The primary aim of this policy paper is to provide investors with a clear, stable and transparent policy guide to investing in Fiji's mineral sector. The Mineral Resources Department (MRD) has always recognised the need to clarify its mineral policy, and was encouraged to expedite the production of a mineral policy statement by the Ministry of Commerce, Industry, Trade and Public Enterprise who, earlier in 1996, produced Fiji's first general Investment Policy Statement.
When compiling this policy paper, MRD attempted to provide responses to the questions most frequently asked by investors where the intention of the legislation is not clear. The majority of questions MRD receives are about licence terms and conditions, security of tenure, land rights, taxes and incentives, so the sections dealing with these issues form the bulk of the policy paper.
As part of the policy formulation process, other Government Ministries, Departments, and Statutory Authorities were consulted regularly to ensure that this policy reflects the real situation in Fiji. Once the Government policy stance was clarified, the consultative process took into account suggestions from the mining industry locally and overseas, as well as comments from regional donor country Governments, multilateral aid agencies and other interested parties both inside and outside of Fiji. Indeed, our thanks go out to all those who contributed to the development of this policy statement at the various stages.
In most cases the policy reflects the policy that exists at present or the policy that is in the process of being implemented, as is the case for the Sustainable Development Policy. Essentially, this means that this policy document reflects Fiji's long term policy position. The only exception to this is the fiscal policy section.
Over the past 2 years the Ministry of Finance and Economic Development, under guidance from the Foreign Investment Advisory Services of the World Bank and the International Monetary Fund, has been working on a review of company taxation, and on the incentives structure in Fiji. The internal review of Fiji's company taxation was completed earlier in 1996 and the recommendations therein are currently under consideration. A number of the recommendations made will affect Fiji's mineral sector, consequently this review has already been discussed with the Mineral Resources Department and the local mining industry. The discussions that have ensued have led to consensus being reached on all elements of a new more competitive mineral sector fiscal policy. The next step is for Government to implement the recommended changes. The implementation process is likely to span 1997, 1998, and 1999.
The only caveat to this policy is that the policies stated herein pertain only to one aspect of Fijis mineral sector, namely, those minerals defined in the Glossary.
If you have any queries about the contents of this policy paper, please address them to: The Director of Mines, Mineral Resources Department, Private Mail Bag, GPO, Suva, Fiji.
Hon. Timoci W. Vesikula
Minister for Lands, Mining and Energy
1.1 The Government of Fiji believes that well-managed mineral sector developments contribute positively to national growth and social welfare improvements for all of Fiji's citizens; hence, the Fiji Government actively supports mineral sector developments.
1.2 State ownership of Fijis unextracted mineral resources forms the foundation of Fiji's mineral policy. However, the Government views Fiji's mineral endowment as part of the birthright of every Fiji citizen; and it sees itself as a steward of this birthright. As the steward, the Government has put in place the regulatory mechanisms to ensure that Fiji's mineral resources will be developed in an environmentally sensitive and socially acceptable manner, and that there is an equitable sharing of the financial and developmental benefits and costs of mining between all stakeholders.
1.3 Government recognises that the private sector is the most able developer of Fiji's mineral resources, and so, confers mineral exploration and development rights on private sector developers. When conferring such rights, Government requires that mineral developers take into account all the social, environmental, and economic costs and benefits of the development at the project planning stage, and throughout the life of the project.
1.4 History clearly shows that mineral sector developments offer unique benefits as well as pose special problems for communities adjacent to mineral deposits, and Government views the direct participation of residents as an integral part of a successful long term relationship. Direct participation can take the form of special small business opportunities, and direct involvement by the local community with socially important aspects of mine planning, such as social infrastructural development. This participation should begin early in the exploration phase and continue through to mine closure. Essentially, mineral sector developers are encouraged to develop a participatory and collaborative approach to mine planning and development.
1.5 As well as steward of Fiji's mineral resources, Government sees itself as a facilitator of investment, and acknowledges that the best way returns to investors can be maximised, is through the creation of a favourable investment environment. In this regard the Government has implemented a number of macro-economic policies to encourage investors, such as the signing of the Multilateral Investment Guarantee Agency (MIGA) , the creation of an Investment Policy Statement, and the development of numerous non-tax incentives. Government treats all economically viable investment projects equally.
1.6 Government also accepts that mining is an unusually high risk industry and private investment tends to be attracted to those areas with good geological potential, transparent fiscal policies, and political stability. Hence Government is in the process of introducing a low-rate, competitive, transparent fiscal policy that should enable investors to achieve returns commensurate with the risks that they face.
General Fiscal Philosophy
2.1 Fiji takes the position that the major inducement to attract mineral sector investors is the opportunity to obtain a return on investment commensurate with the risks faced. In developing the fiscal framework, the Fiji Government has sought to create an internationally competitive package of interrelated measures, which achieves the dual goals of investment promotion and equitable returns to the people of Fiji under a variety of market circumstances. This fiscal framework reflects an attempt to reconcile the national taxation policy with the special needs and characteristics of the mining sector.
2.2 The Governments approach to taxation of mining projects is that the total package of fiscal arrangements enable enterprises to operate in a commercially sustainable manner. The established fiscal framework is considered to provide an environment in which Fijis mineral resources can be commercially exploited, without major derogations. Minor variations in the timing and incidence of some taxes may be negotiated to fit individual commercial characteristics of particular mineral deposits and associated market conditions.
2.3 Foreign mining investors often bring a variety of home-country tax liabilities to their Fiji operations, however, the Fiji Government is reluctant to forego fiscal revenues which will subsequently be taxed by authorities in the investor's home country.
2.4 Beyond the basic standard fiscal package, the Fiji Government is only willing to discuss the need for incentives for particular projects after the project sponsor has demonstrated that the project has the potential to be economically viable. Requests for such assistance should be submitted at the conclusion of a comprehensive feasibility study. In offering incentives, Government's general approach will be to assist development through interim or transitional relief in the early stages of project development/operation, rather than granting life-of-mine concessions.
2.5 Mineral tax policy does not exist independently from the general tax system applied to other sectors of the economy. Nevertheless, there are special features of mineral development which must be specifically addressed, namely: the capital (and debt) intensiveness of mining ventures; the cyclical nature of metal markets; and the long and costly period of pre-operational expenditures on exploration and feasibility studies. These issues have been considered in framing the tax package, and so, this package has been conceived as a whole and should not be seen as a collection of separable parts.
General Tax Measures
2.6 Mineral sector investors wishing to invest in Fiji can apply for industry-specific tax concessions and exemptions from the Government of Fiji under the auspices of the Income Tax Act (Cap. 201) and the Customs Tariffs Act, 1986. The major elements of the general fiscal package include the following:
2.6.1 Customs Duties - Government proposes to introduce a low standard import duty that will be levied according to the Customs Tariffs Act, and administered by Customs Department. Where that duty is payable on primary or intermediate inputs into commodities or products that are exported, the duty will be refunded. Until this policy is implemented, the following concessionary rates of import duties and Value Added Tax are payable by mining companies:
(i) 5% fiscal and 10% VAT: imports on initial capital equipment including specialised equipment and machinery; specialised spares for heavy equipment and machinery; and chemicals used in the mining process.
(ii) 10 cents per litre and 10% VAT: imports of fuel (IDO) for power generation as available under code 117 in Part 2 to Schedule 2 of the Customs Tariff Act.
although investors can apply to the Comptroller of Customs for customs duty concessions, under the existing powers of the Customs Tariffs Act, such as:
126.96.36.199 The Minister, acting on the Comptroller of Customs recommendation, may remit or reduce the duty paid or part of the duty for goods imported into Fiji which will be of benefit to the country. The Minister may impose conditions as deemed necessary, before remission or reduction of duty can be granted.
188.8.131.52 The Minister may remit or reduce the duty payable in respect of imported machinery and equipment (including parts and materials) if satisfied that it will be used to promote economic development or create the development of industry in the country. The Minister can impose conditions as deemed necessary.
184.108.40.206 The Second Schedule of the Customs Tariff Act 1986 specifies the rates of Customs Duty (fiscal duty), and VAT applicable to all goods imported into Fiji. Fiscal duty, at varying rates, and VAT, at 10%, are payable on most goods required for a mining venture. For businesses which export more than 80% of their product, the VAT of 10% is usually fully refundable.
2.6.2 Company Income Tax - Government proposes to introduce a new low standard rate of company income tax that will apply to all companies. Until this is introduced, existing company income tax rates of 35% for resident companies, and 45% for non-resident companies apply.
Under the existing policy, there are a number of areas within the Income Tax Act that allow mine developers to apply for special concessionary treatment:
220.127.116.11 Tax losses can be carried-forward for 6 years, and carry-forward of other losses from 1 to 6 years from the expiry of the concessionary period;
18.104.22.168 Under Section 16(2)(a), a mining venture can apply for reduced tax rates or for a total tax holiday, for a period determined by the Minister, if the development is likely to be expedient to the economic development of Fiji.
22.214.171.124 Under Section 21(1)(c)(ii) a taxpayer with a valid mining tenement may deduct from total income, (i.e. income generated from all sources) all amounts expended on prospecting for minerals in Fiji, as the Commissioner of Inland Revenue (henceforth referred to as the Commissioner) may, at his discretion allow. The Commissioner in his discretion may direct the expense to be spread over a number of years or in the year incurred.
126.96.36.199 Section 21(1)(e), allows the taxpayer, where profits have been derived from the sale of a mineral, or from a right in or a right to work such minerals, to deduct an amount equal to the cost of those minerals, or right, in determining total income.
2.6.3 Depreciation - Under Section 23(1), of the Income Tax Act, a mining company incurring capital expenditure within Fiji in the acquisition of a mining lease or in the development of mines for the extraction, treatment, refinement and sale of minerals may, as an alternative to normal depreciation, apply for accelerated depreciation on buildings, plant and machinery in any 5 out of 8 years.
2.6.4 Dividend, Interest, Know-How and Royalty Withholding Taxes - All Withholding Taxes are assessed in accordance with Fiji's general tax laws, at rates of 10-15% for interest, dividends, know-how, and royalties. Rates for treaty countries are specified in those treaties. The Income Tax Act allows for application to be made to the Minister of Finance for reduction or exemption from dividend, interest or royalty withholding taxes where such reduction/exemption is considered to benefit Fiji's economy.
2.7 In 1996, the Fiji Government completed a company taxation review which aimed to ensure that Fiji's taxes are low, stable, transparent, in as many cases as possible non-discretionary, and internationally competitive. The review stems from a concerted effort by Government to improve the taxation and incentives system in Fiji. The current process of reform is endorsed by the International Monetary Fund, and it is expected to be implemented during 1997, 1998 and 1999.
2.8 Just one element of this review is to simplify and improve the depreciation allowance system. Under the proposed new system companies shall be permitted to write their capital expenditure off at the rates prescribed for the 6 categories of capital, i.e. buildings; motor vehicles; ships and aircraft; computers and telecommunications; plant and equipment; and the sixth category which is a default provision. This and other new changes are likely to be announced from 1997 onwards.
2.9 As a non-tax incentive, at an advanced stage in the exploration programme, provided there is a firm commitment on the part of the company to proceed with development as rapidly as possible, Government will generally consider negotiating the provision of general infrastructure with mining companies, where benefits will accrue to the public at large. Government feels that the development of multi-use infrastructure is an important and highly desirable benefit of new mine construction.
2.10 Royalty taxes: Royalty in Fiji is a composite of two legally separate, but technically identical, taxes, the Royalty and the export tax. The "Royalty" tax is paid, through Government, to landowners, however, as the unextracted minerals legally belong to the State, the State also receives the export tax in the form of royalty. However, since it is recognised that both the export tax and mining Royalty are royalty-type taxes, Government policy is to ensure that the sum of Royalty plus export tax does not exceed 5%.
2.10.1 Royalty - A 3% Royalty based on FOB value will be imposed on bauxite or iron ore, a Royalty of up to 5% of FOB value will be levied on all other minerals. Some flexibility may be possible in the phasing of these payments, so as to accommodate an approved debt repayment schedule within the expected cash flows during the early years of mine operation, with the normal (higher) rates paid subsequently.
2.10.2 Export tax - Export tax is payable at a rate of 3% on the FOB value of gold and silver.
3.1 In Fiji, all unextracted minerals belong to the State. Nonetheless, Government recognises that the private sector is the most able developer of Fiji's mineral resources, and hence, allows the private sector complete and open access to develop Fiji's mineral resources. Government does not require equity participation, or any other form of direct involvement in mineral development projects.
3.2 Fiji's exploration and mining administration system is open and unbiased. The guiding principle is that exploration and mining rights are given to any candidate, who by merit, can show Government that they have the capability to carry out an agreed upon work programme. In the case of multiple applicants for a tenement, rights are allocated to the first qualified applicant. This system supports and protects the rights of all investors, both local and foreign, to prospect, explore and mine their mineral discoveries. Investors rights to mineral tenements, and their security of title are enshrined in Fiji's Mining Act and Regulations (Cap. 146). Mineral Resources Department (MRD) is the Government agency responsible for administering this statute.
3.3 Licence holders who exercise due diligence in carrying out, and comply with the proposed activities detailed in their Prospecting Licence, including maintaining a vigorous exploration programme, and accurate, timely comprehensive reporting in accordance with the Mining Act, are guaranteed continuity of title, implying a right to proceed to project development. Over time, Licence holders are expected to relinquish a portion of their prospecting area.
3.4 While the Fiji Government is very keen to encourage legitimate prospectors and mineral explorers in Fiji, it does not want to see prospective land tied up by companies that are only interested in speculative ventures. MRD will actively discourage any company attempting to engage in such speculative ventures.
3.5 Prospecting Licence holders have a right to progress from prospecting to mining if they have complied with the licence conditions and they have proven that a minable resource exists. Permits to Mine can be issued for a maximum of 2 years, and are renewable annually. Mining Leases and Special Mining Leases can be issued for 5 to 21 years. All leases are renewable at the end of the initial lease period. The period of the renewal depends on the size of the proven resource.
Special Policies and Procedures
3.6 The Director of Mines (henceforth referred to as the Director) at the Mineral Resources Department, grants Prospector's Rights under the Mining Act. With the consent of the Minister, the Director also grants Prospecting Licences, Special Prospecting Licences, Permits to Mine, Mining Leases, Special Mining Leases, Special Site Rights, and Road Access Licences. Applications for any Right, Licence or Lease are considered on their own merit. The criteria for assessing merit are: the expertise and capacity/capability of the applicant to undertake the geological programme, any past record that the prospecting company has in mineral exploration, and the financial standing of the company in terms of its financial ability to undertake the proposed work programme.
3.7 A Prospectors Right allows the holder to prospect for all minerals on any land open to prospecting in Fiji for a one year period. Prospector's can reapply for Prospector's Rights annually. Prospecting Licences and Special Prospecting Licences allow the holder to prospect for those minerals specified in the Licence, and are issued for 1 to 5 years. The terms and conditions of (Special) Prospecting Licences can be varied subsequent to an agreement between the licence holder and the Director of Mines. In arriving at this agreement, the Director considers certain criteria including: the appropriateness of the geological program outlined in the application; the minimum expenditure proposed in the application.
3.8 Joint venturers are discouraged from offering front-payments in their joint venture dealings. It is expected that all planned exploration funds will be spent solely on exploration.
3.9 Extensions to Prospecting Licences are normally available, providing all stated licence conditions have been met. Extensions of Prospecting Licences are normally made on a one year basis, although longer periods may be given. Extensions are subject to the same conditions as apply to initial applications, however, in the case of an extension, it is expected that minimum exploration expenditure will significantly increase with each successive extension.
3.10 In "mature areas", where extensive prior work has been undertaken, or where a well known geological target is the subject of interest, applicants may apply for an initial Prospecting Licence of 2 - 3 years. Further extensions to this Licence may be sought, although this is conditional on the Licence holder undertaking a Pre-feasibility or Feasibility Study with a specified minimum expenditure annually. In considering the grant of exploration rights over a "mature area" the Minister gives due regard to two factors: the Licence holders capacity/capability to undertake the proposed pre-feasibility/feasibility program, and, the likelihood that the grant will lead to a development decision on the prospect.
3.11 All Prospecting Licences, Permits to Mine, and Mining Leases are subject to established reporting requirements. Once prospecting or mining rights have been abandoned or relinquished, the data from the relinquished area (with the exception of data pertaining to closed or protected areas) becomes the property of Government and is then publicly available through MRD at a nominal charge) Information and data regarding areas currently under licence are confidential to the MRD.
3.12 The orderly housing and maintenance of all drill-cores is the responsibility of the Licence holder until termination or relinquishment of licence. At that time, the Licence holder is responsible for the safeguarding, delivery to Government, or disposal of the drill-cores in an acceptable manner, and under mutually acceptable terms.
3.13 Progression from prospecting to mining follows the issuance of a (Special) Mining Lease as prescribed under the Mining Act, and in conformance with the various special terms and conditions agreed upon between the Director of Mines and the Licence holder. The issuance of the Lease is subject to two conditions. First, the submission of a comprehensive Feasibility Study which demonstrates the commercial and technical viability of the project. The Feasibility Study will be accompanied by a detailed financing plan for the development and by all information/assessments as required by the environmental impact assessment process. Second, the completion of a Development Agreement outlining the broad principles, responsibilities, and obligations of all parties to the development. This Agreement would normally be prepared through consultation between the Licence holder, the Fiji Government, and representatives of the people of the development region. In general, new mining projects are handled as Executive Agreements between Government and the Licence holder.
3.14 The mining industry is primarily regulated by the Mining Act and Regulations, although there are supporting statutes, such as the Quarries Act (Cap. 147), and the Explosives Act (Cap. 189). These Acts are administered by the Mines Section and the Mines Inspectorate within MRD
3.15 Fiji's occupational health and safety provisions pertaining to the mining industry is enshrined in the Mining Act and Regulations. Where mining companies can show compliance with the regulations, and application of best-practice work standards, a system of self-monitoring will be developed in consultation with the Mineral Resources Department. This is based on the premise that safe working conditions lead to improved and efficient production in mining.
4.1 Government's main aim for the mineral sector is to ensure that developments proceed in a sustainable manner. Sustainable mineral sector projects are those that effectively incorporate community participation during the corporate decision-making process, that ensure an equitable distribution of the benefits arising from mine developments, and that, having carefully assessed the socio-environmental impacts, minimise these impacts.
4.2 Government sets environmental policies at two levels; the Department of the Environment coordinates the formulation and implementation of national policies, while MRD, as the main regulating agency for the mineral sector, sets complementary mineral sector policies.
4.3 For the purposes of the on-going monitoring/compliance programs, Fiji adopts a pragmatic policy towards compliance with acceptable socio-environmental standards and pollution abatement technology. Government places more emphasis on mining companies complying with agreed emission levels, than with the methods of abatement to achieve compliance. This then provides investors the flexibility to choose measures which will reduce pollution levels in the most cost effective manner, subject to Government approval.
4.4 Government promotes a self-regulatory approach to environmental monitoring. While the Government formulates and sets socio-environmental standards, it undertakes to work with the mining industry to develop codes of practice that will enable the mining industry to meet or exceed such standards.
4.5 Government recognises and enforces the polluter-pays-principle. The developer will be liable to pay compensation to any person or community whose lifestyle or income is adversely affected by the socio-environmental impacts of the mine. In addition, the developer is responsible for all costs associated with mitigation and rehabilitation activities as required, from initial exploration to post-closure of mining activity.
4.6 Government requires that mining companies take precautionary measures to prevent or minimise negative socio-environmental impacts of mining. In instances where there is a significant risk of serious or irreversible damage, or an element of scientific or technical uncertainty exists regarding elements of mine development, Government then expects that precautionary abatement/mitigation measures be taken. Where such measures are required they will be expected to address the worst case scenario.
4.7 Government recognises the economic contribution of mineral sector developments to national growth, but also accepts that mineral sector developments have socio-environmental impacts. Government will ensure that only those developments which have a net benefit in terms of total costs and benefits (including economic, social and environmental costs and benefits) proceed.
4.8 The Dept. of the Environment (as the national environmental policy formulating body) has established an environmental impact assessment process which provides a framework for the assessment of all socio-environmental impacts of mining projects. Developers are required to submit all information/assessments as required by this process to the Mineral Resources Department (as the primary regulating agency for the mineral sector).
4.9 Developers are expected to identify anticipated impacts and suggest methods of compliance with acceptable international standards for mine-related environmental releases. They are also expected to provide technical justification for their choice of environmental monitoring program, and for environmentally-sensitive mine-design decisions. During the Environmental Impact Assessment process the developer will recommend the necessary policies and measures to manage the socio-environmental impacts of the project. The developer will meet the costs of any required audit of the Environmental Impact Assessment document.
4.10 The mining industry, in consultation with Government, will formulate an environmental code of practice for its members, and will set acceptable environmental standards. In addition, the industry will be required to devise a self-regulatory mechanism to ensure that its members adhere to the codes of practice. This mechanism will be reviewed by the Mineral Resources Department. All monitoring, to ensure compliance with socio-environmental standards, will be undertaken by Government-accredited laboratories or consultants. All costs of monitoring will be borne by the mining project developer.
4.11 Developers are required to post a refundable bankers guarantee, as surety of best practice. The amount of the bond will be determined by the MRD according to the element of risk associated with the project. The full bond or a partial amount thereof may be used to remedy unacceptable environmental impacts of the mining project, or may be used as a penalty for late or non-remediation of remediable impacts identified during Environmental Impact Assessment process.
4.12 The developer will pay compensation to any person or community whose well-being, environment, or income is adversely affected by the mining project. The level of compensation will be determined by Government, in consultation with the mine developer and the person or community entitled to such compensation, after considering the degree of impact. Compensation is linked to the degree of impact, not to the value of the mineral.
4.13 Wherever possible, mines are expected to rehabilitate progressively during their operation. Government believes that, ultimately, this will reduce the total costs of rehabilitation. In line with Government's adoption of the precautionary principle, and to ensure that sufficient funds are available to complete rehabilitation at mine closure, the mining project developer will be expected to make contributions to a Mine Closure and Rehabilitation Fund. The parameters and objectives of this fund will be established as part of the comprehensive Development Agreement, prior to mine construction. Contributions to the fund can be flexibly organised to reflect debt repayment or cyclical factors but the fund must represent a good faith effort by project sponsors to make financial provision for the maintenance or restoration of the mining area after the cessation of mining. The final state will be ascertained from the outset, and the repaired state will be subject to an impartial assessment, to ensure that it meets final state specifications.
5.1 In addition to the Mining Lease, developers are required to obtain a Land Lease to gain legal title to the land  on which they intend to mine. The Mining Lease and Land Lease (or Titles) confer on the developer the right to undertake specified activities in a defined area as stated in the leases.
5.2 Government acknowledges that security of land tenure is a critical issue for mineral sector investors. Hence Government is totally committed to enforcing investors land rights which are enshrined in both the 1990 Constitution and the Land Transfer Act (Cap. 131). The Land Lease itself is a legally binding document that guarantees security of land tenure.
5.3 However, developers should be aware that in the long run, good communications with landowners are most likely to minimise land disputes during exploration and mining operations. In island communities where land is in short supply, land problems are often associated with landowner dissatisfaction over the terms of compensation payments for land acquisition, surface land disturbance, and the loss of traditional land use. Without special compensatory policies, landowner grievances can become a significant impediment to harmonious long term mine operations. Prior to mine construction, mining companies must obtain formal agreement with the area residents, through the appropriate channels, regarding compensation payable for loss of tenure and damage to surface improvements.
5.4 All compensation negotiations must be channelled through the appropriate official agencies in consultation with MRD. The agencies (see 5.7) which assist mining companies with land compensation negotiations have as their main aim promoting projects which maximise benefits to the current and future land owners of the proposed development area without jeopardizing project viability.
5.5 Unextracted minerals belong to the State, however, mining Royalty payments are paid to Government but then distributed to landowners. Developers must recognise that the Royalty payment, for the right to extract minerals, and the compensation payments, for landowner loss of tenure and damage to land and improvements thereon are separate. Clear guidelines on how to assess each are provided in the Mining Act, the Native Land Trust Act (Cap. 134) and the Crown Acquisition of Lands Act (Cap. 135).
5.6 Land Leases for Native Land can be obtained from, and are administered by the Native Land Trust Board (NLTB), Land Leases for State Lands can be obtained from the Lands Department, within the Ministry of Lands, Mining and Energy.
5.7 For Native Land, pre-development relations with landowners should be channelled through the NLTB in coordination with MRD. Likewise, for all land compensation and land lease questions relating to Native Land, project sponsors should look to the NLTB for assistance. After mine development has occurred, mining companies may look both to local government authorities and NLTB for guidance and assistance. Land is a sensitive topic in island countries and mining companies should be prepared to spend time informing landowners of developments.
5.8 For State Land issues should be directed through Lands Department in consultation with MRD staff. Mineral sector investors are asked to meet certain criteria before land leases are issued, these relate to environmental protection, technical specifications for buildings and other aspects of infrastructure, as well as rural development. These criteria are determined by the Development Control Unit, within the Department of Town & Country Planning.
5.9 The land administration agencies are essentially there to facilitate as well as regulate. They recognise the importance of ensuring acceptable returns to the land owner while acknowledging that compensation payments can shift the balance from a viable to a non-viable project. Developers are encouraged to acquire independent land valuations prior to entering negotiations for land compensation. The NLTB undertakes its own land valuations and provides these to the landowners. For State Land, the Crown Acquisition of Lands Act stipulates the method of assessing compensation payable, and the elements to be considered in the compensation package.
5.10 Government provides 2 levels of protection of property rights, and land tenure security for mineral sector investors. Protection against political expropriation exists in the form of insurance facilities to investors through the MIGA. At a local level, mineral sector investors' land tenure rights are protected by the mining lease, and the land lease.
5.11 Land disputes can arise from disagreements over lease conditions, or as a result of non-lease related issues. If the dispute concerns conditions in the land lease document, then the matter must be resolved between the 2 parties. When the dispute has arisen on Native Land, due to non-lease issues, then the NLTB will intervene and draft guidelines for conflict resolution. In these cases the NLTB will act as a conciliator. For all land disputes, the Government and NLTB, will take an active role to ensure that an amicable settlement is reached as quickly as possible.
6.1 In many developing countries medium and large scale mineral developments are often accompanied by significant social and cultural impacts. Government sees the creation of a workable social adjustment strategy as arising from a partnership in which investors, government and local groups participate. The terms of this partnership need to be clearly defined from the outset, and should be designed to minimize social/cultural impacts, and ensure that dislocations occur in a gradual and well-planned manner.
6.2 Government believes that addressing the social impacts of a major mining project is the joint responsibility of the government and the project sponsor. Mining companies are encouraged to take a direct interest in community relations and to undertake social initiatives in their own interests. While Government will undertake aggressive social adjustment programs, it also believes that direct participation and input by the mining company must be forthcoming to ensure the success of such programmes.
6.3 Respect for the customs and cultural traditions of local people is an important element in establishing an enduring relationship between the mine and the resident community. As part of its cultural awareness program, mining companies are expected to identify and preserve all sacred or socially important sites in the mining areas. Furthermore, mining companies should deal with rural Fijian society through traditional village authorities, and through the Ministry of Fijian Affairs, to ensure total support from landowners and area residents.
6.4 Project sponsors are urged to see that all construction and operating personnel undergo a social orientation course about the people and customs of the mining region. Government, through the Mineral Resources Department, and the Ministry of Fijian Affairs, will coordinate the development of the curriculum for this course. The course need not be lengthy or costly but it should leave mine workers with a clear sense of the social institutions and cultural traditions existing beyond the mine gate.
6.5 From early in the exploration phase the project sponsor and Government, through the Ministry of Fijian Affairs, should collaborate on a public information and education program about the anticipated nature and impact of the project. Government is mindful that premature release of information may unduly inflate residents expectations, and will be guided by mining company views on when certain information may appropriately be released. However, the Government of Fiji believes that a regular information flow needs to be established fairly early in the project cycle to avoid misconceptions and unwarranted rumours about potential mine development. Once the project has come into operation, mine management is urged to consider establishing resident liaison committees to facilitate information exchange and to provide residents with a forum for airing their views.
6.6 Government expects mine worker housing to be kept separate from existing villages. While mining companies may not always need to provide housing, they are expected to ensure that suitable affordable housing is available for mine workers. All housing for mine workers must meet the technical specifications as determined by the Development Control Unit within the Department of Town and Country Planning.
6.7 Government sees the provision of health and education as its primary social responsibility. However, mining companies - as good corporate citizens - are encouraged to make a contribution toward basic health and educational facilities for workers (and their families). In the interests of preserving harmonious relations with the area residents, these basic social services should be extended to area residents. Where mine development occurs in proximity to existing social infrastructure facilities, mining company financial support can be reduced.
6.8 Government policy is to discourage the development of squatter communities of unemployed migrants, which often arise around mine sites. . To this end the mining company should try to ensure that all temporary buildings, infrastructure and facilities are removed from the project area as soon as they are no longer needed. Any permanent buildings or other facilities which the mining company wishes to use must be under the company's direct control.
6.9 Mining companies should be aware that Government promotes the employment of local workers from the mining region, to redirect some of the benefits from mine development directly to the local residents. However, residents in many rural areas are not likely to have all the skills required by a new project and, indeed, some rural areas may be hard pressed to meet even the mines unskilled labour needs, without a substantial disruption to rural life. Government policy is to facilitate the employment of area residents at the mine by targeting mine area residents for mine-related study scholarships and training, however, employment of mine area residents is at the discretion of the mining companies.
7.1 Even though the number of jobs created by mining is likely to be modest, labour and employment policies in the mining sector are very important to the Fiji Government. On the positive side, Government sees the mining sector as attracting relatively well paid, high-skill positions which can be directly transferable to other sectors of the economy. On the negative side, if mines use their ability to pay high wages to attract skilled workers away from other sectors, inflationary wage pressures can quickly emerge. In Government's view the key to maximizing benefits and minimizing wage pressures is for mining companies to pursue an aggressive program of skill training designed to maximise the participation of local citizens. These complementary programs of skill training and job localisation form the core of Government's labour policy for the mining sector.
7.2 While Fiji has a free collective bargaining system, mining companies are expected to adhere closely to national wage policy and to practice wage restraint. An effective dispute settlement procedure is established in Fiji and is incorporated into comprehensive labour legislation .
7.3 Mining companies are expected to develop and maintain substantial internal training programs. In general, mine management needs to look to these programs rather than to the general economy to meet their needs for skilled labour. Government is prepared to open its training facilities  for collaborative programs with individual companies or with the mining industry in general.
7.4 There are no strict localization targets or rigid localization schedules in Fiji. However, experience has shown that Fiji workers are highly trainable, flexible and motivated. With this in mind, Government anticipates that most of the skilled positions in a new mine would be localized within the first few years of operation. For management and professional positions, localization may take substantially longer. While Government has no desire to set arbitrary timetables, mine managers should be prepared to submit studies on localization efforts and problems. The Immigration Department which controls the localisation process, has adopted a facilitatory approach towards mineral sector investors, recognising the specialised labour requirements of that industry relative to other sectors.
7.5 As in most developing nations, national wage levels are of concern. The ability of mining companies to pay wages which are higher than wages offered by other industries presents a special challenge to the Government's wage policy. Neither the mining industry nor the economy-at-large benefits from excessive wage pressure, and mining projects are expected to be sensitive to the special role that their wage levels may play in the national wage structure. Close cooperation between company personnel Government labour officials and the Mining and Quarrying Wages Council  is encouraged.
7.6 In so far as wage differentials between expatriate employees and local recruits are necessary, employers are urged to make use of such devices as end-of-contract gratuities rather than to increase monthly pay levels, which can needlessly accentuate standard of living differences.
7.7 Government believes that recruitment procedures and practices in the mining sector need to be carefully tailored to the situation of individual projects. As mentioned earlier, Government leaves the mining company to recruit without Government interference. However, it should be recognised that residents in many rural areas are not likely to have all the skills required by a new project and, indeed, some rural areas may be hard pressed to meet even the mine's unskilled labour needs, without a substantial disruption to rural life. In situations where recruitment of people from outside the immediate area is necessary, mining companies should send recruitment teams to other prospective regions rather than advertising and recruiting outsiders at the mine site itself. In this suggestion, Government is seeking to avoid a situation where unemployed migrants are attracted to the mining area on the mere prospect of work. Government believes that once it becomes clear that only residents can be recruited at the mine site, the migrant/squatter problem will become more manageable.
8.1 Government understands that a major mining project requires substantial infrastructural investment. This investment may, in many cases, be critical to the financial viability of the project. While Government does not normally finance specialized infrastructure, Fiji is willing to participate in multi-use infrastructure projects where major benefits accrue to the public-at-large. The conditions of such assistance will be judged on a case-by-case basis.
8.2 All mineral project infrastructure is expected to comply with existing technical specifications, of similar infrastructure already in use in Fiji, as determined by the relevant Regulations . Wherever possible, mine infrastructure should be compatible with existing infrastructure and should be maintainable through normal supplier networks within Fiji. Where project infrastructure transits areas outside the immediate mining lease area, access should be available to the general public on the basis of national policy.
8.3 All infrastructure planning should take place in full consultation with the appropriate technical authorities within the Fiji Government. Government believes that close liaison between Government and the mining company for infrastructure developments will ensure compatibility with existing infrastructure and provide the mine developer with a realistic appraisal of local conditions.
8.4 Government feels that the development of multi-use infrastructure is an important and highly desirable benefit of new mine construction. Fiji will seek, wherever possible to facilitate construction of infrastructure projects which can serve both mine and public purposes. To be considered for Government participation, infrastructure projects must: be cost effective, have quantifiable social benefits, contribute to rural or social development, and be within the general scope of public sector infrastructure investment planning criteria  The nature of Government's involvement will vary according to the type of infrastructure required, although, in general, Government takes a flexible approach towards infrastructure development and management.
8.5 At the conclusion of mining, all infrastructure shall be offered for sale at the depreciated value, on a first-right-of-refusal basis, to the Fiji Government. Should Government decline to assume ownership of the infrastructure, the company shall, at its own expense, be responsible for ensuring that all infrastructure facilities are left in a safe condition.
 MIGA is an independent agency of the World Bank mandated to help facilitate increased flows of foreign direct investment to developing countries. Its core area of business is providing political risk insurance to foreign investors; available risk coverage includes war and civil disturbance, currency transfer/ inconvertibility, expropriation and breach of contract. [Back to Text]
 Fiji's labour laws are found in the following Acts: Employment Act (Cap. 92), Workmen's Compensation Act (Cap. 94) Trade Unions Act (Cap. 96), the Trade Unions (Recognition) Act (Cap. 96A), the Trade Disputes Act (Cap. 97), and the Wages Councils Act (Cap. 98). All are administered by the Department of Labour. [Back to Text]
 The Fiji National Training Council (FNTC) is the official Government body which exists to provide training to employees of both the private and public sector. It delivers training courses on the basis of market demand, and funds these by the 'FNTC Levy', which is a 1% tax on employers' gross payrolls. Where companies choose to train workers in-house, 90% of the levy paid is refunded in accordance with the Fiji National Training Act (Cap. 93). [Back]
 The Mining and Quarrying Wages Council is an official body, established under the Wages Council Act to determine the minimum wages and conditions appropriate for the mining industry. Industry representatives hold permanent seats on this council. [Back to Text]
 Regulations governing the various areas of infrastructure include: Electricity Act (Cap. 180), Housing Act (Cap. 267), Ports Authority of Fiji Act (Cap. 181), Roads Act (Cap. 175), Sewerage Act (Cap. 111), Telecommunications Act (Cap. 173), Water Supply Act (Cap. 89). Each Act is administered by the relevant authority. [Back to Text]