STATEMENT FROM THE ATTORNEY GENERAL
- In consultation with the Prime Minister, in his capacity as the Chairman of the Fiji Mahogany Council under the Mahogany Industry Development Decree 2010 ("Decree"), a number of decisions have been taken to ensure that the policies and the mandate of the Government as outlined in the Decree are fully implemented.
- This will mean that the Fiji Hardwood Corporation Limited ("FHCL”) is appropriately reorganised and managed to be able to adequately perform its role and functions in the development of a mahogany industry and deliver maximum returns to all the stakeholders in the economy, including landowners, saw millers and manufacturers.
2. The Decree has introduced a transparent, efficient and results-oriented regime to develop a mahogany industry. It will leapfrog reforms and contribute to growing the GDP.
3. Earlier this year, expressions of interest were called for the issuance of licences in the mahogany industry. The licensing regime will result in significant additional revenue and contribute to exclusive and specific branding. The numerous expressions of interest received have been thoroughly assessed and the Prime Minister will, upon his return from Vietnam, approve and issue licences in his capacity as the chair of the Mahogany Council.
4. With the licensing and exclusive branding of Fijian mahogany, we believe Fiji will be able to obtain maximum benefit and premium prices for Fijian Mahogany products. In addition, it is envisaged that apart from the income from the sale of mahogany products, the licencing and branding regime will result in additional annual income of FJ$4 million. With these proceeds, we can address the substantial debts of FHCL, which as of 31 January 2011, amounted to approximately $26 million. Of this amount, Government has guaranteed over 62% or almost $16.8 million. FHCL is currently lagging behind in repayments to FNPF.
5. Pending the issuance of licences, FHCL will be directed to supply mahogany logs and timber to all purchasers to ensure that there are no loss of jobs, encourage private sector investment and create further employment. Once licenses are approved and issued, FHCL will be obliged to supply mahogany to only licence holders.
6. To pave the way for the licencing regime, there is a need to transition the structure of FHCL Board and to re-organise the management of FHCL.
7. An interim board has been appointed comprising of the Permanent Secretary for Public Enterprises as Chair, the Permanent Secretary for Fisheries & Forests, Permanent Secretary for Industry & Trade and the Deputy Solicitor-General.
8. A re-organisation of the management of FHCL will be announced by the interim Board in due course to ensure that FHCL is suitably organised so as to better perform its streamlined duties and functions stipulated under the Decree with integrity and transparency.
9. It should be noted that some public-owned entities are there to facilitate private sector growth and provide service to the public. They are not an end in themselves; they cannot be parochial and must position themselves to provide the maximum benefit to the Fijian economy.
10. The streamlining and downsizing of the role of FHCL under the Decree must result in a decrease of its operational costs and an increase in its efficiencies. With increased returns and long-term benefits to all stakeholders, the emerging mahogany industry must lead the way in attracting credible foreign as well as local investment.
11. The new licencees will be those that inter alia carry out substantial value adding in Fiji, create employment, upskill our people, and contribute to reforestation.
12. Government is committed to ensuring that necessary improvements in FHCL are implemented to accomplish the overall mandate of the Bainimarama Government to achieve maximum returns from the mahogany industry for the betterment of the economy and all Fijians.
Aiyaz Sayed-Khaiyum
Attorney General AND MINISTER FOR PUBLIC ENTERPRISES, INDUSTRY AND TRADE
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