August Edition

August 2012

Contents

Vol. 39, No. 08

Interview

42 Meet Xianbin Yao, ADB’s Director-General East Asia and the Pacific nvironment E 44 The challenges that await the Pacific in post-Rio But the solutions are in our hands

Fisheries

46 Breaking the boom-and-bust cycle Sea cucumber a lucrative trade

Regular Features 6 Views from Auckland 7 We Say 12 Whispers

NEW DILEMMAS FOR PM PUNA. Cover report—pages 16-22. Cover photo: Lisa Williams-Lahari

Cover Report

16 New dilemmas for Cooks

But PM Puna has a lot to offer islands leaders

14 Pacific Update 47 RAMSI Update 48 Business Intelligence

17 Changing face of Cook Islands politics Women step up in 2012 21 Cultural crisis for the Kia Orana people Problem building for decades

Forum

23 PIF at a crossroad

Setting a course for 2014 and beyond

24 Healing the Forum divide Apathy for regional body

28 Aust/France improved relations worry Temaru Marles: ‘We take our lead from France’

31 Get out of aid mentality

Why region needs to be independent, self reliant

Politics

32 Micronesian presidents push climate change Marshalls bids to host 2013 Forum meeting

34 Battle lines drawn as Vanuatu prepares for polls Asian links, workers and WTO hot issues

Business

37 CNMI flag carrier pulls plug before takeoff Saipan Air victim of fraud and racketeering

38 Islands want access for tuna into US markets But access withdrawn from treaty negotiations

Sport

41 Cricket: A pathway for Pacific youth

PNG, Fiji Vanuatu battle it out in Fiji Islands Business, August 2012 3

Managing Director/Publisher Godfrey Scoullar Group Editor-in-Chief Laisa Taga 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

Fiji Samisoni Pareti

Dionisia Tabureguci

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

Sam Vulum Patrick Matbob Peter Niesi

Solomon Islands Evan Wasuka

Alfred Sasako

Tonga Taina Kami-Enoka Vanuatu Bob Makin 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.

Copyright Š 2012 Islands Business International Ltd. All rights reserved. No part of this publication may be reproduced without the written permission of the publisher.

www.islandsbusiness.com 4 Islands Business, August 2012

Column

Views from Auckland

BY DEV NADKARNI

The ticking time bomb of food security Last month, Kiribati President Anote Tong, when asked why his country was acquiring land in Fiji, said it was primarily for reasons of food security. He dispelled the notion that the move was for finding a new home for Kiribati citizens.

The world’s media has focused on Kiribati over much of the past decade as one of the nations most threatened by sea level rise.

While the effects of climate change are clearly evident all over Tarawa Atoll—more frequent king tides causing increased flooding, erratic rainfall depleting the water table and increased salinity making agriculture difficult—the atoll nation’s far more immediate problems are less evident. These problems are far more serious than the much talked about sea level rise.

Also last month, Catarina de Albuquerque, the United Nations’ Special Rapporteur on the right to water and sanitation, on a visit to Kiribati, said that the water supply situation in the country was “unsustainable,” and needed urgent measures to ensure access to a sufficient quantity of water for personal and domestic uses.

Food security and access to safe water are growing problems on several Pacific Islands that do not get the kind of media attention that climate change and sea level rise do, although the two problems are connected to an extent. But as well as climate change, a number of other humanmade factors affect food security.

Food security is one of the Pacific’s most pressing issues. Despite this, it gets little attention in the public discourse. As a single issue, food security—which is informally defined as secure, regular access to affordable and nutritious food for all people within communities and nations—has a direct impact on health, poverty, environment and economy, besides affecting almost every other aspect of human life.

It is hard to imagine the Pacific Islands as being deficient in food and freshwater. But away from the gloss of their touristy depiction, many Pacific Islands, especially the smaller ones situated away from the main tourist centres find themselves at a tipping point.

Scattered isolated communities’ access to food is increasingly being affected by growing fuel costs and irregular shipping schedules. The Pacific Islands are feeling the effects of inefficient world food systems that have developed over the latter half of the last century around access to cheap energy.

In addition, climate change, declining fresh water reserves and a struggling private sector exacerbate the problems. These factors make sustainable agricultural development in the 6 Islands Business, August 2012

Catching a wave in Waikiki...a report claims the people of Hawaii are just 9 meals away from hunger and 20 meals away from starvation. Photo: Trevor Templeman

pursuit of self-sufficiency in nutritious food difficult in the islands, increasing dependency on imported foods.

This dependency on global food supply exposes the islands to fluctuating world prices, supply constraints and world trade rules. Even worse is the fact that aid agencies as well as islands governments have shifted their focus away from investment in agriculture in the past couple of decades, discouraging indigenous agricultural practices.

The dependency on food imports is near total in some islands: a recent report from the Centre for Sustainability in Maui, Hawaii, documented that 95% of the island’s food is imported and delivered by just one shipping company weekly.

It claims the people of Hawaii are just 9 meals away from hunger and 20 meals away from starvation if that ship fails to arrive.

While Pacific Islanders do not suffer from caloric deficiencies, there is a rising incidence of nutritional deficiencies. This combined with an over reliance on imported processed foods high in carbohydrates, fats and sodium has led to an escalation in lifestyle diseases—especially Type II diabetes, coronary heart disease and obesity.

Agriculture’s impact on environment So how do we make the islands self-sufficient?

While reviving, promoting and subsidising agriculture seems to be the logical answer, it may not be the right solution for all the islands. That’s because not all islands lend themselves to efficient agricultural practices.

The islands of the region are made up of three

kinds of geologies: volcanic islands, sand islands and coral atolls. Atolls and sand islands provide little by way of suitable soil for traditional agriculture. Current Pacific agricultural practices are restricted to islands with volcanic soil structures.

While traditional soil-based agriculture is appropriate for islands with volcanic soil, it can produce negative environmental impacts, especially on smaller islands with high population.

Many Pacific Islands also have little infrastructure in terms of mechanised farming techniques, trained manpower and even basic agricultural support systems like freshwater storage, further compounded by unreliable rainfall that makes freshwater availability low and uncertain.

The majority of the water, nutrients, pesticides and herbicides added to facilitate crop production never reach the crops and are lost to the surrounding environment. Those losses, often in highly concentrated forms, also have a serious impact on the surrounding marine environment as most water tables are directly linked hydrologically to the surrounding aquatic marine and littoral environment. This is especially true in the case of coral reef ecosystems, which are already under stress from increasing acidification and the effects of climate change.

Also, due to a long history of some form of soil-based agriculture, many of the soil now suffer from a lack of available nutrients required for crop production. This means that inorganic fertiliser application is now common practice to provide the nutrients needed for crop production.

Farmers tend to use a plethora of pesticides and herbicides to control weed and insect pests.

The application of inorganic fertilisers, pesticides and herbicides are known to have detrimental effects on the associated land-based and marine environments of the islands.

Because the soil contains high proportions of sand, water infiltrates easily and is quickly lost to the water tables below the surface of the land.

So the poor quality of freshwater from water tables that the UN Rapporteur was referring to in Kiribati is not only polluted because of its proximity to sewerage systems but would also be laden with any pesticides and fertilisers used for farming.

This is a dangerous cocktail of chemicals in an area where freshwater is already scarce and is almost completely rainfall dependent.

Agriculture ministries around the islands are wary of these issues and some have begun to stress on organic farming with lower use of synthetic fertilisers and using more ‘green’ or organic pesticides as well as farming practices. But these come at a price and will take time before it is implemented.

So what are the solutions for addressing the islands’ problem of food and water security, which is only going to get worse in the future?

Countries of the developed world have embarked on multi-million dollar problems to address their own food security issues—the problem is a global one and not just restricted to the islands or developing countries.

Already, a billion people go hungry on most nights. This number is expected to rise alarmingly by 2050 if nothing is done urgently. A few workable solutions are now being proposed and even being tried out.

In my next column, we will look at some of these, which is making its way into the Pacific Islands region.

WESAY ‘These announcements reflect the rising confidence of New Zealand and Australia that the Fiji leadership is on the right track, although they couldn’t be caught dead saying it in so many words in the media. In their pronouncements, both countries have been cautious. Despite their financial commitments, they still continue to indicate a wait and see approach. It is an understandable diplomatic approach, especially with an eye on public opinion on home territory.’

L

ast month’s announcement of the New Zealand government’s commitment to provide financial assistance to Fiji’s election process is probably the first visible milestone of several months of low profile, behind the scenes interaction between New Zealand’s top officials and those of Fiji’s military-led government.

New Zealand’s public stand on Fiji has been uncompromisingly strident since the regime took over the running of the country in December 2006. As well as banning people officially associated with the regime to travel to or even transit through New Zealand, Wellington has lobbied to exclude Fiji soldiers from United Nations’ peacekeeping operations in other parts of the world—unsuccessfully.

It has also been instrumental in lobbying to keep Fiji out of regional organisations like the Pacific Islands Forum, whose leaders will meet at the end of this month for their annual soiree in the Cook Islands capital of Rarotonga.

In all these years since the 2006 December action in Fiji, there have been many an unpleasant exchange in the media between the leaders of the two countries, which has polarised opinion particularly in New Zealand about its continuing policy of isolating Fiji, rather than showing any willingness to work with it on a path toward democracy. The efforts of apolitical emissaries of the stature of former New Zealand Governor General, the late Sir Paul Reeves, also did not work towards fostering better understanding between the two nations.

The change in government from Labour to National in 2008 did not change that policy of isolation which Labour had put in place and the political relations between the two countries seemed adrift and headed for nowhere—even though all this while, more and more New Zealanders were holidaying in Fiji despite the negative vibe that made its way into the media’s opinion columns.

New Zealand was determined to wait until it could see discernible action on the Fiji regime’s promises of holding an election in 2014, especially after previously promised election schedules came a cropper. And it is about a year ago that these signs began to show, with a slow change in the tide of international opinion about the way the Fiji regime’s leadership was headed.

Behind the scenes activity between a select set of top officials of both countries has been under way since then, away from the glare

of the media and both New Zealand and Australia have shown confidence in the Fiji leadership’s electoral plans. Although little has been said by way of media releases, the fact that the governments of ANZAC nations have committed funds to the forthcoming Fiji election alludes to the fact that both countries have diligently kept track of the developments in Fiji.

Australia last month also announced it would double aid to Fiji in 2014—significantly, the year of the promised election.

These announcements reflect the rising confidence of New Zealand and Australia that the Fiji leadership is on the right track, although they couldn’t be caught dead saying it in so many words in the media. In their pronouncements, both countries have been cautious and despite their financial commitments still continue to indicate a wait and see approach. It is an understandable diplomatic approach, especially with an eye on public opinion on home territory.

The fact that there has been no talk of sanctions being removed and pointed comments about any normalisation in diplomatic and other relationships not likely to happen any time soon are not to be taken as a lack of confidence in the Fiji regime’s plans so much as the compulsions of realpolitik.

If it indeed were the lack of confidence, there would not have been announcements of financial aid in the first place.

But there is no doubt both countries are wary of the uncertainties associated with the ground realities in Fiji. It would be naïve for anybody to be absolutely reassured that the path to the 2014 election will be smooth and without anxiety. There has already been some discontent reported between members of the international constitution commission, charged with drafting a new constitution for Fiji and the regime’s Attorney General, which New Zealand’s Minister for Foreign Affairs Murray McCully has sought to downplay. These perceptions that could lead to raised eyebrows following an air of uncertainty are exactly what the Fiji regime will have to manage in the weeks and months to come.

There are other uncertainties, too, that would undoubtedly be playing up in the minds of leaders of New Zealand and Australia, as well as those throughout the region and even the world.

Visible signs of changing positions

Islands Business, August 2012 7

WESAY The path to elections is only part of the story. No matter how good that path looks today and assuming the way ahead until 2014 would be smooth with only the smallest of bumps, if at all, there must be questions around the transition of power to the newly democratically elected government after the election.

There would definitely be questions relating to the role of the senior leaders of the regime, as well as that of the Fiji armed forces after the election.

For instance, what role, if any, would the present regime’s leaders play, if at all, after the election? Would the new constitution have something in it to address any of these concerns?

Would the present regime join issue with what new laws might have to say about these issues? Could that possibly turn the path

to 2014 a trifle bumpier? Given these questions, the softly, softly approach of the New Zealand and Australia governments is commendable. But then as part of their behind the scenes maneuvers and deliberations over the past couple of years, which led to this thaw in the first place, the governments must have some assurances from the regime’s leadership of what the likely scenarios would be after the election. In fact, there might even be a plan that is too early to believe as being foolproof and to be disclosed.

There is much that could be speculated behind the sudden thaw in relations between New Zealand-Australia and Fiji.

But be that as it may, the signs look promising and the naysayers seem to be clearly running out of steam to pursue their anti-regime stance with the same gusto as in past years.

‘The Pacific islands are not immune to this scenario.

Illegal immigration is rife throughout the islands region.

Much of it is under the radar because of well oiled networks of people smugglers from overseas being in cahoots with local officials of islands governments—even ministers and elected representatives in many instances—and business people.

Little is reported in the local and regional media.’

I

mmigration fraud is on the rise almost throughout the South Pacific region.

Instances of people using new and creative methods to illegally turn up on the shores of several nations in the South Pacific—including New Zealand and Australia—are being recorded with more frequency than ever before. While immigration fraud has been going on for sometime now, it has become more brazen in recent years.

Last month, the media in New Zealand were awash with reports of hundreds of Chinese students who had “disappeared” after entering the country to ostensibly study but were actually detected working on farms hundreds of kilometres away from places they were supposed to be studying at. Many of these “students” have been found but a fairly large number are hard to detect.

The New Zealand immigration department now faces the task of building individual cases at enormous expense and time with a view to deporting them. There will then be appeals and hearings that will prolong the process—all at the unsuspecting taxpayer’s expense.

The New Zealand government has ordered an investigation into its overseas visa offices in China to get to the source of the malpractice in this particular case. Such immigration fraud scenarios are being played out across the Tasman in Australia with more regularity.

Once again last month, there were cases where New Zealand residents of Chinese origin allegedly reported their passports lost

8 Islands Business, August 2012

while travelling in Australia, returned to New Zealand on temporary documents and sold their passports to others in China who travelled to Australia as New Zealand citizens on these altered passports.

Australia has the additional problem of thousands of people turning up on its shores in boats demanding refugee status from a variety of countries. Although this cannot be termed fraudulent because there are genuine cases of refugees turning up, it is increasingly harder to establish genuineness.

The issue has taken such serious proportions that it has polarised the country’s political scene bringing in a paralysis of policy to tackle the situation, while in the meantime the problem looms even larger.

The Pacific Islands are not immune to this scenario. Illegal immigration is rife throughout the islands region. Much of it is under the radar because of well oiled networks of people smugglers from overseas being in cahoots with local officials of islands governments —even ministers and elected representatives in many instances—and business people. Little is reported in the local and regional media.

But there is clear anecdotal and experiential evidence of changing demographics around the region’s islands nations. The look north policy adopted by several Pacific Islands nations has resulted in increased numbers of Asian nationals turning up on their shores and building their businesses while at the same time getting more people from their home countries to run them. They then find

WESAY creative ways of staying put long after their visas have run out. This, they achieve with a combination of guile and corruption with not a little help from local authorities.

Cases of Chinese construction companies bringing in workers for a certain project who simply stay put and do not leave are on the increase in countries like Samoa. These workers then start small businesses like stores and restaurants in urban areas. Local indigenous businesses are now beginning to feel the heat of such competition but are unable to determine whether these businesses are legitimate and the people running them are legal residents because of the lack of avenues of finding out from opaque government departments and uncommunicative officials.

Over in Melanesia, incidences of passport scanIllegal dals in Vanuatu and the Solomon Islands are on immigration the rise. News stories of passports being sold to rife in region Asian nationals are being reported in the media with greater regularity. While many wealthy Asian businesspeople are legitimately meeting the investment thresholds in these countries, the host governments have little or no capacity, competence or international connections to verify the source of their funds or their character.

Selling of passports for a price is not new in the Pacific Islands

region—we have seen instances of this in Tonga decades ago. But that was more an aberration. What is happening now is systematic, clearly in collusion with a number of elements including government officials, ministers, people in power and businesspeople. These people are becoming so brazen that so-called investors are openly asking how much “investment” it would take to gain permanent residency.

Countries like New Zealand have mechanisms to investigate and even reject such genuine sounding requests on the basis of background checks and following past money trails of the applicants.

There have been incidences where seemingly genuine cases have been rejected. The islands have few such mechanisms. Much of the business in the islands is done on a face to face, personal contacts and recommendations basis. This could prove dangerous to the islands in the long run.

Islands governments need to share more information among themselves and between Australia and New Zealand if they are genuinely interested in tackling this spiralling criminal activity. If left unchecked, it will undoubtedly cause socio-economic problems of the kind that will hark back to early colonial times.

For what is happening now is colonisation by stealth, with the use of power and money and quite clearly, complicity with the powers that be—whether it is all made to look official or not.

‘In recent years, there have been several attempts to look at ways of reducing the islands’ aid dependency.

One of these ideas proposed and espoused by the Pacific Islands Forum for sometime now is aid for trade.

This involves promoting trade mechanisms and human capacities between countries within and outside the region to accelerate economic development and also channel aid in programmes that promote investment, create jobs and boost local economies.’

A

id dependency in the Pacific Islands region has long reached the point of no return. The quantum of aid has grown exponentially across decades, and islands governments have done little to stem this increasing dependency of being on the international dole to even meet the budgetary commitments required to run their countries.

For nearly all of them, decades long political independence has not translated into economic independence; in fact, if at all, the years since they began governing themselves, their dependence on

external economic and developmental aid has only grown by leaps and bounds. Most islands economies are so helplessly in the vicelike grip of foreign aid that it is hard to see how they could possibly shake off its debilitating yoke.

For many islands governments, the aid mind-set has taken such deep roots that there appears to be both an unwillingness and a complete lack of capacity in the leadership to evolve credible national or regional strategies for exiting the aid trap. Instead, all efforts are solely directed at securing more of it even if it means increasingly Islands Business, August 2012 9

WESAY conditional flavour in doling out aid especially among Western countries in the media.

These leaders have clearly been emboldened by the emergence of China and the Asia Pacific tiger economies, whose brand of aid has, at least at first glance, far less strings attached. Many of these new donors are willing to blur the lines between loans and aid, often writing off cheap loans to convert them into grants at the stroke of a pen on a mere request from a country’s political head.

Alarmingly, this is being welcomed by some Pacific leaders, who are either naïve to believe in the ostensible generosity of new donors or have a lot to answer to their people about their rationale for doing so. For no matter what, there would be strings attached although they may be less obvious or even invisible as of now but could reach menacing proportions in no time at all.

In recent years, there have been several attempts at all sorts of levels to look at ways of reducing the islands’ aid dependency. One of these ideas proposed and Flying high...emergence of China and the Asia Pacific tiger economies, whose brand of aid has, at first espoused by the Pacific Islands Forum for some time glance, far less strings attached. Photo: wilkapedia.com now is aid for trade, which involves promoting trade mechanisms and human capacities between countries within and outside the region to accelerate economic putting their vulnerable economies at a progressively greater disdevelopment as also channel aid in programmes that promote advantage over the next few decades. investment in the islands to create jobs and boost local economies.

No aid comes without strings attached. For one, much of the aid Though the intentions are noble and the strategy novel, and at is of the boomerang variety, with funds going back to donor counfirst glance workable, the practicalities make it difficult to achieve. tries as consultancy fees and payments to suppliers of equipment, The tyranny of distance, small populations and therefore small machinery and services. markets, lack of infrastructure, lack of human capacity and poor Indeed, it is a subsidy given to their own country’s industries by transportation links all conspire together to make the task uphill. stealth, while basking in the warm and fuzzy glow of altruism. This This has left few options for islands to develop their economies, is then depicted at projects sites with bold signage across recipient one of the more successful ones being tourism. But that too, in nations, while typically only a small portion of the overall allocation the face of fierce competition on both price and quality from other in all probability might have reached the actual aid projects. destinations the world over, combined with events like the global But that indeed is small beef. Aid donors leverage their aid in financial crisis, has been left languishing in recent years. other less obvious and opaque ways, such as leveraging their larBut perhaps the biggest impediment towards investment promogesse by gaining increased access to natural resources in the islands’ tion in the islands is the traditional attitudes to land. This has always sovereign territories. been an extremely touchy issue across the region and the holiest The Pacific Ocean is the largest geographic feature on the planet of cows culturally. and relatively the most unexplored one. The boundaries of many However, the fact remains that historically economic developof the islands’ territorial waters have in recent years been expanded ment has been driven by the acquisition and development of land. out into the ocean, thanks to new data about the extent of their This is so all over the world in all eras of history. In every age, it is continental shelves. land that has delivered economic progress, no matter which way one might look at it.

This development has brought more of the The socio-cultural taboos surrounding land make it impossible The clutches hitherto open oceanic territory under their sovin the islands to put a value on it and make it available for leveragof aid ereign control and triggered off a race among ing for instance, availing commercial finance to facilitate long-term dependence distant wealthy nations for the bounty of natural investment. Land is a central issue holding back investments of scale resources, ranging from fish to minerals under and therefore non-aid dependent economic progress. the sea floor.

This is borne out by the fact that islands countries with a greater It comes as no surprise therefore that mining giants from far off proportion of non communal land that is open to commercial lecontinents are financing satellite and cable broadband networks in verage tend to do far better economically in terms of private sector the islands as was announced last month in a section of the regional investment and the ability of the private sector to create jobs. media. The extent of the pound of flesh expected in return has not As long as the traditional socio-cultural attitudes to land remain found a mention in the media report, but expect it to be substantial. unchanged and with the practical geophysical realities of the islands Western nations have progressively tightened their parameters for set to remain as they always have been, it is hard to see the region administering aid and they are demanding more transparency in the freeing itself from the clutches of aid dependence. implementation process and increased accountability for the use of funds. Some islands leaders have openly criticised this increasingly • We Say is compiled and edited by Laisa Taga.

10 Islands Business, August 2012

Whispers Mobile bogeyman: A recent report by a representative of the United Nations Population Fund in the region revealed how elders in a province in Vanuatu were concerned about the use of mobile telephones by their young people.

There is apparently alarm over how pornographic materials are being pushed through these devices to the children and it has even been blamed for a noted trend of early teenage pregnancies.

“Mo-po” or mobile pornography as it is called, is estimated to be worth around US$2 billion in 2009 and growing, said the writer, while in the United Kingdom, BBC reported it a norm amongst teenagers to make videos of their sexual encounters and distribute them over the Internet once they broke up. One’s child does not need to be connected to the internet to receive such a material, the writer added. Just a text message.

Parents and community leaders in the Pacific have been urged to address the issue of technology in the hands of their children.  Panacea for beer blues? Could a panacea for the recent beer blues in Fiji be in sight? Whispers gathered that the country’s regulators have tied certain conditions to the approval of the sale to Coca-Cola Amatil of what used to be the Australian-owned Fiji-listed Foster’s Group Pacific Ltd. The special conditions will ensure the interests of minor shareholders are not trampled upon should Coca-Cola launch a full takeover, which commentators say looks very likely. Previous takeovers and mergers executed at the Fiji bourse have unfortunately earned a bad reputation of being unkind to minor shareholders, who have ended up being forced to sell their shares lower than the quoted prices. The 600 or so minor shareholders in the Fiji brewery—among them Fiji’s National Provident Fund—now appear to face better prospects.  Mystery in the soil? Money, as they say, talks.

It has been blamed as the reason behind an alarming lack of questions over the way bauxite mining is taking place in Fiji. Thousands of tonnes of soil supposedly containing bauxite ores are now shipped out of the country on a regular basis as there are no local facilities to extract them or do scientific tests. Observers are wondering how Fijian authorities determine how much bauxite are in those soil and whether or not they are taxed. Do the authorities rely only on information provided by the Chinese company mining the bauxite? If yes, how do they determine the accuracy of the data? Another concern is how there is no way of knowing what minerals are really in the soil. Bauxite? Gold? Previous studies done in this particular area revealed the presence of gold.

So if by any chance the exported soil is carrying any gold, it is, by default, going out of the country undocumented. Observers believe the millions of 12 Islands Business, August 2012

dollars already paid to the government in licence fees and to landowners as royalties have sort of watered down any such concerns.  Tender uproar...And still on Fiji mining, did you hear the rumours about how a certain heavyweight foreign miner won a government tender to operate a long-closed gold mine near the bauxite pits? Claims are that it won without putting in any tender documents. So much for transparency.  Bankrupt blue chip? An apparently bitter and disappointed engineer on a prominent Fijian shipping company that services local maritime routes was spotted at a Suva watering hole drinking his sorrows away. The reason? The company was selling its two well-known ferries to another local shipping company because it was cashstrapped and going out of business. What pissed the engineer was his decision to stay on with the company despite lucrative overseas offers only to find himself in the predicament—no job, and the overseas offers have long gone. As for the shipping company, chaired by one of Fiji’s ex-PMs, time will tell if it can pay off the loan it took not so long ago from the country’s development bank to start its ambitious project.  Food for thought: The Ambassador of the Republic of China to the Marshall Islands spoke at a luncheon recently and part of his speech zeroed in on aid to the region. He said that Taiwan was a recipient of US aid, but they grew out of it and have become a developed state. He said the region receives so much aid but they don’t see that aid making a significant difference to graduating the Pacific Islands States from being aid dependent to aid independent.  Words of wisdom: Recently, Dr Transform Aqorau of the PNA Secretariat made a presentation to the Micronesian Presidential Summit where he showed them how since the establishment of the PNA Office in Majuro, PNA countries have doubled the gross value of the raw material of tuna from US$1.5 billion in early 2010 to US$3 billion in 2012 through the scarcity under the Vessel Day Scheme. “But we are not getting the benefit of the increase in the gross value of the resource because the economic outcomes from rental arrangements are subject to negotiations. So unless we change our mindset about being wealthy custodians of our billion dollar resource, and pursue alternative models of development other than access arrangements with Korea, Japan, US, China, and the EU, we

Tales from FOPA Equalling the score: Riding high on the back of the perceived success of the Festival of Pacific Arts (FOPA), Solomon Islands Prime Minister Gordon Darcy Lilo, as head of government of the host nation, was a satisfied man. Whispers has been told the boss took his family and some staff to one of Honiara’s pricey joints for a quiet afternoon cuppa and snacks as a treat for a job well done. Soon orders started coming through. Protocol dictates that the boss man should have been the first to be served. Not in this instance. Some staff, it appears, have had their own way in getting their message across to the boss as well.

Those who witnessed the spectacle said everyone in the party was served but the boss. And he waited and waited until someone inquired as to what has happened to the boss’ order.

“It’s coming,” the staff assured the inquirer. And why did the staff do it? Well, Whispers has been reliably informed that during FOPA, the Prime Minister kept staff and guests waiting for more than an hour at a function held at the residence of one of the diplomats in Honiara. The joint provided the catering.

Due to the boss’ late arrival, staff had to work very late into the night, which was not welcome by the hubbies. “If he thinks he is smart to keep all of us waiting, well, we know of more ways than one to equal the score,” one staff jokingly said afterwards.

Not sure whether poor old smart Gordon knows will continue to be donors to their industry by creating jobs, and wealth from our resources!

This region is in dire need of a change in thinking and attitude by regional and national officials with journalists holding all of us increasingly accountable for our failure to capture a greater proportion of the wealth from our own resources. Development dependency weakens, not strengthens our Pacific Islands.”  Getting the ‘gong’: Solomon Islands businessman Bruce Saunders finally got the ‘gong’.

Awarded the much-coveted Knight of the British Empire (KBE) this year, he can now be rightly addressed as Sir Bruce. But questions are being asked as to how many committees there are that decide the Imperial and Solomon Islands Honours and Awards. Presently, it is decided

Whispers about this, though? Perhaps, now he knows what goes around comes around.  Food outlet gets on staff: An established Honiara food outlet with a growing international clientele is getting on its staff. Shortly after FOPA closed on July 14, it notified staff in writing that the company would no longer provide transport or taxi fares for staff doing the early morning shifts or late night catering for official functions. At the same time, monthly bonuses which were the standard thing, have also stopped. The company had accused staff of not turning up for work during the festival—a claim staff have rubbished. “We all started work around 4:30am and finished around midnight every single day during the festival,” the staff protested.

The company reportedly made tons of money during the cultural festivities. Staff claimed they were not even paid overtime, which is legal in Solomon Islands. Staff are still trying to find out why the company treated them this way after raking in so much money for it. They all concluded that their punishment could be linked to treating the Prime Minister with disrespect.  Life after the festival…If you thought the Festival of Pacific Arts committee members will be taking their hard-earned rest now after the festival is over, think again. The organisers are now having to face some very angry contractors, performers and volunteers who have been complaining about the FOPA committee reneging on contracts, paying less than what was initially agreed to or not paying at all.

Whispers’ agents in Honiara say things are in such a mess because some of the agreements were either made verbally or through some ad hoc arrangement because of the pressure to get things ready at such short notice. The Honiara agents say it will be a long time before some people get paid, if ever. by a committee that operates within the Office of the Prime Minister. The committee sends its recommendations to the Prime Minister who in turn endorses the list and in turn sends it to Government House for onward transmission to Buckingham Palace. Earlier this year, the committee recommended retired politician, former Prime Minister Francis Billy Hilly for a knighthood ahead of another candidate. It has come to light that Sir Bruce’s name was not even on the list. Solomon Islands truly operates in a mysterious world.  On a lighter note: Everyone’s afraid of death—or at least just about everyone. So knowing that even in pleasure one’s surrounded by danger and perils in life, quick thinking and sometime evasive action can make a great differ-

ence between life and death. A couple in Honiara found that out during an earth tremor which hit the Solomons’ capital just before midnight on 25 July. And that story is making the rounds big time in Honiara. It was reported the couple was in the high of their business when suddenly a 6.6 tremor hit. The hubby reportedly was the first to jump out leaving the wife behind. Not only did he jump, he actually ran onto the road, where other equally frightened souls had sought safety.

He discovered to his embarrassment that he had nothing on except his natural harpoon. Given the shock to the system, everyone who saw the night prowler was wondering whether he went back to complete his domestic duties. The missus had a better idea. Word has it that the better half abandoned the sack, complaining that if the man only cared about his own safety and pleasure, what should she be treated for?  TV for Tuvalu? Whispers hears that Tuvalu wants to have a television service of their own.

A government delegation from there was in Suva last month looking at possibilities. Whispers was told the delegation spoke with one TV company in Suva and was also advised to talk to the Secretariat of the Pacific Community.

Advertising & Marketing Manager Sharron Stretton Advertising Executives Tomasi Raikivi 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.

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Kiribati Newstar – Kiribati

Airline bump: It was the talk of the town when top regional organisations heads met in Suva last month: the bumping off of passengers on a certain airline. A senior Forum official said he went to Tarawa once and got bumped off after the airline overbooked.

Last year, another senior regional head and a reporter were bumped off from the same airline from Port Vila. At least three other regional heads were also heard talking about how the food served on the airline is really cheap and one would be better off eating before flying out.

One Stop Stores – Kiribati Robert Reimers Enterprises – Marshall Islands Pacific & Occidental – Nauru South Seas Traders – Niue Nouvelle Messageries Caledoniennes de Presse - New Caledonia Wewak Christian Bookshop - Wewak, PNG Boroko Foodworld - Boroko, PNG

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UPNG Bookshop – Papua New Guinea

Widening the tax net: The Fiji tax man is looking far and wide for every opportunity to scoop up tax revenue. The latest on their list of ‘candidates of interest’ are the considerable number of Fiji citizens working in the United Arab Emirates as pilots and aviation engineers and earning nice chunky salaries too.

The tax man’s interest is piqued by the fact the UAE has no income taxes and ‘horror of horrors’ are paying no tax at all to anyone and ostensibly is not liable to pay Fiji tax as they are residents outside Fiji. The whisper is that the boys in Nasese are brooding over this. Perhaps a freshly minted decree may be forthcoming?

Lucky Foodtown – Samoa Wesley Bookshop – Samoa Panatina Chemist Ltd – (Honiara) Solomon Islands Friendly Islands Bookshop – Tonga Tuvalu Air Travel, Shipping, Trade and Consultancies – Tuvalu Stop Press – Vanuatu

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Islands Business, August 2012 13

Pacific Update

Marshall Islands deportations from U.S. on the rise

By Giff Johnson

N

early one-third of all Marshall Islanders today live in the United States, attending school, working and seeking opportunities that do not exist in their poverty-ridden home. But an increasing number of islanders are finding out that the special relationship between Washington and this western Pacific nation that provides them visa-free access does not extend to islanders convicted of felony crimes in the U.S. More Marshall Islanders than ever before are being deported from the United States, a development the Marshall Islands ambassador to Washington believes reflects stepped-up coordination between state and federal law enforcement agencies in the wake of 9/11, as well as the presence of at least 22,000 islanders in America.

“There are more cases of Marshallese being deported,” Ambassador Charles Paul, who is based in Washington, said in Majuro in June. “It is more than in previous years.”

Riem Simon, who served seven years of a 20year sentence in a U.S. federal penitentiary for criminal assault and was recently deported to Majuro, said islanders currently in deportation detention facilities need help that they are not getting from their government. Most importantly, he thinks the Marshall Islands government should work to stop Marshall Islanders—particularly those who have been convicted of first-time offenses— from being deported.

Most Marshallese in deportation proceedings “want the embassy to make a miracle,” said Paul.

“But our hands are tied.” The Marshall Islands government cannot intercede in deportation proceedings for the same reason the U.S. government doesn’t meddle in legal processes in the Marshall Islands, Paul said.

Simon and a group of Marshall Islands men awaiting deportation in a Louisiana-based detention facility appealed in a letter to the government for help. Simon thinks his government should be

lobbying the U.S. to eliminate deportations of firsttime offenders. He said most islanders have little English language ability and few skills to navigate the legal system in America.

“Ninety nine percent of the Marshallese guys in jail don’t speak English,” he said. When they ask for help from the Marshall Islands Consulate in Springdale, Arkansas—where an estimated 10,000 Marshall Islanders live—or from the embassy in Washington, they get little to no response, he said.

The largest concentration of Marshall Islanders in the U.S. live in Springdale, Arkansas, with thousands working for poultry packing giant Tyson Foods and other factories in the area.

For many of the Marshallese men who go to the U.S., “their biggest problem is drinking,” Simon said. But he believes the reasons they are getting picked up by police and jailed are relatively minor.

“They got drunk, had a fight, and end up in jail.

Next thing they know, they are deported,” he said.

They are being charged for assaults or public intoxication, not murder or drug use, he said.

Simon is now back in the Marshall Islands where he is working with local church and youth groups talking about his experience in an effort to help others avoid what happened to him.

As Simon learned, a felony conviction virtually guarantees deportation. If a person is convicted of a misdemeanor, deportation hinges largely on whether or not the misdemeanor is classified as a “crime of moral turpitude”. Crimes of moral turpitude is a gray area that is often interpreted differently depending on each state, he said. But crimes such as drunk driving, spousal abuse and fraud are termed as crimes of moral turpitude in the United States and are grounds for deportation, he said.

Paul said the most important advice the embassy offers is for people to use a lawyer. “They know how to navigate the system,” he said. Paul said that some Marshallese defendants who have not had the benefit of a lawyer’s advice have agreed to plea bargain deals offered by prosecutors that ultimately result in their deportation.

As the number of people from the Marshall Islands living in the U.S. has skyrocketed in recent years in response to lack of educational, health and job opportunities at home, the Marshall Islands government two years ago produced a DVD as well as pamphlets highlighting the “dos and don’ts” to successfully live in the United States that have been distributed widely. Paul said he is aiming to hire additional staff for the Washington Embassy and is working with two consulates, one in Honolulu, the other in Springdale, to be proactive in addressing the situation of Marshall Islanders facing criminal prosecutions and possible deportations.

Simon says the deportation situation is unfair, particularly because many islanders are not repeat offenders. “Why are they being deported?” Simon asked. “These guys are in for first time offenses.

Everyone deserves a second chance.”

Once a non-U.S. citizen is convicted at the local level, his case file is automatically transferred to U.S. Immigration and Customs Enforcement (ICE). “A person can still be in jail or out on parole and the Feds will pick him up and put him in a deportation holding facility,” Paul said. “They take possession of foreign nationals until they have an opportunity to see an immigration judge.”

Unlike a criminal case, where defendants are entitled to a court-appointed attorney, deportation is an administrative procedure. If a Marshall Islander under threat of deportation wants a lawyer, they have to pay for one and since most cannot afford the legal fees, they go before an immigration judge with few skills to fight deportation.

One thing both Simon and Paul agree on: many of the Marshall Islanders who are being deported have lived in the United States for a decade or more, have moved their entire families there, purchased houses and invested everything they have in the U.S. Many of these young Marshallese have worked hard to bring their families to the U.S., Simon said. “They are dying to stay in the U.S., not return home,” he added.

PNG: The drama of forming a government at its peak

By Dr Satish Chand

P

acific Islands Forum (PIF) leaders meet is due to take place in Rarotonga, the capital of Cook Islands, from August 28 to 31st. Who exactly will be representing Papua New Guinea, the second most populous nation within PIF, remains to be resolved.

Counting for the 111 seats in the national parliament was continuing when this edition of Islands Business went to press.

The writs were due on the 27th of last month.

A government could be in office by the time you are reading this.

Here, I note the losers and winners out of the 14 Islands Business, August 2012

last national elections and sketch out the challenges for the incoming Prime Minister.

The losers…

The last elections have claimed the scalps of some long-serving and prominent politicians. Sam Abal, a former Deputy Prime Minister, and Arthur Somare, a former Minister for Public Enterprises, both tallied Forming a coalition? Peter O’Neill, Sir Michael Somare and Sir Julius Chan have already met to consider the possibility of forming a coalition government. Photos: Oseah Philemon the second highest votes in a contest of 17 and 23 candidates respectively, and thus lost their seats on close calls. another of the sitting members of parliament, lost Bart Philemon, a long serving Treasurer and Lae Open seat to Loujaya Toni, the second woman

Drugs danger in Oceania

By Davendra Sharma

A

resurgence of use of cannabis in Fiji and three American Pacific islands territories has the United Nations alarmed and looking for solutions.

While the trend of use of illicit drugs like cannabis in Australia and New Zealand shows a gradual decline over the past five years, the same cannot be said about Oceania, warns the 2012 United Nations World Drug Report. It notes that Oceania boasts one of the highest prevalence rates of cannabis use globally, peaking between 9.3% to 14.8% of the working population aged 15-64.

Island youths who indulge in such fatal drugs face increased risks of developing psychotic disorders such as schizophrenia, the report cautions.

“Evidence suggests that cannabis and other cannabinoids can produce a range of transient psychotic symptoms and cognitive deficits, such as transient deficits in learning, short-term memory, working memory, executive function, abstract ability, decision-making and attention.”

Such is a concern of the UN that officials are planning to have meeting with Pacific islands governments enforcement agencies with hopes of collecting more detailed data on the use of drugs as well as finding ways to eradicate the problem in the region. Angela Me, a UN statistician who works on the World Drugs Report, said meetings with island authorities would help ascertain if drug use is more prevalent among high school or tertiary level where students have stronger spending power and higher mental stress whilst coping with deadlines and exams.

It is unclear if the island countries source cannabis from foreign tourists from Australia, the United States and New Zealand or the drug is locally grown.

The UN report argues that cannabis is produced in practically every country worldwide and as such it is the most widely produced illicit drug.

Cannabis herb is mostly produced for domestic or regional markets, whereas cannabis resin is trafficked over large distances with the major countries identified as sources being Afhanistan, Morocco, Lebanon, Nepal and India.

candidate to take a seat in this poll and just the fifth woman ever to be elected into the PNG parliament.

Long term observers of politics in the land of the unexpected are hardly surprised by such unexpected outcomes.

And the winners?

As of the 26th July, Peter O’Neill, the sitting prime Minister and leader of the People’s National Congress Party, had won 22 of the 77 seats counted and was certain of being invited by Governor General, Sir Michael Ogio, to form government.

Don Poyle (Triumph Heritage Empowerment Party) and Beldan Namah (of PNG Party) had won 8 and 6 seats, respectively.

Cannabis is known by several names – Chill Out, Snak, Space and Splice. Of the four major drug groups being trafficked worldwide, cannabis by far attracts more buyers. The report suggests the countries with high prevalence of drug users are removed from the predominant production countries – thus confirming belief that there is huge trafficking globally of the notorious drug.

Seizures In recent times, enforcement authorities in some high user countries have taken the problem seriously as links emerge between users and criminal convicts.

“Reports of cannabis seizures refer mainly to cannabis herb and cannabis resin, but also cannabis plant, cannabis oil and cannabis seed. Large quantities of cannabis herb are seized worldwide, while seizures of cannabis resin are concentrated mainly in Europe, North Africa and the Near and Middle East/ South-West Asia, reflecting the locations of production and main consumer markets for cannabis resin,” said the UN report.

Trafficking into the Oceania region has been restricted by the strong enforcement efforts by Australia, where 17-year-olds are the highest age group users.

“In Australia, cannabis was also the most common drug detected among police detainees, where 48% of all detainees tested positive for cannabis use in 2009. Among detainees who self-reported, 54% reported cannabis use during the past 12 months, with the highest proportion reported among the 2125 age group,’ the report outlined.

Western world, where Italy at 15% of population were found to be such users.

“As shown in previous years, high annual prevalence of cannabis use is reported from many Pacific Island states and territories,” the report highlights.

Palau’s Ministry of Education director Emery Wenty however denies his country has such a mega-size problem with cannabis drugs. “Palau is a very small island. If cannabis use is as prevalent as the UN claims,” he said.

The UN report alerted the Palauan government to a unnamed state high school in Palau, which has a student population of 742. The UN research found that nearly 76% of respondents or 565 students regularly use cannabis. Similar statistics taken in the United States would suggest that the worst case noted in that country showed only 23% of students being drug users.

But as Wenty argued that such instances would be rare and isolated in Palau. “You would see it and smell it everywhere. You don’t. “You sort of know just about everybody. It’s inconceivable that a quarter of the population uses cannabis.”

Palau While the United States leads the way in terms of seizures or attempts at stopping the illicit drug trade, the same cannot be said about its territories.

Of particular worry to the UN, is Palau – with a population of 20,600 and a former US territory boasting a usage rate of 24.2% of the adult population. The Northern Marianas, home to nearly 44,600, carries a percentage of 22.2%, followed by Marshall Islands and Fiji at 5% each.

Palau and the Northern Marianas have higher cannabis use than the highest drug user in the

Sensation-seekers and depression-relief users The UN report notes that poor relations with parents, depression symptoms, exposure to other drug users and easy accessibility of drugs are important factors for first-time users of the drugs “Sensation seeking in adolescence represents a propensity toward novel experimental use of cannabis. A number of experimenatl users may continue to use cannbis more regularly for recreational purposes or long-term to become chronic or dependent users,” it said.

Of concern to the UN, how the respondents argued that cannabis helped them “get through the day” habit. The high user market trend was a) weekend usage; b) those with a active night life and 3) city users.

“These users report that the main purpose of their use of cannabis is to reach a social high and that they use it to relax, enhance activity, decrease boredom, increase confidence, reduce anxiety or feel better.”

Sir Julius Chan (Leader of People’s Progress Party) and Sir Michael Somare (Leader of National Alliance Party), two former Prime Ministers, had won six and five seats, respectively.

Chan, Somare, and O’Neill had already met to consider the possibility of forming a coalition government.

The encouraging news for PNG is that two women will now be sitting in the national parliament.

This is a doubling of the figure from the last parliament and if the record of their predecessor is any guide, then more women parliamentarians is good news for the majority of the citizenry.

The last elections have been relatively peaceful.

Credit must go to the Police, Army, and the Elec-

toral Commission of PNG for this.

Donors and Australia in particular lent logistical assistance and thus are also due credit.

The most credit, however, must go to the people of PNG as they have demonstrated that national elections can be held peacefully in the nation.

The newly elected government can claim legitimacy to lead as it has been earned through the ballot box.

The new leader of the second most populous nation within the 14-member Pacific Islands Forum has a role in leading his nation and the people of the Pacific islands.

At Islands Business, we wait for his contributions and wish him the very best.

Islands Business, August 2012 15

Cover Report

NEW DILEM M FOR CO O Welcome to the Cook Islands...Kia Orana spirit under the microscope. Photos: PIFS. Right: Cook Islands Prime Minister Henry Puna, who will be hosting Islands Leaders when they meet in Rarotonga later this month. Photo: Lisa Williams-Lahari

But PM Puna has a lot to offer i

16 Islands Business, August 2012

M MAS O OKS

r islands leaders

Islands Business, August 2012 17

Cover Report

By Lisa Williams-Lahari Pacific Islands Forum leaders gathering in the Cook Islands this month looking to pick up tips from their host on economic progress and a new political stability will find plenty to learn from during their time

in Rarotonga.

Reflecting on 47 years of self-government since August 2, 1965, host Prime Minister Henry Puna says the benefits of progress have led to new dilemmas for the Cook Islands.

“The first impression is that we have a made a hell of a lot of progress in a very short time. In 1965, there was no economy, so to speak. It actually made sense for our people to leave for overseas, to New Zealand, to make a future for themselves and their families,” says Puna.

Forty sevens years ago, terms like climate change and the Internet did not exist; depopulation and good governance were unknown. If you had told Cook Islanders back then that in 50 years they would think twice before drinking unfiltered tap water, that their hair would be cut by Filipinos, their local store service would be Chinese, and their restaurant order would be taken, cooked and served by a Fijian, you would have been laughed at.

Fast forward to 2012 and the dilemmas of progress are no laughing matter for the country’s leader. He notes the emergence of the Cook Islands economy as one of the best in the Pacific.

“And that comes with challenges. We now have one of the highest standards of living in the region and at the same time, we continue to lose highly qualified people to overseas jobs to the extent that we have to import labour into the country.

Population shift The population shift from 19,342 in 2006 to 17,791 on census day 2011 has only seen a similar drop in the 70s, when the airport opened the door to the world. The current trend is driven by factors that are more complex and the Prime Minister says the issues and challenges of depopulation need an urgent and renewed focus on a search for answers.

“Why do people leave? How can these reasons be addressed? Can the causes even be dealt with? We need to get to the bottom of this.

Our people are only human; they will want to check out the other side of the fence. But if there are fundamental reasons driving them away, we need to address them.”

Addressing the fundamental reasons may need one to tread carefully around the new demographic for the country. In 1965, the ratio of indigenous Cook Islanders to foreign workers was a non-issue.

It has been steadily warming and often an emotive debate on local talkback radio in the country for the last decade. “Any comments anyone makes on that issue are capable of being interpreted as being racist,” says Puna. “We need to be careful with language. These people have made a difference and are really very helpful in our economy.”

One area where migrant workers are most helpful and highly visible is in the Cooks’ booming tourism industry. The branding for tourism

Changing the face of Cook Island s Following on from the disappointment of the 2010 elections for those hoping to see more women take to the Parliament floor of the Cook Islands, 2012 has been a year of hope rising for the gender agenda.

Following on from her win at the by-elections in June, young mum and national sports rep Selina Napa has become the newest Cook Islands MP. She will join long-time politician ‘Aunty’ Ngamau Munokoa on the Opposition benches later this year.

Shortly before that, Prime Minister Henry Puna had announced the appointment of Cook Islands Red Cross general secretary Niki Rattle as the new Speaker of the House.

Also in Parliament, PM Puna tabled an Employment Relations Bill seeking six weeks of paid maternity leave for private sector mothers—bringing 75% of the country’s working mums on the same benefits as their public service colleagues.

Outside Parliament, paramount chief Margaret Karika Ariki broke the stranglehold by men on the highest honours year after year on the Queen’s awards list. She made history as the first ever recipient of a Dame of the British Empire. While the Cook Islands has maintained a trend of keeping its knight hoods strictly for former prime ministers, the move away from that has signified a government willing to break the mould and start again.

However, when it comes to Temporary Special Measures or TSMs for women in politics, that is not a government priority even though it could have an interested Opposition to give them the numbers needed to push through a constitutional amendment.

18 Islands Business, August 2012

Asked if TSMs would be on the agenda for future consideration by his cabinet, the Prime Minister repeated what he said two years ago: he would not be forcing a change in what he sees as a level playing field. He says a “cultural shift” needs to happen before reserved seats enforcing balance in parliament is “worth a go”.

For Opposition leader Wilkie Rasmussen, the win of the young Titikaveka mum at the polls as June ended could well catalyse the cultural shift both leaders are looking for. The historical debut for a woman in that electorate is making voters sit up and question culture, politics, and women’s place in both.

“Before Napa entered politics, she was a bit nervous because she was a woman. Wigmore and all the members before him were not just men, they were men of standing in the community,” says Rasmussen.

He says after opening up conversations amongst the party faithful on having a partner for Aunty Mau in Parliament, emails of support from women in the Titikaveka electorate began coming in. He knew he was on to something, “but I knew not to interfere, I had to leave it to the women of Titikaveka to decide for themselves and support Napa’s nomination through the party processes.”

Distancing himself from the voter debates on nominations for the party also ensured his overall hope for peace and unity to prevail. From previous elections, Rasmussen has seen that when three or four want to stand from the same side and the winning nominee loses anyway, those supporters who did not stand are likely to defect to the other side and become their nomination in the next election.

So what energy will this former globe-trotting, gold-winning national netballer, a daughter of former MP and cabinet member, the late Dr

Committed to neutrality, impartiality and independence...Speake r of th and long-time parliamentarian, ‘Aunty’ Ngamau Munokoa. Photo: Lisa

Teariki Matenga, bring to Cook Islands politics?

Apart from her family influences and involvement, Napa brings in an individual strength and her network from her sports, church and community work.

Clean and green

Her Opposition leader also hopes to see some of the no-nonsense focus to the issues which Napa has picked up from raising a young family,

over the years has focused on the ‘Kia Orana’ spirit and people factor.

That branding, coupled with a new travellers’ mind-set of wanting to connect with the people as part of their holiday, has created new pressures for the national industry.

“One thing to bear in mind is that when people come here they expect to have a Cook Islands experience but it’s a reality in our tourism industry now that a lot of our migrant workers are in hospitality and now in frontline roles,” says Puna.

The growing likelihood that your Cook Islands experience will have a non-Cook Islands face is not limited to tourism. It covers all sectors in the workforce. Beyond the impacts on culture and society, it is raising thorny questions for the government and its development partners over whose interests and job sectors are being supported.

Meanwhile, the momentum is building for more public debate and talking spaces where indigenous and ‘new’ Cook Islanders can talk with and hear from the growing migrant worker community.

Like his Forum colleagues though, the issue of migrant workers and Cook Islanders leaving to become migrant workers is part of a juggling act.

Clean and green One ball the Prime Minister wants to keep in the air as a national priority is the vision for turning the nation into a ‘clean and green’ example for Pacific development. From projects aimed at turning ‘pa enua’ or other islands outside the capital on to solar power to water sanitation and lagoon pride initiatives for Rarotonga, the vision for environmental leadership is well on track, says Puna.

Remote islands communities where the energy bill depends on the costs of transporting fuel are first in line for the clean green makeover.

Rakahanga, Manihiki and Pukapuka are switching to 100% solar and closer to Rarotonga, Mitiaro, will be following suit. Another topic over which the Prime Minister’s excitement is clear—a focus on lagoons and almost 2 million square kilometres of ocean making up the Cook Islands territorial waters.

Sanitation and preservation of the Muri Lagoon and concerns over the quality of the lagoon environment in recent years has led to an inaugural Lagoon Day last month. Here, local schools provided an energetic boost to renewing the focus on lagoon life and ecosystems.

One key announcement to leaders has been more than two years in the making. The Prime Minister intends to unveil commitments from the Cook Islands government to launch a one million square kilometres Marine Park in the Southern Cook Islands at this Forum.

The Marine Park concept for the Cook Islands has attracted mounting interest from the global community and Puna issued the challenge for support to the idea when he spoke alongside fellow keynote Kiribati President Anote Tong in 2011 at the Global Eye on Earth Summit in Abu Dhabi.

The support and advocacy of former international rugby professional Kevin Iro has also brought the vision of protecting Cook Islands waters to life. The Cook Islands Marine Park will be five times bigger than the Phoenix Islands Protected Area launched by Kiribati in 2006.

It will be the largest single marine park area in the world, compared to Australia who announced in June ahead of the Rio+20 summit

d s politics: women step up in 2012

eake r of the House Niki Rattle (left) with former Deputy Prime Minister

Photo: Lisa Williams-Lahari

and feels her insights will help the watchdog side of the house focus on issues surrounding families.

“She’ll help break down the stereotype around politics as men’s work. When men do politics, there is a lot of aggression and argument for its own sake. When women are in the room, there is more of a focus and peace to the work. She also brings in the new generation and is a voice for our times,” says Rasmussen.

For Napa, the work of representing her people begins now. She says she spent years observing her politician dad at work amongst the same people she now represents, and his core values will guide her work even as she becomes the poster child for a modern, Cook Islands electorate still in touch with its traditional values.

She will have no easy task towards her first general elections. Her win in what has been a safe seat for the Democratic Party was no landslide, but it withstood jibes over what an Opposition MP and a woman at that, could possibly hope to achieve when it came to making progress (usually associated with the government of the day) happen.

Rasmussen is taking a slowly, softly approach to turning that attitude on its head. “As a party, we are giving more importance to new faces, new voices in the political system, and I feel this will eventually change the shape of governance and politics in the future.

“I’m positive this new spirit will also come into reshaping attitudes against women in politics as we look towards the next election.”

Awareness aimed at voter perceptions of women as political leaders will help deal with attitudes, says Rasmussen. Strengthening inclusion of women and youth in decision-making is part of the plan.

“It’s nearing the time when the old guard, us, will give way. We need to ensure the new generation is ready to take over,” says Rasmussen.

But the fast track measures allocating reserved seats especially for women are still meeting resistance at all levels, with optimists saying it’s all about public discussion and awareness.

On TSMs, the Opposition leader and Prime Minister are poles apart.

Puna has repeatedly said he will not change the

political system allowing specific representation of women in what he views as an equitable and level voting system.

He doesn’t have a woman in his cabinet despite his party’s campaign promise that the option of an appointed cabinet minister from the private sector would be used to bring in someone to represent and advise on gender issues.

He points out that gender advances in 2012 are proof aplenty that his government is walking the talk on women in leadership.

The latest three-year contracts for Heads of Ministries (HOMS) in 2012 have a record of six women as HOMS. Legislation covering maternity leave for working mums is before the House and the inaugural Dame-hood could open the way for more women-Knights of the realm.

However, for those wanting a significant rather than incremental change, the need to rethink political representation and open up the geographical electoral system is still paramount.

Across the Parliament floor, the prime minister’s nemesis, a former New Zealand-based journalist, is more open and comfortable with talk of special measures than most of his Parliamentary colleagues.

Rasmussen notes that in his island electorate of Penrhyn, the all-male island council has discussed a proposal for a reserved post for women.

So far, it has failed to gain support.

“They haven’t supported it. But the idea has been planted, so perhaps one day in the future, it will be approved. The point is, we have started the conversation.”

“My mother’s generation were only good at speaking in the house, as per our Maori traditions. Perhaps, this will give way soon in the world of politics, so that women can have more space. I do believe that.”

Islands Business, August 2012 19

Cover Report that it would be creating a marine park network in its own territorial waters totalling more than 3 million square kilometres of protected ocean.

“It’s something I’m really pleased about. We tapped into a pool of support amongst our own people,” says Puna, of the resurgence and interest

by Cook Islanders from all walks of life in supporting conservation efforts.

He says the issue of preserving and protecting environments for the future has been a strong part of Cook Islands culture and his efforts to support modern-day environmental warriors interested in sustainability merely continues that tradition.

Declaring just over half of Cook Islands’ waters off limits to commercial fishing won’t limit discussions on fisheries, says the Prime Minister.

He says the item will also feature on his list of issues to discuss. “We don’t have much landbased resources to utilise for development but we do have fisheries, for us that is a major issue.”

How much of his support for lagoon and ocean environments stems from his own pearl farming background? Puna chuckles, but is quickly back into reflective mode, admitting his pearl farming electorate is far removed from his day-to-day realities in the Avarua compound, housing the Office of the Prime Minister. He says modern technology keeps him in touch with his electorates and he is making the most of having the Manihiki team on Rarotonga for the annual Maire Maeva Nui independence celebrations.

“But no, it’s still not always satisfactory. I would rather be physically in touch with them, but part of the job of being PM means you need to be here and look after the whole country first.

They understand that need.”

With the current focus for the Cook Islands on hosting the regional leaders meeting this month, Puna is also mindful that another related issue to conservation, climate change, is going to loom large. He predicts it as a key platform too for the Small Islands States grouping within the Forum leaders meeting.

Climate change

“Climate change for the small islands states is always the priority issue, and we want to see this on the Forum agenda as well as in the communique. We are aware and supportive of any measures to call more attention to it,” he says.

With two years down and just over two more to go towards the next general election, Puna is vocal on the key lesson of his leadership so far—a focus on governance. One of the first meetings he held after taking up office as Prime Minister was to meet with the public service heads and assure them he was “out to change the culture of politics permeating the public service”.

“It was one of my first meetings as PM and I made it clear I would change that. We only have a small pool of people working in the service and engaging in the practices of the old would continue to marginalise that workforce. I stressed that appointments need to be made on merit, instead of by association.”

And while the opposition leader would disagree that the Prime Minister is as mindful of political favours and patronage as he claims to be, both would be on the same page on keeping governance linked to process, reporting and accountability.

Due process and transparency in budget presentations has seen a new format and opening up

to the public on government spending in 2012.

The overhaul of how the budget is presented and its user-friendly access has been a welcome breath of transparency and has earned Finance Minister Mark Brown a renewed confidence and credibility. Opening up the books has literally also opened up criticism and conversation on what is being spent and where—not least of which is the cost of more than NZ$14 million in welfare support, including increased support for the elderly.

The challenge of ensuring revenues remain able to meet the cost of welfare is one that government is well aware of, says Puna.

“But we are very serious about looking after our older ones, our pa metua, and we need to start showing that, even if we have to sacrifice to meet that commitment. We feel a very strong moral obligation to these people. They’ve done their bit for the country and made their contribution.

In their sunset years, we should let them have a quality of life.”

For the Cooks leader, the focus on governance by his government is a work in progress. While the Cook Islands leads the Pacific on legislating access to information, more support for the implementation of the Official Information Act and access to information is needed.

As he welcomes his fellow Forum leaders to the Cook Islands this month, one message the Prime Minister will be sharing with his peers is that keeping on track with the guiding principle of the Pacific Leaders’ vision has to be a priority for anyone in the top job.

“Governance is such an important issue. If we don’t get to grips with and deal with it, all our ef efforts undertaken come to nothing,” says Puna.

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Cover Report with lifestyle disease crisis of NCDs linked to the culture of feasting, featured speakers during the 2012 Cook Islands Health Forum on the language crisis for Cook Islands children in New Zealand.

Today’s college students, tomorrow’s leaders...will they be able to speak and write in Cook Islands Maori, and how culturally aware are they? The red flags are already up. Photo: Lisa Williams-Lahari

Cultural crisis for the Kia Orana people?

Problem building for decades

By Lisa Williams-Lahari I t ’ s all happening in R arotonga this month.

When Pacific and global delegates begin jetting into the capital of Cook Islands later in August, the iconic ‘Kia Orana’ hospitality from the 42nd Pacific Islands Forum Meeting host will be centre-stage.

Yet even as that Kia Orana spirit reminds more than 200 Forum officials, leaders and delegates that Cook Islanders know how to make their guests feel welcome, many will be oblivious to a deepening and complex problem which has been building for decades.

Beneath all the smiles and flowers, feasting and drumbeats is a cultural crisis which will cost this country dearly if it isn’t dealt with.

Professor Jon Tikivanotau Jonassen, a former acting Secretary-General of the Pacific’s largest regional development agency, the SPC, says the complex issues of Cook Islands identity and cultural heritage are just one corner of a complex problem.

With the United Nations announcing Cook Islands Maori as an endangered language this year, Jonassen warns the loss of traditional knowledge and language will impact future generations trying in vain and at great cost, to claim what is ours, back.

“We are facing a cultural crisis and we don’t even know it. The sad thing is we are living in a bubble. One day the bubble will burst and we’ll say hey...it’s too late.”

“You are talking about a billion dollar industry,” says Jonassen.

He should know. He was one of the first cultural performers to take Cook Islands dance to the world after independence, and is himself a composer, poet and scholar on Pacific music traditions and performance.

Billion-dollar industry His academic work in Hawaii for the last two decades has given him insights into the cultural industry there. Hawaiian and Tahitian drummers are playing Cook Islands drumbeats and Cook Islands drums, and getting paid more than US$100 an hour to do so. Then, there are the recordings, the shows, the DVDs, the hotel and by invitation appearances.

His comments, strong as they are, will resonate for many. The music industry and composers already bemoan the fact that they have had their work copyrighted in French Polynesia where musicians there are paid royalties, sometimes for Cook Islands songs.

Heritage workers are mindful that Cook Islands artefacts dating back to pre-contact times are better off archived overseas because the conditions to preserve them in the Cooks do not exist.

The creative community keen to take Cook Islands art to the world are already mindful they need to create their own opportunities and are finally enjoying a growing market for homegrown art.

The educators are well into strategising over the dilemma of keeping Maori language skills alive in schools when Cook Islands Maori, given inter-cultural marriages and a high nonindigenous local population, may not be spoken at home.

Even the health sector, caught up in dealing

Copycat cost Given his background, the efforts to reclaim intellectual property and knowledge are of special interest to Jonassen.

The popularity of Cooks Islands drumbeats, music, dancing, and performance across the globe is all good for the tourism statistics—more than 124,000 visitors in 2011 continue to ensure tourism is the economic mainstay.

While globalisation has spurred the inevitable wave of copycat performers of Cook Islands culture across the region and the world, he warns the lack of a proactive strategy to tackle that issue will cost us much more.

“It’s a huge problem for us, because if it continues, it means 50 to 60 years down the road we will have to pay copyright money to someone who copyrighted our stuff. It is ours, but we will have to pay someone else for using it! We need to be more visionary, more willing to fight for what is ours.”

Going global may be a credit to the impact of Cook Islands culture on Pacific identity across the world, but not if performers are leaving out due credit to the Cooks.

“If they don’t acknowledge, it’s called plagiarism, or stealing. If I borrow something from you and I give you credit for it, that’s borrowing—but if I claim it’s been mine all along, that’s not appropriate,” says Jonassen.

Jonassen’s position comes as pa enua (other islands) of the Cooks converge on Rarotonga for the Maire Maeva Nui, the ten-day cultural festivities that precede and follow the 4th August anniversary of independence while retaining citizenship from New Zealand in 1965.

The 2012 theme for the annual event is around Cook Islands Maori. Islands teams compose and choreograph their work with that in mind.

It’s a spectacular event, one that feeds the senses and cultural soul of a nation, and Cook Islands Prime Minister Henry Puna, caught up in the celebrations and connecting with his Manihiki delegation, is well aware of that.

Wake up call “Is there a crisis? Yes and no,” says the Prime Minister, “It’s a good wake-up call. Yes, the Cook Islands music industry is being plagiarised, and people are working on copyright legislation for the Cook Islands right now. If I had my way, it would be passed tomorrow.”

Qualifying his disagreement, he says the government legislation on copyright will go to Parliament, hopefully before the year’s end. Outside of the Parliament, the relocation of the House of Ariki from the Parliament compound to a new permanent building called Kaveora.

That permanent home with operating expenses and staff for the House of Ariki under the Parliamentary Services budget are not the only milestones of 2012 when it comes to cultural leadership, says Puna.

The awarding of the first ever Dame Commander of the British Empire went to Dame Margaret Karika. For the Prime Minister, that historical beginning has paved the way for the renewed recognition for traditional leaders.

Added to that, the declaration of Ui Ariki Day, Islands Business, August 2012 21

Cover Report with a Parliamentary budget of NZ$50,000 to help the celebrations along, has also helped that recognition build the “fundamental first step in moving towards preserving language and our cultural heritage,” says Puna.

“Ui Ariki Day is not just for the chiefs of the country but for all Cook Islanders to celebrate being Cook Islanders, and we do need to acknowledge this as a fundamental first step towards protecting that.”

“We may be having these issues (of a cultural crisis) here in Rarotonga, but I believe with our sisters islands, there are no concerns with that… it’s clear the pa enua are not as threatened as Rarotonga when it comes to erosion of language,” he says.

Tourist eye With so much of Cook Islands culture tied up with performance for the tourist eye, Jonassen says this results in a disconnect between the dancers, performers and spectators.

“I think we have lost the connections. It’s okay to focus on tourism, but don’t only focus on tourists. Focus also on how the tourists are impacting the locals, and ask who is really benefitting from all this? The few who own hotels and the transport systems? How is a Mangaian living in Mangaia having their cost of living impacted by tourism?

Should we pursue policies that ensure the benefits of tourism are spread evenly so that the impacts are not just on a few? We need to be more street smart and we are not.”

Is it already too late? “I don’t think so. Hawaii in many ways has proven you can go back and retrieve your culture. You have to be willing to put money back into it. You have to recognise that tourism is not the only value the Cook Islands can accumulate money from—in fact, one of the main reasons they come here is our culture,” says Jonassen.

Other Pacific countries are part of the Cook Islands dilemma. Cook Islands drumbeats, drum and dances are becoming part of the cultural identity across the region.

22 Islands Business, August 2012

In a typical cultural night at a hotel in the Solomon Islands capital, there is always going to be a version of Cook Islands tamure. At a recent event held at the Woodford International School in Honiara, a Kiribati cultural item during a school assembly drew the largest round of applause and cheers from students—except it was a Cook Islands tamure, to a Cook Islands song.

In Kiribati itself, the government has stepped in to ban versions of the tamure at any official gatherings and events in a bid to refocus youth on the i-Kiribati dances instead.

Festival fracas The former development adviser says work done in intellectual property by SPC, which also coordinates the Festival of Pacific Arts via its Cultural Advisor, is great and in line with appropriate objectives.

“But I don’t think they move fast enough. It’s not their fault. They react to what individual governments want and the fact the Cook Islands has not been noisy about this much earlier is part of where the problem lies.”

One thing Cook Islanders have been noisy about came to a head in July, when the public weighed in via mainstream and social media over the 12th hour decision by government to ditch four years of planning to attend the Pacific Festival of Pacific Arts in Honiara.

Instead, it took a national cultural dance team to the global celebrations of the Queen’s Diamond Jubilee in London. The decision itself was typical for a government needing to balance the budget.

The problem was in the way the information became public after Festival Liaison teams in Honiara responded to queries from some Cook Islanders there seeking information on their delegation.

The decision mostly affected a small crew on the Marumaru Atua, a Cook Islands ocean voyaging vaka heading to Honiara as part of the opening arrival of Pacific canoes. The official position in the ensuing fracas was that the responsibility for welcoming the vaka rested with the host country,

not the Cook Islands.

“The reality is we were faced with a choice.

Attend either the Queen’s Jubilee or the Festival of Pacific Arts. It was a budgeting decision, and it was a difficult one,” says the Prime Minister.

“I was at every destination except in Tahiti (for their stopovers along the journey to Honiara), and I will meet them when they return home.”

For Jonassen, the reasoning doesn’t hold water.

The Cook Islands is the country which came up with the concept of a pageant of Pacific Ocean voyaging canoes arriving for the festival. They debuted this in spectacular fashion at Avana harbour in Rarotonga, during the hosting of the festival by the Cooks in 1992 and since then have taken the Cook Islands canoeing model across the region.

“Our canoe was arriving at the venue with six other canoes built on the Cook Islands model.

We had the chance to say to the world, ‘we are somebody. Our culture is rich. We are here’. We didn’t even bother to go,” he says.

Changing times He is mindful that the undermining and loss of cultural values has not happened overnight.

The changing times means Cook Islanders have opened their doors to a diverse migrant population, who also need support and acknowledgement even as the indigenous Cook Islanders need to feel their own interests and concerns are being heard.

It’s a big and complex challenge, and the responsibility rests in government policy but relies on actual changes—big and small—to the way things are, says Jonassen.

One thing he would like to see end right now is the use of welcome chants during island nights to set up a sense of mana and a moment of humour for those present.

Jonassen says the custom words are no laughing matter. “For example, ending a beautiful Cook Islands chant with these words ‘How about that?’

No matter what occasion it is, chants need to be delivered right. We need to stop thinking it’s ok, no one will understand. The ancestors are listening. Our people are listening.”

Forum

Edgewater Resort & Spa...where Forum Leaders will be accommodated during the Pacific Islands Forum meeting in Rarotonga later this month. Photo: PIFS

PIF at a crossroad

Setting a course for 2014 and beyond

By Dr Michael O’Keefe Later this month, Leaders of the Pacific Islands Forum (PIF) will arrive in Rarotonga to a packed

agenda.

Looming in the background of diplomatic niceties is the strategic question of how PIF should adapt to the changing architecture of regional cooperation. The task is twofold as PIF has to respond to challenges generated from both within and outside.

On the one hand, the draft review of the Forum Secretariat provides ample grounds for self-reflection.

On the other, the growing (defacto) acceptance of Fiji’s timetable for elections through the roadmap for democracy highlights how the landscape has changed as a result of Fiji’s suspension from PIF in 2009.

The review of the Pacific Islands Forum Secretariat—Draft Report was commissioned to address discontent towards the secretariat’s administration. It was released internally in May and prompted a strong defence from the Secretariat itself. No doubt it will be a major topic of discussion in the Leaders meeting in Rarotonga.

The Forum Secretariat is responsible for implementing programmes to further the interests of its members through priorities determined by the Leaders.

These programmes have practical utility and political significance in relation to trade, development and aid. It has a track record of achievement, but the implication of the review is clear.

Leadership and reform is needed if PIF is to re-engineer itself to face future challenges by focusing on its steering role in pursuit of regional interests.

The review highlighted a range of weaknesses in the secretariat’s capacity to achieve its core business.

For instance, it notes that the secretariat’s governance framework is “complex, confusing and full of ambiguity.”

The sometimes trenchant criticism is partially explained by the challenge of responding to the needs of its diverse membership; from developed metropolitan powers to countries on a path to sustainable development, to small islands states burdened by the challenges of globalisation.

The diversity of PIF has the potential to make it a cohesive regional organisation, but equally to introduce tensions that undermine its effectiveness. Diversity can be managed within PIF or in relation to other sub-regional groupings (more of this later).

The review notes a key tension underlying the politics of PIF; funding. The secretariat’s budget is still overwhelmingly provided by Australia and New Zealand (70%). Another 15 % is sourced from the European Union (EU). As the review notes, “ownership of the secretariat” by member states needs to be strengthened.

Whether these funding arrangements equate to influence is contentious and debatable, but clearly the way Canberra and Wellington have sought to influence PIF in the past has varied enormously.

We may be witnessing a high-point in this influence now, but the larger strategic question is whether it is sustainable or expedient.

This is not to say that funding should be spurned, but only to question how it should influence regional agenda setting.

The ANZ partners and other significant donors have used PIF as the prime vehicle for implementing their regional development policies.

There is no sign of this changing, but it is dependent on capacity issues in PIF itself and whether it continues to speak for the region.

PIF’s claim to being the unique representation of Pacific regionalism is also under challenge.

This is where Fiji comes into the equation.

Fiji’s suspension from PIF has led it to look North, West and East (to China, Indonesia, the

Middle East and the UN).

The unintended consequence being that alternative approaches to regionalism have gained impetus.

Fiji has been making new friends and supporting its regional friends through a range of sub-regional and regional forums such as the Melanesian Spearhead Group (MSG), Engaging with the Pacific (EWTP) and Pacific Small Islands Developing States (PSIDS).

Taken together, these regional groupings represent the most significant evolution of regional architecture since the creation of the Forum over 40 years ago.

Currently, its institutional capacity is weak compared to established forums, but the intent is clear. None of these organisations include Australia or New Zealand as members and they focus on specific Pacific issues that have not been effectively dealt with by PIF, such as the impact of climate change on PSIDS. Fiji embracing alternative forms of regionalism and sub-regionalism provides a potent challenge to the pre-eminence of PIF. These new regional groupings have gained ground under Fijian leadership. Fiji is assertively bracing itself for reintegration into international diplomacy post-2014.

As such, these groupings are likely to become increasingly influential mechanisms for expressing Fiji’s interests in the region and beyond.

This new architecture is also gaining momentum beyond Fiji as an expression of regional and sub-regional voices independent of PIF. The question is, what impact will MSG, EWTP and PSIDS collectively have on regional architecture when Fiji re-engages with PIF? Stocktake Now is the time for a stocktake. 2014 is just around the corner and the metropolitan powers and Pacific states must be planning for the reincorporation of Fiji into regional affairs.

What will PIF look like in 2014? How will it interact with other new forms of regionalism that have gained impetus since Fiji’s suspension from participation in PIF? At this stage, there can be no speedier return to democracy than 2014. Waiting until then for the inevitable rapprochement could be counterproductive to the cohesiveness of the increasingly diverse regional architecture for cooperation and development. However, a significant complication is that rapprochement with Fiji may not be as straightforward as it would have been a few years ago.

The confidence with which Fiji has developed new friendships and new avenues of cooperation is not likely to be satisfied by reintegration into the PIF constituted as it is.

Fiji may have to be enticed to return to focusing its diplomacy through PIF and part of this process may be that PIF is renovated.

The review provides fertile ground to support this aim from within, but there are also larger questions that need to be addressed about the purpose and function of Pacific regionalism.

The diplomatic reality is that the regional seascape has changed since Fiji was suspended from participation in PIF. The more fluid dynamic of regional cooperation could be seen as a challenge or an opportunity and it is for PIF leaders to decide how they respond. PIF is at a crossroad.

• Dr Michael O’Keefe is a Senior Lecturer at La Trobe University, Victoria, Australia.

Islands Business, August 2012 23

Forum

Healing the Forum divide Apathy towards regional body

By Dr Roman Grynberg this august Leaders wiLL meet in Rarotonga in the Cook Islands at the annual Pacific Islands Forum Summit and many weighty issues will be discussed but almost all will be settled by officials well before the meeting begins.

One of the big issues that will have to be considered is the review of the Pacific Islands Forum Secretariat completed just two months ago.

The report has many good recommendations but the consultants sent to review the Forum Secretariat have said that islands countries generally feel alienated from the organisation and there needs to be greater participation and ownership by members.

In their very first recommendation, they say ‘Member states (should) exercise greater ‘ownership’ of the Secretariat, ensure that they have appropriate representation at each meeting facilitated by the Secretariat, and seek to provide greater continuity of representation at meetings of FOC (Forum Officials Committee).’

The consultants, in the normal technospeak of such reports, also recommended all sorts of sensible ways of improving communications as though these were somehow the cause of the problem without ever getting to the reason why countries do not feel greater ownership of their paramount regional organisation.

But to answer the question honestly would violate the very first rule of consultancy which is never to tell your clients something that will stop you getting your next consultancy!

All those who work or have worked at the Forum Secretariat know that it is a member driven body and all know exactly which member it is.

It is precisely this total domination by ‘bad cop’ Australia and ‘good cop’ New Zealand of important decisions of the Forum that there is such apathy in the islands capitals towards the region’s paramount regional body.

Forum funding It has nothing to do with communications. All islands senior officials know the Forum Secretariat is funded and almost completely controlled

by Australia and New Zealand and nothing they

do will change those outcomes.

Those islands officials who annoy Canberra and Wellington by trying to change this will end up being sent to a regional office of the Ministry of Works, and so silence and apathy make good professional sense.

But free men and women hate being treated as powerless inferiors and so rather than say something that will just destroy their careers, islands leaders and their officials simply create new organisations where they feel they can speak.

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Forum Officials Committee meeting...in Suva last month. Photo: PIFS

Sub-regions While the Forum Secretariat remains the paramount regional organisation, it is less and less the organisation that matters as the islands divide into ethnic sub-regions.

The progressive balkanisation of the islands starting with the formation of the Melanesian Spearhead Group is a direct result of disenchantment with the domination of the organisation

by Australia and New Zealand and the sense of alienation from other sub-regions, which are

often perceived to act as surrogates of the bigger powers inside the Forum.

The issue that has undoubtedly solidified the bitter divisions between the regions recently has been the exclusion of Fiji since the most recent coup. As a result, this has served to strengthen the Melanesian Spearhead Groupn(MSG) even further as the increasingly important political discussions occur there.

But the economic issues that confront the islands still invariably involve Australia and New Zealand and always will, and no amount of balkanisation of the Forum islands or wishful thinking from the islands capitals will change the commercial facts.

Leaders in Rarotonga will need to give some direction to the on-going PACER+ negotiations and addressing the perfectly legitimate fear that the technocrats who run these negotiations in Canberra will simply force the islands to sign an agreement without any meaningful commitments on aid and temporary movement which are central to the interests of the islands.

Using Polynesian countries, some of which are almost as desperate for Australian aid as the Solomon Islands, it may be possible to force such an outcome in the PACER + negotiations but it will simply worsen relations between the Forum members in the long run.

A clear statement at the Forum by leaders providing directions to the negotiators would be extremely positive.

Indeed, if the Forum outcomes document contains nothing but the usual vacuous platitudes about ‘the continuation of the negotiations and the need for a deepening of the integration of the islands states into the global economy...’ then

it should be seen as a clear signal that Canberra has won the day.

It is time for islands leaders to demand of Canberra clear direction on PACER+ and that the agreement contains meaningful commitments on development assistance and temporary movement of people which are the two issues that matter to the islands.

The Pacific ACP leaers who will also meet will also need to make some contingencies in the event that the EU does not respond positively to their offers.

The negotiations are formally supposed to end

by December this year and it would be prudent for the islands to wait and see what emerges in Africa, a region far more important to Europe than the Pacific.

Whereas PACER+, EPA, WTO and PICTA and the rest of the trade alphabet soup matter, it may be time for leaders to put a stop to the seemingly endless merry go round of trade negotiations which has preoccupied islands trade officials for the better part of the 15 years.

Market access is vital but spending time and resources on addressing the supply side issues that confront islands producers is now probably far more important and will yield greater returns than more trade negotiations.

Trade officials prefer Brussels and Geneva and even Canberra to putting on their gum boots and working with real producers solving real problems and so it is up to the leaders to re-orient work towards what are now the more pressing concerns of trade.

• These are the views of Professor Roman Grynberg who was, until 2009, when his contract was not renewed was Director of Economic Governance at the Forum Secretariat.

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Nauru

Kiribati

Cook Islands

Tuvalu

Samoa

2011-2012

Tokelau

Tonga

New Zealand

Niue

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But the close ties between Australia and France will not please President Oscar Temaru in French Polynesia, with Australia opposing the Maohi leader’s call for re-inscription with the United Nations Special Committee on Decolonisation.

We’re friends...New Caledonia’s President Harold Martin (left) shakes hands with Australia’s Parliamentary Secretary for Pacific Islands Affairs, Richard Marles. Photo: Nic Maclellan

Aust/France improved relations worry Temaru Marles: ‘We take our lead from France’

By Nic Maclellan As she toured the Pacific last April, Australia’s Governor-General Quentin Bryce made an unprecedented visit to New Caledonia.

Bryce’s visit to Noumea was the first ever by an Australian Governor-General, and an important signal of the improved relations between Australia and France, as well as the Government of New Caledonia.

The Governor-General was accompanied by Australia’s Parliamentary Secretary for Pacific Islands Affairs Richard Marles, who has been raking up frequent flyer points as Australia’s diplomatic 28 Islands Business, August 2012

face in the region. Marles has paid particular attention to the three French colonies in the Pacific, making regular visits and building warm personal relationships with leaders like New Caledonia’s President Harold Martin.

Last year, Marles even visited Wallis and Futuna, which is way-off-the-beaten-track for most Australian politicians! His visit for the 50th anniversary of Wallis and Futuna gaining territorial status was the first trip to Matu-Utu by an Australian Member of Parliament.

In a wide-ranging interview with Islands B usiness , Marles talks about the improved relations between Canberra and Paris, stating: “We very much appreciate France’s presence in the Pacific.”

He stresses Australia’s support for integrating “the three French Pacific collectivities into the Pacific family”, and the importance of supporters and opponents of independence developing a consensus position on New Caledonia’s future political status.

But the close ties between Australia and France will not please President Oscar Temaru in French Polynesia, with Australia opposing the Maohi leader’s call for re-inscription with the United Nations Special Committee on Decolonisation.

According to Marles: “We absolutely take our lead from France on this.”

Australia’s improving relations with France pose serious issues for the Pacific Islands Forum policy on the French Pacific, as Forum leaders gather in the Cook Islands this month for their annual meeting.

The Melanesian Spearhead Group (MSG) had planned a mission to New Caledonia in early July to monitor progress on the Noumea Accord, but the mission was postponed after the delegation leader, Fiji’s Voreqe Bainimarama, was not issued with a visa.

The call by President Temaru for international scrutiny of the self-determination process for the Maohi people will also be raised in the Cook Islands.

Improved relations Long gone are the tensions of the mid-1980s, when Canberra and Paris engaged in a war of words over France’s nuclear and colonial policies in the Pacific.

At the time, France’s relations with the Pacific Islands Forum were strained because of nuclear testing, French military operations in New Caledonia and anger over the bombing of the Rainbow Warrior.

In a way unimaginable today, independence for New Caledonia took centre place on the Forum agenda. The 1983 Forum leaders meeting in Canberra issued a communique “recognising that a colonial situation exists in New Caledonia”—the sort of language that is rarely seen in today’s sanitised statements.

In December 1986, Australia joined other Pacific countries at the United Nations, to successfully lobby for New Caledonia’s re-listing with the UN Special Committee on Decolonisation.

But times have changed. After the end of the armed conflict in New Caledonia, the halt to nuclear testing in 1996 and the 1998 Noumea Accord, Forum members have improved relations with Paris. Today, both Australia and New Zealand welcome France’s ongoing role in the region.

Speaking at a press conference alongside New Caledonia’s President Harold Martin in April, Marles stated: “Australia deeply values the presence of France in the Pacific and we deeply value our relationship with New Caledonia.

“We are both stable, liberal democracies which hold the same values about the way we want to see the world.

“I think we have a historic role, together with our partners in the region such as the United States and New Zealand, in building that partnership of support for the Pacific region.”

Strategic partnership for Australia and France In recent years, Australia and France have signed a series of agreements that cement relations on defence, aid co-operation and joint exploration for oil and gas reserves in the waters between Australia and New Caledonia – culminating last January in a Joint Statement on Strategic Partnership.

For many years, Australia and France have expanded defence co-operation in the Pacific, through port visits, joint military exercises, arms deals and meetings between senior military officers. The Southern Cross military exercises held every two years in New Caledonia are a key part of regional military co-operation.

Since 1992, the France-Australia-New Zealand (FRANZ) agreement has provided a mechanism for joint humanitarian and maritime surveillance operations in the South Pacific.

But the Australia-France Defence Cooperation Agreement (DCA), which entered into force in July 2009, provides a new framework to these existing military programmes.

The DCA also covers a much wider range of areas, according to the Australian Department of Defence: “The DCA will enhance bilateral defence engagement by facilitating cooperation in a range of mutually agreed fields including the conduct of military exchanges, exercises and training, defence materiel, logistics support and capability planning, activities to enhance and broaden the interaction of our respective military cultures, science and technology and the exchange of space-based information, including military geospatial information.”

The defence partnership is underlined by French efforts to increase arms sales to Australia—by 2006, Australia was the second largest purchaser of French armaments in the world. Australia’s Defence Materiel Organisation (DMO) and its French counterpart, Délégation Général Pour L’Armement, have held a series of annual meetings after the signing of a co-operation agreement.

Eurocopter, a subsidiary of the giant European Aeronautic Defence and Space company (EADS) is successfully competing with American arms manufacturers to sell helicopters and other equipment to the Australian Defence Force (ADF).

France and Australia are also co-operating in joint exploration of the waters between Queensland and New Caledonia.

As reported in isLands L Lands business in December 2010, Geoscience Australia and French research agencies have conducted joint surveys of the ocean floor near the Capel and Faust Basins, looking for sediments that would indicate deep water reserves of oil and gas.

In March 2010, the signing of a “Declaration of Intention between Australia and France (on behalf of New Caledonia) over Coral Sea Management” signalled increased joint operations over reef ecology and maritime resources in these waters.

For some, the sight of France as the administering power making decisions over New Caledonia’s resources brings back memories of Australia’s deal with Indonesia over the oil reserves of the Timor Gap. A further sign of Australia-France relations is a partnership agreement signed in July 2011 between Australia’s aid agency AusAID and the French

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Islands Business, August 2012

Forum equivalent Agence française de développement (AFD). This agreement opens the way for cooperation in Africa and Afghanistan, but also allows for joint programmes in the Pacific.

All these agreements culminated in the signing of the Joint Statement of Strategic Partnership in January 2012. Former Australian Foreign Minister Kevin Rudd and his French counterpart Alain Juppe signed the agreement in Paris, which highlights joint commitments on Afghanistan, nuclear non-proliferation, terrorism, global economic reform and the Pacific.

Rudd noted: “I would like to say that as a new chapter in our relationship unfolds, we will be meeting now more frequently, systematically and regularly.”

As the two foreign ministers met, Parliamentary Secretary Marles was also in Paris, meeting with the French Overseas Ministry and discussing New Caledonia’s bid for full Forum membership, the future of French Polynesia and other regional topics.

Upgrading Forum membership As regional relations improve, the three French dependencies have approached Pacific governments to upgrade their status with the Pacific Islands Forum.

Wallis and Futuna is seeking an upgrade from observer status to associate membership while New Caledonia (currently an associate member) is seeking to become a full member.

The August 2010 Forum in Vanuatu saw a significant rebuff to this lobbying, with leaders encouraging New Caledonia “to continue their dialogue with France in order to be able to satisfy the full membership requirements of the Forum”

—that’s to say, sovereign independence. But this has not affected Australia’s ongoing support for Noumea’s bid, even before a referendum on political independence.

Welcoming the Noumea Accord as “an amazing process built on a commitment on all sides of politics in New Caledonia to achieve a consensus”, Marles states that Australia is actively supporting New Caledonia’s bid for full membership now.

Even though the Forum’s current members are all independent nations, Australia supports full membership even before New Caledonia makes a final decision on its political future after 2014. This position is echoed by the New Zealand government.

At the 2011 Forum leaders meeting, New Zealand’s Foreign Minister Murray McCully issued a joint statement with France’s t hen Foreign Minister Alain Juppe, stating: “New Zealand encouraged New Caledonia’s interest in increasing engagement with the region and warmly welcomed the prospect of its full membership of the Pacific Islands Forum.”

Noumea’s engagement with the region will also be boosted by the decision to establish a network of delegates to represent New Caledonia across the region, to be based at French embassies in Vanuatu, Papua New Guinea, Fiji, New Zealand and Australia.

No joy for Temaru Under the Noumea Accord, New Caledonia is the only French possession around the world that has a timetable for a decision on selfdetermination.

In contrast, French Polynesia and Wallis and

Futuna remain under French control, without any timetable for decolonisation.

In recent years, President Temaru has stepped up his lobbying for Forum support to have French Polynesia re-inscribed on the UN list of non-selfgoverning territories (a status New Caledonia obtained in December 1986, when Australia and New Zealand joined island nations to successfully lobby for New Caledonia’s re-inscription at the UN General Assembly, in the face of French opposition).

However Australia and New Zealand do not support Temaru’s call for UN scrutiny.

In his interview with I slands B usiness , Marles agrees with the French government’s position that Temaru should focus on the country’s economy rather than decolonisation: “We absolutely take our lead from France on this.”

There’s a new dynamic for France in the region after Socialist Party candidate Francois Hollande defeated Nicolas Sarkozy in the French Presidential elections in May. New Caledonia’s politics also faces new shifts after former President Philippe Gomes won a seat in the National Assembly in Paris, in June legislative elections that saw a setback for the conservative Rassemblement UMP party.

Gomes was outspoken against regime leader Bainimarama leading the MSG mission to New Caledonia in July, with many Kanaks likely to tell the Melanesian delegation that they are seeking political independence, not greater autonomy within the French republic.

The Forum may soon face a dilemma: how long will Australia, New Zealand and Forum Islands Countries continue to “appreciate France’s presence in the Pacific?”

Kia Orana, participants to the 2012 Pacific Islands Forum Leaders meeting, gathered from across our Large Ocean, representing our Island States to dialogue on The Pacific Challenge.

Kia Manuia.

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Forum

Dr Transform Aqorau (right)...the region needs a change in thinking to capture a greater proportion of wealth from their resources. Photo: PNA Secretariat

Get out of aid mentality Why we need to be independent, self reliant

By Dr. Transform Aqorau & Maurice Brownjohn The fish market, roads, bridges, schools, hospitals, wharves, airfield, water tanks, etc, have signs saying funded either by USAid, AusAid, EU, JICA, NZAid, Taiwan, China, or ADB. There is a vehicle in Tarawa with the words “we love Taiwan” written across it.

The EU’s most visible aid project in the Marshall Islands is water catchments. These can be seen outside various homes with the sign “EU Funded!”

In some villages, there are signs which say “eco village”, “solar village” backed by some form of aid. Aid is a huge industry. It has provided development opportunities and at the same time breed dependence.

Everywhere one goes, there are signs of aid— aid the islands can’t afford to own and maintain, and potentially a burden. Where is their independence and self reliance?

There is even a Forum process called Pacific Islands Countries (PIC) Donor Partners Meeting. This is a forum where national and regional officials talk about more aid! There is also the Cairns Compact where Forum Leaders in 2009 decided that donor funds should be implemented according to the Paris Principles for ‘aid’.

National governments, communities, provinces and villages are not the only ones dependent on aid. Regional organisations are also aid dependent. Major regional organisations, SPC, SPREP, PIFS, and FFA, are all donor dependent.

Without donor support, they won’t be able to pay their staff and programmes. And so the cycle of donor assistance is perpetuated. It has become an industry in itself. National governments depend on bilateral aid, while regional organisations depend on regional aid programmes.

The Pacific Islands are so aid dependent.

There is even a second layer of consultations after the Forum. It is known as the Dialogue Partners Forum. This is where Donor Partners meet with Pacific Leaders, usually at Ministerial level, to discuss a range of issues pertinent to the donor partner including aid!

Let’s have a reality check; donors don’t give aid to the Pacific Islands for the sake of it. Aid is clearly policy driven. The contracts and supply tend to go back to the donor economy at inflated prices, either directly or indirectly—in fact a backdoor subsidy to their industry.

Aid is used to lever influence, votes, and fishing

rights. Many aid projects can be termed “liability” or “dependency” schemes, because they systematically nurture dependence, enforced with a web of administrative and financial burdens to fertilise it, and thus the spiral continues. However, it need not be that way!

A chance comment by a Head of Mission about the amount of aid the Pacific Islands region receives got us thinking. The Head of Mission said, his own country received aid in the past.

Indeed, they received a lot of aid, but they used it to build their economy and grew out of it, and became a developed, industrialised country over time. Now they’re giving aid to the region to further their policies. But they don’t see that approach in this region.

Why, have the Pacific Islands remained undeveloped, even developing and increasingly dependent? The aid dependency mindset really needs to change now if Pacific Islanders are to know the true value of their resources so that they can use it from a position of power to negotiate what access to their resources is worth.

How long will Pacific Islanders allow donors to dictate what is their worth?­It happens because they don’t know the value and power that lies in their God-given resources!

In a presentation to the 12th Micronesian Presidential Summit, it was shown that since the establishment of the PNA Office in Majuro, the PNA countries have doubled the gross value of their raw material of tuna from under US$1.5 billion in early 2010 to US$3 billion in 2012, through scarcity under the Vessel Day Scheme.

The US$3 billion raw material fuels a US$6 billion retail trade. But the countries are not getting the benefit of the increase in the gross value of their resource, because the economic outcomes from the rental arrangements are subject to negotiations.

In 2010, returns from the harvest were about 8%. Today, whilst the dollar value has more than doubled, the percentage return of fish value remains unchanged. Meanwhile, with tuna prices more than doubled, the cost of catching rose in line with increased efficiency, and for what was already a profitable industry in 2010, the profits for foreign fleets from the harvest today have grown incredibly.

Unless there is a change in the mindset about being wealthy custodians of a multi-billion US dollar resource, and Pacific Islands pursue alternative models of economic development other than access arrangements with Korea, Japan, US, China, Taiwan, Philippines and the EU, they will continue to be donors to the industrialised economies, by donating billions of dollars of raw material, creating offshore jobs, food security, foreign exchange and wealth from their tuna resources!

Dire need for a change in thinking This region is in dire need of a change in thinking and attitude by regional and national officials at the highest levels, with the citizenry holding officials accountable for the failure to capture a greater proportion of the wealth from their resources.

Some targeted aid used properly can help develop national capacity, but blanket dependency on aid weakens, not strengthens the Pacific Islands. Too much of the region’s “common wealth”—tuna—is given away for a token fee, whilst in return the region gratefully accepts the liability of aid and influence instead.

Islands Business, August 2012 31

Politics PALAU

Toribiong vying for presidency again

By Bernadette Carreon A general elections will be held in Palau on November 6 with three formally declaring their bid for the presidency while four are running for the vice-president’s slot.

Incumbent President Johnson Toribiong is seeking re-election while former president and current Senator Tommy Remengesau Jr is trying his hand again. Former vice president Sandra Pierantozzi is also vying for the presidential position.

The individuals who have announced their vice-presidential bids are incumbent vice president Kerai Mariur; Palau Minister of Infrastructure Jackson Ngiraingas; Palau Minister of Health Stevenson Kuartei; and former House of Delegates Representative Antonio Bells.

There are 13 positions up for grabs in the Senate while 16 slots for the House of Delegates.

A primary election is set for September 26 to determine the top two vote-getters in the presidential and vice presidential posts who will face each other in the November election.

Candidates have until August to file their candidacy before the Palau Election Commission.

The candidates who have declared their interest are now in the heat of campaigning and have also been traveling outside Palau where there is a sizeable number of Palauans to lobby for their support.

President Toribiong officially filed on July 23 his candidacy for the upcoming race in November and so has Pierantozzi. In fact a total of 32 candidates have already filed their petition for candidacy.

President Emanuel Nori of Federated States of Micronesia...at the annual summit of Presidents in the Northern Pacific. Photos: Giff Johnson

Micronesian presidents push c change action, address region a Marshall bids to host 2013 Forum meeting

By Giff Johnson The annual summit of Presidents in the north Pacific in early July agreed to pursue two innovative climate change response strategies and reached agreement on several regional organization proposals.

Emphasizing growing worry about sea level rise, Marshall Islands President Christopher

Loeak said bluntly at the opening of the meeting in Majuro, “We cannot afford any more delays” in climate change action.

The Marshall Islands delegation briefed Loeak, Palau President Johnson Toribiong and Federated States of Micronesia President Emanuel Mori on a “debt swap” strategy for climate change mitigation and ocean thermal energy conversion (OTEC) for producing electricity.

These were cited as key measures to combat

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32 Islands Business, August 2012

MARSHALL ISLANDS

The three presidents...Johnson Toribiong of Palau, Chris Loeak of the Marshalls and Emanuel Nori of the Federated States of Micronesia.

h climate n al issues the global carbon emissions problem that is threatening these small island nations with rising seas.

Loeak said the Marshall Islands is pushing forward with the debt swap plan that is now going into operation in several Caribbean nations.

The communiqué signed at the end of the one-day summit by the three presidents agreed to collaborate on the debt swap proposal and to participate in a workshop in the Marshall Islands

scheduled for October that is being facilitated

by The Nature Conservancy. The international NGO is currently implementing the debt swap strategy in the Caribbean.

“This innovative financing mechanism is linked to improving the environment—for example through the goals of the Micronesia Challenge to set aside 30 percent of reefs and 20 percent of terrestrial resources in managed conservation areas,” said Marshall Islands climate change advisor Steve Why. “Countries can use debt re-financing to establish national climate adaptation trusts to sustainably finance their local adaptation.”

The Marshall Islands is seeking donor funding for a US$3 million site feasibility study for an OTEC plant at Kwajalein Atoll that, if it moves forward, could become the Pacific’s first commercial application of the alternative power source. The presidents agreed to “explore OTEC’s sub-regional potential.”

The Presidents discussed air service opportu-

nities with Nauru’s Our Airline and Honolulubased Hawaiian Airlines. They also called for a meeting with high-level officials in United Airlines, which has recently taken over service connecting the Micronesia area with Guam and Hawaii through its merger with Continental Airlines.

The Marshalls and the FSM, in particular, expressed the need to encourage competition on the “island hopper” route that links Honolulu with Majuro, Kwajalein, Kosrae, Pohnpei, Chuuk and Guam. Mori pointed out that Continental’s air service agreement with the FSM expired late last year and no action has been taken by United to renew it.

The Marshall Islands will be making a bid to host next year’s annual meeting of the Pacific Islands Forum and is also keen to host a proposed new sub-regional Secretariat of the Pacific Regional Environment Programme (SPREP) office in Majuro. The first and only Forum hosted in Majuro was in 1996. SPREP, following the example of other regional organisations, is looking at establishing its first north Pacific office.

The FSM and Palau Presidents agreed to endorse the Marshalls’ bids to host the Forum meeting as well as the SPREP sub-regional office.

The three presidents also endorsed the FSM’s interest in hosting a secretariat for the Sasakawa Peace Foundation of Japan’s initiative to strengthen marine surveillance in the Micronesian region.

This is a multi-year, multi-million project that after several years of negotiation is this now being implemented, with Sasakawa paying for new surveillance vessels and equipment for Palau, the FSM and the Marshall Islands.

Palau and the Marshall Islands have gained international recognition for establishing shark sanctuaries in their exclusive economic zones, and both have been aggressive in enforcing fines and confiscating shark fins and carcasses from fishing vessels in their waters since those bans went into effect. Although the Federated States of Micronesia has yet to follow suit, Toribiong and Loeak “welcomed” progress made by FSM to develop a sanctuary that, if implemented, would in combination with Palau and the Marshall Islands ban shark fishing and finning in an ocean area larger than the continental United States.

Secretariat of the Pacific Community (SPC) Director, Human Resources (based in Noumea, New Caledonia) SPC is the largest regional provider of technical/scientific services and development assistance to Pacific Island countries and territories. It seeks to appoint a pragmatic, innovative and results-oriented person to lead its HR Section, which supports around 570 staff. The successful candidate will possess: a proven track record in strategic HR policy and management, systems development and change management; relevant tertiary qualifications and the skills required to lead and manage a geographically dispersed team; an ability to communicate effectively in a bilingual and culturally diverse environment, and to work across the organisation and with stakeholders and partners; and excellent interpersonal relationship skills, ability to influence others, business acumen and a commitment to continuous learning and development.

The Director, Human Resources, is part of SPC’s executive team and reports to the Deputy Director-General (responsible for operations and management and based in Noumea). The role is responsible for developing and implementing strategic and operational HR policies and management initiatives and provides leadership to the HR Section to deliver support for SPC’s operations in several countries. The Director will contribute to SPC’s corporate development, resource mobilisation, policy innovation and change management, and its strategic relationships with clients and other stakeholders. The appointment is for three years, renewable subject to performance and funding availability.

For a position description, terms and conditions of service and application procedures, visit www.spc.int/en/employment.html or contact Sally Clark Herrmann, Recruitment and Staff Development Officer, in confidence (email sallyh@spc.int or tel. +687 26 01 40). Applications may be submitted in English or French (SPC’s working languages) by the closing date 27 August 2012. www.spc.int

Islands Business, August 2012

Politics

VANUATU

Pretty much on the eve of the 32nd anniversary of Independence (30 July), the minister of trade will be rushing the signed Vanuatu WTO accession to Geneva, even though the Head of State resisted signing it until June, six months after it became too late. The Protocol of the document signed makes it clear that membership offer was available until 31 December last year. Whatever its legitimacy, with membership voted by a majority of only one, the WTO will still be an election issue. And the late signing should be high on any new government’s agenda, Asian workers for Port Vila? Hong Kong television is advertising Vanuatu as a destination for Asian workers. Photo: Bob Makin even if they wanted to stick with WTO. They should surely be after a better deal rather than falling like ripe plums (but we’re getting back to the chestnut imagery).

Globalisation today, however, is important in Vanuatu for another matter. Hong Kong television is advertising Vanuatu as a destination for Asian workers. In a “Who Wants to be a Millionaire?” setting, a young man answers questions relating to permanent residence in Vanuatu.

“How do you apply?” asks the quizmaster. “You have to consult the sole agent in the Pacific, a company called Tai Ping Yang immigration consultant agency,” says the young working father.

Quizmaster: “You are correct.” The man and minister of lands, at least for as long as there is his young son do a high fives. Audience clap.

By Bob Makin some land left.

“And now for the ten-million dollar question, This minister has sold off various large tracts what is the country indicated in this picture?”

Battle lines are being drawn recently, not always as decided by the Council Like Tonga, Vanuatu has seen a huge increase for Vanuatu’s upcoming national of Ministers and drawing more than a little atin retail store-keeping by Asian (and especially elections on the eve of Hallowe’en. tention to himself with pending fraud charges Chinese) store operators. It has also seen a huge Whether it will be a “trick” or “treat” is anyon another front. increase in the population of Chinese building one’s guess and any assessment of the value or These came after an association with a particulabourers. benefit will always have two sides to it. One up, lar Asian businessman (Korean, but now based Strictly speaking, all are styled “foreign invesone down: or one north, one south. in Singapore). And then the best friend of all the tors”, and it is the Vanuatu Financial Services The hoariest old chestnut is being pulled out above, the PM’s first political adviser, had to let go Commission which has an office in Hong Kong of the fire as you read this: wages. of his three illegal Indonesian immigrants because and presumably have some responsibility for the The internal affairs minister is trying to rush his boss said he should. And their association with recruitment drive, if not the much talked about through a minimum wage increase. (The public the Bali Bomber were likely to prove fascinating, advertisement. However, they would not answer asks, is this the same old trick governments dangle but we did not have the chance to learn more. this writer’s questions about the matter. just before an election? Of course, they don’t get Asian links will be much discussed as the camSo be it. Government will have to do so, on an answer.) paign gets underway. First, because of the Tongan 30 October if not before. In Vanuatu, labouring There is a labour advisory council which has to experience of the World Trade Organisation as jobs are supposed to be for ni-Vanuatu alone, and make recommendations and members are being depicted in Fool Me Once, the documentary of the store keeping reserved for locals. It just hasn’t hastened to make a decision. But the secretary Pacific Area Network on Globalisation. happened like that in recent years and especially general of the National Workers’ Union sees the Tongan shops are now Asian (like in Port Vila with the present government. Every shop is now council as simply a rubber stamp for the minister. and Santos) and selling a vast range of Chinese a Chinese shop, and the Asian pushers of cement That union leader, himself, is also running in the cheap goods and trying all the while to get filled wheelbarrows on building sites arrive for the election, so he would see it that way, wouldn’t he? cheaper. job on lorries by the dozen. They may be styled And then, there’s the Workers’ Union secreCivil society in the Kingdom, after 5 years of “investors” by the government and big employtary’s brother, the attorney general. He, too, is WTO, has nothing good to say about the global ers. However, the voters may have a different contesting the election, but not a word to anyone body spear-heading this, just like the civil society idea come 30 October, whether or not they get (just yet) as everyone wants the maximum take in Vanuatu where the churches issued an historithe basic pay rise we started out with, above. But of government pay until it is no longer legally cal declaration against the manner in which the watch this space. It’s early days yet. With three possible, when campaigning begins. government was introducing WTO membership months to go, there’s still a chance for a “treat” for The ripples spread outwards with a cousin without telling people where it was leading them. this country’s ni-Vanuatu inhabitants. brother of the last two mentioned, the present

Battle lines drawn as Vanuatu prepares for polls Asian links, workers and WTO hot issues

34 Islands Business, August 2012

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Business

CNMI flag carrier pulls plug before takeoff Saipan Air victim of fraud and racketeering

By Haidee V. Eugenio

able to revise its FY 2013 budget by increasing its projected revenue by $12 million from other sources, bringing the proposed budget from $102 million to $114 million. Fiscal year 2013 is from Oct. 1, 2012 to Sept. 30, 2013.

Japan and China.

Regional political and business leaders also had advance praises for the CNMI for the anticipated launch of its flag carrier.

The flag carrier initially planned to provide daily flights to Narita, Japan and four times a week to Beijing, China. By Aug. 1, Saipan Air had planned to offer daily flights to Osaka, Japan and thrice-a-week flights to Shenyang, China.

Tan Holdings president Jerry Tan had said Saipan Air would have gained back the Japanese traffic that the CNMI lost after Japan Airlines pulled out from the islands in October 2005, taking with it 182,000 air seats annually.

Japanese arrivals, which accounted for 71 percent of arrivals, immediately declined by 25 percent and have been shrinking since, officials said.

For the commonweaLth L Lth oF the northern Mariana Islands (CNMI), a flag carrier continues to be a pipe dream after Saipan Air Inc. initially indefinitely postponed and later on ceased its operations two days before the much-awaited A sad day for the CNMI Fraud July 1 inaugural flight.

Saipan Air’s June 29 announcement that it Saipan Air, one of the companies under reThat was because its supposed partner, Swift is ceasing its operations came as a shock to the gional business giant Tan Holdings, sued Swift Air LLC, failed to deliver an aircraft. entire CNMI. Air executives Donald A. Stukes, Jeffrey Conry, Saipan Air found out it was a victim of fraud Government officials and the private sector Hank Tobert, Boris Van Lier, and 10 unnamed and racketeering, among other things, perpetrated said Saipan Air’s historic launch and the millions persons for fraud, violations of the Racketeer

by Swift Air’s executives who already have a hisof dollars it would infuse into the economy by Influenced and Corrupt Organization Act, and tory of defrauding other investors. bringing in more tourists from Japan and China – civil conspiracy.

The new airline would have been the CNMI’s and the domino effect to the community -- could Swift Air was not named in the lawsuit because flag carrier, providing service to the islands’ main have been the single major driving factor in the of the bankruptcy petition it filed, preventing it tourism markets of Japan and from being sued.

China initially.

Saipan Air, through its Swift Air terminated its counsel Steven P. Pixley, contract with Saipan Air June asked the U.S. District 24 for reasons that Saipan Court for the NMI to Air counsel Steven Pixley hold the defendants lidescribed as “bogus.” able to pay the company Swift Air cited its failure to $50 million in punitive obtain certain Federal Aviadamages, plus unspecition Administration certified amounts in restitufication for terminating the tion, special damages, contract, only for Saipan Air attorney’s fees, and court to discover later that Swift Air costs. didn’t pay the vendor who is The Saipan Air counresponsible for conducting sel said their background the inspection, so no certificainvestigation showed that tion was issued.

Big news...Tan Holdings president Jerry Tan making a presentation before the Saipan Chamber of Commerce the individuals being It turned out, as early as in January 2012 about the launch of Saipan Air. Photo: Haidee Eugenio sued had been involved Dec. 20, 2011, the defendants with multiple airlines for in the racketeering case used the last two years includSwift Air as a “mere sham and shell to defraud CNMI’s economic recovery in 2012. ing Direct Air and Sky King.

Saipan Air and otherwise operated this entity as “Truly, it’s a very sad day for the CNMI,” press He said these persons followed the same pattheir alter ego,” Pixley said. secretary Angel Demapan told the media. “This tern of acquiring ownership interest of airlines Swift Air filed for bankruptcy in Arizona on latest development is certainly a devastating blow and then basically used the money from the June 27. to the widespread anticipation of increased visitor airlines then end up filing for bankruptcy.

Days later on July 12, Saipan Air filed a $50 arrivals and much needed economic stimulation.”

Saipan Air wire transferred $1.26 to Swift Air, million racketeering lawsuit against four Swift Saipan Chamber of Commerce president in addition to the millions of dollars already spent Air executives for allegedly conspiring to obtain Douglas Brennan also described the pullout of preparing for the business. money and other property from Saipan Air. Saipan Air as a “sad day.”

These expenses include marketing efforts Employees hired for Saipan Air had to be “Saipan Air put a lot of effort, time and money and ticket sales in Japan and China, purchase of accommodated in other companies under Tan to it. Everybody was looking forward to additional supplies, major apartment renovations to house Holdings, which had already invested millions airline seats. It’s a big disappointment that it’s Saipan Air’s crew and personnel, a new office of dollars for the airline business and related not going to happen but it’s something beyond at the Francisco C. Ada/Saipan International activities. Tourism-related companies anticipatSaipan Air’s control,” Brennan told the media.

Airport, and the hiring of 23 flight attendants. ing increased business had to lower their forecast The Chamber of Commerce is the largest busiThese flight attendants were on training when for the year. ness organization in the CNMI with some 150 the decision to postpone the launch was made.

The CNMI government also had to adjust its members.

POI Aviation, Saipan Air’s sister company, also projected revenues for fiscal year 2013 as a result Representative Ray Palacios said Saipan Air’s hired 35 additional employees in preparation for of Saipan Air’s pullout. operations “would have been a big boost to the the new business.

Lt. Governor Eloy S. Inos said the administraCNMI economy,” but said everything bad that Despite what had happened, CNMI officials tion was projecting $5 million to $7 million in happened was beyond Saipan Air’s control. and businesses are not giving up hope that the additional direct and indirect tax revenues from The Marianas Visitors Authority cancelled Commonwealth will have a flag carrier someday.

Saipan Air’s operations, and this could have been promotional activities overseas after Saipan Air But right now, the focus is to continue to market enough to restore 80 work hours biweekly for indefinitely suspended and then later on ceased CNMI as a safe and clean tourist destination for many government employees. operations. However, MVA and other CNMI mostly Asian tourists who have to travel only a Later on, however, the administration still was officials had already held launch receptions in few hours for that tropical paradise experience.

Islands Business, August 2012

Business ing with President Barrack Obama in Honolulu.

In a statement after that meeting, the PIPs stated that they thanked the US State department at the Honolulu meeting for considering improvements to the trade and investment arrangements for Pacific Islands countries.

Critical of the wording of the statement, Dr Aqorau said it “contained a lot of appreciating, welcoming and recognizing”. But there was no constructive progress or outcomes on this matter.

He said it is unlikely this issue would be brought back to the US treaty negotiations.

However at the end of the day he said the 2-year arrangement with the US is an improvement.

James Movick...new FFA head to lead the Pacific Islands into the eighth round of negotiations with the Americans to be held in Vanuatu in September. Photo: PIFS

Islands want access for tuna into US markets But access now taken out of negotiations

By Robert Matau An important bargaining chip for the Pacific Islands parties has been taken out of the US/ Pacific fishing treaty talks.

And that is market access for Pacific islands tuna into the United States markets.

Following the seventh round of talks in Auckland in June, market access was taken off the negotiating table, causing some unhappiness and anger amongst islands parties. Pacific Islands Parties have used this as a bargaining chip during the extensive talks, which began last year, once a successor treaty agreement was being discussed.

The tuna catch in the Western and Central Pacific, as estimated by environmentalists PEW Trust group, is around US$4.6 billion per year.

The US has paid about US$400 million for fishing in Pacific waters since it started in 1988.

It seems that after a meeting between the Pacific Islands Forum Fisheries Agency officials, the Pacific Islands Forum Secretariat and the United States’ State Department, the bargaining chip was taken out of the US treaty talks and handed to the Pacific Islands Forum Secretariat.

PNA rue loss Parties to the Nauru Agreement secretariat director Dr Transform Aqorau said the US has preferential access to the Exclusive Economic 38 Islands Business, August 2012

Zones of the 17 nations in the Pacific but “we do not enjoy the same access to their markets”.

“Access to any market is important because if you can’t sell your fish, it is not possible to go into business,” he said.

“So if you know that you have free access to a market, it will considerably enhance the value of your product, make investments worthwhile, and our domestic industries competitive.”

Aqorau said the US has access to 17 EEZs in the Pacific at less than the premium rates but Pacific Islands States don’t have the same access to US markets.

“I don’t know what the US is making from their tuna sales, but they are making a lot of money, and everyone is also making a lot of money with the high tuna prices.

“The Pacific Islands Parties have still done very well because they have increased their access fees from US$21 million to US$63million so that is a 200% increase.”

However, the issue of market access has been taken out by a process that was outside of the negotiations of the Treaty because market and trade access issues are broader than the US Treaty.

“Fisheries officials were only told last January by the then Deputy Director General of Forum Fisheries Agency that he and a senior official of the Forum Secretariat had gone to Washington towards the end of 2011 after the Leaders Meet-

7th negotiations As the United States rightly paraded the proposed new agreement as a great achievement so were Pacific Island Parties.

The agreement reached meets or exceeds the benchmarks articulated by Pacific Island Party Leaders over the course of negotiations by providing: •$63 million annually to the Pacific Islands Parties over the next 10 years, for a total of $630 million; • A payment per vessel day that is more that 50 percent higher than the $5,000 per day regional benchmark price established by Parties to the Nauru Agreement (PNA); • A 17% return on the value of the fish caught

by U.S. vessels licensed under the Treaty under current conditions, which exceeds the 10% average rate of return desired by Pacific Island Leaders; and • Fair compensation for fishing opportunities in the waters under the jurisdiction of non-PNA States.

“This agreement on the overall financial package is a significant advancement in the negotiations, and creates a strong foundation on which the United States and our Pacific Island partners can continue to build a prosperous and sustainable future for the peoples of the Pacific region,” the US said in a statement.

“The United States looks forward to working with the Pacific Islands Parties to address the remaining technical issues and to reach an early agreement to extend the Treaty.”

Dr Aqorau said non-PNA nations can make 300 days available to the Treaty.

“This is clearly a new arrangement with those contributing days to the Treaty expecting to get a lion’s share of the Treaty payments for the tuna,” he said.

However, he said there are still other important issues that remain and the negotiations are far from over.

“The matter of national laws and domestic developments are issues still remaining to be sorted out.”

He was also critical of the handling of the market access issue. “I think the final statement reflected the results of the agreement on fees and fishing opportunities,” Dr Aqorau said.

“What is quite clear from the US statement is that they are paying for these opportunities in Tokelau and PNA waters.”

As the parties head for the eighth round of negotiations in Vanuatu on September 2 , it looks like stormy waters have yet to be cleared as some rough patches are still to be ironed out before a final agreement can be reached.

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Sport

Cricket: A pathway for Pacific youth

countries, the programmes also aim to increase awareness around issues such as Non-Communicable Diseases, HIV/AIDS Awareness, Gender Equality and many other social issues challenging to the region.

In Suva, Cricket Fiji has also begun a modified version of cricket called ‘Table Cricket’ which is currently being introduced to children with disabilities at all special schools in and around Suva.

The Under 17 event in Fiji will be the first opportunity a number of these players will have had to travel to another country. Cricket Fiji, Cricket programmes.

PNG and the Vanuatu Cricket Association pride

By Adam Cassidy These programmes not only improve the themselves on not only providing opportunities standard of cricket in the region, but also provide for their youth to play cricket, but also to gain not many tourists associate the sPort oF youth with many of the health and awareness valuable life experience through sport. cricket with Fiji. To most ‘outsiders,’ sport in benefits associated with participating in organAll three countries have recently sent some the Pacific usually refers to rugby or to a lesser ised sport. of their most talented young players to Australia extent football.

Six Pacific countries are members of the Inter Interfor six months on cricket scholarships with local However, with warm weather year round, national Cricket Council and they are Fiji, PNG, Australian clubs. beautiful beaches and a Caribbean like atmoSamoa, Vanuatu, Tonga and the Cook Islands.

These players have learned many skills whilst sphere surrounding the grounds, it is little In recent times each of these countries has away from home that they will take back with wonder cricket has exploded on to the seen in them as they become youth the last decade. leaders in their own cricket Nadi will play host to the communities.

International Cricket Council’s Many players who have (ICC) East Asia-Pacific Under done similar things in the past 17 Cricket Trophy. and gained significant experiThe tournament, which kicks ence both on and off the field off on August 27, will bring toreturned home with skills that gether national Under 17 teams have allowed them to also take from Fiji, PNG and Vanuatu up employment with their nafor a three-day carnival that tional cricket bodies as adminshowcases the best young talent istrators, development officers in the Pacific. and coaches.

Through the support of the In terms of on-field acAustralian Government and the tion, those in attendance at the ICC, youth all over the region tournament in Nadi can expect are coming together in villages plenty of colour, plenty of and schools to participate in atmosphere and cricket being organised cricket activities. played with the sort of spirit “The ICC Development Prothat test playing nations could gramme’s focus over the next learn a lot from. few years is on making a sigPNG will enter the tournanificant increase in participation ment as favourites after they globally,” said Kieran McMillan, defeated Vanuatu in the final the ICC East Asia-Pacific Regional Development Manager. On the rise...in 2011, 150,000 children across the Pacific participated in cricket through various of the last Under 17 event in 2010.

“The Pacific countries are school and village programmes. Photo: ICC However, both Fiji and Vancurrently doing a great job in uatu have been working very getting kids right across the rehard at developing the game and are confident developed their own junior cricket participation gion exposed to cricket, and this tournament in they can provide an upset in Nadi. programme that provides youth with a healthy Fiji will be a celebration of that success.” social outlet.

So popular has it become that in 2011 over Apart from the obvious long-term benefits to 150,000 children across the Pacific participated • Adam Cassidy is the ICC East Asia Pacific Regional Project Officer. the standard of national cricket teams in these in cricket through various school and village

Fiji, PNG, Vanuatu battle it out in August

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Interview

Xianbin Yao Director-General for East Asia and the Pacific, ADB Sealed...USP Vice Chancellor Rajesh Chandra and Director General of ADB’s Pacific Department, Xianbin Yao sign a $19 million loan agreement which will help boost the quality of higher education in the Pacific. Photo: USP

ADB and its role in then Pacific Xianbin Yao, the Asian Development Bank’s new Director General for the Pacific, recently visited the University of the South Pacific in Suva, Fiji, to sign an agreement under a US$19 million loan to upgrade regional campuses in Fiji, Kiribati, and Solomon Islands; and improve distance education and e-learning.

He spoke to Islands Business about ADB’s first loan to a regional university, discussed ADB’s contribution to the fight against climate change in the Pacific, provided updates on developments in Pacific economies and explained how ADB in partnership with Pacific governments is helping lift the barriers to business.

ing USP’s relevance, coverage and internal and external efficiencies.

We also very much welcome and are honored that this is the first time that USP has borrowed financial resources for specific parts of its ongoing development, rather than relying on development partner assistance. Incidentally, this is also the first ADB loan to a regional university.

ADB hopes to expand our engagement with USP beyond this project. We have a very high regard for what USP has achieved in the Pacific region and we look forward to expanding our cooperation through future initiatives.

How will the US$19 million loan package help expand the University of the South Pacific, and which countries will benefit?

ADB is very pleased to be working with the University of the South Pacific (USP) on the expansion of USP’s regional network and coverage, and it would be useful to note that we are supporting part of USP’s ‘Strategic Plan 2013-2018’, in conjunction with a number of development partners. In the last three years, USP has been successfully implementing ‘USP Strategic Plan 2010-2012: Quality, Relevance and Sustainability’ to enhance the quality and relevance of learning and teaching programmes. The new ‘Strategic Plan for 2013-2018’ aims to further reshape USP’s strategic focus, while expanding its provision of quality higher education across the region.

ADB’s recently approved US$19 million loan package will help USP: (i) expand and improve its regional campuses in Kiribati and Solomon Islands; (ii) enhance its Information and Communication Technology-based education; (iii)

Can you provide an update on the $US34 million ADB, World Bank, Tongan Government project to give Tonga high-speed internet access through a submarine cable system?

Last year, ADB approved the Tonga–Fiji submarine cable project to support the development and operation of a submarine fibre optic communication cable system linking Tonga to Fiji. The existing international submarine cable network in Fiji will then provide onward, costeffective access to the rest of the world. The infrastructure development under the project will be complemented by the World Bank and AusAID-financed technical assistance (TA) to improve the regulatory framework and develop the regulator’s capacity. The project’s investment plan is at valued at US$32.8 million, to which ADB is providing US$9.7 million in grant funds. The project is now being implemented very smoothly, after some initial start-up delays.

We are currently preparing another submarine cable project, to provide greater and more eco-

42 Islands Business, August 2012

improve student/pre-enrolment services, including the construction of a new dormitory at the Laucala main campus to accommodate regional students, especially female students with families; (iv) strengthen university governance and management; and (v) develop USP’s project management capacity. We believe the assistance will actually benefit all 12-member countries of USP, with a particular focus on Kiribati and Solomon Islands.

We believe USP has a very important role to play in shaping the future of the Pacific, and establishing career counseling services to facilitate skills assessment, job search processes and links to available employment opportunities is an important step to ensure that USP graduates will be most productive in their own countries or overseas. We recognise that one of the key constraints for the development of the Pacific countries is a shortage of skilled or educated human resources, and strongly believe that the USP’s ADB-assisted investment program will contribute to improv-

Pacific economies through improved public sector management, human resource development, infrastructure development, private sector development, and enhanced regional cooperation efforts. Pacific countries can also access new opportunities by taking advantage of new information and communication technology, including those that respond to climate change concerns.

We recognise that the Pacific’s macroeconomic weakness is partly due to the high cost of power generation, through the widespread use of imported diesel fuel. Introducing renewable energy, for example, will contribute to addressing the issue of climate change, a real threat for the Pacific, and improve the countries’ economic stability by reducing reliance on imported fuel.

Information and communication technology development is also expected to help address the weakness of being remote by changing the Pacific’s economic landscape.

Getting an update...Director General of ADB’s Pacific Department, Xianbin Yao inspecting ADB-funded roadworks in Fiji. Photo: ADB

nomical internet access to the Solomon Islands.

Since we are supporting the Solomon Islands to improve its business environment by introducing an online company registry and secured transactions, the improved communication infrastructure should help private sector development.

Economic diversification supported by the private sector is essential; therefore, we are also looking into other potential submarine cable projects elsewhere in the Pacific.

We believe these projects are extremely important for the future of Pacific countries, as better connectivity could address Pacific countries’ fundamental constraint in terms of ‘remoteness’.

Improved information and communication connectivity will allow Pacific countries to explore many new opportunities, and also enable more effective delivery of social services, such as education and health. Improved information and communication connectivity is no longer a luxury, but a necessity, and this is particularly relevant in the Pacific context.

ADB’s latest Pacific Economic Monitor report showed growth slowing to 4.2% in 2013. What is ADB doing to ensure economic stability in the Pacific region, where many economies are dependent on either tourism or resource exports?

Early this year, ADB forecast that growth in Pacific region would run at 6.0% in 2012, and this forecast has not been revised despite the latest assessments of global growth prospects.

Global growth is diminished, generally reflecting a more pessimistic outlook due to lingering sovereign debt and banking sector concerns in Europe, which continue to weigh down the global economy.

In response to this more muted growth outlook and the absence of clear direction in leading economies’ 2013 fiscal stances, monetary authorities around the world have adopted mildly accommodative policies to stimulate growth.

Overall, the Pacific region is expected to experience only indirect impacts from slowing global growth into next year, and growth prospects—especially in larger resource exporting economies—will continue to be driven by domestic developments. Regional growth is now

projected to run at about 4.2% in 2013, mostly due to scheduled infrastructure developments in larger economies. The relatively robust outlook for the Pacific remains subject to downward revision if growth prospects in the People’s Republic of China further decline, or there is significant deterioration in the ongoing Eurozone crisis.

The main impact of developments in these areas would be expected to occur through adverse impacts on Australian exports. Australian growth, in turn, has relatively strong influence on the Pacific economies as their primary economic partner.

ADB has been working with many Pacific countries to improve public financial and economic management in the region for a number of years and, in 2012, are planning to provide policy-based budget support to Nauru, the Cook Islands, Tuvalu and the Republic of Marshall Islands. The policy-based financing builds upon ongoing regional technical assistance (TA) initiatives such as the Pacific Economic Management TA project and ADB’s work with the Pacific Financial Technical Assistance Centre.

ADB also provides assistance under the Pacific Private Sector Development Initiative (PSDI).

This work is also important, as the economic resilience of a country can be substantially enhanced with the development and support of a robust private sector.

Established by ADB in 2006 with co-financing from AusAID, PSDI assists countries in the Pacific to reform their business environments, making it easier for the private sector to conduct business, grow and create jobs. PSDI is a knowledge hub with technical experts and focuses on business law reform, access to financial services, state-owned enterprise reform and public-private partnerships.

In partnership with Pacific governments, ADB PSDI team are lifting barriers to business through targeted, strategic reform activities and helping the region become a more cost effective, less risky place to conduct business.

Where does ADB see opportunities for economic growth?

We are optimistic about the development of

How is ADB assisting women of the Pacific?

We are particularly conscious about the need to address gender issues in the Pacific. Our regional assistance strategy for the Pacific, the ‘Pacific Approach 2010-2014’, calls for ADB to introduce gender as a key policy concern in the core function of governments. For example, the ADB supported Rural Primary Health Services Delivery Project, co-financed with AusAID, is helping Papua New Guinea improve the quality and coverage of its rural health services. Women and children will be the main beneficiaries of this initiative. In addition, women’s economic empowerment is a major theme of the PSDI. Many PSDI reforms have had a major impact on promoting the entry into and retention of Pacific women in the formal economy.

Climate change is a worrying reality for many of our readers. How is ADB contributing to the fight against it in the Pacific region?

ADB fully appreciates that climate change impacts are a real threat for the Pacific and we are very active in working with our Pacific member countries to respond and build ongoing resilience to climate change concerns. We are also ‘climate proofing’ our investments in physical infrastructure in the Pacific.

We will also move beyond ‘climate proofing’ infrastructure, by taking an integrated approach that addresses the climate impacts along with natural disaster risks. ADB is working with governments and other stakeholders in the Pacific to advance the climate and development financing agenda, by combining policy actions, capacity development and investment financing to help build resilience for inclusive and sustainable development.

As there are many financial resources available globally to address the issue of climate change, ADB is also active in making such ‘climate funds’ available to our Pacific member countries.

With the assistance of the ADB and the World Bank, Pacific countries including Tonga, PNG, and Samoa have recently obtained funding from the multi-donor Climate Investment Funds to finance pilot programmes for climate resilience.

We are supporting these countries with programme implementation, as well the Finance Ministers of Pacific countries who have formed a working group to enhance access to climate financing. We will be providing support for the work of this group.

Islands Business, August 2012 43

Environment

The challenges that await the Pacific in post-Rio

lenge facing our region and that it is an issue of human security affecting the livelihoods of all our people. Our region is one of vulnerability—our countries are the most vulnerable on Earth to climate change, natural disasters and sea level rise.

These physical vulnerabilities are further exacerbated by weak or limited human and agency capacity linked to our small size, population and administrations.

These issues are becoming more evident, more immediate and more urgent as I write this article.

On climate change, we need to respond and we need to respond strategically. media in Pacific countries. Side events provided a

By David Sheppard In the Pacific, our regional agencies including platform to profile Pacific issues and leaders and SPREP and SPC are helping Pacific countries to also underscored the importance of cooperation The United Nations Conference on Sustainbetter plan, develop and implement their climate between the small islands developing states of able Development, better known as Rio+20, held strategies through the involvement of all relevant the Pacific, Caribbean and Indian Ocean regions. in June in Rio de Janeiro, Brazil, was the most agencies and local communities. Increasingly, A highlight of one of the side events was the recent of the 10-yearly Earth Summits dating these strategies are linked with plans for disaster signing of an agreement between SPREP and the back to the first held in Stockholm in 1972. risk management under the framework of Joint Indian Ocean Commission (IOC) to strengthen Over this time, we have seen the evolution National Plans for Action (JNAPs). cooperation between our regions, building on of concepts of environmental management Strategies are an important beginning of a a similar agreement between SPREP and the with growing recognition that a well-managed process, however, their implementation is what Caribbean Community Climate Change Centre environment is the foundation of all sustainable counts. As part of that implementation process in (5Cs), signed in 2011. development. the Pacific, we have initiated a major programme Our message at Rio was that small islands of In the Pacific, these concepts are not new— for adapting to climate change—the Pacific Adapthe Pacific are the most vulnerable on earth and previous generations of islanders knew about the tation to Climate Change Project or PACC. This are increasingly threatened, often by factors beneed to live within the limits of the resources of project, developed jointly between SPREP and yond our control, such as climate change. the sea and land if they were to survive.

UNDP, is developing many practical programmes The key outcomes document from Rio: “The Rio+20 has received a mixed bag of reviews. to address the impacts of climate change, includFuture We Want” is, on balance, positive for With over 42,000 participants in the official sesing in sectors such as water, agriculture and Pacific countries and territories. sions and side events, the conference naturally coastal zone management. held great expectations for change However, it is critical that local and global commitments. At the same action is supported by action at intime, the seasoned global conferenceternational level. goers are emphatically touting the The availability of climate change many “informal” commitments that finance is also a major issue for this have resulted from Rio. region. Despite the glacial pace of I was asked in a radio interview climate negotiations, there are many following the Rio Summit whether donors, partners and regional agenit is really worth having such large cies who are “stepping up to the meetings with their immense carbon plate” on this issue. In fact, we have footprints. Was Rio in fact a waste seen an increased level of funding of time? for climate change and this is likely My answer was that there are to accelerate over the next decade as benefits for the Pacific but only if we developing countries meet the comapproach such events in a clear and mitments under the Copenhagen focused way, using it as a platform to Accord and reaffirmed at subsequent achieve our regional goals.

So, what has the Pacific gained Brianna Fruean (middle): “I believe Rio+20 will only be what we let it be; we hold the meetings including Rio, to provide US$100 billion per annum by 2020 from Rio+20? solutions in our hands from now on.” Photo: SPREP to support climate change efforts by Firstly, the Pacific did approach developing countries.

Rio in a very clear and focused way.

The document recognises the “Special Case SPREP strongly supports the full implemenWe held a series of preparatory meetings, involvof Small Islands States” and also the need to tation of the Green Climate Fund to manage ing communities, civil society, the private sector fast-track implementation of the Barbados Plan climate change funds and welcomes representaand governments. These meetings contributed of Action for Small Islands States—a plan for tion on the board of this fund from small islands to an overall Pacific position ensuring that Pacific sustainable development for all small islands developing countries through Samoa and Barbaissues were raised clearly and prominently at the states around the world. dos. The need for accelerated finance is urgent Rio Summit.

The major review meeting of these strateand must be delivered in a manner accessible by The Pacific was strongly represented at Rio gies—the Barbados+20 meeting—is likely to the Pacific. We call for concerted action from the with heads of government from the Federated be held in our region in 2014. This provides an international community to help countries and States of Micronesia, Fiji, Kiribati, Marshall excellent opportunity to highlight Pacific issues territories of the Pacific to respond to climate Islands, Samoa, Solomon Islands, Tuvalu and to a global audience. change.

Vanuatu in attendance. Many ministers and senior Rio has provided a sharper focus to the key A second key challenge highlighted at Rio is officials from the Pacific also attended as well as challenges facing the Pacific region, particuthe need for better ocean management and conCROP agencies (including SPREP, PIFS, SPC larly with its focus on Green Economy in a Blue servation. The topic of oceans covers the largest and FFA), United Nations agencies (including World. I would like to highlight four key chalthematic area in the Outcomes Document from ESCAP) and NGOs (including Greenpeace lenges arising from Rio which are important Rio. Many of the paragraphs almost exclusively and WWF). for ensuring a more resilient Pacific: Climate refer to small islands developing state issues.

SPREP also fielded a strong team comprising Change; Management of the Pacific Ocean; The Rio document does not fully address contechnical and media experts. This team supRenewable Energy; and Waste. cerns relating to the need to review UNCLOS, ported Pacific islandd delegations; highlighted The first major challenge is climate change. managing areas beyond national jurisdiction and Pacific initiatives through various side events; Leaders of Pacific Islands countries have consisseabed mining but provides ways through which and provided comprehensive media coverage of tently noted climate change as the biggest chalthese contentious issues can be discussed further.

Rio+20 with many stories picked up by the local

But the solutions are in our hands

44 Islands Business, August 2012

The health of the Pacific Ocean is fundamental for the survival of our region and indeed for the survival of the planet.

The Pacific is vast and covers 34 percent of the earth’s surface. In fact, the Exclusive Economic Zone of some Pacific countries would swallow up most of Europe.

Of this vast area, only two percent is land, underlining that the Pacific Ocean is the lifeblood of our region. Many of our Pacific countries are often called small islands developing states when in fact they could be called large ocean states when one considers the size of our exclusive economic zones.

The Rio Outcomes document addresses both conservation and sustainable use of resources of the Pacific Ocean. Pacific leaders have recognised this link between conservation and sustainable use through the Pacific Oceanscape initiative.

This is a plan for Pacific countries to work together to ensure the long-term health and viability of our Ocean for the livelihoods of our people and our diverse marine species.

The Pacific Oceanscape is an innovative regional vision, recognising the global significance of the Pacific Ocean and aims to ensure the region’s fisheries industry is effectively managed and sustainable—and that fair and appropriate revenues are returned to our islands nations.

Additionally, the Pacific Oceanscape aims to identify and protect important areas of marine biodiversity. The Pacific islands region is already a world leader in many respects with two of the largest marine World Heritage sites established in the region, including the Phoenix Island Protected Area in Kiribati. Many countries and

territories in the Pacific have also established sanctuaries for iconic species such as whales, turtles and sharks.

Many challenges remain, including the limited capacity of many Pacific nations to enforce policies and strategies in the marine environment, the continued increase in invasive species, the difficulties in managing marine areas beyond national jurisdictions—the high seas—and emerging issues such as deep seabed mining.

The Pacific nations are the steward of one of the world’s most outstanding and significant resources—the magnificent Pacific Ocean.

We need help and we call on the developed countries and the international community to support the efforts of the Pacific nations to better conserve and manage the Pacific Ocean.

The third key issue is renewable energy. This is an integral element of the Green Economy highlighted in the Rio Outcomes document.

Even though the Pacific contributes only 0.03% of the world’s total greenhouse gas emissions, we are the ones in the frontline who will be most affected by increasing emissions, irrespective of whether they come from developed or developing countries. All Pacific countries and territories are developing ambitious plans for renewable energy which is both an environmental and an economic imperative given the high costs of imported fuel.

The development of renewable energy poses many challenges in the Pacific and we still have a long way to go. Achieving our ambitious energy targets will be very difficult for most Pacific Islands countries and territories. SPREP and SPC will continue our joint work in this important

area and we also call for assistance from the international community to our efforts on renewable energy in the Pacific.

A fourth and final challenge from the Rio Summit is waste. Increasing levels of waste and pollution are of major concern in all Pacific countries and territories, whether it be solid waste, ewaste—associated with old and surplus electronic equipment such as computers—or toxic materials such as asbestos and obsolete pesticides.

SPREP is working with many partners, including the governments of Japan and France, to help Pacific countries better manage and reduce their waste.

SPREP member countries have declared this year the Year of the Clean Pacific. Clean Pacific aims to galvanise actions at all levels to improve our management of waste and pollution in the Pacific region. I urge countries—and individuals—to join with SPREP in tackling the challenges of waste management in our islands.

The Rio Summit has underlined the many challenges facing this region. SPREP will continue its work with partners in support of Pacific islands countries and territories to address their sustainable development challenges.

But importantly, the challenge for taking forward Rio rests with all of us. Brianna Fruean, a 14-year old from Samoa, was a member of the SPREP delegation to Rio+20. Her concluding comment about Rio should resonate with us all when she states: “I believe Rio+20 will only be what we let it be; we hold the solutions in our hands from now on.”

• David Sheppard is the director general of SPREP and is based in Apia

The Fiji National University is now offering programmes on Corporate Governance and Change Management for Executives in the region Corporate Governance is designed to demonstrate how to make the board function more effectively, and thus, set the foundation for the company to grow and add value on a sustained basis in the long term.

Change Management is designed to give leaders of organisations a high level understanding of the elements involved in an organisation’s change and how to successfully implement and manage change.

Workshops planned are as follows:

Country Papua New Guinea Cook Islands Solomon Islands Samoa

Workshop

Date

Corporate Governance Change Management Corporate Governance Change Management Corporate Governance Change Management Corporate Governance Change Management

10-11/09/12 13-14/09/12 17-18/09/12 19-20/09/12 28-29/11/12 30/09-01/12/12 03-04/12/12 05-06/12/12

For applications or further information to attend the above workshops or to request a customised in-house programme, please contact the National Training and Productivity Centre: Kasturi Devi on Phone: 3311004 ext. 4010 Email: kasturi.devi@fnu.ac.fj Fax: 3313185 Applications close: 1 month before course commencement

Islands Business, August 2012

Fisheries

Breaking the boom-and-bust cycle

Islands and Vanuatu to develop national sea cucumber fisheries management plans.

These plans include limiting the number of export licenses, separating export licenses from processing licenses to make monitoring more efficient, enforcing permanent moratoriums and short fishing periods, protecting the rights of local citizens in the allocation of licenses, and­— importantly—providing assistance in improving the quality and price of bêche-de-mer products.

SPC is also promoting improvements in resource monitoring through standardising assessment methods.

Being able to compare assessments will enable resource managers to share experiences and advice.

Sea cucumber ranching is working in China for a temperate species (Apostichopus japonicus) but has yet to succeed for tropical species in the Pacific Islands. Although research is being undertaken, no-one has made money from releasing hatchery-raised baby sea cucumbers in the wild.

Therefore the promises of huge profits from farming sea cucumber being promoted by some traders must be taken with a large grain of salt, if not regarded as false.

In some countries, communities have been victimised when such promises have allowed private companies to gain licenses to harvest Preliminary processing...of sea cucumber catch in Wallis & Futuna. Inset: Sea and export existing wild cucumber.Photo: Emmanuel Tardy stocks, resulting in overfishing.

Sea cucumber a lucrative trade?

The Pacific Islands are facing what could be the end of their longest surviving commercial export fishery.

Sea cucumber and beche-de-mer (its processed form) is a source of livelihood for many communities but it is being overfished as a result of continuous fishing and lack of effective management by authorities. Communities are now feeling the pain of losing an important income source.

In the Solomon Islands’ atoll of Ontong Java, 30 years of continuous fishing has brought the sea cucumber fishery to collapse. With few other sources of cash, people are now enduring hardship.

Bêche-de-mer is a luxury food in China where it is called hai sen and said to have medicinal and aphrodisiac qualities. High demand for the product has provided a lucrative trade for small businesses throughout the Pacific.

In fact, the importance of sea cucumber as a commercial fishery is often unrecognised.

In Fiji, Solomon Islands and New Caledonia for example, the value of sea cucumber exports is equal to around 19 to 32% of the value of tuna catches in their exclusive economic zones.

But years of intensive fishing and ineffective enforcement of management measures have depleted the region’s resources. The results of a study of the state of coastal fisheries, carried out by the Secretariat of the Pacific Community (SPC) from 2002 to 2009, are clear—sea cucumber stocks in the Pacific Islands are largely overfished.

While locally managed marine protected areas (MPAs) are helping to protect some breeding populations, the study, which was funded by the European Union, reveals that these managed areas are being increasingly targeted by fishers from within the community.

While subsistence fisheries are often best managed by communities under traditional practices, the sea cucumber fishery is clearly a commercial fishery that requires other management approaches.

History of boom and bust As long ago as the late 1700s, Pacific Islanders were harvesting, processing and selling sea cucumbers to visiting merchant ships.

A boom-and-bust cycle has long characterised the fishery’s history. The most recent boom occurred in the 1980s and 1990s when an increase in demand saw high production and exports.

For this fragile resource, periods of high production cannot last and are rapidly followed by busts when stocks are so overexploited that the fishery remains dormant while it recovers, often for extended periods.

Today, sea cucumber fisheries in many islands are closed after being overfished. As traders seek to exploit the last remaining stocks, new fisheries are opening up in remote Pacific Islands locations, 46 Islands Business, August 2012

but these opportunities are now rare.

French Polynesia and Cook Islands, where sea cucumber fishing was once unheard of, are now moving into the trade. Export production in French Polynesia has risen from three tonnes in 2008 to 125 tonnes in 2011.

The trend is no different for subsistence fishers—they too are finding it hard to get a good catch of sea cucumber to eat or sell at the local market.

What can be done?

Sea cucumber is a commercial fishery best managed under national government control.

Countries that have taken the bold move of closing their fisheries are now on the right track.

The next challenge is making sure the closure is effectively enforced. But many countries do not have good management policies. Papua New Guinea and Tonga are exceptions with fishery management plans that have been successfully implemented.

With EU funding, SPC’s Coastal Fisheries Section is assisting Marshall Islands, Solomon

Learning from Tongan experience The good news is that the region’s longest surviving commercial fishery can bounce back strongly if we learn from Tonga’s experience.

Tonga closed its sea cucumber fishery in 1997.

Eleven years later, it began reaping the benefits —690 tonnes of beche-de-mer were exported in 2009 and 2010, generating some TOP$12 million (US$7 million) annually for the local economy —an all-time record for a non-fish fishery export commodity in Tonga.

Tonga’s results show that resting a fishery for an extended period is an investment, not a loss.

And enforcing good management measures during an open season can bring in substantial revenue and employment.

These results should also reassure the people of Ontong Java in Solomon Islands that by respecting the current ban on harvesting sea cucumber, they can help their fishery recover and, with good management, provide benefits for years to come.

• For more information, contact Kalo Pakoa, SPC Coastal Fisheries Programme (KaloP@spc.int).

RAMSI Update

Corrections lead the way in gender equality A recent audit has confirmed Correctional Services Solomon Islands’ leading stance on gender equality, reports Erin Gleeson from Honiara.

“When we are talking about gender equality, we are really talking about valuing and respecting everyone equally, regardless of rank and regardless of gender,” says Morris Kiukakea.

A team member of Correctional Services Solomon Islands (CSSI) officers who recently led a Gender Audit assessing their agency’s progress towards gender equality, Superintendent Kiukakea says the audit proved the value of staff owning the process of gender awareness and reform.

“What we are learning in these processes is to take ownership and do something on gender,” says Superintendent Kiukakea.

“A lot of other gender training I have been through involved sitting and listening to an expert presenting what is gender. But the approach of CSSI is to allow all staff to search for themselves; what is gender and what does it mean to our organisation. That is the difference”.

Kiukakea said this had challenged the way officers thought about gender related issues.

“We have realised that our thinking has to The CSSI Gender Audit Team...at the launch of Cooling Agents and Panadol in Honiara, June 2012. Front: (from change and so should our attitudes and behavleft): Needy Toupe, Catherine Kere, Minister for Police, National Security and Correctional Services David Tome, iours. After the training, I have seen a lot of men CSSI Commissioner Francis Haisoma, Leah Alufo’oa, Raylyn Ape and Bernice Wasia. Back Row (from left): Morris make an apology for their actions. I am also sure Kiukakea, RAMSI Gender Adviser Emele Duituturaga-Jale, Gordon Konga, Lolonga Mare and Bernard Ramota. there are females who have also had their eyes Photo: RAMSI opened to the meaning of gender equality.

“We always hide behind culture, religion and the system when it comes to gender equality. But doing gender training “We also know that this is the first of its kind in The audit was benchand this Gender Audit Report Solomon Islands,” said Duituturaga-Jale. marked against international have allowed us to spend The audit process also showed that gender best practice but customtime breaking down these dynamics are fundamental to CSSI’s core busiised to the Solomon Islands areas and saying to ourselves, ness of rehabilitation and reintegration because context. The process and is this really what we think of how it enhances officers’ understanding of the product reflect the growand believe?” Superintendent why people end up in Correctional Services in ing capacity of CSSI.Cooling Kiukakea explained. the first place, says Duituturga-Jale.

Agents and Panadol also highThe result of the seven“This was a journey of capacity and leaderlights opportunities for CSSI month audit process is the ship development. It was and it is about men to improve gender equality. report Cooling Agents and Paand women, Solomon Islanders, learning about The five key recommendanadol, named for CSSI female themselves, learning from each other and taking tions from the report include: officers famed capacity for ownership of development.”

• incorporating gender into being able to soothe troubled The report is also a gift to the public service of the CSSI corporate plan; inmates and diffuse tensions Solomon Islands, she says.

• establishing a dedicated quickly.

“It is a model of change; it is a model of how gender officer; Launched on June 14, the individuals have taken ownership of that change, • creating a CSSI website; report highlights CSSI’s lead• strengthening rehabilileading an organisation, and having a real impact ership on gender equality in tation programmes to focus on Solomon Islands.” the region as well as at home. on ending gender- based Superintendent Kiukakea acknowledges that CSSI’s initiatives have inviolence; and achieving gender equality in CSSI will be a slow cluded setting up a women’s • for donors to continue to process and his team is getting ready to revisit network, introducing gender support CSSI’s gender efforts. the country’s Correctional Centres and share the training for all new staff and RAMSI’s gender adviser, findings of the report. He is also excited by the setting specific targets for Emele Duituturaga-Jale, who opportunities the report brings.

— Emele Duituturaga-Jale provided support to the genincreasing the number of “The Gender Audit Report was like a window females in both CSSI’s execuder audit team appointed by of opportunity to deal with the whole dynamtive and its ranks. CSSI was also responsible for CSSI, believes the report has set a new benchics of what is happening in Corrections. It has organising the inaugural Pacific Islands Regional mark for Solomon Islands. unbundled a whole lot of issues.

Correctional Women’s Conference in 2011.

“This is a ground-breaking initiative. I do not “In an institution like CSSI, which is focused The 2012 CSSI Gender Audit was led by a team know of another correctional service anywhere on ranks, this work reminds us that we are workof 10 CSSI staff—all Solomon Islanders—with in the world that has actually conducted a gender ing for an institution with values and that we support from RAMSI’s Gender Adviser. audit. should value everyone with respect.”

“This is a ground-breaking initiative. I do not know of another correctional service anywhere in the world that has actually conducted a gender audit.”

Islands Business, August 2012 47

Business Intelligence

Pacific under the microscope

By Davendra Sharma

O

“no foreign exchange control”.

Scores of investors have over the years parked their excess funds in Vanuatu with the pretext of hiding money from their home country’s bank and tax authorities.

Ireland has dispatched a team of investigators to the South Pacific—first to Australia, then New Zealand and now to Vanuatu. Sources have told newspapers in Britain that Vanuatu is a “critical stage” in their search for the millions belonging to the fallen tycoon, Quinn.

ne government calls it a tax haven for investors, another dubs it as a mechanism for dubious money laundering.

Concern is mounting on how astute western investors—who are worried about tax implications at home—are siphoning money to Pacific islands countries like Vanuatu and Papua New Guinea.

Questions have been asked by government agencies in Ireland, England, Australia, India and the United States.

Last month, the Australian Tax Office (ATO) and the Anglo Irish Bank (AIB) began exploring means to pressure the government of Vanuatu into exposing details of individuals or firms who have swindled money into Vanuatu on the pretext of foreign investment.

The ATO and AIB would argue that such shifting of monies from the home countries of investors comes as an expense of escaping tax at home.

A team representing the former Anglo Irish Bank, now the Irish Bank Resolution Corporation, Port Vila...Vanuatu promotes its capital as a pure tax haven. Photo: Vanautu Tourism. headed to Vanuatu on July 9 seeking answers as to where stashes of nearly 500 million pounds of the infamous Quinn family of Ireland are being kept Investigators are headed by Risk Management Inin the Pacific. ternational, an elite private investigation firm, and Britain’s authoritative Independent newspaper the Kroll agency in London. reported that the Vanuatu tax-haven is for the “We have reached a critical stage,” the source was world’s rich who search “a discrete offshore locaquoted by The Independent as saying. “There are tens tion for their fortunes”. of millions in cash missing.”

The former detective sergeant heading the invesIrish chase millions from Vanuatu tigation is also a former member of Ireland’s Office The Irish bank is trying to uncover the Quinn of the Director of Corporate Enforcement. family’s overseas investment empire to repay loans He is believed to have led a number of successful of 2.8 billion pounds. Sean Quinn, his son Sean investigations into corporate fraud and irregulariJunior and nephew Peter were found guilty of ties. Vanuatu, the investigators believe is the final contempt of court in trying to thwart the bank’s stop for them as they hunt down the fortunes of operations.

Quinn, whose €4billion business empire collapsed Vanuatu sells its lucrative investment prospects after an ill-fated share gamble on the now-nationto foreign parties to place their surplus funds. It alised Anglo Irish Bank. Along with his family, they promotes Port Vila as a “pure tax haven” which are being targeted for debts totalling €2.8 billion. administers and manages offshore entities, trusts or even banks.

Australia seeks answers Vanuatu offers extensive and very stringent seThe Quinn group, which started in Derrylin, crecy protection laws and zero taxes for investors Northern Ireland, in 1973 quickly spread through who park their savings in the tax haven accounts Europe with manufacturing plants in the United in Port Vila.

Kingdom, Germany, Belgium, France, Spain and Investors are assured that they need not pay any Slovakia. income tax, wealth tax or tax on profits. Potential investors are attracted to such lures in Vanuatu as The empire came to a sudden halt on 16 January

this year when its founder was declared bankrupt.

The Australian Tax Office-sponsored Project Wickenby is also on the war path as it continues its chase for millions hidden by individuals and corporations in the islands.

Early in July, the ATO cautioned investors who have continued to siphon money from Australia to Vanuatu despite a six-year crackdown by authorities.

Tax specialist Mathew McKee, of the Argyle Lawyers who is part of the Pacific Legal Network, said there was growing hope that ATO will recover more hidden monies from Pacific tax havens as under Project Wickenby it had solicited A$600 million after auditing 3000 individuals in the past six years. All of the amount would be lost tax revenue for Australia if the project had not intervened.

“It is a function of the growing predicament between Australia and other countries in relation to information exchange on tax issues,” McKee argues.

“So, in the past, where most countries pretty much acted as islands in terms of tax information, you are seeing a growing exchange of information.”

Australia has a unique infrastructure in place so if individuals or entities hold money abroad and then decide to transfer it home, the authorities are able to quickly trace it through Austrac. “So if you’ve got offshore income, then repatriate it to Australia, that will come up in Austrac’s records and Austrac will immediately flag that with the ATO,” said McKee. Money laundering in PNG Last year, two brothers Phillip and David Waller were sentenced to two years each following investigations into their money laundering through Pacific tax havens.

The former co-directors of a Sydney work safety company utilised illegal round-robin schemes— where money from their company was transferred and then returned tax free to their personal accounts—which they then claimed were loans.

“Those who are tempted to deliberately cheat the system should be warned,” ATO commissioner, Michael D’Ascenzo alerted investors looking at Pacific islands tax havens.

“Those who do the wrong thing will get caught.

The net is closing in on those who use tax secrecy jurisdictions to deliberately avoid paying their fair share of tax.”

to

Air Pacific, Air Vanuatu competition intensifies

By Robert Matau

C

ompetition between Air Vanuatu and Air Pacific could see a second Port Vila to Suva service introduced towards the end of the year.

“Our first flight and others since that have been very successful as word got around,” Air Vanuatu’s General Manager Sales and Marketing, Floyd Smith said.

So successful has the service been that Smith

48 Islands Business, August 2012

has hinted a second service sometime in September or November. Smith confirmed that with a Memorandum of Understanding signed by Fiji’s Attorney General Aiyaz Sayed-Khaiyum and Vanuatu, it now opens the door for the Vanuatu national carrier to secure three flights to Suva or Nadi by either a Boeing 737-800 or an ATR. Smith described the inaugural flight as very successful and growing by the week as “word gets out”.

“We felt that a weekly 68-seater ATR service

Floyd Smith...of Air Vanuatu. Photo: Air

Vanuatu

was the ideal size to service the Suva market and this is tailored to meet the requirements of Suva-based customers including commercial, business, regional offices and student markets,” Smith said.

“Nadi, on the other hand, is considered a ‘feeder and transit market’, and is well serviced by

Papua New Guinea’s Institute of Banking and Business Management (IBBM) was also alerted last month of the risks of money laundering from undetected criminal activities.

Despite PNG having an anti-money laundering (AML) centre, established as the Financial Intelligence Unit (FIU), domestic corruption and money laundering was rife in PNG, said Dr R Bhaskara, chief executive officer of the Indian Institute of Banking and Finance, in his address to the IBMM. Misappropriation of government funds occurred using government payments which, according to the authorities, were generally placed through the banking sector in PNG and used to purchase real estate, high-value vehicles, distributed in cash or moved offshore, he told investors in Port Moresby last month.

“The techniques to launder proceeds from other large-scale crimes in PNG such as illegal logging, arms trafficking and fraud are less clear,” he said. “There is no indication of terrorist financing risks in PNG.” PNG’s FIU was ill-equipped with resources to deal with increasing volume and techniques of laundering and corruption in the country, he said. “It cannot fulfill the role it should be playing in developing the national AML system and receiving, analysing and disseminating reports.”

Anti-money laundering in Pacific PNG is part of a strong regional group for Asia Pacific Group Anti-Money Laundering (APG)— where numerous other Pacific Islands Forum countries are committed. They are Cook Islands, Fiji, Marshalls, Nauru, Niue, Palau, Samoa, Solomons, Tonga and Vanuatu. Australia, New Zealand and India are also members.

Bhaskara said that under the APG requirements, PNG had vowed to have effective AML policies in place, as well as laws to govern combating the financing of terrorism (CFT).

“But a lack of political will, poor inter-agency cooperation, lack of resources and concerns over undue influence undermine the efforts of the few agencies actively pursuing money laundering and proceeds of crime in PNG,” he said.

Suspicious banking transactions and inherent corruption in the financial sector would have to be picked up by enforcement authorities in PNG and other signatories of the APG in the islands.

“Papua New Guinea has yet to commence supervision and enforcement of AML/CFT requirements and key regulators have been notably absent from efforts to regulate and supervise for AML/CFT.” Other Pacific islands states like Tuvalu, Kiribati and the Northern Marianas hold observer status with the Sydney-based APG, while Wallis & Futuna, New Caledonia, French Polynesia­—are included with the French AML/CFT systems.

the current two Air Pacific’s Boeing 737 flights, which we codeshare with them.”

With a 68-seater ATR 42, Air Vanuatu was able to launch a Port Vila-Suva flight last month bringing regional organisation workers, university students and business people in Vanuatu to Suva and vice versa.

The Port Vila/Nadi flight serviced by Air Pacific’s Boeing 737 was to remain the prime portion of flying between the two nations where tourists and travellers could transit to other major destinations.

Air Vanuatu didn’t intend to go into direct com-

Samoa looks at financial centre to boost economy

By Merita Huch

S

amoa’s Shadow Finance Minister and economist Afualo Dr Wood Salele is all for the new financial centre recently approved by cabinet—but the time couldn’t be worse, he said.

“It comes at the wrong time, pushed by the wrong thinking and it’s bad economics,” says Afualo.

“A stock market is good when the country’s economy is strong but what investor would be enticed when this country’s economy isn’t good?

How can you attract investors when nobody is willing to spend money when they find out that there are more risks doing it than benefits?”

Minister of Finance Faumuina Tiatia Liuga insists it’s a well thought out plan that will bring Samoa out of any financial crisis in future.

“We don’t have natural resources and our revenue is relied mainly on tourism and agriculture, so why not utilise the knowledge-based resources?

It will create jobs, create white collared jobs for our children who often have to look overseas for work due to the unavailability of such careers in Samoa. It will bring into the country these investors at least 3000 employees to more than 100 foreign companies—hence the 15-storey building”.

Dr Wood Faumuina says this has been Afualo Salele..financial in the pipeline for sometime center a gamble. but much work had to go into Photos: Merita Huch considering amendments to the current legislation to protect investors and shareholders at the same time.

He said 99% of foreign investors who have committed to starting Samoa’s stock market are from Asia and they prefer coming into the country to work the financial center.

Asked if Samoa was opening up its doors to money laundering and other fraudulent behaviour in the financial sector, the Minister said all this had been considered and existing laws in the country would ensure the avoidance of such occurrences. He is also hoping to see at least a couple of locally based companies listed on the stock market from the word go. And this is especially in the areas of energy and telecommunications.

“It’s good in a way where if your company is listed on the share market, transparency is vital, there’ll be more work for the country’s auditors

petition with Air Pacific as they do have a codesharing arrangements, said Smith.

But once the airline announced its new Suva service, Air Pacific just turned the heat on—running full page colour ads in the local Vanuatu daily newspaper and slashed their airfares.

Air Vanuatu was anticipating more traffic for Air Pacific as a result as passengers wishing to fly from Suva to Hong Kong or other international airlines could use Air Pacific.

However, Air Pacific reduced its fares, and mounted a new Pacific Sun ATR42 Suva/Port Vila

and it will help boost funding for listed companies. But it’s all based on perception, it’s a gamble where one day you can become a millionaire and overnight—you can lose it all,” says Afualo.

“But life’s a gamble,” says the minister—“every work we put ourselves into is a gamble, taking your kids to school is a gamble, life is a gamble but the minute you take on difficulties of life, that’s when you realise the worth and value of what you do”.

Faumuina is confident there will be a drastic turn-around for the better in terms of economic growth once this financial center is in place and start operating next year.

He referred to Singapore which is three times less the size of Samoa and yet with a population of 5 million—only about 100,000 are Singaporeans.

“They have no natural resources, they heavily rely on tourism and it’s knowledge-base to create what is now one of the best economies in the world,” Faumuina beamed.

It’s that type of development he sees in this new financial center.

“We are the first country to go to business every day—we don’t have existing immigration restrictions that other countries have to allow foreign investors to work in the country and we are stable politically—these are Fa u m u i n a Ti a t i a some of the reasons behind the Liuga.. “I want to see Samoa as the interest taken up by investors Switzerland of the who’ve committed to entering Pacific.”

Samoa and supporting the financial centre.

“I want to see Samoa as the Switzerland of the Pacific—the hub of trading and business development,” Faumuina said.

“It’s all good but I don’t think we’re ready for this turnaround yet—until we clean up our own small economy first—we can’t pay our debts—how can we even think of enticing those outside when we’ve spent the last 50 years trying to find a fivestar hotel to be built here?

“I’m all for development but not on an institution that’s relying on a gamble for revenue. It’s all a gamble and it might work but if it doesn’t, then we’re in a lot of trouble,” says Afualo.

“They should be looking at State Owned Enterprises to do their work and bring in more money for the government to operate and pay off the debts we have now, instead of taking this on.”

(via Nadi) return service, obviously to rival the Air Vanuatu’s Port Vila/Suva service.

Air Pacific’s move brings to three the number of flights it operates to Vanuatu—two B737 Nadi/ Port Vila/Nadi services on Tuesday and Saturday which it codeshares with Air Vanuatu.

Both ATR42 services are “stand alones”, hence there is no code-share involved.

While questions sent to Air Pacific weren’t answered when this edition went to press, the competition will definitely benefit travellers travelling between the two countries.

Islands Business, August 2012 49

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