Tuesday, 2 December 2008

HONG KONG HOTELIER EYES 'LAST FRONTIER'

With Fiji, Vanuatu in the bag, Samoa’s next


By Dionisia Tabureguci

Hong Kong hotelier, Richard Chiu, is looking at opportunities to build more hotels in the South Pacific region as growth prospects for this industry has been described as promising, particularly in Fiji and Samoa.

Chiu, who heads the Warwick group of hotels internationally, was in Fiji last month to announce a F$12 million 100-room expansion project for Naviti Resort along the Coral Coast.
“I think people are now realising that the Pacific is the ‘Last Frontier’ and I mean that in a positive way. They are starting to realise that if you are in search of a clean environment, natural beauty, you have to come here,” he said.



Chiu’s experience in the region began in 1979 when he bought Hyatt Fiji (now Warwick) which was then losing business. After major renovation works, that hotel was renamed ‘The Warwick Fiji’ and gradually recovered on the back of a strong industry growth in the decade that followed.
It is now a sprawling 250-room family type hotel with four conference rooms. The success of Warwick led to the purchase of the 140-room Naviti Resort in 1988.

Incidentally, Warwick Fiji was one of the first in the Warwick group, which had a modest beginning in Bali in the late 1970s, as Chiu recalled, “we did not have our own management capacity then and had to hire.”

This chain now has 36 hotels worldwide and is represented in France, Africa, the Americas and in the Asia/Pacific region.

Last frontier: “In those days (late 70s, early 80s), the Pacific was very much the backwaters of tourism as South East Asia was much more the prominent area. Now, things have changed and the Pacific is becoming much more important,” said Chiu, of his observations after 25 years in the global tourism industry.

“When I first came to Fiji (late 70s), I was so impressed by the natural beauty, unpolluted waters and the friendliness of the people that I thought this must be one of the future destinations for world tourism. My plan was to be here when things take off and be part of that development. It has taken a bit longer for that to be realised as we did not anticipate the coups. But things have picked up and growth is finally happening,” he added.

Now, Chiu is looking at opportunities in the region in much the same way he saw Fiji over twenty years ago. Last year, the group added to its growing list of Pacific exposure Vanuatu’s Le Lagon Resort, a 140-room family hotel, situated along the beachfront of Erakor lagoon in the capital Port Vila.

“Le Lagon is doing very well. We are planning to renovate all the rooms, put in another food and beverage facility and build another swimming pool so there are major undertakings planned for that one,” said Chiu.

While announcing the Naviti expansion, Chiu also revealed yet another major investment with details still under wraps but which would involve building a 200-room hotel on its property next to Naviti. “It is still being studied now but it has a good chance of going ahead,” he said.

The next project, scheduled to begin some three months from now after formal agreements are signed, is a four and half star hotel in Samoa. This is a response to a healthy economic growth expected for Samoa as well as a growing tourism industry. Last year, Samoa neared the 100,000 mark in visitor arrivals. This year, if all goes well, the figure should break the 100,000 mark for the first time.

“We would also like to investigate investment opportunities in Tonga, Cook Islands and even as far as the Solomon Islands so, yes, we are very Pacific,” said Chiu.

On the political ripples in the region, the hotelier is placing his bets on the wave of democracy finding its place on the shores of most countries. “I think overall, governments across the Pacific are becoming more mature. I see democratic tendencies taking root and stability is naturally going to follow. Fiji has been a very good example, with quick recovery in a very mature way. So I am confident in Fiji in particular, and in the Pacific.”

“We look at our investments as long term investments so it is very important that we are able to see where we are in five, ten years from now. It is not our ambition to be everywhere but it is our ambition to be a significant and important player in our markets. So in five, ten years from now, we would like to be a major player in the Fiji tourism market and in the Pacific.”




The Chius left with the Qarases right.
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This article appeared as: "HONG KONG HOTELIER EYES 'LAST FRONTIER'" in the Islands Business Magazine, September 2004; p:37.

Thursday, 16 October 2008

Cable & Wireless reveals why FINTEL/TFL merger makes sense

A renewed attempt to merge two local telco megapowers is now seriously being explored by their shareholders...


RIGHT: Ian Kyle, C&W's Fiji-based regional director for C&W in the Pacific.

by Dionisia Tabureguci

THE OPERATIONS of Fiji International Telecommunications Ltd (FINTEL) and Telecom Fiji Ltd (TFL) are currently tagged to come under one portfolio as talks, described as being “very delicate right now”, progressed into its first two weekends when this edition went to press.

At least one shareholder, UK-based Cable & Wireless plc (C&W), has indicated a desire to see this undertaking come to fruition because it believes merging the two entities would ease the currently complex nature of domestic and international telecommunication service provision in Fiji.



“The fact of the matter is that in Fiji, the current structure that we operate under is unusual to say the least,” said Ian Kyle, C&W’s Suva-based region director Pacific Islands..

“You would normally find in a territory that there would be a single national telco to provide telecommunication domestically and internationally. And normally, the common view is that a solid national telco is a good foundation stone for competition to be built on. The trouble is that in Fiji, there is a lot of sniping between everybody because everyone is in their niche part of the market. TFL runs the domestic, FINTEL runs the international, Vodafone runs the mobile. And because of its very nature, there’s a lot of suspicion if you like between TFL and FINTEL. It’s human nature but the fact of the matter though is that whether or not these companies are constructed in a single way, the effect is the same. The issues of communication across the board from domestic to international have all the same challenges—whether it’s one company or two.

“So it seems to C&W that it would be eminently sensible at a time of deregulation to think about consolidation because we can get lots of synergies, lots of efficiencies of scale.

“I mean there are just a lot of redundancies in the way these structures are set up.

“If we could get these companies together, I think there’s scope for making it more efficient as an end to end process,” said Kyle in an interview with this magazine.

C&W owns 49 percent of FINTEL’s issued shares while 51 percent is owned by the Fiji government, managed on its behalf by TFL’s parent company, Amalgamated Telecom Holdings (ATH). FINTEL and TFL have been exclusive international and domestic carriers respectively since 1989 until last month’s signing of a Settlement Deed to fully deregulate Fiji’s telecommunication industry.

The deed, a result of a five-day mediation process last November christened the Radisson Telecom Accord, saw the Fiji government issuing both companies a 15-year non-exclusive open license each in return for the premature ending of the seven years left in their exclusive licenses.

FINTEL’s exclusive hold on international access will expire 18 months from the January 17 signing and according to Kyle, FINTEL will use this time to pursue the merger.

“It is all very exploratory at this stage but what we will be looking at doing is taking FINTEL and TFL and joining the two together and calling it the National Telecom of Fiji or something like that,” said Kyle. “I don’t know what the name would be. That’s just an example. It might just remain TFL. But essentially, rather than having just one company that collects and hands off all the domestic (telephone traffic) to another company to do international delivery, if you combine those two companies into one, you would save a lot of energy.”

While the idea of a FINTEL/TFL merger has been floated for quite some time now, it wasn’t until after last month’s signing that it became a serious consideration for ATH and C&W.

ATH officials have been spending the post-signing weekends attending in-house executive workshops in which overseas experts were being employed to assist the telecom conglomerate rationalise its business portfolio, now that the three main companies under its wings have each been awarded a 15-year open license, effectively giving rise to a possibility of duplication of services, which will make business sense for ATH to avoid.

“The FINTEL/TFL merger is not a new issue,” confirmed Tomasi Vakatora Jnr, acting CEO for ATH. “We had been looking at it in the past but it is now being explored in light of the new industry environment. It has to be seen in a commercial perspective because you don’t go into something like this unless you can get something out of it. You only do mergers and acquisition for two reasons: either you are going to get more profits to pay more returns to your shareholders or your balance sheet gets stronger, adding shareholder value. Unless you add shareholder value, there is no point in doing it.”

While the business case is being explored, both entities at the outset would have strong points to add to each other’s operations should there be a merger.

In FINTEL’s case, it would be a relief, given its vulnerability right now.

“Well before and up until the Radisson Accord, and still, even after the Radisson Accord but less strongly, we felt that FINTEL needed to merge because it was probably, out of all the companies going into those discussions, essentially potentially had a lot to lose because it only had one little section of the market,” said Kyle.

“We’ve been quite open in our discussions with everybody on this merger although we have to say we are very pleased with the outcome for FINTEL with the Radisson Accord and the potential it now has to diversify and grow into something bigger than the niche operator it previously was.

“I think what the Radisson Accord has done to a large extent is make everybody aware of what the rules are now and how they can see their businesses going forward. But I have to say that from the C&W perspective, it doesn’t change our view. We still feel that it would be very logical for these two companies to join together.”

For TFL, it could do with FINTEL’s international experience, although it’s not ruling out doing international on its own. In any case, its relationship with FINTEL has been a major source of revenue and which has helped subsidise its provision of services to rural Fiji.

“It’s not easy to set up your own gateway because when you take calls overseas, you have to negotiate counter parties,” said Vakatora.

“You will have to negotiate individual agreements in each country you want to terminate your calls in. You would probably be setting up hundreds of agreements because of this, so it’s not a very easy thing. We therefore will have to look at the business case because there are costs involved. Alternatively, we could just go and deal with somebody who already has connections in other places and use their networks. Of course, FINTEL will have to be competitive after 18 months and if it does it at a good price, well then operators may still connect through FINTEL for international.”

But whether that would necessarily mean TFL would find the merger idea attractive can only be established in the coming months, as an announcement on it is being promised.

For FINTEL, should the merger talks collapse, the company is ready to go out on a limb.

“If the merger doesn’t go forward, I think we’ll ensure that FINTEL strongly develops into a multi-service company,” said Kyle. “We will use Kidanet strongly to go into the ISP market and become a vibrant ISP and VoIP provider. We’ve got permission to provide mobile MVNO (Mobile Virtual Network Operator) services. That’s another lucrative market that we might want to get into. More importantly, we have an open license, which allows us to provide alternative domestic and international voice directly to customers. So the potential service list for FINTEL has gone up a lot now, compared to what we were before.

“But if we do go stand-alone, there will be quite a re-learning process for FINTEL to deal with retail customers.”


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This article appeared as: "Cable & Wireless reveals why FINTEL/TFL merger makes sense" in the Business Intelligence section of Islands Business Magazine, February 2008. pp: 50,51

Thursday, 14 August 2008

USP's financial position on council agenda

by Dionisia Tabureguci

As teachers and students’ morale continue to sink at the Fiji-based main campus of the University of the South Pacific, the institution’s weak financial position and exorbitant salary packages enjoyed by its senior management are expected to top the agenda at this year’s first USP Council meeting, scheduled to take place in Tonga mid this month.

The salary packages are at the centre of rising tension between USP management and parties representing students and teachers within campus.



The fate of these packages are going to be known at this month’s Tonga meeting scheduled to be held on May 19-20, council member Dr Morgan Tuimaleali’ifano confirmed in an interview with ISLANDS BUSINESS.

Risking being slaughtered by the university’s disciplinary system, Tuimaleali’ifano said it was time USP affairs were put out in the public domain as the perceived “double standards” and “favouritism” were taking their toll on staff and students.

Earlier requests by ISLANDS BUSINESS for an interview with the university management have proved futile.

“Yes, this is a substantive item on the agenda. It is substantive because the subcommittee on the management packages has to report back to confirm the additional perks that were part of those packages.

“And secondly, they also have to report back on whether the contracts of those people—their contracts are going to expire at the end of the year—whether the contracts are going to be renewed.

“And if renewed, whether they are going to be renewed under the existing terms or if they are going to be reviewed in line with the reality of affordability in the region.

“That is, whether the member countries can afford these kinds of packages,” said Tuimaleali’ifano, who is a member of the USP Council, as well as vice-president of the Association of the University of the South Pacific Staff (AUSPS).

Funded mainly by government grants from its 12 member countries and aid from donor partners, USP in recent times has been treading on shaky financial grounds after posting a substantial loss in 2006 and dealt a severe blow with the Fiji government decreasing its grant allocations in the last two years.

Believed to have begun when former Vice-Chancellor Anthony Tarr took up office in 2005, USP’s financial status has now weakened further to the extent where drastic cost cutting measures have been taken.

The controversy surrounding this is that while the highly paid senior management officials are executing the cost cutting measures, they are increasingly being pointed at by unhappy staff and students who believe they should first do something about their own high salaries, which no one knew about until details were leaked to the Fiji media last year.

SECRET NEGOTIATIONS
“At around the time that Tarr came in, the university had started restructuring so he was making some very important appointments,” explained Tuimaleali’ifano.

“He appointed four deans to the faculties as well as a new team in his administration. The team comprised a deputy Vice-Chancellor, three Pro-Vice Chancellors, a registrar who was already there and a director of finance who was also already there.

“So in addition to that management team were the four deans and Tarr secretly negotiated packages for all of them which no one, not even the council, knew about until the salary slips were leaked to the media last year. The salary slips revealed they were receiving exorbitant packages; on average, around F$250,000 each. The Vice-Chancellor was getting almost F$500,000, the deputy was getting around F$400,000 and everybody else was on around F$300,000 down to F$200,000 each.

“When it was leaked, the management denied it. The current acting Vice-Chancellor denied it and said it was erroneous, mischievous and misleading. The staff took the matter to the council and the council then set up a high-powered three-member committee to look into it. The committee did research in about six to nine months and when the council met again in October last year, the committee reported back and confirmed everything and added some more in that there were added perks.

“These additional perks included two cars for the Dean of Islands and Oceans, two deans were each given three free return fares a year as opposed to one for everyone else and the Vice-Chancellor was getting an additional F$60,000 a year for housing allowance in addition to a huge fantastic salary. Against that, the salary of one tutor is F$38,000 and a lecturer is on F$42,000 a year, while the vice-chancellor was getting around F$38,000 a month if you calculate his package and perks in dollar terms,” Tuimaleali’ifano said.

This is not the first time that Tarr has left behind a messy financial university business after prematurely ending his term in office.

Documents obtained by this magazine revealed that he had been associated with a similar situation at the Indiana University School of Law where he served as dean and professor prior to joining USP.

In her presentation to the Indiana University’s faculty council committee of the School of Law’s progress and which was part of the campus planning committee 2006-2007 annual report, then acting dean Susanah Mead wrote: “The whole meeting was focused on the School of Law recovery of financial distress.

“At one point the fund deficit reached $2.1 million. Last year, half of this deficit was eliminated. The cause of the deficit was mostly placed on the previous dean, Tony Tarr. He mismanaged hiring (excessive) and used soft money and encumbered funds for operating expenditures.”

IndyLaw’s news archive contained an article dated November 24, 2004, which reported that Tarr “will step down as dean of the Indiana University School of Law (Indianapolis)—to become leader of the University of the South Pacific.”

At USP, Tarr was instrumental in the setting up of IT investments that cost the university a F$1.4 million loss in 2006, when a total of F$1.79 million in investments in IT had to be written off. But his other legacy, the “exorbitant salaries” are not as easy to erase.

According to Tuimaleali’ifano, when the management salary package committee presented its findings at the October council meeting and shocked everyone, the council agreed that the leader of the committee should continue to negotiate with management on their packages in the hope they would reconsider and return to what they were getting previously. The other option would be to wait until the expiry of the contracts.

“The council also unanimously agreed that all the packages be made available to the public, just like everyone else’s. But until today, this has not been done,” he said.

Following a special AUSPS general meeting held in November last year in which USP’s financial crisis was discussed, suggestions were made by it in a letter to the USP Council chair Fiame Mata’afa for the immediate review of the controversial packages as “an initial step to redressing the financial crisis.”

Mata’afa’s response dated February 2, 2008, and addressed to Tuimaleali’ifano and AUSPS president Mahendra Reddy revealed this would not be legally possible.

“As members of the council, you will both know that this matter was discussed at the council and a resolution was passed regarding the matter. In the discussions, it was reported that the university’s legal advice was that the termination or variation of the contracts themselves would not be lawful,” Mata’afa wrote.

“I have reviewed the legal advice and have discussed the matter again with the university’s lawyers and I am satisfied the matter has been dealt with sufficiently by the council.”

The contracts, she said, were legally binding as they were entered into with Tarr, who, under the “Vice-Chancellor’s broad discretionary powers under clause 4(d) of the Staff Ordinance”, was within his own right to draw up such contracts.

To review or terminate them would expose the university to “considerable financial liability,” Mata’afa added.

This, however, had only poured salt to the wound. For against the background, USP was also still dealing with an unresolved issue—increase in professorial salary.

In last year’s May council meeting, minutes of which was obtained by ISLANDS BUSINESS, it was revealed that in order to be on par with other universities, USP had to increase the base salary of professors by at least 15.7 percent to make it attractive enough for professors to stay.

As the council had agreed some years ago that salaries be reviewed every three years, the third such review was due on January 1, 2007.

COST CUTTING
The council did approve the 15.7 percent increase but because this was expected to “have significant budgetary implications”, the council arrived at an understanding with AUSPS to stagger the increase under the formula of a 7.5 percent increase on January 1, 2007, 5 percent increase from January 1, 2008, backdated to January 1, 2007 and a 3.2 percent increase from January 1, 2009 backdated to January 1, 2007. The 5 percent increase due in January this year had not been paid, said Tuimaleali’ifano.

In the midst of this quandary, the students are said to be suffering as cost cutting measures being put in place are filtering down to them. “When Fiji came short (last year, Fiji, the biggest government contributor, allocated F$38 million against the F$41.3 million expected by USP and this year, it allocated F$36 million), the shortfall had to be covered from savings around the faculties,” said Tuimaleali’ifano.

“Tutors were terminated when they finished their contract and others were downgraded. Inside the faculties, unfilled positions were not filled and for anyone resigning during the year, that position disappeared. It’s sad because it is affecting students and teachers’ morale when the very ones who are bleeding or hemorrhaging the resources are the ones going around chasing people for not cutting costs. They are still getting their high salaries and no one has suggested to them to reconsider their salaries and more importantly, none of them has volunteered.”

USP’s state of financial disrepair is also expected to feature prominently on the agenda of USP member countries’ finance ministers who will meet on May 15, four days before the council sits.

Sources told this magazine there is a likelihood the formula of calculating government grants to USP would be reviewed to reflect the reality of the tough economic times in the islands.


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NOTE: This is the original version of an article published in the Islands Business Magazine (www.islandsbusiness.com) as: USP's tangled mess on council agenda. The article appeared under the Pacific Update section of the May 2008 issue of Islands Business; pp 14-15.

Islands Business is the flagship publication of Islands Business International.
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Wednesday, 5 December 2007

Critical times in Pacific tuna

Islands Business Magazine interviews Andrew Wright, Executive Director of the Pohnpei-based Western and Central Pacific Fisheries Commission (WCPFC). Better known as the Tuna Commission, the WCPFC is linked to management and conservation of the Pacific’s tuna resources.


Wright…ensuring sustainable tuna stock in Pacific waters

By Dionisia Tabureguci


After years of gestation, the Western and Central Pacific Fisheries Commission (WCPFC) was finally set up in 2004 to “bring together all those with an active interest in the tuna resources of the Western and Central Pacific Ocean (WCPO) in an effort to work collaboratively for the effective management, long-term conservation and sustainable use of tuna stocks in this region,” says executive director Andrew Wright.

As an organisation therefore, the Tuna Commission—as it is more commonly referred to—is a meeting point for countries that own tuna fishing grounds in the Pacific and countries that are not from the region but who come here to fish. In fishing speak, the latter are more commonly known as Distant Water Fishing Nations (DWFNs).
More specifically, they include fishing boats from Asia, Europe, South America and to a lesser extent Australia and New Zealand.



Together, DWFNs are documented to haul out more fish from the Pacific Ocean than what the Pacific islands nations themselves do and therefore, their role in the management and conservation of the Pacific’s fish resources is considered very important.

Over the years, concerns have been expressed over the Pacific’s tuna resources and how they have been exploited—or overexploited as some believe—especially by DWFNs, as well as vessels that engage in Illegal Unreported and Unregulated (IUU) fishing.

Such a scenario would put an oversight organisation like the Tuna Commission under pressure to ensure the interests of its regional members are protected.

WCPFC members are—Australia, China, Canada, Cook Islands, European Community, Federated States of Micronesia, Fiji, France, Japan, Kiribati, Korea, Republic of Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Philippines, Samoa, Solomon Islands, Chinese Taipei, Tonga, Tuvalu, United States of America and Vanuatu.

Its participating territories are American Samoa, Commonwealth of the Northern Mariana Islands,French Polynesia, Guam, New Caledonia,Tokelau andWallis and Futuna, while Indonesia is a cooperating non-member.

ISLANDS BUSINESS MAGAZINE: What was the idea behind the setting up of the Western and Central Pacific Fisheries Commission – just a brief summary of its role in the areas of tuna conservation and management?

WRIGHT: The origin of the WCPFC can probably be best traced to the Rio Earth Summit and international concerns at that time relating to the lack of institutional mechanisms to manage and conserve marine resources in areas beyond national jurisdiction i.e. on the high seas.
This was at a time of significant conflict and concern over high seas fishing – including in the South Pacific in relation to driftnet fishing.
At that time the Secretariat of the Pacific Community (SPC) undertook scientific work and research on regional tuna stocks and the Forum Fisheries Agency coordinated administrative arrangements among its members – focusing on their relations with distant water fishing nations for fisheries access.
Despite considerable political pressure from several distant water fishing nations FFA chose not to include them among its membership.
While this proved to serve the FFA member countries well it also meant that there was no institution that was responsible for conserving and managing tuna fisheries in the WCPO.
Those responsible for the establishment of the FFA in the mid-70’s were fully aware of this and knew that, in order to establish effective management arrangements for regional tuna stocks, at some point in the future they would need to develop additional institutional arrangements that would involve the distant water fishing nations.
It wasn’t until a new international Convention, known as the UN Fish Stocks Agreement, that was a supplement to the 1982 UN Convention on the Law of the Sea, and dealt specifically with highly migratory fish stocks such as tunas), was negotiated in 1995 that Pacific Island countries felt it was time to start engaging distant water fishing nations in discussions on what collaborative arrangements might be possible.
So between 1994 and 2004 Pacific Island countries and territories and fishing nations entered a long negotiation firstly to agree to the text of a new international convention that established the WCPFC – and then to start to flesh out the administrative and other supporting procedures and processes that would make it work.
All that work was completed in June 2004. So the WCPFC brings together all those with an active interest in the tuna resources of the Western and Central Pacific Ocean (WCPO) in an effort to work collaboratively for the effective management, long term conservation and sustainable use of tuna stocks in this region. This is, in effect, the objective stated in the WCPF Convention.

ISLANDS BUSINESS MAGAZINE: What are some pertinent issues right now on the conservation and management of tuna? What may be some challenges faced by the Commission in carrying out its task to help conserve tuna stocks for its member countries and the progress made in dealing with these challenges?

WRIGHT: This is a hard question because the challenges are different depending on who you speak to.
Apart from the challenges caused by rising oil prices, which impacts on everyone involved in the fishery, for many years the coastal States in the region, effectively the FFA member countries and the American and French territories, have aspired to develop their domestic tuna fishing industries.
At the same time, distant water fishing nations are anxious to secure long term access to the fishing grounds to support the activities of their national fleets.
Balancing these interests is proving challenging. Pacific countries are becoming increasingly actively engaged in the fishery.
I think there are mounting pressures for the distant water fishing nations to change traditional ways of operating, which were essentially over-the-horizon modes of fishing with minimal engagement or investment in shore-based services in the region, to one where local investment is probably going to determine access to long term fishing opportunities.
Of course, an overarching concern is being able to support the development aspirations of Pacific island countries and territories without jeopardising the ability of regional tuna stocks to sustain fishing – it is not much use promoting development, securing major investment, which most tuna fishery development initiatives require, and find that tuna stocks become over exploited and so jeopardise those investments.
The objective of the WCPF Convention acknowledges the need to ensure our fish stocks are used sustainably. I think this is a second major concern, managing fishing effort throughout the WCPO within sustainable limits.
The scientists have been telling us for some time that bigeye tuna, and to a lesser extent yellowfin tuna, are probably being over-fished and that these stocks will not be able to support such high levels of fishing indefinitely.
Unfortunately, the indications in 2007 are that fishing effort in the purse seine fishery is expanding – and new vessels continue to enter the fishery. Excess capacity, or when the catching power among all vessels in the fishery exceeds that which can support sustainable fishing operations, is a major concern in nearly all fisheries around the world.
In some cases it is supported by Governments which provide subsidies to vessels to enable them to continue uneconomic operations and it invariably leads to industry pressure being applied in management organisations like the WCPFC to take decisions that don’t limit catch or fishing effort when over-fishing is obviously occurring.
This results stocks becoming over-fished and collapsing. World fisheries are littered with examples of this. I would hate to think we in the WCPFC will not learn by those experiences.
Now some of the island countries, those making up the grouping known as the Parties to the Nauru Agreement, have developed a tool to manage purse seine fishing effort within their national waters.
This tool, known as the Vessel Day Scheme (VDS), is scheduled to become operational on 1 December 2007. It is quite a complicated arrangement which involves close coordination among the eight PNA members to manage purse seine fishing effort within agreed limits.
If the limits are adhered to there is potential to leverage a significant premium for access to national waters of the PNA – particularly if competition for access increases as the purse seine fleet grows.
However, ineffective implementation of the VDS, particularly in relation to an inability to constrain effort by granting access to whoever wants it will be detrimental for regional tuna stocks – and place investments in the fishery and associated contributions to the economic development of Pacific Island countries in jeopardy. Fisheries all over the world are now also required to make a major effort to minimise the impact of fishing operations on non-target fish or other marine animals that are caught incidentally during fishing operations.
The WCPFC is working at addressing this for WCPO tuna fisheries – focussing at this stage on sea birds, sea turtles and sharks. A fourth major challenge is making sure all those involved in the fishery participate fully in the work of the Commission. This includes providing full and accurate data on the operations of their fishing vessels in the Convention Area and also establishing effective control over those vessels – so applying and implementing the decisions of the Commission aimed at supporting conservation and management.
The biggest challenge in relation to this at present is in the west of the Convention Area, in the region of Indonesia, Philippines and to a lesser, but growing extent, Vietnam. Tuna fisheries in that region account for and estimated 25% of the total WCPO tuna catch – yet detailed information for the various fisheries in that region is poor and control over fishing vessels generally inadequate.

ISLANDS BUSINESS MAGAZINE: Is the WCPFC the only organisation involved in tuna fisheries management in the Pacific? If not, what is the role of the WCPFC relative to that of the other organisations?

WRIGHT: There are two other dedicated tuna regional fisheries management organisations with Pacific Ocean responsibilities. The Commission for the Conservation of Southern Bluefin Tuna is, as the name suggests, dedicated to southern bluefin – which is a temperate water fish found in southern waters of the Pacific and the Indian Ocean.
In the Eastern Pacific, the Inter-American Tropical Tuna Commission has a very similar role to that of WCPFC – where its responsibilities extend westward towards the WCPO to the eastern waters of Kiribati and French Polynesia. Any further west is the area of the WCPFC.
Tuna fisheries in the WCPFC area account for 51% of the global supply of tunas to world markets – and 78% of the total Pacific Ocean tuna catch. WCPFC has formalized relations with both IATTC and CCSBT, we exchange information with them regularly and participate in each other’s meetings.

ISLANDS BUSINESS MAGAZINE: What sort of networking does the Tuna Commission do in order to fulfill its mandate?

WRIGHT: We are required to establish and support networks that focus mainly on communications and information exchange with the 33 countries, the fishing entity of Chinese Taipei and territories that make up the current membership of the Commission, other fishing States with activities in the WCPO, a range of other inter-governmental organizations such as IATTC and CCSBT, the fishing industry from all over the globe and non-government agencies with an interest in WCPO tuna fisheries. It’s a full time job!

ISLANDS BUSINESS MAGAZINE: There is another existing establishment in the Pacific (FFA) that looks after the interest of tuna fishing in the Forum member countries? Do the two organisations work together? Or how complementary are their roles?

WRIGHT: I'm happy to say that WCPFC works very closely with both the FFA secretariat in Honiara and the SPC Oceanic Fisheries Programme (SPC-OFP) in Noumea.
Both SPC and FFA played a central role throughout the negotiations to establish the WCPFC. The FFA Secretariat’s provision of technical and policy advice to FFA members has certainly provided considerable support to their participation in the Commission.
The need for this support is likely to continue for the foreseeable future as the work underway in the Commission does place significant strain on generally under-resourced national fisheries administrations.
The SPC-OFP has been the region's main tuna research body assisting its members with fishery monitoring programmes, maintaining a regional tuna fisheries database and providing scientific support for national and regional management for more than 30 years.
The WCPFC has benefited from this in that many of the required data collection systems and historical databases were already established and being administered by SPC - we didn't have to start from scratch. The WCPFC now contracts the OFP to provide data management and stock assessment services for the WCPFC Convention Area as a whole. This is a mutually beneficial arrangement, as it avoids duplication and complements the SPC-OFP work in its member countries.

ISLANDS BUSINESS MAGAZINE: Sometime back, you raised concerns on the rise in illegal fishing vessels in Pacific waters and the shift of South American vessels from Eastern to Central Pacific.
Is illegal fishing in the WCPO increasing - if so, why?

WRIGHT: Yes, and I am still concerned about that. Illegal, unregulated and unreported (IUU) fishing is a concern to fisheries management agencies everywhere. Given the general deterioration of fish stocks in other oceans, the relative productive fishing grounds here, the large geographic area covered by the WCPO and a limited capacity to carry out monitoring and surveillance throughout this region the WCPO probably experiences very high levels of IUU fishing.
This not only involves fishing by fleets which do not participate in the work of the Commission but no doubt includes the activities of some vessels that belong to members of the Commission – particularly in respect of, for example, the under-reporting of catches. The challenge with IUU fishing is that, because it is generally unreported, we really do not know the extent of it.
Some experts estimate it could account for an additional 10% on top of the estimated reported catch – so for the WCPO that could amount to an additional 200,000 metric tonnes of tunas that are harvested each year in the WCPO that we know very little about! Not only does IUU fishing result in lost revenue opportunities, but those operations do not provide data to assist in assessing the status of local fish stocks and they undermine the sacrifices that those that comply with the decisions of the Commission make in their efforts to achieve sustainable use.
In relation to the migration west of some Latin American vessels as a result of poor fishing conditions in the eastern Pacific, yes, we have received reports of illegal activities from the zones of both Cook Islands and French Polynesia and of course the majority of their activities on the high seas are unreported.
In addition, the licensing of some of these vessels by any FFA member is in contravention of agreements both within the FFA (which relates to the licensing of vessels that are not on FFA’s Regional Register of Foreign Fishing Vessels) and within the Commission (and an undertaking not to support the activities of vessels in the WCPO that are not flagged to a member of the WCPFC). This creates some major challenges for this organisation – that will hopefully be addressed at its meeting in Guam in December.



ISLANDS BUSINESS MAGAZINE: How does a vessel get permission to fish in the WCPO? Why haven't the Latin American vessels requested permission to fish?

WRIGHT: Firstly, to operate on the high seas in the WCPF Convention Area, members of the Commission need to officially authorize each of their vessels and provide the vessel details to us so that we can place the vessel on the WCPFC Record of Fishing Vessels.
This then establishes that the member is taking responsibility for that vessel when it is operating in the WCPF Convention Area. Within the WCPFC rules, there’s no capacity to authorize a vessel unless you are a member of the Commission. I guess the Latin Americans know this and that is why they have not applied to have their vessels placed on the WCPFC Record of Fishing Vessels.

ISLANDS BUSINESS MAGAZINE: What is the Commission doing to try and better regulate fishing in the WCPO?

WRIGHT: The Commission’s efforts to better regulate fishing fleets includes the development and implementation of a satellite-based vessel monitoring system for vessels operating on the high seas that will complement that being managed by the FFA secretariat for vessels operating in the national waters of FFA members, the development of a regional observer programme that will involve the placement of observers on fishing vessels operating in the region to collect independent information, procedures to support the boarding and inspection of fishing vessels on the high seas, procedures to verify transhipment when vessels transfer their catch to other vessels such as carriers, means to more effectively encourage compliance with the decisions of the Commission including means to deter the support of any activity associated with IUU fishing and efforts to improve the detail and scope of data that is provided by fishing vessels in respect of their fishing operations.

ISLANDS BUSINESS MAGAZINE: Why are the Latin American vessels, which normally operate in the Eastern Pacific, shifting to the central Pacific? Why the depressed fishing conditions? Something to do with climate change, etc?

WRIGHT: Yes, IATTC scientists have been advising that tuna stocks in the eastern Pacific Ocean (EPO) cannot sustain current levels of fishing capacity and have been calling for a reduction in capacity among the fleets active there for many years. Good fishing conditions were experienced earlier this decade, as a result of strong recruitment to the fishery of juvenile fish, and fleets expanded in response. Now fishing conditions have returned to more long-term average conditions and there is a need to establish tighter fishing effort controls so that fishing operations are closer to that which can be sustained, some EPO fleets have moved west into the WCPO.
This highlights one of the most significant challenges shared among all RFMOs managing tuna at present. An inability to secure agreement among all those who are fishing tuna stocks to cut back on their fishing effort when scientists advise stocks are threatened with over-exploitation. It appears no-one is willing to take hard decisions that will lead to fleet reductions. It cannot go on indefinitely. Perhaps only a major crisis, such as a complete collapse of stocks, will force people to take the responsible action required to establish sustainable fisheries. If it gets to that stage, some fleets, and some economies, including Pacific Island economies, are going to suffer considerable hardship.

ISLANDS BUSINESS MAGAZINE: A recent paper by Professor Tom Kompas of the Australian National University titled "Tuna Resource Management: Economic Profit and Optimal Effort in the Western and Central Pacific Tuna Fisheries" (an article on this was featured in a recent issue of our magazine) warned of the dangers of the region being over-exploited by exposure to more open foreign fishing vessel access and the use of effective modern technology.
I notice that concern over these two factors have been raised in the past. A cover article in the May 2005 edition of Islands Business magazine carried a story of how new technology in catching fish was a growing concern for some as it was raking out juvenile fish from the Pacific ocean. It would be interesting to talk a bit more about just how tuna fishing technology has developed, what are some of the new age equipments (compared to say, the 80s), the capabilities of new technologies and what are the implications of technological advance in the tuna fishing industry. On the increase in open access, what has been the noted trend?

WRIGHT: In the early 1980s the average purse seine vessel was catching 3,500 mt in a good year – around 15 metric tonnes per fishing day. Today, although small vessels still harvest this amount, larger, high-tech vessels are averaging closer to 30 mt/day and 8,500 mt a year. Some vessels now operate almost continuously for 3 or 4 years before going for major maintenance on a slip.
Other than the Japanese seiners, which supply niche markets in Japan, most seiners transship their catch to carrier vessels on the fishing grounds rather than undertaking long voyages to deliver their catch to distant canneries or home ports. In places, like Solomon Islands and Papua New Guinea, canneries have been established close to the major fishing grounds – which also results in increased periods fishing. Modern seiners have sophisticated equipment such as bird radars (to detect birds associated with schools of fish), side scanning sonar that can extend several thousand meters each side of the vessel, helicopters and sensitive depth sounders and fish finders. In addition, in the last decade there has been an increase in the use of man-made rafts or fish aggregating devices (FADs) and fishing on naturally occurring logs which aggregate schools of tuna. Not only does FAD fishing generally result in higher catch rates of tuna but tuna schools associated with FADs generally consist of smaller, juvenile bigeye.

ISLANDS BUSINESS MAGAZINE: It has been suggested that the Pacific go into value-adding and go to the world market as a collective body to market their tuna and to cut down on the politics involved. This suggests that PICs could very well handle their tuna industry much better than they do now, not just in conservation and management but in marketing as well as development of the industry. What do you think of this opinion and what is your reading of the Pacific tuna industry so far and how it has contributed to development of Pacific islanders?

WRIGHT: Approximately 45% of the WCPO tuna catch is taken from within the exclusive economic zones of FFA members – and so they do control access to a significant proportion of the total WCPO tuna fishery. For 20 years or more observers have suggested that they have the capacity to establish a cartel type arrangement and so dictate supply to world markets – including influencing prices. The challenge to achieve this among such a diverse group of countries is to be able to satisfy the individual needs and development aspirations of all of these countries – or at least those responsible for the lion’s share of the catch. It has not proven possible to do that and so some countries continue to license fleets under bilateral access agreements while others are pushing ahead with aggressive development of their domestic industries.
While the development of the domestic industries in some Pacific countries does involve Pacific Island nationals, by and large, domestic development is driven by foreign interests. There are some good reasons for that – among them the significant investment required to establish and operate these ventures plus the fact that local experience is still at its early stages of development.

ISLANDS BUSINESS MAGAZINE: Annex B of the Vava'u Declaration on Pacific Fisheries Resources, a result of this year's Forum Meeting in Tonga, indicated a move by Pacific's Forum member countries to try to consolidate the region's tuna fishing industry. What are your views on this move?

WRIGHT: The Leader’s recognition of the significance of fisheries as the region’s premier renewable resource requiring concerted efforts to establish conservation and management arrangements to support sustainable fisheries is overdue and to be commended. As I said above, I do believe that there are already trends towards a restructuring of the regional tuna industry that will see a gradual decrease in the proportion of fishing operations that are supported under bilateral access arrangements and an increase in operations based in the region. My only hope is that the substance of the Vava’u Declaration is not lost on administrators and mangers and that the over-arching principle of supporting development within sustainable limits is in fact applied.

ISLANDS BUSINESS MAGAZINE: One of the highlight of governments proposed actions (Communique of Vavau Forum meet) is to: "Fully implement without delay the conservation and management measures developed and endorsed by the Western and Central Pacific Fisheries Commission (WCPFC)" and "seeking the urgent adoption of additional measures by the WCPFC to address over-fishing of bigeye and yellowfin, including a reduction in longline catches and addressing purse seine fishing, and specific steps to reduce the catch of juvenile bigeye and yellowfin."

What are WCPFC's tuna conservation and management measures and what are its additional measures to address overfishing of big-eye and yellowfin, that the Forum ministers are referring to?

WRIGHT: Conservation and management measures are the formal binding measures adopted by the Commission which all members are under obligation to implement at the national level. If I remember correctly, the Commission has adopted around 15 different conservation and management measures in the two years it has been operational. Some of these relate to regulatory issues – such as the establishment of the WCPFC Record of Fishing Vessels, a schedule for the development and implementation of the regional observer programme and the VMS, for example, and conservation and management measures relating to both target and non-target stocks – non-target being those fish species and other marine resources taken incidentally during tuna fishing operations. Among these are two conservation and management measures that attempt to address the concerns relating to the over-fishing of yellowfin and bigeye tuna. One adopted in 2005 focuses on limiting fishing effort in the purse seine fishery between 20ºN and 20ºS and establishing a catch limit for fleets operating in the long line fishery.
The 2006 measure seeks to establish capacity limits on fisheries taking yellowfin and bigeye using other fishing gears throughout the Convention Area. At last year’s annual Session in Samoa, the Commission agreed that at the 2007 Session, scheduled for Guam in the first week of December, the Commission would develop and adopt a supplementary measure that address the issue of relatively large catches of juvenile bigeye and yellowfin tuna taken by purse seiners that fish on FADs – floating objects or fish aggregating devices.
While this will be a step in the right direction challenges remain in reducing juvenile bigeye and yellowfin catches in that the longline fishery takes significant amounts of bigeye that have not yet matured and also that surface fisheries in Indonesia and Philippines are responsible for significant amounts of juvenile yellowfin and bigeye catch. A measure that is confined to FAD fishing alone will not achieve the reductions in juvenile bigeye and yellowfin catch that are necessary to reduce the threat of the stock becoming overfished.


ISLANDS BUSINESS MAGAZINE: General discussion: any points we missed but which you feel are important to highlight?

WRIGHT: I think you have it pretty well covered Dionisia! Some of these views are likely to be a little contentious for some members of the Commission Dionisia – so perhaps you better preclude everything by saying that you sort me out for my personal views and that these might not represent the views of all the Commission members. Thanks.




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NOTE: This is the original transcript of an interview with Andrew Wright, published in the Islands Business Magazine (www.islandsbusiness.com) as: Interview: Andrew Wright, Executive Director, Western and Central Pacific Fisheries Commission; pp 48,49, December 2007 edition.

Islands Business is the flagship publication of Islands Business International.
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Tuesday, 10 July 2007

Nakelo men revive old meke

* Islands Business Exclusive

"The meke, performed only by men and held in high regard by the villagers, is called: 'Maravu Levu', which literally translates to mean: 'The Great Calm', but in the context of this dance is the name of a so-called 'waqa ni meke' or 'the ship that carries dances'"

by Dionisia Tabureguci
Thu, 5 Oct 2006

SUVA, FIJI ---- Spectators at the official opening night of the 3rd Melanesian Arts and Cultural Festival were treated to a rare performance of an over 70 year old meke (dance) by an 80-member group from Nakelo village in the province of Tailevu, central Viti Levu.

The meke, performed only by men and held in high regard by the villagers, is called: “Maravu Levu”, which literally translates to mean: “The Great Calm”, but in the context of this dance is the name of a so-called “waqa ni meke” or “the ship that carries dances”.



The dance is of historic significance which the village elders recall as being the meke composed and performed initially for the Duke of Gloucester, the late Prince Henry William , when he visited Fiji in the 1930s.

...Nakelo men performing 'Maravu Levu'.

Village elder Necani Mate is a grandson of one of the composers and explained that this meke is significant because it was composed with the help of the “other side” or the spirit world, at a time when all of Fiji had supposedly subscribed to Christianity.

“The Duke of Gloucester was the first member of the Royal Family (of Great Britain) to set foot on our shores and while all the preparations were being made, the one thing missing was a meke. The governor sought the assistance of the then Vunivalu and Tui Kaba, Ratu Popi Seniloli, to help find a meke for the entertainment of the Duke of Gloucester.” The title of Vunivalu and Tui Kaba are conferred to the high chiefs of Bau island, traditionally the seat of power over the province of Tailevu. The bearers of the titles commanded great respect from areas in Fiji that had political alliances with the islet in pre-Christianity Fiji. This link is still acknowledged today.

“Ratu Popi decided to ask the Tui Nakelo (high chief of Nakelo) for a meke and this was how it became a task during my grandfather’s time for a meke to be composed to entertain the visiting royalty,” said Mate.

He said the composers had run out of ideas so they decided to ask the spirit world for guidance. To achieve this, they performed a sacred ritual to the “other side” which resulted in the “sighting” of the “Maravu Levu”, a seven-decked ship in the Ocean of the Spirit World that supposedly carries “all the dances in the world”. “The captain of the ship told our elders that the ship had run out of dances and the only one left was the dance that tells the story about the ship itself. And this was how this meke made its way into this world,” Mate related.

The unique thing about this dance, he added, was that it could not be performed by people from other parts of the country as the choreography of movements is very complex and is only known by its Nakelo guardians.

“Other areas work on body movements. This meke works on feet movements.

One wrong move and the dancers could be clubbing each other instead,” Mate winked.











...village elder Necani Mate.



The actual performance, said the village elder, is supposed to reflect every aspect of the ship as it sails through the waters of the Spirit World and this was the reason why there are seven traditional dance accessories being used by the seven subgroups of dancers where each subgroup represents a part of the vessel.

Mate said a “full-strength” dance would have to feature 1200-men as this would enable a “reconstruction” of Maravu Levu in its entirety. But this, he stressed, has never been witnessed by anyone as it has never been performed before.
“The one that was danced for the Duke of Gloucester was made up of 800-men and even that has not been repeated because there are not enough people. I must say that the complete set of seven major movements have never been performed before.”
Mate said if the Maravu Levu was performed in its entirety, it would take over an hour.

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NOTE: This article was published on Islands Business on-line (www.islandsbusiness.com) as: "Nakelo Men revive old meke.”
Date of on-line edition: Thursday October 5, 2006.
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Tuesday, 26 June 2007

ANZ’s new Pacific chief confident in regional economies


“We have made much progress but progress to us here at ANZ is not just how many accounts we have opened nor how much people have saved with us. It is more a question about how we are contributing, how we are helping to unlock the potential in rural areas of the Pacific and whether we are making a real difference to the lives of the people we provide bank accounts and other services to.” 

- Mike Guerin, new managing director of ANZ's Pacific operation.


by Dionisia Tabureguci

PACIFIC island countries are going to see more of the Australia and New Zealand Banking Group as it continues to make its presence felt in the region.
The new managing director of its Pacific operations Mike Guerin said the bank has a number of plans geared towards extending its reach in the region further than the 10 countries that it operates in. 

“I believe ANZ can contribute to the local economies by providing international expertise and knowledge transfer, building local employment opportunities and international career options for Pacific islanders and by ensuring ANZ maintains and grows points of representation throughout the Pacific,” said Guerin in an interview with Islands Business Magazine.


ANZ, the fourth largest bank in Australia, has presence in Vanuatu, Tonga, Timor Letse, Solomon Islands, Samoa, Papua New Guinea, New Caledonia, Kiribiati, Fiji, Cook Island, American Samoa, together contributing over A$100 million a year to the Group’s financial results.
In return, ANZ has been a major player in financing businesses in the region as well as making available financial services to the rural communities through its rural banking partnership with the United Nations Development Programme.

Guerin said the bank has an obligation to be an even greater contributor to innovation, employment, investment, increased productivity and community support across the region. “We need to better structure our business to strengthen organic growth and support inorganic growth opportunities. I see a need for greater specialisation and an even stronger focus on our customers and building on our customer value proposition,” he said.

Being a large business in the region also comes with certain responsibilities and in the past, banks have come under fire, accused of directing funds only to sectors that are doing well and lessening their exposure to suspect sectors in order to save their skins.

An example is the Agriculture sector in Fiji in the last five years when the sugar industry began to go down. The decline was reflected in the drop in commercial banks lending to the sugarcane-growing business, which decreased from over F$85 million in 1994 to F$14.9 million in 2001 to F$4.7 million in 2005, according to Reserve Bank of Fiji statistics.

Guerin offered a bank’s perspective on this. “Fiji’s sugar industry is presently going through some changes designed to better position itself for future prosperity,” he said. “Prudent management of their debt levels and repayment obligations is important to industry participants while they seek to place the industry on a stronger footing. One of our obligations is to ensure we not lend money to people and industries where resultant repayment obligations will further stifle their ability to remain viable,” he added. The bank believes its role in stimulating activities in the rural areas is being delivered in a more holistic way.

An example of this, Guerin said, is the ANZ-UNDP rural banking partnership, designed to benefit rural dwellers and not just those involved in agriculture.
The project, piloted in Fiji, is now made available in Samoa, Tonga, American Samoa, Papua New Guinea, Kiribati and the Solomon Islands.

To date, the project has opened over 60,000 accounts and mobilised over AUD$3 million.

“We have made much progress but progress to us here at ANZ is not just how many accounts we have opened nor how much people have saved with us. It is more a question about how we are contributing, how we are helping to unlock the potential in rural areas of the Pacific and whether we are making a real difference to the lives of the people we provide bank accounts and other services to,” said Guerin. “

People now have a safe place to save with a bank that comes to them, they are able to borrow at competitive interest rates to improve their homes, start small businesses or purchase a truck for their village. Parents are able to save for school fees, pensioners in rural areas now don’t have to spend most of their monthly benefit on paying for transport to town and most people have enough savings to get them through an unexpected natural disaster,” Guerin added. 

He said the bank’s Pacific operation would be using the rural banking project to expand its lending to agriculture.

“The future will see ANZ continue to expand into new countries; develop new products and services to ensure we keep up with the needs of our customers and partner with new organizations and increase the availability of banking services in rural areas. Financial literacy and our partnership with UNDP will remain a cornerstone to all future developments.”
Overall, the bank sees opportunities across the board and would be strengthening its focus on specialisation, with tourism being an industry high on its priority list.

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NOTE: This article appeared as: “TOURISM HIGH ON BANK’S PRIORITY LIST”…Guerin has plans to extend ANZ’s reach; pp 42,43, November 2006 edition.

Islands Business is the flagship publication of Islands Business International.

In this blog, picture of Mike Guerin in a press conference in Suva supplied by ANZ Fiji.

Tuesday, 12 June 2007

Interim government investigates “new information” in mine deal

Rehab Deed for mine sale delayed


By Dionisia Tabureguci

FIJI’s interim government has deliberately delayed the signing of the Deed of Rehabilitation for the sale of Emperor Gold Mine (EGM) in Vatukoula because of what it says are “new information” that it has begun to investigate.

As corporate announcements in Australia allude to the completion of the sale process between Emperor Mines Ltd (EML), the ASX-listed owner of EGM, and Westech Gold Pty Ltd, a private company in Australia headed by former EGM engineering consultant Brian Wesson, Fiji’s interim attorney general Aiyaz Sayed-Khaiyum has confirmed to Fiji Business magazine that “certain matters have come to light and which we are in the process of investigating and verifying”. Saiyed-Khaiyum chose not to elaborate on what these “certain matters” may be but gave indication that a decision may be reached by the end of the week (end of March).


“I can assure you that the decision made will be in the interest of the community in Vatukoula and also in the interest of the nation,” he said.

It is understood the signing was to have taken place on March 20, 2007 with all parties on standby but this did not eventuate because the AG had not given approval.

Ever since EML’s announcement in December last year that it will close down its Vatukoula mines, questions have been raised by industry experts and representatives of the affected Vatukoula community regarding various events that transpired afterwards, including the sale of the mine to Westech, an Australian incorporated company whose owners have been quoted as associating it more to power production than gold mining.

In particular, questions have been raised on the background and backers of Westech Gold Pty, given that it was only registered with the Australian Securities and Investment Commission in February this year.
“This should raise some serious questions about the authenticity of the whole deal,” said a concerned source, familiar with the operations at Vatukoula.

“Given that (Westech Gold) was only registered in the past month, the company cannot have any asset and I simply cannot believe that the Fiji government will allow the sale of the company (EGM) with $15 million in liabilities to a company with no asset. What nonsense is this?”

In a series of correspondence with Fiji Business magazine, the source has joined other industry observers in expressing reservation about the deal, which they view with deep suspicion as being created to allow Emperor Mines Ltd to get out of its financial, social and environmental obligations at Vatukoula.

Further criticisms were levelled at the nature of the transaction, which involved no actual purchase but simply a transfer of shares from Emperor’s companies that own the Fijian assets - along with the liabilities – to Westech Gold.

This disposal has in turn given much relief to EML’s major shareholder, South African owned Durban Rooderpoort Deep Ltd (DRD) who has been moving to improve upon its battered share price performance by cutting down its losses, contributed mainly by the estranged Vatukoula operation. DRD had also made known its plans to sell its interests in Porgera and Tolukuma gold mines in Papua New Guinea and to undertake a major restructure and share consolidation. The complete disappearance of Vatukoula and associated liabilities from its books has given the miner much room to move with its restructure plans and has also returned some investor confidence with its share price having recovered overnight on the Johannesburg Stock Exchange.

But what it has left behind in Fiji is a long list of unanswered questions and concerns about the new owner of the Vatukoula gold mine, the expertise that it seem to lack and the financial position that not many are aware of.

Another commentator to this magazine noted how the new owner expressed optimism in restarting Vatukoula, which he believes is already a dying operation.

“Restarting sunset mines is always difficult,” he said. “For such a mine, the finding of a new and higher grade orebody system is usually what is required to revive it from its natural death and this upside potential was not there when EML decided to sell Vatukoula. I doubt very much that there is an upside to EGM because of lack of viable resources to kick start mining operations and the 4million ounce resource infers total resource…what is more critical is how much of this total resource is categorised as being amenable to mining.”

Representatives of the gold mining community have also expressed their concerns. In an open letter to Fiji’s interim government last month, the representatives urged the interim administration to intervene in the ownership transfer of the Vatukoula gold mine.

The list of issues that EML has left behind and which workers reps are not sure how the new owner proposes to deal with, relate to: the recently redundant December 5th 2006 workers, the stranded 500 or so subcontractor employees, unresolved disputes like the 1991 strikers and workmen compensation issues, landowners and historical land claimants, environmental concerns both within and downstream communities, women, children and other groups affected by the Vatukoula mine closure.

“Government should assure the people of Vatukoula that all these obligations will be taken care of, by whom and when before it concludes negotiations with the two companies Emperor and Westech,” they said.

Footnote:

Who is Brian Wesson?
Brian Wesson is the owner of Westech International, the company that has been associated with the transfer of ownership of EML’s Fiji operation to Westech Gold Pty Ltd, a company that only got incorporated in February 2007. 

Prior to moving into this major undertaking, Wesson was chief engineer at Vatukoula in 1993 where he spent 11 years. An electrical engineer with over 30 years experience in the resource and energy sectors, Wesson started his career with Rand Mines in South Africa in 1980 in the electrical department of the Harmony Gold Mine. He was transferred to East Rand Propriety Mines as sectional resident engineer in 1982 and was moved to Durban Rooderpoort Deep in 1989.

On September 19, 2006, Wesson was appointed a non-executive director of ElDore Mining Corporation Ltd, an Australian mineral exploration company that recently acquired Robust Mines Ltd in Fiji. Robust Mines Ltd has exploration properties in Waimanu in Colo-i-Suva, Buca (Dakuniba) and Vatukoula South West.
Wesson’s resignation from ElDore was announced on ASX on January 29, 2007. Wesson emerged again in mid-March when EML announced it was selling EGM to Westech International. The press reported Wesson and his wife Amelia as directors of Westech International.
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NOTE: This article was published in the Fiji Business Magazine as: "New information prompts govt to delay gold signing. AG Sayed-Khaiyum: 'We're in the process of investigating and verifying'", pp 5,6, April 2007 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
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