WT/TPR/S/213 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. While Fiji has made sectoral re forms since its last Review, significant impediments remain to 
efficient resource allocation (such as government in tervention, state-ownership, public and private 
monopolies and a general lack of competition), and thus to international competitiveness.  Further 
market-opening and deregulatory measures in key sect ors would facilitate adjustment toward a more 
diversified and efficient economy. 
2. Agriculture, including subsistence farming, re mains vital to the economy, despite its small 
and declining GDP share, which fell from 10.9% in 2001 to 9.8% in 2006.  Its comparatively low 
labour productivity reflects many factors e.g. subsis tence farming, small farms, low mechanization, 
inadequate inputs, poor husbandry and other farming practices, inade quate infrastructure, marketing 
deficiencies, and high production costs due to lack  of scale economies and expensive farm inputs.  
Land tenure reform is essential for greater productiv ity.  Government sees agriculture as fundamental 
to reviving the economy and promoting food security th rough self-sufficiency (e.g. in rice and milk).  
Import substitution policies include relatively modera te to high tariffs, the main border assistance 
measure, on foodstuffs.  An Import Substitution Plan w as adopted in 2008.  The sugar industry, one of 
the main farming activities, is inefficient.  It is protected by relatively high MFN tariffs of 27% and 
import licensing, and is controlled by a majority state-owned monopoly processor, the Fiji Sugar 
Corporation.  It makes losses despite receiving gove rnment subsidies (e.g. grants and guaranteed 
loans) and guaranteed high prices on quota exports to the EC (and United States).  Faced with the 
phasing out of EC sugar preferences and lower expor t prices, Fiji has introduced reforms intended to 
arrest declining production by improving efficien cy in growing, processing, and transportation, 
including upgrading mills.  Sugar marketing reforms ar e also envisaged.  The State is also indirectly 
involved in rice, food processing, and dairying.  
3. Fishing and forestry are also important com ponents of the Government's affirmative action 
plan to boost opportunities for i ndigenous Fijians.  Fishing polici es, especially for tuna, are to 
promote the industry's indigenization and sustaina ble management by setting catch quotas based on 
sustainable yields rather than relying only on limiti ng vessel numbers;  current catch levels are well 
below these levels.  All fish caught in Fijian waters  must be landed in Fiji and long-lining fishing 
methods must be used (unless caught under the U. S. Treaty).  Fishing licences are allocated 
preferentially taking into account Fijian ownership, amount of investment in onshore facilities, export 
potential, and local content;  indigenous Fijians are given priority.  To be Fijian registered, foreign 
vessels must be Fijian owned or be an incorpor ated Fijian company with at least 30% domestic 
ownership.  Strict rules of origin on fish exports to the EC have severely restricted export 
opportunities, but were relaxed unde r the EPA;  however, these benefits have been removed following 
the EC's decision to prohibit all Fijian fish e xports on SPS grounds in May 2008.  A new forestry 
policy adopted in 2007 aims to expand sustaina ble management.  The state/landowner-owned Fiji 
Pine Ltd grows and markets pine while the st ate-owned monopoly, Fiji Hardwood Corporation, 
handles planted hardwood (mahogany) plantations.  Both sectors appear  to suffer from over-
exploitation and receive generous tax and other financial incentives;   improved concessions will apply 
to fishing from 2009. 
4. Manufacturing, consisting mainly of clothing,  accounted for 14.1% of GDP in 2006, down 
from 15.6% in 2001.  Fiji's policy objectives are to  diversity and expand the manufacturing sector by 
developing competitive, high-value-added industri es, including by divesting public enterprises and 
reviewing tariffs annually to promote competitiveness .  Overall average applied MFN tariff protection 
for manufacturing increased from 7.7% in 2003 to 10. 1% in 2008 (11.1% in 2009).  Fiji also uses Fiji WT/TPR/S/213 
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extensive tax and other incentives to encourage investment and/or manufacturing for export, 
especially in rural areas.  The largely foreign-owned cl othing industry has contracted substantially.  It 
faces increasing international competition from redu ced preferential tariff margins in Australia and 
New Zealand under SPARTECA as well as restrictive and complex rules of origin, and enhanced 
access to the United States by othe r competitors, such as sub-Saharan African countries and especially 
China after the Agreement on Textiles and Clothing  expired from 2005.  Competition from China is 
likely to intensify once the United States lifts saf eguard measures imposed on certain Chinese exports, 
as intended from 2009.  Australia now accounts for over 80% of Fiji's clothing exports;  at least one 
major Fijian producer has relocated to Africa  and the single and largest Fijian producer, a 
Singaporean company, accounting for half of F iji's clothing exports, closed in 2005.   
5. There is state involvement in services (especia lly in transport and communications), which 
accounted for 72.1% of GDP in 2006, growing subs tantially from 68.6% in 2001.  Banking and 
insurance is relatively open, allowing foreign br anches and subsidiaries.  Insurance has no state 
involvement, and state ownership in commercial ba nking ceased in early 2006 (the state-owned Fiji 
Development Bank still operates under Reserve Bank oversight).  The framework for supervising and 
regulating the banking and insurance sectors continu es to be strengthened in line with international 
best practices e.g. Basle bank supervisory guidelines, and developments in the global financial sphere.  
The underdeveloped capital market is supervised by the Capital Markets Development Authority. 
6. Fiji's telecommunications market was fully de regulated in January 2008 (Telecommunications 
Promulgation), thereby ending the monopolies on domest ic, international, and mobile services, which 
had been protected by a 25-year exclusivity licence until 2014.  State ownership remains substantial:  
49% in Telecom Fiji Ltd (51% owned by the Fiji Na tional Provident Fund), 51% in Fiji International 
Telecommunications Ltd, and 51% in Vodafone F iji.  A new mobile operator commenced operations 
in October 2008.  An independe nt Telecommunications Authority of Fiji is being established to 
regulate the sector, including administering an ope n licensing system based on unrestrictive licence 
numbers and automatic issuance if requirement s are met (excluding mobiles).  The Commerce 
Commission regulates retail non-mobile prices (which cross-subsidize domestic calls from excessive international and mobile charges), and other ma tters, e.g. access and interconnection, misuse of 
market power, and consumer protection.   The IT  and audio-visual sectors receive substantial tax 
concessions, which are to be increased from 2009.  F iji Television Ltd's exclusive licence to provide 
free-to-air channel and terrestrial-based pay te levision ended in 2004, and four new licences were 
tendered and issued conditional on increased local cont ent (50% by 2015).  Media cross-ownership is 
allowed subject to some restrictions, such as on licences and foreign control and ownership. 
7. Road transport is regulated by permits.  Five -yearly permits are issued for bus routes and 
freight carriers.  An indefinite freeze on ne w permits introduced in July 2006 was lifted in 
January 2008.  A 10% subsidy was recently introduc ed for bus operators.  Coastal/inter-island routes 
are licensed using an economic needs test;  cabotage is prohibited.  A Sea Route Licensing System for 
coastal shipping, to be introduced from 2008, has be en delayed and if introduced may reduce shipping 
competition even further.  Non-profitable routes are serviced by government subsidies paid to 
tendered private operators.  Significant port reforms have occurred since Fiji's last Review.  Main 
ports are managed by the state-owned Fiji Ports Co rporation Ltd, previously the Fiji Maritime and 
Ports Authority (under the Sea Ports Manage ment Act, 2005), and the Commerce Commission 
reviews its charges.  The state-owned stevedoring monop olist, Ports Terminal Ltd, is to be privatized 
following the gradual introduction of  competition.  Government is seeking a strategic partner for the 
loss-making Fiji Ships and Heavy Industries, a Gove rnment minority-owned entity that went into 
receivership in 1999 and was subse quently bought for F$6.25 million.  Fiji has not joined the Pacific 
Islands Air Services Agreement designed to form a single Pacific aviation market.  A cabinet task 
force is reviewing the national airline, Air Paci fic (51% government-owned), which competes with WT/TPR/S/213 Trade Policy Review 
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other carriers in providing domestic and internatio nal services.  The state-owned Airports Fiji Ltd 
manages international airports a nd the 51% government-owned Air Terminal Services Fiji Ltd is the 
only provider of ground handling services at Nadi International Airport. 
8. Reform of the loss-making state-owned electricity producer, Fiji Electricity Authority, was 
reversed in 1999, when companies that had been st ructurally separated were re-consolidated into the 
Authority, at substantial cost.  It is both the re gulator and the major power supplier.  Although they 
are renewed by the Commerce Commission, prices are government-influenced, below cost recovery, 
and include cross-subsidies.  Establishment of an independent mega-regulat or covering electricity, 
communications, and water was endorsed by cabinet  in 2006.  Tourism, which is suffering from 
political developments, benefits from generous taxation concessions;  a new tourism incentives 
package was announced in the 2009 Budget, again involving substantial investment allowances and 
tax holidays.   
(2) AGRICULTURE  
(i) Features 
9. Since peaking at 11.3% in 2003 agriculture's share of GDP fell to 9.8% in 2006 (10.9% in 
2001) (Table IV.1).  Subsistence is a major shar e of agriculture (38% in 2006), accounting for some 
4% of GDP.  While representing only a small sh are of paid employment (around 1% in 2006), the 
agriculture sector accounts for a major share of jobs (including subsistence activities).  Agriculture is 
mostly crop growing, especially sugar cane, which accounted for some 3.0% of GDP in 2006, down substantially from 3.9% in 2003.  Other activities include traditional food crops (dalo, cassava, and 
yaqona), tropical fruits (pineapple, paw paw, and mango), ginger, vegetables, spices, cocoa, coconut 
products, beef, dairy, pork, poultry, sheep, goats, ho ney, and rice.  The main agricultural exports are 
sugar, fruits (especially paw paw and mango) and vegetables (mainly da lo (taro) and yaqona (kava)). 
Table IV.1 
GDP by activity, 2001-06 
(Per cent) 
Activity 2001 2002 2003 2004 2005 2006a 
Agriculture, forestry, fishing & subsistence 14.9 15.3 14.8 14.5 14.5 13.2 
Agriculture 10.9 11.2 11.3 10.6 10.4 9.8 
   Crops 5.8 6.2 6.2 5.6 5.6 5.2 
      Sugar cane 3.2 3.8 3.9 3.3 3.1 3.0 
   Livestock products 0.6 0.6 0.9 0.7 0.6 0.7 
   Subsistence 4.3 4.1 4.2 4.0 3.9 3.7 
   Public sector 0.3 0.3 0.3 0.3 0.2 0.2 
Fishing 2.7 2.9 2.1 2.7 2.9 2.4 
   Subsistence 1.0 1.0 1.0 1.0 1.0 0.9 
   Public sector .. .. .. .. .. .. 
Forestry 1.3 1.2 1.3 1.3 1.2 1.1 
   Subsistence 0.6 0.6 0.6 0.5 0.5 0.5 
   Public sector .. .. .. .. .. .. 
Mining & quarrying 0.9 0.9 1.0 1.2 0.8 0.5 
Table IV.1 (cont'd) Fiji WT/TPR/S/213 
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Activity 2001 2002 2003 2004 2005 2006a 
Manufacturing 15.6 14.9 13.8 14.8 13.3 14.1 
   Sugar 1.8 1.4 0.7 0.8 1.3 1.6 
   Beverages and tobacco  2.1 2.3 2.6 2.9 3.7 4.7 
   Other food industries 1.1 1.2 1.2 1.2 1.2 1.1 
   Non-food industries 10.2 9.6 8.9 9.6 6.8 6.3 
      Clothing and footwear 5.8 4.8 4.1 4.7 2.0 1.3 
   Informal sector 0.4 0.4 0.4 0.4 0.4 0.4 
Services       
   Electricity and water 3.0 3.0 2.9 2.8 2.7 2.6 
      Electricity 2.6 2.7 2.6 2.4 2.3 2.2 
   Construction 4.1 4.6 4.3 4.3 5.4 5.7 
      Private sector 0.9 1.2 1.2 1.4 2.7 3.0 
      Public sector 1.4 1.7 1.6 1.4 1.2 1.3 
      Own account and self employment 1.7 1.6 1.6 1.5 1.5 1.4 
   Wholesale and retail trade, hotels, restau rants, cafes, etc. 12.3 18.3 17.3 19.8 20.0 19.9 
      Wholesale and retail trade  11.9 12.3 11.6 12.3 11.0 11.3 
         Informal sector 0.4 0.4 0.4 0.4 0.4 0.3 
      Hotels and restaurants 4.0 6.1 5.7 7.5 8.9 8.7 
         Informal sector 0.8 1.1 1.1 1.2 1.4 1.4 
   Transport and communications 16.7 18.4 17.3 15.7 17.5 15.7 
      Transport 11.3 12.6 11.9 11.3 12.9 11.8 
         Land 1.8 2.0 1.9 1.8 1.7 1.6 
         Water 1.3 1.4 1.4 1.3 1.5 1.3 
         Air 2.3 3.3 3.1 3.2 3.0 2.8 
         Services allied to  transport 5.0 5. 1 4.8 4.2 5.8 5.3 
         Informal sector 0.9 0.9 0.9 0.9 0.8 0.8 
      Communications 5.4 5.7 5.4 4.4 4.6 3.9 
   Finance, Insurance, real estate, a nd business services 13.4 12.3 11.6 11.1 10.9 14.4 
      Finance 3.8 2.9 2.7 2.9 3.8 5.3 
         Monetary ins titutions 2.8 2.5 2.4 2.3 3.0 4.0 
            Public sector 1.2 0.7 0.6 0.6 0.6 0.4 
         Other financial in stitutions 1.1 0.4 0.4 0.6 0.8 1.3 
            Public sector 1.0 0.3 0.3 0.6 0.6 0.6 
      Insurance 3.5 3.2 3.0 2.9 1.7 2.9 
         Public sector 1.8 1.0 0.9 0.7 -0.6 0.7 
      Real estate and business services 6.1 6.2 5.8 5.3 5.3 6.2 
         Formal sector 1.8 1.7 1.6 1.7 1.9 2.6 
         Owner occupied dwellings 4.3 4.5 4.2 3.6 3.4 3.6 
   Community, social, personal, and hous ehold services 18.8 21.2 20.0 18.9 19.3 19.9 
      Personal and household services 2.1 2.2 2.1 2.0 2.0 1.9 
         Informal sector 1.5 1.6 1.5 1.5 1.5 1.4 
      Social and community services 16.7 19.0 17.9 16.9 17.3 18.0 
.. Not available. 
a Provisional. 
Source:  Fiji Islands Bureau of Statistics (2007), Key Statistics, National Income , December.  Viewed at:  
http://www.statsfiji. gov.fj/K ey%20Stats/National%20Incom e/3.2_GDP%20Current.pdf. WT/TPR/S/213 Trade Policy Review 
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10. Fijian agriculture is dominated by small farms.   Many are below one hectare and few are over 
100 hectares (predominantly grazing, old coconut est ates, and forestry).  Commercial farming is 
mainly of coconut, meat and dairy, domestic urba n and export-oriented crops , and livestock and niche 
markets, such as vanilla and kura (noni).  Semi-c ommercial farming covers mainly traditional crops 
like taro and kava.  There are industry councils fo r several commodities, including ginger, root crops, 
yaqona, rice, livestock and coconut, but they ar e operationally weak a nd depend on government 
support.  Councils consist mainly of farmers a nd major export wholesalers, and provide a collective 
industry voice to government for small operators .  Agriculture's comparatively low productivity 
reflects mainly subsistence, small farms, low mech anization, inadequate inputs, poor husbandry and 
other farming practices, inadequate infrastructure (e .g. roads and ports), marketing deficiencies, and 
high production costs, reflecting lack of scale economi es and relatively expensive farm inputs.  Land 
availability and the lack of agricultural research are also major constraints.  
(ii) Policy objectives and measures 
11. Agriculture is viewed by the Government as an important sector to resurrect the economy.1  
Central to government policy is restructuring the su gar industry into a commercially viable, efficient, 
and sustainable industry through a reform package aimed at reducing inefficiencies in milling, cane 
production, and transportation.  Ot her policy goals include facilitating private-sector development;  
accelerating agricultural diversification into areas of competitive advantage (e.g. high value niche 
export and traditional crops);  promoting food secur ity, including in rice and milk;  and enhancing 
tourism-agriculture linkages.  Agricultural polic y is intended to replace "top down" supply-driven 
institutions with demand-driven service delivery, such as extension and farm management advisory 
services, to promote commercial farmers.  This "demand driven approach to project implementation" was launched in October 2007.  The Fiji Development Plan calls for sustainable community 
development through competitive e xports and efficient food security.
2  According to the authorities, 
Fiji's food security policies are based on promotion of agricultural production by lowering input costs through tariff reductions.  Policy goals for agriculture  are:  to maintain the sector's GDP contribution 
at 12%, more than double non-sugar exports to F$80  million;  and almost halve fruit and vegetable 
imports to F$80 million in 2010.
3     
12. The Government's Import Substitution Plan w as implemented in 2008 to assist farmers and 
hotels to target crops that could potentially be  consistently supplied domestically, especially 
vegetables and fruits (e.g. off-season paw paw, pi neapples, melons, mangoes, vegetables, fresh 
ginger, pulses), spices (e.g. vanilla), coffee, honey,  and livestock products.  Farmers are assisted to 
improve agricultural production through technical  advisory and other extension services.  The 
agriculture ministry also funds an Export Promo tion Program, aimed at raising agricultural exports, 
especially of dalo, ginger, vegetables, breadfruit, pa p paw, and cassava.  The total cost of the Import 
Substitution Plan and the Export Promotion Progr am in 2008 is estimated at F$2.5 million;  
F$5 million was allocated in the 2009 Budget. 
13. Land tenure reform is vital for Fijian agricultu re.  The Native Land Trust Board administers 
some 30,000 native land leases, of which 50% are of agricultural land for sugar cane, root crops, 
vegetables, dairying, beef, and poultry.  Agricu ltural leases are for up to 30 years (Agricultural 
Landlord and Tenant Act) but can be extended by a further 20 years (Native Land Trust Act).  The 
Government is reforming native title administrati on to ensure fair benefits under secure lease 
arrangements to indigenous land owners wishing to farm the land.  The Committee on Better 
                                                      
 1 Fiji Government, Press Release, State targets tourism and agriculture for economic recovery , 
27 September.  Viewed at:  http://www.fiji.gov.fj/publish/page_10180.shtml. 
 2 Government of Fiji (2007), p. 103. 
 3 Government of Fiji (2007), p. 103. Fiji WT/TPR/S/213 
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Utilization of Land was formed as a consultative and advisory forum aimed at reducing the amount of 
idle agricultural land and to improve landowners' well- being.  Better land utilization is one of the key 
pillars of economic reform.  According to  the authorities, reform is needed to, inter alia , overcome 
rigid administrative arrangements, create a market  for leased land, and to administer land using a 
market-based system. 
Border measures and domestic support 
14. The tariff is the main border measure assisti ng agriculture.  On average, MFN tariffs on 
agriculture increased from 9.1% in 2003 to 12.0%  in 2008, and will rise to 12.7% in 2009 (based on 
HS) (Chapter III).  While Fiji seemingly uses quaran tine restrictions as a means of protecting local 
agriculture (e.g. honey), its two major regional ma rkets, Australia and New Zealand, are among the 
world's most stringent users of quarantine restricti ons to curb imports, thereby restricting Fiji's export 
potential.4 
15. The Government has extended generous tax incen tives in the 2009 Budget to assist farming 
and agri-processing, including significant tax holidays (Chapter III(4)(ii)). 
(iii) Selected activities 
(a) Sugar 
16. Fiji's major farming activity, sugar cane, is high cost and inefficient.  It accounted for over 
30% of agricultural GDP in 2006 and provided some 40,000 jobs, supporting about 20% of the 
population.  Sugar cane production fell by more th an one fifth during 2005-08, and exports have 
declined, falling to F$185 million or some 15% of to tal Fijian exports in 2007 (Table IV.2).  Some 
60% of sugar is exported to the EC and a re latively small amount to the United States under 
preferential quota arrangements at well above world prices (Chapter II).5  Some one quarter of Fiji's 
sugar cane production is refined for domestic use.  Fiji imported sugar from India in 2008 due to 
production shortfalls after fulfilli ng its higher-priced export quota commitments to the EC and the 
United States.  Land tenure insecurity, production a nd milling inefficiency, and political interference 
have contributed to d eclining sugar production.6 
17. The Government plans to raise sugar cane production from 3 to 4.7 million tonnes annually 
by 2009/10, and to ensure that, under the EPA negotiati ons, the EC agrees to import the equivalent of 
300,000 tonnes of sugar.7  Sugar cane yields are expected to rise from 50-60 tonne per hectare to some 
75 tonnes from 2009 through greater mill efficiency, fa rm productivity, and sugar content.  Farm 
production costs are also expected to fall from F$35 to F$20 per tonne and milling costs from 
F$280 to F$140 per tonne, in 2010.  Until recently, to  assist restructuring, the Government funded a 
six-year Alternative Livelihood Project costing F$95 million, to provide income opportunities to those 
affected.  It consisted of agricultural diversifica tion, extension, and training programmes as well as 
micro-finance services in cane growing areas of the Western and Northern Divisions.  The 
                                                      
 4 Australia, for example, was slow to recognize from Fiji high-temperature forced-air (HTFA) treated 
paw paw for fruit fly (accepted by Ne w Zealand in 1996), and does not a llow Fijian ginger (even though Fiji 
exports fresh ginger to Hawaii for distribution to North America, and Australia also has unfavourable ginger 
disease status).  The industry-owned Nature's Way Coop erative runs the only export facility for fresh fruit and 
vegetables and meets bilateral quarantine standards by disinfecting for fruit fly using HTFA treatment.    
5 Fiji's minimum tariff rate quota allocation to the United States was about 9,000 tonnes annually or 
0.9% of its allowed global imports. 
 6 Government of Fiji (2007), p. 101. 
 7 Ministry of Finance and National Planning (2007), p. 38. WT/TPR/S/213 Trade Policy Review 
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Government's bio-fuel industry st rategy is aimed at facilitating expor ts of ethanol and reducing fuel 
and energy imports;  sugar mills have also been al lowed to co-generate electricity for their own use 
and for sale to the national grid.  The Government  also provided F$5 million to the sugar industry 
support programme in 2008.8  Much of the industry's restructuring will be under the Fiji National 
Adaptation Sugar Strategy, adopted in 2006, and fu nded by the EU Action Plan of Accompanying 
Measures for Sugar Protocol Countries.  
Table IV.2 
Major exports, 2002-07 
(Per cent) 
SITC product 2002 2003 2004 2005 2006 2007 
Sugar 26.8 23.6 22.0 26.4 25.8 14.2 
Clothing 25.5 25.4 23.8 14.2 11.4 11.7 
Textiles, yarns and made up ar ticles 0.9 0.7 0. 7 1.5 1.2 1.2 
Molasses 1.4 0.7 1.0 1.2 2.3 1.2 
Gold 7.8 8.0 9.3 7.0 5.2 0.3 
Timber, cork and wood manufactures 4.5 3.2 4.4 5.3 4.5 5.8 
   Woodchips 2.8 1.6 2.1 2.8 1.6 3.3 
   Plywood 0.4 0.3 0.2 0.2 0.3 0.1 
Footwear and headgear 2.4 2.1 2.0 1.0 0.5 0.3 
Fish 9.0 8.3 8.6 9.8 11.7 12.2 
   Canned 0.6 0.2 0.2 0.2 0.1 0.2 
   Fresh 6.5 6.9 6.7 8.0 9.9 10.1 
Fruits and vegetables 2.0 2.5 3.3 3.4 3.9 4.3 
   Dalo 1.3 1.6 2.0 2.2 2.5 2.9 
Yaqona 0.2 0.2 0.2 0.3 0.4 0.5 
Copra .. .. .. .. .. .. 
Coconut oil 0.7 0.5 0.4 0.4 0.3 0.5 
Mineral water 3.3 4.8 5.5 8.0 10.4 12.7 
Coral and similar materials 0.6 0.6 0.9 1.0 1.1 1.0 
Ginger 0.7 0.7 0.7 0.8 0.7 0.7 
Flour 0.6 0.5 0.9 1.1 1.3 1.6 
Canned meat of bovine animals 0.6 0.8 0.7 0.9 0.8 0.7 
Uncooked pasta 0.9 .. 1.1 1.4 1.2 1.4 
Sweet biscuits 0.1 0.1 1.0 1.6 2.1 2.4 
Folding cartons, boxes and cases 1.2 1.3 1.3 1.2 1.3 1.3 
Other 10.8 14.0 12.2 13.4 13.8 17.9 
.. Not available. 
Source:  Fiji Islands Bureau of Statistics, Key Statistics, March 2008.  
18. The Government heavily regulates and protects the sugar industry through the operations of 
the majority state-owned monopoly processor Fiji Suga r Corporation (FSC) and by restricting imports 
through licensing and relatively high MFN tariffs of 27% (increased to 32% for 2009).9  The FSC is 
                                                      
 8 The Fiji Sugar Corporation and the Growers Counc il have announced they will engage a Japanese 
joint venture partner to make ethanol following a competitive tender process ( Pacific Islands Report , "Fiji Sugar 
Growers in Deal to Produce Ethanol".  Viewed at:  h ttp://pidp.eastwestcenter.org/pireport/2008/February/02-18-
09.htm).  It would produce 100,000 litres per day when fu lly operational, with production capacity to be only 
50% in the first year.  Investment costs would be approximately F$36.5million, with projected annual revenue 
of F$20.2 million. 
 9 FSC is 68% government owned and 17% owned by the National Provident Fund.  The FSC is also 
responsible for the storage, marketing, delivery, and sa le of raw sugar, and its subsidiary the Fiji Sugar Fiji WT/TPR/S/213 
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the only licensed importer of sugar, and its imports are duty-free.   Annual farm production quotas 
apply through farm basic allotments (FBAs), th e growers' share of the national harvest quota.   FBAs 
are reviewed annually.  They are adjusted downwar ds if the grower's shortfall exceeds 20% of the 
FBA;  growers are de-registered  if their shortfall is 100%.10  The FSC must purchase from the grower 
the average of his preceding three year's produc tion unless it fails to meet prescribed quality 
standards.11  Until recently, when a cane quality-based pa yment system was introduced, growers were 
paid based on cane weight and not sugar content.  The "Master Award" in the legislation provided for 
70% of export returns to be returned to growers;  this is being lowered to 60%.  The FSC has incurred 
major losses (US$9.6 million for the six months  ending November 2007), and the Government 
subsidizes its infrastructure spending, including mill improvements.  It is reportedly insolvent and 
remains in business only through government gr ants and guaranteed loans amounting to some 
F$5-10 million annually.12  Government policy is for the FSC to  achieve at least a 10% return on 
funds and a debt to equity ratio of not more than 60:40.13   
19. Responsibility for sugar was transferred to the Ministry of Finance but returned to the 
agriculture ministry in August 2008.  A major s ugar reform programme has been initiated under the 
oversight of a Parliamentary Select Committee.  Re forms, largely funded by the FSC using an Indian 
Government loan of F$86 million, are aimed at improving efficiency in growing, processing, and 
transportation.  Refurbishment of  Fiji's major sugar mills (Rarawai, Lautoka, Labassa, and Penang) is 
expected to be completed for the 2008 crushing seas on.  The FSC became a commercial entity subject 
to the Companies Act in 2005 with the repeal of the FSC Act.  The  Sugar Research Institute was 
formed in 2005, and is to be funded equally by the Government, the Sugarcane Growers Council, and 
the FSC.14  Reforms also include an Accelerated Cane Replanting Programme.  Starting in 2007 it is 
planned to replant sugar crops on 70%  of land over five years, at an estimated cost is F$21 million.   
20. Although the sector was boosted by the higher-p riced sugar exports to the EC and the 
United States, this distorted Fiji's resource use a nd allowed inefficient practices and standards to 
develop.  Phasing out of the EC's sugar preference s (Chapter II) will require the industry to undertake 
substantial structural adjustment to improve co mpetitiveness while it continues to face major supply 
challenges, including the availability of land for sugar cane growing, following the non-renewal of 
leases.15  Averaging about four hectares, Fijian suga r cane farms are generally too small (and thus 
poorly mechanized) to be internationally e fficient, with over half under 5 hectares. 
(b) Dairying 
21. Over 200 registered farmers supply milk to the Rewa Co-operative Dairy Company (RCDC), 
the only dairy processor.  Fiji impor ts some 95% of its dairy require ments, especially powdered milk 
and cheese.  An informal dairy market also suppli es milk to urban dwellers for home consumption, 
                                                                                                                                                                     
Marketing Company is the marketing agent.  The statutory Sugar Commission of Fiji coordinates the sector, and 
includes representatives from grower s, millers, land owners, trade unions, and government.    
 10 If growers' production exceeds the FBA by 20% th e FBA is increased by the difference between the 
three-yearly average output and the FBA of the farm during the period under review. 
 11 The extraneous materials must be less than 2% by weight;  cane purity must be a minimum of 70 pty;  
cane must be of an approved variety;  and burnt cane must be less than seven days old.   
 12 Stoeler (2005). 
 13 Government of Fiji (2007), p. 102. 
 14 The contributions by the growers and the FSC are deducted from the sugar proceeds according to the 
Master Award for sharing returns between them. 
 15 Most sugar cane farms are farmed by Indo-Fijians on native land under 30-year leases that began to 
expire in 1997.  Almost 2,000 leases expired in 2000;  many (almost 80%) were not renewed and are now idle.   WT/TPR/S/213 Trade Policy Review 
Page 92 
 
 
farm use, and the production of ice blocks, ghee,  and yoghurt.  The RDCD factory has about 70% 
excess capacity. 
(3) FISHING , FORESTRY , AND MINING  
(i) Fishing 
22. Fishing contributes about 2.5% of GDP (about one fifth is subsistence) and accounted for 
about 12% of total exports (mainly fresh and canned tuna and canned mackerel) in 2007 (Table IV.2).  
The Government's policy objectives are to raise the GDP share to at least 3% and fish exports to over 
F$100 million (i.e. by 15-20%) by 2010.  The indus try's performance was erratic during the review 
period;  it improved from 2004 largely due to highe r fresh tuna exports to Japan's sashimi market.16 
Canned tuna production has declined and the major cannery, Pacific Fishing Company Ltd (PAFCO), 
has increasingly exported frozen alb acore loins to the United States for canning.  Canned fish imports 
(mainly from Thailand) are rising;  about 11% of PAFCO's canned tuna is consumed domestically, 
and this accounts for only some 6% of fish consumption.   
23. Marine fisheries comprises three segments:  subsistence;  coastal small-scale artisan 
commercial;  and offshore/industrial.   Most exported fish is from offshore/industrial areas, either 
caught in Fiji's EEZ by licensed vessels, or imported from unlicensed Fiji vessels  that are licensed to 
fish in neighbouring EEZ's (e.g. Vanuatu, Solom on Islands, and Tuvalu) or the high seas, and are 
"based" at and land their catch in Fiji.17  Imported fish that is exported includes canned, frozen (e.g. 
albacore loins) and chilled fish (e.g. sashimi tuna).18 
24. Government policy is for the sector to be priv ately driven with the Government's facilitative 
role limited to regulatory and resource-management functions.19  Fishing policy is administered by the 
Fisheries Department of the Ministry of Primary I ndustries.  Fisheries management is governed by the 
outdated Fisheries Act 1942 (and Fisheries Regula tions), and the Marine Spaces Act, 1977 (and the 
Marine Spaces (Foreign Fishing Vessels) Regulations, 1979), which regulates foreign fishing vessels.
20  Licence fees are set by legislation at F$50 plus 5% of the landed value of the catch.21  Fish 
exports must be licensed, and certain species cannot be exported due to conser vation or environmental 
reasons.  With the assistance of the Forum Fisherie s Agency (FFA) Fiji is reviewing its legislation 
with the aim of introducing a new licensing Fisheries Management Act. 
25. Fiji wanted to improve the Cotonou rules of or igin for preferential access under the interim 
EPA to facilitate fish exports to the EC, including maintenance of current exports by their inclusion in 
the EPA's HS codes 304 and 305 (Chapter II).  The EC  requirement for at least 50% of the vessel's 
                                                      
 16 There are several fish processors, including six plants to handle exported sashimi tuna.  The 25% 
state-owned PAFCO (4% owned by locals and the rest by Japanese interests) exports frozen fish loins to the 
United States for further processing;  canned tuna mainly to the United States, Canada, and Japan;  and fishmeal primarily to Japan and the Philippines.  The private Fiji Fish Marketing Group exports mainly chilled fish, 
including sashimi, to Japan, the United States, and China.   
 
17 This includes tuna that is mainly  exported under pre-arrangements;  only rejected fish is sold locally. 
 18 The other main cannery, the private VOKA Industries, sells canned mackerel processed domestically 
from New Zealand imported fish.     
19 Ministry of Finance and National Planning (2007), p. 42. 
 20 Fiji Government Press Release, Fisheries legislations needs to be updated , 22 August.  Viewed at: 
http:/www.fifji.gov.fj/publish/page_9846.shtml.  
21 Annual management fees of F$6,000 for oceanic fi sheries are the same irrespective of size of vessel 
or ownership.  However, annual access fees of F$20,000 for la rger and F$15,000 for smaller vessels are higher 
for foreign-owned than locally-owned (F$10,000 and F$5,000, respectively) or indigenously-owned or chartered vessels (zero fees).  Fiji WT/TPR/S/213 
 Page 93 
 
 
crew and officers to be ACP/EU nationals has been eliminated.  The requirements for the boat's 
ownership to be at least 50% ACP/EU nationals and for tolerance limits for non-originating raw 
materials at a maximum of 15% of the ex-works price were revised.  These changes allow fish to be sourced from vessels regardless of flag, ownership, and crewing requirements.  Processors can thus 
use "globally sourced" fish (e.g. fresh and frozen t una) to make fish products (e.g. canned tuna and 
tuna loins for reprocessing).
22  However, vessels fishing for the EC  market must meet EC standards, 
along with fish processing establishments, landing sit es, and all facets of the supply chain.  Thus, 
according to authorities, meeting EC requirement s (which requires fishing vessels as well as 
processing plants to be inspected) will still be a ma jor challenge for Fiji, since its processing plants 
are supplied by Fijian and other flagged vessels, and the competent authority (Ministry of Health) will 
therefore need to also inspect non-Fijian registered boats landing catch in Fiji.  The rules do not seem 
to have changed on eligibility of ch artered vessels:  these require at least 50% of the crew to be 
ACP/EU nationals, the charter/lease to be accep ted by the ACP-EC Customs Cooperation Committee, 
and Fiji to have first offered the EC an opportunity to  negotiate a bilateral fisheries agreement.  Fiji 
uses the "bareboat charter rules" and conditions , and ensures these requirements are met before 
issuing a fishing licence, and monitors enforcement.   
26. Based on a  recent report alleging that serious deficiencies in Fijian inspection and processing 
requirements potentially put EC consumers at risk , the EC prohibited all Fijian fish products in 
May 2008 on SPS grounds.23  The authorities indicated that the Pacific Fishing Company Ltd 
(PAFCO) would consider resuming exports of canned tuna to the United Kingdom if this prohibition 
was removed and its fishing interests were covered.  A consultant is currently helping Fiji to address 
non-compliance and the report's recommendations;  acco rding to the Fijian authorities, there has been 
significant progress, including in the preparation of a draft Food Safety Regulation, training of Fijian inspectors on EU legislation covering fishing vessel s and others on good hygi ene practice, and other 
requirements. 
27. Reducing tariffs on canned, preserved or prepared fish in 2008 from 27% to 15% (the rate for 
fresh fish) substantially lowered the effective protect ion for fish canning.  Fiji's incentive regime for 
fishing also consists of tax incentives, duty concessions on imported inputs, fuel tax rebates
24, and, 
until recently, low or zero interest loans (e.g. loans of  generally up to F$200,00 0 to indigenous Fijians 
and Fijian fisheries-based companies, including fore ign joint ventures, provided by the Seed Capital 
Revolving Fund (Chapter III)).25  Due to failures, such as loan de faults and bad debts, the scheme has 
been suspended while under review.  Support pr ogrammes also assist the artisan sector.   
28. While Fiji has no explicit requirements for fishi ng vessels to be locally registered, the large 
share of foreign fishing companies have generally registered to obtain domestic licences.  These must be fully owned by Fijian citizens or Fiji incorporat ed companies with at least 30% Fijian ownership.
26  
To ensure proper Fijian ownership the Government has directed that local partners must provide 
"genuine" inputs.  Foreigners can become citizens after five years. 
                                                      
 22 FFA (2007), p. 2. 
 23 FFA (2008), p. 7. 
 24 Domestic operators are still disadvantaged relative to overseas operators who receive duty-free fuel 
(ADB, 2005a, p. 30).   
 25 Campling, Havice and Ram-Bidesi (2007), p. 391. 
 26 Campling, Havice and Ram-Bidesi (2007), p. 379. WT/TPR/S/213 Trade Policy Review 
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(a) Non-tuna fishing 
29. This consists mainly of subsistence and co astal commercial fishing in territorial and 
archipelagic waters.27  Subsistence fishing targets mainly fi nfish, beche de mer, octopus, seaweed, 
lobster, crab, and molluscs.  Some 50% of rural hou seholds are involved in subsistence fishing.  The 
State’s transfer of ownership of customary fishing rights of the qoliqoli areas to traditional owners 
included authority for them to license annually comme rcial fishing, subject to certain conditions, and 
to implement quotas on catch volumes and/or the num ber of licensed vessels if considered necessary 
for fisheries conservation (Qoliqoli Act, 2006).28  However, the qoliqoli legislation has been 
suspended.  Coastal commercial fi shing covers fish sold in local markets, subsistence products sold 
domestically and exported beche de mer, troches, co ral, and aquarium fish.  Aquaculture, including 
the culture of tilapia, freshwater pr awns, seaweed, pearls, grass carps a nd marine prawns, is also being 
promoted. 
(b) Tuna 
30. Fiji's industrial/offshore fishery remains almost en tirely tuna-oriented, but has diversified into 
non-tuna pelagic fish species (e.g. wahoo, marlin , swordfish, and mahi mahi) since 2006.  The 
Government has aimed, with mixed success si nce the early 1990s, to implement an Offshore 
Licensing Policy based on maximum sustainable yiel ds, especially for offshore fisheries involving Fiji 
or foreign joint-venture fishing vessels.  The policy ob jective is to ensure that  the total allowable catch 
is lowered to the sustainable yield for each targeted species.29  T a b l e  I V . 3  provides major 
developments in the Fijian Tuna industry.   Fiji is a signatory of the Convention on the Conservation 
and Management of Highly Migratory Fish Stocks in  the Western and Central Pacific Fisheries, which 
entered into force in 2004;  it is bound to adopt conservation and management measures agreed by the 
responsible Commission. 
31. The offshore tuna fishery is subject to the T una Development and Mana gement Plan, 2002.  It 
provides for setting sustainable harvest levels fo r each target species of albacore, bigeye, and 
yellowfin tuna.  Current levels of annual total a llowable catch (TACs) were set in 2002 at 15,000 for 
all tuna species (big-eye, albacore, and yellowfin ), well above annual catches, which average about 
9,000-10,000 tonnes.30  Only long lining is currently practi ced in Fijian waters and such licensed 
vessels must land all their catch in Fiji;  the onl y exceptions are purse seine operations and fishing 
vessels operating under the U.S. Treaty (see below).  The Plan also set the maximum number of 
licensed long liners at 90 in 2002;  this was late r increased to 110 to address the needs of processors 
and indigenous Fijians.31  Following a 2004 study by the SPC and the FFA, the cap was reduced to 
60 in 2007.  In 2007, Fiji issued 57 tuna long lin e licences, 38 for Fiji-flagged vessels and 19 foreign-
flagged.  In that year, 140 long line vessels were based in Fiji, through formal arrangements, like 
charter and joint ventures, with locally owned companies;  the other 83 vessels had licences from 
Vanuatu and Solomon Islands a nd landed their catches in Suva  and Levuka.  An additional 
                                                      
 27 Archipelagic waters are those w ithin the outermost islands of an  archipelago and are treated as 
internal waterways under international law.   
 28 There are some 410 qoliqoli or traditional customar y inshore fishing areas in Fiji.  In 2002, the 
Government initiated the ongoing Marine Resources Inventory survey project to understand the extent of these resources and to assist in their management. 
 
29 Government of Fiji (2006), p. 113. 
 30 Previous levels set in 1995 were 8,500 tonnes of Skipjack and 1,500 tonnes of Yellowfin for pole and 
line fishing;  at 3,000 tonnes of Albacore, 2,500 tonnes of  Yellowfin and 2,000 tonnes of Bigeye for long lining;  
and 8,500 tonnes of Skipjack and 1,500 tonnes of Yellowfin for purse seine. 
 31 The authorities reject allegations that the allocation of fishing licences is non- transparent and corrupt, 
and that caps have been ex ceeded (ADB, 2005a, p. 30). Fiji WT/TPR/S/213 
 Page 95 
 
 
122 foreign vessels visited Suva and Levuka in 2007.  As a party to the U.S. Treaty, Fiji must allow 
access to U.S. purse seiners licensed under the Treaty to fish within Fiji's EEZ.  Members of the 
Forum Fisheries Agency (FFA) extended the Treaty ag ain for ten years in 2003 (Treaty on Fisheries 
between the Governments of  Certain Pacific Island States and the Government of the United States).32 
Table IV.3 
Development and status of the tuna industry, 1997-06 
Year Industry 
development 
initiative  Characteristics, ownership 
and structure of industry  Incentives, relevant trade-
related measures  Status  
1997   Tax free Pafco temporarily closed, IKA 
Corporation (state owned) closed 
July 1997 MOU (trial sgreement 
between Pafco, FCF 
and Bumble Bee 
Seafood) 10-year agreement between 
parties;  FCF (procuring from 
long line and purse seine 
vessels), Pafco for processing 
and Bumble Bee Seafood for management and marketing of 
loins in the United States Upgrade of facilities, tax 
concessions/target secured 
markets, which allow 
flexibility with rules of 
origin requirements Continuation of the agreement – 
loins to the United States, canned 
tuna flakes to the domestic market 
1999-
2006 10-year Agreement 
continues    
2003 Rural commercial 
fishers fishing around FADs Individual local ownership, 
group ownership 50% tax deduction on 
export income, 40% investment allowance on 
capital items of over 
F$50,000, low import duties, loss carry forward, 
duty-free inputs for exports, 
subsidized fuel, duty concessions on capital 
expenditure Supply local markets and local 
processing plant 
2006 Six processing plants 
– for handling sashimi 
tuna for export 
 
About 30 companies and 30 long line 
vessels registered 
under Fiji flag to supply processing 
establishments in Fiji Locally owned and foreign 
joint ventures with at least 
30% local ownership   
 
Locally owned, joint ventures, and domestic-based foreign 
operations Preferential access to EC, 
fuel rebate, tax concessions, 
on import of bait, 
equipment, fishing inputs 
including materials for vessel construction Fiji Fish – exports of pre-packed 
sashimi, loins, fresh chilled fish, 
frozen fish; 
Tossa Bussan – skinless loins, tataki 
(opened new factory in 2006); Trimarine Pacific/Cletrock/ Golden 
Ocean/Hangton Pacific – fresh 
chilled and frozen tuna exports; Hangton, Trimarine and Tossa 
Bussan – recently upgraded 
facilities; Locally owned vessels, contracted 
foreign and chartered vessels, 
foreign-flagged vessels – catching and supplying from Fiji's EEZ, high 
seas and other pacific country EEZs. 
Source:  Campling, L., E. Havice a nd V. Ram-Bidesi (2007), Pacific Island Countries, the Global Tuna Industry and the 
International Trade Regime – A Guidebook , Report prepared for the Forum Fisheries Agency, April, pp. 400-01.  
Viewed at:  http://www.ffa.int/node/1030. 
                                                      
 32 The U.S. Treaty allows U.S. fishing vessels access to the fishing resources in EEZs of certain Pacific 
island nations, including Fiji for fishing fees paid by the U.S. tuna industry and the U.S. Government.  Total fees 
paid to the FFA have risen from US$12 million annually to US$21 million (US$3 million is paid by the 
U.S. tuna industry).  Of the US$3 million, 15% is divided equally among FFA members, and the rest distributed pro rata  based on tuna weight landed in each EEZ.  The other US$18 million is paid by the U.S. Government to 
the FFA as aid to support regional economic development programmes.  Originally the Treaty allowed 
50 vessels but this has been reduced to 45 (including an optional additional five licences reserved for joint venture arrangements). WT/TPR/S/213 Trade Policy Review 
Page 96 
 
 
32. Fishery licences are allocated preferentially taki ng into account Fijian ownership, degree of 
investment in onshore facilities, export potential and local content, including the vessels' construction.  The degree of access also depends on the benefits to Fiji.  Fiji-registered Fiji fishing vessels are given 
high priority, followed by chartered non-Fiji-regist ered Fiji fishing vessels, and foreign vessels.  
Fiji-registered Fiji fishing vessel s with full local ownership using below 2,500 hooks and a carrying 
capacity of less than 40m
3 have access to archipelagic waters, territorial seas, and the EEZ, while 
foreign vessels are limited to the EEZ.  Vessels not meeting these requirements irrespective of flag are 
limited to the EEZ.  
33. Fiji policy also promotes indigenization of the fishing industry, including local participation 
in fishing and fish processing.  The policy objectiv es are to maximize long-term economic returns to 
the broader community, in particular to indigen ous Fijians, and to increase the proportion of tuna 
caught and landed by indigenous Fijian licensed ve ssels to at least 40% of the licensed quota.33  The 
Tuna Management Plan calls for a licensing policy to ensure Fijians receive maximum benefits from 
fishing.  To ensure that indigenous Fijians holding fishing licences under charter arrangements are 
genuinely benefiting financially, th e Department created a specific monitoring unit in 2006 to ensure 
that some indigenous Fijians were not being mis-used by foreigners simply to obtain access to Fiji's 
tuna resources. 
34. The 2009 Budget introduced a number of measures aimed at assisting the industry, to apply 
immediately;  these included reducing the tariff on fuel from F$F0.08 to F$0.02 per litre, specialized fishing vessels from 10% to zero, and on fish baits from 3% to zero.  An export tax of 3% on 
unprocessed fish will apply from 2009.  
(ii) Forestry 
35. Forestry contributes about 1% of GDP, with an estimated half of production being 
subsistence.  Logs are predominantly processed in to sawn timber, veneer or plywood. The sector 
contributes some 5-6% of total exports, mainly pi ne wood chips, mahogany timber, and plywood.  
Exports are mainly to Australia, New Zealand, a nd the United States, except for wood chips, which 
are sold solely to Japan.  The sector has under-performed since 2000 due to fluctuating logging rates.  
Although several mills have closed on Vanua Levu , pine forests and wood chips have increased 
following the completion of the new port in Wairiki, Bua.  Government plans to expand pine plantations on available grassland areas;  F$600,000 was provided in 2008 largely to help establish a 
new 400 hectare plantation.  The National Forest I nventory (the first for ten years) is due for 
completion in 2008.  The Government plans to ra ise the overall sector’s GDP contribution to 1.6% 
and to double annual exports by 2011.  Commercial annual harvesti ng rates are to reach 100,000 m
3 
for mahogany, 450,000 m3 for pine, and 150,000 m3 for native forests. 
36. The Strategic Forestry Plan, 2002-05, supplemented the National Forestry Action Plan 
adopted in 1990.  The 2002-05 Plan's objectives we re:  to provide appropriate institutional and 
physical infrastructure to support forest development;  to ensure sustainable development and 
management of forests;  promote community-owned  and managed forest-processing and value-adding 
facilities based on indigenous forests and commun ity-owned plantations;  and to promote production 
and export of value-added timber products.  A new forest policy endorsed in November 2007 contains 
five pillars primarily aimed at  expanding sustainable forest management.  These pillars for a 
permanent forest cover are:  a protected forest ne twork;  increased landowner involvement;  a thriving 
forest industry that provides stable employment and contributes to the national economy and improves 
rural livelihoods;  institutional frameworks to en courage investment in  sustainable forest 
                                                      
 33 Government of Fiji (2006), p. 113. Fiji WT/TPR/S/213 
 Page 97 
 
 
management; and a forest administration that delivers efficient services paid for by users.34  Fiji is a 
signatory to a number of forest-related conventio ns and agreements, including the International 
Convention on Biological Diversity (CBD), UN C onvention to Combat Desertification (UNCCD), 
UN Framework Convention on Climate Change (UNF CCC), Convention on International Trade in 
Endangered Species of Wild Fauna and Flora (C ITES), and the International Tropical Timber 
Agreement (ITTA).  It also participates actively in the UN Forum on Forests (UNFF).  According to 
the authorities, the 2007 forest policy provides th e necessary framework for Fiji to satisfy its 
forest-related obligations unde r these international processes. 
37. Some 85% of Fijian forests are communally owned;  the rest are either privately or state 
owned.  The legal framework for forest management  is provided by the Forest Management Act, 1953 
and the Forest Decree 1992 (implemented by the For estry Department of the Ministry of Fisheries and 
Forests).  The Decree is being reviewed to ensure an adequate institutional framework is in place to 
support implementation of the new forest policy.  Other agencies involved in the management of Fiji’s forests include the Native Land Trust Board (NLTB) and the two state-owned companies, Fiji Pine Limited (FPL) and the Fiji Ha rdwood Corporation Limited (FHCL). 
38. NLTB, as the trustee of native Fijian lands, approves and issues forest harvesting licences on 
native land before the Forestry Department issues its licences for entry and the removal of logs. In 
addition to its licensing role, the Department looks after research on forestry and timber utilization, 
training, export quality control, and the overall forest policy direction. FPL is responsible for 
managing most of Fiji’s pine plantations.  Its subs idiary, Tropik Woods Industry Limited (TWIL), is 
responsible for harvesting, processing, and marketi ng of pine timber and other products. The Fiji 
Hardwood Corporation (FHCL) was established in  1998 to manage, harvest, and market valuable 
mahogany plantations.  The Fiji Mahogany Trust was formed under the Fiji Mahogany Act, 2003 to 
strengthen landowner participation in  the mahogany industry and ensure e quitable sharing of benefits.  
Current arrangements with FHCL allow landowne rs to run their own companies to harvest 
plantations, cart logs, and operate portable sawm ills.  In addition, land  owners are offered 
employment opportunities and receive stumpage paymen ts for trees felled as well as land rentals.  
However, the Government recently decided to tran sfer mahogany plantations to the land owners, and 
to deregulate the industry to allow other private companies to harvest, process, and market mahogany. 
39. Mahogany harvesting commenced in 2003 and production has increased gradually to an 
expected level of 80,000 m
3 by end 2008.  FHCL's targeted annual production from 2009 is expected 
to be around 150,000 m3, which the authorities state will be within sustainable levels.  FHCL has its 
own processing facilities but is also increasingly selli ng logs to other saw millers and processors or 
using hired processing facilities.  It has had financ ial difficulties and relied on government guarantees 
to borrow finance.35  However, according to the authorities,  FHCL's profit outlook is promising.   
40. Landowner participation in the pine industry h as increased since 2002 under the Affirmative 
Action Programme, assisted through the Seed Ca pital Revolving Fund (SCARF) of F$2.5 million, 
administered by the Fiji Development Bank and the Forestry Department.  Examples include the large-scale pine harvesting (200,000 tonnes annually)  in the Bua/Macuata pine forests from end 2006 
and recent completion of the Wairik port and the wood- chip loading facility (expected to raise exports 
by F$25 million).  Pine plantations cover some 45,000 hectares and the policy obj ective is to raise this 
to 75,000 hectares. 
                                                     
 
 34 Fiji Government, Press Release, Cabinet approves New Fiji Forest Policy,  6 November 2007.  
Viewed at:  http://www.fiji.go v.fj/publish/page_10579.shtml. 
 35 Minister of Finance and National Planning (2007), p. 42. WT/TPR/S/213 Trade Policy Review 
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41. The 2007 Forest Policy provides for two main types of timber harvesting licences:  forest 
management licences, and special harvesting licences.  The former are long-term agreements that not 
only grant the rights to harvest forests but ai m to promote their sustainable management.36  Both types 
of licence are first negotiated and approved by th e NLTB after consultations with the Forestry 
Department.  A total of 0.045 million hectares (5% of total natural forest area) are under forest 
management licences.  All protection forest areas with special environmental significance, and CITES-listed species are excluded from logging opera tions.  Management fees are paid to the 
Department of Forests, and royalties are paid dir ectly to the NLTB;  these are transferred to the 
landowners, except for an administrative levy de ducted by the NLTB.  Royalties are set using the 
residual log value in which all costs are subtracted from the value of the final product.  No 
regeneration costs are levied. 
42. The Government is concerned by deforestati on and forest degradation and their negative 
environmental impact, aggravated by poor logging and other forestry practices.  The authorities indicate that the problem is not really "over-logging" but inadequate logging standards.  Through the Forest Decree, the Forestry Depart ment is trying to enforce the 1991 Fiji National Code of Logging 
Practice (FNCOLP), in an effort to reduce the ne gative environmental impact of logging and to 
contribute towards the sustainable management of Fiji’s forest resources.  However, the Code's 
implementation has been rather ineffective, due ma inly to inadequate skills, lack of resources, and 
difficulties in using the Code itself.  The Code is be ing reviewed and this is expected to be completed 
by end 2008. Proposals for commercial logging or for sawmills must undergo an Environmental 
Impact Assessment (Environment Management Act,  2004).  All commercial logging operations must 
submit an EIA for approval. 
43. In 2004, there were 26 licensed sawmills (18 ope rational, all small but one), two small veneer 
and plywood sawmills, and one  wood chip plant integrated with the large sawmill.  Portable sawmills 
are being encouraged, especially in harvested ma hogany forests.  Despite increased plantations, 
two thirds of Fiji's processed products (sawn wood and plywood/veneer) come from native forests.  
The forestry sector is an important component's of the Government's affirmative action plans for 
indigenous Fijians.  Government plans are to raise the share of indigenous forestry workers to 40% 
and to ensure that the value of contracts secured by indigenous Fijian businesses will be at least 40% 
by 2011.  Fiji drafted a Fiji Standard for Forest Management and Certification covering criteria and 
indicators of good forest management in 2006;  this was expected to be in place by end 2008.
37 
44. The industry benefits from generous tax concessi ons (Chapter III).  Export of round logs is 
prohibited, and an export tax of  3% on the f.o.b. value of unprocessed timber will apply from 2009. 
(iii) Mining 
45. Gold (and silver) are the only minerals activel y explored for and mined in Fiji.  Mining and 
quarrying, mainly also of lime, and aggregates (cru shed basalt, alluvial sand, gravel and coralline 
dredged offshore for cement manufacture) has declin ed in relative importance during the review 
period, and contributed 0.5% of GDP in 2006 (dow n from a peak of 1.2% in 2004).  Exports fell 
sharply in 2007 from 2% of total exports to 0.3% .  Exploration expenditure had expanded from just 
over F$2 million in 2000 to over F$6 million in 2002 but has since declined, partly due to the 
country's civil unrest and political instability.  Government goals are to double mineral exploration 
expenditure to F$12 million and to  raise annual gold exports by over  30% to F$100 million by 2011.  
                                                      
 36 Special harvesting licences include small and short- term domestic licences e.g. collecting fuel wood, 
and annual licences. 
 37 Fiji Government, Press Release, Public invited for consultation on Fiji Standard for Forest 
Management and Certification , 13 October 2006.  Viewed at:  http://www.fiji.gov.fj/publish/printer_7622.shtml. Fiji WT/TPR/S/213 
 Page 99 
 
 
46. The Mineral Resources Department of the Mi nistry of Lands and Mineral Resources 
administers mining regulations in accordance w ith the 1978 Mining Act and supporting regulations.  
Foreign mining investment is keenly sought, and wh olly owned foreign companies registered in Fiji 
are allowed.  Holders of explorer licences are guara nteed rights to exploit and develop discoveries.  
Prospecting and special prospecting licences are usually  issued for one to five years (at least two to 
three years in "mature areas"), and are usually extendable.  Mining permits of two years (extendable for one year at a time), mining leases from 5 to 21 years (extendable for up to 21 years) and special mining rights (subject to terms and conditions specif ied by the Minister) are also issued.  Mining 
policy and legislation, along with the fiscal regime , have been reviewed with the aim of raising 
exploration expenditure, and a new mining act was scheduled to be introduced in 2006. 
47. Royalties of 3% of the f.o.b. value apply to baux ite and iron ore, and of 5% on other minerals.  
Gold exports are also taxed at 3% f.o.b. (tempor arily abolished in 2001-02), but government policy is 
to ensure that together they do not exceed 5%.  Mi ning profits are taxed the same as other income, but 
the Minister may reduce rates or provide tax holiday s for certain periods if considered expedient for 
Fiji's economic development. 
48. The main mining activity at the Vatukoula Gold  Mine was previously operated by Emperor 
Mines Ltd, previously the largest single employer in  Fiji.  In December 2006, it closed and was placed 
on a three-month care-and-maintenance programme , and re-opened in N ovember 2007 under new 
ownership following Government negotiations of new concessions.  These include mainly exempting 
gold from the export tax and reducing the royalty rate  from 6% to 3% for five years;  a two-year 
exemption from import duties on automotive diesel oil or industrial diesel oil used at the mine;  a 
three-year exemption from fiscal duty on imported pl ant, equipment, machinery, and motor vehicles 
for operating the mine;  and eligibility for exemption from withholding tax on overseas loan interest payments, consultants' fees, and dividends .  No reduced company tax rates apply.
38  The new owners 
also refunded the Government's costs since May 2007 of maintaining the mine's care-and-
maintenance programme (1.7 million pounds), an d established a F$6 million Rehabilitation Trust 
Fund to meet social and environmental concerns.  The company is also looking at developing the 
Tuvatu gold prospects.  
(4) ENERGY  
49. Fiji's energy requirements are met from biomass sources of wood, bagasse (sugar by-product 
converted to electricity by the FSC), hydro-power (covering 54% of its primary energy needs in 
2000), and imported petroleum fuel and coal (mai nly from Australia, New Zealand, and Singapore), 
the latter being used primarily in cement manufacture.   The Department of Energy of the Ministry of 
Transport, Works and Energy is responsible for en ergy policy and off-grid rural electrification.  The 
overall national energy sector goal is for efficient, cost effective, and environmentally sustainable 
energy development.  The Government aims to improve the national energy mix from 40% of 
renewable energy to 50% for the grid, and from 5% to 10% for off-grid electricity by 2011. 
50. Fiji has adopted the 2004 Pacific Islands Energy Policy (PIEP) and related Pacific Islands 
Energy Strategic Action Plan (PIESAP) as the basis of its National Energy Policy and Strategic Action Plan endorsed by Cabinet in November 2006.
39  Its energy policy reflects:  fundamental 
concerns on environmental vulnera bility from climate change affec ting sea levels;  environmental 
pollution and damage from conventional energy so urces;  economic vulnerability from heavy reliance 
on imported fuels;  energy supply security, given limited storage facilities for bulk petroleum fuels 
                                                      
 38 Mining Weekly  (2007), "Westech Gold secures Fijian tax concessions for Vatukoula", 20 August.  
Viewed at:  http://www.miningwee kly.com/article.php?a_id=114999. 
 39 Council of Regional Organizations in the Pacific (2004). WT/TPR/S/213 Trade Policy Review 
Page 100 
 
 
that are sourced over long supply chains at relativ ely high prices;  development of renewable energy 
sources;  limited scope for market reforms, given size;  and limited human resources and institutional 
capacity.  The PIEP is centred around mainly regi onal energy and cooperation;  open consultative 
cross-sectoral policy development and integrated  planning, which includes promoting appropriate 
regulatory guidelines to meet consum er needs and promoting sustainable energy options for electricity 
generation, reducing dependence on fuel imports , lowering greenhouse gas emissions, and meeting 
renewable energy targets;  reliable, safe, a nd affordable access to efficient power, including 
expanding private-sector particip ation, corporatizing/commercia lizing power utilities, establishing 
competitive markets to introduce independent power pr oviders;  safe, reliable, and affordable supplies 
of petroleum products, including improving competitiv eness of supply, access to alternative fuels, and 
fuel substitution;  and efficiency of energy use and conservation.  Generous ten-year tax holidays and 
duty-free importation of capital equipment and ch emicals announced in the 2009 Budget will apply 
from 2009 until end 2014 for companies investing at  least F$1 million in bio-fuel production and 
employing a minimum of 20 local employees. 
(i) Hydrocarbons 
51. Fiji imports all its petroleum fuels and these have  risen substantially in line with rising use 
and international prices.  They have increased some  three-fold since 2000, and in 2007 accounted for 
one third of total imports (18% in 2000).  Some 10% of petroleum imports are used to generate 
electricity.  Three multinational firms (Mobil, Total, which commenced in 2007 after buying out 
Shell’s Fijian operations, and BP) import petroleu m products and store/distribute through wholesalers 
and retailers, and re -export to neighbouring island countries.40  The Department of Energy is 
endeavouring to raise the quality of petroleum fu els by improving minimum fuel specifications;  
Cabinet agreed in 2007 to reduce maximum sulphur content levels for automotive petrol and diesel 
from 5,000 to 500 ppm, effective from 2009 for envir onmental reasons (Environmental Management 
Act, 2006).   Standards for fuel storage and transport are set by the Petroleum Act (cap 190), and 
supply, distribution, and use (along with electricity) are regulated during emergencies under the Fuel 
and Power Emergency Act (cap 191).41  Liquid Petroleum Gas (LPG) is imported from New Zealand 
by two private firms.  To reduce fuel imports, th e Government is investing in renewable energy, 
hydro-power, power cogeneration, and ethanol production.  The Gove rnment's objective is to have 
30% of fuel used in transport from bio fuel, LPG or LNG by 2010. 
52. While Fiji has had no oil or gas discoveries, so me areas, especially the offshore Bligh and 
Bau Water Basins, have geological potential.  In or der to attract greater foreign exploration activity, 
Fiji amended the 1978 Petroleum (Exploration and Ex ploitation) Act in 1995 (Petroleum (Exploration 
and Exploitation) (Amendment) Ac t), which covers both onshore and offshore areas.  There have 
been no subsequent significant legislative ch anges affecting oil and gas exploration. 
(a) Oil and gas exploration 
53. The Minister of Mines issues exploration licences in designated areas, including to foreign 
companies registered in Fiji.  Applications must include proposals for exploration work and 
                                                      
 40 Exclusive import licences for petroleum oils give n to the state-owned petr oleum company, the Fiji 
National Petroleum Company (FINAPECO) formed in 1990 were removed in 1992 as a forerunner to its 
termination in 1993 (it was to become the exclusive Fiji importer of petroleum products based on oil purchased 
from Malaysia refined in Singapore and distributed by the multinational companies, but after substantial losses 
it closed without importing any oil).  Nevertheless, imports of lubricant oils remained subject to import licensing 
until August 2004, at which time 25 importers were licensed, including Shell, Mobile, and BP (Government of 
Fiji, 2004).  
41 Although still on the statute it has not been used for many years. Fiji WT/TPR/S/213 
 Page 101 
 
 
expenditure.  The Government may also enter in to a petroleum agreement (consistent with the 
legislation) with a prospective licensee on term s and conditions covering petroleum exploration, 
development, production, and tran sportation whereby work commitmen ts are supported by guarantees 
prior to granting of the exploration licence;  these pr ovide more investor certainty by setting out some 
of the obligations and rights.  A model petroleum agreement has been released.  Exploration licences 
are for five years, renewable for two three-year periods.  On discovery, the licensee may apply for a 
three-year "appraisal area" to appraise whether it is commercial.  The licensee  of a significant gas 
discovery may apply for a ten-year gas evaluation area. 
54. The licensee is guaranteed the right to apply for a production licence of 21 years (renewable 
for indefinite five-year periods subject to nego tiated conditions), to deve lop and produce commercial 
discoveries, subject to terms and conditions as well as work obligations specified in the petroleum 
agreement negotiated at the exploration stage, based  on a model agreement.  The Minister of Mines 
may direct the producer to increase the extracti on rate if it is below the "maximum economic 
recovery" rate.  Pipeline permits and licences of up to  21 years (subject to renewal) may be issued by 
the Minister to transport oil from licensed commerc ial fields (subject to public interest and land 
approval considerations) under term s and conditions specified in the petroleum agreement, or for 
other applicants on such arrangements specified by th e Minister, consistent with the legislation.  
Compensation is required for damaged land, incl uding payment of surface rent.  Royalties are 
generally set at 10% of the value of oil or gas at the "measurement point" (on location at the field after 
processing for transportation), although the petroleu m agreement may specify-sliding scale or formula 
royalties exceeding 10% based on production levels, we ll productivity, oil or gas prices, net profits or 
other variables agreed upon or determ ined in the petroleum agreement.  Government may require that 
oil be delivered to  a Fiji refinery based on a price mutually ag reed, or at a price set by the Minister 
representing the price available by the producer, or in accordance with the price determined in the 
petroleum agreement.  
(b) Petroleum products 
55. Wholesale and retail prices of petrol, kerosene, and automotive diesel oil (but not LPG) are 
regulated by the Prices and Incomes Board.  The th ree importers submit quarterly costs to the Board, 
which selects the least expensive to calculate a maximum price using an agreed formula.  In 
February 2008, the finance minister temporarily w ithheld scheduled petroleum product price increases 
under the Counter Inflation Act.42  Prices vary geographically and large users, such as the Fijian 
Electricity Authority (FEA), negotiate bulk contracts with importers.  Retail distribution is by either 
dealer-owned-dealer-operated or company-owned-deal er-operated station outlets.  Certain petroleum 
users receive tariff concessions on petroleum products. 
(ii) Electricity 
56. Electricity generation contributed 2.2% of GDP in 2006.  The state-owned FEA generates 
almost all electricity in Fiji, and transmits and dist ributes electricity on the th ree islands with grids, 
Vitu Levu (accounts for 90% of generation), Vanua Levu and Ovalau (Electricity Act, 1966).  It 
operates four hydro power stations (two small st ations commencing in 2004 and 2006), which have 
accounted for under half of power produced since 2005 (down from over 80% in 2000) partly due to 
water shortages in the Monasavu Dam on which the major Wailoa power station relies;  and 12 diesel 
plants.43  The diesel plants are operated and maintained  by an American subsidiary company under a 
                                                      
 42 Fiji Government, Press Release, Fuel prices to remain unchanged , 8 February 2008.  Viewed at:  
http://www.fiji. gov.fj/publish/page_11163.shtml. 
 43 A new hydro-power plant of 40 megawatts is to be established at Nadarivatu in Ra costing an 
estimated F$100 million.  It is expected to be operational in 2010.   WT/TPR/S/213 Trade Policy Review 
Page 102 
 
 
20-year agreement starting in 2003.  FEA also has a joint venture agreement with an overseas firm to 
develop hydro power.  It also purchases relatively small amounts of electricity produced by independent power producers (IPPs), these being FSC (produced from bagasse), Tropik Woods Ltd 
(from its expanded Drasa mills in Lautoka using wood waste), and from Sustainable Energy Limited 
(previously it was also purchased from Emperor Gold Mine).
44  FEA generation and distribution 
technical losses are some 10%.  It has no formal policy document.  FEA's Ten Year Power Development Programme 1998-2007 has been re placed by frequently revised rolling plans.   
Corporatization of FEA and appointment of a priv ate Board to run it commercially in 2001 improved 
efficiency.
45 
57. About 90% of households are supplied by the FEA;  the rest obtain supplies mainly from 
self-generation or from small village grids.  Some half of the rural population has no access to power.  
Substantial new generation capacity is needed, a nd the Government is keen to attract private 
investment, including through public-p rivate partnerships (PPPs) with FEA.  Government plans are to 
obtain 90% national electrification by 2011 and not less than 85% in rural areas. 
58. There is no independent power regulator.  FEA is  both the sectoral regulator (the Regulatory 
Unit) and major power supplier.  It licenses other ge nerators, including IPPs, to supply the grid, build 
and operate transmission lines, and distribute and sell electricity, as well as inspecting, licensing and testing electrical installations.  FEA also negotiates wholesale tariff agreements with IPPs, mainly for 
co-generation purchases of electricity.  While th e FEA's commercial performance and institutional 
efficiency may be scrutinized under the Electricity Ac t and the Public Enterprise Act, which require it 
to operate commercially by covering co sts, this is largely discretionary.
46  It has incurred large losses 
recently (F$16.0 million before tax in 2006), mainly due to the Government setting non-cost-recovery 
tariffs and insisting it meet certain social obligations.47  FEA has benefited in recent years from a 
US$4 million grant, and the provision of guara ntee and interest relief on a US$9 million loan.48  
While its single national tariff is subject to revi ew by the Commerce Commission, these have been 
infrequent and Cabinet has generally held prices c onstant or reduced them, seemingly for political 
reasons.49  However, rolling price increases, recommended by the Commerce Commission in 
November 2004, were implemented for three year s commencing 2005;  these targeted commercial 
users, raising prices for them by 6.45% compared  with 3.2% for residential customers in 2006.50  
Increased 2006 tariffs were s till at non-cost-recovery levels.51  The FEA also implemented an 
electricity fuel surcharge of F$0.0651 per un it from October 2006, approved by the Commerce 
                                                      
 44 These involve co-generation agreem ents except for Sustainable Energy  Lit, which is a dedicated IPP 
producing power for the grid. 
 45 World Bank (2006b). 
 46 Secretariat of the Pacific Applied Geoscience Commission (2005), p. 6. 
 47 These include supplying subsidized power to rura l Viti Levu and to the whole of Vanua Levu and 
Ovalau, which cost at least F$30.0 million in 2006;  this  also reflects the value of th e cross-subsidies maintained 
by the FEA (FEA, 2006, p. 9).  Although the Government was to reimburse the FEA for these costs (Public 
Enterprise Act) it does not do so, in line with the Government's 2002 decision to recognize them as part of the 
FEA's annual dividend.   
 48 World Bank (2006b). 
 49 While in 2005, Fiji's average residential and comm ercial power prices were relatively low compared 
with other pacific and Caribbean island s, they were on average three times more expensive than in New Zealand 
and higher than in Palau, Micronesia and the Marshall Islands (World Bank, 2006b). 
 50 The "lifeline" tariff that subsidizes power charges for poor households (those spending F$50 or less 
per month on electricity) were exclud ed.  The Government also subsidizes some uneconomic grid extensions 
annually but the waiting list is long. 
 51 Average production cost from dies el-run stations were F$0.28 per unit compared with  average sale 
price of F$0.217 per unit (FEA, 2006, p. 9).   Fiji WT/TPR/S/213 
 Page 103 
 
 
Commission, to help offset escalating diesel costs.52  Since it is much more expensive to supply power 
to regional areas than to urban c onsumers, uniform tariffs also cross-subsidize other customers at the 
expense of urban Vitu Levu consumers, and are also  a disincentive for the FEA to extend services into 
other areas.53 
59. Government is to reform the power sector by restructuring the FEA and encouraging private 
sector participation through IPPs;  it plans to have six IPPs by 2011.  However, its restructuring to 
improve efficiency has gone backwards.  A 1998 Re organization Charter that separated FEA into 
three distinct companies, one each for generation (PowerGen Fiji), distribution (PowerLines Fiji), and 
sales (MegaPower Fiji), was repealed in 1999 and the companies were re-consolidated into the FEA at 
substantial cost.54  Moreover, regulatory stre ngthening would help to manage the anticipated increased 
private sector role and ensure cost-recovery tariffs  are set so that the FEA has sufficient funds to 
finance the required investment and to reduce the drain on the government budget.  With this in mind the Government is considering separating the FEA's regulatory functions from its commercial 
activities.  In 2006, Cabinet approved the establishm ent of an independent mega-regulator to cover 
electricity, telecommunications, and water (and sewerage).
55  Five-year tax holidays announced in the 
2009 Budget will apply from 2009 to companies inv esting at least F$250,000 in renewable energy 
projects and power cogeneration. 
60. A Rural Electrification Policy a dopted in 1993 allows any rura l village or settlement to 
request government assistance in electrification.  This can include extension of the FEA grid, 
provision of a stationed mini-grid, or supply of a diesel generator connected by a mini-grid operated 
by a village committee.  The Government provid es 95% of the capital costs (raised from 90% in 
August 2008), which are shared between FEA and the Government.  In 2006, some 60 rural electrification projects were completed at a cost of F$1.9 million.
56  The Government also allowed the 
establishment of Renewable Energy Service Compan ies (RESCOs) under public-p rivate partnerships 
for rural electrification (Renewable Energy Servi ce Companies, 2007).  The Department of Energy 
leases solar home systems through competitive bidding at subsidized  rates to RESCOs, who install 
and maintain them in return for ch arging user fees to recover costs. 
(5) MANUFACTURING  
61. The share of manufacturing in Fiji's GDP, though fluctuating in recent years, fell from 15.6% 
in 2001 to 14.1% in 2006 (Table IV.1).  The sect or accounted for some 22% of paid employment in 
2006.  The main manufacturing activities are beverag es and tobacco (GDP share rose from 2.1% in 
2001 to 4.7% in 2006).  While non-food industries comprise the largest manufacturing segment, its 
share declined substantially from 10.2% to 6.3% duri ng this period, mainly reflecting a fall from 5.8% 
                                                      
 52 Necessary as the approved tariff increases did not a llow prices to be adjusted for rising diesel fuel 
prices.  All institution customers and residential users with monthly electricity bills below F$15 were fully 
exempted from the surcharge (those with monthly bills between F$15-25 were charged half the surcharge).  In 
line with the FEA's requirement to review the surcharge if diesel prices or quantities used varied by over 10%, it 
was lowered to F$0.0497 in November 2006 due to improved hydro flows. 
 53 Secretariat of the Pacific Regi onal Environment Programme (2004). 
 54 A proposed 1998 Electricity Reform Bill pursuant to the FEA Charter, to legalize its structural 
separation under a Director General and to provide a competitive framework, was never passed.  It provided for 100% state ownership of the transmission company and of at least 51% in the other two companies that would 
compete with private companies.  It al so proposed replacing the national electri city tariff with a system that set a 
maximum retail tariff, allowing different charges between locations and consumer groups.  
55 FEA (2006), p. 30.  The first stage of this was for the Ministry of Public Enterprises and Public 
Sector Reform to review the regulatory framework (using a consultant) and to develop best options for 
developing such a regulator.  
56 FEA (2006), p. 15. WT/TPR/S/213 Trade Policy Review 
Page 104 
 
 
to 1.3% in the clothing and footwear share of GDP.  Sugar fell slightly, from 1.8% of GDP to 1.6%.  
Manufacturing exports remain significant, especially  clothing (11.7% of total exports in 2007), 
mineral water (12.7%), and sweet biscuits (2.4%). 
(i) Policy objectives and measures 
62. Fiji's policy objectives are to diversity and e xpand the manufacturing sector by developing 
competitive, high value-added industries, including  by divesting public enterprises and reviewing 
tariffs annually to promote competitiveness.  The authorities indicate that tariff concessions are an 
important government measure towards achieving these objectives.  Overall average applied MFN 
tariff protection for manufacturing increased from 7.7% in  2003 to 10.1% in 2008 (Table III.1).  Fiji 
also uses extensive tax incentives (e.g. income tax and other tax and duty concessions), and non-tax 
incentives (e.g. concessionary credit)  to encourage investment and/or exports in manufacturing, 
including more generous incentives in regional areas (Chapter III). 
(a) Textiles and clothing 
63. Fiji's clothing industry has contracted sharply;  it currently employs around 
5,000-6,000 workers, compared with 18,000 in 2003.  Its fabric requirements are imported from 
Australia and Asia.  It consists  of mainly manufacturers producing on a "cut, make and trim" (CMT) 
basis for Australian customers (or head offices) using mainly knitted synthetics and polycottons imported from Asia.  The CMT market relies heav ily on meeting local-content requirements under 
SPARTECA (at least 45% of the ex-factory price of the garment of Australian and/or Fijian origin), 
which have slowly been eased, including through the introduction and extension of SPARTECA TCF, 
but remain overly restrictive according to Fijian authorities (Chapter II and Chapter III).  While 
SPARTECA assisted Fiji's clothing sector, it focused on obtaining inputs from Australia rather than 
from alternative, cheaper Asian sources, thereby im peding the development of a more internationally 
competitive Fijian industry, especially as the rules ma y also have acted perversely to discourage some 
Fijian manufacturers from improving productivity.
57  SPARTECA TCF also has certain limitations, 
including a 70% threshold for excess local area  content (ELAC), the 35% minimum LAC (MLAC) 
and the exclusion of woollens at the strong insi stence of the Australian industry (Chapter II).  
Repeated requests by Fiji to include woollens and reduce the 70% threshold to 65% have so far been 
rejected.58  However, Australia has agreed to reduc e the 35% minimum MLAC to 25%, from no 
earlier than 2008, subject to Fiji implementing a cr edible audit and compliance programme, which is 
being established. 
64. The largely foreign-owned industry has contract ed due to increasing international competitive 
pressures;  substantially reduced tariff preferen ce margins into Australia and New Zealand under 
SPARTECA, in line with unilateral trade liberalizat ion in those countries;  as well as enhanced access 
to the United States by other competitors.  Th is began with duty-free and quota-free access for 
sub-Saharan African countries, under the African Gr owth and Opportunity Act (AGOA), whereby at 
least one major Fiji operator closed and shifted to Af rica.  More recently, following the expiry of the 
Agreement on Textiles and Clothing (ATC) on 1 January 2005, Fiji has faced increased competition in 
the United States from globally competitive suppliers, such as China and Viet Nam.59  Within eight 
months of the quotas ending, the only Fijian compan y (from Singapore) producing clothing for the 
United States' market had closed;  it accounted for ha lf of Fiji's exports and was its largest garment 
manufacturer.  Fijian clothing exports are now pr incipally to Australia (82% in 2006), and the 
                                                      
 57 Scollay (2005). 
 58 Scollay (2005). 
 59 Safeguard measures introduced by the United Stat es (and the EC) on select ed Chinese exports until 
2009, to protect their own manufacturers, continue to restrict competition in these markets. Fiji WT/TPR/S/213 
 Page 105 
 
 
Government is concerned about the continuing shri nking external market for Fiji's clothing exports;  
exports fell from some F$253 million in  2003 to F$95 million in 2006. 
(b) Beverages 
65. The main factor behind the growth of the Fijia n beverages industry has been the expansion in 
bottled mineral water production, which more than  doubled from 2001 to 2005.  Exports have grown 
rapidly, and accounted for 12.7% of total exports in  2007;  the Government's goal is to raise exports 
from F$80 million to F$100 million by 2011.  Four water bottling companies are in operation.  Mandatory export standards were a dopted for mineral water in 2005. 
(c) Food processing 
66. The Government is involved in processing rice (the state-owned Rewa Rice Ltd) and food 
(state-owned Food Processors (Fiji) Ltd (FPFL)).  F PFL, formerly a subsidiary of the Fiji National 
Trading Corporation (liquidated in 2004), was declared a commercial government company in July 2003 and is required to operate commerc ially and achieve a 10% rate of return.
60  It is directed by 
a board comprizing private directors under the supervision of the Ministry of Public Enterprises.  It mainly bottles, cans or freezes local agricultural prod ucts, but imports most of its materials (cans and 
bottles) and all its tomato paste.  It competes with private processors (e.g. Foods Pacific Ltd and Eagle 
Ridge) and with imports.  
(6) S
ERVICES  
(i) Features 
67. Services make up by far the largest part of the Fijian economy, contributing 72.2% of GDP in 
2006 (up from 68.6% in 2001).  The sector is domina ted by social and community services (18.0% of 
GDP in 2006), transport and allied services (11.8%),  wholesale and retail trade (11.3%), hotels and 
restaurants (8.7%), finance (5.3%), and telecomm unications (3.9%).  It accounted for some three-
quarters of paid employment in 2006, suggesti ng higher labour productivity in services than in 
manufacturing.  The main employment activities are:  community, social and personal services;  wholesale and retail trade, restaurants and hotels;  and transport, storage and communications. 
(ii) GATS commitments and offers 
68. Fiji has not changed its GATS commitments.  It submitted an initial offer to the WTO under 
the Doha Round in 2 003 but has not yet made a revised offer.  Fiji's initial offer, although still limited, 
broadened the coverage of its GATS commitments, which covered onl y hotels, motels, other tourist 
accommodation and restaurants (these commitments we re not improved).  Restricted commitments 
were offered for certain business services (profess ional services:  legal, accounting, auditing and 
bookkeeping, and taxation).  Commitments for othe r professional services (architectural, engineering 
and integrated engineering, and urban planning and landscaping) lim ited foreign equity to 49%.  No 
restrictions were inscribed for other scheduled business services (computer and related services of 
consultancy services related to the installation of computer hardware, and research and development 
services on natural sciences, social sciences and human ities, and inter-disciplinary services);  mode 4 
(temporary movement of people) was unbound.  Fo r scheduled environmental services (refuse 
disposal, sanitation and other environmental services)  foreign firms must form joint ventures with 
national suppliers.  Unlike Fiji's existing commitments, the initial o ffer also introduced extensive 
                                                     
 
 60 Transferring a F$2.9 million loan liability from  NATCO further deteriorat ed FPFL's profitability. WT/TPR/S/213 Trade Policy Review 
Page 106 
 
 
horizontal commitments on modes 3 and 4 for mark et access and on all modes for national treatment, 
which apply to all offered service commitments. 
(iii) Banking, finance, and insurance 
69. The Financial Intelligence Unit (FIU), estab lished formally in 2006 under the Financial 
Reporting Act (FTR Act), 2004 is responsible fo r formulating, implementing, and enforcing 
anti-money-laundering measures.  Fiji introduced additional measures under the FTR Act in 2008 to 
protect it and the financial system from money la undering and terrorist financing activities. These 
include adopting a comprehensive list of financia l institutions covered unde r the FTR Act, and the 
mandatory reporting of cash transactions of $10,000  and above as well as all international electronic 
funds transfers.  The authorities indicate that the FTR Act, now fully implemented, will ensure Fiji 
complies with the relevant international standards,  and its obligations under the UN Security Council 
Resolutions on terrorist financing.  According to the authorities, the shortcomings and weaknesses in 
Fiji's financial system and the FIU, identified by  the World Bank in its 2006 report, have been 
rectified following the introduction of the FTR Regulations, which entered into force in 
January 2008.61  The Government is taking further steps to implement World Bank recommendations 
to strengthen law enforcement and prosecution.  Fi ji also introduced requirements in 2008 to report 
currency holdings taken overseas or brought into  Fiji of F$10,000 and above.  The National 
Anti-Money Laundering Council, Chaired by the Secretary of the Ministry of Justice, plays an instrumental role in Fiji's framework for combati ng money laundering, terrori st financing, and other 
serious crimes by advising on nationa l implementation and enforcement. 
70. To improve competitiveness in the financial sector, the Government is committed to 
establishing a Financial Services Ombudsman to unde rtake dispute resolution and mediation between 
service providers and customers.  Im plementation is planned for 2009. 
(a) Banking 
71. Fiji has five commercial banks.  Four operate as foreign branches (not subsidiaries) of their 
parent company (two from Australia, and one each  from India and Papua New Guinea), and one is 
fully overseas owned (Colonial National Bank).
62  The Pakistani-owned Habib Bank withdrew from 
the market in 2006.  State ownership in the ba nking system ceased in January 2006 when the 
remaining 49% government stake in Colonial National Bank was divested to the Australian 
Commonwealth Bank.63  Foreign banks may enter as branches or subsidiaries or by acquiring a 
domestic bank.  The two Australian bank branches have about 68% of the market in terms of assets.  
Gross assets of banks rose by 12% in 2007 to F$3,957 million. 
72. Commercial banks accept three types of deposits  (savings, cheque, and term).  They 
(including foreign bank branches and credit unions) are regulated by the Reserve Bank of Fiji 
(Banking Act, 1995) to meet its statutory requi rements for promoting a sound financial structure 
                                                      
 61 World Bank (2006a). 
 62 The Bank of South Pacific Ltd bought out the Pakistani branch operations of Habib Bank Ltd in 
December 2006.  On 1 April 2007, the Reserve Bank exercised its Cont rollership powers under the Banking Act 
to take control of the operations of the Asset Management Bank Fiji Ltd (AMB), with a view to winding down 
its operations.  The Government-owned AMB was established in 1998 to manage the non-performing loans of 
the National Bank of Fiji.  The AMB’s ratio of cash reco veries to transfer values was relatively low (below 
30%), and resolving a major bad loan to a resort project has been substantially held up by the Native Lands 
Board Trust. 
 63 A majority (51%) of the insolvent National Bank of Fiji was purchased by Colonial Fiji Life Ltd in 
1998.  These operations were then bought by the Commonwealth Bank in 2006.    Fiji WT/TPR/S/213 
 Page 107 
 
 
(Reserve Bank of Fiji Act, 1985).64  In recent years, the Reserve Bank's Financial Institutions 
Department has made substantial efforts to st rengthen regulator y supervision, including releasing 
guidelines developed in accordance with the Basl e supervisory recommendations.  Liquidity-risk 
management requirements for ba nks were released in June 2005 (Banking Supervision Policy 
Statement No. 9A);  "fit and proper" require ments in August 2007 (Banking Supervision Policy 
Statement No. 10);  and minimum requirements on corporate governance in October 2007 (Banking Supervision Policy Statement No. 10).  Banks must also meet minimum disclosure requirements (Banking Supervision Policy Statement No. 5A of July 1999) and certain requirements relating to 
large credit exposures (Banking Supervision Polic y Statement No. 2 of March 1998).  Revised 
guidelines for loan classification and provisioning fo r impaired assets were released in October 2001 
and are being revised to comply with the Intern ational Reporting Standards.  All banks, including 
foreign branches, must have a minimum "local" capital of F$2 million and a minimum weighted capital (Tier I and Tier II) adequacy ratio of 8%.  In 2007, banks averaged an adequacy ratio of 
13.2%;  non-performing loans amounted to F$52.5 million,  equivalent to 2.1% of total loans.  The 
Reserve Bank conducts on and off-s ite examinations of banks to ch eck on compliance with regulatory 
and prudential requirements. 
73. Interest rate margins on deposits and loans rema in relatively wide;  these are an indicator of 
the banking sector's competitiveness, efficiency, and risk profile along with the economy's degree of intermediation.  Such spreads (based on bank savin gs deposit rates and average lending rates) have 
remained at around 7% since 2000.  A new payments  system in the form of a real time gross 
settlement system (FIJICLEAR) went "live" in August 2007 and was la unched officially in 
mid-October 2007. 
74. The Reserve Bank's bank licensing requirements do not differentiate between domestic and 
foreign companies.   
(b) Insurance 
75. The insurance industry, including brokers a nd agents, is regulated by the Reserve Bank 
(Insurance Act, 1998).  There are seven general in surers:  two are Fijian owned (eight in 2007)
65;  and 
the rest are incorporated subsidiaries in Fiji of  overseas parent companies, one each from India and 
New Zealand and the rest from Australia.  Two life insurance companies operate, both are foreign owned;  one is a Fijian-incorporated Australian subs idiary and the other a foreign branch from India.  
Gross assets of insurance comp anies totaled F$825.8 million in 2007 and net premium income was 
F$163.7 million (53.0% from general insurance). 
76. The Reserve Bank conducts on- and off-site s upervision and has increased its prudential 
regulation of insurance companies.  A number of po licy guidelines and statements have been issued, 
including on solvency requirements (2002), co rporate governance guidelines (2003), asset investment 
management policy (2004), reinsurance manage ment strategy (2007), and on "fit and proper" 
requirements, including of brokers (May 2008).   Life insurance companies mu st hold a surplus of Fiji 
assets over liabilities of at least F$1 million.
66  Those incorporated in Fiji must also have paid-up 
                                                      
 64 Since February 2003, the Reserve Bank has also provided oversight of the state-owned Fiji 
Development Bank (FDB), at the request of the Minister of Finance.  The FDB withdrew its application for a 
banking licence in November 2005. 
 65 Two companies (one Fijian owned and one an Australian owned subsidiary) specialize in medical 
and term life insurance.  Under a scheme approved by the Reserve Bank in 2001, FAI Insurance (Fiji) Ltd is 
being wound up by QBE Insurance (Fiji). 
 66 Or, if greater, the sum of 5% of the amount of ne t liabilities up to net liabilit ies of F$100 million plus 
2.5% of the amount of net liabilities that exceed F$100 million.   WT/TPR/S/213 Trade Policy Review 
Page 108 
 
 
capital of at least F$1 million.  General insurance companies, including foreign branches, must hold a 
surplus of Fiji assets over Fiji liabilities of F$1 million, or 20% of net premium income during the last 12 months, or 15% of net outstanding claims provision,  whichever is the greatest;  Fijian incorporated 
companies must have paid-up capital also of at least  F$1 million.  In 2007, the solvency surplus over 
the required solvency margin totaled F$102.9 million.   All insurers had solv ency surpluses in 2007, an 
improvement on 2006.  More recent improvements have been made following a review of the 
prudential supervision and licensing regime in 2007 against the Core Principles determined by the 
International Association of Insurance Supervisor s.  The Reserve Bank is currently working to 
develop a strategic risk management policy and polic y on assessing the role of actuaries for insurance 
companies. 
77. The Reserve Bank allows insurance to be placed  abroad, and issued a policy statement on this 
in October 2002.  To obtain permission the app licant must show that no locally licensed business 
provides the service or if so that it should be allowed in the "public interest", or that the local premium 
is at least 15% above the offshore premium.  An  overseas insurance tax of 4.65% applies.  The 
Reserve Bank is reviewing its 2002 policy.  In 2007, offshore insurance placements totalled 
F$23.0 million, mainly covering term life, aviation, comprehensive liability, and material damage and 
business interruption. 
78. Licensing requirements do not differentiate betw een local and foreign companies wanting to 
operate in Fiji.  Placement of local insurance business offshore must be approved by the Bank. 
(c) Capital market 
79. Fiji's capital market is thin and underdevelope d (and thus susceptible to imperfections).  It 
consists primarily of the stock exchange, unit tr usts and government bonds.  It continues to be 
regulated by the Capital Markets Development Au thority (CDMA;  Capital Markets Development 
Authority Act, 1996;  the Capital Markets Develo pment Authority Rules, 1997;  and the Unit Trust 
Act, 1997).  CDMA annually licenses market intermed iaries such as brokers, dealers, investment 
advisers, unit trusts and their representatives,  securities exchanges, and central depositories.
67  Along 
with the Ministry of Finance, it plans to establish a Committee to progressively review legislation 
affecting capital markets.68 
80. The Fijian stock exchange is the South P acific Stock Exchange (SPSE).  Currently 
16 companies are listed, the largest being Amalgama ted Telecom Holdings Ltd (ATL), which is also 
one of Fiji's largest taxpayers.  Traded securities are shares, government and statutory authority bonds, 
treasury bills, statutory authority promissory notes,  Reserve Bank notes, and tradeable term deposits.  
There are no derivatives or futures markets.  Tr ading in securities is governed by the SPSE Business 
Rules 2000.  Foreign companies listing on the SPSE must be listed on a recognized overseas stock exchange, establish a Fiji share register, have 200, 000 shares (less if approved by SPSE) held by at 
least 50 Fiji residents, and obtain CDMA approval. 
81. The superannuation industry consists only of the Fiji National Provident Fund (FNPF), 
supervised by the Reserve Bank since 2004.
69  The Fund's gross assets are almost the same as the 
banking sector and it has a major role in mobilizing savings.  Investments continued to dominate its 
asset base.  It invests mainly in government securiti es (59% of FNPF's total investments were "noted" 
in December 2007), statutory bodies, and local author ities (14%).  Private-sector investment is mainly 
                                                      
 67 Unit trusts must be approved by the Minister of Finance.  There are six licensed unit trusts in Fiji. 
 68 Ministry of Finance and National Planning (2007). 
 69 Prior to the enactment of the Insurance (Amendment) Act, 2003, the FNPF was supervised by the 
finance ministry. Fiji WT/TPR/S/213 
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in tourism-related buildi ng and construction (6%).  Although its po licy is to invest some 15% abroad, 
the FNPF's foreign investments are subject to Rese rve Bank recall.  In 2006, the FNPF was requested 
to recall a large proportion of its foreign investment s, given Fiji's low level of foreign reserves.  
FNPF's annual return on investment was 5.6% in December 2007, up from 5.4% in 2006.  The 
Reserve Bank has strengthened prude ntial regulation and supervision of the FNPF.  It conducted its 
first full on-site investigation in 2006 and the second in May 2008.  Both examinations adopted a risk-
based approach to assess safety and soundness.  The Government aims to deregulate the 
superannuation industry to promote competition, wide n choice, and to improve members' returns. 
(iv) Telecommunications 
82. Fiji's telecommunications market has expande d during the review period, especially for 
mobile services.  For a small island nation, Fiji ha s a relatively reliable and efficient digitalized 
telecom system with access to the Southern Cr oss undersea fibre optic cable (connected in 
November 2000) that links New Zeal and, Australia, and North America.70  Fixed-line penetration 
remains low but increased from 11.9% in 2002 to 14.3% in 2008, while mobile-phone penetration 
rose from 11.0% in 2002 to over 75.0% in September 2008;  almost 85.0% of telephone subscribers in 
2008 had mobile phones (48% in 2002).71  Through the progressive deployment of wireless CDMA 
systems into the rural areas over the last five years,  it is now possible to provide access via this system 
to 80% of the population at a connection charge of $46 for basic mobile prepaid telephone service 
within one of the three major regional zones (Central  Eastern, Northern and Western).  Access to data 
services up to 256 kbps is also opti onally available.  The average cost  of providing satellite access to a 
remote community with no alternative means is F $17,000.  About 95% of the population has coverage 
via the national mobile network.  While  Fiji's mobile call tariffs were among the highest in the world, 
the authorities indicate they are now very competitive and compare well with other countries having similar GDP per capita, as well as with Australia and New Zealand.
72 
83. As part of the Government's plan to make F iji the South Pacific telecom hub within ten years, 
Fiji’s telecom industry was fully deregulated in  January 2008 (Telecommunications Promulgation, 
2008).  This ended the three telecommunication monopolies previously protected by 25-year 
exclusivity licences until 2014, and implemented by the Deed of Settlement the Government signed 
with the three telecom operators in January 2008 to  dismantle the exclusivity arrangements.  Telecom 
Fiji Ltd (TFL), 49% state owned (51% owned by th e FNPF) through its parent holding company ATL 
had a monopoly on domestic voice (local and long-distance) and data transmission services.73  Fiji 
International Telecommunications Ltd (FINTEL) , 51% owned by ATL and 49% by Cable and 
Wireless Ltd, had the monopoly on international voice  and data transmission services.  Vodafone Fiji 
Ltd, 51% owned by TFL and 49% by Vodafone International Ltd, was the sole provider of mobile 
services under a "licence" assigned from TFL.74  The licence’s validity was legally challenged in 2006 
                                                      
 70 An alternative route for international connections is the Intelsat Ocean Regi onal (POR) satellite.  A 
VSAT network has also been constructed recently to  provide access to rural and remote communities.   
 71 ITU online information, Telecommunications Statistics.  Viewed at: http://www.itu.int/ITU-
D/icteye/Indicators/ Indicators.aspx#. 
 72 ITU (2004).  Such charges reflected high intercon nection charges with FFL of F$0.60 for local calls 
and of US$0.44 for long distance.  Vo dafone could not deal di rectly with FINTEL for in ternational service but 
had to go through TFL.  
73 The Government created ATH in March 1998 to hold all its shares in TFL.  The purchase agreement 
required the FNPF to cooperate with government in removing all exclusive rights (specifically mentioning 
Vodafone, FINTEL, and certain TFL connections), by 1 December 2003, which eventually  occurred in 
January 2008. 
 74 All operators had to use the TFL domestic network to terminate all calls directed to national fixed 
line subscribers, and TFL shared revenues with FINTEL (47%) and Vodafone for terminating international and mobile calls, respectively.  This enabled TFL to maintain below-cost tariffs on local calls and line rentals due to WT/TPR/S/213 Trade Policy Review 
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and 2007 but Vodafone an d the Government compromised these arrangements as part of the mediated 
industry deregulation in November 2007. 
84. As part of the Deed of Settlement with TFL,  FINTEL, and VFL, the Government extended 
certain temporary concessions to them in retu rn for removal of the exclusive privileges.75  T h e  
settlement agreed to the revocation of licences grante d to them in return for new licences being issued 
before the entry into force of the 2008 Te lecommunications promulgation in August 2008.76  At that 
time a second mobile licence was issued to Digicel Fiji Limited, thus ending VFL's 14-year monopoly.
77  Digicel is rolling out its national netw ork and commenced services in October 200878;  It 
is already advertising as having the greatest mobile c overage.  There are also other re-sellers of VFL 
services e.g. Inkk Mobile.  Other markets facing comp etition include Internet service provision, VoIP, 
prepaid mobile services, and provision of facilities. 
85. Under the 2008 Promulgation, the Ministry of Commerce, Industry, Trade and 
Communications retained responsible for policy formulation and implementation, including on 
policies covering fiscal incentives, investment promoti on, and rural development.  It must also review 
these policies at least every thr ee years.  The legislation provides for the establishment of an 
independent body, the Telecommunications Authority of Fiji (TAF), to regulate the sector, including 
issuing licences and technical standards (functions previously performed by the Department of Communications).  Since the promulgation commenced, work has progressed on establishing and operationalizing the TAF.  The Department of Co mmunications will continue to provide necessary 
administrative support to the Office of the Minist er, in respect of the Minister's functions and 
responsibilities as provided for under the 2008 Promulgation.   An open licensing system has been 
adopted with an unrestricted number of licences and no discretion in issuing them (except for 
mobiles) on a first-come first-served basis, subject to limited requirements.  The Fiji Electricity Authority (FEA) has applied for a licence to enable it to lease access capacity in their fibre optic link 
across the main island Viti Levu.   Licences are for a maximum 15 years.  Importers of 
telecommunications equipment, including radio tr ansmitting devices, must have an import permit 
from the Authority. 
86. An "economically reasonable and technically feasible" universal service scheme is to be 
established to provide all Fijians "reasonable" access on an equitable and affordable basis to basic 
telephone services, using either fixed or mobile or  any other technology;  public call offices and 
shared phones;  internet services;  and any other ser vices specified by the Minister.  Areas eligible for 
universal service benefits must be declared, where costs prevent services from being provided on a 
"reasonable" commercial basis.  While the Au thority may determine that a licensee having a 
                                                                                                                                                                    
 
cross-subsidies from in ternational and mobile calls.  The introduc tion of market competition necessitates the 
removal of such subsidies.  The 2008 Promulgation provid es that TFL access deficit costs due to below-cost line 
rentals will no longer be applicable in  2011 (three years after its commencement). 
 75 These were:  not to permit any new operator or licensee entitled to operate mobile services, other 
than Vodafone, to offer such public commercial services until end-September 2008;  subject to TFL continuing 
to make significant investment into broadband infrastructure used for IP excluding copper cable ("broadband 
infrastructure investment"), it will be permitted to nego tiate access contracts with other service providers on a 
commercial basis and will not, for at least three y ears from the commercial launch of broadband service 
provided through the broadband infrastructure investment, be compelled to permit access to such broadband infrastructure otherwise than on a commercial basis, so long as it does not act anti-competitively;  and no licence 
will be issued for 18 months to compete with FINTEL's international gateway rights. 
 
76 The three licences were issued in January 2008. 
 77 Four companies meeting the selection requirements were invited to bid for two mobile licences in 
February 2008;  Digicel was the sole successful tenderer. 
 78 Digicel is required to achieve 85-90% population coverage within two years, and is committed to 
divesting a share of ownership domestically. Fiji WT/TPR/S/213 
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"substantial degree of power" in a telecommunicati ons market must bear a "reasonable" universal 
service obligation, the provision of universal service ob ligations is to be tendere d.  Providers of such 
obligations may, with the Authority's permissi on (in consultation with the Commerce Commission), 
recover identified costs not recovered from the te nder price by charging higher interconnection rates 
for terminating services in eligible areas, adjusting regulated retail prices applying within and outside 
the eligible universal service area, and by an y other agreed means, including market-based 
arrangements.  Providing universal services is to  be funded from the Universal Services Fund, 
financed by levies on licensees of up to a maximum prescribed percentage of gross revenues net of 
settlement charges paid to other levy-paying licen sees.  The maximum percentage being proposed is 
0.5%.  The Fund has started collecting levies. 
87. The Commerce Commission, in consultation with the Authority, regulates certain aspects of 
the telecommunications sector:  access agreements and resolution of associated disputes;  prices;  restrictive trade practices and agreements;  authori zations and notifications in  respects of acquisitions 
of shares and other restrictive trade practices and agreements;  misuse of market power;  access and interconnection;  and consumer protection (C ommerce (AMDT) Act, 2007).  The Commission can 
only increase the regulatory burden wh ere the benefits "reasonably" anticipated to users outweigh the 
burden "reasonably" expected to be placed on licensees.  It must review areas where telecommunication markets are considered anti-co mpetitive, identify licensees with "substantial" 
market power (as defined in the Fair Trading Decree) , and take appropriate action, including directing 
them to provide a reference interc onnection offer to other licensees on request, subject to its approval, 
and for such agreements to be published on th e Commission’s website.  No such reference 
interconnection offers have yet been filed, but th e Commission has successfully mediated one interim 
interconnection arrangement.  It may also require licensees with "substantial" market power to offer 
certain forms of indirect access or access to fac ilities to other licensees if there is a "reasonable" 
likelihood of demand for alternative telecomm unications licences, it is necessary to introduce 
competition, and the costs of providing such ser vices are "fairly distributed" among the licensees 
providing the service and those receiving it.
79 
88. Licensees must grant timely non-discriminatory interconnection to other licensees to enable 
"end-to-end" operability and effective communication by customers of different networks, on terms 
consistent with those provided to itself or affiliat es.  Interconnection charg es are to reflect "direct" 
costs plus a "reasonable" contribution to fixe d and common costs of interconnection.  The 
Commission may, upon request, determine the existen ce of an access deficit if a licensee's retail 
revenue from connection and line rental charges fo r fixed lines is below the costs of providing 
connection and access lines due to retail price regulati on.  Such licensees are permitted to charge all 
other licensees an access deficit charge, whereby all licensees contribute to the access deficit in 
proportion to their respective gross revenues in the previous year, calculated net of settlements on a 
value-added basis.  This effectively allows c ontinued cross-subsidization of domestic calls by 
excessive international and mobile call charg es.  The Commission must publish annually access 
deficit charges from each licensee and their individual gross revenue shares.  It is to revise its retail 
price controls on telecommunication services, including tariff re-balancing, aimed at progressively eliminating access deficit charges over three years i. e. in 2011.  Price cap regulations are being 
challenged by Vodafone. 
89. The authorities indicate that the Government currently has no plans to divest government 
holdings in any telecommunication company. 
                                                     
 
 79 Indirect access means a method of access whereby co nsumers are able to select or pre-select the 
services of interconnected licensees. WT/TPR/S/213 Trade Policy Review 
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(a) Information technology 
90. Internet penetration rates remain very low in  Fiji;  1.6% in 2007 (about half with broadband), 
up from 0.9% in 2002.  The Government established the IT Advisory Council in 2001.  The Fiji 
National ICT Council was responsible for formula ting and implementing the National Strategy Plan 
2003-05, which had the overall goal of achieving uni versal access to internationally competitive 
information and communication technology services.  In June 2003, Cabinet endorsed Fiji's Electronic 
Commerce Policy Framework, which identified sev en key issues to be addressed for a safe and 
efficient online system:  information, payment, re dress, jurisdiction, privacy, price, and speed of 
internet usage.  E-Fiji was to have been establis hed by the Advisory Council in 2006 to implement 
targeted policies to accelerate ICT growth.   Following review of the E-Fiji policy in 2007, cabinet 
endorsed the Electronic Transactions Promulgati on 2008 in March (gazette d in November 2008), 
aimed at:  recognizing the validity of and promoti ng the development of electronic communications in 
commercial and non-commercial dealings, includi ng with government entities, and removing 
uncertainty about using electronic methods to satis fy various legal require ments over documents and 
record keeping.   The IT industry benefits from substantia l taxation concessions , with additional 
measures announced in the 2009 Budget introduced from 2009 (Chapter III). 
91. Several Internet Service providers (ISPs) were  licensed in 2002 to compete with the state 
entity Connect (owned by ATH and an offshoot from TFL).  However, due to interconnection 
difficulties the first independent ISP, Unwired, did not commence until October 2005;  six other licensed ISPs are still not operational.
80  A third major ISP, Kidanet, began services in 2007.  
Bandwidth costs, which were internationally high, have dropped by more than 60% and are expected 
to fall further as more competing service pr oviders enter the now liberalized markets.81 Voice over 
Internet Protocol (VoIP), initially (like call-back) deemed illegal in an atte mpt to support FINTEL's 
high international call prices, is now allowed by licensed providers, with minimal regulation under a 
policy approved by Cabinet in June 2007.82  The VoIP market has incr eased as more service providers 
have been licensed and with the enhanced access to  Internet-based VoIP services via licensed ISPs.  
The licence holder must be a Fiji resident or citizen or a Fiji company that "over time" will have 
majority Fijian control.  
92. E-Government is to be expanded by enc ouraging delivery of services online.  An 
e-Government Plan was adopted in 2003 targeting 25 online applications by 2006.83  The Government 
has secured a US$20 million loan to finance e-Government development.  Progress is slow and 
two online applications are currently being tested.   
                                                      
 80 While Connect had no ISP licence itself it claimed to have an exclusive ISP license until 2014 by 
virtue of its parent firm's (TFL) domestic telecom licence.  Under Connect's interconnection arrangement with 
TFL, charges were set according to volume.  Connect could not procure international bandwidth directly from 
FINTEL but had to deal with TFL, and could not offe r high speed access through fi xed wireless without TFL's 
approval.    
81 Transparency in bandwidth pr icing is lacking and it is unclear whether Connect can obtain 
bandwidth directly from FINTEL, which is cheaper, or must go through the more expensive TFI (which in turn 
procures international bandwidth from FINTEL).  Various customers seem to be charged different prices (ITU, 2004). 
 
82 Government of Fiji (undated a and b).  The illegality  of call-back and VoIP was ineffective.  A local 
firm, TELPAC, successfully marketed call-back facilities, and VoIP use for international calls expanded. 
 83 Government of Fiji (2003). Fiji WT/TPR/S/213 
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(b) Audiovisual services 
93. Fiji Television Ltd's exclusive licence to provide free-to-air and terrestrial-based pay 
television channels ended in 2004.  Four more  companies (MAI TV Ltd, Pacific Broadcasting 
Services Ltd, Talei Vision, and Channel 2 Fiji Ltd)  have each been granted licences to provide 
free-to-air television following a tendering process.84  The licences were conditional on the stations 
providing more local content and children's progr ammes.  MAI TV and Channel 2 Fiji have begun 
free to air broadcasts in Suva and Nadi.  MAI TV is already featuring local programmes and, as tendered, will broadcast 50% local programme content by 2015 to meet the Government's stipulated 
requirements.  Pay television using coaxial cable is not available.  The audiovisual industry benefits 
from generous taxation concessions, and additio nal measures announced in the 2009 Budget 
(Chapter III). 
94. The Fiji Broadcasting Corporation operates six ra dio stations;  the Government buys national 
public broadcasting time on two of these.  Other comm ercial radio stations also operate. According to 
the authorities, there are no restrictions on foreign equity. 
95. Rules issued in September 2005 allow for limit ed media cross-ownership subject to licence 
limits, directorship restrictions, limits on foreign control and ownership, sale of public shares, and 
other qualifications.
85  A foreigner must not be able to exercise control of a commercial television or 
radio broadcasting licence, and two or more foreigners  may not have equity or directorship interests 
exceeding 20%.  For subscription television broadcas ting licences, a foreigner may not have company 
interests exceeding 20%, and two or more foreigne rs may not have such interests exceeding 35%.  
Investments by joint ventures/partnerships should be made through the local entity and effective 
control should remain in local hands.  
(v) Transport 
96. The Ministry of Works and Transport (formed in 2002 as the Ministry of Transport, Works 
and Public Utilities) is responsible for policy form ulation and implementation, including on regulatory 
arrangements, in all modes of transport.  Its main goal is to provide a safe, efficient, affordable, 
widely accessible, and environmentally sustainable integrated transport system.  The Ministry's 
Transport Planning Unit coordinates transport pl anning, monitors policy and developments, and 
provides strategic advice guided by inputs fro m external reference groups comprising key 
stakeholders, especially the National Transpor t Coordinating Committee (NTCC) and National 
Transport Consultative Forum (NTCF). 
(a) Road 
97. Fiji has a good road transportation system with  all major cities and towns connected.  The 
feasibility of developing a mass transit system along the Suva-Nausori Corridor is being examined.    
98. The Land Transport Authority (LTA), established as a body corporate under the Land 
Transport Act, 1998, regulates road transport, in pa rt to ensure equitable and affordable fares for all 
forms of public transport.  These services include taxis, minibuses, and buses, as well as their rental 
and hire.  The LTA issues three-yearly Public Se rvice Vehicle (PSV) permits.  Five-yearly road PSV 
permits apply to bus routes and freight carriers.  An indefinite freeze on issuing all PSV permits 
                                                      
 84 Fiji Government, Press Release, More local content and children's programmes for TV , 
11 September 2007.  Viewed:  http://www.fiji.gov.fj/publish/page_10023.shtml. 
 85 Fiji Government, Press Release, Government Policy on Cross-Media Ownership , 14 September 
2005.  Viewed at:  http:/www.fiji.gov.fj/publish/page_5408.shtml. WT/TPR/S/213 Trade Policy Review 
Page 114 
 
 
introduced in July 2006 was revoked in January 2008.86  Maximum taxi and bus fares are regulated.  
In lieu of increased bus fares in light of rising fuel  costs, the Government extended a 10% subsidy to 
bus operators in July 2008.  They also benef it from long-standing concessions and rebates, including 
an F$0.18 cents per litre fuel concession and ta riff/tax concessions on new chassis/engines and 
identifiable fixtures and components.87  The revenue forgone from these concessions/rebates totalled 
F$2.6 million from January to May 2008.  A road user levy, differentiated by vehicle category and 
classification, announced in the 2009 Budget, will appl y from 2009 on all vehicles;  it will finance an 
Infrastructure Rehabilitati on and Development Fund. 
(b) Maritime transport 
99. The Fiji Islands Maritime Safety Administration (FIMSA), a Department of the Ministry of 
Works, Transport and Public Utilities, is responsible for all maritime sa fety matters within Fiji waters.  
It monitors compliance with international mariti me conventions and regulates inter-island shipping 
services through licensing, in accordance with the Marine Act 1986 (amended in June 2005 to give 
effect to the re-organization of sea ports), and subsidiary Regulations.   In September 2008, Cabinet 
approved the Sea Ports Management Regulation 2008, to ensure the effective implementation of the 
Sea Ports Management Act 2005 by the Fiji Ports Co rporation Limited.  The Regulations cover, inter 
alia, licensing of business operations within port areas and contractual obligations with the Fiji Ports 
Corporation Limited.  
100. Under the current licensing system for inter-island and coastal shipping services the FIMSA 
licenses vessels on a route basis and applies an econom ic needs test in deciding whether to license 
additional carriers.   Licensed operators must be Fijian, in cluding locally registered entities with 
majority local ownership managed by Fijian citizens.   Boat owners wishing to obtain a licence have 
priority over chartered operations.  Cabotage is prohibited but the FIMSA may issue a permit enabling 
foreign vessels to engage in coastal and inter-isl and shipping if no domestic equivalent services are 
available and it is considered to be in the "public interest."  Freight rates are set by the Prices and 
Income Board, although there has been a recent proposal to shift this regulatory function to the 
FIMSA. 
101. A Sea Route Licensing System, consisting of Class A licences (operators servicing outer 
islands on designated authorized traditional routes) and Class B licences (operators servicing tourists) 
was to have been introduced from January 2008 but has been delayed largely because it has been 
opposed by a major shipping operator.88  The authorities indicate that the proposed sea route licensing 
system would result in less competition.  A Shi pping Franchise Subsidy Scheme, introduced in 2003, 
provides regular and reliable shipping services on non-viable routes (Lau, Lomaiviti, Kadavu, and 
Rotuma).  The services are provided by the Fiji Shipping Corporation Ltd by contracting out to commercial operators.  The contracts are re-let ever y three years, with operators tendering on the basis 
of the amount of subsidy needed to run the service;   the total subsidy increased from F$1.5 million in 
2005 to F$2.3 million in 2006.  There has been a substantial increase in shipping services under the 
scheme.
89  The company also runs the small, loss-ma king government fleet operations, consisting of 
                                                      
 86 Fiji Government, Press Release, PSV permits to be issued – Natuva , 18 January 2008.  Viewed at:  
http://www.fiji.gov.fj/pub lish/page_11031.shtml. 
 87 Fiji Government, Press Release, Government to provide subsidy to bus operators , 3 July 2008.  The 
concessions/rebates provided by Government to the bus industry amounted to F$2.6 million for the period 
January to May 2008.  
88 Fiji Government, Press Release, New shipping scheme to be implemented – Korovulavula , 
17 October 2007.  Viewed at:  http://www.fiji.gov.fj/publish/page_10358.shtml. 
 89 The number of shipping trips rose by 83% in 2006 over 2005;  passenger numbers were up by 123% 
and cargo volume by 195%. Fiji WT/TPR/S/213 
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specialized vessels to carry government cargo at non- commercial rates;  at times passengers and 
private cargo may also be carried at these rates.  Cabinet has approved the restructuring of the FIMSA, including making it a statutory authority, ai med at enabling it to better meet international 
commitments, and by giving it autonomy to reduce the amount of red tape. 
102. Fiji has undertaken significant port reforms since its  last Review (Charter on Port Reforms).  
Suva, the main port, handles about half of Fiji's sh ipping cargo.  Government is intending to construct 
another cargo-only wharf next to Rokobili Container Park in Suva to free up Kings Wharf for use only 
by cruise ships.
90  Most sugar and timber exports are fro m Lautoka, while Levuka is the main tuna 
fishing port.  These ports, and Malau, are manage d by the state-owned Fiji Ports Corporation Ltd 
(FPCL), created in August 2004 (formerly the Maritim e and Ports Authority of Fiji Islands (MPAF)), 
under the Sea Ports Management Act, June 2005.  This made the FPCL subject to the Public 
Enterprise Act.  Malau is owned and operated by the Fiji Sugar Corporation to ship bulk sugar and 
molasses;  and Savusavu is a declared port of en try under the Customs Act and does not fall under the 
FPCL's control, although it is used by internationa l vessels, especially cruise ships.  Dues payable to 
the FPCL are subject to review by the Commerce Commission.  Ports Terminal Ltd (PTL), formed in 
1997 as a government-owned commercial stevedoring company with some port management 
functions, is to be a subsidiary of the FPCL until its stevedoring and cargo-handling activities are 
privatized.91  Competition in providing stevedoring servi ces is to be introduced gradually and once 
FPCL is well established PTL will be privatized through an employee buyout or any other 
restructuring option recommended by Government.92  PTL's rates and charges are subject to review by 
the Commerce Commission.  
103. Some marine services provided by the FPCL, such as tug boat services, are contracted to 
private firms. 
104. The state-owned Fiji Ships and Heavy Industries Ltd repairs vessels.93  It is a Government 
Commercial Company (GCC) established under the Pub lic Enterprises Act in May 2001 to administer 
slipway and shipyard assets.  These were previously  owned and operated by Sh ipbuilding Fiji Limited 
(SFL), a Government minority-owned entity that we nt into receivership in 1999.  Subsequently, 
Government successfully bid F$6.25 million to  acquire the assets from the receivers and re-
established the slipway and shipbuilding activities by funding a refurbishment of FSHIL assets in 
2001/2002 costing F$2.85 milli on.  The Government is planning to secure a strategic business partner 
for FSHIL in order to increase its long-term commercial viability. 
(c) Air transport 
105. Air transport is vital to the Fijian economy;  its  importance is further increased by the tourist 
sector's reliance on overseas air travellers.  The Ministry of Foreign Affairs, International 
                                                      
 90 It will cost F$500 million and is expected to be completed by 2012 (Fiji Government, Press Release, 
$500 million development earm arked for wharf development , 23 January 2008.  Viewed at:  http://www.fiji. 
gov.fj/publish/page_11057.shtml). 
 91 Such privatization is to enhance the opportun ities for "resource owners" within a port, and PTL 
employees to participate in ownership on "fair and equitable" terms;  promote competition and improved standards in providing stevedoring and related services;  and to realize a "fair" return to government. 
 
92 Minister for Public Enterprises and Public Sector Reform (2005). 
 93 Its last ship was built in the late 1990s, and it repairs cruise ships, roll-on roll-off and fishing vessels.  
It needs an estimated capital injection of US$78 million to  expand and modernize its slip facilities to take larger 
vessels ( Islands Business  online information, "Shipping: Fiji Ships Needs US$78 million to Keep Afloat", 2007.  
Viewed at:  http://www.islandsbusiness.com/archives/ fiji_business/index_dynamic/containerNameToReplace= 
MiddleMiddle/focusModuleID=17544/overi deSkinName=issueArticle-full.tpl). WT/TPR/S/213 Trade Policy Review 
Page 116 
 
 
Co-operation and Civil Aviation, through its Departme nt of Civil Aviation, is responsible for policy 
formulation and implementation.  Fiji is yet to become a member of the 2003 Pacific Islands Air 
Services Agreement (PIASA), which en tered into effect in October 200794, which aims to create a 
single pacific aviation market involving 3rd, 4th, 5th, and 6th freedoms within 30 months.  According to 
the authorities, while Fiji is working towards membership, its cautious approach reflects the 
agreement's implications for Fiji's local aviation in dustry, and more importantly its national airline, 
Air Pacific Limited.  Fiji belongs to the Pacifi c Aviation Safety Office, which opened in 2002. 
106. The Department of Civil Aviation negotiates b ilateral air service agreements.  Fiji has these 
agreements with 27 countries.  Of the seven that ar e operative, four operate scheduled airlines to Fiji 
(Air New Zealand, Air Korea, Air Niugini, and To ngan Airlines);  the others (Air Vanuatu, Solomon 
Air, and Our Airline (Nauru)) fly ad hoc  to Fiji.  Qantas operates a code-share arrangement flying to 
Fiji with Air Pacific.   The agreement with Tonga was to provide  increased reciprocal rights for Air 
Fiji and Tongan Airlines in March 2008, including ra ising route capacity on the Nadi/Fuamotu route 
from 350 to 1,000 seats each way per week and providing for multi-airline destinations.95  T h e  
Minister responsible for Civil Aviation, throu gh the Department of Civil Aviation, licenses 
international airlines operating to Fiji as well as fo reign registered airlines/aircrafts operating air 
services within its domestic airspace.  The Air Transport Licensing Board licenses domestic air services.  All licensing decisions of the Board ar e made in accordance with the Civil Aviation 
(Licensing of Air Services) Regulations, Cap.174.  In 2004, Government approved air subsidies to 
airlines operating on identified uneconomical rout es;  the subsidy was based on an open one-year 
tender to all licensed air operators in Fiji.  Th e amount of the subsidy was some F$0.3 million in 
2007.  Eight uneconomical routes are subsidized (V anuabalavu, Cicia, Moala, Koro, Gau, Lakeba, 
Ono-i-Lau, and Rotuma). 
107. Fiji's domestic aviation laws prohibit cabotage.   However, in practice cabotage is unfeasible 
because traffic volume is low and there is only one ot her international standard airport (Nausori).  
108. Fiji's national airline, Air Pacific, runs domestic and international services.
96  I t  i s  5 1 %  
government-owned (Qantas has 46.05% equity and the rest is held by other shareholders, including 
Air New Zealand (1.94%), Kiribati (0.27%), Tonga (0.27%), Samoa (0.12%), and Nauru (0.08%).  A 
Cabinet Task Force is currently reviewing the op erations of Air Pacific Limited, including the 
Government's inability to exercise rights as a majori ty shareholder and the lack of direct routes into 
South East Asia, the Middle East, and Europe .   The review is in its final stages.    
                                                      
 94 Although rejected by Air Pacific, it has been es timated that if Air Pacific closed down due to 
competition from PIASA, Fiji would still benefit by US $0.8 million annually, in the long run, since the 
estimated annual loss of US$31.5 million to Fiji from its closure is below the annual benefits of 
US$32.3 million from having other airlines flying to Fiji ( Islands Business  online information, "Aviation: Fiji 
Regime Probes National Carrier, Future of Air pacific hangs in the balance", 2007.  Viewed at:  http://www.islandsbusiness.com/islands_business /index_dynamic/containerN ameToReplace=MiddleMiddle 
/focusModuleID=18046/overideSk inName=issueArticle-full.tpl). 
 
95 Fiji Government, Press Release, Fiji supports Airlines Tonga – Korovulavula , 10 September 2007.  
Viewed at:  http://www.fiji.gov.fj/publsih/page_10009.s html.  The Memorandum of Understanding signed in 
March 2008 agreed to the increased route capacity and ex tended the route schedule to include Vavau as the 
second point in Tonga for Fiji's designated airline, and Nausori as the second point in Fiji for Tonga's designated 
airline.  It also  provides for 5th freedom rights for the designated Tongan airline beyond Nadi and Nausori to 
Australia, and beyond Fua'amotu and Vavau to New Zealand for the Fijian designated airline ( Solomon Times,  
"Fiji and Tonga sign Air Services MOU", 22 June 2008.  Viewed at:  http://www.solomontimes.com/ 
news.aspx?nwID=1740). 
 96 Other major domestic carriers are Sunflower Airlin es, Pacific Sun, Turtle  Airways Ltd, and Air 
Wakaya. Fiji WT/TPR/S/213 
 Page 117 
 
 
109. The Civil Aviation Authority of the Fiji Isla nds (CAAFI), re-organized in 1999, regulates 
civil aviation safety regulations in accordance with  the ICAO Chicago Convention on International 
Civil Aviation (Civil Aviation Act, 1976, Civil Avia tion Authority of Fiji Act, 1979, and the Civil 
Aviation Reform Act, 1999).  These laws governing ci vil aviation rules were amended in April 2008.  
In January 2007 the CAAFI was de-listed from th e "re-organized entities" and now operates as a 
statutory body directly responsible to the Minister  for Foreign Affairs, International Cooperation and 
Civil Aviation.  The CAAFI Board is appointed by the Minister.  According to the authorities, the CAAFI applies standards mandated by the Interna tional Civil Aviation Organization (ICAO), and is 
strengthening its powers to ensure compliance by  airlines and aerodrome operators. The system of 
licensing airports has been changed to "Certification of Aerodromes". 
110. Airports Fiji Ltd, a government commercial activ ity created in 1999, owns and manages Fiji's 
international airports at Nadi and Nausori (it has also been contracted to manage 13 domestic 
outer-island airports).  According to the authorities,  the airport charges levied by Fiji are compatible 
with those in states of the same status, and much lower than at New Zealand and Australian airports.  
Air traffic management (ATM) in Fiji is no longer  contracted to Strategic Air Services Limited 
(SASL);  the contract was terminated in 2006 and the responsibilities returned to AFL.  Under the 
Reform Act, ATM is a core responsibility for AFL.  Joint ventures on any contract are not restricted 
provided they are in line with Fiji's investment policies. 
111. Air Terminal Services Fiji Ltd (ATS) is the only ground-handling company that services 
international flights at Nadi International Air port.  Ground-handling service providers at Nausori 
Airport include Air Pacific Limited for internationa l routes and for domestic air operators, and Air Fiji 
mainly for domestic air carriers.  ATS provide s aircraft maintenance, cabin services, baggage 
handling, passenger check-in, cargo services, freight sales, and freight handling services.  It is 51% owned by the Government and 49% by the ATS Employees Trust.  
(vi) Tourism 
112. Tourism is vital to the Fijian economy, and is the largest contributor to economic growth, 
investment, and foreign exchange earnings.  It provides employment for some 40,000 people 
(including indirect jobs), and creates some 17% of GDP on average.  However, due largely to political 
developments, the industry’s estimated earnings cont racted by 8.0% in 2007, though latest estimates 
recorded a much smaller fall in overseas tour ism numbers (of 1.1%) than earlier forecast.
97  However, 
tourism arrivals are expected to increase in 2008 by 7.5% to 580,000;  and total tourism earnings are 
expected to rise by 10.4% to F$753.7 million.98  Most overseas tourists come from Australia (36% in 
2006), New Zealand (20%), the United States (12%) and the United Kingdom (9%);  domestic tourism is also important, increasing total tourism num bers by almost one fifth in 2006.  Tourism is 
targeted by the Government as a priority sector for rejuvenating the economy.
99 
113. The Ministry of Industry, Tourism, Trade and Communications is responsible for formulating 
and implementing tourism policies.  The Tourism Development Plan 2007-16, endorsed by Cabinet in 
May 2007 (replacing the 1998-2005 Plan), provides a comprehensive guide for the sustainable development of the industry.  The plan provides the overall strategic direction for the growth of Fijian 
tourism, and is supported by a rolling action plan  and a series of regional strategies.  The 
Development Plan is to be fully implemente d from 2009, and aims to achieve a target of 
1.1 million visitors and earnings of F$1.2 billion by 2016.  Tourist receipts in 2007 were 
                                                     
 
 97 Ministry of Finance and National Planning (2008b), p. 129. 
 98 Ministry of Finance and National Planning (2008b), p. 129. 
 99 Fiji Government, Press Release, "State targets tourism and agriculture for economic recovery", 
27 September 2007.  Viewed at:  http://www.fiji.gov.fj/publish/page_10180.shtml. WT/TPR/S/213 Trade Policy Review 
Page 118 
 
 
F$682.6 million;  these are forecast to surpass F$1 billion in 2011 and to reach F$1.485 billion in 
2016. The Fiji Tourism Development Action Plan 2007-09 and the Tourism Regional Strategies for 
Yasawa, Nadi Corridor, Ra and Vanua Levu were also adopted in 2007.  The Action Plan sets out the 
institutional arrangements to create "Team Fiji" and for analysing government approaches to tourism.  
The four regional strategy models provide a framewo rk for setting the direction for sustainable and 
appropriate tourism development in the respective pilot areas, a nd outlines specific strategies for 
managing tourism growth.  The regional strategies operate in the context of the overall Fiji Tourism 
Development Plan 2007-2016.  The state-owned Fiji Visitors Bureau conducts tourism promotion and 
advertising, including of Fiji's eco-tourism facilities.  It is re-directing efforts from traditional to Asian 
markets. 
114. Tourism has benefited from ge nerous taxation concessions, w ith the SLIP package extended 
until end-2008 to be replaced from 2009 with a possibl y more generous scheme, also including tax 
holidays, announced in the 2009 Budget (Chapter III).100  Current arrangements comprise standard 
allowances and a hotel incentives package.  Standard  allowances cover a 55% investment allowance 
on total capital expenditure provi ded revenue is not shifted offs hore;  a 150% tax deduction on 
expenditure for environmental protection and co mmunity support;  and a 125% tax deduction on 
expenditure to upgrade public infrastructure e.g. ro ads, sewage systems and water supplies.  The hotel 
incentive package consists of a sev en-year tax holiday for capital investments of at least F$10 million 
and import duty exemptions on all capital goods, incl uding plant, machinery and equipment, used in 
the investment project.  The incentives to apply from 2009 consist of two parts:  a Standard 
Allowance, which provides for an investment allo wance of 55% on total capital expenditure (provided 
no revenues are shifted offshore);  and a Hotel Incenti ve package, which grants a ten-year tax holiday 
on projects of at least F$7 million, as well as import duty exemption on all capital goods not available in Fiji.
101  Increased hotel and gambling turnover taxes apply (Chapter III).  The industry is also 
assisted by a number of customs incentives e.g. 10% tariff on building materials, furniture, and 
fittings, and no import excise tax. 
 
                                                      
 100 FIRCA had estimated that the tax incentives for tourism had cost F$93 million in revenue forgone 
from 1998-03 (FRC, 2004). 
 101 The 13-year tax holiday provided for investments in the newly established Tax Free Region will be 
increased to 20 years on hotel developments with at least 25% equity by indigenous Fijian land owners. Fiji WT/TPR/S/213 
 Page 119 
 
 
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