Better dialogue between government and the private sector will help to smooth key processes holding back the growth of business in Tonga, the Chamber of Commerce & Industry (TCCI) has told government in a hurried submission on the Foreign Investment Bill last Friday, February 22.

Tonga Chamber of Commerce & Industry (TCCI) has called on government to establish a formal public private dialogue process. 

“Businesses must be given sufficient time to consider and prepare written submissions on pending legislation” Chamber said in a statement today.

After being offered a last-minute opportunity to comment on a new Foreign Investment Bill 2019 before parliament last week, the Chamber included these requests in its submission to the House.

“We think an effective and regular PPD process will go a long way in smoothing the key processes holding back the growth of business in Tonga,” the TCCI stated.

TCCI has sought to sign a formal PPD (or Public Private Dialogue) MoU with the Ministry (MCCTIL) to formalise regular consultation with the government on pressing issues affecting businesses in Tonga.

No consultation

Last week Chamber had to hurriedly pull together a submission on the new Foreign Investment Bill that was introduced in Parliament at the beginning of the week. The House had allowed TCCI and businesses to be consulted after MPs raised the issue that there had been no community consultations on the draft legislation.

 “Given the urgent need for the House to pass the Bill, Chamber sent out [to members] the Foreign Investment Bill 2019 on Wednesday 20 February 2019 for comment with a deadline of Friday 22 February 2019, 10:00 am for receipt of comments. 

“In its submission forwarded to the Ministry of Commerce, Consumer, Trade, Innovation and Labour on 22 February 2019 the Chamber and businesses commented on the consultation process itself and how it may be improved in future consultations, as well as making specific and general comments on the Foreign Investment Bill 2019,” TCCI said in their submission.

“This Bill when it becomes law will have significant impact on the Tongan- owned businesses.”

Foreign Investment Bill 2019

With regards to the Foreign Investment Bill (Part 3–Administration of Foreign Investment Regime in Tonga) the Chamber proposed that a Committee consisting of government and private sector members, including the Chamber of Commerce should make the final decision in what constitutes a “Reserved and Restricted List” and in granting the Foreign Business Certificate and not the CEO and Minister. 

“The current proposed law may lead to favouritism if only two people make all the decisions where a lot of money will be involved,” stated Chamber.

The Chamber noted that a fair and credible system for vetting and approving foreign investment applications is needed.

“There is scope for foreign investment, especially in areas beyond local financial capabilities, advanced technology and in areas of major tourism resorts etc., where investment capital of more than $5 million pa'anga would be required as minimum investment level. Foreign investment in these areas would significantly boost Tonga's economy, create new markets and new local jobs and as a catalyst for other related small local businesses to thrive.“

The main issues were around oversight and consultation.

“On the whole the Bill is good; its main drawback is that there is no mechanism in the Bill to ensure that there is ongoing and regular consultation with the Tonga Business Community… on whom the effects of foreign investment will be most felt.

“To include in the Bill provision for the establishment of an oversight committee to oversee the administration of this Act and its regulations, membership of which will include the CEO/Registrar, as Chairman, plus a representative of the Chamber and a business person, and others as the Minister sees fit. This will ensure constant/ongoing consultation and oversight.

“Establishment of an advisory investment board, consisting of a good mix of representatives (public and private sector) from the key sectors such as energy, Chamber of Commerce, Tourism Association, energy, environment and planning. This Board to give advice from time to time in decision on major foreign investment and to help the Minister in making key decisions, the Chamber submitted.