Transparency of the Regulatory System
Fiji returned to parliamentary democracy following elections in 2014, allowing for debate and discussions on proposed new laws. Although the government has made some progress, consultation with the private sector and other stakeholders on proposed laws and regulations remains an area of concern. The business community has complained that the government enacts new regulations with little prior notice or publicity. 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, costly penalties due to the interpretation of tax regulations by the Fiji Revenue and Customs Authority (FRCA) 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 for foreign goods. Some importers have had import permits denied for categories of food or animal products which were previously allowed, with little or no explanation for the change.
Fiji’s constitution provides for public access to government information and for the correction or deletion of false or misleading information. Although the constitution requires that a freedom of information law be enacted, there is no such law yet.
International Regulatory Considerations
Fiji has been a member of the WTO since January 1996. According to Fiji’s trade profile on the WTO website, there are no records of disputes. Fiji is reviewing its domestic processes to ratify the WTO’s Trade Facilitation Agreement.
Legal System and Judicial Independence
The legal system in Fiji developed from British law. Fiji maintains a judiciary consisting of a Supreme Court, a Court of Appeal, a High Court, and magistrate courts. The Supreme Court is the final court of appeal. Since April 2009, Fiji has recruited prosecutors and judges on contract mainly from Sri Lanka.
Both companies and individuals have recourse to legal treatment through the system of local and superior courts. Fiji’s Companies Act 2015 repealed outdated legislation. A foreign investor theoretically has the right of recourse to the courts and 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. In 2016, the government deported foreigners involved in business disputes or protests against governmental regulations without explanation, access to legal assistance, or opportunity to appeal.
Laws and Regulations on Foreign Direct Investment
The Foreign Investment Act (FIA) and the 2009 Foreign Investment Regulation regulate foreign investment in Fiji. All businesses with a foreign-investment component in their ownership are required to register and obtain a Foreign Investment Registration Certificate (FIRC) from Investment Fiji. Information on the registration procedures, regulations, and registration requirements for foreign investment is available at the Investment Fiji website: http://www.investmentfiji.org.fj . In 2016, amendments to the FIA also require that foreign investors seek approval prior to any changes in the ownership structure of the business, with penalties incurred for non-compliance.
Investment Fiji’s online Single Window Clearance System enables online business registration, application for a FIRC, and payment of the requisite application fee. Information on the registration procedures, regulations, and registration requirements for foreign investment is available at the Investment Fiji website: http://www.investmentfiji.org.fj . However, the most up to date reporting requirements may not be available on the website.
Competition and Anti-Trust Laws
The Fiji Commerce Commission (FCC), established under the 2010 Commerce Commission Decree, regulates monopolies, promotes competition, and controls prices of selected hardware, basic food items, and utilities, in order to ensure a fair, competitive, and equitable market.
Expropriation and Compensation
Expropriation has not historically been a common phenomenon in Fiji. A foreign investor theoretically has the same right of recourse as a Fijian enterprise to the courts and other tribunals of Fiji to settle disputes. In practice, the government has acted to assert its interests with laws affecting foreign investors.
In 2013, the government amended the Foreign Investment Decree with provisions to permit the forfeiture of foreign investments as well as significant fines for breaches of compliance with foreign investment registration conditions.
In 2010, through the Natadola Development Decree, the foreign investment certificate of the project developers of the Natadola Bay integrated tourism development project was cancelled, and their shares in the project forfeited. The government’s 2010 Media Decree, which limited foreign ownership of media organizations to ten percent, forced the sale of Australia-based News Limited’s controlling stake in the Fiji Times, the country’s oldest and main daily newspaper.
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.
ICSID Convention and New York Convention
Fiji acceded to the New York Convention in September 2010. Fiji has been a member of the ICSID since September 1977. However, there are no legislative or other measures adopted to make the convention effective.
Investor-State Dispute Settlement
In 2010, a director of a major U.S. investor, Fiji Water, was deported. The same company was singularly targeted with an increased export tax to USD nine cents (FJD 18 cents) per liter of water in 2016. Other foreigners were deported in 2016 following payment disputes or protests against governmental regulations.
Past investment disputes have often focused on land issues, particularly in the mining, timber and tourism sectors. Such disputes have been resolved through labor-management dialogue, government intervention, referral to compulsory arbitration, or through the courts. In some instances the investors have withdrawn from Fiji when a resolution could not be found. 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 2017 survey ranked Fiji 97 out of 190 on the efficiency of the judicial system to resolve a commercial dispute. According to the survey, Fiji required 34 procedures to enforce a contract and took 397 calendar days to complete procedures at a cost of 38.9 percent of the value of the claim.
International Commercial Arbitration and Foreign Courts
Fiji has been a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States since 1977. Fiji acceded to the New York Convention in September 2010. However, there are no legislative or other measures adopted to make the conventions effective.
Fiji’s Companies Act 2015 has provisions relating to solvency and negative solvency. According to the 2016 World Bank Doing Business survey, in terms of resolving insolvency, Fiji was ranked 89 out of 189. The survey estimated that it took 1.8 years at a cost of ten percent of the estate to complete the process, with an estimated recovery rate of 46.2 percent of value.