July 2014 by Islands Business

www.lyndenpng.com 1-907-243-7248 +61 (0) 447 330 095

July

2014

Vol. 40, No. 7 V

Contents Fishery

30 PNA day fee hike puts pressure on fishing fleets States want greater share of income

Technology

31 SPC wins satellite imaging awards Team covers activity costs with workload

Sports

32 The Ô Olympic GamesÕ for Micronesia Guam to dominate track and field events

33 Australia hails its Samoan World Cup star Cahill wears his Pacific heritage with pride

Viewpoint

34 Do many hands make light work?

Photo: Palau Visitors Authority

Palau Ð where size doesnÕ t matter: Playing host to Pacific P Island Forum Leaders this month, this 458sq km island state is a global giant in environmental protection.Ñp ages 16-19. Cover photo: Mark Downey

Cover Report

14 PM O’Neill comes under fire

Content of Task Force Sweep Team letter revealed

16 P Palau - where size doesnÕ t matter

Leading the world in environmental protection

22 Multi-million dollar Fiji airport upgrade NZ company wins $80 million contract

Environment

35 21 years of serving the environment and peoples of the Pacific

Regular Features

4 Letters 6 Views from Auckland 7 We Say 12 Whispers 14 Pacific Update 36 Business Intelligence

Politics

23 PNG lobbies for its SG nominee Melanesians vie for top forum post

Aviation

24 Samoa airline hits bumps Compliance issues stop Inter Island Airways

25 Fiji Airways starts new Suva-Apia link Regional services to expand

Business

26 Marshall Islands move into commercial fish farming ‘Moi’ fish farms to expand

28 JapanÕ s Abe spurs PNG interest Gas supplies sufficient for 25 years

Maritime

29 Pacific islands work on updating their sea charts SPC starts work in Vanuatu Islands Business, July 2014

L E T T E R S Managing Director/Publisher Godfrey Scoullar Group Editor-in-Chief Samisoni Pareti Group Advertising & Marketing Manager Sharron Stretton

Staff Writer Robert Matau 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 Niue Stafford Guest Papua New Guinea Baeau Tai P Sam Vulum Patrick Matbob Peter Niesi Solomon Islands Evan Wasuka Alfred Sasako T Tonga Taina Kami-Enoka T V Vanuatu Tony Wilson T

Islands Business is published monthly by Islands Business International Editorial & Advertising Offices Level III, 46 Gordon Street, PO Box 12718, Suva, Fiji Islands. Tel: +679 330 3108 Fax: +679 330 1423 E-mail: Editorial: editor@ibi.com.fj Subscriptions: subs@ibi.com.fj Advertising: advert@ibi.com.fj Printing: Oceania Printers, Raojibhai Patel Street, Suva, Fiji.

Greenpeace’s ‘remote control’ I would like to express condolences on behalf of Greenpeace for the passing of Laisa Taga. Our deepest thoughts are with her colleagues and family in their grieving. I also just wanted to follow up on a recent article in Island Business and say that Greenpeace will maintain a full-time staff presence in the Pacific and is currently in the process of recruitment for one new full-time position to be based in the region. Greenpeace focuses along the whole chain of custody to help expose and take action against environmental crime. Greenpeace is still working to protect Pacific tuna resources in Pacific countries such as Kiribati, PNG, the Solomon Islands and Fiji. My colleague Nathaniel Pelle and I have just returned from Kiribati where we were researching how to develop a locally-operated tuna fishing fleet in order to guarantee a greater share of the value of their tuna resources. This is part of our Transforming Tuna in the Pacific work and involves working with governments, local businesses and local fishermen. Whilst we are always extremely mindful of our resources, Greenpeace is not facing funding problems and has taken this decision for strategic reasons. Greenpeace is not proposing to replace employed staff and contractors with volunteers. We are replacing the current model

of a single static office in Suva with two people working on fisheries campaign issues that are more nimble and able to operate throughout the entire Pacific region. However, volunteers do play a vital role in Greenpeace’s work around the world and our objectives going forward include developing and maintaining an activist presence in Suva and expanding regionally. I hope that helps explain Greenpeace’s new approach in the Pacific. Elsa Evers Media Advisor – Greenpeace Sydney, Australia.

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www.islandsbusiness.com Islands Business, July 2014

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Column

Views from Auckland BY DEV NADKARNI

Time to add value to seasonal labour scheme

enterprise between an RSE worker and his Kiwi employer began operations on Vanuatu’s Tanna Island. Vinepower, a Marlborough based viticultural contracting company and its long time ni-Vanuatu RSE employee Seth Kaurua have set up Tanna Famas, which will grow and export coffee and high quality coconut oil for niche markets in New Zealand. Likewise, workers from the island of Santo have invested in a community transport and fishing boat, while workers from Samoa have invested in a bus to service a remote area of their island. It is heartening to see an RSE worker put not only his capital but also the skills he has learned in New Zealand into a joint venture with his own employer in his native country. This trend needs to be encouraged.

areas since 2007, with 77 per cent of these saying One of the more significant announcements participation in the scheme was a factor in their during Prime Minister John Key’s visit to three decision to expand. Pacific Island countries last month is that New Probably the best finding from the point of Zealand will allow more seasonal workers from Boosting skills, view of Pacific Island participants in the scheme – the islands to work on the country’s farms. entrepreneurship Samoa, Tonga, Solomon Islands, Tuvalu, Vanuatu Numbers are likely to rise from the current 8000 Skills development could well be a worthy adand Kiribati – which have been sending their to a shade more than 10,000 in the next couple of junct to the RSE scheme for encouraging greater workers over the years is summed up in this years. This will further boost remittances – the economic development in the home countries. sentence from the report: “Employers universally single biggest revenue earner for many Pacific For instance, selected workers already in New rated their Pacific workers as dependable, Island nations. Zealand on valid work visas could receive adproductive and enthusiastic.” (RSE Monitoring: New Zealand’s Recognised Employer Scheme ditional training in the trades or skills not easily Key findings from the 2012 Employers’ Survey). (RSE) is an acclaimed success story that has found back home. This is already being done at a Participation in the scheme has resulted created a win-win situation for all stakeholders. fairly basic level. Workers are being given training Launched in a small way in 2007, in financial management, banking the scheme has grown from and investing in micro enterprises strength to strength. It has been at short workshops. Two and three studied in several countries around days’ programmes teaching other the world as a model scheme in skills have also been added to the seasonal migration, contributing mix. But it needs to be scaled up. to economic development in both To begin with, New Zealand’s source and host countries. many government owned polyOne of the biggest impediments technics and institutes of technolin the way of regional seasonal ogy could be tapped to deliver migration schemes all over customised, short term (six to 12 the world is the fear of illegal week long) courses on trades like immigration – the strong possibility carpentry, plumbing and building, of workers simply disappearing to name only a few. This could into the countries at the end of either be done at the site of their their visa duration to become seasonal work or at nearby camillegal over stayers. However, puses (the government has more the New Zealand experience has than two dozen such institutes proved otherwise, mainly because Top pick...Pacific islanders hope for employment opprtunities in Australia and New Zealand. scattered across the country, many of the way it has been designed, Photo: Upload.evocdn in rural areas). A selection process especially with the intention to for the right kind of students will minimise such eventualities. have to be put in place. Visa issues in more than just accolades for Pacific Island To quote from a World Bank commissioned will also have to be worked out by involving the nations. One of the conclusions of the World study of the RSE scheme conducted by the immigration authorities. Bank commissioned study quoted above says, University of Waikato: “The design features of RSE workers who complete the courses “Participating in the RSE has raised incomes in the programme and the low rate of overstaying satisfactorily have the potential to grow into a both Tonga and Vanuatu, allowed households have already led to this policy being heralded as potentially valuable human resource back in to accumulate more assets, increased subjective international best practice. The large development their home countries. They would have the standards of living, and, additionally in Tonga, impacts seen here should further foster the case knowhow to set up small businesses back home, improved child school attendance for older for other countries to consider similar policies.” work to earn an income in the offseason periods children. Communities also seem to have This is nothing short of an expert endorsement and transfer their knowledge to others to run a received modest benefits, in terms of monetary of the scheme for implementation elsewhere. yearlong enterprise, even if they have to return contributions from workers, with community to New Zealand to work the next season. Also, leaders overwhelmingly viewing the policy as Better productivity, local building skills, for example, could prove having an overall positive impact.” greater investment valuable in the aftermath of natural disasters – a Pacific Islands Trade & Invest NZ, the Pacific Research conducted by New Zealand’s fairly common occurrence in the cyclone season. Islands Forum Secretariat’s trade and investment M i nistry of Business, I nnovation and Such an upgrade to an already successful proarm’s office in New Zealand, which has been Employment in 2012 says that at least 95 per gramme such as the RSE scheme would prove involved with the RSE scheme since inception cent of the farm sector RSE scheme employers quite meaningful as an effective economic delists numerous small inward investment projects believe that their participation has resulted in velopment initiative using the human resources in Vanuatu, Samoa and Tonga as a result of better quality and more productive workers and route. Indeed, this would be a living instance of workers’ participation in the scheme. In March a more stable workforce than in previous years. the old adage of teaching a man to fish rather than this year, a unique joint venture private sector Seventy-five per cent extended their cultivation arranging to give him one every day. 6 Islands Business, July 2014

WESAY “Fiji needs to be part of the Pacific Islands Forum as much as the Pacific Islands Forum needs Fiji in its fold. The relationship provides a synergy that has benefited the region immensely in the past four decades and more”

iji’s possible return to the fold of the Pacific Islands Forum, the region’s preeminent inter-governmental organisation of independent nations of the Pacific, has been much in discussion in recent months. Fiji was suspended from the Forum in May 2009, after it failed to meet the deadline set by the regionl group to hold democratic elections in the country. Fiji’s interim government, which had assumed political power after the events of December 2006 during which an elected government was ousted, then claimed that conditions were not right to hold elections. It would not at that time make a firm commitment to a timetable for the elections, which is what precipitated the suspension. Meanwhile, Fiji was also suspended from the British Commonwealth of Nations for much the same reasons. Over the past year, however, Fiji has made rapid and convincing progress toward holding democratic elections in September. Under the auspices of the interim government, the country has developed a new constitution. It has also reworked its electoral systems and invited international observers to oversee the electoral process less than two months from now. A couple of months ago in the run up to this scenario, both Australia and New Zealand, two of the wealthiest and only Western world members of the Forum, lifted several sanctions that they had placed on Fiji over the past eight years. The lifting of sanctions was clearly a show of confidence in the slow but sure steps that the interim government was taking toward returning to a democratic polity driven by free and fair elections. In fact senior ministers and politicians of these two nations have gone on record in the media praising Fiji for its efforts, albeit choosing their words cautiously. They have also expressed willingness to help with the electoral process, which they have been invited to participate in, by Fiji’s administration. All in all, there is an air of increasing positivity around the Fiji situation over the past few months. History will judge whether the ANZAC nations’ isolationist policies toward Fiji actually served any useful purpose. Many of these had been seen as excessive, needlessly penalising Fijian citizens but the two ANZAC nations steadfastly stuck to their stand. Critics have said that when these two nations found that the strategy was not working, they should have made course corrections and engaged in more meaningful dialogue. They chose to stick to their tough stand instead. But it is clear that these isolationist policies opened up a new front for Fiji, more out of necessity than by its own volition. With travel bans and a string of economic sanctions in place, Fiji had little choice but to build bridges with Asia, most notably China. The economic and military giant was only too happy to extend the

arm of friendship since the move played nicely into its geopolitical strategy in the region and beyond. Over the years, Chinese involvement in Fiji – and in fact around the region, notably in Tonga and Samoa – grew significantly enough for the United States to sit up and take notice. Under the circumstances it is not difficult to understand Fiji’s dilemma on whether to return to the Pacific Islands Forum, in which Australia and New Zealand have a big say. Despite suspending Fiji, the Forum has continued to be headquartered in Fiji, with almost no impact on its working. This unusual situation is akin to a hypothetical one, which would arise were the United Nations to suspend the United States, yet operate out of its enclave on American soil. In the meantime, Fiji along with encouragement and support from its Melanesian neighbours has been successful in forming the Pacific Islands Development Forum (PIDF), which had its second meeting last month. PIDF sets itself apart from the Pacific Islands Forum in being focused on development rather than being a political force. It has set itself up with a number of countries around the world offering it support and attending its meetings. Some of the traditional and longstanding funders of the Pacific Islands Forum have also pledged financial support to the PIDF. Time will tell whether the PIDF will complement the activities of the Pacific Islands Forum for the benefit of Pacific Islanders or will ultimately merely serve to compete for the same pool of funds from international donors. If the PIDF’s leadership works on the path of complementarity with the Pacific Islands Forum, nothing could be better for the people for the Pacific. But it is not advisable to look at PIDF as being a replacement for the older organisation, which has an unenviable, longstanding reputation as the most significant inter-governmental organisation in the region. There have been reports in some quarters of the media last month that Fiji’s leadership is looking unfavourably at the prospect of rejoining the Pacific Islands Forum. It has reportedly laid some preconditions for doing so. One of these is that Australia and New Zealand should not be part of the grouping anymore. It is also reported to have expressed lack of confidence in the Pacific Island Forum’s functioning. Fiji is indisputably a leader in the region and almost all other island nations look up to it. It has also been the region’s hub for long and is geopolitically extremely strategic both in terms of location and its infrastructure. Fiji’s position on the Pacific Islands Forum is understandable given the events of the past eight years but to influence any decision on rejoining the grouping on this experience Fiji has made rapid progress to elections

Islands Business, July 2014 7

WESAY would be irrational and unfortunate. Not just for Fiji or the Pacific Islands Forum but for all the island nations as well. Fiji needs to be part of the Pacific Islands Forum as much as the Pacific Islands Forum needs Fiji in its fold. The relationship provides a synergy that has benefited the region immensely in the past four decades and more. Any move to destabilise it would not be in anybody’s favour.

There appears to be mutual exclusivity and therefore enough room for both PIDF and the Pacific Islands Forum to coexist, as with some deft planning and political will on the part of regional leaders, the two organisations can complement each other to greatly benefit the people of the region. Fiji needs to think through its decision carefully not on its own behalf, but also on behalf of so many other smaller island nations that look up to and depend on it.

“If there is one factor that is holding back this most resource rich sub region in the Pacific Islands, it is divisive politics driven by the shameless self interest of those in positions of political power. Such politics, focused solely on personal gain, has made Melanesian governments inherently unstable”

elanesia has had a lot going for it for more than a decade now. The exploitation of onshore and offshore resources have helped Papua New Guinea, the Solomon Islands, Vanuatu, Fiji and New Caledonia – which form the Melanesian group of countries – stay ahead in economic growth rates compared with the rest of the region. On the back of strong demand for oil, minerals, hardwood, and other land based resources from the fast growing economies of Asia, a steady stream of income has been added to these countries’ coffers. Global majors have beaten a path to PNG to set up gigantic operations to mine minerals, petroleum and natural gas, with more investments on the anvil. Also, the extension of sovereign Exclusive Economic Zones (EEZ) thanks to the redrawing of the continental shelf boundaries according to the United Nations Law of the Sea has progressively added to the offshore resource exploitation potential of these countries. This has brought even more mining companies from all over the world asking for licences to prospect and to mine minerals from under the sea. The Melanesian economy will be on a strong path of growth over at least the whole of the next decade, according to economists. But what does all this newfound wealth mean to the common citizen in Melanesia? Is it having a positive impact on the quality of life of the average Melanesian? Is the great abundance of resources that the Melanesian people collectively own in good hands? Should one go by the sordid political developments in many of these countries over the past several years and more so in recent months one cannot be faulted for being pessimistic. Fierce political rivalries, unbridled corruption, administrative failure and worsening governance are taking a heavy toll on the countries’ achievement of development goals: the riches earned from the exploitation of mineral resources are scarcely reaching the common man.

8 Islands Business, July 2014

If there is one factor that is holding back this most resource rich sub region in the Pacific Islands, it is divisive politics driven by the shameless self interest of those in positions of political power. Such politics, focused solely on personal gain, has made Melanesian governments inherently unstable, with so much time and effort of elected representatives wasted on political machinations, that matters of governance and development become secondary. Governance, administrative function and development have suffered greatly in Melanesia at the hands of petty politicking. In Papua New Guinea last month Prime Minister Peter O’Neill sought to push through changes in the law that would restrict criteria to elect prime ministers in the event of no confidence motions. Quite simply, it was meant to ensure he would remain in power even in the event of a successful no confidence motion in Parliament. It was clearly a desperate attempt to counter a corruption scandal that began to spiral out of control threatening his continuance as the head of the government. He was alleged to have approved multi million dollar unauthorised payments to a law firm. O’Neill has fought back saying his signature was forged and has strenuously denied having endorsed the payments. In the face of an arrest warrant, which his legal team is appealing against, he seems clearly worried of the outcomes, going by the desperate legislative measures aimed at self-preservation that he wants taken. After failing to quell the opposition move and with the political scenario worsening for himself and his party, he used his powers to sack the nation’s Attorney General as well as his government’s appointed ‘Task Force Sweep’ – the country’s anti-corruption watchdog. Meanwhile, the opposition is demanding that O’Neill stand down until the investigation is completed. There is little doubt that the country is headed for a full blown

Step down: Opposition demands

WESAY political crisis – all at the cost of the myriad issues that plague the people who voted the government to power. Melanesian countries seem to have a love affair with no confidence motions. Efforts to topple governments no sooner than they are voted to power has been their bane for decades now. In Vanuatu, for instance, it has almost become a political tradition to pass a no confidence motion almost as soon as a government assumes power. Such frequent changes in leaderships and governments render term based democratic elections meaningless. In the latest case in May, a no confidence motion involved the overthrow of Prime Minister Moana Carcasses. Just days later, another such motion was threatened against his replacement Prime Minister Joe Natuman, which came a cropper. Reasons for such frequent no confidence motions might be justifiable to the opposition, which so often seeks to change the nation’s leadership for one reason or another, but is it the best way to bring about change in a democracy? The immediate reason for the latest motion in Vanuatu was immigration policy. Increasing Asian immigration is causing concern throughout the region including in New Zealand. Scandals involving politicians who backed the applications of wealthy Asian immigrants is posing a major headache to their political parties. Immigration is ballooning into one of the major issues of our time. In the next few years, political parties will have to take on

immigration concerns as one of their main election planks. It is already happening in Europe – most notably in France, the UK, Germany and the Scandinavian countries. It is a question of time when it happens in Australasia. But destabilising a government as has happened in Vanuatu last month is not the solution for dealing with such issues. If anything, it throws rational policy making into an even more contentious mode, complicating the issue and postponing any meaningful solution through dialogue, which is how matters such as these must be resolved in a democracy. An interesting observation is that while political parties in Melanesian nations all too often fight among themselves bringing governance to a halt at the cost of achieving their developmental and economic goals, they present a fairly efficient and united face collectively to the region and the world. For instance, quite commendably among themselves, these countries have come together to forge a united front both politically – in the form of organisations like the Port Vila, Vanuatu headquartered Melanesian Spearhead Group – and for trade, removing and rationalising most tariffs and bureaucratic hurdles. It is indeed a fine and efficiently working example in regional cooperation creating a win-win situation for all concerned. Why can’t they show the same good sense in governing themselves and serving their own people?

“It must be asked if New Zealand’s leaders would have indulged in such frivolous banter that was irrelevant to the occasion at official functions in any Western countries that they were visiting. The fact that they did it in the Pacific Islands betrays a lack of seriousness and the often noticed, condescending “it’s my own backyard so I can do as I please” mentality”

op New Zealand politicians’ periodic flights into the Pacific Islands with media contingents and popular Pacific rugby players in tow have been a regular feature over the past several years. They are obviously meant to convey friendly concern for the people of the islands for consumption both at home and around the region. Such visits are often used as high profile platforms for announcements of new programmes and initiatives meant for the betterment of the islands and islanders. Last month New Zealand Prime Minister John Key led a delegation to Samoa, Tonga and Niue as the first of a series of visits into the Pacific Islands region scheduled this year. As usual, the group comprised Members of Parliament from the major parties, ministers, officials and a media contingent. And as usual, there

were the announcements and pledges of new money for new and ongoing projects, the social engagements, the communal dancing and partaking of food – and of course the photo ops and selfie ops. However, there was much to read between the lines in last month’s tri nation trip. And it’s more about New Zealand politicians’ own electoral interests than those of the Pacific’s. For one, it came just about three months before the elections in New Zealand due in September. The Pacific Islander living in New Zealand is an important constituency for any political party in the country. Auckland has been labeled the world’s largest Polynesian city and people who trace their origins to the Pacific make a considerable portion of the electorate. The ruling National Party has never quite been the favourite of Pacific Islanders, who have traditionally been closer to Labour and Islands Business, July 2014 9

WESAY National would like to pull as many Labour supporters as it can into its fold ahead of the elections, which it hopes to win for the third time in a row. Opinion polls so far have consistently shown that it is likely to win comfortably, but given New Zealand’s quirky MMP electoral system, no chances can be taken. Unlike previous trips to the Pacific, which also comprised leaders from different political parties, New Zealand politicians quite clearly took their electoral battles with them to the islands during last month’s visits. It was Prime Minister Key who set the ball rolling clearly with a view to appease the Pacific Island voter in New Zealand. Delegates from the opposition were right to criticise him for using the overseas jaunt to score political brownie points. He did this unabashedly using his speaking rights at the many official functions to advance the National Party’s case among Pacific Island voters back home. At official functions in Tonga and Niue, Mr Key and opposition MPs exchanged innuendos in full public view, referring to recent political embarrassments that the leaders have had to face back home and sneaking in electoral slogans during speeches. At best this was poor sense of timing at attempts at humour and at worst it was lack of respect for the host countries. It must be asked if New Zealand’s leaders would have indulged in such frivolous banter that was irrelevant to the occasion at official functions in any western countries that they were visiting. The fact that they did it in the Pacific Islands betrays a lack of seriousness and the often noticed, condescending “it’s my own backyard so I can do as I please” mentality. Immigration, for instance, is threatening to balloon into a major election issue as of now. Auckland’s skyrocketing house prices and growing unaffordability are being blamed on high immigration rates, among other factors. Immigration into New Zealand last year was the highest in ten years. And with the Australian economy cooling down rapidly, not only has migration across the Tasman slowed down to a mere trickle, Kiwis are coming back home from Australia in hordes. Labour Party has said it will take a tough stand on immigration making it tougher to migrate to New Zealand. National does not agree and will continue with its existing policies. Quite clearly, that would be music to Pacific Islanders’ ears, among the highest categories of people wanting to immigrate to New Zealand. Any allusion to that touchy issue would only be seen as a political ball

China only too keen to fill the gaps

Islands Business, July 2014

game – and that is exactly what happened, with Labour scoring an own goal by referring to it: something that Key adroitly latched on to only to have Labour further accusing National of using the trip for electioneering. Another important item on the agenda last month was to launch former Labour politician Shane Jones, who the National Party successfully maneuvered into quitting the party and putting him on a newly constructed pedestal as an economic ambassador for the Pacific. The move was considered a coup in New Zealand politics, having brought to an end a good politician who could be a challenge to both the Labour leadership and the National Party. The colourful but capable Jones will quite clearly be New Zealand’s new face in the Pacific, with Foreign Minister Murray McCully playing a lesser role in the region and stepping up his act in other parts of the world. The trip also came at a crucial time ahead of New Zealand’s bid for a seat on the United Nations Security Council in September. It is badly in need of crucial votes from sovereign nations to be elected to the august body to which it has aspired for years. Close on the heels of the Pacific trip, global leaders who are entitled to cast a vote in the UN elections were treated to a luxury holiday in New Zealand at the expense of the tax payer. Both Prime Minister Key and Foreign Minister McCully justified the expense and said it was necessary to get New Zealand the coveted seat on the Security Council. Another perception that has been making the rounds after the Australian elections and the slowing down of its economy that performed spectacularly during the years of the global financial crisis is whether its financial support to the Pacific would continue. There has been discussion in the media that Australia is cutting down on its aid programmes across the board. While this is unlikely to affect the baseline funding for the islands, which is small by Australia’s standards, the perception is that Australia will generally tighten the screws. The question that follows is whether New Zealand would take up that slack. While that remains to be answered, the question itself seems increasingly irrelevant. No prizes for guessing why: China is only too keen to fill in any gaps. Though Niue Premier Toke Talagi was at pains to downplay China’s role in his country in front of the visiting Kiwi delegation, obviously for reasons of political correctness, he did let slip that “China was a very good friend.” • We Say is compiled and edited by Samisoni Pareti.

Connecting the Pacific to the World Congratulations to Pacific Islands destinations, hotels, resorts, tour operators and airlines that participated at the inaugural South Pacific Tourism Exchange 2014 and we look forward to a bigger and more successful SPTE 2015.

Whispers

tion from the local communities living near the industrial zone. Locals want an environmental impact study to be done first before the industrial zone is commissioned. PNG’s Midweek Chronicle says the state is not impressed with the delay, taking the trouble to remind the country yet again that once commissioned, it would create 40,000 new jobs and earn the country K3 (AU$1.3b) billion a year in exports.

More trouble for the multi-million dollar tuna industrial zone in Madang Province, on the northern shores of Papua New Guinea. Work on the proposed Kina 212 million (AU$90m) project has been put on hold because China’s Export-Import Bank has put a freeze on its K190 million (AU$80m) loan. The bank says that the loan freeze has been triggered by a National Court decision to stay the development, upholding an applica-

Sourcing the watermelons … You have to admit it … Samoa’s long serving Prime Minister Tuilaepa Lupesoliai Neioti Aiono Sailele Malielegaoi knows his ways around sensitive and tricky situations. Like recently when a Tongan exporter of watermelons complained loudly that it took her 15 years to get the PM to approve the exports of Tongan watermelons to Samoa. Not missing a beat, Tuilaepa simply pronounced that what she claims to be Tongan watermelons are actually Samoan… it only got to Vava’u in Tonga when a Samoan man married a Vava’u maiden!

an interview he did recently with “one of your colleagues.” That ‘colleague” happened to be a journalist from this publication!  West Papua has never had this much regional support. Churches and human rights organisations have tried for years to keep the issue alive. Now, as Fiji prepares for elections, at least one political party has decided to enter the fray and challenge Indonesia’s occupation of the Melanesian land.

  Out-manouvering the press … It was no different when he hosted members of the Pacific media in Apia in 2004 in the lead up to his hosting of the Pacific Islands Forum Leaders’ Summit. Soon after reading from his written speech, Tuilaepa announced to the media group that to save them the trouble of thinking up questions to ask him, he would just read from the transcript of 12 Islands Business, July 2014

“If this is the way the Nauru Government treats its own members of parliament, I certainly wouldn’t want to be an imprisoned refugee depending on their kindness,” was a comment reported by the Marshall Islands Journal and it was in reference to the Nauru Parliament’s recent decision to suspend five members of parliament

from the house. The newspaper, edited by a doyen of Pacific journalists Giff Johnson, labelled the treatment of the MPs as “abominable” and that the Baron Waqa Government of Nauru treats talking to foreign journalists as “treason.” As a response, the Journal suggested the following” “Establish and apply a set of sanctions against Nauru, sanctions such as removal of landing rights for Our Airline (belongs to Nauru), restrictions on Nauruans getting visa for travel (and) refusal to provide economic assistance.”  New boss of the region’s largest intergovernmental body was the least impressed with the accusation leveled against it by an Australian academic that the organisation he leads and that of another regional agency were embroiled in a ‘turf war.’ Such talk is mischievous and unhelpful, said Dr Colin Tukuitonga, Director General of the Noumea-headquartered Secretariat of the Pacific Community. It was Dr Ian Fry, of the Australia

Whispers National University that claimed the SPC was competing for supremacy on the issue of climate change against the Apia-based Secretariat of the Pacific Regional Environmental Programme. “We have different roles and our work do not impede on the work of the other,” said Tukuitonga. Fry also doubles up as the top climate change advisor and negotiator for the Tuvalu Government.  Fiji is just discovering that even its own diplomats are not immune from the unpredictable life in the streets of Port Moresby. Staff at the Fijian Chancery had to be evacuated last month after more than 100 PNG Defence Force soldiers stormed the building they were in. It just so happened that the soldiers were unhappy about their retirement benefits and the landlord of Defence Haus – which houses the Fijian Embassy - happens to be the army’s retirement benefit fund. No one was injured in the melee but the word is that Fiji’s chief diplomat, Foreign Minister Inoke Kubuabola has instructed that the Fiji High Commission in Moresby be relocated.  In just one swift transaction, Majuro – capital of the Marshall Islands – lost 36 of its hotel rooms to a new campus for the University of the South Pacific. The Marshall Islands Government – as a co-owner of the university – is purchasing what used to be the Long Island Hotel for US$3.8 million. A down payment of $2m has already been made, said to have been sourced from fishing access fees and the hope is that the balance would be met by a friend in the Government of Taiwan. The regional university offers preliminary to undergraduate and graduate courses in its Majuro campus as well as its extension study centre which offers classroom and distance learning options.

Life’s not bliss in Bomana … One rather colourful occupant of PNG’s Bomana penitentiary is beginning to find his new life well, not as colourful. Paul Tiensten (pictured), one time cabinet minister, was in court recently to plead that his life was in grave danger and he needed to be released on bail. And for support, he tendered an affidavit from the former Director of the Office of Climate Chairman who also happens to be the chairperson of the Bomana Prison Peace Committee, one Dr Theo Yasause. He’s a fellow inmate, serving 5 years for murder. Tiensten, on the other hand, copped a nine year jail term with hard labour in April this year for stealing AU$4m from government.

rugby board’s sevens circuit this season. Following the team’s eighth placing in the series, down two places from the last season’s sixth placing, head coach Viliamu Punivalu declared “I know when I’m not wanted’ and handed in his letter. So who’s going to replace him? Well, according to a random poll our correspondent took on the streets of Apia, the consensus seems to be Brian Lima. The renowned bone crushing Manu Samoa tackler has just been convicted for assaulting his ex-wife. Interestingly, some think the job of coach should just be given to the Chairman of Samoa Rugby who also happens to be the country’s Prime Minister. And the reason? Because he complains too much, came the reply! 

 With no signs of a casino that was supposed to have been completed months ago, Fiji’s endorsed casino operator is fighting a different battle this time around …. challenging a court action in the United States over claims that it owes a former partner US$1.5 million. The ex-partner of One Hundred Sands happens to be the Snoqualmie Tribe in the US and it claims that it had invested the money into One Hundred Sands, was promised repayment by February 2012 but its mid 2014 again and construction work on the casino in Fiji has not even begun. Meanwhile, the chairman of the casino has said the tribe has withdrawn from the casino project and he would not be distracted by the claim.  Samoa’s Rugby Sevens is coach-less following a rather poor showing in the international

Baby New Maternity … Thanks to Australian aid, a baby is growing up in the atoll of Tarawa with the name ‘New Maternity.’ This pronouncement didn’t come from the proud father, but from visiting Australian politician Senator Brett Mason in an interview on Radio Australia’s Pacific Beat show. In talking about the beautiful island and homes, the Australian minister also spoke about a new maternity ward in Betio that his country funded. “In fact, just before I opened the new maternity ward, a baby was born because babies often can’t wait, of course, they come when they’re ready,” Mason was quoted as saying, only to add: “But I was told that the baby had been christened New Maternity in honour of the maternity ward.” The gender of baby MW, however, was not disclosed. • 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, July 2014

Pacific Update

Under the spotlight...Papua New Guinea Prime Minister Peter O’Neill fronts the media over allegations of approving a massive payout to a local law firm. Photos Sam Vulum

PM O’Neill comes under fire over AU$30 million payout By Sam Vulum

apua New Guinea is embroiled in political turmoil triggered by the attempted arrest of Prime Minister Peter O’Neill by police on June 17 as part of ongoing anti-corruption investigations into payments to a prominent law firm. The investigations spiraled into political chaos after a secret letter by the Task Force Sweep Team, established by O’Neill in 2012 as one of his first acts as Prime Minister after the 2012 elections, carrying fresh evidence implicating him in the payment was leaked to the media. One of the key pieces of evidence in the investigation was a letter, written in 2012, that appeared to be from Prime Minister Peter O’Neill authorising some of the payments to Paraka Lawyers. In January this year, Task Force Sweep Team chairman Sam Koim said the letter did not appear to have legitimately come from Peter O’Neill’s office, backing up O’Neill’s statement that it was a forgery. But the “very confidential” letter from Koim to PNG’s police commissioner, leaked to the media, outlines new evidence against O’Neill. The letter incriminating the Prime Minister reads in part: “This letter notifies you of the change of position from my previous letter to you dated 14th January 2014. The foregoing paragraphs contain the brief of our reassessment of the case as against Peter O’Neill in light of fresh evidence that have now become available. “In my previous letter, I briefed you of the findings of the Task-Force Sweep as against Hon Peter O’Neill, Hon Don Polye, Hon James Marape and Mr Steven Gibson. I did indicate that based on our investigation, the payments made to Paraka Lawyers were illegal and fraudulent. We recommended that

14 Islands Business, July 2014

Messrs Polye, Marape and Gibson be charged for their respective and joint roles as there were sufficient evidences to proceed against them. “In respect of the case against the Prime Minister Hon Peter O’Neill, we found at that material time that there was no other evidence linking him apart from the alleged letter of 24th January 2012 which he openly denied authoring or signing it. Forensic test of the signature of PM O’Neill was not available at that time. We found that a case of fraud against Mr O’Neill on the basis of the questionable letter alone was unsustainable. We however advised that as the investigations into the allegations of fraudulent payments to Paul Paraka Lawyers were continuing, we would advise if there is fresh evidence warranting a review of the case against the Prime Minister. “As you are aware, we have now received the Forensic Examination Report from the Sydney based Forensic Document Services Pty Ltd confirming that the signature on the letter dated 24th January 2012 bearing the Prime Minister’s letterhead, name and signature directing payments to Paul Paraka Lawyers is PM O’Neill’s. “We have also received a subsequent letter by PM O’Neill to Hon James Marape copied to Hon Kerenga Kua and Hon Don Polye dated 15th May 2013. In that letter, PM O’Neill attempted to clarify his previous letter of 24th January 2012 and in doing so, confirms the existence of the first letter of 24th January 2012 which he openly denied. That subsequent letter was produced by Hon Don Polye together with his sworn statement of 29th April 2014. “Mr Polye revealed a number of new evidence and information that drew our attention to collect further evidence so as to independently verify the assertions made. The information contained in

his sworn statements had been corroborated with other evidence already available and subsequently obtained. “Upon reassessing the case in light of the fresh evidence, we are of the firmest believe that PM O’Neill’s denial of authoring and/or signing the directive letter of 24th January 2012 for Paraka Lawyers payments can no longer hold water. There are corroborating evidences that confirm not only that he authored the directive, but also confirm that he intended to settle Paraka Lawyers’ purported outstanding legal bills. “We have found that PM O’Neill had knowledge of the Paraka Lawyers operations and the controversy surrounding the purported legal bills prior to issuing the written directive on 24th January 2012. Evidence indicates that under his watch as the Minister for Finance and Treasurer between July 2010 and June 2011 in the then Somare Government, a staggering amount of K39.06 million was paid to Paul Paraka Lawyers through structured and layered payments. “Mr Paul Paraka knew his purported bills were illegal and fraudulent hence would not pass the judicious vetting process at the Department of Justice and the Attorney General hence would not submit his bills for vetting. Mr Paraka was also under extreme pressure as he was sustaining his relatively huge operational expenses out of bank overdrafts. As at the date of the PM O’Neill’s directive of 24th January 2012, Paraka Lawyers’ main operating account was in red by a negative balance of -K8,071,040.11. Mr Paraka was desperate for money, had the political connections and seized the opportunity. “It is apparent that Mr Paraka’s desperateness reverberates in PM O’Neill’s directive of 24th January 2012. PM O’Neill’s directive of 24th January 2012

was succinct, prescriptive and threaded with absocommissioner after a lengthy discussion with his lute sense of urgency. His directive compelled every National Executive Council. public officer in the Department of Finance and “Cabinet has taken the decision to retire ComTreasury to improperly draw funds from the Court missioner Kulunga now under the circumstances. order votes and when the court order vote was fully On behalf of our people, I want to thank him for exhausted, payments were made out of reserve trust his long and distinguished service to the constabuaccounts without the requisite warrant authorities lary and country,” O’Neill said. from Department of Treasury, thereby breaking all He also welcomed the appointment of Vaki. laws and existing lawful processes. On June 18, O’Neill announced that the Task“There is no evidence of subjecting Paul Paraka force Sweep has been disbanded and the deputy poLawyers’ legal bills to the established vetting prolice commissioner Simon Kauba has been sacked. cesses administered by the Department of Justice The chairman of the taskforce, Koim then issued and the Attorney General. a statement calling it “the gravest mistake a respon“PM O’Neill’s conscious direcsible government would make.” tive was the cause and continued “The interest of the country to be the operating cause for the must dictate our decisions and supayments made to Paul Paraka persedes any individual’s interest,” Lawyers between February 2012 he said. and May 2013, a sum of K80 mil“The country’s interest or [what] lion. There is causal link suggesting they sometimes call the ‘national that when PM O’Neill stated in his interest’ is the interest of the comdirective letter of 24th January mon people of our great nation, 2012 to “have all the outstanding not that of certain individuals who legal bills owed to Paraka Lawyers sit on the throne.” settled forthwith,” he meant K80 But PM O’Neill would not hear million, a fact Mr Paul Paraka himany of this. self acknowledged. “We cannot continue to have “Throughout the course of policemen and women who are the payments to Paraka Lawyers government employees, running between February 2012 and May around trying to undermine gov2013, PM O’Neill was abundantly Retired Commissioner Tom Kulunga. ernment decisions,” he said. kept informed not only of the on“We are going to continue to going payments to Paraka Lawyers, terminate everybody who is going but more so, of the impropriety of to undermine the work of the govthe payments. There were ample ernment. red flags with opportunity to intervene. PM O’Neill “This government has had enough - we are not was in a position to sever the continuing influence going to put up with these little games anymore.” of his original directive but did not take any practiThe announcement came as the country’s new cal steps to do so. police commissioner, Geoffrey Vaki, was arrested “PM O’Neill’s directive of 13th May 2013 for by Kauba. ITFS to investigate the allegations and his subseVaki spent several hours inside police headquarquent letter dated 15th May 2013 explaining his ters before emerging and being escorted to the previous letter of 24th January 2013 cannot be fraud office for questioning. taken as an “intervention” for the obvious reason O’Neill also said the Taskforce Sweep has been that they are all written after Paraka Lawyers had politically compromised, and its integrity has been collected all its “outstanding bills”. Those acts came politically influenced. after the criminal act as intended had been commitThe turmoil continued with Attorney General ted fully -the payment of K80 million. Kerenga Kua sacked by O’Neill. He appointed Ano “After reassessing the case and analysing the Pala Attorney General and Minister for Justice. available evidentiary materials, we have reached a O’Neill said Kua was sacked for opposing the considered belief that PM O’Neill acted dishonestly government’s attempts to change the constitution and corruptly when he directed Paul Paraka Lawin relation to votes of no confidence. yers outstanding legal bills to be settled in full. A He said on June 12, Kua wrote to the Prime Minconspiratorial line between Mr Paul Paraka and PM ister opposing the government’s plan to amend secO’Neill is also visible from our analysis. tion 145 of the constitution, undermining cabinet “Based on our considered finding, there is more and government solidarity. than sufficient evidence to mount a case of misap“It is unfortunate that I’ve had to take this decipropriation, conspiracy to defraud and official corsion at this time, but I must do so in the interest of ruption against Prime Minister Peter O’Neill. The government and its stability,” O’Neill said. detailed analysis of the evidence is enclosed herein He thanked Kua for his time in the department, for your consideration and appropriate action.” which included developing and bringing a number Reacting to this letter, Police Fraud Squad served of vital legislation to parliament. a warrant of arrest on O’Neill but the PM successO’Neill also announced a commission of inquiry fully took out a court order to stay the arrest warinto the Paraka case. rant. He said said the police, courts and government The PNG Government has also retired Police departments have been politically compromised. Commissioner Sir Toami Kulunga and appointed “We have the highest regard for the courts but Geoffrey Vaki as the Acting Police Commissioner. there are individuals that have been highly comproThis happened after Kulunga gave orders to arrest mised,” he said. O’Neill. This triggered a string of events that led “I think it needed to be cleaned and we need an to another. independent process to clean it out.” Prime Minister Peter O’Neill announced the apO’Neill has vowed to defend himself against what pointment of Geoffrey Vaki as new acting police he describes as a “politically motivated stunt.”

Forum is work in progress By Netani Rika

elanesian leaders failed to attend the 2nd Pacific Islands Development Forum on the Fijian resort island of Denarau last month. Conspicuous in their absence were Papua New Guinea Prime Minister Peter O’Neill and his Solomon Islands and Vanuatu counterparts Gordon Darcy Lilo and Joe Natuman. In fact the only Melanesia leader present was the host, Fiji’s interim Prime Minister Rear Admiral Frank Bainimarama. Tongan Prime Minister Lord Tu’ivakano was the only Polynesian leader at the PIDF while President Anote Tong of Kiribati and Nauru’s Baron Waqa represented Micronesia. In terms of scale, the event was truly regional with red carpet welcomes, gala dinners, military parades, police-escorted motorcades, accommodation at five star hotels and formal Fijian ceremonies of welcome. Fiji’s Information Ministry – which exercised complete control of the media during the threeday meeting offered no reason for the non-attendance of key Pacific delegates. Most of the focus was directed to the chief guest, outgoing Indonesian President Susilo Bambang Yudhoyono and the warm relations between his country and the host nation. Indeed, such was the intensity of local media coverage on SBY that civil society representatives at the talks claimed his presence overshadowed the importance of the meeting. “It did take (away) some of the focus,” Pacific Islands Association of NGOs Executive Director Emele Duituturaga said. Civil society groups at the PIDF wanted to address issues of self-determination and justice including self-determination for West Papua but did not get the opportunity to do so. “There was no opportunity to engage (with Yudhoyono). It was very high level security, it was a State visit and treated as such,” Ms Duituturaga said. Diplomatic observers noted that the absence of Pacific leaders could be due to the largely technical aspect of the forum, including a proposed green regional economy. “Once you get to that level of technicality, most leaders would rather send a bureaucrat to deal with the issues,” a former Fiji diplomat to the United Nations said. “Leaders typically want to discuss high-level, priority matters and not the finer details of how to create an environmentally friendly economy.” For now the gains of the PIDF which Bainimarama hopes will replace the Pacific Islands Forum Secretariat are difficult to measure. A number of bilateral deals were signed on the periphery of the forum but no real strides were made to include civil society. While CSO representatives attended the meeting, they were treated as poor cousins. “It’s not as genuine as we’d like it as yet,” Ms Duitutraga said. Islands Business, July 2014 15

Cover Report

Photo: Mark Downey

National treasures....The Rock Islands of Palau - fragile biodiversity being protected by innovative conservation plans for the last deacde.

Palau – where size doe s

Leading the world in environmental p ro

Words: Samisoni Pareti

Pictures: Courtesy of Palau Visitors Authority

ot counting the 400 or so volcano-uplifted little limestone islands that make up the spectacular Rock Islands, Palau is small. With a population of 21,000 living in the islands’ 16 states, the island republic does live up to the Greek meaning of the name of the cultural grouping it belongs to, that of Micronesia. However being tiny does not matter when it comes to marine conservation or in the protection of the environment. In fact in the sphere of sustainable development, the republic of Palau is a giant. Consider this: In 2003, long before marine conservation became fashionable, Palau put into place a very innovative plan to protect the islands’ fragile biodiversity. Each private owner of land, a community or state can apply to be part of the Protection Area Network, agreeing to work towards conserving their natural resources in their demarcated protected areas. In 2005, two years later, Palau took the lead in establishing the Micronesian Challenge. This initiative announced on November 5, 2005 by Palau President Tommy E Remengesau Jnr aims to

16 Islands Business, July 2014

conserve at least 30 per cent of near-shore marine resources and 20 per cent of the terrestrial resources. It was a hard act to follow and in no time, neighbour Micronesian countries of the Federated States of Micronesia, Marshall Islands and the American territories of Guam and the Northern Marianas have joined the Micronesia Challenge. Put together, this means a combined region of nearly 5 per cent of the marine area of the Pacific Ocean and 7 per cent of its total coastline. Not so long after, indeed three months later, Palau raised the conservation bar, yet again. This time President Remengesau in March 2006 signed into law a ban against bottom trawling in Palau waters. Indeed, this ban also covers citizens of Palau who may be involved in this type of destructive fishing anywhere in the world. Offenders face both civil and criminal penalties. “We are legislating out of a responsible concern for our seas and seabed and their vulnerable coral habitats and deep water fishstocks.” Palau’s President said then. “If these measures are good enough for our own waters, what is the excuse for so disrespecting the waters beyond? It is time now to bridge the gap for the deep seas.” Three years on, in 2009, Remengesau was no longer in office. But the push towards marine protection continued unabated. On September 25 of that year, President Johnson Toribong announced

Cover Report

Photo: Palau Visitors Authority

Sea of Tranquility...part of Palau’s protected area.

e sn’t matter

p rotection

Photo: Kevin Davidson

Underwater focus...a diver photographs coral underwater.

at a meeting of the United Nations the creation of type framework and implement programmes to reverse the world’s first shark sanctuary in Palau. From that the devastation to our oceans and seas, I will work to date, the fishing of sharks in Palau’s 600,000 square close Palau’s waters to commercial fishing. kilometres of ocean was outlawed. This effectively “Make no mistake, this is not an effort to lock up means that in an ocean the size of France, sharks of Palau’s waters and throw away the key. Like a Bul, all species can roam freely and unharmed. This shark ending commercial fishing will give nature a chance sanctuary earned the island nation the Future Policy to heal from what the scientists are telling us is the Award from the World Future Council. damage caused by the intensive fishing pressures. A bul In 2013 Remengesau was back in the high office is similar to a taboo, a practice of many Pacific Island of the Presidency of Palau. If critics thought that the communities in which land or the sea becomes no taker conservation threshold had been reached or the political zones for a certain period of time. It will also release will to do so had been exhausted, they were in for a the vast potential of our waters to provide more food surprise. Addressing a United Nations conference on for our people, more fish for the region, and to grow oceans February of this year, President Remengesau Palau’s economy. These objectives - environmental President Tommy E Remengesau announced the impossible: a total ban against Jnr. Photo Lisd.ca health, food security, and economic growth - are the commercial fishing in all of Palau’s waters. very essence of Sustainable Development.” “A stand-alone SDG (strategic development goal) “Local chiefs did not know the science of their is the best way to tackle the interconnected issues of the oceans environment, but they lived in harmony with their surroundings,” environment and our best chance to align all stakeholders to make President Remengesau told that UN meeting. “They understood progress on the commitments the international community has that the people’s health and prosperity rose and fell with the ocean’s already made,” Remengesau told the UN conference last February. tides. When resources became scarce, they declared a bul- what we “Until the international community can agree on a holistic SDGmight today refer to as a moratorium. Reefs would be deemed off Islands Business, July 2014 17

Cover Report limits during spawning and feeding periods so that the ecosystem could replenish itself and fish stocks would remain abundant. “Certain areas, like Ngirukuwid (in Palau), were given permanent protection because of their important biodiversity. The goal was not conservation for its own sake, but to restore the balance between people and nature. The best science now confirms that our approach to managing the oceans is sound. The traditional ethos of the Bul is enshrined in Palauan law: Article 6 of Palau’s Constitution requires Palau’s government to “take positive action” to conserve “a beautiful, healthful and resourceful natural environment.” While the plan to outlaw commercial fishing in all of Palau’s waters is just that, a plan for now, and that any ban will have to get the endorsement of the republic’s Congress, Remengesau no doubt has worked it all out. Two main factors seem to be influencing his thinking: the constant pressure commercialisation has brought to bear on our environment, and the need for a good strategic development goal, or SDG that he spoke about at last February’s United Nation conference. “The international community has allowed fish stocks to plummet,” Remengesau. “Once thought to be limitless, more than 80 percent of global fish stocks are now fully or overexploited. Reckless and destructive fishing practices, overfishing, and illegal, unreported, and unregulated fishing have robbed us of our resources. They must be stopped. “Pollution is saturating our waters. The Pacific is home to a plastic gyre inconceivable in its size. Remote parts of Palau - areas uninhabited for centuries - are littered with someone else’s garbage. Ocean acidification and bleaching are decimating coral reefs and coastal habitats that once teemed with life. “Climate change is causing the seas to rise at unprecedented rates, increasing the intensity of storms.

Standing alone...one of Palau’s many attractions is Badrulchau in Baldaob’s far north where ro ws o

In the last two years, two of the most powerful storms in history, Bopha and Haiyan, have decimated our shores. Haiyan displaced the entire population of our northern state of Kayangel. People from that island will not return to their homes for at least a year. “Palau is north of the Pacific typhoon belt, so we have never experienced these disasters before. We are grateful to our partners for

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Islands Business, July 2014

Cover Report

re ro ws of large basalt monoliths like this stand. Photo: Kevin Davidson

helping to clean up and rebuild. But we know that these disasters will continue and will likely get worse. If our partners really want to help, they should reduce their Greenhouse Gas emissions and agree to an international agreement that will protect Palau’s future.” For him tourism and not fishing is the best strategic development goal for Palau. The numbers seem to indicate this too. A study by

the Australian Institute of Marine Science in 2011 estimated that a single reef shark contributed almost US$2m in its lifetime to the economy of Palau. In one year, some US$18m is earned from the shark tourism business, about 8 per cent of the island’s gross domestic product. “You might wonder how closing our waters to lucrative commercial fishing will help Palau’s economy grow. The answer is simple: Palau’s economic potential lies in tourism, not tuna. Tour Tourism, in fact, already provides more than half of our GDP, and it depends upon our pristine marine environment. “Palau’s homes and villages are beautiful places, but it is our pristine reefs, our sharks, our Rock Islands, and our beaches that more than 100,000 tourists a year come to experience. If we can grow that sector sustainably, we can replace lost income from fishing while preserving the marine environment, which is our heritage. What we need are the right partners to help make this Bul effective and enforceable. We hope to access technology to monitor illegal vessels in our waters. And we need to measure the rising tides so that we can prepare for and respond to extreme weather, and avoid disaster when the coming storms pass through.” – Staff Writer Robert Matau contributed in the research of this story.

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Islands Business, July 2014

Yokwe and welcome to our leaders at the 45th

PNA’s GOAL: MAXIMISE BENEFITS AND PARTICIPATION OF OUR PEOPLES IN UTILIZING OUR TUNA RESOURCES

Pacific Islands Forum Leaders Meeting from the PNA

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Cover Report

High flyers...an artist’s impression of the proposed Nadi International Airport terminal building. Photo: Supplied

Multi-million dollar Fiji airport upgrade NZ company wins $80 million contract By Samisoni Pareti

adi International Airport will receive a massive $102 million facelift to give it an attractive and modern look as part of plans to create a striking impression of the South Pacific’s most integral airport. Airports Fiji Limited (AFL) the state owned commercial company which manages and operates airports in the country has selected a New Zealand company for the Nadi Airport Modernisation Project. Hawkins Infrastructure the second largest construction firm in New Zealand is partnering with Fiji’s largest builder - Pacific Building Solutions (PBS) to complete the development in 16 months. The contract awarded to Hawkins and PBS joint venture is worth an estimated $80 million with AFL’s financial partner Westpac providing a loan of $85 million for the development. Plans on modernizing Nadi Airport began in 2012 when the government introduced the Airport (Development and Modernisation) Decree but the project had been delayed due to various factors including looking for a suitable contractor. Last year in November the Nadi Airport Modernisation Project’s ground breaking ceremony was held initiating the first phase which was the extension and redevelopment of the departure lounge. “It took us a bit more than 6 months to decide on the contractor that we chose for the Nadi Airport Modernisation Project and it is big occasion for us,” AFL Chairman Faiz Khan said after the announcement on June 23. “It’s taken six months because it was important for us that we partnered with a contractor that we believe will deliver. It’s no secret that in Fiji you have limited choices available in terms of construction contractors so we had after the expression of interest selection processes. We had

22 Islands Business, July 2014

three that we had shortlisted one fell out initially and two were left and I think the two that we had left provided significant competition right till the end. I’m just glad that we have made a decision and now we look forward to exciting yet challenging times ahead.” Hawkins and PBS will commence construction works on July 15 with the project expected to be completed by October 15 next year. The modernization process includes the ceiling of the departure check in hall to be elevated by seven meters, modern duty free shopping experience, specialty retail shops, renowned food and beverage outlets, kids play area, floor space expanded by 4,000 square meters, additional carousel and immigration counters, and larger passenger area at arrivals, expanded ground level airline lounges, a prayer room, two lane vehicle entry routes and a redesigned car park. “The contract period is 16 months subject to extension of time and forced majeure events. There are certain incentives built in the contract for early completion as well so you have got to balance those as you go along. If you have a forced majeure events that are outside of our control that allows for extension of time but at the same time we want to incentivise the contractor to finish early,” Khan said. “The construction budget for Hawkins and PBS joint venture is $80 million. The total budget for the Nadi Airport Terminal Modenisation Project is $102 million. That’s the budget we have in our books for the last one year. When we went out to the public during the ground breaking ceremony in November last year we had announced a much lower budget and that was through the consent and permission of the minister, at that time because we had not tested the market so we didn’t want to disclose what our budget was to the market. We were in the tender process at the time a lot of the times when you disclose the budget to the market when you are

in the tendering process people bid according to the budget so our intention was to test the market that is why we couldn’t disclose the true budget at the time.” Contractors who started the first phase of the project are expected to complete the extension of the departure lounge later this month. AFL issued them with a contract estimated to be around $2.5 million. The airport upgrade will surely bring a whole new meaning to being the hub of the South Pacific. Nadi Airport handles 96 percent of all international passengers and around 30 international scheduled flights a day. It’s estimated more than 1.6 million travelers go through Nadi Airport each year. It also handles more than 1.3 million tonnes of freight, services 26 regional and international airlines and connects Fiji to some 23 cities in the region and internationally. Nadi Airport generates more than 95 percent of AFL’s total revenue and 100 percent of its profits. “It’s a question of improving the quality of our airport being comparable to the other international airports that are there. Everybody knows that tourism now is more than 50% of the national economy so having an airport that is comparable to other international airports around the world it in itself provides an impetus or incentive for people to come into Fiji. So we want to be part of that tourism focus in Fiji so apart from the business aspect of Airports Fiji Limited it’s a question of the national focus that is over here in terms of improving the tourist numbers,” Khan said. Hawkins built Christchurch’s new international airline terminal but this is their first project in Fiji. The 16 month project will involve the demolition, construction, refurbishment and modernization of Nadi Airport. AFL says the airport will remain operational during this period and they will ensure flight disruptions are minimal. It has also revealed a duty free incentive has been approved by the government for all materials that will be imported for the upgrades. It is expected that $3 million will be saved from this duty free concession which will go towards AFL’s initiative to help sporting projects. The tenancy of its current retail outlets are also being reviewed as they look to increase rental prices. “There are a number of things that are happening one is the correction of rentals that we are getting at the airport. Correction is coming from markets forces between a willing tenant and the landlord is AFL. So we are in the process of renegotiating. We are going back out into the market and asking them what they would like to pay and we have signed a number of contracts over the last few months .These contracts are giving us rates at least four times more than what we were getting before and that’s become effective immediately without even the modernisation being completed so that is the correction aspect,” Khan added. “We have signed up with I believe six so far and there are others in terms of specialty retail stores in the departure lounge in terms of food and beverages which we want to significantly improve compared to what we have at the moment in terms of the arrival concourse. So there are a number of tenancy and concession agreements that are yet to be signed. There is already interest it’s a good place to do business.”

Politics

melanesian

As it is, a regional coalition under the banner of Regional Assistance Mission to Solomon Islands (RAMSI), had to be put together in a hurry to salvage what was left of Solomon Islands. Although it did not remove instability altogether, RAMSI’s 10-year operation which ended in 2013, helped contain the situation. Port Moresby’s case for a permanent Regional Peace-Keeping Force was premised on its experience earlier when its Defence Forces singlehandedly put down a rebellion on the Top contenders for the Forum SG job...(from left) Fiji’s Kaliopate Tavola, the Solomon Islands Dr Jimmie Rogers, Papua New island of Luganville in Vanuatu, freeing a Melanesian neighbour and savGuinea’s Dame Meg Taylor and outgoing Pacific Islands Forum secretary-General Neroni Tuiloma Slade. Photo: Supplied ing it from potential secession. Jimmy Stevens, the man who engineered the rebellion later died in prison. Stevens was captured alive in an almost bloodless operation, lasting six months and died in prison thereafter.

PNG lobbies for its SG nominee

Melanesians vie for top forum post By Alfred Sasako It is not new. Nor is it unknown. As a matter of fact, the race for a Melanesianled economic dominance in the South Pacific has been an on-off, on-again, off again preoccupation of many Melanesian political leaders since the 70s. Then, the island nations that dotted the Pacific Ocean began severing ties with their colonial masters one by one through the process of political independence. In terms of the Melanesian bloc, the shores of these islands were awash with the drive for nationhood. In some cases the anticipation for political independence, which did not come quickly enough for some, reached fever-pitch level as the Jones’ Syndrome hit the Pacific. Not-to-be-ignored alarm bells were ringing in London, Canberra, Washington and Paris. Fiji became the first Melanesian nation to break free of the colonial stranglehold. Papua New Guinea, Solomon Islands and Vanuatu followed closely one after the other thereafter. But they soon find that maintaining a somewhat comfortable living standard is rather unsustainable. Pressures from population growth have eaten away all or any economic gains since independence in the mid and late 70s (PNG in 1975, Solomon Islands and Vanuatu in 1978). Inter-dependence on donors who were largely their former colonial masters such as Britain, Australia and France set in, leaving little or no time at all to think through initiatives that would keep the dream of a Melanesian-led economic triumph in the Pacific alive. One of the many setbacks confronting the Pacific as a whole is the fact that they are spread rather thinly right across a vast expanse of water. Secondly, these island nations produce either the same or similar commodities when it comes to trading.

Thirdly, these so-called island paradises are located way, way out of the main markets destination such as Australia and the vibrant economies of Asia. But things appear to be changing as a new wave of optimism hits the Pacific’s Melanesian bloc. That optimism seems to be closely tied in with the economic boom taking place in Papua New Guinea, which is leading the fight to resurrect the dream of establishing a Melanesian-led economic bloc and perhaps dominance. Despite its perceived crime-infested environment, PNG’s strong economic growth, due largely to multi-billion dollar investments in its mineral sector as well as in its oil and gas reserves, places this Melanesian giant in a strong position to lead a Melanesian bloc economic-led revival. Exports of its gas and oil are set to hit the roof, transforming the nation’s economic landscape over the next few years. PNG wants to share its new-found wealth with its Melanesian brothers and sisters. The first shipment of natural gas from this multi-billion dollar investment left Port Moresby for Japan in May. More will follow. Papua New Guinea has been in the forefront in a number of past attempts to forge closer Pacific cooperation, amongst its Melanesian bloc members, in particular. In 1981 for example, then Prime Minister, Sir Julius Chan, proposed the setting up of a Pacific Islands Peace-keeping Force to deal with any civil unrest in the region. Australia and New Zealand shot down the proposal when it was formally discussed at the South Pacific Forum meeting in Port Vila. The cost of maintaining such a force in such a peaceful region was the main reason for its rejection. Had Canberra and Wellington read the signs of the time that Solomon Islands would be plunged into a civil unrest induced by lack of development, a $10 billion budget over ten years would have been saved.

Integration of Melanesian Economy With donor fatigue taking a toll on previously generous givers, the race to build a formidable economic bloc is once again on. To show its seriousness in establishing a Melanesian-led economic powerhouse, Port Moresby early last month (June) sent a highpowered ministerial team to sound out Solomon Islands and Vanuatu on the idea. Although the objective of the mission by PNG’s Minister for State-Owned Enterprises (SOEs), Ben Micah, remained shrouded in secrecy, those familiar with it said it was two-fold. Establishing a framework for the Integration of Melanesian Economy is said to be the first and the second to secure regional support for PNG’s candidate for the position of Secretary General of the Suva-based Pacific Forum Secretariat. Minister Micah met with Prime Minister Gordon Darcy Lilo in Honiara on 3rd June before travelling on to Port Vila for a meeting with the Vanuatu Prime Minister. In Honiara, the discussion was said to be on PNG’s request that Solomon Islands withdraw its candidate, Dr Jimmy Rogers, for the Forum Secretariat job. Unconfirmed reports said Port Moresby used its new-found wealth in threatening the Honiara government during the discussions. According to one report, PNG said it would withhold K20 million (AUD8.5m) in bilateral aid if the Solomon Government did not talk Dr Rogers, a former head of the Noumeabased Secretariat of the Pacific Community, out of the Forum job. Fiji too is putting up a candidate for the top regional post. Suva is certain to take offence at PNG’s bullying tactics and may opt out of the move towards Integration of Melanesian Economy. It is not clear if a deal was clinched. Micah’s almost secretive trip took the PNG High Commission officials in Honiara by surprise. No one knew the Minister was coming until his private jet had landed at Henderson Airport in Honiara. “We know nothing about the Minister’s travel arrangements,” one PNG High Commission official told Foreign Affairs in Honiara. As a result no PNG High Commission officials were present either on arrival or when Minister Micah flew out of Honiara. Islands Business, July 2014 23

Aviation

Samoan flyer...Inter Island Air Dornier aircraft at Samoa’s Faleolo Airport. Photo: Supplied

Samoa airline hits bumps Compliance issues stop Inter Island Airways By Samisoni Pareti Plans by the American Samoa based airline Inter Island Airways to enter Fiji’s domestic air service have been delayed by numerous compliance requirements. Although the airline received its license in August 2012 from Fiji’s Air Transport Licensing Board to fly scheduled domestic flights, Inter Island has been forced to delay the commencement of its business for more than a year. Inter Island Airways (Fiji) Limited requires an Air Operating Certificate (AOC) from aviation regulator the Civil Aviation Authority of Fiji (CAAF) before it can begin its flights. The airline has been trying to acquire this compulsory certification but has failed to meet the standards. CAAF Chief Executive Netava Waqa explained that the AOC was one of the few certificates and approvals they issue for start-up operators like Inter Island Airways. “There are others such as the Certificate of Airworthiness for the aircraft, the licenses for Inter Island Airways pilots and engineers, the approvals for Inter Island Airways check and training pilots, the approvals for Inter Island Airways Operations and Engineering Manual Suite, the maintenance organisation certificate for their facility to conduct maintenance and repair of aircraft, the aviation security programme approval, to name a few,” said Waqa. “All the requirements are stipulated in the Fiji Air Navigation Regulations (FANR), CAA Fiji Standards Documents (CAAFSD) and Fiji National Civil Aviation Security Programme applicable to commercial air transport operators (CATO).” An AOC is the approval given by CAAF to 24 Islands Business, July 2014

aircraft operators to allow it to use aircraft for commercial purposes. It requires the operator to have personnel, assets and system in place to ensure the safety of its employees and air travellers. The certificate will list the aircraft type and registrations to be used for what purpose and in what area- specific airport or geographic region. Inter Island Airways is a subsidiary of Aviana Airways Corporation based in Las Vegas in the United States of America. Aviana Airways Corporation and Inter Island Airways (Fiji) Limited President and Chief Executive Officer Barney Sene has not commented on the continuous delays affecting the start of their business in Fiji. However they have stated on their website that the are looking at an early October launch date. “The AOC process is approximately 50% completed (Flight Operations process is 99% completed) with remaining 50% of certification process work directed towards completing the construction and availability of new aircraft maintenance facilities, hiring and training of aircraft maintenance personnel and review and audit of maintenance procedures required to service and maintain its Dornier 228 fleet. Inter Island Airways (Fiji) is now working towards receiving its CAAF approval and issuance of AOC by midSeptember 2014,” Inter Island Airways had stated. But the airline has made one too many promises for a launch date. Initially in their business plan they had set a launch date of December 2012 pending the license approval and AOC certification. This was changed to between the months of February and April 2013 and last November Inter Island Airways announced a new launch date of March 17, 2014. They further postponed it to July and now it’s been shifted to October.

With the current progress of their AOC certification it is highly unlikely the airline will be able to receive CAAF approval within the next three months. CAAF has confirmed Inter Island Airways has made no progress since late last year to acquire the certification. “Some of these processes have not started and to initiate them would require specification application letter. That process begins when application(s) is/are received from Inter Island Airways. You may wish to ask Inter Island Airways when they plan to submit applications for these CAAF tasks to begin,” Waqa said. The airline is struggling to begin its operations after failing to complete the acquisition of Sunflower Aviation which was earmarked to become its base at Nadi Airport. Islands Business can confirm that Sunflower Aviation has been bought Sky Dive Fiji owner Tim Joyce. This means Inter Island Airways must construct a new facility which would take more than the three months it has to acquire AOC certification, and to meet their new October launch plans. These business obstacles coupled with the resignation of Drauna Waqasokolala last month as Director Airline Operations of Inter Island Airways (Fiji) Limited places more uncertainty around its Fiji operations. Inter Island Airways has 11 licenses to operate both domestic and charter flights but these licenses may worth nothing if it doesn’t obtain CAAF certifications to start its operations. “Its regulatory you have to be in compliance with certain things but we are getting very close. We are going through a lot of our manuals and documentation with the authorities. We are working very closely with them so we go through all the things that we need to change, modified and adjusted with Fiji regulations and just bear in mind that what we are doing is we are actually building an airline that is a scheduled airline so the requirements are much higher than just a regular charter airline because we have to run everyday seven days a week on a schedule. We are also bringing in airplanes that are not in operation here in Fiji today,” Inter Island Airways (Fiji) Limited President and CEO Barney Sene said this in an interview with the media in November last year. While there is much to be done for getting the airline off the ground there is a lot of anticipation for the arrival of Fiji’s newest domestic carrier. The entry of Inter Island Airways will not only bring competition to Fiji’s major domestic airline Pacific Sun now rebranded as Fiji Link but it has promised to improve connectivity to the outer islands in Fiji’s northern islands with consistent flight schedules. Inter Island has licenses to operate flights to Kadavu, Labasa, Rotuma, Savusavu, Suva and Taveuni. It intends to introduce a fleet of three Dornier 228 aircraft which they also use in American Samoa. The airline also has plans to use Fiji as the regional hub to connect with direct flights to other Pacific Island countries like American Samoa, Cook Islands, Niue and Tuvalu.

Aviation

Fijian bird...Fiji Airways has introduced a Suva-Apia service. Photo: Fiji Airways

Fiji Airways starts new Suva-Apia link Regional services to expand By Merita Huch

fIj I I aIrways – fIj I I’s natIOnal carrIer er – IntrOduced a new dIrect flight linking the country’s capital with that of Samoa’s. There had always been two flights out of Fiji for Apia in the past. However, Fiji Airways from June has announced three more flights out of Nadi and two direct flights to Suva every week. There’s also the direct flight from Apia to Honolulu covering another market that Samoa had found difficult to tap into. “We’ve had a strong connection with Samoa for years and the change is part of a plan to expand our services to the region and beyond,” says Air Fiji’s Managing Director Stephan Pichler. “Our five year master plan highlights our commitment and underscores our desire to remain the leading network airline in the region. We are targeting growing our capacity in this region by almost 87%, and the Apia-Suva services are a key part of that plan.” Samoa’s Prime Minister, Tuilaepa Lupesoliai Sailele Malielegaoi says this change has been long overdue. “This will avoid what’s happening now, where many have to travel to Auckland to get quicker flights to Fiji,” he says during the launch of the new services by Fiji Airways in Apia. Fiji Airways has tough competition in the form of Air New Zealand and the Virgin Samoa but Pichler thinks it has a lot to offer as well and with many Pacific islands using the Fijian route to get to other islands this can prove profitable not only for the airline but for Samoa as well. The Fijian flag carrier a private company with the Fijian Government and QANTAS holding majority shares is seeking extra ways to earn revenue and sees the Samoa route as a way to tap into what’s available in the region but at the same time focusing on grabbing business from outside of the Pacific. “We’re delighted to be able to introduce the new and direct services between the two Pacific capitals. This will greatly benefit tertiary students studying at the university campuses in Apia and Suva, as well as the business community. It is our aim to develop Suva as a key business hub in the region, and increase travel and trade in the South Pacific.”

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Islands Business, July 2014

Business

Commercial opportunity...seven large lagoon fish cages were put together in late May in Majuro and are ready to begin growing large volumes of fish for export to Hawaii. Photo: Hilary Hosia.

Marshall Islands move into commercial fish farming ‘Moi’ fish farms to expand By Giff Johnson The history of the Marshall Islands is littered with so many failed attempts to turn aquaculture and fish farming ideas into commercially viable businesses that it is a wonder Rongelap Mayor James Matayoshi even considered starting a fish farming operation in Majuro. But for once, all of the ingredients are pointing to the possibility of success. Matayoshi’s Rongelap Atoll Local Government (RALGOV) has maintained for several years a small black lip pearl oyster farm on the isolated atoll in the Marshall Islands. But the fish farming pilot project launched in late 2012 was a complete departure from previous attempts at starting this type of fisheries work in the Marshall Islands. From the start, Hawaii, the closest market to the Marshalls, was targeted with the experimental growing of “moi” (Pacific Threadfin), a fish 26 Islands Business, July 2014

prized in Hawaii. Great interest from Hawaii fish distributors resulted in significant technical assistance, including help from scientists at the Oceanic Institute to fine-tune a fishmeal mix that included locally available products. Ryan Murashige, President and CEO of Hukilau Foods in Hawaii and Vice President of Hawaii Moi and Fish Company, was heavily involved in assisting RALGov workers set up and maintain the pilot project. The results of growing moi eggs in aquaculture tanks at a College of the Marshall Islands facility in Majuro were startling: They achieved a 17 percent survival rate, close to double the survival at fish farms in Hawaii. The surviving fish were then put into small lagoon cages for grow out and harvested in mid-2013 after about six months, a shorter growth period than at Hawaii farms. The pilot project was so successful, RALGov established Aquaculture Technologies of the

Marshall Islands (ATMI) and earlier this year completed construction of a hatchery and nursery so it can grow fish eggs at commercial levels for later lagoon grow out. In late May, off-island technicians worked with local ATMI staff to put together new, large lagoon cages for grow out of commercial-level volumes of fish. Those cages have now been located on the north shore of Majuro Atoll next to a small island that will soon be the grow out base for moi fishing farming. The aim, said Matayoshi, is to produce about half a million fish for export to Hawaii in the coming year. Each of the seven cages can hold up to 80,000 fish, Matayoshi said. ATMI’s hatchery is the first of its kind in Majuro. The initial pilot project was operated with the support of the College of the Marshall Islands programme, which has a small aquaculture hatchery that was used for initial growing of moi eggs in late 2012 and early 2013 before the fish were moved into small cages located in the lagoon in the downtown area of Majuro. A small team of RALGov staff fed and monitored the fish around the clock until they were harvested. The fish farming business is getting a boost from the government’s utility company that is installing electricity cables for the first time to the small island of Drirej on the north shore of Majuro where the new cages are located. This is setting the stage for use of the island of Drirej for a base for the fish grow out. “This means employment opportunities to people on Drirej,” Matayoshi said, adding that as the fish farming gets into commercial volume production, it is going to open many more job opportunities for Marshallese. Eggs now being hatched at the ATMI facility will soon be ready for transfer to Drirej. There are still hurdles to leap. But if the latest effort is as successful as last year’s pilot, this will be the first commercial-level fish farming business to succeed in the Marshall Islands. Matayoshi is thinking big and is already looking beyond the initial seven cages now at Drirej and waiting for fish. “What if we work with all the landowners (across the northern reef of Majuro) and partner up and build cages on their islands and we supply the fingerlings and feeds out of our facilities — the hatchery and feed mill?” he asked. “I call it ‘Aquaculture Farmers Cooperative.’” This is a huge commercial opportunity for local landowners in the capital atoll, Matayoshi said. Major expansion of fish farming is in the hands of local landowners, he said. “Let’s revolutionise our export capacity now,” he said. “We can unite through our cooperative and have 100 cages for aquaculture farming in the lagoon.” No doubt, given the past failures with a variety of aquaculture projects in Majuro, people are watching with interest to see if the ATMI plan will work. Having its own on-island hatchery is a key piece of infrastructure that will allow the fish farm to be growing eggs continuously to feed baby fish to lagoon cages. In addition, ATMI has support from Hawaii-based fish farming exports, the new sea cages are constructed and waiting for fish, and power going into the island that will be the new base of fish farming operations. All of this has combined to put ATMI in position to be the first company to successfully develop fish farming from a “project” to a successful export business for the Marshall Islands.

Business – InterOil and ExxonMobil have been notified that PNG’s natural gas will be used in the development of DME (dimethyl ether)/ methanol and power supply. DME is used principally as a substitute for propane in liquefied petroleum gas whereas methanol has a wide array of industrial applications, even though its use as an alternative fuel to petrol has not been seriously explored in the past. O’Neill said the visited by Abe – the first since 1985 when Yashuhiro Nakasone touched down in PNG – illustrates the high confidence the powerful world lobby group, G7 has in PNG. “This is a vote of confidence in PNG as we continue this stable political climate and create conducive environment for investments,” said O’Neill. PNG gas powers Tokyo The integrated development project, which started pumping gas to Japan last month, includes gas production and processing facilities, onshore and offshore pipelines and liquefaction facilities. With exports last month of US$50 million to Tokyo Electric Power Company, TEPCO, the PNG gas provided power to parts of Tokyo, Kanagawa, Saitama, Chiba, Tochigi, Gunma, Ibaraki, Yamanashi and east Shizuoka. TEPCO will buy 1.8 million tons of LNG every year for 20 years from PNG, which has an annual supply capacity of roughly 6.6 to 6.9 million tons. As O’Neill watched the flow of his country’s LNG into Japan in June, he was handing out an olive branch to other Japanese investors like Sojitz Corporation keen on tapping into PNG’s resources sector. Both Sojitz and Itochu are keen to start production in PNG to convert gas into methanol, ammonia and urea fertiliser. His government plans to direct revenues from the booming extractive industries into struggling and government-dependent sectors of the economy like agriculture, fisheries, logging and tourism.

On deck, from left, Minister for Petroleum and Energy Nixon Duban, ExxonMobil PNG Ltd Managing Director Peter Graham, the Prime Minister Peter O’Neill, Governor of Hela Province Anderson Agiru and PNGLNG Project executive, Decie Autin. Photo: Supplied

Japan’s Abe spurs PNG interest Gas supplies sufficient for 25 years By Davendra Sharma TWO new Japanese-initiated petrochemical plants – one each in Papua New Guinea and West Papua, Indonesia are set to pick up green lights as feasibility studies open new hopes for creating local petrol sufficiency in parts of the region. To bolster Japanese interest in PNG, a reciprocal visit to Port Moresby by Japanese Prime Minister Shinzo Abe from July 10-12 has been scheduled in response to Peter O’Neill turning up in Tokyo last month to watch PNG-supplied gas hit the country’s power supply stream. The petrochemical plant on the PNG divide – marking the biggest financial undertaking by Japanese firms in PNG - has been attributed as a spin off investment emanating from the island nation’s mega-rich multinational LNG project, which rolled out production last month amidst forecasts of invigorating growth in the resourcesladen country. Around Port Moresby there is a new wave of optimism that an industrial and logistics corridor will open up over the next five years in the vicinity of the capital as a result of the ExxonMobil giant LNG project. Prime Minister Peter O’Neill’s trip to Japan also served to confirm his promise to fast-track moves by two Japanese consortiums to inject between $US 1-2 billion (2.03 to 4.06 billion kina) in a petrochemical plant with a potential to generate 5,000 jobs during construction and 28 Islands Business, July 2014

production life of the operations. It will also mark a new era of a gradual stagnation or to lesser extent decline in PNG’s dependence on investments by Australian companies – which have poured in excess of $US20 billion over four decades since independence and today account for $US5.5 billion in two-way trade between the colony-coloniser countries. In the wake of highly-successful LNG project, several Japanese multinationals have been hungry for a slice of PNG’s prosperity. When some Japanese investors came to PNG last year to explore petrochemical prospects in the country, O’Neill said his government will allocate a portion of the Konebada Petroleum Park. “My government is committed to supporting industries that add value to our natural gas reserves, which (are) good for the country,” he noted. PNG has sufficient gas not only to export but also to use for downstream processing on projects like the petrochemical industry being proposed by the Japanese giants Mitsubishi and Itochu. “This will create employment, grow our economy and provide spin off business opportunities for our local companies. “This is what I want to see happen in our country.” O’Neill has assured that his government will provide gas reserves (1.2 tcf) needed for the impending project. Operators of the $US19 billion LNG project

West Papua Japan’s Itochu has also been on petrochemical business in West Papua though Germany’s Ferrostaal GmbH plant construction and engineering company has outlaid $US2 billion in West Papua with promise of starting operations in 2019 to produce methanol, propylene and polypropylene from natural gas. Once operational, the production capacity of the petrochemical plant is expected to peak at 400,000 tons of polypropylene, 150,000 tons of synthetic ingredients and by-products of gasoline on top of 34,000 tons of liquefied natural gas per year. Such production will reduce imports of petrochemical by around $US600 million per year to Indonesia and the region. “This plant uses only natural gas from West Papua, which has potential to last up to 25 years,” said Ferrostaal and West Papua government forecasts.

Maritime

A cruiseliner in Port Vila, Vanuatu. Ships like this now require modern charts to help with navigation. Photo: Supplied

Pacific islands work on updating their sea charts SPC starts work in Vanuatu By Robert Matau The majority of the Pacific’s underwater charts are outdated with some of them dating back to Captain James Cook’s expeditions to the region in the 18th century. Secretariat of the Pacific Community’s Applied Geoscience and Technology Division (SOPAC)’s acting Deputy Director Jens Kruger said the majority of nautical charts in the Pacific are out of date and no longer useful “Some charts are just sketches dating back to the days of Captain Cook, and most have not have not had any new information added since World War II,” he said. Kruger was responding to queries on their latest efforts to update the underwater charts of Vanuatu. Starting this month, the International Maritime Organisation’s Safety of Life at Sea Convention regulations will require member countries to move toward using electronic navigational charts. Failure to update nautical charts will result in their withdrawal from circulation. This in turn, would cause cruise ships to stop visiting certain Pacific destinations, severely impacting local tourism as a consequence. Kruger said the relevant legal instrument that enforces the standards for safety of maritime transport through the provision of hydrographic services is the Safety of Life at Sea (SOLAS) Convention. He said the latest version of SOLAS adopted in 2002 made it mandatory for large ships to have digital systems for navigation. All states wishing to operate in the international maritime community are therefore required to: • map their seabed (carry out hydrographic surveys)

strategy that would enhances regional hydrographic services to member countries. SPC estimates that AU$924,000 per year will be required to set up and operate this unit and assist Pacific Island countries fulfill their obligations under SOLAS and improve navigational and maritime safety in the Pacific. In the case of Vanuatu, SOPAC is currently updating the nation’s navigational charts. Kruger said Luganville Harbour on the Vanuatu island of Espirito Santo was identified as a priority area to survey through a New Zealand funded hydrographic risk assessment study. They have also selected popular cruise destinations like: •Hog Harbour, Santo Island •Wala, Malekula Island •Homo Bay, Pentecost Island. Luganville Harbour is 126 square kilometres in area and would take 30 days to survey whilst the other areas are smaller and require approximately one week each. “We are currently in Port Vila busy with the mobilisation of the vessel,” he said. “The Government of Vanuatu has provided the SPC with the Vanuatu Police Patrol Boat RVS Turoroa, and we are currently installing our survey system on the boat. “The survey is undertaken using a multi-beam echo-sounder with an integrated inertial navigation system. “This specialised equipment will enable us to meet the Special Order survey requirements stipulated by the UK Hydrographics Office, who are the Principal Charting Authority for Vanuatu.”

• make new charts or modernise existing charts (produce electronic naviga tional charts); • communicate ma rine safety information. SOLOMON AIRLINES The Cook Islands, Fjii, Kiribati, Marshall Islands, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu have all ratified their SOLAS convention obligations in December 2, 2013. He said the majority of Pacific island countries and territories did not have the capacity or resources to fulfill their obligations under the SOLAS convention. A recent regional meeting of the Pacific ministers of energy and transport recogPHONE: nised this as a major Brisbane - (617) 1300 894 311 impediment to mariNadi - (679) 7672831 time safety and economic development Honiara - 177 from within the and has urged the SPC Solomon Islands or (677) 20031 to set up a dedicated externally. hydrographic unit. They also want the regional organisation to develop a regional

Bridging the Paciic www..ysolomons.com

Islands Business, July 2014 29

Fishery

PNA day fee hike puts pressure on fishing f leets

here to stay. As important as raising the fishing day fees, from PNA’s view, is the countries’ agreement in Majuro to cap the number of fishing days available for sale in 2014 and 2015 at 44,623. “This will help sustain and conserve tuna resources for the future, while increasing the value of fishing days,” said Aqorau. Other important decisions reached by the eight Ministers: • A new plan to apply a VDS to longliners was discussed and the Marshall Islands and Federated States of Micronesia signed the plan to show their fishing day increase to US$8,000 per day,” Joseph By Giff Johnson support for implementing the first such controls said. “Times have changed (since the US$63 over the industry that targets yellowfin and bigeye T he P arties to the N auru A greement million figure was agreed) and the value of the tuna for sashimi markets in Asia and the U.S. (PNA) continue to set the pace in fisheries manvessel day scheme is going up,” said Joseph. “We • Ministers confirmed the economic imporagement in the western Pacific and the group’s need to revisit the (financial) issues in the treaty.” tance of domestic purse seine development to latest decisions are upsetting tuna fishing counThe PNA wields strong leverage with the U.S. some Parties to promote sustainable national ecotries long used to controlling the multi-billion fleet because the 40 U.S.-flagged purse seiners nomic development, and agreed that domestically dollar industry. PNA ministers’ decision in midfish almost exclusively in the waters controlled by flagged fishing vessels can be accorded different June to raise fishing day fees by 33 percent—from the PNA: Papua New Guinea, Solomon Islands, treatment in VDS prices to support small island US$6,000 to US$8,000—produced immediate Tuvalu, Kiribati, Marshall Islands, Nauru, Federdevelopment needs. concern from the United States tuna fishing ated States of Micronesia and Palau. PNA’s mes• Despite welcoming progress made by industry that has for nearly 30 years enjoyed sage, in a nutshell: “We want a greater share from the Western and Central Pacific Fisheries preferential access to PNA waters, where over fishing in our waters and we’re going to take it.” Commission (WCPFC) in adopting and applying 50 percent of the world’s supply of skipjack tuna Although all purse seiners fishing in the region measures to conserve and manage tuna stocks, is caught. The decision, made during the annual have operated for several years under PNA’s the Ministers noted with concern shortfalls in meeting of PNA ministers in Majuro, is part of VDS—which is the lynchpin in its fisheries manmeasures adopted at the last Commission meeting PNA’s ongoing strategy to produce a larger share agement programme—it is still under challenge for conservation and management of of revenue for the island. bigeye tuna, arising largely from the During the past four years under continuing opposition by some fishing PNA’s “vessel day scheme” (VDS), states to apply effective measures for the eight members have increased management of high seas fishing. their revenues from US$60 million a Ministers called on the WCPFC year to about $250 million. The new to ensure a greater contribution to price increase, which goes into effect bigeye tuna conservation from the next January, could bump revenues to distant water longline fleets that catch a new record of over US$350 million. this tuna on the high seas. “We are surprised and disappointed Both PNA fisheries officials and that this is being raised as an issue for scientists working on tuna stock 2015, since we had understood that assessment have criticized distant the interim agreement settled this water fishing nations this year for matter for 2015,” said Brian Hallman, failure to provide operational high the executive director of the American seas catch data. Joseph said distant Tunaboat Association. Last year, after water fishing nations are not sharing several years of arduous negotiations, the burden of conservation equally the U.S. government and industry with the islands, and one example of leaders agreed to increase their anthis is the fishing countries refusal nual payment from US$21 million to to provide tuna catch data they’ve US$63 million a year. But the way this promised for many years. “They need funding is shared among all Forum to pull their socks up and provide the island nations, it works out to less than the existing minimum day fee of Big money on deck...A purse seine fishing vessel off-loads hundreds of tonnes of data,” he said. “This is an obligation US$6,000. While the financial package skipjack tuna in Majuro that will be transported to an Asian cannery. Photo: Giff Johnson of these states, but eight years later it is still a problem.” was agreed a year ago, the treaty is still • Ministers also expressed grave not in final form, and a negotiating sesconcern over what they described as “continuing sion is scheduled in July in New Zealand. PNA’s from both European Union and U.S. officials. abuse of WCPFC measures by some fishing states new financial requirements dim hopes that the “U.S. vessels have been operating under the VDS to obstruct the domestic tuna development of treaty will be concluded at the upcoming talks. for the past year—carefully following all of the Small Island Developing States” and strongly “While it is understandable that the PNA rules—and we are not sure if it is a system that supported the WCPFC requirement for countries wish to maximize their licensing revreally works, mainly because of its complexity and Commission Members to support the ongoing enue, context and timing are important,” said the fact that no action is being taken regarding development and strengthening of the VDS Hallman. “For the past year, the price of tuna to hundreds of legitimate non-fishing day claims by to manage the purse seine fishery. Ministers the fishermen has been significantly lower than the US fleet,” said Hallman. “This problem needs called on all members of the WCPFC to ensure previously, and some vessels are experiencing real to be addressed.” PNA officials say that distant that conservation measures did not transfer economic problems right now.” water fishing fleets abused non-fishing days last a disproportionate burden to Small Island “We won’t agree to anything after 2015 unless year because of inconsistencies in how they were Developing States in accordance with the it reflects the new benchmark price,” said Dr. applied by the eight PNA members. At a meetWCPFC Convention and the WCPFC-endorsed Tranform Aqorau, the PNA CEO. Marshall Ising earlier this year, PNA agreed on a standard resolution on the Special Requirements of Small lands Marine Resources Authority Director Glen definition for non-fishing days and closed some Island Developing States. Joseph acknowledged that world market prices loopholes to stabilise the VDS, said Aqorau. Taken together, the PNA decisions at its middropped and have remained well below last year’s Despite U.S. criticism and EU refusal in bilatJune meeting suggest a resolve to push the islands’ record-setting US$2,300 price per ton. “But there eral negotiations with individual PNA members control of the fishery to new lengths. are indications of improvement that warrants the to accept the VDS, Aqorau said the system is

States want greater share of income

30 Islands Business, July 2014

Technology must be taken into account when automated classification processes, such as vegetation mapping, are applied to satellite images. Atmospheric correction software that relies on mathematical algorithms must first be applied to the image data to eliminate unwanted features. The problem has been that it is not possible to apply atmospheric correction to ‘pansharpened’ images, the image type most commonly sought by government departments across the Pacific. These images are produced when data from a panchromatic (black and white) sensor are merged with data from lower resolution multispectral (colour and infrared wavelength) sensors. To solve the problem, Wolf Forstreuter and his team had to be creative. They invested in atmospheric correction software that is speWinning team...the SPC imaging team at Nabua, Fiji, after taking out the DigitalGlobe Reseller Excellence Award 2014 for the highest sales cific to satellite imaging and volume in the Asia-Pacific region. Photo: Supplied has the capacity to compare and process the different types of atmospheric conditions in the Pacific. This software was then applied to the raw satellite imaging data before the panchromatic and multispectral data sets were combined to produce pansharpened images. The result was a success. ‘Nowhere else in the world can you get pansharpened image data that are atmospherically corrected,’ says Forstreuter. ‘It’s not a big invention but it has a big effect and we produce it right here in our small office for Pacific Island countries.’ The innovation earned the GIS and remote sensing team its second award, a Digitaldirectly to Pacific Island countries. The result Globe Innovation Award 2014. By Sean Hobbs* is an exceptional deal for Pacific Island governForstreuter points out that the work performed ments accessing state-of-the-art satellite imaging by his team is paid for from SPC’s core budget. Many eyes will be focused on the Pacific technology. In other words, the team is not driven by donorIslands Forum and the upcoming Third InterThis type of imaging has a variety of applicafunded projects. Instead, its capacity has been national Conference on Small Island Developing tions across different government ministries developed specifically to enhance SPC’s core States. But there are also smaller happenings that and sectors, including forestry, land planning, service delivery to its members. should grab the attention of Pacific Island leaders. agriculture, geology, fisheries, port operations, ‘The team is acting in the interests of SPC’s One such is the winning of two awards by the disaster management, infrastructure and urban members. For Pacific Island countries it is Secretariat of the Pacific Community’s (SPC) planning, biodiversity conservation, climate simply not economic or feasible for each one to Applied Geoscience and Technology Division change adaptation, and education. At the very have dedicated staff, who know where to obtain (AGTD, previously SOPAC) from the world’s least, it allows Pacific Island countries to replace satellite data, the correct satellite for a particular leading provider of satellite imagery, DigitalGlobe long-outdated aerial maps and cartographic data. application, the price of satellite data, and the Inc. based in Colorado, USA. This should be of Another factor influencing the region’s ordering process, which involves many rules and interest to Pacific Island countries because they demand for satellite imagery has been an inregulations. The technology and the regulatory currently receive the highest-resolution satellite novation at SPC that improves satellite image space are constantly evolving. So we act on behalf image data commercially available at some of the quality. Prevailing weather conditions can affect of our Pacific Island member countries – it’s lowest prices on the planet. the quality of images captured by satellites. This a service, where our main job is to stay on top Cost-effective delivery of service by SPC, the is a major challenge in the Pacific, where humid, of everything and support the countries,’ says only authorised reseller of DigitalGlobe products tropical conditions drive cloud cover and other Forstreuter. in the Pacific Island region (not including Austradisturbances in the imaging process. DigitalGlobe operates a fleet of five highlia and New Zealand), has driven increased sales Wolf Forstreuter, a GIS specialist who leads the resolution earth imaging satellites. Readers will of satellite imagery. This has led to SPC receiving GIS and remote sensing team at SPC, explains be familiar with the imagery captured by Digia DigitalGlobe Reseller Excellence Award 2014 that, while the fringing reef of an island may be in talGlobe satellites used in the popular internet for the highest sales volume in the Asia-Pacific full sun, there is often cloud cover hovering over applications, Google Earth and Google Maps. region. SPC purchases satellite imagery data from parts of the island. And with elevated islands, the DigitalGlobe at around one-third of the average * Sean Hobbs is SPC’s Climate Change Communications different sides of a hill will often have different global price. This price, along with the additional and Information Officer (seanh@spc.int). levels of atmospheric moisture. These factors reseller discount received by SPC, is passed on

SPC wins satellite imaging awards

Team covers activity costs with workload

Islands Business, July 2014 31

Sports weeks to go and still waiting for about $400,000,” said Spegal in June of one of the organizing committee’s many challenges to preparing for the influx of 1,700 competitors and officials. I wish that I had been able to secure more funding six months ago.” Pohnpei’s weather approximates that of a rain forest, which has hampered construction of a new soccer field at the College of Micronesia’s national campus. “The weather has not been kind with regards to the new soccer field at the national campus, and we probably will not be able to use it as the grass will not have enough time to establish a strong root system, so only the first half of the first games would be played on grass,” Spegal says. “After that the surface would be mud. Plan B is at the field at PICS High School where they presently play.” There are some new twists this year: this is the first Micro Games to include soccer, a sport that remains little played compared to basketball, baseball and High hopes...The Marshall Islands weightlifting team comprised mostly of teenagers has high hopes of multiple medals in volleyball. Spear fishing and Micronesian Pohnpei, following strong showing at regional competitions during the past year. Marshall Islands’ 19-year-old Lomina Tibon All-Around—a combination of spear (centre) won four gold medals at the Oceania Championships in New Caledonia in May. Photo: Supplied throwing, coconut tree climbing and other island skills—makes for a truly Pacific-style competition. Guam, the Northern Marianas and Palau have been the top medal winning islands for many years, with Palau dominating in medals—129 total with the Northern Marianas a distant second at 92—for the hometown audience at the 2010 Games. For the first time, the Marshall Islands moved into the fourth spot in medals in 2010, and hopes to do at least as well with a resurgent weightlifting program that over the past year has seen a team of Marshallese teen male and female lifters grab gold medals over Australian, New Zealand, Fijian and PNG competitors, while the historically dominant Marshalls wrestling team is vide sufficient bandwidth to the venues for liveBy Giff Johnson rebuilding around youthful competitors largely stream video broadcasting from the Spanish Wall untested in regional competition. Softball Field, the Daini Baseball Field, and the Majuro — Twenty years ago, the only way Guam is the island to beat in many team sports, College of Micronesia National Campus Gymnato get a report on a Micronesian Games comparticularly men’s and women’s basketball. While sium, where basketball competition will be held. petition—or even just a baseball or basketball the Northern Marianas, Guam and the Marshall The fallback is delayed broadcasts through social score—was to have someone ring you after a Islands dominated swimming for many years, media of events that will run from July 20 to 30. game, at a cost of $4 a minute. Suffice it to say, both Palau and Pohnpei have increasingly proIn addition to sports delegations from all the getting results was a challenge and sometimes duced competitive swimmers. Palau and Guam United States-affiliated islands in the north it could be months before a full set of results will continue their rivalry on the baseball field, Pacific, Kiribati and Nauru are expected to send wended its way through the mail to Majuro or while in athletics Palau, Guam and the Northern sizeable groups to Pohnpei, giving this Micro Koror or Saipan. Marianas are expected to dominate because of Games the full panorama of “Micronesia” sports This month’s Micronesian Games in Pohnpei superior facilities and training opportunities. prowess. is expected to bring together nearly 1,700 athletes, A challenge for islands like the Marshall IsKnown as the “Olympics” of Micronesia, these coaches, officials and media representatives for 10 lands is it has no indoor gymnasium to prepare Games were first launched in 1969 during the days of competition. With Pohnpei linked to the basketball and volleyball teams. Three years after U.S. Trust Territory administration and hosted outside world by a submarine fiber optic cable, a portion of the national gym collapsed and the by Saipan, the capital of the Trust Territory. But this year’s games, the 8th since the first in 1969, facility was condemned in 2011, the facility rethe idea of an every-four-year event didn’t catch may have the most options to broadcast results to mains unusable with no solution in sight. Majuro on immediately. The second Games didn’t hapthe world. The thousands of people throughout also lacks a track field, so runners practice on pen until 1990, but since then it’s been a muchthe Micronesian area wanting news about the the equivalent of a cow pasture. Other islands, anticipated quadrennial competition. performance of their relatives and friends will be including Kosrae, Nauru and Kiribati have similar The greatest benefit of hosting these big able to tune in through live Internet broadcasts limitations in facilities that make for challenges events—this is Pohnpei’s second Games—is the of competitions on V6AH Radio, Pohnpei’s adapting to the competition-level sports comrenovation of sports facilities that local residents government AM station (http://www.fm/pohnplexes on offer in Pohnpei. can make use of for years after the regional compei/radio.htm). “Video broadcast will also be But lack of facilities doesn’t deter anyone petition. “The track and tennis courts will have available on our website 8th Micro Games, our from Yap to Majuro, with each island sending a brand new surfaces,” says Micro Games OrganizFacebook page 8th Micro Games 2014, and our substantial sports delegation. The best athletes the ing Committee CEO Robert Spegal. “The college YouTube channel Pohnpei island network,” says Micronesia region has to offer will be on display gym will have new floor for basketball and new Jun Salomon who is working with the Media and from July 20 to 30 in Pohnpei, and with excellent scoreboard.” A challenge for organizers is securBroadcast Committee for the Games. telecommunications technology available, the rest ing promised funding from government. “The Salomon says they are working with sponsor of the world can tune in, too. timeliness of government support — barely six FSM Telecommunications Corporation to pro-

The ‘Olympic Games’ for Micronesia

Guam to dominate track and field events

32 Islands Business, July 2014

Sports

Australia hails its Samoan World Cup star

skill and talent such as Harry Kewell and Mark Viduka, players who were once his teammates during the “golden generation” from 2000-2010. But when it came to performing on the big stage, under pressure, there was nobody better than Tim Cahill. He thrived on the big stage with his impeccable timing, peerless aerial ability and a vertical leap, which defied his relative small frame 5’10” (1.78m) and made him a player feared by opposition teams. Although he started his career in the midfield, he had an uncanny knack for scoring goals so it was no surprise that he shifted up front to striker in the latter half of his career. Fiercely competitive, athletic, and fearless in the face of adversity, Cahill is a player who always strived to win at all costs. That mental strength more than made up for his perceived physical and technical limitations. Arguably his greatest moment came at the 2006 FIFA World Cup late when he came off the bench in the dying moments to score two goals in a historic 3-1 win over Japan. It was Australia’s first win at a World Cup and Cahill had the honour of scoring Australia’s first World Cup goal (Australia failed to score a goal at their first World cup appearance in 1974). Eight years later he’s still scoring goals at the highest level. Simply put, Cahill knows how to score and he changes games with his goals. The story of Tim Cahill’s journey to the top of the soccer world began as a 14 year-old representing Samoa at a 1994 FIFA Oceania Under 20 tournament alongside his older brother Sean. His younger brother Chris also represented and captained Samoa a decade later. That appearance, however, prevented Cahill from playing for Australia until FIFA overturned its eligibility rules after a long period of legal proceedings in time for his Australian debut aged 24 at the Oceania Nations Cup in 2004. Following his short stint for Samoa, Cahill’s desire to become a professional soccer player prompted his parents to take a loan to pay his airfare to England where he would seek out his dream. In 1997 he packed his bags and a few months later had signed his first professional contract Island magic...Tim Cahill celebrates scoring a goal for Australia’s with second division English club Millwall. Socceroos. Photo: Supplied Following his first game for the club in 1998, he never looked back. He was part of the Millwall side that won aspiring young footballers across the country,” the Football League Second Division championsaid respected soccer commentator, Les Murray ship in the 2000–01 season. Cahill was a central of SBS. part of Millwall’s run that led them to the FA Former Socceroos coach Rale Rasic told media Cup final for the first time in their history, scorCahill was “the best Australian footballer” he had ing the winning goal in the semi-final against seen in his lifetime. Sunderland, and securing a UEFA Cup place in That is some accolade for the football player the process. His last game for the club was against born and raised in Sydney to a working class Manchester United in the final, which Millwall family of immigrants. Cahill shares Samoan and lost 3–0. Cahill made 249 overall appearances English-Irish heritage. His Samoan-born mother, for The Lions, scoring 52 goals in the process. Sisifo, is from Tufuiopa, Upolu and Salai’lua, Before the start of the 2004–05 season, Cahill Savaii. His dad, Timothy Senior, is English-Irish. was transferred to English Premiership glamour It was from these humble beginnings that Cahill side Everton for a fee of £1.5 million. In his first forged his professional career which was built on season, he was Everton’s top goalscorer and s the a strong work ethic, courage, humility and loyalty. fans’ Player of the Season. The latter traits, Cahill says, he learned from his He is the elder statesman and last remaining Samoan side where his family and cultural ties player from Australia’s “golden generation” but to the homeland remains strong. He literally as Socceroos coach Ange Postecoglou infuses wears his Samoan culture on his sleeve with his youth and discards the old guard to renegerate distinctive arm sleeve tattoo. the national team, he remains faithful to Cahill There have been Australian players of superior who continues to be the Socceroos saviour.

Cahill wears his Pacific heritage with pride By Peter Rees The only Pacific islander playing in the FIFA World Cup is not only representing Australia and his Samoan heritage. He’s also holding his own against the world’s best. The likes of Christian Karembeu (New Caledonian/France) and Wynton Rufer (Maori/ New Zealand) graced soccer’s flagship event in 1998 and 1982, but not with the same impact as Australia’s Tim Filiga Cahill who has played in three World Cups and scored in each one. Australians are hailing him as their best ever soccer player after his heroic feats for the Socceroos at the FIFA World Cup 2014 in Brazil. The 34 year-old Samoan soccer star set the World Cup alight in June with two sensational goals against Chile and The Netherlands. His second goal against the Dutch - a powerful volley off his left foot - has been described as the best goal of the tournament by the world’s media. It was Cahill’s fifth goal in a World Cup making him one of just eight players in history to have scored goals in three consecutive World Cup tournaments - two against Japan in 2006 (Germany), one against Serbia in 2010 (South Africa) and two against Chile and The Netherlands in 2014 (Brazil). This feat put him in illustrious company and cemented his name alongside legends, Roberto Baggio, Robin van Persie, Jurgen Klinsmann and Pele. He is also Australia’s all-time leading goal scorer with 34 goals, a record he made his own in a 4-3 loss to Ecuador back in March when he bagged a double. Although Australia failed to win their pool games against Chile and Netherlands, Cahill’s heroics inspiration of a young and inexperienced Socceroos outfit from the front is now written in folklore. A second yellow card meant he would miss Australia’s final pool game against 2010 FIFA World Cup champs Spain, forcing the Socceroos to play on without their one true world class player. Australia’s 3-2 loss to the Netherlands may have been Tim Cahill’s last World Cup match, but he left his mark on the game, and he has no regrets about missing the Socceroos final game against Spain. “I capped my World Cups off with one of the most memorable moments in my lifetime, one of the goals everyone is talking about as one of the goals of the tournament,” Cahill said. “You never go into a title fight thinking you are going to lose and when you get that one chance you have to take it. And in the defining moments in my career, that has made a difference to me.” His absence from the game against Spain hasn’t stopped Australian media’s almost unanimous appraisal of Cahill as the best soccer player Australia has produced. “Mile Jedinak may be Australia’s captain, but Tim Cahill is the Socceroos’ undisputed leader and a source of inspiration to his team-mates and

Islands Business, July 2014 33

Viewpoint

Do many hands make light work? By Matthew Dornan & Tess Newton Cain

he reality is that, with the greatest goodwill in the world, many of these countries are too small to be viable in the normal understanding of that expression and we really have to develop an approach that I could loosely call… pooled regional governance… it applies with airlines, it applies with policing, it applies with a whole lot of other things. But it’s just not possible if you’ve got an island state of fewer than 100,000 people to expect to have all of the sophisticated arms of government So spoke John Howard, former Prime Minister of Australia, in July 2003 whilst announcing the deployment of Operesen Helpem Fren (also known as the Regional Assistance Mission to Solomon Islands or RAMSI). He encapsulated a number of things that inform thinking about development challenges in small Pacific island states, including how those challenges might be met. John Howard did not invent the concept of ‘regional governance’ or the idea of pooling resources as a way of remedying service delivery deficits at national level. The countries of the Pacific island region have been coming together in numerous forums, whether political or technocratic, since the formation of the South Pacific Commission in 1947 (now known as the Secretariat of the Pacific Community or SPC). However, since the Auckland Declaration of 2004 which set in train the development of the Pacific Plan, we have seen an increase in the number of pooling initiatives. Indeed, pooling is often viewed as one of the criteria against which the success or otherwise of the Pacific Plan can be judged. But, until very recently, there was no published study of how these initiatives had fared. To remedy this knowledge gap we undertook a study of 20 pooling initiatives during 2013, initially to inform a submission to the review of the Pacific Plan ongoing at that time. We examined available literature and interviewed people who had been at the heart of designing and implementing initiatives across a range of areas including education, trade policy, management of fisheries and bulk procurement. What we discovered is that as a development solution, regional pooling of services has had mixed fortunes. Of the 20 initiatives we examined, we assessed eleven to have achieved some degree of success, although all had their problems either in getting going or in maintaining delivery. Seven were widely considered to be failures as pooling initiatives and two could not be assessed. Some initiatives have endured for a long time and continue to provide regional public goods to Pacific island citizens. The University of the South Pacific is the most often cited example, and in terms of longevity, it is certainly a success. Other attempts at pooling never got off the ground. A significant amount of time and energy went in to examining the feasibil-

34 Islands Business, July 2014

Regional institution...part of the University of the South Pacific’s Laucala Campus, Suva, Fiji. Photo: yahoo.com

ity of bulk procurement of fuel for small island states, but bulk procurement remains elusive. And then there are others that operated for while, with varying levels of success but could not be sustained. Air Pacific and the Pacific Forum Line are good examples. So, it is evident that pooling of services in the Pacific is challenging and we have spent some time thinking about why that is. One reason is smallness. National governments of small countries struggle to provide adequate levels of service to their populations. A lack of capacity at national level is not automatically remedied by working together with other countries which also lack resources and have small, over-stretched, civil services. Other challenges stem from the voluntary nature of regionalism. If membership of a given ‘club’ to deliver services on a regional basis is going to be initiated or maintained, each member needs to feel that the net benefit of being in the club outweighs any costs associated with joining. Members also need to feel that the benefits of pooled service delivery are being shared equitably. This is one of the reasons that the implementing agencies for pooled service delivery are domiciled in many different places rather than being co-located. Providing a home for a regional organisation or programme brings with it significant economic benefits, including employment opportunities and local procurement. If one country is perceived to be benefitting more than others this can lead to a loss of support for a pooling activity. This was one of the main reasons behind the failure of Air Pacific as a regional airline. It was based in Fiji and other partners withdrew their support believing that the service was benefitting its home country disproportionately. One of the characteristics of pooled service

delivery in the Pacific that sets it apart from other parts of the world is the heavy reliance on donor assistance to establish or maintain programmes and facilities. On average, the initiatives we examined received 80% of their funding from donor partners. This has advantages and disadvantages. Donor funding alleviates the risk of initiatives failing because of under-capitalisation. At the same time, regional organisations mandated to deliver pooled services are often perceived to be (and possibly are) more responsive to the demands of donors than to their national members. This in turn may lead to a lack of political buy-in on the part of Pacific island leaders. The Pacific Plan review talks about the importance of sub-regionalism for the future of regionalism more widely. Our study shows that pooled service delivery at the sub-regional level has been a success in the past. For example, the ability of the Parties to the Nauru Agreement to coordinate the activities of member countries has been possible because it excluded the broader membership of the Forum Fisheries Agency. The members of the Melanesian Spearhead Group are currently developing plans to pool services in several areas (including shipping and bulk procurement) in the hope that geographical proximity, cultural affinity and smaller membership will lead to greater success than has been achieved at the pan-regional level. If and when these plans come to fruition, we will look forward to assessing their success in improving the lives and livelihoods of Pacific island citizens. Matthew Dornan is a Research Fellow of the Development Policy Centre, at the Australian National University where he specialises in Pacific Island development. Tess Newton Cain is a Non-Resident Fellow of the Lowy Institute for International Policy (Melanesia Program) and a Research Associate of the Development Policy Centre. Funding from the Asia Pacific Policy Studies Society supported their research into pooled service delivery.

Environment

Service their guide...the team at the Secretariat of the Pacific Regional Environment Programme in Samoa. Photo: SPREE

SPREP with David Sheppard

21 years of serving the environment and peoples of the Pacific

acific history was made twenty one years ago on June 16, 1993. On that day Pacific island countries signed an agreement to establish SPREP - the Secretariat of the Pacific Regional Environment Programme - as an independent, intergovernmental organisation to ensure better management and protection of the Pacific environment. SPREP’s mandate under the 1993 SPREP Agreement is to “promote cooperation in the Pacific region and provide assistance in order to protect and improve the environment and to ensure sustainable development for present and future generations”. This month SPREP pays tribute to the vision of our Pacific members as we celebrate our 21st birthday. SPREP provides assistance to Pacific countries and territories to protect and improve their environment and to respond to key challenges such as climate change and the management of waste. The Pacific environment is fundamental to sustainable development and the livelihoods of Pacific peoples. Put simply, if the Pacific environment both on land and at sea is poorly managed or treated then the livelihoods of Pacific peoples will suffer. SPREP’s focus is on working to support Pacific island members to address their environment and sustainable development challenges and priorities. I am pleased that SPREP has more than doubled its direct financial and technical support to our Pacific members over the last four years, in the areas under the SPREP mandate. We will continue and accelerate these efforts in support of our Pacific island countries and territories. SPREP had humble beginnings from an office

in SPC Noumea in 1972, then moving to the old Copra Office in Vaitele, Samoa in February, 1992 and then to our current SPREP Campus offices in Vailima, Samoa from 2000. From a one person Secretariat in 1972 we have grown to around 90 staff today. We are pleased to note that the first ever out-posted SPREP Officer, Moriana Phillip, is now working in the Office of the Environmental Planning and Policy Coordination (OEPPC) in the Republic of the Marshall Islands. SPREP has grown over the years but our core principle remain the same - helping Pacific island countries and territories and their peoples to better manage and protect their environment to ensure sustainable development. SPREP’s origins date to a Pacific regional conservation conference in 1969, which recommended the recruitment of a regional ecological adviser and SPREP started as a programme within the SPC (Secretariat of the Pacific Community). With each decade SPREP reached a new turning point. In July 1972 we began as a small programme that focused on the conservation of nature in the Pacific, based in the old headquarters of SPC in Noumea, New Caledonia. The 1970’s were a crucial time for SPREP as it was also during this time that plans evolved after discussions with Maurice Strong, the Director of UNEP in 1974, to hold a “mini-Stockholm” Pacific regional conference on human environment and prepare a regional environment programme. Stockholm was the first of the so-called Earth Summits held every 10 years since 1972, with the latest summit held in Rio de Janeiro last year. In the 1980s we continued to grow as a pro-

gramme. A coordinating group of organisations was formed comprising representatives of the South Pacific Bureau for Economic Cooperation (now the Pacific Islands Forum Secretariat); United Nations Environment Programme (UNEP); United Nations Economic and Social Commission for Asia and the Pacific (ESCAP); and SPC. The Forum Secretary-General was Chair and Arthur Dahl was the one-person secretariat in 1982. Things started to move with SPREP in the late 1980s with the appointment of Joe Reti and then Vili Fuavao as SPREP coordinators. At the time, there was considerable discussion regarding moving SPREP from a programme of SPC to an independent regional organisation. Like any birth, there are always nervous moments but we were fortunate for the guidance of wise men and women from many Pacific Islands to steer us through this process, including Robin Yarrow from Fiji; Sione Tongilava from Tonga; and Kilifoti Eteuati from Samoa. After lengthy discussions the decision was taken at the highest political level to establish SPREP as a separate regional organisation, based in Apia, with Vili Fuavao as our first director. In 1992 SPREP moved to Samoa and was established as an independent inter-governmental organisation with the signing of the SPREP Agreement in Apia on June 16, 1993. SPREP was born from the visions of great people and today we can see how far our reach has grown. The direct technical and financial support we provide to our members has grown over the last four years and we intend to accelerate this. Islands Business, July 2014 35

Business Intelligence

Experts warn of good quality kava exports By Hilaire Bule & Merita Huch

ith a German court ruling last month to lift a ban against Pacific kava exports, one of the region’s experts on the traditional commodity has warned about the need to monitor and maintain product quality. “Farmers planted all sorts of kava, traders and exporters are not controlling the quality of the kava being exported,” said Dr Vincent Lebot who’s based in Port Vila, Vanuatu. “The wrong varieties and wrong parts of the plant have been exported. This is potentially very dangerous because if some kava of poor quality is exported to Europe, it will mean the end of Pacific kava exports. “ Y o u have to understand that BfArM basically was quiet upset when they lost the case and they will be very happy if they discover that they were right. Now we are entering a very dangerous and risky period because if we don’t do our homework, we might export poor quality kava and that will be the end of the story.” BfArM is the German health authority agency that instigated the ban against Pacific kava exports into Europe in 2002. It had said then that some kava tablets were toxic and resulted in the death of a consumer. Pacific countries led by scientists like Dr Lebot then put together a case to challenge the ban in the German courts. Dr Lebot said when scientists made an evaluation of the so-called ‘German cases,’ none of them were valid. “We have accumulated very important types of evidence to demonstrate that BfArM overreacted when they decided to ban the kava, they had no scientific evidence and no quality control measures. Nothing was there to assess the risk at that time. It was really an over-reaction that cost over hundred millions of dollars to the South Pacific growers because not only did they lost German market overnight but also the entire European market because other countries like the United Kingdom and Switzerland decided to ban kava based on German’s decision,” said Dr Lebot. With the expected removal of the EU ban against kava exports from the Pacific, Samoa’s leading exporter Tagaloa Eddie Wilson believes growers should return to kava cultivation right away. He said by the time the ban was imposed, kava farms had taken up some 3000 acres of land in Samoa, and he estimated that Pacific kava exports earned US$250m between 1999 and 2000. Islands Business, July 2014

NZ reaps rewards from cash cows By Davendra Sharma

oaring demand for $NZ10 billion New Zealand milk and dairy products from the South Pacific region and parts of Asia has prompted producers to expand plant facilities in Christchurch last month. There are also projections for a 50 per cent growth in demand for New Zealand’s premium UHT milk over the next five years from the islands region and Asia. While Fiji is the largest importer of manufactured goods particularly dairy in the South Pacific, New Zealand regards the bloc of countries under the Forum collectively to be their seventh largest trading partner. New Zealand has broad trade and economic ties with South Pacific Forum island countries – though the trend is greatly in New Zealand’s favour. Last year, New Zealand exported in between $NZ1-1.5 billion to the island countries – especially Fiji, Tonga, Samoa, Papua New Guinea, French Polynesia, New Caledonia and the Cook Islands. In return New Zealand only sources imports of around $NZ100million every from the region. Australian-owned Goodman Fielder - which also manufacturing operations in Fiji, New Caledonia and Papua New Guinea – last month injected more capital in broadening its plant facilities in New Zealand to tap into the country’s burgeoning dairy sector. Goodman Fielder will upgrade its ultra-heat treated (UHT) milk plant in Christchurch to increase capacity amid booming demand for UHT milk in the Pacific islands and parts of Asia. “The premium UHT category in Asia Pacific is anticipated to grow by around 50 per cent over the next five years,” said Goodman chief executive Chris Delaney. “This project will provide us with additional capacity to address this growing market through our iconic brand distribution capability. We are invest investing now to meet that demand and also plan for future growth,” he announced. New Zealand’s white gold industry employs 45,000 workers tending about 6.4 million cows. China alone buys $NZ7.7 billion of Kiwi goods of which $3billion is dairy. For New Zealand, dairy is the largest foreign ex exchange earner, accounting for 28 per cent of over overseas sales in an economy where exports make up about a third of output. The Goodman Fielder expansion which will entail extending UHT building, installing a new pasteurising, sterilising and palletising line, and the installation of a new high-speed filler – will be completed in October next year. Goodman’s dairy business in New Zealand has had a somewhat erratic performance over the last five years but nevertheless the Australian owners reckon of all its operations around the world, the dairy aspect of their profits could be considered as one of the jewels in the company’s future. Demand for New Zealand milk and other dairy products bounced back pretty quickly after fears of outbreak of killer bacteria in their products that could cause botulism. It prompted recalls from China, Vietnam, Thailand, Sri Lanka and Russia, though Pacific Islander importers were assured that their products were not affected from New Zealand. New Zealand relies on business to the South

Pacific especially Fiji, which ranks ahead of Kiwi exports to Mexico, South Africa, Brazil and Russia. Pacific reliance on Kiwi white gold Over the years, consumers from around the South Pacific have become accustomed to pure milk and related dairy products like cheese and butter from New Zealand. So much so that milk and dairy dominates the list of exports from New Zealand, which earned $1.5 billion from trade with the region in 2011, reflecting a 12 per cent annual growth in sales. New Zealand sells more milk and dairy to the French territories in the region than it exports to mainland France. Fiji imports around 70 million litres of milk while its local production only yields around nine million litres from its 18,000 families in the smallholder dairy sector. Fiji Dairy also imports all of its powdered milk from New Zealand’s Fonterra, which is the world’s largest dairy exporter and was embroiled in a bacteria saga last year. Goodman’s struggles in South Pacific Whilst the Australian food giant is revamping its operations in New Zealand and at home, it is forecasting job cuts around the region – where nearly 6,000 employees are based. Its Fiji operations manager Chris Zaayman told media in April that Goodman intended to build a sustainable business in the region with better cost efficiencies than competitors. “As a leading local food manufacturing company, we have a process of continuous improvement to ensure that we gain the best possible efficiencies, while we executive in the most effective way,” he said.

Goodman Fielder sold By Samisoni Pareti

oldman Fielder’s new owners, Singaporebased Wilmar International and Hong Kong’s First Pacific Company have yet to reveal their plans for their Fiji and Pacific operations. Manufacturer of renowned brands like Meadow Lea margarine and Edmonds baking powder, Goodman Fielder’s operations in the Pacific are located in Fiji, Papua New Guinea and New Caledonia, in addition to New Zealand and its headquarters in Australia. The company website says it employs over 6,000 people in almost 50 plants in Oceania. In Fiji, Goodman Fielder is market leader in the production of frozen chicken through its Crest brand as well as its Tuckers Ice Cream business. Neither its Fiji General Manager Chris Zaayman nor the head of the parent company’s Corporate Office Martin Cole could respond by press time on the new owners’ plans for their Pacific Island operations. The board of Goodman Fielder International had approved in May a takeover bid of AU$1.37 billion from the two Asian companies.

Fiji cannery partner expands tuna loin contract to Samoa By Samisoni Pareti

Town, on Ovalau Island, off Suva’s northeast coast. Levuka was the country’s first capital. Through its partnership with Bumble Bee in San Diego, PAFCO processes tuna loins for exports to the US. This foreign contract makes up 95 per cent of its business.

tuna companies. “A Bumble Bee delegation was in Samoa (in iji’s Pacific Fishing Company – operator of the May) for a visit and continued discussions, where country’s main tuna cannery – believes it won’t they met with Prime Minister Tuilaepa Sailele Mabe affected by Bumble Bee’s interest in expanding lielegaoi who later announced the company’s plans its tuna loin business to Samoa. Former chairman for a loining plant in Apia that is scheduled to be of PAFCO Iqbal Janiff told Islands operational in 2016, if everything Business magazine that the Fiji cangoes well,” reported Samoa News. nery deals with cooked tuna loins for “Besides the loining plant, Samoa exports to Bumble Bee in the United News understands that Bumble Bee States. Its interest in Samoa however will also set up a fresh fish operais to do with fresh, frozen loins. tion. Samoa News (has) learnt .. that “There are two types of tuna Bumble Bee’s top executives will be loins,” said Janiff. “There’s the fresh in Apia to sign on June 24 an agreefrozen loins, which are fish that have ment with Samoa firming up its combeen gutted and skinned. Then mitment for the loin and fresh fish there’s the cooked loins, they need operations. to be cooked first before they are gutTupuola Terry Tavita with the ted. PAFCO does this second type of Prime Minister’s Office said that he loining while Bumble Bee is looking was not aware of the date to sign the at getting Samoa to do fresh frozen agreement, but acknowledged there loins.” had been a Bumble Bee delegation The US company’s foray into Sain Samoa. moa therefore won’t affect its part“Additionally, Tuilaepa mentioned nership with PAFCO, Janiff said. in Parliament that negotiations were He said his term as PAFCO chairon going with Bumble Bee and anman ended last May, but he is aware other company delegation was to be of plans to increase the capacity of Island smiles ... Bumble Bee executives in one of their visits to PAFCO in March 2002. in Apia later this month,” Tupuola PAFCO’s cooked loin plant. said via phone from Apia. Photo: File Photo CEO of PAFCO Ban Singh has An earlier report by Samoa News declined to talk about the latest newspaper had said that Bumble Bumble Bee investment. A report by the American Samoa-based Samoa Bee was working on a plan to process tuna loins in When the Levuka-based cannery, owned by News last month said that the Samoan �� GovernSamoa, and then export these for processing and the Fijian Government celebrated its 50th year of ment was forging ahead with plans for a tuna procanning to neighbouring American Samoa. The operations in 2013, it had 882 people on its pay cessing plant, with an agreement reportedly to be proposed relocation to Samoa was for tuna loins roll, of whom 70 per cent were women. Most of signed later (in June) with San Diego based Bumble processing only, something that PAFCO had been these come from villages near and around Levuka Bee Foods — one of the three major U.S. canned doing for Bumble Bee.

Kina Weakens, Cost of Living Increases in PNG By Ian Hetri

The decline in kina value is reported to be causing an increase in the cost of living in PNG. Prices apua New Guinea’s economy continued to of basic goods and service had increased markedly grow for the 13th consecutive year in 2013 and is expected to further increase until real LNG and inflation remained below forecasts. On acrevenue starts flowing in. The decline in the kina count of low international commodity prices and value has been attributed to PNG’s large and growhigh demand for imported ing current account deficit goods and services, the and broader strength in the kina depreciated against US currency according to the major currencies to the the ANZ’s Singapore-based benefit of PNG farmers and Economist Daniel Wilson. exporters, though it has put It is likely to contribute pressure on domestic prices to a much higher inflation and prompted the Bank of outcome, but it will give Papua New Guinea to introonly a modest boost to the duce new measures to stabination’s exporters, accordlise the kina exchange rate. ing to the analysis from To support this growth ANZ. As the value of the and in consideration of the kina weakens against the inflationary pressures, the Island magic... Rising fuel prices have become a US dollar, imported goods Bank continued to take a burden in PNG. Photo: Supplied such as capital equipment cautious approach by mainwill cost more. This analysis taining the monetary policy is supported by the Bank of signaling or Kina Facility Rate (KFR) at 6.25 perPapua New Guinea’s March Monetary Policy Statecent. The growth however has slowed in recent ment, which predicted an annual headline inflation months as the kina declines in value against major of 5.5% for 2013, up from last year’s modest 1.6% currencies like American and Australian dollars. rate.

One area that is causing great concern is the increase in the price of petroleum products including petrol, diesel and kerosene. Those in towns and cities who commute to work using motor vehicles are burdened with the increasing petrol and diesel price. Public transport costs have also soared. Those who rely on kerosene for cooking and in providing light especially in the remote parts of the country or the outskirts of the major towns and cities have been hit hard by the increase in kerosene price. Recently, Interoil advised through the Independent Consumer and Competition Commission that the Import Parity Prices (“IPP”) for the month of June 2014 will increase for petrol, diesel and kerosene. On average, the domestic indicative retail pump prices for fuel products will change as follows for all centres around the country; Petrol prices will increase by 3.81 toea per litre; Diesel prices will increase by 2.05 toea per litre; and Kerosene prices will increase by 1.69 toea per litre. InterOil has calculated the IPP based on an interim pricing arrangement as agreed mutually with the PNG Government. Islands Business, July 2014 37

RE-ADVERTISEMENT OF CHIEF EXECUTIVE OFFICER The Solomon Islands Ports Authority is a State Owned Enterprise charged to deliver essential port and stevedoring services at the declared ports in Solomon Islands (Honiara and Noro) on a commercial basis. The Authority has recently initiated a reform process with new vision and core values to give a better focus on its key functions to achieve its vision, mission and objectives. The CEO will be accountable to the Board of Directors for the privilege of exercising his or her authority. The CEO will drive the business and ensure the Authority delivers ‘second to none’ services to all its customers and healthy returns to its shareholders. The incumbent should exercise initiative and independent judgement in the performance of assigned tasks including strategies for a growth agenda for the company. The Authority now invites applications from persons capable of leading this dynamic and exciting company with a vision for growth and long-term development. Candidates must have international experience in Port Operations and Management and demonstrated financial, marketing, global business development and leadership skills to execute SIPA’s Strategic Plan 2013-2017. Candidates should also possess appropriate tertiary qualifications, business economics and management, engineering, and commerce, MBA or other relevant disciplines. Relevant postgraduate qualifications would be an advantage. Benefits and conditions are excellent and include a fully furnished company house and fully maintained company vehicle. All applications should be accompanied by detailed curriculum vitae outlining full personal details and information on qualifications and experience relevant to the position. Those who had applied for this position previously need not re-apply. All applications will be treated in strict confidence and should be marked and addressed as follows; “Confidential” The Chairman Solomon Islands Ports Authority P.O Box 307 Honiara Solomon Islands Applications close Friday 18th July 2014 at close of business. Further details of job description and selection criteria for this position can be found on Solomon Islands Ports Authority website: www.sipa.com.sb or contact CEO-Interim on: ceo-interim@sipa.com.sb or on phone (677) 22646.

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