2013 Investment Climate Statement
Bureau of Economic and Business Affairs
March 2013

Openness to, and Restrictions upon, Foreign Investment

The Fijian government assures local and foreign investors that Fiji remains a safe place to invest and do business under the post-2006 military-led government, introducing industry-specific incentives and reducing corporate rates to promote investment. Generally, government restrictions and conditions are designed to ensure that investment is desirable for Fiji's development and the use of its resources. However, in light of political events in Fiji and concerns about the treatment of some established foreign investors by Fiji authorities, potential investors should exercise considerable caution. In 2006, the armed forces commander, Commodore Voreqe “Frank” Bainimarama, overthrew the elected government in a bloodless coup d'etat. The government is now headed by Bainimarama as prime minister. In April 2009, the 1997 Constitution was abrogated, the judiciary dismissed and a state of emergency imposed by the coup regime after the Court of Appeal declared the December 2006 coup and Bainimarama’s interim government unlawful. Bainimarama and his government rule by decree. In January 2012, the government lifted the state of emergency and press censorship. Later in the year, it appointed the Constitutional Commission which undertook national consultations on a new constitution toward the promised 2014 election. A draft constitution was presented to the president on December 21, 2012 and is expected to be considered by the constituent assembly early in 2013.

Fiji has a tradition of a strong judiciary where contractual rights are generally upheld. However, post-coup, the independence of the judiciary has come into question, raising concerns about due process of law. Furthermore, all cases challenging the actions of the interim government since December 2006, its decrees, and the coup itself were dissolved by decree. This prohibits the judiciary from hearing challenges to the actions of the government since April 2009, such as the 2006 coup and the abrogation of the constitution in April 2009.

Tourism, with estimated earnings of F$1.1 billion (US$0.628 billion) and visitor arrivals reaching about 702,052 in 2012, is the country‘s largest foreign exchange earner. Sugar remains of national importance although production is in decline. The government instituted comprehensive reforms to address quality concerns, farm productivity and mill efficiency. The once large textile industry now comprises a small but stable component of Fiji’s exports. Two-way U.S. trade with Fiji is approximately $175 million. The Fiji government forecasts a 2.7 percent growth in the economy in 2013. The estimated growth of 2.5 percent for 2012 is the country’s strongest growth since 2006. Growth in 2013 is expected to be driven by the agricultural, manufacturing and financial intermediation sectors.

The governmental body Investment Fiji (http://www.investmentfiji.org.fj/) is responsible for the promotion, regulation, and control of foreign investment in the interest of national development. Investment Fiji pursues this task in conjunction with relevant government ministries. Government approval is required for all foreign investment in Fiji.

All businesses or enterprises with a foreign-investment component in their ownership are required to apply to the Chief Executive, Investment Fiji, for the issuance of a Foreign Investment Registration Certificate (FIRC) and also pay a requisite application fee of F$2,875.00 (US$1,624.40).

Applications for a FIRC are available on-line and the following documents must accompany the application: If a company is being listed as a Shareholder, then a certified copy of the certificate of incorporation and name(s) of those associated with the Shareholding Company; a copy of the Shareholders Agreement and a copy of the Declaration of Shareholders, witnessed or certified by a justice of the peace, lawyer and/or chartered accountant, are to be submitted if local equity contribution is required; a certified copy of the passport bio-data page, together with a recent colored passport size photo of all those associated with the business; a police clearance report from the country of residence in the last 12 months or more; and proof of company registration abroad (if applicable).

Contact: The Chief Executive, Investment Fiji, P.O. Box 2303, Government Buildings, Suva; Telephone: (679) 3315-988; Fax:(679) 3301-783; email: info@investmentfiji.org.fj; website: http://www.investmentfiji.org.fj/

The Foreign Investment Act stipulates that the approval process for investment applications should take no longer than 5 working days. In practice, the process takes between 5-10 working days. Depending on the nature of the business, however, investors may also be required to obtain permits and licenses from other relevant authorities and should be prepared for delays.

Investment areas that have been reserved for Fiji nationals include small scale businesses such as cafeterias, taxis, handicrafts, tailoring, repair of personal/household goods, plumbing/electrical, plant nurseries, day-care, bakeries, backpacker services, nightclubs, and liquor bar operations. Additionally, there are certain investment activities subject to restrictions. Investment in fishing enterprises require at least 30% local equity, while investors in forestry, tobacco production, tourism (cultural heritage), real estate management and development, construction, earthmoving, and inter-island shipping must meet certain minimum investment thresholds. Full listings of reserved and restricted areas can be found at: http://www.investmentfiji.org.fj/pages.cfm/for-investors/doing-business-in-fiji/foreign-investment-act-foreign-investment-regulations.html

Foreign investors can acquire real estate. However, the land situation in Fiji is complex and only a small percentage of land is available for purchase. If the property is larger than one acre, the Minister of Lands must approve the purchase. There are industry-specific incentives for tourism, mining, filmmaking and audio-visual activities, boat building, fishing, logging and saw milling operations, and bus building.

If a scroll bar appears below the following table, swipe the table to move left/right of the dashed line.

Measure

Year

Index/Ranking

TI Corruption Index

2012

n/a

Heritage Foundation’s Economic Freedom Index

2012

57.3 (105)

World Bank’s Doing Business Report

2013

60

MCC Gov’t Effectiveness

FY2013

-0.27 (25%)

MCC Rule of Law

FY2013

-0.44 (19%)

MCC Control of Corruption

FY2013

0.03 (53%)

MCC Fiscal Policy

FY2013

-2.6 (63%)

MCC Trade Policy

FY2013

68.0 (61%)

MCC Regulatory Quality

FY2013

-0.16 (47%)

MCC Business Start Up

FY2013

0.917 (31%)

MCC Land Rights Access

FY2013

0.64 (36%)

MCC Natural Resource Mgmt

FY2013

16.4 (16%)


Conversion and Transfer Policies

The Reserve Bank of Fiji (RBF) relaxed a number of foreign exchange controls in 2013. The RBF raised the commercial banks’ delegated authority to process a number of typically larger types of transactions such as profit remittances that may be repatriated. Foreign investors bringing in funds or equipment to invest in Fiji are guaranteed repatriation of their investment profits and capital on the condition that all regulatory requirements are met. Provided all required documentation was submitted, the processing time for remittance applications is approximately three working days. Remittance through parallel markets continues to require prior approval by the Reserve Bank.

The Fiji dollar remains fully convertible. The Reserve Bank has not removed its suspension of offshore investments by non-bank financial institutions and companies. Although no limits were placed on non-residents borrowing locally for some specified investment activities, the RBF placed a credit ceiling on lending by commercial banks to non-resident controlled business entities.

Expropriation and Compensation

The foreign investor theoretically has the same right of recourse to the courts and other tribunals of Fiji in respect of the settlement of disputes as a Fijian enterprise. In practice the coup government has acted to assert its interests by decrees affecting foreign investors.

Expropriation has not historically been a common phenomenon in Fiji. In 2010, however, through the Natadola Development Decree, the foreign investment certificate of the project developers was cancelled, and its shares in the project forfeited. The government’s 2010 Media decree, which limits foreign ownership of media organizations to 10 percent, forced the sale of Australia-based News Limited’s controlling stake in the country’s oldest and main daily newspaper, the Fiji Times in 2010. Also, in the same year, a director of a major US investor, FIJI Water, was deported, and the same company singularly targeted with an increased export tax, from 0.33 of a cent per liter of water to 15 cents per liter of water.

The 2010 Natadola and Momi Bay Decrees effectively forced the takeover of private assets, extinguished creditors’ claims, and excluded the jurisdiction of the courts from the transfer of properties in dispute to the Fiji National Provident Fund (FNPF). This action left no recourse for foreign investors who had filed legal challenges, as those challenges were terminated from the court process by the Natadola and Momi decrees. Further taxes imposed on Fiji Water and other water companies cannot be challenged in the courts, and the decisions of Fiji Revenue and Customs Authority (FRCA) in this respect are also outside the purview of the courts, by government decree.

Dispute Settlement

The legal system in Fiji developed from British law. Fiji maintains a judiciary consisting of a Supreme Court, Court of Appeal, a High Court, and magistrate courts. The Supreme Court is the final court of appeal.

In April 2009, upon the abrogation of the constitution, the entire judiciary and the Director of Public Prosecutions were dismissed and had to reapply for their jobs, with legal officials considered friendly to the coup regime being re-appointed. To fill vacancies in the judicial system, Fiji has recruited prosecutors and judges on contract from other commonwealth law system countries, such as Sri Lanka.

Both companies and individuals have recourse to legal treatment through the system of local and superior courts. Laws govern all aspects of commercial transactions, including bankruptcy law, and the courts have generally enforced these laws in a transparent and consistent manner. A foreign investor theoretically has the right of recourse to the courts and other tribunals of Fiji with respect to the settlement of disputes, but government decrees have been used to block foreign investors from legal recourse in investment takeovers, tax increases, or write-offs of interest to the government.

Past investment disputes have often focused on land issues, particularly in the logging and tourism sectors. Such disputes have been resolved through labor-management dialogue, government intervention, referral to compulsory arbitration, or through the courts. Fiji is a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.

The World Bank Doing Business 2013 survey, ranked Fiji 67 out of 185 on the efficiency of the judicial system to resolve a commercial dispute. According to the survey, Fiji required 34 procedures to enforce a contract, took 397 calendar days to complete procedures at a cost of 38.9 percent of the value of the claim.

Performance Requirements and Incentives

To support the implementation of newly approved investments, Investment Fiji established a monitoring system to assist companies in obtaining necessary approvals to commence operations. The investing firm must ensure that commercial production begins within 12 months for investments below $1.25 million (F$2.5 million) or within 18 months of the date of approval of the project for investments above $1.25 million (F$2.5 million).

Foreign investors can apply for incentives following registration with Investment Fiji. Information on incentive packages for investors can be obtained from the Fiji Revenue and Customs Authority (http://www.frca.org.fj/). Incentives offered include preferential tax treatment and duty free or low duty treatment of imported materials and equipment. The incentives reflect the Fiji government’s long-term concerted efforts to encourage exports and develop priority sectors, including tourism, commercial agriculture, fisheries, forestry, the filmmaking and audio visual industry, and the information technology industry. Fiji also established a tax free region in the northern and maritime island regions of the country to encourage rural development and introduced incentives to encourage investment in bio-fuel and renewable energy.

Tourism incentives include tax-related investment allowances on approved expenditures on tourist boats/ships and approved building and expansion projects. The tourism incentive package for approved large tourism development projects with capital investments of more than F$7 million and completed before December 31, 2018, may qualify for a 10-year tax holiday. Filmmaking and audio-visual incentives include a 15% tax rebate on production costs spent in Fiji. Incentives to encourage investment in the agriculture, fisheries and forestry industry include zero-rated fiscal duty on imported agricultural machineries, equipment and inputs and specialized equipment and machinery for forestry and fisheries and a 10-year tax holiday for commercial agricultural enterprises.

The Ministry for Industry, Tourism, Trade and Communication and the Ministry for Foreign Affairs, International Cooperation and Civil Aviation control import and export policy. Commercial import policy includes consideration of tariff measures, import restrictions, quota arrangements, and other policies designed to assist development of local industries.

Most imports are subject to import duty, which is levied at various rates in accordance with the Customs Tariff Act of 1986. Such duties may be waived or reduced upon eligibility for investment incentives. Approved ICT businesses for example, are eligible for free fiscal duty and import excise on imports of computers, computer parts and accessories, specialized plant equipment, fittings, and furniture. Most goods may be imported without an import license. However, there are restrictions on the import of a number of products to protect local industries or for the purposes of quarantine. The restrictions are absolute for some products, while others may be imported subject to conditions imposed by statute or under license from the Ministry of Industry, Ministry of Primary Industries, or other relevant ministries or departments. Quotas may be placed on imports of particular products, such as motor vehicles.

Right to Private Ownership and Establishment

Foreign investors are discouraged from acquiring controlling interest in, or taking over established, locally owned enterprises in Fiji. Permission may be given, however, if such an acquisition or takeover is deemed to be in the national interest. Foreign investors typically operate through a branch or a local subsidiary in Fiji. Formation of both public and private companies is possible, the process taking about two weeks. Registration costs are nominal. The South Pacific Stock Exchange and authorized banks in Fiji are allowed to approve investments by non-resident individuals and businesses in publicly listed companies and in fixed deposit accounts. A public company must have a minimum of seven shareholders, with no maximum; a private company must have a minimum of two shareholders and a maximum of 50. There are no nationality or residence restrictions on shareholders, but applications for the issue of new or additional shares for increased capitalization should be submitted to the Reserve Bank of Fiji for processing before share certificates may be issued to non-residents.

Protection of Property Rights

Fiji’s Copyright Laws are in conformity with World Trade Organization (WTO) Trade Related Aspects of Intellectual Property (TRIPS) provisions. However, while copyright laws adhere to international laws, and provisions are available for companies to register a trademark or petition for a patent in Fiji through the Office of the Administrator General of Trademark, Patents, Designs and Copyrights, the enforcement of these laws remains inadequate. Illegal materials, and illegal reproductions of films, sound recordings and computer programs are widely available throughout Fiji.

Contact: Administrator General, Trademarks, Patents, Designs, Copyrights P.O. Box 2226, Government Buildings, Suva; Telephone: (679) 3312798; Fax: (679) 3300662

Land Rights

Land ownership and usage is a highly complex and sensitive issue in Fiji society. In late December 2006, the post-coup interim government imposed a temporary ban on all land sales after receiving reports of alleged irregularities in the development and sale of land to foreigners but the ban was lifted in 2007.

Land in Fiji falls into three categories: iTaukei land, Crown land, and Freehold land. iTaukei Land (formerly known as native land) refers to the 87.75% of the land held by indigenous Fijians under communal tenure relationships. This land, which is reserved for the special use of its owners, may not be sold, only leased. The iTaukei Lands Trust Board (TLTB) is the statutory body responsible for managing native land, including leases. In its post-coup anti-corruption drive, the government dismissed several TLTB officials and undertook major reforms on the regulation of land usage, Through the Land Use decree, the government established in 2011 a “land bank” within the Ministry of Lands and Mineral Resources. The Land Bank is a competitive mechanism to the TLTB of leasing native land. As at October 2012, 4,389 hectares of land from 39 landowning units in Fiji’s 9 provinces had registered with the Land Bank.

Crown Land refers to the 3.95% of the land in Fiji owned by the government. Like TLTB land, Government (State) land may not be sold. The availability of Crown land for leasing is usually advertised. This does not, however, preclude consideration being given to individual applications in cases where land is required for special purposes.

Freehold, private land accounts for 8.06% of total land area. Investors may lease land, though each lease category has different conditions and terms. Leases may be sold, transferred and amended, but such dealings are subject to the consent of the TLTB and Lands Department.

Government leases for industrial purposes can be up to 99 years with rents reassessed every 10 years. TLTB leases for land nearer to urban locations are normally for 50-75 years. Annual rent is reassessed every 5 years. The maximum rent that can be levied in both cases is 6% of unimproved capital value. Leases also usually carry development conditions that require lessees to effect improvements within a specified time.

Apart from the requirements of the TLTB and Lands Department, town planning, conservation and other requirements specified by central and local government authorities affect the use of land. Investors are urged to seek local legal advice in all transactions involving land.

Contacts: Permanent Secretary, Ministry of Lands and Mineral Resources, P.O. Box 2222, Government Buildings Suva; Telephone: (679) 3211556; Fax: (679) 3302730

General Manager, iTaukei Land Trust Board, P.O. Box 116, Suva; Telephone: (679) 3312733; Fax: (679) 3229696

Transparency of Regulatory System

Although the government has made some positive efforts, there is a perception among foreign investors of a lack of transparency in government procurement and approval processes. Some foreign investors considering investment in Fiji have encountered lengthy and costly bureaucratic delays, shuffling of permits among government ministries, inconsistent and changing procedures, lack of technical capacity, and slow decision-making. The Biosecurity Authority of Fiji (BAF) regulates all food and animal products entering Fiji and has stringent and costly point-of-origin inspection and quarantine requirements upon foreign goods. United States dairy, fresh food and frozen food exports face severe bureaucratic hurdles entering the Fiji market. The Fijian franchise of Kentucky Fried Chicken closed its Fiji operations in 2011 after new and costly ingredient point of origin inspection requirements were imposed by BAF. Government claimed the business closed due to poor performance. Investment disputes involving the government have raised serious transparency concerns.

Since the coup, all legislation has been by presidential decree, usually after a nominal period for public or industry consultation.

Efficient Capital Markets and Portfolio Investment

Fiji has a well-developed banking system supervised by the Reserve Bank of Fiji (RBF). The RBF regulates the Fiji monetary and banking systems, manages the issuance of currency notes, administers exchange controls, and provides banking and other services to government. In addition, it provides lender-of-last-resort facilities and regulates trading bank liquidity.

There are four trading banks with established operations in Fiji: ANZ Bank, Bank of Baroda, Bank of South Pacific, and Westpac Banking Corporation. Fiji’s fifth commercial bank and new entrant, Bred Bank opened its operations in November 2012. Non-banking financial institutions also provide financial assistance and borrowing facilities to the commercial community and to consumers. These institutions include the Fiji Development Bank, Fiji National Provident Fund, Housing Authority, Credit Corporation, Merchant Finance, and insurance companies. As of June 2012, total assets of commercial banks amounted to US$2.8billion (F$44.9 billion).

The capital market is regulated and supervised by the RBF. Eighteen companies were listed on the Suva-based South Pacific Stock Exchange in 2012, of which ten experienced positive growth yielding capital gains for investors.

The Fiji dollar is pegged to a basket of currencies of Fiji's principal trading partners, chiefly Australia, New Zealand, the United States, the European Union, and Japan. The U.S. dollar declined through 2011, making U.S. exports more affordable.

Competition from State-Owned Enterprises (SOEs)

SOEs in Fiji do not exercise delegated governmental powers. SOEs benefit from economies of scale, and may be favored in certain sectors. The Fiji Broadcasting Company Ltd (FBCL) is exempt from the Media Decree which governs private media organizations and exposes private media to lawsuits. In some sectors, the Bainimarama government has pursued a policy of opening up or deregulating various sectors of the economy, even those where an SOE had a monopoly status such as international airline routes.

The Ministry of Finance has in the past publicized seeking a rate of return of 10% by SOEs. This is not strictly enforced as SOEs have usually not been able to meet a 10% rate of return.

SOEs are concentrated in utilities and key services and industries: Air Transport (Air Pacific/Airports Fiji Limited); Sugar Industry (Fiji Sugar Corporation); Utilities (Fiji Water Authority, Fiji Electricity Authority); Tuna processing (Pacific Fishing Company). Essential major services such as utilities and international transportation are dominated by SOEs. The state-run FBCL is exempt from complying with the Media Industry Decree and has been designated an essential industry under the Essential National Industries Decree (ENID).

SOEs follow a normal corporate structure with board of directors and executive management. All SOEs have boards of directors who are appointed by a cabinet minister. Some SOEs have board seats allocated specifically to the heads of certain government departments. Usually the Permanent Secretary for Finance is a board member. There is no explicit requirement for SOEs to consult government before making policy decisions but officials probably do so under coup government scrutiny. There is no Sovereign wealth fund or asset management bureau in Fiji.

All SOEs are required by the legislation establishing them to publish annual reports. Fiji hosts domestic and international auditing firms, and Fijian standards are comparable to international financial reporting standards.

Some SOEs have had difficulty meeting their obligations due to insolvency or inefficiency. The Fiji Sugar Corporation SOE was delisted from the South Pacific Stock Exchange in 2011 as it no longer met solvency requirements.

Corporate Social Responsibility (CSR)

Major companies’ advertizing often promotes the company’s alleged social benefits or charity sponsorships. CSR is a relatively new concept to reach Fiji; mainly multi-national companies practice CSR through charitable foundations. There is no official favoring of CSR-friendly businesses, and consumers tend to seek value for price.

Political Violence

On January 1, 2012, PM Bainimarama announced the lifting of the state of emergency and press censorship, effective January 7, 2012 but imposed a restrictive Public Order Amendment Decree on January 5, 2012. The requirement for meeting permits under the Public Order Act was lifted to enable meetings to discuss a new constitution in 2012. A Constitution Commission, appointed in May 2012, carried out extensive public consultations and handed over a draft to the President in December 2012. The draft will be considered by a Constituent Assembly from roughly February to April 2013 before it is vetted by a Tribunal headed by a Chief Justice and subsequently assented and proclaimed by the President. Over 500,000 voters have been registered during the national electoral voter registration process from July to December 2012 as Fiji prepares for elections in 2014. There is skepticism among some civil society organizations about the transparency of promised reforms, consultations, and promised 2014 elections. Despite the current government’s efforts to avoid political violence, the magnitude of the political changes occurring increases the possibility that civil disturbances might occur.

Fiji had a parliamentary republic form of government, but is currently ruled by decree under the 2006 military coup government led by the armed forces leader and prime minister, Frank Bainimarama. Fiji has suffered four coups d’etat in its history: two in 1987, one in 2000 and one in December 2006. The 1997 Constitution was abrogated in April 2009. There was, in addition, a mutiny within the Fiji military in November 2000. In May 2000, then Prime Minister Mahendra Chaudhry and members of his government were held hostage by a group of Fijian nationalists. In the end, Fiji's military intervened, removed the coup leaders, and installed an interim government that remained in power after 2001 general elections. The same government was again returned to office following elections in May 2006 and formed a multi-party cabinet with the Fiji Labor Party until the coup of December 2006.

Fiji remained relatively stable from 2001 to 2006. Mounting tensions between the government and the military peaked in December 2006 when the military staged a repressive but relatively bloodless coup. Parliament was dissolved, the prime minister deposed, and the vice president, government ministers and senior bureaucrats removed from office. In January 2007, the military named an interim government to govern until national elections can be held, with the military commander, Commodore Bainimarama, as prime minister. The military committed numerous human rights violations in attempting to silence critics of the overthrow. It declared a state of emergency and eliminated or restricted many civil rights. In April 10, 2009, following the Court of Appeal ruling that the December 2006 coup and the interim government appointed in January 2007 were unlawful, the 1997 Constitution was abrogated. A state of emergency, which permitted censorship of the media, remained in effect until January 7, 2012. Fiji currently has no constitution, parliament, or national elections, and the judiciary is allegedly subject to government pressure. Under media censorship, most opposition to the government was expressed on overseas blogs.

Corruption

Annual reports by the Auditor General which have highlighted abuses and the misuse of public funds have not been published since 2005. The limited accountability for corruption, inefficient government systems, and lack of effective disciplinary processes pose major challenges to Fiji’s fight against corruption. Fiji’s relatively small population and limited circles of power often lead to personal relationships playing a major role in business and government decisions.

Alleged corruption in government and the civil service was cited by the military as a major justification for its overthrow of Fiji’s democratically elected government in 2006. The military itself, however, has suffered from a lack of a transparent budgetary process and has itself evaded the Auditor General’s investigations. In 2007, the government established by proclamation an independent commission against corruption, the Fiji Independent Commission Against Corruption (FICAC), with broad powers of investigation. Some investigations have targeted coup opponents, allegedly at the instigation of the government.

Fiji acceded to the UN Convention Against Corruption in 2008.

Bilateral Investment Agreements

Fiji has negotiated double taxation agreements with the Australia, Japan, Malaysia, New Zealand, Papua New Guinea, the Republic of Korea, and United Kingdom. Fiji has not entered into a bilateral investment agreement with the United States or any other country.

Fiji is party to a number of regional and international trade arrangements, including the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), an interim Economic Partnership Agreement (iEPA) with the EU, and the Generalized System of Preferences (GSP). Under SPARTECA, Fiji has broad, duty-free access to the markets of Australia and New Zealand for its exports, subject to certain exceptions and limitations. In November 2007, Fiji signed an interim EPA (iEPA) on trade in goods, replacing the trading section of the Cotonou Agreement, which secures preferential access to the EU market for some Fiji exports. The interim EPA must be renewed by Jan 1, 2014 or Fiji will lose their preferential trading status. Fiji is also party to the Melanesian Spearhead Group (MSG) and the regional Pacific Island Countries Trade Agreement (PICTA) but is presently excluded from participation in the Pacific Agreement on Closer Economic Relations (PACER) Plus trade negotiations.

OPIC and Other Investment Insurance Programs

The U.S. Overseas Private Investment Corporation (OPIC) (www.opic.gov) provides investment insurance in Fiji for qualified applicants. The risks of currency convertibility and expropriation are safeguarded under Fiji's foreign-exchange regulations. OPIC provides political risk insurance and loans for qualified projects. Fiji is not a member of the Multilateral Investment Guarantee Agency.

Labor

The workforce in 2010 was estimated at 364,608, with an estimated labor force participation rate of 61.4 percent. Nearly 93 percent of the workforce has been educated to a secondary school level, and four percent have received a university-level education or post-secondary school technical training.

Fiji continues to face a “brain drain”, with many skilled and professional workers migrating overseas for better working and living conditions. Acute shortages are found in a broad range of fields, including the medical, management, and financial sectors, and for competent trade-skilled people in the construction and tourism industries.

The Ministry of Employment and Industrial Relations has responsibility for the administration of labor laws and the encouragement of good labor relations.

The Employment Relations Act, promulgated by decree in April 2008, consolidates and updates Fiji’s labor and employment laws. The legislation mandates that labor disputes be resolved through mediation courts and tribunals. In 2011, the Fiji government also gazetted the Essential National Industries Decree (ENID) regulating union activity in “essential industries”. Named industries include the national airlines, utilities, broadcasting, and banking sectors. The ENID Decree authorizes the Prime Minister to declare any additional industry “essential” at any time. Labor unions in industries deemed essential are subject to specific rules distinct from those under the Employment Relations Act, including limits on the ability to strike. “Essential” industries also face government intervention in collective bargaining agreements if the industry experiences financial loss.

Fiji has been a member of the International Labor Organization (ILO) since 1974 and has ratified 33 ILO conventions of which 30 are in force.

Foreign-Trade Zones/Free Ports

To encourage development in the northern and maritime regions of Fiji, each has been declared a Tax Free Region (TFR). Businesses that are established in such a region and meet the prescribed requirements will enjoy a 13-year corporate tax holiday and import duty exemption on raw materials, machinery, and equipment. The Kalabu tax-free zone near the capital, Suva, hosts garment factories with designated tax-free factory status and eligible information communication technology (ICT) companies.

Foreign Direct Investment and Foreign Portfolio Investment Statistics

Foreign direct investment remains sluggish. According to data provided by Investment Fiji, total foreign direct investment registered from January- September in 2012 totaled US$123 million (F$218 million). Registration is a precondition but does not necessarily mean that actual investment will be made.

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