4 December 2017

New Companies Law approved in Timor-Leste meets global best practice and will reduce cost of doing business

PSDI has been supporting the Government of Timor-Leste’s ongoing commercial and economic legislative reforms. A successful outcome of this support was the approval of a new Companies Law on 17 May 2017 (Law 10/2017), which is designed to raise Timor-Leste’s companies framework to global standards and increase access to the formal sector. PSDI’s support included a legal and registry diagnostic, the hosting of consultative workshops with a public-private taskforce to review proposals, and policy and legal drafting recommendations to simplify and modernize the law.

Many recommendations were incorporated in the new law, including:
the elimination of bearer shares, in line with international best practice on the prevention of money laundering and terrorism financing;
the disclosure of beneficial ownership, in line with the Financial Action Task Force's October 2014 note “Transparency and Beneficial Ownership”; and,
the reduction of minimum share capital requirements and the elimination of unnecessary mandatory corporate bodies in order to decrease the costs of doing business.

As part of its commitment to disseminate legal information and increase access to legislation in Timor-Leste, PSDI has now prepared an unofficial English translation of the new law, as well as the new Business Registration and Verification Services, and Business Registration laws. These can be downloaded below.

Law 10/2017: New Commercial Companies Law
Decree-law 7/2017: Business Registration and Verification Services, P.I.
Decree-law 16/2017: Business Registration

30 November 2017

PSDI pilot project finishes training Fijian women professionals

Graduates of PSDI's Women in Leadership Program in Suva on November 30.
A group of 25 women employees of companies listed on Fiji’s South Pacific Stock Exchange (SPSE) graduated today from a PSDI pilot project designed to prepare them for leadership and board positions.

Over three, two-day sessions, the Women in Leadership Program—part of PSDI’s Economic Empowerment of Women work area—trained participants on topics such as governance, risk management, effective communication and transitioning to leadership roles. The participants were also paired with mentors who would provide them with ongoing support and guidance.

The broader purpose of the pilot project was to demonstrate how such training could help close the gender gap on boards and in corporate management.

"The thing that this program's supposed to build is confidence; to know that all doors can be opened and all it takes is networks and a sense of confidence or belief in oneself," said PSDI Economic Empowerment of Women Coordinator Vijaya Nagarajan.

19 April 2017

Tonga becomes first Pacific country to publish detailed SOE performance results online

The updated website was launched by Poasi Tei, Minister of Public Enterprises (fourth
from left). Also pictured at the launch are Sione ‘Akau’ola, CEO, Ministry of Public
Enterprises; Christine Ford, Assistant Director, Pacific Economic Growth Division,
Australian Government Department of Foreign Affairs and Trade; Andrew Ford,
Australian High Commissioner to Tonga; Minister Tei; Elena Procuta, Acting New Zealand
High Commissioner to Tonga; and Tatafu Moeaki, ADB Development Coordinator.
With PSDI support, Tonga's Ministry of Public Enterprises' website has been updated to provide key information about Tonga’s state-owned enterprises (SOEs)--a first for the Pacific. 

Profiles of each of Tonga’s SOEs, including recent financial performance and the names of board members, as well as the performance of its overall SOE portfolio, are now available on the website. 

The updated website was launched today by Tonga's Minister of Public Enterprises Poasi Tei at a demonstration attended by the Australian High Commissioner and New Zealand Deputy High Commissioner.

"Tonga’s public enterprise portfolio is composed of 14 entities which together hold an estimated T$454m in assets, and it is our responsibility as a government to ensure the proper stewardship of this investment," said Minister Tei.  

"As a Ministry, we are implementing an ongoing program of reforms to improve the performance of the PEs, and this has made our portfolio one of the best performing in the Pacific. While we are very proud of this achievement, we are also conscious of how quickly public enterprise results can deteriorate when political commitment to commercial outcomes weakens. Our government’s commitment remains strong, as the launch of this website illustrates."

The updated Ministry of Public Enterprises website features profiles on each
of Tonga's state-owned enterprises.
Development of the updated website and reforms guiding it were supported by PSDI, as were amendments to the Public Enterprise Act in 2010, which required SOE financial accounts to be published in local newspapers.

PSDI is assisting a number of other countries in the region to also make information on their SOEs’ performance publicly available. 

12 March 2017

A Decade of Reform: PSDI 2015-2016 Annual Progress Report published

PSDI Annual Report 2015-2016 cover
PSDI’s latest annual report, A Decade of Reform, looks back on our work since 2006, noting numerous successes in removing numerous barriers to private sector investment and entrepreneurship.

“PSDI’s achievements over the past decade demonstrate that strong analytical work, sustained advocacy, and open and cooperative engagement with Pacific island governments, institutions, and the private sector are requirements for reform success,” said Liliana Warid, Private Sector Development Specialist with ADB’s Pacific Liaison and Coordination Office. “Across the Pacific, PSDI has made it easier for formal businesses to start-up and grow, thereby increasing economic activity and spurring job creation.”

The report reviews PSDI’s efforts to alleviate poverty by promoting inclusive economic growth through reforms that encourage private sector investment and entrepreneurship. It showcases 10 of our most significant reform initiatives, including:

The development of secured transaction frameworks in eight Pacific countries that have made it possible for lenders to easily accept movable assets such as vehicles, machinery, or accounts receivable as collateral for loans. PSDI support in Solomon Islands and Tonga has seen financing provided to cocoa exporters and vanilla farmers using their crops and stock as collateral.

The creation of online business registries in Samoa, Solomon Islands, Tonga, and Vanuatu that have reduced the average time it takes to register a new business from around one month to approximately one day.

The restructuring and/or privatization of 67 state-owned enterprises (SOE), leading to improved financial and operational performance. The average return on equity of the SOE portfolios in eight Pacific countries improved from -5.6% in 2008 to 0.6% in 2014.

Strengthening the capacity of Papua New Guinea’s (PNG) competition regulator, which helped the country improve competition and reduce costs in the telecommunications sector, and assistance to Samoa to pass its Competition and Consumer Protection Act, which provides greater protection to both consumers and business owners.

Innovative approaches to engaging women in the private sector through business-creating pilot projects in PNG, Solomon Islands, and Tonga.

An extended chapter in the report on the economic empowerment of women examines ways to improve women’s role in the formal economy. It highlights the importance of creating women-friendly business environments, such as online business registration processes that are affordable and easy to access, and women-friendly business entities, such as community companies and cooperatives.

3 March 2017

PSDI hosts Fifth Pacific Business Registries Workshop

 PSDI hosted its 5th Pacific Business Registries Workshop in Sydney on 2-3 March.

The workshop, co-hosted with the New Zealand Companies Office, brought together staff from business and secured transactions registries in 13 Pacific countries as well as government and private sector representatives and technical experts.

Participants discussed issues confronting Pacific registries, recent developments, and the opportunities for, status of, or outcomes from registry reforms.

“Most of the participants have benefited PSDI support to modernise their business laws and establish online registries that have reduced red tape and lifted barriers to business,” said PSDI International Business Law Expert Aaron Levine.

PSDI international business law consultant Terry Reid welcomes participants to the
workshop at ADB's Pacific Liaison and Coordination Office.
Each country’s delegation presented on the status of their registry. These included a number of countries that had recently completed reforms, such as:
Vanuatu, which implemented an online registry covering companies, business names, and charitable associations
Papua New Guinea and Samoa, which have developed online personal property securities registries for loans secured by movable property, such as inventory, agricultural goods and equipment, accounts receivable, and machinery
Solomon Islands, which now has an online registry that covers foreign investment, companies, and business names, and
Tonga, which is finalizing a new foreign investment act that will make it easier for overseas investors to invest.

“There are consistent benefits when company registries are moved online,” said PSDI International Business Law Expert Terry Reid during an interview at the workshop with the Fiji Sun.

“First, transactions costs fall, as there is less work and resources required in processing registrations, and the personal cost of using these services fall, as there is usually no longer any need for travel.

“The overall time needed for registrations reduces enormously: average pre-reform processes take three-to-four weeks while the post-reform average is one-to-two days.

“This increased convenience and reduced costs drives increased registrations—we see the rate of company registrations almost double once registries move online. And this, in turn, leads to more businesses participating in the formal economy.

“In addition, online registries are a huge help to remote communities. The Pacific is a big place, and these online platforms are an excellent vehicle for allowing near universal access to what were previously hard to access registration services.”

He added the increased accessibility and reduced cost online registries helped women business owners formalize their businesses.

PSDI International Business Law Expert Aaron Levine presents on recent developments
in Pacific registry reform. At the close of the workshop Mr Levine announced he would
soon be ceasing work with PSDI, prompting a farewell song from the participants,
many of whom he had worked with personally over the years.
Other presentations were delivered at the workshop by technical specialists and PSDI experts, who discussed topics such as opportunities for governments to accept mobile and internet-based payments, and the challenges of compliance with international anti-money laundering standards.

“We are helping some business registries to establish online processing of payments, which will make these services even faster and more accessible and provide a model that can be replicated by other government departments,” said ADB Private Sector Development Specialist Liliana Warid.

“We will also be continuing to assist the governments of Cook Islands, Fiji and Timor-Leste with secured transactions reform processes."

Participants also heard how recent reforms have led to Pacific registries being considered global leaders.

“I would say with regards to business law reform and registries, really, the Pacific, in some aspects, is leading the world,” said PSDI Registries Expert Anthony Frazier in an interview with Pacnews at the workshop.

“PSDI through ADB has been very successful. We think there’s been a significant impact on ministries of commerce and various agencies that run these registries, and the law reforms have made it much easier for people to start their business. That’s the whole point: for people to be able to make their own livelihood,” said Mr Frazier.

“We’ve also put in laws that make it easier for people to use moveable property as collateral for loans. Banks often times use land as collateral. In the Pacific not many people have access to land, so the new laws that allow movable property like equipment, trucks, restaurant equipment, even accounts receivable to be used as collateral really opens up business opportunities for small business to gain credit where they did not have the opportunity to before.”

27 February 2017

Secured transactions registry launched in Samoa

Seated (left to right) at the launch of the Personal Property Securities Registry are ADB’s
team of  consultants that supported development of the registry: Anthony Frazier,
Paul Rankin, Gary Sin and Aaron Levine
Lending institutions in Samoa will be able to provide credit to more businesses following the launch of an online registry that makes it easier to accept movable property — such as machinery, accounts receivable, or inventory — as collateral.

Activation of the Personal Property Securities Registry was the culmination of an extensive PSDI-support reform to establish a personal property securities framework in Samoa, through which security interests in movable property can be safely and easily recorded.

“Access to credit is a critical driver of economic growth. It allows new businesses to form, successful businesses to grow, and jobs and wealth to be created,” said Masud Nizami, Financial Sector Specialist with ADB’s Pacific Liaison and Coordination Office. “With limited land ownership in Samoa, using movable property as security for loans makes sense — it makes credit possible for all businesses with assets and it ‘unlocks’ the value of these assets to help grow the private sector.”

Lenders can use the online registry to secure their claim on assets borrowers have pledged as collateral and verify that the asset has not already been pledged elsewhere. Moreover, under the new framework, lenders can repossess a pledged asset in the event of non-repayment without needing a lawyer and a court order.

ADB Consultant Anthony Frazier hosts a training session with lawyers following the
launch of the Personal Property Securities Registry
It is expected that the convenience and accessibility of the registry will also encourage non-bank suppliers — such as wholesalers, agricultural stores, exporters, and vehicle dealerships — to extend credit, as this can now be secured against their customers’ business assets or products.

The registry was launched by Tuifa'asisina Misa Lisati Leleisiuao Palemene, Samoa's Associate Minister of Commerce, Industry, and Labor, at a ceremony attended by government and private sector representatives, church and community groups, and the Australian and New Zealand High Commissioners to Samoa.

PSDI International Business Law Reform Expert Aaron Levine gave a demonstration of the registry’s functions.

PSDI is now working the Government of Samoa to raise lenders’ awareness of the new system and encourage the creation of new lending products.

23 February 2017

Private sector assessment for Palau: high-end tourism best option for economic growth

Palau PSA cover
Strong economic growth is masking urgent infrastructure and environmental challenges that threaten the long term sustainability of Palau’s economy, says our private sector assessment published today.

Private Sector Assessment for Palau: Policies for Sustainable Growth warns that the rapid growth of low-end tourism could damage Palau’s famed natural environment and World Heritage sites, which are pivotal to maintaining tourism as the country’s leading source of revenue.

The report was launched by the President of Palau Tommy Remengesau at Palau’s 4th Annual Economic Symposium, which was attended by more than 200 government and private sector representatives.

PSDI Lead Economist and report co-author Paul Holden used the keynote address at the symposium to present findings and recommendations from the report, while PLCO Private Sector Development Specialist Liliana Warid joined a panel discussion.

“Figures showing GDP growth of 5.3% in 2014 and 8.2% in 2015 do not capture the risks that increased tourism numbers bring to popular tourist sites,” said Ms Warid. “To sustain economic growth and build on the success of earlier business environment reforms, Palau should seek to reduce overall tourist numbers while increasing individual tourist spending.”

PSDI Lead Economist Paul
Holden presents in Koror.
The report calls for the creation of a comprehensive national tourism policy and the building of infrastructure that will encourage high-end tourism. It also recommends business laws be amended so an online business registry can be established and a modern business licensing system developed.

Other recommendations in Private Sector Assessment for Palau include further reforms to the finance sector to build the capacity of the National Development Bank of Palau and reducing the financial burden of inefficient state-owned enterprises by having them operate on commercial principles. The report also suggests measures to promote women’s equal access to economic opportunities.

The report builds on a private sector assessment PSDI produced for Palau in 2007, noting the Government of Palau has demonstrated a strong commitment to private sector-led growth in the past decade. The report highlights improved financial regulation, the establishment of a secured transactions framework, and the formation of the Economic Advisory Group comprised of senior government and private sector representatives as particular achievements.

Research for the report was gathered from in-depth consultations with a broad selection of government and private sector representatives.

22 February 2017

PSDI-drafted report on improving PNG’s competition and consumer framework released for public comment

The consultation draft of a report produced by PSDI as part of the Papua New Guinea’s Consumer and Competition Framework Review (CCFR) has been released for public comment.

The CCFR’s Public Report and Recommendations is the result of extensive consultations with business and consumers across PNG on consumer issues and competition law and regulation. It assesses the effectiveness of current laws and regulations enforced by the Independent Consumer and Competition Commission (ICCC).

Referencing feedback gathered during the consultations, the report offers 188 recommendations in the areas of:
consumer protection
competition policy and law
economic empowerment of women
industry regulation
price monitoring and control, and
the competitive environment for business.

A series of public workshops to discuss the report’s findings and recommendations will be held in Port Moresby, Lae, Kokopo, and Goroka during March and April

Once comments provided on the consultation draft and gathered in the upcoming workshop have been considered, a final set of recommendations will be provided by the review team to the Government of PNG.

The CCF Review was initiated by the Department of Treasury to examine the laws and institutions that protect consumers and promote competition in Papua New Guinea, and to make recommendations for their improvement.

The draft report has been released for review and comment by the public. It is available for download from www.ccfreview.info and comments can be submitted to comment@ccfreview.info until 28 April 2017. 

7 February 2017

New series of PSDI case studies examines private sector’s role in public service delivery

A new series of PSDI case studies profiles the range of private sector involvement in public service delivery in the Pacific.

Our first three Case Studies in Private Sector Participation look at private sector provision of three services: solid waste management, franchise shipping, and water supply services.

Each study outlines the forms of contracting used, the impact of private sector involvement, and opportunities for extracting better value for money in future.

Two case studies in Solid Waste Management examine the contracting of rubbish collection to the private sector in Papua New Guinea and possibility of outsourcing household waste collection in Fiji.

Franchise Shipping finds such services in PNG and Solomon Islands have improved people's ability to plan projects, open markets, confidently increase local production, and raise their standards of living, and that the contracting these services to private operators has been cost-effective.

Water Supply Services draws on a survey of public-private partnerships in eight countries, noting that water and wastewater services in most Pacific countries have been the responsibility of public sector departments or state-owned enterprises and that very few collect enough revenue to recover their costs and provide a commercial return.

6 February 2017

PSDI prepares technical support program for PNG’s Independent Consumer and Competition Commission

ICCC teams review the findings of PSDI's capability assessment and present ideas
for how they could respond to them.  
PSDI hosted a capability assessment workshop with staff from the Independent Consumer and Competition Commission (ICCC) on February 3 in preparation for a capability building technical assistance package later this year.

PSDI Competition Experts Andrew Simpson and Geoff Thorn assessed how the staff and management practices of the ICCC are positioned to achieve competitive market outcomes for Papua New Guineans, and meet government priorities. The assessment revealed that the ICCC was generally ready to deliver on its mandate, but there were some areas for improvement.

“Strong governance frameworks alone are not enough to ensure good outcomes for consumers”, said Mr Simpson. “Equally important is that ICCC staff are empowered with the right resources and training to encourage competitive economic outcomes. The existing talent and dedication of ICCC staff can be built upon to achieve this.”

ICCC staff reviewed the assessment findings and considered how they could be applied them to their work areas. Particular interest was paid to how the ICCC could be more proactive in defending consumer rights, detecting and prosecuting anti-competitive behaviour, and managing resources to deliver on government priorities.

Geoff Thorn discusses with one of the ICCC teams how the findings of the capability
assessment relate to their work.
The results of the assessment will be provided to Treasury and used to inform the technical assistance program and broader change management process.

The capability assessment complements PSDI’s assistance to Treasury in reviewing PNG’s competition and consumer protection framework, the final report from which will be released for public consultation in the coming months.

30 January 2017

Project to help establish renewable energy in rural PNG

PSDI SOE Reform Expert Laure Darcy inspects a proposed solar
farm site in Alotau.
A PSDI initiative to introduce private sector-provided solar power to provincial electricity grids in Papua New Guinea is moving forward, with site visits undertaken in the provincial capitals of Kavieng and Alotau.

The project will enable private sector operators to establish solar farms that will supply energy to power grids in regional centres. Taking a public-private partnership approach, PSDI will assist PNG Power Ltd to tender selected sites for solar farm development. The project will provide a model for increased private sector-provided renewable energy, which will reduce PNG Power’s overall cost of generation and increase the reliability of supply.

PSDI will assist PNG Power Ltd with feasibility studies of the proposed sites, tender preparation, and bid evaluation. PSDI may also assist with project implementation, including advising on proposed business models and power purchase agreements.

PSDI’s SOE Reform Expert Laure Darcy and a PSDI-recruited solar expert visited possible sites for private solar farms with representatives from PNG Power Ltd in late January. Due diligence undertaken through these visits will confirm if the sites are suitable for the project.

Francis Uratun from PNG Power (second from left), PNG Power
Kavieng Plant Manager Paul Topa (third from left) and PSDI's
consultant power expert Gavin Street inspect a potential solar farm
site at Kavieng. 
“The private sector has a lot to offer in securing a sustainable, lower-cost energy future for rural PNG,” says Ms Darcy. “The ability of private sector firms to innovate and provide lower-cost energy generation complements the Government’s expertise in energy distribution and responsibility for economic development. This partnership will produce tangible benefits for rural Papua New Guineans.”

Once assessment of the sites is complete a public notice will be issued calling for bids from private sector electricity providers to develop the sites.

29 January 2017

Infographic brochures explain what we do and why we do it

PSDI infographic cover
A new series of three-page, infographic brochures provides an overview of the context, aims, and achievements of PSDI.

Using clear and accessible text and images, these booklets illustrate the need for and benefits of business environment reform in Pacific island countries.
One brochure profiles PSDI overall, while the others explain the support PSDI provides under four of its focus areas: business law reform, economic empowerment of women, financing growth, and state-owned enterprise reform.

Click her to view or download the brochures: