by Mary Lyn Fonua

Tonga's business community, suffering an estimated $200-$300 million pa'anga worth of losses, are uncertain whether or not they will be covered by their insurance policies.

The issue of insurance cover and the fact that most insurance policies have a riot clause that means insurance companies may not pay out for damage caused by civil disturbances, was the first concern expressed by business people attending a casual meeting called by a new Tonga government Committee for Reconstruction and Recovery on November 22.

"We need to establish the cause of the destruction, and the official cause will have a big bearing on the liability of insurance companies," the Minister of Transport and Civil Aviation, Paul Karalus told about 50 business people assembled at the Longolongo Police Compound, outside of Nuku'alofa's central Restricted Zone.

The meeting was chaired by the Minister of Labour, Commerce and Industries, Lisiate 'Akolo, who said the government wanted, "to get feed back of what you want.

"We are in a big crisis. It's been roughly estimated by the Ministry of Works in a walk-around survey that the loss of buildings alone exceeds $40 million, and this doesn...’t take account of stock or inventory losses."

"We all agree it is much, much higher than that!" people at the meeting interjected.

Richard Prema, director of a major retailer Prema and Sons Ltd., said that he estimated the town's losses were already in the vicinity of "$200 million to $250 million."

Other people thought combined losses may reach $300 million, and added that this would not include the loss of business cash flows or the loss of records, and then the loss of time was "incalculable".

Insurance liabilities

Pousima 'Afeaki, chairman of the Tonga New Zealand Business Association, was concerned over the riot clause in the insurance policies.

Paul Karalus said that Peter McCloud, the New Zealand chairman of the Association of Chartered Loss Adjusters would arrive in Tonga before the end of the week, as part of an investigation that would eventually answer the question of insurance liabilities.

"He will be interested in individual cases, the level of insurance coverage, the nature of coverage and also look at other avenues of funding that could be available to the private sector to enable rebuilding," he said.

"This was no damn riot at all - they were here on their own agenda," Michael Jones, a director of E. M. Jones Ltd. Group of companies, said.

Crime committed

Paul Karalus replied, "We all know that a crime was committed and that is being addressed, but you must understand that it is difficult to ensure that it is addressed in its totality."

He said the New Zealand and Australian police and military personnel had been brought in to Tonga as part of the investigative and apprehending process

"Please bear with us," said Paul. "They were not brought here to re-establish law and order, the local military are doing a very good job. We brought in people with apprehending and investigative skills to follow through and also to ensure that the ports of entry are secure, particularly for the movement of foreign people, and that's why they were brought in."

Paul said that the government was meeting every day and a task force was being set up to look at how to help with the rebuilding process.

Need answers quickly

Business people asked about the possibility of deferring Consumption Tax payments and lifting Import Duty payments, "so that we can recover in a short time."

"These are issues that we cannot guarantee, but we will take it back to government and the Minister of Finance," said Paul.

"I think government needs some ideas right away - a task force will take too long," said Paula Taumoepeau, a director of the M. F. Taumoepeau, group of companies.

Paula stressed the need for importing new building materials, and taking the consumption tax off and allowing duty free entry for capital items, and, "a good incentive for rebuilding properties is to increase the leases of land-owners so they can have more time to rebuild," he said.

Michael Jones said, "A question of essence is: how long will it take? And we need answers quickly!"

George Nakao, of Fund Management Ltd. Group of companies, said with regards to assistance, "it would be helpful if we ask for maximum assistance rather than soft loans and CT exemptions."

Food supply

Lisiate said the government was currently assessing the food supply for the community, surveying businesses about their needs, and looking at the possibility of a recurrence of violence.

He believed that despite the huge loss of stock the food supply was sufficient for the time being.

Regarding a recurrence of violence, he said, "Who knows what the next generation of the same group of people will do?"

Ashwin Khatri, of Narottams, pointed out that some properties had been saved, and asked, "what is government doing to protect what's left?"

Lisiate replied that the police and armed forces were stretched thin and replied that business people would, "have to protect their own properties."

Building codes

Paul Peltzer, general manager of the ANZ Bank, Tonga, asked if there was to be a strategic plan to put new building codes into place that would decide what sort of buildings would be allowed in town.

Lisiate said the government agreed that this was an opportunity to improve the town business area, "and to look into issues like drainage and the problems faced in the past.

"There is a strong feeling in Privy Council that this is an opportunity rebuild and redesign the Nuku'alofa CBD."

However, he said that overseas funding would be needed to develop this concept and there was also the difficult issue of ownership of land.

Banking system

Paul said the ANZ bank would be back in business next week, and assured his customers that, "you have not lost money, your deposits are safe. Your loan records are also safely backed up - so we will be in touch with you!" he said.

Paul was concerned with the impact on loans repayment. "The government needs to talk with the banks if they want to assist with loan repayments, but the government has to approach us if they think there are people who need assistance."

He said the banks and the Reserve Bank were meeting daily, "on issues of liquidity and what the impact will be on the country."

Business people expressed concern about still having to meet loan repayments for the stock and inventory that was lost, while not having any insurance payout, and then also trying to find funds for rebuilding their businesses.

Chinese Community

A member of the Chinese Community said they had suffered the most damage and losses. "More than 50 shops were broken into and so most goods were lost," he said. "However, we had already paid consumption tax at the port for these goods so we are asking for a refund. We also have containers of goods at the wharf to clear and because most shops are now bankrupt we can't pay consumption tax and duty to release these goods. We are asking government to help because Christmas is coming and the shops have nothing left and no money, so how are we going to get these goods out?"

Other Chinese business people said that they were fearful and still staying in the Chinese Embassy with their families. The violence had forced them to flee from their homes. "Some Chinese people are still sleeping outside in their cars because our homes are threatened," they said.

Residents in Restricted Zone

Many businesses expressed concern that five days after the destruction they still could not get access to the Restricted Zone to recover anything that might be left. There was also concern for the residential homes in the RZ because people were not allowed in or out though the military checkpoints so food could not be passed through to the people in the area.

Major Rex Johnson the regional commander of the Salvation Army said they had full access to the Restricted Zone and were checking residents, "and feeding everyone, so if you know of people there who are starving please let us know, because we can reach them."

The meeting applauded him.

Justice system

Barrister, Tavake Afeaki appealed for people to come forward with evidence that would help the government and police. "We must force the people who were behind this to face our justice system. Please take any photos, videos or number plates ids to the police. Without evidence a whole bunch of lowlife scumbags will escape justice and then they are going to come back and do it again to you and me and our families," he said.

"Tell the police, tell the army and bring the evidence to them, so that we can prosecute these punks and savages and bring them to justice!" he said.

The meeting which was also attended by the Minister of Public Enterprise, 'Afu'alo Matoto, and the President of the Tonga Chamber of Commerce Tapu Panuve, surveyed businesses on the extent of their losses and asked a fundamental question, "Do you want to stay in Tonga?"

Senita 'Uhilamoelangi of the Pacific Tonga Ma'a Tonga USA money transfer business that was burned in Tungi Arcade, told the meeting, there was a need for an emergency fund so that small businesses could restart. "We lost everything," he said, "but the most important thing that I almost lost is my heart."