Samisoni Pareti
Calls for the World Trade Organisation to consider a ban on fishery subsidies that may include fishing licenses and access fees have sent shockwaves around the islands of the Pacific that rely on fishing as their major source of revenue.

Lifeblood...fishing licenses and access fees rake in some US$60 millionto US$$70 million for the Pacific islands region each year.

But Australia and New Zealand-two members of the Pacific Islands Forum that are pushing for the ban-defended their role to this magazine last month. They said they've taken onboard the islands concerns regarding licenses and access fees .

The two are members of the group that are calling themselves the “Friends of Fish”. The group includes countries like Chile, Ecuador, Iceland, Peru, Philippines and the United States.

According to the group, fishery subsidies worldwide of US$14 billion to $20.5 billion annually make up 20 to 25% of the total global fishery revenue.

This, they argue, is distorting free trade in fishing, causing over-capacity and over-fishing. They said controls like a ban should be imposed to lessen the stress on current fish stocks and also to “level” the world's playing field in trade.

This move by the 'Friends of Fish' prompted three Pacific islands countries who are members of WTO to submit a paper to the world trade body last July, urging it not to include fishing licenses and access fees, which one authority estimates rakes in US$60 million to US$$70 million for the Pacific islands region each year.

“The “Friends of Fish” are still pushing for fisheries subsidies that distort trade to be subjected to new disciplines or banned,” explains Robert Sisilo, the Pacific Islands Forum permanent representative at WTO, based in Geneva.

“But since the submission of our paper to the Negotiating Group on Rules (of WTO), consideration is now being given to give special and differentiated treatment to small vulnerable coastal states like ours in the Pacific.

“In other words, access fees, development assistance, fiscal incentives to develop our fisheries sector should not be defined as subsidies and therefore not banned.

“Discussions on this will continue this year with a view to adopting legal texts that hopefully will take onboard our position-which is to exclude access fees, development assistance, fiscal incentives to develop our fisheries sector and assistance to small-scale fisheries-from the definition of a subsidy and therefore not banned.

“Both Australia and New Zealand support us on this,” added Sisilo.

Indeed New Zealand's envoy in Fiji, Michael Green, who has been briefed on the implications of his government's stand on fishery subsidies, confirmed the concerns of the Forum member countries had been taken onboard.

“New Zealand's proposal that access fee subsidies should not be prohibited was a direct response to comments from Fiji, Papua New Guinea and the Solomon Islands on the need for these subsidies to continue,” said high commissioner Green.

“We understand that fishing licences and access fees are a major source of revenue for Pacific Islands countries and other developing coastal states. This is why we have been very clear in the negotiations that we do not want to ban subsidies and licences/access fees.”

Solomon Islands says it can only hope promoters of the fishery subsidy ban would stay true to their words.

Speaking at the just-ended WTO ministerial conference in Hong Kong, Solomons' commerce minister, Walton Naezon warned the promoters against “introducing language in fishery subsidy disciplines that would create a dispute against countries based on sustainable development.”

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Samoa sets up venture capital fund

A venture capital fund has been established in Samoa backed by the European Investment Bank (EIB) and Samoa's leading financial institutions.

The fund's priority is to finance Samoa's small and medium business enterprises.

Jean-Philippe de Jong, EIB's representative and chairman of the Samoan Venture Capital Fund, says its purpose is to support the expansion of businesses which have bankable expansion plans, but which are restricted by the security requirements of other lenders.

“Once the fund has identified a suitable business, it will have a very close look at it and undertake a thorough process of due diligence. It will be an active investor and the companies in which it invests will benefit from its expertise,” he says.

Shareholders include ANZ Bank, National Bank of Samoa, Samoa Life Assurance Corporation and the Samoa National Provident Fund. Directors are Papalii Panoa T Moala of the National Provident Fund, Mandy Simpson of ANZ Bank, Naomi Chakwin of the Asian Development Bank, and Robert Simms of the International Finance Corporation. The fund is managed by Pacific Venture Capital Managers with Venture Capital Partners of Australia, backed by ING Investment Management as advisors.

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Air Fiji's survival plan

Air Fiji, a foreign-owned domestic carrier with regional ambitions, says its survival depends on forging business connections with airlines in neighbouring countries, beginning with the Solomon Islands and Tonga.

It has entered into an agreement with Solomon Airlines for the supply of technical, market and training services and aircraft. On December 19, it began operating in Tonga as the 49% owner of Airlines Tonga Ltd, 51% owned by a local tour company, Teta Tours.

The new airline was granted an operating licence valid until August 16, because of the failure of a local airline, Peau Vava'u, owned by Tonga's Crown Prince Tupouto'a, to meet licence requirements for air services to small outer islands. The government will later review the performance of both airlines to decide which should be granted a monopoly.

Air Fiji is controlled by a company jointly owned by the Tuvalu government and China National Aero Technology Corporation, supplier of Harbin Y-12 aircraft that are part of the airline's fleet. Since it is foreign owned, it lost a Fiji licence to operate Fiji/Tonga services to the government controlled Air Pacific.

Now it faces competition from a domestic airline to be established by Air Pacific sometime this year. Air Fiji hopes to build a future based on international and regional air service rights granted by Tonga and some other governments. It operates Fiji/Tuvalu flights with a Embraer Brasilia propjet and is examining the future operation of such large propjets as the ATR-42.

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Solomons' Boyers favours VAT

Solomon Islands Finance Minister Peter Boyers favours the introduction of a value-added tax (VAT) to replace what he described as a dinosaur of a tax system that encourages corruption, suffocates growth and strangles the economy.

The World Bank has assisted the preparation of a proposal for VAT that has been circulated to the business community. Goods and sales taxes would be abolished, duties lowered and unified, and VAT brought in at an as yet undecided rates, but perhaps between 8-10%.

Present taxation policy has loopholes that cost the government an estimated A$35 million annually in discretionary tax exemptions.

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Temaru drops solidarity tax

French Polynesia's president, Oscar Temaru, in December was forced by a threatened general strike to drop a plan for a so-called “solidarity tax” intended to fund an increase in the minimum wage. Instead, he had to raise taxation on tobacco products to fully fund this year's 138,000-million Pacific franc (US$136-million) budget approved by the territorial legislature.

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Another profit year for Fiji TV

Fiji Television Ltd, operator of free-to-air television services in Fiji and Papua New Guinea and pay channels regionally and in Fiji, has reported a F$4.52 million (US$2.6 million) group profit for the year ended June 30, 2005 (F$4.45 million for the previous year).

The company, controlled by Yasana Holdings Ltd, a government favoured Fijian provincial investment company, has a 15-year income tax exemption from January 1, 1994.

Dividends for the year totalled a record of 18 cents per F$1 share. FijiTV bought Media Niugini Ltd, operator of Papua New Guinea's EMTV in December 2004. Its Fiji free-to-air commercial service is a monopoly since the government has so far refused to issue a licence for one prospective competitor.

Sky Pacific, its 12-channel satellite delivered pay service, has one competitor in Fiji, Public Broadcasting Services.

In November, Sky Pacific was launched in Tonga in partnership with the Tonga Broadcasting Corporation. The plan is to spread this service throughout the region. 2004/05 turnover was F$16.82 million (US$9.7 million). During the year the public company's share price grew by 24% to a record F$4.39 (US$2.53).

Chief executive Ken Clark became chief executive for Media Niugini from January 1 but will continue as Fiji TV's general manager commercial. Mesake Nawari took over as CEO FijiTV.

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Staging Connections opens in Fiji

Staging Connections, an international event production business operating in Australia and New Zealand, has opened a Fiji branch with offices in the Sheraton Fiji, Sofitel Fiji Resort & Spa and Shangri-La Fijian resorts.

The company will promote Fiji as a destination for conferences, incentives and meetings. It employs more than 700 technicians, artists, producers and designers and operates in more than 75 hotels, convention centres and resorts.