Friday, May 13, 2016
The Fiji Cane Growers Association was formed in 1992 and has since been a significant voice in the sugar industry. It was a major player within the Sugar Cane Growers Council and enjoyed between 42-47 percent support amongst cane growers generally during elections of the Sugar Cane Growers Council - the four elections it contested every three years from 1995 to 2004.
The FCGA’s service to growers was rewarded in late 2000 when it led the Sugar Cane Growers Council – the umbrella organisation of growers.
For six years between 2000 and December 2006, the FCGA through the Sugar Cane Growers Council uplifted the livelihood of growers and helped them overcome challenges like rising cost of sugarcane production. The FCGA-led Growers Council also finalised a plan for comprehensive assistance to growers following the announcement of a $275 million European Union grant , which over a period of seven years would have boosted sugarcane production to over 4 million tonnes, helped displaced growers and implemented Alternative Livelihood Programs and Crop diversification. Unfortunately, the military coup of December 2006 not only derailed the EU grant but also resulted in the ousting of the FCGA and its Chief Executive from the Growers Council by the military regime.
The regime later disbanded the Sugar Cane Growers Council and further directed the Fiji Sugar Corporation to cease deduction of growers membership levy to the FCGA in an attempt to kill the organisation.
Sugar Industry Reforms
The deteriorating state of the sugar industry is also largely linked to the problems faced by cane growers. Problems of the growers remain largely unresolved or have exacerbated primarily due to the erosion of their constitutional right to be a major voice in the sugar industry. A month after the military coup of 5th December 2006, the composition of the Sugar Cane Growers Council, which is the umbrella body of growers, was tinkered with and the legitimate authority usurped, spearheaded by the unlawful sacking of the SCGC Chief Executive Officer as well as by the regime’s then sugar minister’s move to install his political supporters to positions of authority.
Almost three years later in 2009, the SCGC was scrapped, which meant that the last remaining democratically elected institution comprising of elected representatives of the cane growers was abolished.
The Regime, upon a recommendation of its Sugar Minister, deferred the Growers Council elections scheduled for 2007 to 2008 through a Decree. In 2008, the regime’s Cabinet, once again acting on the recommendation of its sugar minister, postponed the elections until 2010. The reason for the postponement, according to the then sugar minister was that SCGC elections would be an impediment to reforms being undertaken in the industry. Although the regime’s sugar minister exited the military government’s Cabinet in August 2008, reforms continued arbitrarily and growers’ voice was throttled when as earlier stated, the SCGC was scrapped as an elected body.
This was legitimized on August 25, 2015, when the Government used its Parliamentary majority to pass the Sugar Industry (Amendment) Bill. This abolished the democratic status of the Sugar Cane Growers Council (SCGC).
Reform of the Sugar Cane Industry Bill Number 19 of 2016
At a time when the Indo-Fijian community or Fijians of Indian descent as known under the 2013 Constitution are commemorating the 137th anniversary of the first arrival of Indentured labourers, descendants the Indentured labourers on 14th May 1879, who are predominantly cane growers, face enslavement or another Girmit, if the Reform of the Sugar Cane Industry Bill Number 19 of 2016 is passed in Parliament by the Fiji First Government using its numerical majority.
Having studied the Reform of the Sugar Cane Industry Bill Number 19 of 2016 and considering the views of the stakeholders who have made submission to the standing committee it is clear that sugarcane growers will be further enslaved and they will be at the mercy of government and the Fiji Sugar Corporation in everything they do as part of sugar cane farming.
The Bill affects the livelihood of 200,000 people in our nation who are directly or indirectly dependent on the sugar industry. Worse, it will subjugate around 16,000 growers, 12,872 of whom are active, under the Fiji Sugar Corporation (FSC) and Government, reminiscent of their darkest days during the 93 year old stranglehold of the industry and the nation by the Colonial Sugar Refining Company (CSR) (1880-1960) and its subsidiary South Pacific Sugar Mills (SPSM) (1961-1973).
Against a backdrop of such a frightening scenario for growers, the parliamentary standing committee on Economic Affairs scrutinising Bill No. 19, will devote only around 20 hours of its time in receiving submissions from growers and the public in 8 cane growing districts over a period of 6 days. And that too when growers are lacking knowledge on the more than draconian features of the Bill which hasn’t been publicised and not even translated into the i-Taukei and Hindi languages. Is this Government’s version of common and equal citizenry that is supposed to provide equal opportunities to all?
Sugar Cane Growers Fund Amendment Bill No. 20 of 2016
We strongly object to the amendment to the SCGC Act that empowers the Minister to direct the SCGF Board where to invest the funds. This is untenable. These Funds were raised by growers with the purpose of assisting them financially during their hardship. The proposed change will give Government total control of the Fund because of the structure of the Board. Its Chairman is the Director of Sugar and has the Executive Chairman of FSC as a Board Member. This is totally unacceptable. Growers as the sole shareholders of the Fund must have control of SCGF. If there is to be any supervision of the Fund, it should be done by the Reserve Bank of Fiji. Government should have no influence and control over it.
Sugar Industry Act
The Bill seeks to repeal the Sugar Industry Act of 1984, which was a product of widespread consultation, negotiation and consensus building before it was tabled in the House of Representatives and agreed to both by the then Alliance Government led by Ratu Sir Kamisese Mara and the Opposition National Federation Party led by Siddiq Moidin Koya (SM Koya) in a truly bipartisan manner. The Act recognised the importance of the largest stakeholders of the industry – cane growers, thereby creating an umbrella body, the Sugar Cane Growers Council that was a fully democratized institution.
The Act also made provision for the Master Award, which came into force in 1990. But it incorporated the Denning Award, awarded to cane growers by Lord Denning after impressive submissions in 1969 from their then leader A D Patel. Mr S M Koya ably supported him.
The Denning Award ensured equality, dignity and justice for cane growers. The Fiji First Government has time and again in Parliament accused, albeit frivolously, the current NFP leadership of undermining the achievements and vision of its founder leaders. Yet, this Government is destroying the legacy, achievements, vision, and honest hard work of A D Patel and S M Koya by forcing this Bill down the throats of growers. CSR quit Fiji because it did not agree with the Denning Award. However, the Fiji First Government through this Bill, is treating growers like beasts of burden who have outlived their usefulness.
The Sugar Cane Industry Reform Bill demolishes all freedoms, independence, fair play and justice for cane growers. Every aspect of their livelihood is controlled by the Fiji Sugar Corporation and Government through the Minister for Sugar, who currently happens to be the Prime Minister.
- Another Girmit: This Bill is worse than draconian – it is an imposition of another Girmit also on the 100th anniversary of the arrival of the last shipload of Indentured labourers in 1916. And this very serious issue is not even being explained to growers who are entitled to information regarding the Bill. Government cannot expect growers to download the Bill from Parliament website and scrutinise because majority of growers do not understand the complexities of issues and depend on their children and most importantly their leaders to explain issues to them.
- Total lack of Information: This Bill should have been translated into Hindi and i-Taukei languages and widely distributed. There should be a comparison between the current Bill and what is in the Sugar Industry Act. That is how growers can understand what is in this Bill and what they are losing by way of repealing the Act.
- Rescuing FSC: The Bill is also about rescuing FSC and writing off its debt to Government at the expense of eroding every right of growers. It must be understood that without cane growers there is no sugar industry or FSC – it is as simple as this.
- Sugar Industry Tribunal: The powers of the Tribunal have been diluted. The Tribunal cannot hear disputes between growers and FSC independently of any stakeholders. It can only hear disputes after it has been certified by the Permanent Secretary for Sugar. This means the Government controls and decides what is a dispute and what is not. This is denial of access to fair hearing and justice. There is no Registrar to the Tribunal as has been the case for 31 years under the Sugar Industry Act. Under this Bill, the Tribunal will be appointed by the Chief Justice. Under the Sugar Industry Act, the Tribunal was appointed by the Chairman of the Judicial and Legal Services Commission (the CJ) after consultation with the Commission. Under the Bill, the Tribunal is subservient to Government through the Permanent Secretary for Sugar. As a person qualified to be appointed a judge, the Tribunal has been responsible for ensuring all stakeholders adhere to the Master Award and rightly so because an Award is a legal contract and determinations are judicial in nature. Under the Bill, this role is with the Minister for Sugar and his/her Permanent Secretary in terms of determining what is or not a dispute.
- Accountant of the Industry: Under this Bill the Accountant will be appointed by the Minister and amongst other things, perform duties assigned to him or her by the Minister. Under the Sugar Industry Act, there has been an Accountant to the Tribunal, appointed by the Minister in consultation with the Standing Select Committee on Sugar of the House of Representatives. This has been important because the Tribunal certifies cane payments.
- Sugar Cane Growers Council: The Sugar Cane Growers Council is now a toothless tiger. If this Bill is passed in its current form, the Council changes from a toothless tiger to a puppet of Government because it will be fully controlled by Government. It will have two members each from three cane producing associations – which were formed to administer Fair Trade only. They are not representative of all growers. Then it will have two Divisional Commissioners and a representative of the Sugar Ministry. The Minister will appoint the Council and the Chairman. The Council has no role in negotiating sale of sugar. Its role is confined to basic cane cultivation issues. This is unacceptable. Furthermore, the appointment of representatives of the Cane Producers Association to the SCGC is highly questionable. In the case of the Rarawai Cane Producers Association, the Chairman has been excluded on the pretext that he produces less than 100 tonnes of cane. If the same rule is applied, then it should be applied across the board so that all members of the Council are cane growers.
- The Register of Cane Growers is no longer in the hands of the Tribunal. It is with Fiji Sugar Corporation. A registration of a grower can be cancelled by FSC on its own or upon the order of the Minister for Sugar. This is the height of politicisation.
- Master Award: Part 5 of the Bill is like a noose around growers’ necks. The Minister for Sugar has powers to revoke the Master Award. The Minister then can make the Master Award in consultation with the FSC and Growers Council. Both are fully controlled by Government. Where is the voice of growers? A draft Master Award will be subject to public hearings. It will be a product of Government, FSC and SCGC – all politically controlled. This is like putting the cart before the horse. Even if other stakeholders and representatives of growers suggest changes, such changes will only be incorporated in the Master Award if it is agreeable to both FSC and SCGC. This will not happen because of the political control by Government of both organisations. The current master award, which continues until it is revoked, was a product of public consultation. It wasn’t a ready-made document as will be the case under this Bill. In his submission to the Economic Affairs Committee last week, the Registrar to the Tribunal revealed that the Quality Cane Payment will come into force next year. This is shocking because growers don’t know about it. It will mean the unilateral revocation of the master award and the current sharing formula of proceeds from the sale of sugar of 70/30 in favour of growers will be abolished. The current Master Award must be retained and any variation in future referred to the Tribunal for determination.
- Growers treated like criminals: The Bill criminalises cane production. Growers are now threatened with fines as fixed penalties of up to $500 for the schedule of offences growers commit. If they refuse to pay the fixed penalties, they can be fined up to $5,000 or imprisoned for 12months, or both. A grower commits an offence if he/she delays harvesting or refuses to plant cane unless he/she gives a 7-day notice to the Permanent Secretary for Sugar. For example, if due to continuous milling inefficiencies, a grower decides to stop harvesting, it is an offence. A grower must allow the Permanent Secretary 14 days to rule on the dispute. This means that growers are at the mercy of Government, which has direct control of their livelihood. Yet there are no penalties for FSC for any of its failures or negligence.
- SRIF: The Sugar Research Institute of Fiji will no longer be an independent body and under this Bill it will be controlled by the FSC. Again the importance of SRIF being independent of all stakeholders was thoroughly emphasised before the Standing Committee last week. Under this Bill SRIF will be controlled by FSC, which means the Corporation will dictate which new cane varieties should be given to growers for planting.
The Bill’s intention is to rescue FSC by turning the loans and guarantees by Government into State equity. Government currently has 68% shares in FSC. Minority shareholders own 32%. Government wants to take over all shares and compensate other shareholders by paying them the value of the share price of FSC.
Currently the FSC is technically insolvent. However FSC Executive Chairman Abdul Khan claims FSC will become profitable in 3 years because according to him by 2020 the sugar cane crop production will increase to 3.5 million tonnes and sugar production to 437,500 tonnes by ensuring 50,000 hectares of land is used for cane cultivation yielding 80 tonnes per hectare.
He says currently 47,000 hectares is used for cane cultivation. This contradicts the Ministry of Sugar, which said 42,000 hectares was currently used for cane planting while 39,000 lay idle.
Abdul Khan has been the Executive Chairman for many years. The Annual General Meeting of FSC was held for 3 years on 27th May 2015. On 29th May 2015 the Fiji Times reported Mr Khan as saying that FSC had, quote, “good reasons for not holding an AGM over the last three years and not releasing the information because at the time there was lot of to and fro in the industry and for the company as well”.
“There was talk of divestment, there was talk of share buyback, There were all sorts of talk”, Mr Khan was reported as saying. He said the Corporation wanted to protect sensitive information because “it would have compromised the position of all the shareholders, not just the majority shareholders but also minority ones”. -
Can Mr Khan inform the people of Fiji of any commercial company or statutory organisation that deliberately delays its AGM for three years because of “to and fro” talks? If FSC can deliberately delay its AGM for three years, what guarantee is that despite enslaving and controlling cane growers, it will be able to achieve its targets in 2020?
The answer is a simple NO. Even it would not have happened if the FSC had announced its targets before TC Winston devastated the sugar industry in North Western Viti Levu. This is evident from the industry’s cane and sugar production figures of the last 9 years until 2015 – 8 of which were under the military regime and Bainimarama government.
If Mr Khan’s statistic that currently 47,000 hectares of land is under sugar cane crop then currently only 39.14 tonnes of cane is produced per hectare. Therefore his bold announcement of an 80 tonnes per hectare from 50,000 hectares of land by 2020 is simply unachievable especially if growers are forced to endure another Girmit under Bill No. 19. FSC also produces cane. Can Mr Khan reveal what is the average tonnage per hectare on FSC farms?
The other issue is whether the minority shareholders who have 32% stake in FSC were consulted before this Bill was tabled in Parliament. Was the Board of FSC aware of this Bill? Were the Sugar Industry Tribunal, Sugar Cane Growers Council and Sugar Research Institute of Fiji aware that their independence was being eroded via a Bill?
The devastating impact of the 2006 coup on the sugar industry
The fallout from the 2006 military coup has been devastating for the sugar industry and the livelihood of growers.
This has been through now what has become a reality, the total loss of the $350 million grant to the sugar industry over a period of 7 years from 2006 to 2013.
A sum of $275 million was allocated for the program known as Sugar Adaptation Strategy. The FCGA believes a sum of $8.9 million was given from the 2006 program. But this was primarily to industry institutions like the Sugar Research Institute, not for direct assistance to growers.
This grant has been lost. It was aimed at economic diversification in the sugar sector and to provide assistance for social impact mitigation measures for displaced growers who could not meet their increased cane production targets.
If the coup hadn’t destroyed democracy, Fiji could have now been producing around 4 million tonnes of cane and manufacturing around 400,000 tonnes of sugar. The sugar industry would have been salvaged had the military regime fulfilled its commitment to hold elections by March 2009.
Fiji and the cane growers are poorer for the loss of the EU grant.
Industry in death throes
These Bills will kill the sugar industry. After the coup in December 2006 the military government started interfering with the industry. As a result cane production has declined by almost 50%. Sugar production has declined by almost 100,000 tonnes as revealed by the official figures in our submission.
At a time when growers are trying to recover from the effects of TC Winston, Government must direct all efforts towards helping them. Instead it is sending them back into Girmit 100 years after the arrival of the last indentured labourers in 1916.
The bottom line is cane growers are being stripped of all their rights just to save FSC. The Fiji First government has confirmed through this Bill that growers are sacrificial lambs.
We reject these Bills outright and request the Committee to do the only sensible thing and that is to recommend that these be shelved.
These Bills will debilitate cane growers, making cane growing totally unprofitable and pushing growers into debt in perpetuity.
Government claims reforms implemented by it both before and after the elections have revived the industry. Nothing can be further from the truth.
Cane farming has become a non-profitable business for at least 70% of growers who produce only 30% of the total cane crop while 30% of growers produce 70% of the crop. For 2013 season growers received the highest payment of a little less than $89 per tonne. If one removes the cost of production, harvesting and delivery of cane of $45 per tonne, the nett income that growers get from a tonne of cane is $44.
70 percent of growers produce an average of 150 tonnes of cane. About 12,872 are active growers. That leaves 9000 growers in this category.
Their net income at $44 by 150 tonnes is $6,600 in a season. This is $9,400 below the tax threshold of $16,000. No other commercial business can survive on this.
The sugar industry statistics prove that the industry is plummeting. The only improvement has been in the area of TCTS (Tonnes of cane required to make a tonne of sugar). It must be emphasised that this was through a $85 million mill upgrade program through a soft loan from the Exim Bank of India, negotiated in late 2005 by the deposed government before the military coup. The military regime and this Government benefited from this.
The Prime Minister has repeatedly rejected calls for a bi-partisan approach to find solutions to revive the industry through a parliamentary select committee on sugar. Such a committee has always been in existence throughout our history of parliamentary democracy but is sorely absent this time around. The positive impact of such a Committee can be evidenced from the fact that bipartisanship resulted in the Sugar Industry Act, resulting in prosperity of growers and economic advancement of the nation.
However, this Government’s reforms, which it arbitrarily imposed is not working. And given such a scenario, it is only prudent that a collective approach is made to find solutions before it is too late.
The establishment of a parliamentary select committee on sugar and the democratization of the SCGC would be an ideal start for the instilling of confidence in cane growers.
Also the Sugar Ministry has been a separate portfolio in all governments since Independence. But here we see that the Prime Minister is responsible for Sugar. But at the same time the PM’s devotion of time towards the industry is limited because of his hectic schedule and overseas travel. For Government to do justice, Sugar must have a separate ministry.
A feeling of disenchantment is undoubtedly being felt by the growers, their families, the cane cutters, lorry operators, lorry drivers, labourers and farm hands. This Bill is the biggest disincentive for a segment of Fiji’s population who have sacrificed their livelihood and triumphant days to ensure the sugar industry remained the lifeblood of Fiji’s economy for over a 100 years.
We re-iterate that the Sugar Industry Act must be retained. We demand that the structure of Sugar Cane Growers Council that existed before the military coup must be retained and not controlled by Government. Growers through the SCGC must have a say in the marketing of sugar and other matters of importance that affect their livelihood.
If these Bill is not shelved, then Government should expect more growers to exit the sugar industry and a sharp decline in cane production because of enslavement of growers.
Attar Singh Bala Dass
President General Secretary