30 June 2016

Spreading the word on an easier way to do business in Vanuatu

Participants at the business registry information session in Lakatoro, Malampa province, on 22 June with PSDI Business Law Reform Expert
Aaron Levine (centre).  
The benefits of Vanuatu’s new online business registry and modernized, simplified business laws have been highlighted in a country-wide awareness-raising campaign by PSDI in partnership with the Vanuatu Financial Services Commission.

From August 2015 to June 2016, presentations on how to use the system were delivered to provincial leaders and representatives from government, business, and civil society in Lakatoro, Penama, Port Vila, Santo and Tanna. PSDI Business Law Reform Expert Aaron Levine along with staff from the Vanuatu Financial Services Commission, which manages the registry, gave the presentations in Bislama, English and French, and held discussions with participants.

The registry, created last year with support from PSDI, dramatically simplifies the process of formalizing companies, small businesses, and charitable organizations. By enabling business registration, governance, and fee payments to be done online the system reduces the average time needed for company registrations from over three weeks to under three days.

28 June 2016

PSDI January-June 2016 newsletter released

PSDI’s first newsletter for 2016 is now available for download.

The newsletter looks back at PSDI’s activities over the first six months of 2016. It features articles on:
The activation of Papua New Guinea’s secured transactions registry
The regional Leaders Seminar on State-owned Enterprise Reform hosted by PSDI in Sydney
The passage of the Competition and Consumer Protection Act in Samoa
The conclusion of PSDI’s Tongan pilot project, the Women’s Business Leadership Program
The presentation of upcoming publications on credit guarantees and the Doing Business indicators at the Australasian Aid Conference.

The newsletter also contains a summary of PSDI’s key achievements and milestones so far this year, along with links to associated media coverage and discussion.

Download the newsletter here.

27 June 2016

Op-ed: Consumer Protection and Competition Review needed for a fairer PNG

By Andrew Simpson, PSDI Competition Expert and Coordinator of the Consumer and Competition Framework Review Team. This article was originally published in The National on 27 June, 2016.

For 14 years now, through its regulatory, price oversight, and competition law functions, the Independent Consumer and Competition Commission has worked to protect the interests of consumers and businesses in PNG.

The business environment and consumers’ expectations have changed, however, since the ICCC was established by an Act of Parliament in 2002. The business environment is more complex, dynamic, and diverse. Consumers have gained access to more products and services from more producers and suppliers. The government recently initiated a broad review of the consumer protection and competition promotion framework to ensure the law can protect consumers from unfair dealing and enable businesses to enter new markets and grow.

The Consumer and Competition Framework Review was initiated by the Department of Treasury and supported by the Pacific Private Sector Development Initiative, an Asian Development Bank (ADB) program with funding from the Australian and New Zealand governments. For over a year the team has been meeting with consumers and business people to understand their needs and concerns. Once consultations are complete and all inputs considered, the review team will provide a set of recommendations to the Government for a modernized ICCC that responds better to the needs of individuals and the economy.

An emphasis on women as consumers and business owners is central to the review. Although women comprise a large share of consumers and a growing number of business owners, the current framework will not meet their needs and circumstances. Unless women are aware of the consumer protection and competition laws and able to rely on them, those laws will not effectively protect their interests and promote economic growth for all.

The ICCC has multiple roles affecting PNG consumers and businesses. It is responsible for product safety, price control, regulation of four state owned enterprises (SOEs), and enforcement of competition laws. The review seeks to balance the outcomes of these interconnected responsibilities. Fair treatment of consumers and small businesses is an important goal, but the legal framework must also promote economic growth and investment without imposing excessive costs on public finances or private firms.

The ICCC enforces product safety standards and certifies the accuracy of scales used by traders. These standards are critical to ensuring consumers are not exposed to unsafe products and get what they have paid for. If consumers do not have confidence in the goods they buy and the traders who sell them, they will spend less and economic growth will suffer. As PNG’s consumer protection laws are less comprehensive than those of many countries, the review is considering whether additional protections are required. These may include a ban on “misleading or deceptive” conduct in commerce, such as charging high prices at the checkout than advertised in-store, or altering a second-hand good to hide its faults.

The Commission monitors prices charged for rice, flour, and sugar, and oversees price controls for fuels, PMV, taxi fares, and water and sewerage services. It thereby reflects the government’s desire to safeguard consumers from unduly high prices for these essential goods and services. At the same time, the ICCC recognizes that prices should reflect supply and demand. The review is examining whether price monitoring and control operate effectively in these markets.

SOEs that provide ports, electricity, postal and third-party motor vehicle insurance services are regulated under agreements negotiated with the Commission every five years. Businesses and consumers alike rely on these services, and their cost, quality, and reliability are matters of widespread concern. The regulation that governs SOEs—and the obligations and expectations the government places on SOEs and their managers—shapes their charges and the services they provide. For this reason, the review is exploring SOEs’ incentives and opportunities for promoting their efficient operation.

Importantly, the Commission also enforces PNG’s competition laws, which aim to ensure that businesses compete on a level playing field. Anti-competitive conduct by firms, such as price-fixing, bid-rigging, or driving smaller rivals out of markets, ultimately increases prices for consumers and reduces new investment.

Competition laws that are clearly worded, widely known, and effectively enforced are essential to preventing such behaviour. The review is considering how the existing competition laws—and enforcement of them—can be improved. The review is also considering whether competition laws can be expressed more clearly, whether the ICCC has enough resources, and whether enforcement powers and processes are effective As the SOEs are large businesses, the review is also considering how they can compete on an equal basis with private firms.

This review will help create a fairer PNG and an economy that works better for businesses and citizens alike. We can meet this challenge by considering the views of all parts of society, as well as the needs of the economy.

The review team is currently seeking comments from businesses and members of the in PNG public on all issues regarding consumer protection and competition in PNG. For more information and the three issues papers visit www.CCFReview.info 

20 June 2016

Timor-Leste strengthens response to money-laundering, terrorism financing

With PSDI support, the Government of Timor-Leste has approved two key documents that will bring its anti-money laundering and counter financing of terrorism (AML/CFT) framework into line with international, Financial Action Taskforce (FATF) standards.

PSDI has been working with the National Commission for the Implementation of Measures to Combat Money Laundering and Financing of Terrorism to undertake a national risk assessment, draft a strategic plan to respond to shortcomings identified in the assessment, and guide the implementation of AML/CFT processes across government and the private sector.

The risk assessment was based on inputs from a broad range of public and private sector stakeholders—whose perceptions it gathered on the money laundering and terrorist financing threats and vulnerabilities faced by Timor-Leste—and on  relevant data, such as that concerning on proceeds-generating crimes.

The strategic plan responds to the threats and vulnerabilities identified in the risk assessment and in an evaluation undertaken in 2012 by the Asia/Pacific Group on Money Laundering, a regional associate of FATF. The plan identifies strategic objectives and provides a roadmap for implementing key legal and institutional changes needed to strengthen the AML/CFT framework.

13 June 2016

Comparative study on Pacific ports’ pricing and productivity released

PSDI regional ports study front cover
A PSDI analysis of seaport pricing has found significantly higher costs and lower productivity in Solomon Islands compared to other ports in the region.

The study benchmarked regional port productivity and tariffs and found the Solomon Islands Port Authority (SIPA) underperformed the port services of neighboring countries, with a port call in Solomon Islands costing double, on average, that of Fiji, Papua New Guinea, Samoa, and Tonga. The study reports that SIPA’s high tariffs and low productivity have resulted in the price of imports and exports increasing and caused shipping lines to reduce their traffic through the port.

The study outlines a range of measure that could be undertaken immediately to improve SIPA’s performance and lower its charges.

The study can be downloaded here.