The Secretariat of the Pacific Islands Forum (PIFS) is on damage control mode following accusations of disloyalty and being non-transparent in its dealings with countries it was created to serve.

The accusations were contained in a three-page letter written by the Solomon Islands Foreign Minister and External Trade, William Haomae, to the Forum Secretary-General, Tuiloma Neroni Slade.

Haomae claimed to have the support of five other members of the Forum.

“The Forum Islands Countries listed below would like to express their concerns regarding the conduct of the Pacific Islands Forum Secretariat (PIFS) in the execution of its duties to facilitate the establishment of OCTA as per [the] trade ministers’ decisions,” Haomae, said in his strongly worded letter to Tuiloma dated 19 January, 2010.

Haomae is the Forum Islands Countries’ (FICs) lead spokesperson on PACER Plus.

PACER (Pacific Agreement on Closer Economic Relations) Plus is a new regional trade and economic agreement being largely pushed by Australia and New Zealand. It involves Australia, New Zealand and the Forum Islands Countries.

OCTA is the acronym for the Office of the Chief Trade Adviser and it is being created to offer advice and guidance to Forum islands member countries in their negotiations for the new free trade agreement with Australia and New Zealand.

Since the two developed countries of Australia and New Zealand are also members of the Forum, other Forum islands members opted to form an office the chief trade adviser that is independent to that of the Forum Secretariat in PACER negotiations.

A New Zealand academic and trade expert Dr Chris Noonan has been earmarked for the position of CTA (Chief Trade Adviser), although he has yet to be formally appointed, which was why Haomae wrote to the Secretary-General Tuiloma last month.

“Despite the importance placed by the trade ministers on the urgent establishment of OCTA, FICs (Forum Islands Countries) have noted with surprise that the handling of the matter by the secretariat has been characterised by extraordinary delays,” wrote the Solomon Islands’ minister.

“FICs are concerned that the significant time lags between Dr Noonan’s communication with the secretariat and its responses are interfering with the fulfilment of the mandate given to the secretariat by Forum Ministers.

“Repeated requests for urgent updates from some FICs have yielded at best, delayed responses.
“Similarly, it has been brought to the attention of FICs that Dr Noonan’s requests for the chance to travel to Fiji and Vanuatu to assist in moving this process forward have been rejected.

 Worrying precedent

“Given the low costs of the proposed travel and its importance, and the significant amount of funding that remains available, the Forum Secretariat’s recalcitrance is puzzling, contrary to its mission to serve all the members’ interests, and might set a worrying precedent for the on-going PACER Plus process.

“More seriously, FICs are alarmed to see that the actions of the Forum Secretariat have been characterised by an inappropriate degree of opacity.

“In particular, while the governance structure of OCTA was discussed through successive rounds of PACER Plus meetings, the contract discussions between the Forum Secretariat and Dr Noonan have not been made available to FICs.”

The five other countries which, Haomae said, supported the Solomon Islands’ position were the Federated States of Micronesia, Kiribati, Nauru, Samoa and Vanuatu.

One week after Haomae wrote his letter, Secretary-General Tuiloma embarked on a Pacific islands tour, reportedly to brief heads of government and their foreign ministers about OCTA.

Questions sent to his office remained un-answered by press time.

The Haomae letter was silent on whether Dr Noonan had briefed the Solomon Islands trade minister and his other Pacific colleagues on the difficulties surrounding his appointment as CTA.

But the minister appeared to be very well informed and knowledgeable of all the key issues the New Zealand trade expert had been arguing with the Forum Secretariat.

These issues were subject of a series of correspondence between him and the Secretary-General initially, then the Forum Secretariat’s Director of Economic Governance Programme, Dr Chakriya Bowman, later.

Bowman is a former AusAID trade negotiator.

Delays in securing a work permit from Fijian authorities had forced her to work from the Pacific Trade Commission’s office in Sydney since her appointment towards the second half of 2009.

According to documents obtained by this magazine, the flurry of letter exchanges stepped up one day after Dr Noonan received his CTA contract with a covering letter on 15 December 2009.

Addressed to Tuiloma, Dr Noonan’s six-page response highlighted a total of 25 issues about his proposed contract.

To him, the job description offered by Tuiloma “does not provide any basis for an independent CTA and if signed, could obstruct the establishment of OCTA.”

He was particularly worried about the influential role the Pacific Islands Forum Secretariat (PIFS) wanted to give its Economic Governance Director.

“Lines of accountability need to be clearer and different to what has been proposed,” wrote Noonan.
“In this regard, your letter talks of the CTA liaising with the Director of Economic Governance at PIFS, while the consultancy contract has the Director of Economic Governance as the “project manager” of CTA.

“I believe this creates exactly the conflict the OCTA special unit was to be set up to avoid.

“The CTA cannot report to the Director of Economic Governance and cannot require the approval of Director of Economic Governance for OCTA funds to be expended.

“The effect would be that the CTA could not leave Vanuatu to visit other FICs or doing virtually anything without the consent of the Director of Economic Governance

“The relationship needs to be the opposite of what has been proposed.

“The Director of Economic Governance does not represent any state in the PACER Plus negotiations and has a limited role, while the CTA will represent FICs.”

Similarly on issue Number 11, Noonan raised questions about Tuiloma’s instructions that Bowman would advice Noonan on issues relating to EPA (which Pacific Islands Countries) are negotiating with the European Union) and PICTA (Pacific Islands Countries Trade Agreement).

 Bones of contention

Noonan, who was until recently the Pacific ACP legal adviser on EPA negotiations, said it is the Forum Islands Countries and the Pacific members of the ACP bloc that should offer advice on the two matters, and it is not Bowman’s job.

“PIFS does not represent any state in these negotiations,” Noonan wrote.

“The role of PIFS in PACER Plus seems to be restricted because of ministerial instructions for it not to give PACER Plus policy advice to FICs.”

 Among other bones of contention, Dr Noonan outlined in his 15th December 2009 letter, included insistence by PIFS that the:
  • CTA’s monthly pay to be approved by Bowman only after an invoice is accompanied by a monthly report. 
  • No tax-free status for the CTA and his staff. 
  • Bowman to be project manager of CTA. 
  • PIFS to have control over information documents generated by CTA. 
  • CTA be liable for all insurance. 
  • It reserves the right to terminate the contract of the CTA “on five days notice and without any cause”. 
  • Automatic reduction of consultancy fees if CTA fails to meet deadlines.

“The proposed contract is contradictory,” argued Noonan.

“It has elements of an employment contract and elements of a consultancy contract. In some jurisdictions, it could be interpreted as an employment contract.

“If it were found to be an employment contract, some of the clauses in the proposed contract would be illegal and unenforceable in some Forum jurisdictions.”

It is unclear whether Tuiloma responded to Dr Noonan’s comprehensive list of concerns regarding his CTA contract. But ISLANDS BUSINESS was able to obtain a letter signed by Dr Bowman, dated 13 January 2010, and addressed to Dr Noonan, in which she attempted to defend the proposed contract being offered.

“The offer to you as CTA is in the form of a consultancy agreement,” wrote Bowman.

“This ensures independence for the office of the CTA as well as for the Forum Secretariat, and accords with the directive of the Forum Islands Countries’ Ministers.

“The Forum Secretariat considers a consultancy agreement to be the appropriate method of appointment, and has accordingly made this determination.”

The Australian also used her two-page letter to insist that the provisions of the proposed contract would make the CTA independent and free from the influence of the Forum Secretariat.

This was why Bowman told Noonan that the contract made the CTA responsible for the establishment of OCTA, its legal structure, staff recruitment and fundraising from donors.

“To maintain independence at all times, there is no role for the Secretariat and there is no need for such a role. Conversely, the CTA cannot be part of the Secretariat. You cannot therefore be contracted to the Secretariat, or in any other way be appointed to the Secretariat.

“Otherwise, you/CTA will become subject to the Secretariat’s rules and procedures and to the authority of the Secretary-General.”

Bowman’s letter was silent on other key concerns raised by Dr Noonan, a point the Auckland-based trade expert and university academic stressed in his response to Bowman dated 18 January 2010.

“Contrary to the assertion in your letter, the consultancy agreement does not ensure the independence of OCTA nor does it provide for “no role for the Secretariat”.

“If OCTA is to be independent of PIFS, PIFS cannot reserve the right to dismiss the CTA on five days notice without any cause or access documents generated by the CTA, or require the CTA to report to the Director of Economic Governance or get approval of PIFS to travel to FICs or use OCTA funds.

 Compromised

“With such a contract, the position of the CTA (and PIFS) would be compromised from the outset.”

Noonan also challenged Bowman’s insistence that remuneration proposed for the CTA “reflects the highest level of fees (at Deputy Secretary-General level) that can be provided under the Forum Secretariat’s operating procedures.”

To this, Dr Noonan responded: “Unlike the CTA, the Deputy Secretary-General cannot be dismissed on five days notice without cause, does not need to put in an invoice to be paid, and have tax free status.

“The CTA can expect to be subject to tax in one or more jurisdictions. But the reasons advanced for PIFS position are not convincing.

“I cannot accept what is being offered and have made it clear what I expect.”

 Dr Noonan’s letter addressed to Dr Bowman was dated 18 January, 2010.

Haomae’s letter was authored just a day later and in many ways could be seen as a strong rebuke against Tuiloma and Dr Bowman.

 The minister sided with Dr Noonan in all the key issues including the subject of remuneration for the CTA.
“Given the level of funding committed by Australia and New Zealand to OCTA, and the understanding that future funding will be available as PACER Plus takes shape, FICs would like to ensure that the CTA is offered a remuneration package commensurate with his experience and essential role in PACER Plus negotiations,” wrote the minister.

“Forum trade ministers’ decisions made it clear that this process will require an adequately-resourced OCTA, enabling FICs to obtain the best possible technical assistance and support.

“FICs therefore require that the necessary provisions are made for a remuneration that reflects the ministers’ expectations for OCTA.”

On allegations that PIFS through Dr Bowman is trying to undermine the independence of OCTA, Minister Haomae wrote that this was the ministers’ “second major worry”.

 He said PIFS should “avoid any degree of direct oversight of the OCTA” because this would be seen as “contrary to the spirit of an independent OCTA; contrary to the instructions of the trade ministers that OCTA be independent; in conflict with the references to independence specified in the funding agreements with Australia and New Zealand; and counter-productive given the OCTA’s need to be a source of trusted and independence advice to FICs.

“The CTA must have complete control of all financial matters relating to OCTA such that the Secretariat will not be in a position to approve or disapprove disbursements of funds and thus compromising OCTA’s independence,” wrote Haomae.

“Secondly, the CTA requires full control of his staff, in particular relating to their appointment and termination of contracts.

“The appointment and termination of the CTA himself will be a decision reserved for the FIC trade ministers or the OCTA governing board.

“Failure to reflect these key issues, amongst others, will prejudice the OCTA’s ability to provide consistent or trusted advice to FICs.”

The six trade ministers of the Federated States of Micronesia, Kiribati, Nauru, Samoa, Solomon Islands and Vanuatu also lamented about what they said was the lack of support in their preparation for PACER Pus negotiations with Australia and New Zealand.

They said FICs had wanted OCTA to be established immediately so that they could obtain independent policy advice and develop a “common regional position” before any PACER Plus meetings.

So long as the CTA is not in post and in a position to facilitate a FICs meeting, FICs do not have the means to undertake important steps in preparation and coordination in the lead-up to any PACER meetings, wrote Minister Haomae.

“In sum, given the central role of the CTA in PACER Plus negotiations, FICs will not proceed with PACER Plus negotiations of any kind in 2010 until the CTA has been appointed on terms acceptable to FICs.”

The letter also demanded a financial report from PIFS on OCTA funds already made available by Australia and New Zealand.

It also urged the Secretariat to finalise the appointment of the CTA as a “priority duty” and that the process be executed in a “transparent, cooperative and timely manner”…..Article from Islands Business International, February Issue, website: http://www.islandsbusiness.com

SOURCE: IBI/PACNEWS

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