Bills 19 & 20 stifle the voice of the grower: NFU

  • 12th May 2016
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This Bill together with its precursor, the Sugar Industry (Amendment) Act passed by the House of Representatives in August 2015 completes the isolation process of the growers from the mainstream of the industry.
The voice of the grower has been stifled. The institutions which carried this voice have been highjacked by the State and its nominee the Fiji Sugar Corporation.
The Bills propose to place the industry firmly in the hands of those who  have led it since 2009, and have failed. Indeed, they are the very ones who have caused its present calamity”:  Mahendra Chaudhry , General Secretary, National Farmers Union  

Mahendra Chaudhry presented NFU’s submissions to the Parliamentary Standing Committee on Economic Affairs re Sugar Industry Bills 19 & 20 in Lautoka this morning.

The following is his full submission to the Committee:

Historical Background

Before I make my submission on the Bills proper, I wish to make some introductory remarks on recent developments in the sugar industry putting them against a backdrop of key initiatives taken in the past that had set the industry on a path of growth and prosperity.

 We all know that Fiji’s cane farmers have had a long history of oppression and exploitation by the miller going back to the CSR days, nay, even further back to Indenture.

Anyone who studies cane farming history will realise that the decades between the 1940s and the 60s were highly turbulent years marked by instability, unrest, cane strikes and a high degree of indebtedness in the farming community.

Four milestone developments thereafter paved the way for an extended period of peace and stability, contributing to the rapid growth of the industry.

The first was the Agricultural Landlord and Tenants Ordinance in 1966, the last gesture by the Colonial government to deal with the vexed issue of agricultural land before its departure from Fiji.

The second was the Lord Denning Award of 1970 which finally gave cane farmers a modicum of justice with a guaranteed minimum price and a 30/70 proceeds sharing formula which has been the hallmark of Sugar Master Awards since then.

The third was the Lome Convention of 1975 which stabilised prices and gave Fiji sugar preferential entry into the EU market under its Sugar Protocol based on a guaranteed quota at a price almost three times above world market prices.

The fourth was the 1984 Sugar Industry Act which brought about significant  reforms by acknowledging the crucial role growers played in the success of the industry and the national economy, thus, giving them partnership status in the industry.

The 1984 Sugar Industry Act is still viewed as a highly pragmatic piece of legislation that gave recognition to all industry stakeholders – the government, the miller, the grower, the landowner and the trade unions.

It was a significant move, long outstanding I must say, to remove the decades-long suspicion and distrust that had marred relations between them. The Act:

  • provided greater transparency and accountability in the operations of the industry; and
  •  gave growers a fair say in the industry in which they had a 70% stake.

To facilitate this, the 1984 Act set up the office of the Sugar Commission of Fiji, the Independent Tribunal to act as referee among the stakeholders, and the Sugar Cane Growers Council, an elected body of cane growers, fully funded by them, created to represent their interests in the sugar setup.

The Sugar Commission (SCOF) was to function as a multilateral stakeholders organisation. Its function was to co-ordinate the activities of all sections of the industry so as to foster cooperation between them and promote efficiency. It had representation from cane growers, millers, landowners, trade unions and the government. It was chaired by an independent chairperson appointed by the Minister after consultations with the Standing Select Committee of the House of Representatives on Sugar.

The industry prospered under the 1984 Act. I will shortly be providing comparative data to illustrate this. The point is that with the growers amply represented on the various institutions, it gave them confidence in the industry because they could now demand accountability and transparency in the manner in which it operated.

Regrettably, all this changed when the Bainimarama administration in 2009, unlawfully, and without any consultations, disbanded these key institutions, and forcibly imposed its decision despite strong objections from the growers.

The dissolutions could not be challenged in a court of law as the jurisdiction of the Courts had been severely curtailed by the regime following its abrogation of the 1997 Constitution and the promulgation of draconian decrees.  No policy or action of the interim government could be legally challenged.

The National Farmers Union wrote several letters to the Prime Minister in 2009/2010 warning of the dire consequences of meddling with industry institutions. Our main concern was that growers were being deprived of their legitimate voice in the industry.

Furthermore, the dissolutions remained unlawful as the Sugar Industry Act 1984 was not amended to effect these changes. The current Bills, Nos 19 and 20, the subject of the present consultations by the Standing Committee for Economic Affairs, are largely designed to formalise these arbitrary decisions made in 2009/2010, although some of them were regularised in 2015 by way of amendments to the Act.

There is absolutely no doubt, that the changes initiated were politically motivated to dismantle democratic institutions, and more importantly, to curb the influence of trade unions and their leaders. The irony is that in doing so, they  caused serious damage to the industry and put its future viability at risk.

It’s true intentions became clear when, soon after, an assault was mounted on unions and organisations representing cane growers and mill workers. All union activities were halted, officials were assaulted, harassed, arrested and detained for long periods at a time under the Public Emergency Regulations (PER). I myself and other officials of NFU, were particularly targeted.

The end result of all this maneuvering, is that growers have been completely marginalised from the entire industry which is now a total monopoly of the miller, Fiji Sugar Corporation (FSC). Consequently, growers are deprived of any representation or voice in the industry in which they have a 70% stake.

It leaves a dangerous lack of transparency in FSC’s dealings with the growers regarding matters in which they have a crucial financial stake. For instance, FSC has been withholding from growers vital information regarding milling data which was freely available in the past to growers organisations. Such a situation only serves to create distrust and animosity between the growers and the Corporation.

Industry statistics (source FSC Annual reports) for the 1980s and 1990s  indicate a highly prosperous industry. Annual cane production used to exceed 4 million tonnes from which between 420,000-450,000 tonnes sugar was made: twice exceeding the half a million mark in the years 1986 and 1994. TCTS ranged from 7.8 to 9.04. The three big sugar mills ran for up to 6-7 months from June to December, at times extending to January the following year.

FSC had a workforce of over 3000 at peak crushing time. There were around 20,000 active cane growers and between 12-15,000 cane cutters.

 Raw sugar accounted for about 25% of Fiji’s total exports and 12% of its GDP.  Almost 65,000 hectares of land was under cane.

As late as 2006, despite the serious problem of non-renewal of cane leases, we produced 3.2 million tonnes of cane and 310,000 tonnes of sugar.

Compare these statistics with the industry’s dismal performance following the army takeover in December 2006. Industry performance plunged sharply from 2009 onwards.

The years from 2010 through to 2013 can be labelled the worst in the history of the sugar industry. In 2012 we crushed 1.5m tonnes of cane, converted to 155,000 tonnes sugar. Earnings dipped to a low of $186m.

Let’s look at some comparative statistics. I will take the 2006 season and the 2015 season to show how the current administrators have run down a once vibrant industry.

Description 2006 season     2015 season
Cane crushed  (tonnes)     3.2million    1.84 million
Sugar produced (tonnes     310,000     222,000
Cane per hectare (yield)       58          42
TCTS      10.4          8.3
FSC workforce      2000          1500
Active cane growers     15,730         12, 600
Cane cutters     15,205           8970
Land under cane (hectares)     55,438          42,000
Raw sugar exports/ %age of total exports        19%           8%

On average, industry performance has slipped a massive 50% since 2006. Who is to blame for this sharp decline? Prime Minister Bainimarama has time and again put the blame on what he calls “politicians and the politicisation of the industry”. But as we have shown industry statistics do not support his argument.

Madam Chair, the industry today has come round a full circle. By reversing the provisions of the 1984 Sugar Industry Act, the Bainimarama administration has placed it once again solely in the hands of the miller, FSC and the Sugar Ministry.

FSC is itself a failed entity, bankrupt to all intents and purposes, continuing to survive only through government grants, and loans guaranteed by it.  How could such an institution be relied on to provide proper direction and run the industry efficiently?

The explanatory notes to the Bills before the Committee state that they are intended to provide for the next stage of reforms to improve its efficiency and effectiveness. However, the notes do not provide even the scantiest information on how such an outcome is to be achieved.

On the contrary, an informed analysis of the Bills reveals no reforms which can be considered of benefit to the industry as a whole. Nor does it prescribe a credible rescue plan for FSC from the morass to which it has been consigned by those who have been at its helm since 2009.

All Bill No. 19 does is to simply formalise what has been happening in the industry since 2009 – disempowerment of the growers and the demolition of institutions which ensured accountability and transparency in its operations.

Moreover, it is a Bill designed as an attempt to bail out FSC.  But it would be a folly to believe that FSC’s finances can be turned around by merely writing off $175m of its debt to government under cover of converting it to equity.

The Qarase Government made the same mistake when it wrote off a total of $104m between 2003 and 2005. This reprieve lulled FSC back into complacency and old habits.

Indeed, to us it is a devious way of juggling the books to make the Balance Sheet look good. It adds no value – it is not new money coming into the Corporation.

But this is how FSC’s books have been disguised in recent years to play down its insolvency.

Let me give some examples of its machinations in attempting to give the Corporation financial credibility since its current chairman Mr. Abdul Khan took office.

Soon after his appointment as Executive Chairman two significant developments  found their way into FSC’s financial statements:

  • The FIRST was reversal of substantial amounts in impairment losses which were recorded in its books on account of :
  • the very significant losses incurred in recent years
  • its liabilities significantly exceeding its assets
  • its huge debt repayment commitments
  • negative cash flows; and
  • the existence of material uncertainty that cast significant
    doubts about its ability to continue as a going concern

In its 2010 Statement of Comprehensive Income an impairment loss on property, plant and equipment of $173m was recorded, reducing their value from $261m in 2009 to $95m in 2010. ( Source FSC Annual Reports).

But note this: $120m of this impairment loss of $173m was written back in the years 2012 ($40m), 2013 ($45.5m) and 2014 ($35m) thereby showing (paper) profits of $1.8m in 2012, $6.3m in 2013 and $6.9m in 2014.

In actual fact, for each of these years, FSC had incurred heavy operating losses: $38m in 2012, $39m in 2013 and $28m in 2014.

The write back of impairment losses without any material improvement in the financial performance of the Corporation remains, therefore, a highly controversial issue.

Despite such dressing up of the books, the Independent Auditors stated in very clear terms in their 2014 report that given the negative performance of the Corporation in recent years, there exists a “material uncertainty that cast significant doubt about the Corporation’s and the Group’s ability to continue as a going concern”. 

The Auditors further state in the same report, and I quote:

The appropriateness of the going concern assumption on which the financial statements are prepared is critically dependent on the Government’s support to the Corporation and the sugarcane industry, the restructuring of the Corporation’s debt and additional equity to enable the Corporation to continue in operation for at least twelve months. The appropriateness of the going concern assumption is also dependent on improved quantity and quality of cane supply together with improvements in mill performance, and other factors as outlined in Note 23.

Should the going concern assumption be not appropriate, adjustments would have to be made to reflect a situation where the assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts stated in the statements of financial position of the Corporation and of the Group.

In addition, the Corporation and the Group may have to provide for further liabilities which may arise, and to classify the non-current assets and non-current liabilities as current assets and current liabilities, respectively. No such adjustments have been made to these financial statements ”  Unquote.

The Corporation has substantiated the write back of the impairment losses on the basis of assumptions made and targets set in the Sugar Cane Industry Action plan 2013-2022, one of which is to increase cane production from 1.8m tonnes in 2015 to 4.2m in 2019 – a highly inflated and unachievable goal, in our view, given the environment under which the industry currently operates and the challenges it faces in the coming years.

I was, therefore, quite amused to read in last Saturday’s paper (FT 7 May 2016) reporting Executive chairman Abdul Khan’s submission to the Committee that ‘FSC will be back on its feet in three years’.

This is just plain propaganda – Mr Khan has been a Director of FSC since 2009 and its Executive Chairman for over five years now and in the course of that time he has made a number of promising statements about FSC and the industry. Regrettably, however, none of his statements has come to pass so far:

The state of FSC and the industry has gone from bad to worse under his stewardship. And now he tells the Committee that things will change because “Our strategic Action Plan to 2020 is to increase crop size to 3.5m tonnes, increase sugar production to 437,000 tonnes …”

FSC’s annual reports over the years have consistently mentioned attaining a crop size of 4.2 million tonnes – but the target date keeps changing. In its 2007 report, this magical figure was to have been realised by year 2010. In its 2009 report the goal post was moved to year 2013 and then moved again in the 2014 report to 2019 under its newly formulated Sugar Industry Action Plan.

It’s just too confusing – the Chairman says one thing and the annual reports another.  Who is to be believed?

  • The second development, as I had mentioned earlier, is the very substantial provision for Directors Remuneration which appeared for the first time in FSC’s accounts for the period 1st June 2011- 31st May 2012; that is, soon after Abdul Khan took charge as Executive Chairman.

The following figures appear in FSC’s Annual Reports for the years 2011 – 2014 under sub heading Directors’ Emoluments:

  Description 2014    2013    2012     2011
 Directors Remuneration  791,000  846,000  781,000       –
 Directors  Fees  42,000  42,000  43,000  53,000
 Other Services & Allowances  48,000  43,000  62,000  103,000
881,000 931,000 886,000 156,000

In 2014 the FSC Board of Directors comprised:

Abdul Khan -Executive Chairman (Appointed to Board 28.10.09, Executive chair 1.1.2011)
Marika Gaunavou – Deputy Chairman
Ratu Deve Toganivalu, Viliame Gucake, Ratu Willian Katonivere, Arvind Singh, Joseph Roden and Tevita Kuruvakadua

According to reliable sources, the Directors’ Remuneration is shared between the Executive Chairman Abdul Khan and Deputy Chairman Marika Gaunavou – both of whom are supposedly working full time for FSC. Please note that from 2012 to 2014, these two have jointly picked up super pays of $781,000, $846,000 and $791,000 – respectively for each of these three years – a total of $2.4million!

What was paid to each of them is not revealed in the accounts but assuming it was shared 60/40 than Mr Khan would have collected $1.44m and Mr Guanavou $800,000.

I am simply flabbergasted. How can the FSC board justify such massive salaries at a time when the Corporation is, to all intents and purposes, bankrupt and there exists “material uncertainty” about its ability to continue as a going concern.

Abdul Khan’s salary, for instance, was reportedly paid TAX FREE in NZ Dollars when he was initially appointed executive chair. How is this justified?

He also enjoys other benefits which include housing, medical insurance, motor vehicle, paid leave. It is believed that the remuneration package was subsequently revised to include a performance bonus but this needs to be established, as also whether the payment is still made tax free in NZD.

The NFU calls for a thorough investigation into this issue. As far as we are concerned this is tantamount to milking a dead cow. We have  written to FSC’s executive chairman seeking details of the Directors’ Remuneration and other questions we have regarding what appears to be a conflict of interest between his responsibilities to FSC and his private business interests. I shall be speaking on this shortly.

Let me with your permission read this short letter to which a reply has not as yet been received.

I repeat there is little transparency on these matters. An investigation is clearly warranted.

As I see it, the two developments – that is, the write back of impairment losses and the huge payout in Directors Remuneration since Abdul Khan took over as executive chairman – may be linked. The objective here  being to show (paper) profits in order to justify the high pays.

There are other questions that need to be answered regarding the Executive Chairman.  I mentioned a conflict of interest.

It is well known that he has been pushing for FSC to set up cogeneration plants at its Rarawai and Labasa Mills, knowing well that the current low quantity of cane produced at these two mills make the projects highly risk prone.

Despite this, FSC borrowed $17m from the Fiji Development Bank to finance the Labasa project which was paraded as an all year round power plant. Our information is that the plant has been lying idle since work on it was completed last December because of technical problems.

FSC is seeking a $US 71 million ($F152m) line of credit from the Government of India through the EXIM Bank of India for its Rarawai project. A further $65m, it has said, would be raised locally.

All in all, Khan is quoting a colossal sum of $F217m for the 40 MW plant at Rarawai mill. We have made our own inquiries into the matter and understand  from competent sources that the entire Rarawai project should not cost any more than $US45 million (ie $F90m). This includes the cost of installing the 2x 20 megawatt turbines, building costs of the factory, cost of transporting bagasse from the mill to the cogeneration plant etc.

Abdul Khan is seeking more than twice as much – why? He needs to explain this huge discrepancy in costs.

At the same time, Abdul Khan’s privately owned company, Pacific Renewable Energy Ltd which was registered in 2010, has signed a 12 MW power supply agreement with FEA. Khan’s biomass facility is yet to be constructed in Lautoka.  Industry observers have questioned the delay considering that the agreement with FEA was signed more than 2 years ago.

The matters I have raised are serious. They reflect on the honesty and integrity of the FSC Board. They raise questions of accountability and transparency in the operations of FSC and the improper use of tax payers’ money to prop it up.

These issues must not be brushed aside but investigated for the good of the industry and to set it on the right course.

Bills 19 and 20

Our principal objection to the Bills are in respect of the following matters:

  1. Transfer of the functions and powers of the Sugar Industry Tribunal and the Industrial Commissioner in the Sugar Industry Act (Cap 206) to the Minister, the Fiji Sugar Corporation and the Permanent Secretary
  1. The composition of the Council of Sugar Cane Growers and related matters
  1. Restrictions on Industrial Action and Penalties imposed
  1. Compulsory transfer of privately owned FSC shares to government and conversion of government loans to equity
  1. Transfer of the Sugar Research Institute to FSC
  1. Transfer of Growers Register to FSC
However, we need to draw the attention of the Committee to the fact that the Bills are being rushed through the consultation process without the stakeholders being given sufficient time to consult with their constituents.

The Bills were introduced on 25 April in the last sitting of the House of Representatives which adjourned on 29 April. Printed copies of the Bills were not made available to the public until the following week and they have not been translated into the vernacular languages which are the common medium of communication among the farming community.

The changes proposed in these Bills will have significant impact on the manner in which the sugar industry will operate in the future. It will most certainly affect the livelihoods of the thousands who are dependent on it. As such, it is not proper that the legislation be fast tracked in this manner.

We propose, therefore, that consideration of the Bills be held in abeyance until such time as its contents are translated and published in the vernacular languages and the stakeholders given reasonable time within which to consult with their constituents.

Transfer of the functions of the Tribunal and the Industrial Commissioner  (Parts 2,5,6,8)

The most significant change here is the transfer of power to make, alter or revoke the Master Award from the Sugar Industry Tribunal to the Minister (s36).

This provision completely removes the credibility and the independence which must at all times remain attached to the process of determining the most important and vital aspect of the industry.

It hardly needs mention that the process must not only be conducted in a most judicious and impartial manner, but, more importantly, it must be seen to be so conducted, if it is to instil trust and confidence in the growers.

The Master Award sets out the standard provisions governing the mutual rights and obligations of a registered grower and the Corporation with respect to:

(a) planting, cultivation and harvesting of cane by the grower

 (b) the sale and delivery by the grower to the Corporation of cane harvested by the grower

 (c) the acceptance and purchase by the Corporation of the cane delivered to the Corporation by the grower

 (d) the manufacture, storage, marketing, delivery and sale by the Corporation of sugar, molasses and other by-products made from cane delivered by the grower to the Corporation 

It is an enforceable agreement which at the end of the day, determines the share of the proceeds each party receives from the sale of sugar and its by products manufactured by the miller from cane supplied by the grower.

The making of the Master Award is a contentious process where each party will seek to gain advantage for itself. It therefore, requires an arbiter who is completely detached from the parties and who is not politically aligned or the holder of a political office.

With due respect, the growers cannot be expected to perceive a Minister of government which is the sole owner of the FSC, discharging this function with the independence and impartiality required of it.

It is a clear case of conflict. And no less akin to politicising a judicial office.

We, therefore, urge the Committee to recommend that the power to make the Master Award remains with the Sugar Industry Tribunal.

This becomes even more imperative in light of the fact that a review process of the Master Award is currently under way.

Transfer of the Register of Growers to FSC (Part 6)

The Bill transfers the responsibility for maintaining the Register of Growers from the Registrar of the Office of the Tribunal to FSC.

This again is a case of conflict. It is a growers matter and it should not be subject to FSC control. It is best left to the Tribunal’s office which currently maintains it.

Registration may involve new farms or transfer of existing farms. Quite often disputes arise in the case of transfers involving estates with more than one beneficiary. These have to be properly determined before registering a transfer. It is a function best left to the independent office of the Tribunal which consults the Growers Council or the FSC where warranted.

The keeping of Register of Growers is an administrative function which is best left to existing arrangements which have been working well. Why is it necessary to make the change and burden FSC with this responsibility for which it will have to build expertise and provide an outlay. As it is, the Corporation is unable to cope with its own core function in an efficient and effective manner. Why complicate matters by giving it additional responsibility.

Abolition of the Office of the Industrial Commissioner (Part 2)

We note the abolition of the office of the Independent Commissioner constituted under the Sugar Industry Act (Cap 206) and the transfer of its functions to the Permanent Secretary. Along with this, all other staff employed in the Office of the Tribunal are to be transferred to the Ministry of Sugar.

We see no merit in this change concurrent with which the disputes machinery is also altered with the Permanent Secretary taking over the role of the Industrial Commissioner.

We note that the disputes resolution procedure in Part 8 of the Bill does not provide for mediation or conciliation process as is currently the case where this role is discharged by the Industrial Commissioner.

Under the new set-up all disputes are to be referred to the one-man Tribunal for determination with the likely consequence of creating a huge backlog of cases to the frustration of the parties to the dispute.

The Sugar Industry Tribunal  (Part 2)

The Bill proposes a one person Tribunal but makes no specific provision for any staff to assist him or her in the discharge of his/her duties, unless it is intended that the staff of the Sugar ministry is to carry out this role.

Likewise, the Bill does not state the source of funding for the Tribunal’s remuneration and other expenses associated with the discharge of its duties.

The Council of Sugar Cane Growers (Part 3)

The Council as constituted under the Bill cannot be considered as a duly mandated cane growers’ organisation for the following reasons:

  • it is not a body directly elected by the growers
  • appointments to the Council are made by the Minister and not the growers
  • the Cane Producers Associations which are deemed under it as purportedly representing the cane growers are not duly mandated to act on their behalf in all matters pertaining to their rights, interests, privileges and obligations connected with the industry
  • the government officials appointed to the Board of the Council are not the chosen representatives of the growers but government functionaries and they have no business there, notwithstanding the fact that since 2016 the Council’s operating expenses are funded by government.

This was deliberately done to take control of the Council. It does not have the approval of the growers who wish to have their own elected Council as was provided for in the 1984 Sugar Industry Act.

  • The power given to the Minister to impose a special levy on growers for capital projects is not acceptable as control of the newly constituted Council is not in the hands of the growers.
  • We note also that the Bill does not specify how the operating costs of the Council are to be funded. 

Acquisition of Sugar Research Institute of Fiji  (SRIF) – Part 10

We support the submissions made to the Committee by the Director SRIF.

The transfer and acquisition of the Sugar Research Institute to FSC is not acceptable to the growers who wish the Institute retained as a separate entity as at present, but funded totally by the government as its contribution to agricultural research specific to the sugar industry.

The growers wish to retain their representation on the Institute.

Compulsory Acquisition of FSC shares – Part 10

We object strongly to Clause 84 of the Bill which forces all shareholders of FSC, except the government, to transfer their shares to the government for a consideration yet to be decided, whether they agree or not.

Private shareholders have not received any prior written notice of this scurrilous imposition on them.

We point out that it constitutes an act of deprivation of private property by the State and may well constitute a contravention of Section 27 of the Constitution – Freedom from Compulsory or Arbitrary acquisition of property.

It is, no doubt, a draconian provision which sets a dangerous precedence for future acquisitions of privately owned assets by the State.

We urge the Committee to seek independent legal advice on this matter because of its potential negative impact on investor confidence in Fiji.

We oppose also the conversion of government loans ($175m) to equity because it significantly distorts the actual financial position of FSC. It is a devious practice at the expanse of the taxpayer.

Restrictions on Industrial Action – Part 7

Clause 56 of the Bill provides for the issuance of infringement notices in lieu of persecution for offences allegedly committed under this part of the Act.

Under its provisions, fixed penalties (fines) are prescribed for different types of offences upon payment of which the offender is discharged of all liabilities under the offence and no further action is to be taken in respect thereof.

We submit that this provision can be abused with the person charged being lured or coerced into admitting an alleged offence he/she has not may have committed in return for the payment of a fine and a discharge.

We submit that this option be available to be exercised only after the determination of the guilt or otherwise of the person charged.

Sugar Cane Growers  Fund (Amendment)  – Bill 20 of 2016

The Bill continues the process initiated by the Bainimarama regime in 2009 to take full control of the Sugar Cane Growers Fund despite the fact that the moneys in the Fund belong to the growers.

The Fund’s Board is now appointed by the Minister who also appoints its Chairperson. The current Board is chaired by the Director, Sugar Ministry.  Its other members are CEO of SCGC, Chairman FSC, Industrial Commissioner and the Tribunal’s Accountant.

Currently, the Fund has a capital portfolio of around $65m invested in loans to the FSC, South Pacific Fertilizers Ltd which is owned by the Fund and to the growers for the purposes prescribed in the Act.

We are opposed to the amendments mentioned hereunder for the following reasons:

Subsection 4 of Section 4 of the Principal Act which is being deleted provided a safeguard to ensure that the moneys of the Fund are not invested outside the industry except by prior approval of the relevant standing committee of the House of Representatives.

This was specifically inserted in 1998 to ensure that the Fund was well secured and moneys were not invested in ventures or loans to outsiders which failed to meet the onerous requirements under the Trustees Act.

This amendment must be read in conjunction with the amendment proposed to Subsection (4) of Section 5 whereby the Minister is given the power to order the Board to invest as directed.

Currently, only the Board has the power to invest moneys not immediately required by it in stocks, bonds, debentures or other securities on such terms and conditions as it may determine. This provision has the effect of the Minister being given the authority to override the Board on such matters.

Our position is that the control of the moneys in the Fund should  always be vested in the Board which should have a growers’ majority on it.

The State’s duty should be to ensure that it gives, through the Minister responsible, adequate directions to the Board to safeguard and secure the moneys in the Fund.

The Minister must not under any circumstances be empowered to direct the Board on its investments or lending.

Conclusion

This Bill together with its precursor, the Sugar Industry (Amendment) Act passed by the House of Representatives in August 2015 completes the isolation process of the growers from the mainstream of the industry.

The voice of the grower has been stifled. The institutions which carried this voice have been highjacked by the State and its nominee the Fiji Sugar Corporation.

The process began in 2009 with the unlawful dissolution of industry institutions  created under the Sugar Industry Act 1984 to promote cooperation and understanding among its stakeholders.

The tragedy is that the powers-that-be have learnt no lessons from its past turbulent history. Not only are they meddling with the livelihood of some 13,000 growers and another 200,000 people directly/indirectly dependent on the sugar industry for their well-being; they are jeopardising the national economy.

The Bills propose to place the industry firmly in the hands of those who  have led it since 2009, and have failed. Indeed, they are the very ones who have caused its present calamity.

How can they salvage the situation? How can they be expected to make it more effective and efficient as is stated in the explanatory note to the Bill.

So wherein lies the answer to this dilemma?

It certainly is not in maintaining the status quo but in reversing the whole process started in 2009.

It is in cleaning up the FSC and the Sugar Ministry. The hangers on in the decision making process must be replaced by people with  expertise and full commitment to the industry and not to their own agendas.

Yes, the industry can be returned to its former glory but to do so will need a sizeable investment by the State in a well-formulated crop rehabilitation programme and in the harvesting and transportation infrastructure.

Our sugar industry will be entering a new era come September 2017 when the EU support arrangements expire. We will then be subject to the vagaries of the international market place where the going is not easy.

We will need to bring down costs through improved efficiency and a substantial increase in production at the farm and factory levels to give a good return to the growers to keep them on their farms.

BUT success can only be guaranteed provided the cane growers are once again empowered and recognised as equal partners.