Creating a level playing field for foreign, local entrepreneurs

In May this year Samoa’s international gateway became one of few aerodromes in the region to have an apron and aerobridges.

The  commissioning of the Faleolo International Airport’s new features cost over $50 million tala, and was financed through separate funding mechanisms courtesy of China and the World Bank in partnership with the Samoa Government.

The investment should over time lead to an increase in passenger traffic into and out of Faleolo, as frequent flyers enjoy the new travel experience when checking in to depart or arrive in the country.

But the decision by the Government – through the Ministry of Works Transport and Infrastructure – to award a contract to run a café at the airport has raised eyebrows and triggered accusations of favouritism. The Tang Cheng restaurant – which has become the subject of scrutiny following the awarding of the contract – is in the food court section of the airport lounge, and is one of four eateries.

There are concerns amongst former food caravan operators, who provided a similar service at the airport prior to the multimillion tala upgrade, that nationally-owned firms continue to miss out on similar opportunities.

But Minister of Works Transport and Infrastructure, Papali’i Niko Lee Hang, rejected the favouritism charge in the awarding of the contracts and indicated that the successful vendor was the highest bidder.

“The awarding of the contract was based on merit and the tenants followed the process in place. There is no favouritism! The tenant who won the tender submitted the highest bid,” he told Samoa Observer in an interview.

The Minister then referred the matter to the Samoa Airport Authority CEO Silimanai Ueta Solomona, but the former said his office did not get any complaints from their former tenants.

“We know of only one tenant that operated a caravan in the carpark area and that business continues to operate in the new terminal,” said Silimanai.

“The establishment you refer to, submitted a proposal and was accepted by Samoa Airport Authority. In response to ‘favoritism’, Samoa Airport Authority considers all proposals favorably in as long as it aligns with the objectives of Samoa Airport Authority’s strategic plans and meets the needs of her guests and employees.”

The response by the Minister and the SAA CEO – based on my interpretation – means that there are no special concessions given to locally-owned businesses, when it comes to investment opportunities such as this. 

The position of the Ministry and the SAA to award this and other contracts to the highest bidder has downsides: locally-owned entrepreneurs get to miss out on investment opportunities, and you open the door to increasing foreign ownership of local businesses, further marginalising local entrepreneurs.

Perhaps a review of Samoa’s Reserved List by the Ministry of Commerce Industry (MCIL) and Labour is timely, in light of public concerns at the alarming expansion of foreign-owned retail outlets in Apia.

In February this year there were concerns in Samoa that foreign investment enterprises were the only beneficiaries of the Government’s business assistance scheme. But the MCIL Assistant CEO (industry development and investment promotion, Fiu Jacinta Matulino, denied there was favouritism.

“The Ministry reaffirms that there are no favoritisms, and that all eligible businesses inclusive of local businesses, are entitled to the assistance schemes administered by the Ministry,” she told this newspaper back then. 

Some of the complaints at that time zoomed in on the alleged involvement of non-citizens in business activities, which are placed under the Government’s “reserve list” and only for Samoans. 

But Fiu denied the accusations and said her office had yet to receive a complaint in relation to that at that time.

“Mainly on the issue of involvement of non-citizens in activities listed in the reserved list, mainly in the ‘retailing’ activity, where these businesses were reported to be registered under citizens, to obtain business licenses and to avoid the foreign investment enterprise registration process with Ministry of Commerce Industry and Labour." 

“No complaint has been received with regards to the registration process, fees charged and the monitoring process carried out by the Ministry.” 

While we do not question the competencies of the MCIL officers in terms of enforcement and monitoring of the reserve list, an annual review of the list of foreign-owned businesses and whether they are in compliance with the necessary laws, could be the first step towards addressing some of the concerns expressed by local businesses and entrepreneurs.

Have a lovely Saturday Samoa and God bless.

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