both bagged silver medals in the women’s 75kg+ and 75kg divisions respectively, while their teammate Vaipava Ioane picked up a bronze in the men’s 62kg. There was disappointment for Ele who lost her Commonwealth title form, but considering she had only given birth to her second child six months earlier on top of off successive injuries; it was a remarkable effort to even finish on the medal dais. Samoa’s other medal hope and Delhi gold medallist, Faavae Faauliuli, finished eighth in Glasgow. Nauru strongman Itte Detenamo also relinquished his Commonwealth title in the men’s 105kg+ settling for silver with a total of 396kg which was four kilogrammes behind the winner from Canada. Fiji marked their return to the Commonwealth with a bronze medal to weightlifter Apolonia Vaivai who finished behind Samoa’s Mary Opeloge in the women’s 75kg with a total of 209kg. It was some consolation for Fiji who ran out of time to field their main medal hope, the Fiji rugby sevens team. Fiji last competed in Melbourne in 2006 but was banned by the Commonwealth in 2009. The ban was lifted in March. After featuring in the medals four years ago, Tonga’s boxers were not able to repeat their double bronze feat in Delhi, while Samoa just missed out on a medal in rugby sevens, after being beaten by Australian in the bronze medal playoff. Athletes from 13 Pacific nations competed in Glasgow. Next stop – Port Moresby 2015 With the Glasgow Games done and dusted, Pacific athletes and officials will now divert their attention to the Pacific Games in Port Moresby, Papua New Guinea next year. The Port Moresby Games will be unique as the event will see the participation of athletes from New Zealand and Australia joining athletes from the 22 island nations. The Pacific Games Council voted for their inclusion on a trial basis at their Port Moresby meeting in July. An MOU to be signed with ONOC (Oceania National Olympic Committees) will ensure the protection of the Pacific Games name and structure. One of the aims of the inclusion of Australia and New Zealand is for the Pacific Games to earn recognition from the IOC (International Olympic Committee) and international federations as the official continental games for the region. Several sports that will feature in Port Moresby are already doubling as Olympic and World Championship qualifiers. Weightlifting is one of those sports and they will likely draw the top lifters from Australia and New Zealand. Sailing, Taekwondo, rugby sevens are other sports. Islands Business, September 2014 45

Viewpoint

The PIDF Comes of Age

he second Summit of the Pacific Islands DevelopBy ment Forum (PIDF) was Dr Michael held on Fiji’s Denarau IsO’Keefe* land from June 18 to 20. Over 400 delegates from the region and beyond were in attendance and keynote presentations were provided by the Prime Minister of Fiji, Rear Admiral Josaia V. Bainimarama (Retd) and His Excellency Susilo Bambang Yudhoyono the outgoing President of Indonesia. PIDF II Summit Announcements and Outcomes The PIDF Summit outcomes document is concise and focused. It begins with a restatement of the Ten Things needed to enable green-Blue Pacific economies from the Inaugural Summit outcomes statement. This statement captured the spirit of the Inaugural Summit and a reminder of it is valuable as the PIDF becomes more oriented toward implementing this vision. The Outcomes document includes a summary of the presentations, deliberations and agreed initiatives to guide the activities of the year ahead. The first plenary focused on “the strategic framework for green growth.” It included presentations that highlighted the steps needed to implement the Ten Things vision from the inaugural summit to produce an enabling environment to embed green-blue economies at the national level. This plenary included an interesting reflection on how the PIDF could integrate with regional and subregional organisations such as the Melanesian Spearhead Group. It dovetailed with the strategic statement produced by the Governing Council on the eve of the Summit. In addition, the Fijian government detailed their new Green Growth framework, which could act as a model for how other PSIDS could operationalise these principles in national policies. The second plenary focused on creating “the enabling environment and genuine partnerships for Green Growth.” The focus was on private sector involvement both at the industry level and in relation to small and medium enterprises (SMEs). The importance of developing enduring partnerships

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between governments, civil society and the private sector to promote the Green Growth agenda was reaffirmed. Subsequent plenaries and parallel meetings focused on regional and international cooperation, links to the SIDS conference in Samoa, the post-2015 development agenda and institutional matters, the full details of which can be found on the PIDF website. In addition to continued funding from existing development partners, the PIDF Secretariat acknowledged financial support from Japan, Timor Leste and Nauru. The provision of funds from a new development partner highlights the success in positioning the PIDF as a partner of choice in relation to implementing Green Growth initiatives. The provision of funds from a Pacific nation other than Fiji also represents a major development. No doubt the Secretariat will hope to emulate both types of diversifications in funding in the year ahead. The Summit also saw the signing of a number of Memoranda of Understanding with key parts of the regional architecture focused on environmental issues and development issues. MOUs were signed with the Secretariat of the Pacific Community (SPC), International Union for Conservation of Nature and Natural Resources (IUCN), University of South Pacific (USP), Melanesian Spearhead Group (MSG) and World Wildlife Fund (WWF). These agreements have twofold significance. First, they provide the basis for meaningful collaboration across a range of sectors relevant to identifying and implementing a Pacific Green Growth agenda. Second, these agreements elevate the importance of the PIDF as a partner with regional and sub-regional intergovernmental and non-governmental organisations. To institutionalise this sort of cooperation so quickly is a major functional and diplomatic achievement in itself.

The provision of funds from a new development partner highlights the success in positioning the PIDF as a partner of choice

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46 Islands Business, September 2014

The Inaugural Governing Council Meeting The prelude to the Second PIDF Summit was the Inaugural Governing Council Meeting. The meeting was chaired by the Prime Minister of Fiji and attended by the President of Kiribati, President of Nauru, Vice President of the Federated States of

Micronesia, Minister of Foreign Affairs from the Solomon Islands, Secretary of State for ASEAN Affairs from Timor Leste, Chief Secretary and Secretary to Cabinet from Tonga, Vice Chair of the Pacific Islands Private Sector Organisation (PIPSO) and ViceChair of the Pacific Islands Association of Non-Government Associations (PIANGO). The Governing Council is a new initiative introduced to provide oversight over the PIDF. The Inaugural Governing Council Meeting’s Outcomes Statement stamps its direction over the PIDF. It identifies the Strategic Profile for the PIDF, lays the groundwork for an agreement establishing the PIDF, and a Workplan to achieve these aims. The Strategic Vision provides a number of unifying themes that are true to the Ten Things vision of fostering inclusive and distinctive collaboration to promote the transition to green-blue economies. It is clear that the key theme of the Inaugural PIDF Summit, namely involving government, private sector and civil society, will be a central plank of the PIDF foundation Agreement. The Workplan is focused on encouraging collaboration with existing partners and the brokering role that the PIDF will play in building partnerships to encourage mainstreaming the regional Green Growth agenda. Therefore, it is true to the ‘lean’ model proposed by the Inaugural Summit and only requires a modest budget. Mr Feleti Teo’s appointment as Secretary General was recently confirmed and he will oversee the implementation of the Workplan in the year ahead. The agenda is much more focused and there is considerable momentum from the successful second PIDF Summit, so observers will be watching the achievements of the next year with interest. Geopolitical Implications The solidification of regional and external support for the PIDF also has significant diplomatic and geopolitical implications. Not least of which is the use of the PIDF by Fiji to strengthen its Look North (and West) policy. Of equal importance is the use by Fiji’s new friends, such as China, Indonesia, Kazakhstan, Kuwait, Qatar, Russia, Turkey and the United Arab Emirates, to engage closely with Fiji and with other Pacific Small Island Developing States (PSIDS). This establishes the PIDF not simply as an arena for forwarding an inclusive regional Green Growth agenda, but also an arena where the increasingly complex geopolitics of the South Pacific will be played out. • Dr Michael O’Keefe of La Trobe University in Australia was an Observer at the PIDF Summit.

Environment

The Pathway to the 3rd SIDS Conference in Samoa By David Sheppard

amoa will make history this year as the first Pacific island country to host an international United Nations conference. The 3rd International Conference on Small Island Developing States (SIDS), to be held from 1 to 4 September, will also mark a 20 year milestone along a journey with which the Secretariat of the Pacific Regional Environment Programme (SPREP) has been actively involved. Martin Luther King Jnr once said: “If you can’t fly, then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.” To help move forward, let’s take stock of how we got here and retrace the pathway to the 3rd UNSIDS Conference in Samoa. In 1992, the Earth Summit, held in Rio de Janeiro, brought together over 30,000 participants, including more than 100 of the world’s leaders, and resulted in leaders agreeing to “Agenda 21” - a set of global principles and targets for sustainable development. The Rio Earth Summit was the world’s largest ever conference addressing environmental issues in the context of human development. That Earth Summit also resulted in three global agreements – the United Nations Framework Convention on Climate Change; the Convention on Biological Diversity; and the Convention to Combat Desertification. For the Pacific islands, the most significant outcome of the Earth Summit was the global recognition of the special case and vulnerabilities of Small Island Developing States and, in 1994, the first ever Global Conference on the Sustainable Development of Small Island States was held in Barbados. This “SIDS summit” agreed the Barbados Programme of Action, which addressed the special needs and vulnerabilities of small islands, and set out a strategy for implementing sustainable development in Small Island Developing States. In the Pacific islands region, this work led to a number of initiatives, including development of national state of the environment reports and national environmental management strategies. National environment units and departments were also developed and strengthened in Pacific countries. Funding for initiatives was provided through initiatives such as the Global Environment Facility. Despite these initial positive steps, it was

SPREP delegation at Small Island Developing States Special Exhibit at the Rio+20 in 2012. From L - R Mr. Sefanaia Nawadra, Ms. Brianna Fruean and Ms. Kathleen Leewai. Photo: Supplied

generally agreed that more action was needed if small islands were to achieve the lofty goals agreed in Rio and Barbados. Ten years after the Earth Summit, in 2002, the World Summit for Sustainable Development (WSSD) was held in Johannesburg and had as its major outcomes the Johannesburg Plan of Implementation and the Declaration for Sustainable Development. WSSD initiated a series of partnerships between governments and non-state actors. Termed “Type II Partnerships,” these represented a fundamental shift from the top-down, state-centred approach favoured at the 1992 Rio Summit to a more collaborative, bottom-up, multi-stakeholder approach. It was hoped that establishing such mechanisms would increase flexibility and enhance the implementation of sustainable development policy in collaboration with states, international organisations and other non-state actors. Pacific Leaders launched 14 Pacific Umbrella Initiatives as part of these Type II Partnerships. Two of these regional partnerships are the Nature Conservation Roundtable and the Pacific Climate Change Roundtable, which have been very successful in ensuring implementation of programmes in their respective areas. The establishment of these

was facilitated by SPREP. Other successful Pacific Type II partnership initiatives resulted in the development of the Pacific Islands Regional Oceans Policy and the regional Integrated Water Resource Management programme. Following the World Summit on Sustainable Development, the second SIDS Summit was held in Mauritius in 2004 to assess the implementation of the Barbados Programme of Action and develop the “Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of SIDS.” In June 2012, the United Nations Conference on Sustainable Development or Rio+20, was held in Rio de Janeiro, marking the 20th anniversary of the Earth Summit. One of the strongest Pacific messages at Rio+20 focused on the special case for SIDS. SPREP, our members and our partners worked to reinforce this special case, using a series of case studies, exhibits and side events. The Rio+20 Conference endorsed a special summit for SIDS in 2014 to follow up on actions agreed in Barbados and Mauritius. This leads us to Samoa, the host of the Third International Conference of Small Islands Developing Sates. The Samoa conference will focus the world’s attention on uniquely vulnerable small islands. Islands Business, September 2014 47

Business Intelligence

Airport plans ended, back to square one By Tony Wilson

RARE unanimous vote by Vanuatu’s MPs to end plans for a new controversial V$350 million (US$3.66m) international airport have refocused attention on the parlous state of Bauerfield International Airport. Plans to resurface Bauerfield’s runways, which are too small for modern passenger jets, have been in limbo while debate raged over the pros and cons of the Greenfield international airport plan, its cost and location. The ink was hardly dry on the agreement to discontinue the project, which had been made easier because the contentious, new airport contract had already lapsed, when the finger pointing and accusations began between MPs and senior public servants. The previous government of then Prime Minister Moana Carcasses had appointed a bi-partisan Parliamentary Ad Hoc Committee to examine the new airport proposal and make its recommendations to parliament, which it did late in July. And the committee’s recommendations make it crystal clear the airport proposal and concession agreement had serious ‘legal and financial flaws.’ In the preamble to the committee’s findings, it said that ‘it is distressing to note that some public servants, not all, have been particularly unfriendly and unhelpful.’ “Sometimes the intervention of our Public Servants has bordered on being obstructionist,” the report said. Prime Minister Joe Natuman quickly

FLIGHT of fancy?... Parliament debates new runway for Vanuatu’s international airport. Photo: Supplied

weighed into the issue stating that the blame for the Greenfield Airport fiasco lay with both elected Government MPs and senior civil servants. But he condemned attacks on senior civil servants and called on both sides not to play the ‘blame game.’ “I have already stated that this is not the time to be pointing fingers. I urge everyone to learn from this and move on together,” said Prime Minister Natuman. “I wish to reiterate that at the end of the day the buck stops with decision-makers. “It is not a light matter to be prime minister, or a minister of the state.’’ But some MPs, while praising the Prime Minister’s stand, said they believed the public service must be held accountable, just as they would be. “We are almost at a watershed as a nation and the 2016 elections will be critical to the nation’s development,’’ said one senior MP,

who did not want to be named. “Many of us will not stand again – we are old and some are ill and there are likely to be a number of young, fresh faces coming into parliament and we must have a public service that we can trust. “One that will play a key role in helping new MPs find their feet, so those that have made mistakes with this contract should be held accountable.’’ They said the original 18-member Task Force set to establish the new international airport plans and contract appointed by another former Prime Minister Sato Kilman had made a raft of mistakes that needed to be examined. “The Singapore registered Vanuatu Trade Development Limited paid for all 18 Task Force members to visit Singapore three times – and we should be asking what was that all about,’’ said the senior MP.

Tonga floats Development Bank for the Pacific By Taina Kami Enoka

etting up a regional development bank gained the support of the Association of Development Financing Institutions of the Pacific meeting in Nuku’alofa last month. Tonga’s Acting Prime Minister Samiu Vaipulu floated the idea when he opened the regional conference. He noted the establishment of the Asian Development Bank, a Caribbean Development Bank and an African Development Bank and the most recent announcement of another development bank by the BRICS group of countries, namely Brazil, Russia, India, China and South Africa. “I urge all of you, the bank practitioners

48 Islands Business, September 2014

and institutions to move the development bank from being recognised as a national aspiration to a regional ambition by seriously considering the setting-up of a Pacific Development Bank,” Vaipulu told delegates. He also moved for this regional bank to be set up in Tonga, saying that the government would fully support it. He suggested the proposed Pacific Development Bank would provide an alternative for financial institutions sometimes accused of attaching stringent and unfair conditions to their developmental loan facilities. General Manager and CEO of Tonga’s Development Bank, Leta Havea Kami told Islands Business magazine that such an in-

stitution would be a “conduit for funding to come to small island states.” Although the regional development bank has been discussed in previous meetings over the years, Kami said that since the challenge has been made at a government level, it has become more specific. “It’s now about how to actually get about setting it up. We can do the ground work but it’s for ministers to do the lobbying.” This was the 29th Annual General Meeting for ADFIP. Acting PM Vaipulu noted that the countries in the region were small and served small markets, but the impact it makes are significant.

He said it appeared that all 18 members belonged to the Vanua’aku Party – the country’s oldest and most influential political party. “These public servants should be explaining to the Public Service Commission why they should still have jobs - but that is unlikely to happen,’’ he said. There have been reports that Vanuatu Trade Development Limited (VTDL) which was to have run the new international airport for 50 years, is planning to sue and is claiming US$31 million in damages. Epi MP Robert Bohn, who chaired the Ad Hoc committee, told Islands Business that under the terms of the contract VTDL chose for the contract to be dealt with in a Singapore court if required and the Vanuatu Government chose for it to come under Vanuatu law. “Although this seems bizarre, this type of thing is not uncommon in contractual law,’’ he said. MP Bohn, who appears likely to have a pivotal role in Vanuatu’s aviation affairs regardless of who is in power, said he did not think the matter would end in court. “It is my understanding that this company plans to do further business in Vanuatu unrelated to airports and this should negate any court action,’’ he said. He said that during the committee’s investigation they discovered that Vanuatu does not have an aviation master plan. “This document is considered as the bedrock document that all discussions of aviation infrastructure development should be based on,’’ he said in the committee report. “We need to engage the proper consultants to provide the country with a master plan urgently and I can see no reason why it could not be done by early next year.’’

Bohn said plans to replace the runway and apron overlays at Bauerfield Airport should also be undertaken while the master plan is being prepared. “We need to have the airport in a state of repair that would enable it to operate for another 10 years at the outside,’’ he said. He said funding for Bauerfield repairs would be sourced from a number of areas including the World Bank, the EU or the Australian and New Zealand Governments. Vanuatu can and must grow tourism with its existing facility, said the Vanuatu Chamber of Commerce Tourism Councillor, Bryan Death. “There’s quite a lot of potential growth in tourist arrivals without a new international airport,’’ he said. Death said the new airport would not have brought more tourists to the country for another eight years. “What everyone is in agreement with is that we need an airport that can accept ETOPS aircraft,’’ said Bohn. ETOPS stands for twin engine performance standard and means a twin engine plane able to follow routes of more than 60 minutes flying time. At present tourists coming from Vanuatu’s top two tourist destinations - Australia and New Zealand are arriving and departing on 737-800s but to attract tourists from the lucrative Asian markets, bigger planes are required. Bohn said Asian tourists do not want to have to pay for transit visas in Australia nor spend time there en route to Vanuatu. “Bauerfield cannot take the bigger planes for direct flights from Asia at this stage so a new airport seems to be the answer, but the decision will become clearer once we have an aviation master plan in place,’’ he said.

“Without our development banks and financial institutions, many potential entrepreneurs [will not] be able to secure financing to start or grow their businesses.” He urged delegates to explore and implement different modalities of delivering services, particularly areas with remote outer islands and where the risk of delivering services tend to be high. These remote islands are not served by a commercial bank, he said, but it is the development banks that venture into these remote areas to support and build the private sector, for long term sustainability. “We must work together in the region to overcome the challenges of distance, scale,

and economic and political participation so that the region avoids economic and social stagnation and achieves sustainable economic growth,” Vaipulu said. “We must harness the private sector and regional organisations to create economies of scale. We must meet the challenges of good governance and sustainable resource management and stamp out corruption.” Delegates were challenged to ensure financial security and stability so the Pacific attracts both public and private investment. Private sector development creates jobs, offers new sources of income, alleviates poverty and increases engagement with the global economy.

Fuel company focuses on gas By SAM VULUM

he National Petroleum Company of Papua New Guinea (NPCP), the third largest shareholder of the world class Papua New Guinea Liquefied Natural Gas project (PNG LNG) is estimated to be valued at US$8 billion to US$9 billion if it is listed on an international stock exchange on pricing basis. NPCP, which holds the State’s share in the PNG LNG project, owns 16.6% behind Oil Search which holds 29% and the operator, ExxonMobil which holds 33.3%. The project is expected to produce more than 210 million metric tonnes of gas over its estimated 30 years of operation. NPCP chairman Frank Kramer said that the net worth of the company depends on how they value the entity. Kramer said the important thing is that it represents true value for its seven million plus Papua New Guinean shareholders. He said NPCP has huge potential to grow if it is managed properly and it gets appropriate support as custodian of the project. NPCP managing director Wapu Sonk said US$50million worth of gas has been sent to Asian markets in seven shipments so far, five in June and two in July. “By the end of the year we are expecting about 60 shipments to overseas markets,” he said. The marketing destinations are Japan, China and Taiwan. He said all the cash flowing from the sales are parked in a trust account. Sonk said the company is set to concentrate on upstream processing of oil and gas resources. He said NPCP would take on upstream processing which is exploration and development of oil and gas fields to owning LNG ships, facilities, plants, oil refinery and exporting gas to world markets. Sonk said during the launching of the company’s website in August that since it is a petroleum company, their core businesses will be on petroleum resources and they are starting to do power generation in the country to meet the increasing demands of power. Sonk said they would also supply power to companies in the local and international markets. Islands Business, September 2014 49

TRADE MARK CAUTIONARY NOTICE IN PALAU Notice is hereby given that Diageo Brands B.V., of Molenwerf 10-12, 1014 BG, Amsterdam, The Netherlands, is the sole owner and proprietor in Palau and elsewhere of the trademark below:

Invitation International Conference on Emerging Trends and Issues in Management and Public Administration in the South Pacific Region and Beyond 04-05 December 2014, USP, Suva, Fiji Islands The Conference will be hosted by School of Management and Public Administration (SMPA) &Pacific Islands Centre for Public Administration (PICPA) at USP. Managers, public servants, entrepreneurs, business owners and professionals, and future leaders are all invited to the Conference. Management Workshops will be held by highly experienced USP senior staff. High-profile Keynote Speaker from Australia will present at the Conference. Conference website: https://www.usp.ac.fj/index.php?id=16611. For enquiry please contact: Conference Chairs: Professor Fang Zhao (Head of School of SMPA) at fang.zhao@usp.ac.fj or Mr. Siosiua ‘Utoikamanu (Director of PICPA) at siosiua.utoikamanu@usp.ac.fj

GORDON’S which is used in International Class 33 upon or in connection with the following goods: Alcoholic Beverages Diageo Brands B.V. claims all rights in respect to the above trademark and will take all necessary legal steps against any person, firm or corporation counterfeiting, imitating, violating or otherwise infringing its rights in Palau. MUNRO LEYS Lawyers & Notaries Public Pacific House, Butt Street, PO Box 149 Suva, Fiji Tel: +679 331 4188 Email: trademarks@munroleyslaw.com.fj www.munroleyslaw.com MUNRO LEYS

VACANCY EXECUTIVE DIRECTOR Applications are invited for the post of Executive Director at the Western and Central Pacific Fisheries Commission (WCPFC). The Executive Director resides in Pohnpei, Federated States of Micronesia where the secretariat of the Commission is headquartered. There are currently 34 international and local staff and contractors at the secretariat. The Commission’s website contains a range of information relating to the Commission including the Convention which establishes the Commission and describes the responsibilities of the Executive Director (Article 15), Staff Regulations and other basic texts. The Commission’s websites address is www.wcpfc.int. Appropriately qualified individuals with extensive experience in institutional management and multilateral arrangements for the conservation and management of highly migratory fish stocks and/or shared fish stocks are invited to submit applications, complete with a resume and contact details for three (3) referees, to the Chairman at edrecruitment@wcpfc.int. A full position description is available at www.wcpfc.int/vacancies-opportunities. The deadline for applications is 6 October 2014. The appointee is required to take up the post by March 2015. 50 Islands Business, September 2014

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