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The independent weekly Marshall Islands Journal is the country’s only
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Marshall Islands Journal News Archive beginning in 2005 through 2009
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From the 12/25/09 issue of the Marshall Islands Journal

The 21st century is coming to RMI

By GIFF JOHNSON  

The small cable that made its Majuro debut Saturday didn’t look like “technology on steroids” — as the new fiber optic cable has been described by local business people who appreciate the power of this new development — but the message of 21st century communications hardware is “small is beautiful.”

With the kick off of installation of a state-of-the-art submarine fiber optic cable, 21st century telecommunications will soon open in Majuro, Ebeye and Kwajalein.

The Tyco Durable, a high-tech cable-laying vessel, successfully attached the new multi-million dollar cable to Majuro Atoll on Saturday.

“The end of dial-up Internet is near,” said Marshall Islands National Telecommunications Authority General Manager Tony Muller Saturday as the cable was being installed. “We’ll have DSL (high-speed) Internet to all subscribers early next year.”

“The cable is more than just a cable,” Bank of Marshall Islands Chief Information Officer James McLean said. McLean called the “broadband” the cable is bringing as “technology on steroids. It enables different business models we’ve never had before.”

NTA is paying $21.5 million for Tyco Communications to install the submarine fiber optic cable that will run on the ocean floor. Majuro is the last point on the cable that will connect to the US Army base at Kwajalein in the Marshall Islands, to the Federated States of Micronesia capital Pohnpei and finally to Guam, where it will feed into global communications networks.

The Tyco Durable, after making the cable connection in Delap Saturday, headed for a point 30-miles from Kwajalein where the Majuro trunk cable will link with the branch that goes into the missile range. It will then continue toward Guam, stopping briefly at a point 90-miles north of Pohnpei, where the main line will be connected to Pohnpei’s branch.

“Cable laying will be completed by the end of January,” Muller said. The Kwajalein branch was laid last week and the Pohnpei one was put in last month.

“In February we’ll do testing and commission the line,” Muller said. The aim is to begin using it by April 1 or earlier, he said.

The high-speed Internet available next year will open up numerous possibilities, including cell phone banking, McLean said. “Cell phones will become mobile ATMs in the near future,” he said.

Pumping information at the speed of light

It is hard to believe looking at the new submarine fiber optic cable — which is small, probably no bigger across than an inch-and-half — that this will transmit a huge volume of information almost instantaneously.

“Real time” is how information technology experts like their data. Not three hours from now or tomorrow. The days of information taking days or weeks to arrive are gone in most parts of the world and soon enough will disappear even from our slow-moving islands.

Take Kwajalein, for example. The people running missile tests today have to send out a crew of a couple of hundred tech guys and gals to sit around for weeks getting ready for a test and to record everything during the actual mission. Then it all gets packed up and flown back to the Lincoln Labs at MIT, or to the Pentagon. In April, once the cable gets turned on, this is how it will work at Kwajalein: Just a handful of technicians fly out from the US, the rest sit in their computer labs in Washington or Boston watching eight different screens providing data on every phase of the missile test. Film and data by the gigabyte will be flying through this one-and-a-half inch diameter pipe from Kwajalein to the USA so that the USA-based technicians and scientists can watch the test unfold as it is happening.

Same for people on Majuro and Ebeye, assuming NTA can solve its domestic connection challenges. Imagine having the problem affecting one local guy who went abroad and was faced with unknown territory: high speed Internet. “I kept clicking on the download button because it wasn’t working,” he said. But a few minutes later the hard drive on his computer was full. “What happened?” he wondered to himself. Then he discovered the download was so fast he had literally missed it, and so had repeatedly downloaded the same document about 100 times. Let’s hope we, too, will soon have this experience.

 

 From the 12/4/09 issue of the Marshall Islands Journal

10,000 ATMs in Majuro?

By GIFF JOHNSON

How about 10,000 ATMs in Majuro? And a few hundred on the outer islands? If that sounds so outrageous as to be impossible, then you are not talking to the right people. Majuro, as everyone knows, has two “automatic teller machines” (ATMs) provided by Bank of Guam outside its bank and also at the RRE complex. But the fiber optic cable that will go into play in April 2010 will afford the Marshall Islands a quantum leap in technology, rending the type of ATM now in use in Majuro obsolete for anyone with a cell phone and Internet access.

Bank of Marshall Islands is positioning itself to make full use of the cable technology.

Over the past 10 years, major banks have launched Internet-based banking, said BOMI’s Chief Information Officer James McLean. But the Internet continues to be plagued with security issues. Meanwhile, cell phones offer a new and better opportunity for banks and other businesses, he said.

“We’re looking at jumping over ‘e-banking’ and going to the next technology,” McLean said in anticipation of the new cable that will enable world class communications speed and quality.

Cell phones will become “mobile ATMS” in the near future, he predicted.

The convergence of technology — the cell phone and the high-tech cable — means “a hand-held mobile device is the future of banking,” he said.

There are 10,000 cell phones on Majuro, McLean said. “That’s a huge market,” he added, saying these are “potentially 10,000 ATMs moving around.”

He noted that in the US, only a couple of banks have started moving in the direction of mobile banking, including First Hawaiian Bank. “It is very attractive for third world countries,” he said, adding in many developing countries cell phones are Internet-linked, helping people to start and run small businesses.

“This (mobile banking idea) falls in line with this,” he said. “We can jump over decades of technology we missed out on.”

The bank is looking outside the box to see how it can maximize use of the new cable when it goes online next year, McLean said.

“If others look at themselves in the same light, they will see more opportunities to improve efficiency or generate more revenue,” he said. “Seemingly separate things — water, electricity, taxes — are suddenly not so separate anymore.” He pointed to time-saving opportunities that can be provided to pay bills or for services in this manner.

“The cable is more than just a cable,” he said. McLean called “broadband” — high speed Internet service the cable will bring — as “technology on steroids. It enables different business models we’ve never had before.”

 

Editorial: How to ruin good businesses in RMI

For the past few years, local business people individually and the Chamber of Commerce collectively have complained about obvious smuggling activity evident in some Majuro stores. The availability of products for lower cost than the tax for these products confirms the obvious: the items were smuggled in.

Finally, the Ministry of Finance launched an investigation into illegal tobacco sales in late 2008.

In October that year, Finance and National Police came up with evidence of smuggling, going so far as to get court orders to search two businesses and confiscate tobacco products alleged to be smuggled.

So here’s our question: Why does it take the government 13 months to file criminal charges against the companies involved? It does not help to delay enforcement. It just allows illegal activity, if indeed it is happening, to continue unabated.

Smuggling hurts the government and tax-paying businesses in two ways: The government is not getting the tax revenue it should be from the companies breaking the law and law-abiding companies that are paying taxes are being put out of business because they can’t compete with the low “no-tax” prices. Taking this to its natural extreme, tax-paying businesses go bankrupt and close, leaving the Majuro and the RMI government with few or no tax-paying businesses. How do you think that will affect the RMI’s budget?

 

 From the 11/27/09 issue of the Marshall Islands Journal

Ading: RMI’s future at stake

By GIFF JOHNSON

“Difficult, but can be done.” That sums up Minister of Finance Jack Ading’s response to the Comprehensive Adjustment Program (CAP) Advisory Committee’s report to President Zedkaia and Cabinet on Monday this week that recommends ways the RMI government can cut spending by $4 to $10 million a year.

“If we don’t start now and put more money into the trust fund, who suffers?” Ading asked. “Our children and grandchildren. We have to think about future generations.”

The CAP report, commissioned by Cabinet, identified 13 areas where spending can be reduced by government. These areas range from the $34 million price tag of the public service, and housing and electricity allowances for VIPs to vehicle purchases and subsidies to government agencies.

“The report is great,” Ading said. “The next step is for Cabinet to consider seriously if it is ready to implement the recommendations.” He acknowledged the challenge of implementing some of the recommended cutbacks. “Some of the recommendations are not easy,” he said. These include “entitlements” such as Nitijela sitting fees that provide $5,000 annually to each member of Nitijela.

The recommendations to cut housing and power allowances for high-ranking government officials “may be easier and can be implemented as soon as possible,” Ading said.

Prominent in the report are a series of options regarding the government’s large salary bill. It suggests eliminating up to 70 vacant positions, a limited reduction in force from 50 up to 400 workers, reducing the number of hours worked, and reducing the pay scale of government workers from one-to-five percent. He acknowledged the difficulty of these public service pay cut recommendations, but added “if it’s got to be done, it’s got to be done.

“I’m willing to sacrifice my benefits for the benefit of the Marshall Islands.”

Now that the Cabinet has been briefed, it needs to meet to consider the recommendations and next steps, Ading said.

A few key points from the new report

Key facts presented in the CAP report to Cabinet:

• Salaries account for 46 percent of all General Fund spending

• Salaries, debt payments, subsidies to RMI agencies and electric bills account for 80 percent of the General Fund

• The average salary for RMI government workers is $14,417

• A reduction in force (RIF) of 50 RMI employees would save the RMI $700,000 year while reducing by 400 would save $5.6 million a year.

• Reducing the pay scale for government workers across the board by one percent would save the government $350,000; a five percent cut would save $1.75 million

• While Nitijela law requires that senators not receive the $100 daily sitting fee for any session days missed through unexcused absences, “it is known that all Nitijela members receive the entire $5,000 allowance regardless of their attendance records.”

• 30 top government leaders, from the President, Cabinet, Nitijela Speaker and Vice Speaker to PSC Chairman/commissioners and an ambassador at large, receive a $9,000 annual housing allowance

• In 1992, Cabinet authorized giving 150 landowners on Majuro a 1,000 kilowatt hour electricity allowance at a cost of $180,000. The number of landowners on the 1,000 KW free power list has jumped to 565 and now also includes 24 top-level RMI government officials bringing the bill in 2008 to $900,000

• In 2008, $66,346 was spent on new vehicles from the General Fund. “In fiscal year 2009, as of early July, the General Fund trend had doubled, totaling $126,223.”

• General Fund travel spending was its lowest in 2008 since 2002. In 2008, the General Fund spent $1,134,305

• General Fund subsidies to RMI agencies and other entities have increased 43 percent from FY2004 through last year. The amount of subsidies jumped to over $6.3 million in 2008, with a total spent over the past five years of about $28 million.

Who’s on the team?

The Comprehensive Adjustment Program Advisor Committee was headed by chairman Ben Chutaro and vice-chairman Ben Graham.

Other members of the Cabinet-appointed panel were: Dr. Hilda Heine, Jack Niedenthal, Mike Slinger, government Secretaries Tommy Kijiner, Jr., Kino Kabua, and Jefferson Barton, Nitijela Counsel Divine Waiti and Marie Maddison.  The group’s advisor was Kevin O’Keefe.

 

From the 11/20/09 issue of the Marshall Islands Journal

Secured transactions good for business

Secured transactions expert Anthony Frazier gave local business people a briefing Friday on a new system going into effect that is expected to have a positive impact on loan funding for the private sector.

He and local consultant Ben Chutaro also led trainings on the soon-to-be-implemented secured transactions program for bank and other officials over three days last week.

Although Nitijela adopted the secured transactions law more than two years ago, it is only in recent weeks that the necessary elements are being put in place to actually implement it.

Frazier said he expects it to be in operation by early in 2010, following adoption by government of new regulations enforcing the law. Not only banks but businesses can benefit from the new regime, Frazier and Chutaro indicated.

“Secured transactions can increase economic activity in the country,” Frazier said. “It is easier for lenders to secure loans by using moveable property as collateral.”

Frazier emphasized that land is not included in the definition of “moveable property.”

The law will allow banks to more easily get their money back in case of a default by the company taking the loan, he said. The new system will set up an electronic system that allows lenders to know if a would-be borrower has already pledged this same collateral to another lender by establishing a filing office into which notices of liens may be filed.

Frazier said these two developments “give lenders greater comfort in extending credit.

“By increasing access to credit, this law can help spur overall economic growth as it allows for increased investment in the local economy and, ultimately, increased employment.”

The filing office where information will be administered by a Secured Transactions Filing Office that is located at the Land Registration Authority in the MIDB building. It will be an electronic operation, with all filing and searching of the records done via the Internet.

Countries that have adopted secure transaction legislation have “seen a direct uptick in their gross domestic product in the year following adoption,” he said.

“Everything is in place,” he said. “All we need are the regulations.”

The Asian Development Bank has provided funding to assist with the final implementation of the Nitijela law.

Lower interest rates for commercial loans

Interest rates for commercial loans will be reduced once regulations implementing a new “secured transactions” law are completed by the government, a Bank of Marshall Islands official told the Marshall Islands Chamber of Commerce meeting Friday.

Once the bank can use “moveable property” as collateral for commercial loans, the bank will reduce its interest rates for these loans, said BOMI Chief Information Officer James McLean.

The regulations that are in draft form are currently with the Ministry of Resources and Development, which is the government ministry responsible for assisting private sector development.

R&D Secretary Tommy Kijiner, Jr. told the Journal Friday that the regulations are expected to go to Cabinet for review and approval later this month.

 

From the 11/13/09 issue of the Marshall Islands Journal

The meter principle

The Department of the Interior’s Insular Assistant Secretary Tony Babauta has agreed to partially fund a proposal from the Marshall Islands government and the Marshalls Energy Company (MEC) that will implement initiatives to assist the utility company to become self sustaining, DOI said in a release Wednesday. Under the proposal submitted to DOI, the MEC seeks a three-pronged approach to:

• Install debit meters for accountability

• Establish a meter-calibration program to ensure accuracy

• Install meter locks for security.

“I applaud the proposal of the RMI government and the Marshalls Energy Company to ensure the fair delivery of services to Marshallese residents,” Babauta said.  “Plans such as this one submitted by the MEC work toward the goals of accountability and transparency, which in the end results in a more efficient system from the standpoint of both provider and consumer.”

The DOI grant, from the Operations and Maintenance Improvement Program, in the amount of $200,000 will help to address studies that have shown that the MEC incurs a more than 10 percent loss from theft and non-payment of electric utility services.  This can result in millions of dollars a year in unrealized revenue, DOI said. The installation of electrical meters is intended to cut down on such loss and has been successful in other islands such as Kosrae and Palau.

The DOI grant is subject to an equal matching funding requirement from the RMI.

MEC records net loss of 4.1 million

The Marshalls Energy Company suffered a $2.9 million operating loss in fiscal year 2008 and overall its net deficit for the year was $4.1 million, giving the company an overall $10.9 million net deficit when previous years losses are combined, the latest Deloitte and Touche audit reported.

Aside from detailing MEC’s heavy losses, auditors identified only two findings (problems) in the company’s accountability.

Overall, it had $19.6 million in revenues and $22.5 million in operating expenses. Added to this was $1.5 million in interest payments and small subsidies for the Jaluit and Wotje power operations totaling $355,000 that produced the overall $4.1 million net deficit.

“Despite the wildly fluctuating fuel prices, MEC has been able to maintain electricity tariffs at levels which are one of the lowest in the Pacific,” MEC said.

In 2008, MEC received a cash advance from the RMI government of slightly over $7 million, of which $2.3 million was applied to outstanding utility debt owed by the RMI government and its agencies, the audit said. MEC also has a five-year fuel contract with SK Networks Co., Ltd. that started in 2007 and runs through December 2011.

MEC management “acknowledges that it is currently dependent on RepMar for cash advances to fund operations and for its affiliates to pay for actual services rendered in order to maintain MEC as a going concern,” the audit said. “Should RepMar and its affiliates choose to discontinue cash advances and payment for services rendered, MEC management may have to consider alternative measures including, among other possibilities, an increase in electricity and fuel rates to maintain MEC as a going concern.”

The audit raised the issue of account reconciliations not being prepared on a timely basis, “which resulted in numerous year-end correcting entries for electricity and fuel receivables, inventory, construction-in-progress, import tax payable, import tax expense and related party accounts.”

Management said “procedures are in place covering reconciliations” and “staff have been instructed to comply with these procedures.”

From the 10/23/09 issue of the Marshall Islands Journal

Yards of MEC meters

MEC’s plan to install prepaid meters for Majuro power customers is moving ahead with Interior Department, Asian Development Bank and Pacific Power Association assistance.

MEC General Manager David Paul said a request for proposals advertisement will go out through the Fiji-based PPA, which will also help review bids received from overseas companies.

MEC is planning to install meters for its 3,400 customers — residences, businesses and government offices.

The Interior Department has approved funding to assist this three-year installation project. ADB funding will also support the project, Paul said.

The meters, about $300 each, are expected to cost over $1 million.

“We’re going to work closely with the PPA to get technical assistance (on the bids),” said Paul. “We want to do it right the first time.”

PPA Director Tony Neil, who visited Majuro last week, said the prepaid meters “provide a means for utility companies to get into the black (make money).”

The Interior Department is also funding an assessment of power plant and distribution losses in utility companies in all US-affiliated islands in the Pacific, Neil said. MEC’s plant and distribution system will be the first to be evaluated in early December. Paul described this study as a critical part of MEC’s recovery plan.

Shortage of statistics

By GIFF JOHNSON

US and RMI leaders want to see better performance in government services, and have set new requirements for the ministries of Health and Education to improve data collection and to use it to demonstrate if they are meeting required standards.

Two resolutions from the recent US-RMI Joint Economic Management and Financial Accountability Committee (JEMFAC) meeting in Honolulu focus on the need of RMI to improve its collection of data and to strengthen the link between data and budgeting. The Ministry of Health was directed to “undertake a systematic program to diagnose health data problems and discrepancies in the production of statistics by using technical assistance offered by the United Nations Population Fund (UNFPA).

JEMFAC advised the Ministry of Health to provide a report to its technical meeting early next year on “progress made to complete the diagnostic activity, interim recommendations and a tentative timetable and list of resources to implement solutions.”

This resolution follows problems being identified with Ministry of Health statistics, including the recall of the 2007 annual report when data discrepancies were pointed out by other agencies.

The JEMFAC resolution comments that “if the Office of Insular Affairs deems insufficient progress has been made, after appropriate consultations with the Ministry of Health, then JEMFAC may direct the Ministry of Health to undertake additional remedies at its August 2010 meeting.”

The Ministry of Education was directed to “contract with outside expertise to develop comprehensive technology plans, including standards for students, teachers and administrators, and budget and training schedules to meet those standards.” JEMFAC recommended that Education request use of unspent money from Supplemental Education Grant (SEG) funds from fiscal years 2005 and 2006 to support these efforts.

RMI Chief Secretary Casten Nemra pointed out the need is to “get credible data so we can properly analyze (issues) and make decisions based on the data.”

Nemra said both the US and RMI recognized “the issue needs to be addressed.” And, he said, the Ministry of Health fully supports the resolution.

Interior Department official Alan Fowler said JEMFAC “put more emphasis on getting statistical data” at this year’s annual meeting. The RMI ministries “need data to make performance-based budgeting work,” Fowler said.

The aim, he said, is to get RMI officials to produce the statistics themselves and to reduce reliance on outside consultants.

Nemra said the government’s planning office and other agencies have been making good use of an official statistics program at the University of the South Pacific campus in Majuro. “This is an investment and it takes time, but when it’s done, we have skills here,” Nemra said.

Planning office Director Carl Hacker said last week that there is room for 12 new students in the USP statistics program. He said there are 16 Marshallese currently enrolled and if government offices “want to push to improve their organization’s ability to handle performance budgeting, administrative statistics and data analysis, this is a way to develop long term and local sustainability.”

In a separate resolution, JEMFAC directed the RMI government to “refocus the performance budgeting effort on the three Compact-funded entities for fiscal years 2010 and 2011 to resolve performance budgeting and measurement issues fully, and ensure that the ministries demonstrate improvements in handling budgets and data, and strengthening the link between both.”

The Ministries of Health and Education and the RMI EPA are the three entities being funded by the Compact.

 

 From the 10/16/09 issue of the Marshall Islands Journal

ALRO tanker to cut fuel cost?

Despite high shipping costs to deliver gas to Ebeye and Jaluit, ALRO prices for gas at the pump are close to or slightly less than Majuro pump prices.

ALRO is the Ebeye-based petroleum company that supplies fuel to Ebeye and Jaluit through a contract with Mobil Oil Micronesia.

ALRO Chief Executive Officer Alvin Jacklick, who also represents Jaluit in the Nitijela, spoke to the Journal Saturday about his plans to bring down the cost of supplying fuel to remote islands and Ebeye.

Currently, he said, Ebeye is paying $4.95 a gallon for gas at the pump, about five cents lower than most Majuro stations, while the price at Jaluit is $5.25 a gallon.

“Our goal is to provide fuel to the outer islands as inexpensively as possible,” Jacklick said. “To do that, we need our own tanker to deliver the fuel.”

Jacklick said ALRO’s board supports services to the outer islands “with minimal profit. They see their responsibility to meet this important need for daily life.”

If ALRO is successful in buying a tanker — which it is working on now — “the fuel price on the outer islands will be way less than the Majuro prices,” Jacklick predicted.

He said he is working with banks to obtain financing for buying a tanker. One that he has identified is available for about $1.5 million, he said.

Jacklick’s plan is to buy a tanker that can also carry cargo and passengers. Since Ebeye only requires shipments about once-a-month, and Jaluit is generally on a quarterly basis, with passenger accommodations and cargo space, the vessel could be used to transport people and goods when not delivering fuel, he said.

“My goal is to bring a tanker next year,” he said.

“It is critical for the business to have a ship for outer islands delivery to minimize delivery costs.”

Copra price cut by 30 percent

The price of copra in the Marshall Islands will drop dramatically on November 1, Tobolar’s board of directors announced late last week.

“Based on world market prices, we had no choice but to drop the price,” said Tobolar Copra Processing Authority board Chairman Jemi Nashion, an assistant secretary at the Ministry of Finance.

The price will drop from the current 23.5 cents to 16.5 cents per pound in Majuro, and from 22 cents to 15 cents per pound on the outer islands. This is a 30 percent drop.

The old price is being maintained through the end of the month for two atolls that are currently having a copra pickup service from the Marshall Islands Shipping Corporation, said Nashion.

Even at the lower price that starts November 1, Tobolar may have difficulty keeping the price at this level through next September, the end of the current fiscal year. The Nitijela’s approved budget puts $1.2 million aside for copra subsidy.

“That will probably cover the price for 10 months,” Nashion said.

He expressed hope that the world market price will rebound. But if the world market price drops, “we will absolutely need more money to maintain the price,” he said.

Usually Tobolar announces price changes effective almost immediately.

This three-week window is giving a short-term advantage to Arno and other islands that can transport their copra to market by small boat.

Nashion said Tobolar has seen an upswing in copra coming in from Arno as producers are apparently hustling to get their copra in before the October 30 cutoff of the higher price.

From the 10/9/09 issue of the Marshall Islands Journal

High level talks with Japan

The first Japan-Marshall Islands Policy Consultation on Economic Cooperation will be held this Friday at the Marshall Islands Resort.

The aim of the high-level talks is both to “deepen understanding” about Japanese aid cooperation policies and to discuss specific development projects for RMI, said Japan Charge Kazuyuki Ohdaira (pictured).

Yukio Numata, the Senior Coordinator of the International Cooperation Bureau at Japan’s Ministry of Foreign Affairs, is heading the Japan side to the one-day discussions. Ohdaira said the RMI side will be headed by Chief Secretary Casten Nemra, and include representatives from the President’s Office and secretary-level officials from five ministries.

The talks were initially planned for March, but were delayed by Japan.

“We will explain Japanese cooperation policies toward the Marshall Islands, and learn about development plans and policies of the RMI (at the meeting),” Ohdaira said.

The Charge indicated the Japanese side is keen to review detailed sector development plans from individual RMI ministries. This will help “to deepen our understanding,” he said.

Among the specific plans up for discussion are the RMI’s request for funding for a campus for the University of the South Pacific and new vessels for outer island services. These are two large budget projects now under consideration by the Japan government, he said.

Two other Japan-funded projects that are in motion are an $8 million fish market for Uliga Dock, and a $4 million grant to install a large solar system at Majuro Hospital.

Trust fund at $87.7 million

At the end of August, the Marshall Islands government’s trust fund stood at $87.7 million — nearly returning to the level it had attained two years previously before the financial collapse that hit global financial markets starting in late-2008.

The “A” Account, which is the main account of the trust fund was $75.6 million at December 31, 2008, according to the RMI’s Compact Implementation Office at Foreign Affairs.

As of August 31, 2009, it had grown to $87.7 million, a 16 percent return over 11 months, according to the report from the Compact Implementation Office. This level, however, is still lower than the $89 million the trust fund had attained in late 2007.

Demonstrating the severity of the losses the trust fund sustained over the past two years, the $75.6 million balance at December 31 last year included the $10.8 million US Compact annual contribution made in October 2008. The RMI’s Trust Fund lost more than $20 million, or nearly a quarter of its value, when the global financial crisis hit beginning a year ago.

The annual US contribution to the Trust Fund is scheduled for this month and will total $11,132,214.

The “D” Account of the trust fund, which the Republic of China/Taiwan is contributing to each year, went from $3,987,233.58 on December 31 last year to $6,087,662.96 as of August 31 this year.

 

From the 10/2/09 issue of the Marshall Islands Journal

MOH financial issues not being resolved

By GIFF JOHNSON

Auditors report seven serious problems with accountability at the Ministry of Health’s “Health Care Revenue Fund” in 2008, including violations of the RMI procurement code that have remained unsolved despite being identified in audits since 2006.

The report, by Deloitte and Touche auditors, was issued to Nitijela in September. It found $273,771 in Health Care Revenue Fund purchases during fiscal year 2008 that did not have enough documentation to prove that they followed the RMI government’s purchase (procurement) law. That is 35 percent of all non-payroll spending checked by the auditors that did not follow the law.

Auditors said this showed there is a “lack of adequate internal control policies and procedures” governing procurement documentation required by law.

Auditors said the Ministry of Health has been advised in the past two audits for FY2006 and FY2007 that it has not followed the procurement law in administering the Health Care Revenue Fund. The Ministry responded to say that it is going to “make it a policy for all high level administrators in the Ministry responsible for initiating purchase requisitions to be well versed in RMI procurement code to ensure compliance.”

Other key points made by auditors:

• Ministry staff did not reconcile the Health Care Revenue Fund’s Bank of Marshall Islands account during FY2008, resulting in unrecorded collections from Ebeye hospital of $38,997. In addition, Ebeye hospital’s daily collections and deposits of money are “not monitored by accounting personnel in Majuro,” and related receipts, daily cashier reports and bank deposit slips were not sent to Majuro in a timely way. The audit said that June and July 2008 documents were not sent to Majuro until February 2009.

• Money received from patients at Ebeye hospital was not entered into the Ministry’s accounting program (known as the MIP system) as done for Majuro Hospital. “Management,” said the audit, “only learned of this condition when it was brought to their attention during the audit.”

These problems relating to reconciliations and Ebeye hospital money collections could result in misstatements and theft of cash going undetected, auditors said. The Ministry said it would take action on these problems, by performing monthly reconciliations and by having the Director for Support Services at Ebeye provide deposit and cash information to Majuro for entry into the accounting system.

• Prepayments of $96,932 were not “liquidated” (closed out) in a timely manner “due to incomplete receiving reports and lack of vendor invoices,” the audit reported. “One prepayment of $6,644 was not supported by a vendor invoice.” This problem occurred because the Ministry does not have a system for timely monitoring and reconciliation of prepayments, the audit said. “Effective immediately,” responded the Ministry, “the accounts receivable accountant will ensure that timely monitoring, reconciliation and liquidation of prepayment is implemented.” The Ministry said that “management may revisit its prepayment policies and procedures.”

• The Health Fund automatically cancels unfilled purchase orders (POs) after three months “without investigation to determine whether cancellation should occur,” the audit said. This leads to management being unaware of unrecorded and outstanding vendor invoices for these POs. “Reconciliation procedures performed by management in response to audit inquiries revealed additional unrecorded expenditures of $180,163.” Auditors said Health Fund management should check unfilled POs prior to cancellation. The Ministry said this would be done, including preparation of invoice and receiving reports.

Nitijela approves $137 million budget

The Nitijela approved the second highest budget in RMI history for the new fiscal year that started on Thursday this week.

The $137.4 million budget was approved officially signed into law on September 21 by Speaker Jurelang Zedkaia.

Only one floor amendment was made to the budget bill before it was passed.

Minister in Assistance Ruben Zackhras moved a floor amendment to take $300,000 from the Ministry of Education’s “professional development” account and put it in the school lunch program account.

This pumped the school lunch program from $100,000 to $400,000. Prior to passage of the budget, the Ministry of Education had cancelled its lunch program at all Majuro public schools for lack of funding, and Education officials said they feared this would have a seriously negative impact on student learning.

The Nitijela responded, though it did not add new money to Education’s budget, simply moved money within the large $25.9 million budget for public schools.

 From the 9/25/09 issue of the Marshall Islands Journal

Power at risk

By GIFF JOHNSON

Adding a new degree of uncertainty to an already challenged business environment in Majuro, MEC General Manager David Paul warned Wednesday’s Chamber of Commerce meeting that power for the capital is in an unpredictable phase and electricity service could be interrupted if one of the two large engines break down.

“I don’t want to panic anyone, but the assessment from our mechanical engineers is that the big engines in the new power plant could go tomorrow, next month or in six months,” Paul said. “We’re aggressively working to get parts in and the generators overhauled.”

But, said the new Marshalls Energy Company general manager, “as a responsible manager, I don’t want people to panic but this is the reality (of the power situation in Majuro). I don’t have a crystal ball.”

Several of the smaller generators in the old plant are still ‘down’ as a result of a fire three years ago, and while one was recently returned to service, Majuro’s electricity usage is at the point where MEC currently has almost no backup generating capacity. And if one of the big six megawatt engines is forced to shut down — as happened recently — it will put MEC in the position of rationing power. The new plant’s two engines “are in a state of disrepair,” he said. “They require a major overhaul.”

MEC has been financially strapped the past three years, with little money available for major engine work.

For the new plant’s two Deutz engines, it can take many months lead-time to fabricate new parts, which also have to be paid for in advance, Paul said.

A Marshall Islands Social Security Administration official said Paul, who is on the MISSA board, advised the board to purchase a generator, which the retirement agency is now planning to do.

“On Tuesday, we briefed the Cabinet regarding the financial situation of the company, and I expect the Minister of Public Works (Maynard Alfred) who chairs the MEC board will go on Nitijela to explain the situation to the public,” Paul told the Chamber. Paul concluded by asking if there were any questions. The normally voluble Chamber crowd responded with an unusual silence.

New freight rules on the way

A new US Homeland Security rule comes into effect early next month will require anyone shipping any cargo to and from the Marshall Islands to use a US-recognized freight forwarder or agent.

Triple B Sales Manager Andrew Alt was at the Marshall Islands Chamber of Commerce meeting Wednesday to explain that on October 7 the Transportation Safety Administration rule goes into effect. Triple B’s local agent is Pacific International Inc., and Alt explained that PII will assist local businesses and others to move their cargo in either direction.

The TSA is ramping up security of cargo carried on US passenger airlines. The new TSA regulations will impact all islands in the Micronesia area, Alt said. “Continental will not be able to accept cargo from current ‘known shippers’ after from October 7,” he said. After that date, all cargo must go through a freight forwarder.

Alt is here through Friday to meet with businesses wanting to prepare for the new regulation.

 From the 9/10/09 issue of the Marshall Islands Journal

EPA to get tough on unpaid fines

Unpaid fines are an ongoing concern for the EPA as the loss of income has resulted in an inability to maintain equipment and respond to environmental problems effectively.

At the same time EPA recognizes that litigation should only be used as a last resort as it is costly, time-consuming and adversarial.

For this reason, EPA is implementing a new procedure starting on October 1.  Permit applications by individuals or companies with outstanding fines will not be considered until the fines have been paid in full.

Those who disagree with fines issued may appeal EPA’s decision, a right provided under the National Environmental Protection Act.

Any appeal before the courts or an alternate dispute resolution process will not be considered, the EPA said.

RMI hosts climate meeting

The Marshall Islands will host the second annual Pacific Climate Change Roundtable (PCCR) and related meetings October 19-23. The meetings will be held at the International Conference Center (ICC).

The Secretariat of the Pacific Regional Environment Program, in collaboration with the RMI government, is sponsoring the PCCR  and a preparatory  Climate Change Negotiations Workshop to help the Pacific islands prepare for the upcoming UN Conference of the Parties which will be held at the end of the year in Copenhagen.

The event will bring together climate change experts, advisors, regional and international organizations on climate change, including policymakers to discuss climate change issues and mitigation efforts in the region.

While much effort is being invested in the international and Pacific islands communities to mitigate greenhouse gases that cause climate change, some impacts will be inevitable regardless of how this is addressed due to the longevity and amount of carbon dioxide already in the atmosphere, said the RMI Office of Environmental Planning and Policy Coordination in a statement. “It is important that the resiliency of our people and islands is built to help us combat these negative changes.”

In 2005, Pacific island leaders adopted the Pacific Islands Framework for Action (PIFACC) 2006-2015, and the South Pacific Regional Environment Program was directed to develop an Action Plan to implement the PIFACC, by establishing a set of national and regional activities that would meet the key principles of the PIFACC.

From the 9/3/09 issue of the Marshall Islands Journal

Five-year wait for investment return

Pan Pacific Foods (RMI) Inc.’s parent company chairman and president Xie Feng says they are giving the RMI-based fish processing plant five years before its parent company Shanghai Kaichung Deep Sea Fisheries Co, Ltd expects to see a return on its $12 million investment.

Shanghai Kaichung Deep Sea Fisheries is one of China’s biggest fishing companies — 40 percent owned by the Chinese government and the remaining 60 percent to private stockholders.

Much is riding on PPF as it is the first ‘foreign-based-division’ of Shanghai Kaichung Deep Sea Fisheries Co. Ltd, and as one of China’s fisheries industry leaders for the past 30 odd years, PPF brings to the table decades of experience.

But, despite this experience PPF says it needs the RMI government’s support to make the project a success.

During President Tomeing’s recent tour of the plant, PPF laid out a road map of milestones that need to be reached in order for the plant to maximize its production capacity and remain in production long into the future — providing an employment opportunities for the nearly 40 percent unemployed Marshallese citizens. Some of the hurdles PPF says it needs RMI assistance with to reach its milestones include:

• Timely processing of labor permits to bring in their skilled trainers to train locals.

• Finalization of a Memorandum of Undestanding with the Marshall Islands Marine Resources Authority to license four more of their purse seiners to increase fish supply for processing — currently only two vessels are licensed.

• Assistance with negotiations with the US to treat fish from RMI as a domestic product and gaining approval to provide fish to the US military.

• Receive an  official letter from the government/cabinet regarding PPF’s ‘tax holiday’ status.

“PPF doesn’t only belong to China,” PPF (RMI) Inc. president Zuliang Zhang clarified to RMI’s President Tomeing.

“It also belongs to the Marshallese people.”

Pollution fines to be raised to $1 million?

To combat a rash of recent lagoon oil spills, the RMI EPA is seeking to increase pollution fines to $1 million.

If you’ve been in Majuro in the past few weeks, you might have noticed a marked increase in the number of small oil spills along the shore, evidenced by foul odors and dark blotches in the water.

The RMI Environmental Protection Authority (EPA) has investigated three spills appearing at G&L, RRE Shoreline and Rita. All have been cases of bilge or ballast oil deliberately dumped in the middle of the night to avoid detection, EPA said.

“Each spill has been too small to warrant sophisticated off-island chemical analysis (the only certain method of finding the culprit), but is still big enough to pose a threat to marine life and the environment, and in one case has led EPA to make a radio announcement to alert children of the potentially harmful health effects of swimming near the spills,” EPA said in a release. “In the past, spills have been treated with soaps or fertilizer, but it is now known that for small spills, these treatments can cause even greater damage to the environment than the spill itself,” EPA said. “That is why the oil is left to disperse and degrade on its own.”

The EPA said illegal discharges like the ones in Majuro recently are significantly affecting the environment.

“It is sad that some commercial vessels feel they can bypass the law and intentionally harm our environment and recreational areas,” EPA said. EPA is seeking to strengthen legislation to deter the illegal discharge of oil by ships. “EPA will be proposing amendments to the Coast Conservation Act designed to ensure that enforcement and prosecution of ships shown to be illegally discharging bilge oil is effective,” EPA said. “These amendments will increase fines up to $1 million, bringing them in line with other countries such as the United States, Canada and Great Britain.”

 

From the 8/28/09 issue of the Marshall Islands Journal

Hospital hazard concerns Chamber

Continuing problems with fixing Majuro Hospital’s hazardous medical waste problems were a focus of concern at last week’s Marshall Islands Chamber of Commerce meeting.

Concern was raised about containers loaded with hazardous medical waste sitting for months near the airport, and bags of hazardous waste piling up at Majuro Hospital.

It was explained that an incinerator for burning this hazardous waste was installed by Majuro Atoll Waste Company about a year ago at its location near the airport, but has not been operational as it is waiting for provision of electrical equipment by the Ministry.

While MAWC has the contract for hauling hospital waste for disposal, AC Construction has the contract for handling incineration of the hospital’s hazardous waste.

One Chamber attendee asked a question about large scale funding for the Ministry of Health that comes from the US government, and why the US doesn’t assist in this matter.

“This is an independent country,” said the US Embassy’s Interior Department representative Alan Fowler.

“They determine how best to use the funding. Yes, it could be used better, in Education, too, but we don’t run these ministries. This is a sovereign, independent country.”

MAWC makes a difference

Thousands of tons of auto batteries, aluminum cans, and steel from vehicles have been exported from Majuro in the past two years, by Majuro Atoll Waste Company.

The Batkan-based firm is preparing to add millions of “pet” plastic bottles and hundreds of cars to its list of recycling materials.

MAWC Manager Roger Clark gave the Marshall Islands Chamber of Commerce a report Friday on its work since formation in 2007.

In the past two years, MAWC has exported for recycling 250 tons of automobile batteries. “We don’t get a lot of money for them, but it gets rid of a lot of lead,” Cooper said.

Another 900 tons of steel has been removed from the island and exported for recycling the past three years, Cooper said.

“We’re now preparing our first container of ‘pet’ plastics to recycle,” he added. “We can get about $200 per ton, which is a break even price.”

Unfortunately for MAWC, the world market price for recycled steel crashed over the past year, going from $365 a ton in 2008 to $160 a ton today.

Cooper said that the business and private waste collection program is working and generating about $100,000 a year to help out with some of the costs of operating the waste company.

Cooper is particularly happy with MAWC’s green waste/compost operation, which is converting bushes, grass, fish scraps and copra cake into a fertilizer.

The end product “is in high demand,” Cooper said. “We can’t keep up with the demand from the community.” MAWC is selling sacks of compost for $3 and a loader scoop for $15.

He recognized the national government and a wide range of donors who have helped provide equipment and support for the waste company.

 From the 8/21/09 issue of the Marshall Islands Journal

 

India helps to light up Laura

The long awaited solar streetlights funded through a grant from the government of India have finally arrived.

Last year Majuro Atoll Local Government was awarded a $100,000 solar streetlight grant to purchase about 30 streetlights that will be installed in the Laura area  — a response to the high cost of powering streetlights and addressing the need of ensuring security and safety of the community.

Mayor Titus Langrine told the Journal MALGov is coordinating with Ministry of Foreign Affairs to inform the Indian Embassy in Philippines to confirm the arrival of the solar streetlights and to schedule a blessing ceremony. He said the aim is to have the Ambassador of India on island for the ceremony before installation work begins.

“This is a pilot project with installation of the solar streetlights starting in Laura,” said Langrine. “MALGov will collaborate with MEC and Public Works to install the lights.”

The solar streetlight units were purchase through Island Eco.

Wally to represent Marshalls

The Marshalls Billfish Club board-appointed All Micronesia Tournament Committee will be hosting the 17th Annual Budweiser All Micronesia Fishing Tournament in Majuro in early September. 

The major sponsor of the 17th annual tournament is Budweiser (Ambros-Guam) with co-sponsorship by Deloitte and Ching Fu. Other sponsors include ALRO, ACE International, Bank of Marshall Islands, Do it Best, ePacific, JoeMar Construction, KOOs, MALGov, Matson, MEC, MI Shipping Corporation, MIDB, MIMRA, MIR, MIVA, NTA, Office of the President, Pepsi, PII, RMI Ports Authority, RRE Hotel, Republic of China Taiwan, TCMI, V7AB.  Both the RRE Hotel and the Marshall Islands Resort are offering discount packages for our visitors, which really help make traveling to Majuro a success, MBC said in a release. Visiting teams from Japan, Taiwan, Guam, Saipan, Pohnpei, Yap, Kosrae, Kwajalein and Samoa are set to compete in this event, with more teams possible.   The team representing Majuro and the Marshalls Billfish Club will be the 2009 Atjang Paul Memorial Trophy winner Captain Wally Milne of Team Marah.

 

From the 8/7/09 issue of the Marshall Islands Journal

Komol tata PII

By SUZANNE CHUTARO

Gas prices plummeted this week in Majuro with the introduction of a new player in the local gas market.

Despite an eight-month lag Pacific International Inc. (PII) delivered on its promise to start selling gas and as of Thursday last week it is now selling gas at the pump for $4.90 a gallon — a 50-cent difference from the current highest priced gas on island.

In January PII Operations manager Kenneth Kramer told the Journal the decision to sell gas arose from PII’s discontent with the four local gas stations that were not translating decreases in world fuel prices to the Majuro market.

“Prices charged (at the pump) are ridiculously high,” Kramer said at the time.

Until PII joined the market the price for gas at Riwut, SEPS, Aces One Stop and RRE Gas stations ranged from $5.15 to 5.40 per gallon.

Riwut corner was the first to respond, dropping its price on Saturday to match PII’s. Both SEPS and Ace’s One Stop dropped to the $4.90 gallon rate on Monday, meanwhile RRE followed suit first thing Tuesday morning.

The rapid price cuts by all the other fuel stations on Majuro in response to PII’s reduced price suggest that over the past year, the four stations were cooperating to maintain nearly similar prices at the pump — until last month when a 25-cent price spread opened up among the four.

Mobil is currently the only supplier of gas on Majuro, and Mobil has not reduced its selling price in recent weeks. Meanwhile, although Mobil is supplying fuel to Majuro stations at around $4 per gallon, gas in America is retailing at the pump at less than $2.40 per gallon, meaning the wholesale price is under $2.

But one of the original four Majuro gas station operators, who asked to remain anonymous, denies price fixing by the four downtown stations, saying that PII can afford to sell at a loss because “it is a big company that can survive off its other operations.”

This operator claims “PII is only selling at a loss to penetrate the market. We’re only a small company and this new price has really eaten into our margins. It was already tough competing with the other three companies. Now it’s going to be double the hurt because the market share will be smaller.”

This operator says that at this $4.90 rate they will “manage to just break even.

“We will have to make some drastic changes,” the operator said offering that there may be some employee lay offs as a result.

Meanwhile this same operator says they have also lost business on diesel sales because both PII and the Batkan Fuel Depot have been selling diesel for $3 a gallon, a pricing policy originated by the Batkan Fuel Depot. But Mobil’s dealer rate to the Majuro fuel stations has been slightly over $4 says the operator. Batkan Fuel Depot is buying its diesel from the Marshalls Energy Company, which sells diesel for under $2.50 a gallon.

“How is it that ALRO, which buys its diesel from our same supplier Mobil, can sell fuel to the outer islands cheaper than what we can buy here in Majuro?” asks the operator. “Mobil is really the one who is making all the money here,” said the operator.

RMI gets 7.1 million in Compact money

The Marshall Islands Government’s Ministry of Finance received just over $7.1 million in US Compact-funded payments last month.

According to a release from the US Embassy in Majuro, these payments are the fiscal year 2009 Compact Sector Grants for the month of July, Compact infrastructure projects for the month of July, the Enewetak Food & Agriculture Program, the fiscal year 2008 SEG, the 4th Quarter Kwajalein Landowner Payment, and the 4th Quarter Kwajalein Landowner Escrow Payment.

The breakdown of these July payments which totals $7,149,524 is as follows:

• Education Sector Grant, $1,315,000

• Health Sector Grant, $815,000

• Kwajalein Environmental Impact Grant, $20,000

•  Ebeye Special Needs Education Grant, $215,000

•  Ebeye Special Needs Health Grant, $195,000

• Public Sector Capacity Building Grant, $25,000

• Project Management Unit, $7,332

• Outer Islands Elementary Schools, $213,544

• Power Generation, $213,118

• Captitol Building Complex, $56,775

• Enewetak Food & Agriculture Program, $270,000

• FY08 SEG, $1,105,923

• 4th Quarter Kwajalein Landowner Payment, $1,562,000

• 4th Quarter Kwajalein Landowner Escrow Payment, $1,135,832

 

 From the 7/31/09 issue of the Marshall Islands Journal

 

MAWC builds employee base

After starting off with just eight employees two and a half years ago, Majuro Atoll Waste Corporation’s staff has grown to about 30, with all of its staff on pay rates higher than the minimum wage.

“We hire people on the lower rates and then if they produce the work I advance them,” MAWC manager Roger Cooper told the Journal Tuesday, adding that his highest paid worker is on $8 an hour.

As well as the Marshallese staff, Cooper is coordinating the group of Filipinos that are on island to reduce Majuro’s tons of heavy scrap metal into pieces that can be shipped off island.

“We have teams at the PII (Pacific International, Inc.) yard and Public Works yard.”

The steel cutters are not, however, working at full capacity.

“We need 40 bottles of oxygen a day for the cutting equipment,” Cooper said, “but PII can only put out about 10 a day the moment. But they’re working on it.”

So while the cutting of scrap metal is slow, “the guys are doing a lot of prep work for when oxygen supplies improve.”

In other news from MAWC, which is a government-owned corporation similar to Marshalls Energy Company:

• The corporation is working on a number of grants to pay for new waste collection equipment

• A JICA senior volunteer, who is an expert in land-fill and recycling techniques, is due to join MAWC in late September

• The corporation is working with the Asian Development Bank on a feasibility study for a waste incinerator that produces energy and fresh water.

What would we do without water?

In the last month, Majuro Water and Sewer Company has fixed three major water leaks in Delap. “One was across from former President Amata Kabua’s house, one was across from Stevedore, and the other was in front of the Capital Building’s main gate,” MWSC administrator Arlington Robert said on Monday.

At the time of the interview, Majuro’s reservoir held 11.5 million gallons with pumping only on Mondays. “We raise it to two days when it reaches 12 million gallons,” he said.

Leaks in the main water system are only visible during water hours. “We drive around looking for leaks, especially when we get reports of very low pressure.”

The problem of illegal leaks is harder to deal with. “Since we began looking for illegal leaks in about 2000 we have probably investigated about three a year,” Robert said. None of these were in 2009. “Usually we hear about illegal leaks from people complaining about their neighbors. Our procedure is that a policeman and I will go to the house and take a photograph and get the peoples’ names.” It is then up to the police to file a report with the Attorney General’s office. As well, MWSC charges the household a $100 fine. “If they pay the fine, we will reconnect them,” Robert said.

To the best of Robert’s knowledge none of the previous illegal leak cases has gone to court.

A majority of households in RMI have improved water sources compared to 1999, according to the Demographic and Health Survey 2007 published by the Economic Policy, Planning and Statistics Office.

“In urban areas, close to eight in 10 households have access to an improved water source while almost every household has access to an improved water source in rural areas.” Despite this data, Majuro’s Water and Sewer Company is this week still only pumping city water on Mondays.

As well, according to the Health Survey, “Water from an improved source can be contaminated at collection during transportation, and during
storage.” Most households (61 percent) use an appropriate method, such as boiling, for their drinking water, but 37 percent use no treatment.”

According to the World Health Organization, polluted drinking water causes about five million deaths around the globe a year and that safe water could prevent 1.4 million child deaths from diarrhea each year.

 

From the 7/24/09 issue of the Marshall Islands Journal

Tobolar loses $1.4 million

By SUZANNE CHUTARO

Tobolar has lost $1.4 million since late 2008 because of the artificially high price paid to copra producers and a huge reduction in the world market price for coconut oil — developments that could herald the end to the primary cash crop in the Marshall Islands.

Pacific International Inc.’s Chief Executive Officer Jerry Kramer, whose company holds the management contract for Tobolar, warns that the current copra price approved by the government is hurting the Delap-based copra processing plant.

“The government wants Tobolar to pay a price that far exceeds the world price,” said Kramer, adding that while the government’s heart is in the right place, this price comes with consequences.

According to Kramer, the world price for copra is at seven to eight cents per pound while government has ordered the price paid to copra producers be 22¢ per pound for the outer island producers and 23¢ per pound for Majuro’s producers.

In recent weeks, outer island copra producers have been complaining that they have not been getting paid for their copra. In June, after a cry for help from Tobolar to the government, Cabinet approved a $500,000 subsidy to Tobolar.  This fund however did not materialize until last week — a month after the approval  — and only $170,000 of it was made available.

“I understand government’s position to help the people but this has consequences, it costs,” said Kramer. “We have to bite the bullet and cut the price of copra.”

Kramer said because of the high cost, Tobolar is in the red by $1.4 million. “We can’t sell our oil, we’ve used up our line of credit with Bank of Guam and we’re on the boarder line of whether or not Tobolar can pay its loan,” said Kramer.

Tobolar’s last copra oil sale was in November 2008. Even as the world price of copra oil has fallen from $1,400 per ton back to $440 per ton now, Kramer said Tobolar still can’t find a buyer.

Kramer warns that if the current RMI price for copra doesn’t reflect the world prices, then come 2010, Tobolar will need an additional $3 million subsidy just to cover the cost of buying copra from producers. But with no one buying the Marshallese copra oil, one is left with the question of what Tobolar will do with all the copra it continues to buy?

Ship registry tops 50 million tons

The Marshall Islands ship registry surpassed the 50 million gross ton mark earlier this month, continuing its steady growth, said International Registries Inc. (IRI) in a release this week.  In less than six years, the Marshall Islands fleet has grown from 18.5 million gross tons and 626 vessels at the end of 2003 to 50 million gross tons and 2,044 vessels in July 2009 reflecting an average annual growth rate of 23 percent in terms of gross tonnage. The registry, which is administered by IRI, attributes its success to the decentralization of registry services to its 20 worldwide offices.

The milestone was passed last week when the 11,259 gross ton new tanker Songa Emerald, managed by Songa Ship Management of the UK, was launched at Samho Shipbuilding in Korea.

 

Reform for RMI

By GIFF JOHNSON

FSM President Emanuel ‘Manny’ Mori has at least four recommendations for island governments, including the RMI, that are trying to solve financial problems and deal with huge government payrolls.

Mori’s home state of Chuuk has been attempting to work its way out of a more than $40 million deficit over the past two years, and Kosrae is also trying reforms to deal with its lack of funding to meet payroll and services.In comments to the Journal, Mori listed his top suggestions based on experience in Chuuk and Kosrae:

• “We must live within our means,” he said. “We cannot run government deficits.”

• The islands need to encourage more people to stay in the subsistence system by fishing and farming to improve health and food security. This underlines why conservation of land and ocean resources is so important for the islands, Mori said.

• Key to addressing an over-staffed government is getting people to shift into private sector jobs. “My warning to Marshall Islands officials is do not reduce the public sector without growing the private sector,” he said. About 400 government workers in Chuuk and 100 in Kosrae were let go as part of reforms. Many simply left to Guam or the United States. This has caused many problems for the FSM social security and health funds, as well as national and state tax revenue streams, because so much revenue was cut off overnight, he said.

• By teaming up as a region, US-affiliated islands can get more attention and action from Washington. Mori said he sees cooperation among the three freely associated states as well as Guam and the Northern Marianas, in dealing with Washington as key to engaging Washington. During this week’s summit, Mori said he will be asking the Presidents to go to Washington as a group later this year to meet top Obama administration officials.

“We can go as a group and impress upon the new administration that we in the Pacific have unique needs and we’d like to engage (with Washington),” he said. “It will be most effective if we all go.”

Mori sees numerous possibilities with US relations since President Obama took over. “The attitude of US officials we’ve met so far has been very positive,” he said. “We still don’t know all the players, but the lower level staff are very positive about helping us.”

The US government is now getting on board on climate change — “a big change” for the US, he said. “The whole world welcomes Obama turning from no position to ‘we’re with you.’ I’m very positive the Obama administration will help our islands.”

New USAKA rules hurt Ebeye stores

By SUZANNE CHUTARO

A shopping policy at the US missile range at Kwajalein has retailers at neighboring Ebeye crying foul over loss of revenue and local government taxes.

Ralik Store owner Tom Butler is calling in to question the new shopping policy at USAKA that he says is hurting the Ebeye businesses and the local government.

“Most Marshallese (who work at USAKA) would come to Ebeye and spend their money on the island,” said Butler.

“Now it seems USAKA is selling cola and other goods with no local or national tax. They are hurting Ebeye business.”

USAKA’s Public Affairs Officer Vanessa Peeden confirms that the sale of retail goods to USAKA employed Ebeye residents has been in effect for the past year adding that “the USAKA/RTS Commander has designated certain retail shopping for C-badge contractor employed personnel who do not reside on USAKA/RTS.”

According to Peeden, C-Badge employees are authorized to shop and purchase retail goods at Army/Airforce Exchange Service (AFES) retail outlets up to a total value of $250.

Since the policy has been in effect, Ebeye retailers say they’ve seen a dramatic drop in sales.

Triple J owner Robert Jones who was on Ebeye last week says that their records are reflecting a slowing of the economy on Ebeye and he wonders what role the tax-free competition from USAKA plays in the equation.

Meanwhile Kwajalein Atoll Local Government’s Chief Administrative Officer Aeto Bantol said they are concerned with the USAKA policy because 80 percent of the local government’s revenue is dependent on Ebeye business.

“Mayor Johnny Lemari is studying the situation and will probably meet with USAKA officials,” said Bantol. “While some think (the policy to allow Marshallese employed at USAKA to purchase goods) is a good thing, the local businesses are the ones suffering therefore making them lose money and most importantly, paying less taxes to the local government of Kwajalein.”

Peeden says, however “over the course of the last year, the USAKA/RTS commander has discussed with the RMI government the sale of retail goods to C-badged contractors employed personnel.

“USAKA/RTS provides purchasers with a detailed receipt of purchase so as to comply with Article V, paragraph 7 of the Status of Forces Agreement concluded pursuant to Section 323 of the Compact of Free Association. Said provision requires that property imported into the Republic of the Marshall Islands under exemption, which is subsequently transferred to a person not entitled to such exemption subjects that person to be liable for import duties and other charges according to the laws and regulations of the Government of the Republic of the Marshall Islands.”

According to Jones, “Ebeye residents can buy a 12-pack of Pepsi or Coke for $3 on Kwajalein. This is about half of our landed cost with the high tax and freight rates on Ebeye. This creates the incentive for resale on Ebeye through the so-called black market. I feel they should be required to pay the same taxes as Ebeye merchants pay to the two governments.”

Ralik Store’s Butler asks if it’s fair that local business are now forced with compete with a subsidized business that pays no local or national taxes, be it import or gross revenue tax?

“I’m a small business owner on Ebeye,” said Butler. “We are seeing a 25 percent drop in sales since this has gone into effect.”

 

 

From the 7/10/09 issue of the Marshall Islands Journal

 

Mr. MEC

The Marshalls Energy Company will see its first change of command in more than 23 years, with the MEC board on Monday naming David Paul as its new General Manager.

MEC GM Billy Roberts is now in a 90-day transition period, with his last day on the job expected to be in early October. Roberts has managed MEC since early 1986.

Paul is to be joined by an experienced Australian technical advisor who has experience in the power industry, including in the Pacific. The MEC board has established a new position for this second post.

“Making these changes is a step to reorganizing the company,” said MEC board Chairman Public Works Minister Maynard Alfred (pictured).

Paul will start July 20, beginning a transition with Roberts for management of the company that oversees Ebeye’s power company, Majuro Water and Sewer Company, Jaluit and Wotje power operations, and installation of solar equipment on the outer islands.

Paul is in the process of resigning from his post as Mobil Oil Micronesia’s territory manager for the RMI and FSM markets, a position he’s held for four years. Prior to that, from 1998, he worked at the Ministry of Foreign Affairs and with the Office of Compact Negotiations.

“This is a great challenge and opportunity to be part of an organization that is vital to the economy and development of the Marshall Islands,” Paul said.

Majuro’s power operation was launched in 1982 by a British company known as IPSECO. MEC was incorporated as a company two years later and managed as a joint venture with IPSECO. Roberts, who was brought to Majuro by IPSECO as a power plant engineer, was named GM of MEC in March 1986, when the MEC-IPSECO partnership dissolved with IPSECO’s bankruptcy.

“This was not an easy undertaking for me as Chairman,” Alfred told the Journal of his giving notice to Roberts earlier this week. “Billy is a talented chief executive who has worked since the company was established.” Roberts tendered his resignation from MEC in mid-2006, and his final day was to have been October 2006. But former President Kessai Note asked Roberts to stay on for an indefinite period to help MEC get through a crisis period that was developing.

Hacker: Poverty is a big issue

There is serious hardship in the Marshall Islands, particularly in urban communities, RMI chief planner Carl Hacker told a group reviewing RMI progress on meeting “Millennium Development Goals.”

“In the field, you see how big an issue this is,” said Hacker, whose office has been conducting a series of surveys on Majuro, Ebeye and the outer islands.

People would be shocked to spend two days in the community to see houses with no water or electricity, and so many kids that you wonder what are they eating.”

He said the water survey now being conducted shows that from the bridge to the airport, the percentage of houses with no access to water is high, he said.

In the Ajeltake to Laura area a big problem for the environment is for many homes, the beach is their bathroom, he said.

“There is plenty to be concerned about,” Hacker said.

The demographic and health survey “showed 22 percent of homes headed by women, and only 30 percent of women working (in RMI),” Hacker said.“Those are prime indicators of poverty.”

Hacker also raised concern about the relatively high budgets for the ministries of Health and Education, which have more than doubled since the 1990s.“But we’re still seeing a lot of the same results,” he said.

“We need to look at outputs. We’re thinking too much about the funding and not worrying enough about results.”

The government ability to provide services to the public “is going to get tougher because of higher debt issues and Compact funding going down,” he said.

“Efficiency is the key. If we don’t make some changes now, we will have real problems soon.”

Hacker believes an important missing element in decision-making is using statistical information to inform decisions by government departments.

“Senior management needs to know how to use these numbers throughout the year (in running their programs),” he said.

 

From the 7/3/09 issue of the Marshall Islands Journal

 

1 million in Compact money not spent

The Marshall Islands government did not spend nearly $1 million of Compact funds provided in fiscal year 2008, requiring it to be returned to the US government recently for reallocation to a future fiscal year.

Nearly half of the $978,587 unspent by September 30, 2008 has already been given back to the RMI, with the balance to be put into FY2010, which starts October 1 this year.

This unused balance is the highest ever since the new Compact went into effect in 2004. It also includes $153,852 in unspent money from FY2006.

The US Embassy provided a breakdown of the unused Compact funds for FY2008:

• Education: $0

• Health: $252,862

• Kwajalein Environmental Impact: $7,554

• Public Sector Capacity Building: $128,891

• Ebeye Special Needs Education: $326,644

• Ebeye Special Needs Health: $108,784

• FY06 Unused Carryover: $153,852.

In FY 2004, the first year of the new Compact, unspent funding amounted to $198,770. It has increased every year since then, to $295,154 (FY2005), $573,436 (FY2006), $601,830 (FY2007) and $824,735 (FY2008) plus $153,852 (FY2006) for the FY2008 total of $978,587.

“All FY04-FY07 carryover funds have been re-granted to the RMI,” said US Embassy-based Interior Department grants official Alan Fowler.

“Out of the $978,587 in FY08 carryover funds, $435,428 has already been re-granted in FY2009 as per a RMI government request for use by KAJUR on Ebeye.

“These were the Ebeye Special Needs funds for Education and Health (listed above).  These funds were drawn down by the RMI in March. The remaining $543,159 is included in the FY 2010 Compact allocations and will be available for use on October 1, 2009.”

Diver rushed to Kwajalein

Another Majuro diver suffered the “bends” while diving last Saturday, forcing the Ministry of Health to pay for a medical referral to Kwajalein Hospital because Majuro Hospital’s hyperbaric chamber does not work.

The diver, Raimon Anmontha, works for a local tropical fish export company, and experienced problems on a deep dive Saturday.

The Laura resident was rushed into Majuro Hospital’s emergency room Saturday afternoon after experiencing symptoms of decompression sickness, including vomiting blood.

The Ministry of Health moved quickly to organize a medevac to Kwajalein, and AMI flew Anmontha to Kwajalein early Sunday morning. The AMI charter flight cost the Ministry of Health more than $5,000. As of Wednesday, the diver was reported to be on his fourth period of time inside Kwajalein Hospital’s hyperbaric chamber. 

He is the second diver during June to seek treatment at Majuro Hospital for the bends. The hospital’s hyperbaric chamber has been here since 2007, but has not been in operation.

 

 From the 6/26/09 issue of the Marshall Islands Journal

Million for Mili

By DOUGLAS HENRY

 

A proposal to invest $1 billion for the development of Mili Atoll is on the table by representatives from the Russian government.

According to Mili Senator Kejjo Bien, the Russian government is proposing to invest $1 billion in developing hotels, fisheries, and scuba diving on Mili.  “It’s not just for Mili, but for the betterment of the Marshall Islands,” said Bien.

Vasily Shestakov, vice-chairman of the Russian party ‘Just Russia in the Duma’ — and a former judo partner and confident of President Vladimir Putin — along with Dr. Ei Ho Kim, who was appointed by President Litokwa Tomeing in 2008 as RMI’s Special Presidential Economic Advisor, traveled to Mili last week with Senator Bien to hold meetings with landowners on Mili.

Bien told the Journal the next step is to request and organize a meeting in Moscow between the RMI and Russian officials to discuss the proposal. As part of the development proposal he said he hopes to designate Mili as a port of entry to allow direct and easy access of equipment and material to the Atoll.

Bien, who is hoping to wrap up the arrangements between the two governments within the next two months, said if successful “building equipment and materials will also be funded by the Russian government.”  

Japan helps on fuel issue

The Marshall Islands this past week was beneficiary of nearly 900,000 gallons of fuel, a shipment that arrived in the islands as an outcome of an assistance request made a year ago by President Litokwa Tomeing’s administration to the Government of Japan.

According to a press release issued by the Marshalls Energy Company, the arrival of the tanker vessel MT YC Clover into the Port of Majuro is an important occasion for the people of the Republic of the Marshall Islands. The tanker vessel is carrying fuel purchased by the people and Government of Japan trough the Japan’s Non-Project Grant Aid (NPGA) program. This is the first time the Republic of the Marshall Islands has received an award under this program.

The tanker vessel MT YC Clover has been chartered by SK Networks of Korea to deliver fuel to the Marshalls Energy Company under the existing supply contract between the two companies. The vessel had available the space required to carry the 892,000 gallons of diesel fuel in addition to the 1.5 million gallons of fuel requested by the Marshalls Energy Company which was already loaded on board the tanker. As a result of President Litokwa Tomeing’s visit to Japan in late 2008, the Japan Non-Project Grant Aid program approved the Republic of the Marshall Islands application for assistance as requested during the Economic Energy Emergency that the government of the Republic of the Marshall Islands declared in June of 2008.

The government of Japan responded with an approval of approximately 200 million Yen to be dispersed the Non-Project Grant program.

The NPGA program of 200 million Yen for the Marshall Islands is administered by the London based international procurement agency Crown Agents Foundation. Crown Agents Foundation staff based in Japan and London visited the Marshall Islands earlier this year to finalize the arrangements for the purchase of the fuel supplies and to arrange shipment of fuel products to the Marshalls Energy Company from SK Networks from Korea.

His Excellency President Litokwa Tomeing, the government and the people of the Republic of the Marshall Islands would like to convey their appreciation to the people, the government of Japan and the Charge d’Affaires, a.i. Kazuyuki Ohdaira and the staff of the Embassy of Japan for their prompt attention in coordinating this important assistance to the energy needs of the RMI.

 

From the 6/19/09 issue of the Marshall Islands Journal

 

Tax collection down 4 percent

Tax collection levels through April are down about four percent compared to 2008, according to the Ministry of Finance.

Majuro’s collection rate is significantly lower than Ebeye’s, according to figures supplied by Assistant Secretary Bruce Bilimon.

“For the Majuro comparative analysis, we only focused on the tax revenues, meaning we excluded non-tax revenues including ship registry, Republic of China grants, fees and other revenue,” Bilimon said.

The figures for October 2008 to the end of April this year show that $12.1 million was collected in Majuro, about $465,000 less than the same period for fiscal year 2008.

Ebeye data show tax revenue from 2008 to 2009 being nearly equal. Through April, Ebeye’s tax collection showed a $21,000 shortfall when compared to the same period in 2008.

“Of significance, we are realizing a drop on import tax that we expected due to enacted laws on selected food items and MEC import tax exemptions,” Bilimon said.

“Conversely, we are realizing an increase in the Gross Revenue Tax (GRT) compared to 2008.”

Bilimon said “the significant drop has been on the import tax side, and for a good purpose — to help our people.”

He said the solution to lower tax revenue will be forthcoming from the tax reform plans now in progress to “bring about the changes that as a country we will need to take if we are to sustain going forward.”

Bilimon said he “saluted the staff for doing their best when it comes to administering our tax process and procedures effectively, and ensuring tax laws are being followed.”

He promised to continue developing the tax office’s professionalism to serve the interests of the RMI. 

“Of course, our job will be much more successful if everyone, taxpayer and tax collectors, observe their duty to our country,” he said.

Boot camp to build jobs for youth

By GIFF JOHNSON

With the College of Marshall Islands’ accreditation woes behind it, the Majuro institution is branching out to offer new training opportunities to Marshall Islanders.

Its latest effort is the “ABC Toolbox” — ABC for “Academic Boot Camp.”

With the financial support of the National Training Council and its own money, CMI is gearing to launch its first group of approximately 60 students to attend a live-in, 10-week session that aims to develop skills that will allow entry level employment in construction jobs and help students aiming for Job Corps training to improve their chances, said CMI President Wilson Hess. The program is expected to start in August.

The program will be held at CMI’s Arrak Campus. “The aim is to introduce basic skills for employment,” Hess said. It will include a focus on reading, writing, computers and math. But it won’t end there. Part of the training will be to develop work skills and attitudes needed to succeed, he said.

Those eligible are people who have graduated from high school, GED or NVTI.

The origin of the plan was to develop people who can compete for jobs in Guam, with the coming military buildup. But Hess says the training should provide skills that will help ABC Toolbox graduates get jobs in the local construction industry or go on to successful completion of Job Corps programs.

“At CMI, we see kids who can’t measure with a ruler or read a thermometer,” Hess said. “These are every day tasks.” The ABC Toolbox aims to develop these types of skills among participants. “After a 10-week immersion, there should be demonstrable ability to perform in a work environment,” Hess said.

Tamara Greenstone, a former field director for WorldTeach, will direct the program that is currently seeking staff to deliver the various parts of the program.

The longer-term aim is to run this program two-to-three times with NTC and other donor support, test and monitor student progress, and “then get it approved by the United States Department of Education as an English as a Second Language educational/vocational program,” Hess said. “Then students attending the ABC Toolbox will be eligible for Pell grants” — a development that will help sustain the program.

 

From the 5/29/09 issue of the Marshall Islands Journal

BOMI to get Hawaii branch?

By GIFF JOHNSON

Bank of Marshall Islands effort to open its first branch in the United States will move forward this week with RMI Banking Commissioner Ann Marie Muller (pictured) issuing a letter approving BOMI’s application to the state of Hawaii.

“There’s still additional work to be done for the bank to qualify on its own merits as a standalone bank with its own ABA (American Bankers Association) routing number,” Muller told the Journal. “But it shows significant progress has been made for my office to issue an approval for application to the State of Hawaii.”

BOMI hired the Los Angeles-based Secura Group — one of several US firms recommended by Muller — to assist it in the application process.

Although the application process is at the very start, a BOMI official explained the significance of the move. “The single most important aspect is Ebeye has no access to negotiate checks off-island,” said BOMI’s Chief Information Officer James McLean. “We’re their only bank. If this goes through, it will give Ebeye banking services it needs.”

The bank is seeking to set up only a “clearing branch” to act as a way to clear BOMI checks in the US. Currently, individuals and businesses with BOMI accounts can only transfer money to US companies by wire transfer — or by opening an account with a US bank. The branch, if approved, would not handle deposits or issue loans.

Muller said her office has been engaged over the past year with Secura Group officials. “The bank management and compliance department also has done a significant amount of work to address the Banking Commission’s recommendations,” she said.

The RMI Banking Commissioner’s approval is the first step in BOMI’s application process. It then must get approval from the Hawaii State Banking Commission, then get the okay from the US Federal Reserve.

Muller said BOMI success in establishing a US bank branch is important for economic development of the country, and she is hopeful that the US government will “help the RMI achieve economic development and progress.

“This is significant progress and we are hoping for the best to come,” Muller said. “Helping our financial sector is a major step toward that goal.” She noted the bank is pursuing the most difficult option among those recommended by the Banking Commission in 2006.

That same year, Citizens Security Bank of Guam terminated its relationship with BOMI because of increasingly strict US banking requirements for dealing with foreign banks, ending BOMI’s ability to have its checks transacted in the US.

Regional fisheries office for Majuro

By GIFF JOHNSON

Majuro is to host an important new regional fisheries office.

Ministers from eight Pacific nations that control the majority of the $3 billion in tuna caught in the Pacific voted earlier this month to make Majuro the headquarters for the PNA Secretariat.

Over the past year, the “Parties to the Nauru Agreement” (PNA) countries have flexed their muscles, seeking to enforce tuna catch limits to prevent over-fishing while at the same time increase the revenue flowing into the islands from the fishing industry. Currently Pacific islands receive less than five percent of the total catch value, or about $150 million.

Marshall Islands Marine Resources Authority Director Glen Joseph told the Journal fisheries ministers from the eight PNA nations — RMI, Federated States of Micronesia, Kiribati, Tuvalu, Palau, Nauru, Solomon Islands and Vanuatu — voted for the new secretariat to be in Majuro. The move is being fast-tracked with a study team established to evaluate details of costs and administrative issues associated with setting up the new headquarters. A special meeting to focus on the secretariat is scheduled for June, Joseph said.

Foreign Minister John Silk confirmed the development before Nitijela recessed from its recent session. RMI was the only nation seeking to host the new regional body.

With the approval of the PNA country ministers, the issue is now going to the RMI Cabinet for review, approval and action.

Joseph expects the new headquarters to start with about five staff. Based on a previous bid by the RMI to host the Tuna Commission headquarters (which is in Pohnpei), a floor in the MIDB Building or the second floor of the K&K Payless Long Island building are among venues under consideration for the PNA HQ. The PNG government has committed $1 million to developing the PNA Secretariat, Joseph said.

Joseph said establishment of the PNA Secretariat is not an effort to break up the Forum Fisheries Agency (FFA), which has represented all the independent countries in the region since the 1980s, but is rather an effort by PNA to fully establish itself. “PNA has always been a group within the FFA,” Joseph said. “We’re not advocating a split.” He said a more powerful PNA will translate into greater economic benefits for both PNA and non-PNA countries in the region.

“There will definitely be spinoff benefits for non-PNA nations,” Joseph said. “This move is a catalyst for change. The status quo is not acceptable. We want a larger slice of the $3 billion pie.”

 

From the 5/22/09 issue of the Marshall Islands Journal

MediSource to help on diabetes

By DOUGLAS HENRY

A private pharmaceutical business is stepping up to help treat a major lifestyle disease: Diabetes. “MediSource Pacific will soon be helping diabetic patients by providing their medical needs,” said Sandy Alfred, manager of MediSource Pacific.  MediSource sells prescription and non-prescription medicines and medical instruments and caters to individuals and agencies such as Majuro Hospital. “We’ve provided maintenance and repair to Majuro Hosptial’s medical equipment,” Alfred said.

The pharmaceutical company, which is on the ‘back road’ behind Pacific Basin Wholesale in Uliga, also provides services to Ebeye Hospital, the 177 Health Care Plan, and the Department of Energy, he said, adding that he has not yet ventured into small clinics.  The pharmacy brings in their medical products from suppliers in Australia, Canada, and the US “because we believe in quality,” Alfred told the Journal.

According to Alfred, it is possible to negotiate for a best price, “but we can’t compromise on the quality.”

Alfred used to be the administrator of Majuro Hospital, but he made the leap into the private sector because: 

“ I wanted to fulfill a dream to operate a pharmacy.” He said that his business allows him to help the community on their medical needs and “switching from an employee to an employer, means I get to support my employees’ families.”

Alfred graduated from Creighton University, School of Pharmacy, Nebraska, in 1989 and then worked as a pharmacist in the US for 15 years.

 

Last ditch bid to lure JAL to RMI

By SUZANNE CHUTARO

 

The Marshall Islands has hit, yet again, another snag in its bid to jump-start its tourism industry as air access via the Japan Airlines (JAL) direct Japan-Majuro charter begins to crumble before it even took off.

Marshall Islands Tours owner Satoshi Yoshii, who has been acting as the liaison between JAL and RMI, told the Journal earlier this month that he is hoping to bring in another JAL charter in August. But this all depends on several factors. 

Yoshii said JAL is now seeking approval from the RMI to contract Continental Airlines to handle all of its ground handling services. According to Yoshii, when JAL first approached the government a verbal request from the government under the Note administration was that JAL contract Air Marshall Islands to provide the ground handling services. 

But recently, in what AMI General Manager Bill Capelle describes as a “cost-saving” measure, AMI had suspended its IATA membership — a membership, which Yoshii says JAL requires in order for a third-party to provide service for JAL.  Capelle told the Journal that AMI is trying to focus its efforts on returning regular service to the outer islands.

Yoshii’s recent visit to Majuro was a last push effort to secure permission from the government for JAL to contract Continental for its ground handling service needs.

While in town Yoshii met with officials from the Ministry of Foreign Affairs and Marshall Islands Visitors Authority (MIVA). According to MIVA’s General Manager Delores deBrum-Kattil, Yoshii also put a request for the RMI to guarantee 100 seats on JAL in order to secure the planned August charter. Before departing for Japan Yoshii said all he needed to make the August charter happen was a permission letter for JAL from the RMI government.  MOFA Secretary Kino Kabua told the Journal last week that she was waiting on her staff to provide her with the details of JAL’s request and to review a letter that was being drafted by the Ministry to respond to Yoshii and JAL’s request.

Kabua and Foreign Minister John Silk flew to Japan to accompany President Litokwa Tomeing at the Pacific Area Leaders Meeting on Tuesday.

This latest hurdle creates a feeling of dismay as confidence in RMI’s tourism industry continues to wither away. The JAL news follows the announcment that two of Majuro’s three major hotels are now up for sale.

 

From the 5/15/09 issue of the Marshall Islands Journal

Tobolar loss
Tobolar is on track to lose $1.2 million for the year. “It’s a huge issue,” new R&D Minister Mattlan Zackhras (pictured) told the Journal this week. He said Tobolar has been losing $100,000 a month because of the gap between the world market price and the high price paid to RMI copra makers. After peaking in June 2008, world market prices for coconut oil dived and have stayed far below last year’s peak. Zackhras said the Cabinet has been discussing the problem, following meetings with Tobolar management. He said the Cabinet has identified possible sources of funding to help Tobolar maintain the price at current levels. “There are some funding sources we’re looking at,” he said. “It’s a matter of the Cabinet approving it.”

Local film a hot item in stores
Locally-produced film Ña Noniep is a hit with customers in Majuro and Ebeye and US mainland Marshallese. Sales have exceeded expectations, with the initial order of 1,000 DVDs nearly sold out, and demand still high. Producer Jack Niedenthal told the Journal this week he has placed a second order — originally planned for 500 DVDs, he increased it to 1,000 after EZ Price Mart asked to buy 300 more to sell at the Uliga store. Niedenthal said after three weeks of availability, he’s sold 75 copies through the Bikini web site, and this week the film became available through Amazon.com, the huge Internet-based retail company. When the 1,000 DVDs arrive, they will be sold through Majuro Coop School, just like the first batch, Niedenthal said. An east coast-based Marshallese told Niedenthal that interest in Ña Noniep among the Marshallese community on the mainland is high. He ordered a film through the Internet and then invited Marshallese in the area to come watch the show at his house. “My place was packed worse than the Super Bowl,” he said.

From the 5/1/09 issue of the Marshall Islands Journal

Copra production down
The amount of copra brought into Tobolar the first quarter of this year dropped by 33 percent from the quarter ending December 2008. It was the lowest three-month total since July-September 2006, according to Tobolar statistics.
Still, the 1,307.44 tons milled from January to March if extrapolated for 12 months would still give the RMI a solid copra-producing year.
But it is way down on the last quarter of 2008, when 1,955.54 tons were brought in to and milled at Tobolar.
Pacific International Inc. CEO Jerry Kramer, whose company manages Tobolar for the government, said “it may be that ships were delayed slightly and the next quarter will be above normal.”
Indicating copra production remains strong because of the high price and good shipping, Kramer added: “I noticed a couple of very large payments (for copra) just last week.”
An interesting feature of recent months is high copra production in Majuro. “Copra production in Majuro seems to be increasing, which is a direct sign of the poor job market in Majuro,” Kramer said.
The statistics bear him out. In all of 2003, Majuro produced only 22.57 tons of copra. In only the first three months of 2009, Majuro copra makers have more than doubled the 2003 figure with 58.1 tons. In fact, Majuro’s pace of copra production is out-doing Namdrik, Ailuk, Jabot, Kwajalein, Lae, Lib, Ujae, Utrik, and Wotho.

Majuro gas stations have us over a barrel
Majuro gas prices are more than two dollars a gallon higher at the pump than in Palau, and more than one dollar above prices in the Federated States of Micronesia, according to data provided this week by the Ministry of Internal Affairs, which is monitoring local gas pricing.
Palau’s price at the pump is now $2.95 per gallon, compared to $5 in Majuro. In FSM, it is $3.90.
Comparative data from the government planning offices in Palau and RMI show that gas prices at the pump in Majuro increased more dramatically than Palau during world market hikes, and declined less quickly than in Palau when the world market went down during 2007-2008. Palau is serviced by both Shell and ExxonMobil. ExxonMobil is RMI’s sole fuel gas provider.
When prices began increasing in the second quarter of 2007 (April-June), Palau went up 6.8 percent compared to 13.2 percent in Majuro. When global market prices peaked during the third quarter of last year, Palau went up 6.8 percent compared to Majuro’s 11.8 percent. But when the world market dropped dramatically from October to December last year, Palau’s prices dropped 23.6 percent (from $4.74 to $3.62) while Majuro’s prices dropped only 12.6 percent (from $6.65 to $5.81).
In December 2007, when crude oil on the world market was selling for $87.60 per barrel, the gas price at the pump in Majuro was $5.04 per gallon. Today, with crude oil selling at less than $50 per barrel — or about 40 percent less than December 2007 — Majuro’s pump price is almost identical at $5 a gallon.

From the 4/25/09 issue of the Marshall Islands Journa

John Silk works on diplomat for DC
New Foreign Minister John Silk’s top priority is getting an ambassador to the United States nominated by Cabinet and confirmed by Nitijela later this week. The Nitijela will meet Thursday this week.
He told the Journal Wednesday that he expected the Cabinet to consider a recommendation for a new ambassador for the RMI’s Washington embassy this week.
“My priority is to get someone to DC,” he said.
Other top priorities are to get “bill 1756” back on the US Congress’ agenda, and to resolve the status of the Nuclear Claims Tribunal, which currently has no chairman.
Silk added that the RMI government has not renewed the contract of its Washington law/lobbyist firm Steptoe and Son, saying that it had cost the RMI a lot of money during the past 12 months without much result.

Graduates set sail for a grand new life
By DOUGLAS HENRY
Waan Aelon in Majel (WAM, also known as Canoes of the Marshall Islands) trainees came to the end to their quest in achieving vocational skills to hold their sails up high.
A Vocational Training Achievement and Tipnol (large canoe) Launching Ceremony was held Friday at WAM’s training ground. Family, friends, and VIPs attended to witness the graduation ceremony. According to WAM Program Manager, Alson Kelen, 17 out of 22 students who originally started the six-month training finished the program. They are: Dania Noah, Takju Anitok, Jolie Anni, Lyndon Kadu, Johnlee Amlek, Enos Hebesus, Junior Ebort, Ismel Lautrok, Hemby Henesone, Jenujin Albert, Michael Laikidrik, Totha Jibas, Daisy Boaz, Keico Teico, Davis Anjo, Charity Elcar, and Irene Kiwa.
The WAM program was a pilot program run by Alele Museum during the 1990s. Now it operates as a NGO (Non-Government Organization). “This program is unique because of the traditional skills and life instruction they offer,” said graduation speaker, Ben Graham.
He pointed out that as many as two or three out of every 10 school age students are not attending school in the RMI and the WAM program was providing a valuable service by giving its trainees a second chance to move forward with their lives. The students achieved experiences from traditional to modern skills of traditional chants, navigating, carpentry, English, math, fiberglass, and alcohol abuse prevention, said Kelen.
Kelen struggled his way up the ladder to keep the program alive, “at first I had to go door to door to look for participants, now they are coming to our door,” said Kelen.

From the 4/3/09 issue of the Marshall Islands Journal

Are RMI’s Millennium Goals even possible?
Included in the RMI Demographic and Health Survey 2007 is a pamphlet titled The Millennium Development Goals and their Targets, which states that in January 2009, RMI President Litokwa Tomeing and his Cabinet established an RMI MDG Workgroup.
It is inspiring that President Litokwa Tomeing has formed this group to make good on its ratifying of the United Nations Millennium Declaration in 2000. There are eight Millennium Development Goals, which RMI has said it will achieve. However, is this admirable ambition even remotely possible? The goals are:
1. Eradicate extreme
poverty and hunger
With unemployment at 33 percent, most of those who have a job earning minimum wages, and high inflation in the past two years, putting food on the table has become harder and harder for a many families. While one motto of our culture is ‘jake jobol eo,’ meaning that no person will go hungry through sharing, the reality for many in urban centers is starkly different.
2. Achieve universal
primary education

Travel around Majuro or Ebeye on a week day during school hours and you will see dozens, if not hundreds, of elementary-aged children simply hanging out. Meanwhile, if every child were to attend school, it is doubtful that there would be enough desks, classrooms, or teachers to cope with the numbers.
3. Promote gender equality and empower women.
We have one female senator in the Nitijela, who is also the only female minister in Cabinet. The majority of government secretaries are male. A smaller percentage, but still a majority of business owners are male.
4. Reduce child mortality
According to the Demographic and Health Survey (DHS) 2007, which covers 2003-2007, almost four out of every 100 babies will not survive to their fifth birthday (37 deaths per 1,000 live births). In the period 1993 to 1997, a time of lesser medical knowledge, equipment and services, the statistics show that less than three out of every 100 babies survived (26 deaths per 1,000 live births). It may be that the data back from the 1990s is faulty, but iinfant mortality, particularly on outer islands, remains high.
5. Improve maternal health
This area appears to be a bright spot on an otherwise gloomy picture, with, according to the DHS, 95 percent of Marshallese women make use of a skilled provider, and 77 percent make the recommended four or more visits to that provider during their pregnancy.
6. Combat HIV/AIDS,
malaria, and other diseases

The DHS of 2007 does not give data for the number of people who have HIV or AIDS. This does not mean it doesn’t exist in RMI. The DHS was a household survey, and it’s not surprising that no-one announced to surveyors that they have the disease.  Research by the Ministry of Health and the Journal shows that while Marshallese are aware of HIV and AIDS, few people, especially youth, use condoms. We also know that sexually transmitted infections (STIs) are rife, adding greatly to the risk of contracting HIV, which can lead to AIDS.
7. Ensure environmental
sustainability

Recent studies show that by the end of the century sea levels will rise by three to five feet. With our low-lying atolls, sustainability doesn’t appear to be an option. And it won’t take even a small percentage of that rise for our fresh drinking water supplies to be severely affected.
8. Develop a global
partnership for development
Big on this agenda are good governance, dealing with debt, and making available the benefits of new technologies, especially information and communications. To this we point out that our economy is mostly built on donations of one sort or another or the selling of our shrinking fish stocks, that we owe such organizations as the Asian Development Bank serious amounts of money, and NTA offers one of the most expensive communication systems in the Pacific.
We wish the President all the best in the attempt to achieve the Millennium Development Goals. He has a major challenge ahead.

Japan’s 8 million project
Japan will spend $8.2 million to build a new fish market in Majuro and provide transport vessels to generate commercial fishing opportunities on four outer islands, according to agreements signed Friday.
Marshall Islands President Litokwa Tomeing, Japan Embassy Charge d’Affaires Kazuyuki Ohdaira, Resources and Development Minister Fredrick Muller and Fiji-based head of Japan International Cooperation Agency’s Pacific region office Juichiro Sasaki signed agreements for the large fisheries project.
Although the Marshall Islands is eligible each year for large-scale Japanese infrastructure aid, this is the first major Japan-funded infrastructure project since 2004, when Japan approved a $9 million grant for new facilities at Majuro hospital. “Japan’s average fisheries grants are smaller than this project,” Ohdaira said at the brief signing ceremony. “We are convinced this fish market center will improve greatly the living standard of fishermen and consumers.”
Sasaki said the fish market center and the vessels will “help promote fisheries in the outer islands” that have few income generating options. Fishermen on the atolls of Aur, Arno, Jaluit and Maloelap will feed reef fish into Majuro for sale in the capital. “This will enhance the fresh fish transportation and distribution network and improve food security.”
Muller agreed: “This will open more opportunities for local fishers,” he told participants at Friday’s ceremony.
Ohdaira said agreement had been reached on the project relatively quickly for a grant of this size.
He called the three-year period from RMI submission of the project request to Friday’s signing a shorter process than expected.
JICA will put the fish market project out to bid in the next three months, Sasaki said, with construction expected to start in January 2010.  It is scheduled to finish in March 2011. It will be located at the Uliga Dock.

From the 3/27/09 issue of the Marshall Islands Journal

MEC lures Navy to RMI
By GIFF JOHNSON

The visit this summer by the US Navy vessel Dubuque is giving the Marshalls Energy Company the opportunity to promote Majuro as a destination for regular US Navy refueling visits.
This, coupled with the recent visit by a representative of Glenn Defense Marine Asia to inspect port and related facilities in Majuro, is producing optimism at MEC about increasing fuel sales to navy ships.
“We work through Glenn Marine of Singapore, which handles 23 different navies including the US,” MEC’s Phil Welch told the Journal. “Their manager was here recently and was impressed with some of the equipment we have that is advantageous for a navy visit.”
Welch said MEC is “pushing for more port calls by navy vessels.”
From previous visits, the company knows what it needs to do. Aside from a good harbor, MEC has one key advantage over most islands in this part of the Pacific: a large fuel storage capacity.
“We have big enough fuel tank farm to provide strategic reserves,” Welch said. “The navy can pre-position fuel in Majuro so it’s here when they need it.”
He acknowledged that there is more work to do, particularly in working through a variety of details to begin to regularize the frequency of refueling stopovers by the US navy.
“We want to make Majuro a destination, not just an ‘alternative’ port for the navy,” he said. “We have a safe port, adequate supplies and can pre-position fuel.”
Next month, a second advance team for the USS Dubuque will be arriving in preparation for the anticipated June visit. “It’s another chance for us to promote port Majuro,” Welch said.
Majuro needs additional equipment to make it more attractive to the navy. Among the items on Welch’s wish list is what is known as a “breasting barge” — a large floating platform that can be placed alongside a visiting vessel anchored in the lagoon to speed loading and offloading crew and visitors.
The addition of such equipment will “make the navy more comfortable” in coming to Majuro, he said.
Overall, Welch says Majuro and MEC is in a better position to attract the navy, particularly now with MEC able to be competitive on fuel prices against high-seas refueling operations since the global reduction in price and the Nitijela’s recent action of eliminating import taxes for MEC.
“We’re getting a lot more inquiries now for fuel purchases,” he said. Most of these are coming from fishing-related companies.

Landowners hear worth of tourism
By DOUGLAS HENRY

Many Marshallese are unaware of the importance and benefits of tourism, the head of the Marshall Islands Visitors Authority said at Monday’s opening of National Tourism Week at the ICC.
To respond to this situation, “MIVA has increased its local awareness activities,” said Christopher Bing, Chairman of MIVA’s board of directors. “We need support from government, local businesses, traditional leaders, and churches.”
Tourism Week kicked-off at ICC Monday with a landowners’ forum led by Johnny Edmonds, Director of Irimaru Enterprises Ltd., New Zealand.
Edmonds was brought in by MIVA to focus tourism discussions on involving landowners in the tourism industry. The land and people are essential entities, generating the engine of tourism and subsidizing other sectors of the economy, Edmonds said.
Bringing life to landscapes needs participation from the locals linking their culture and stories to their natural environments allowing “it to turn into a living landscape, because of the unique relationship between the people and the land,” Edmonds told the Journal.
Guam’s famous tourist site called Two Lovers Point is an example. Located on a cliff, this spot has a love story told by the locals to go along with the natural environment that allows it to come to life.   
According to Edmonds, tourism is in fact the largest business in the world — millions of visitors worldwide — generating an extremely high number of dollars annually. According to the United Nations, tourism is the largest employer globally. Basically, says Edmonds, “it’s big.”
Edmonds said it doesn’t matter that RMI’s economy is struggling to get on its feet. “It’s a good time, although the economy is down, it doesn’t mean you stop — from small beginnings come great results,” says Edmonds.
He said there are key points to help generate tourism:
• Cultural traditions and values
• Land administration structures
• Business administration structures
• Cultural tourism
• Working and achieving together.
Friday this week will be an island-wide cleanup, beautification and tree planting at the PSC and NTA area to end Tourism Week.

From the 3/20/09 issue of the Marshall Islands Journal

Bed boost
By GIFF JOHNSON

Majuro’s new hospital will go out for bid this summer, with groundbreaking to start construction now set for November.
The estimated $20-30 million US-funded project will greatly expand the Ministry of Health’s physical presence in Delap, taking over the open space between the existing hospital and the capital, as well as demolishing and rebuilding new facilities where administrative, 177 and DOE programs are located now.
A revised architectural concept for the new facility was presented to Ministry of Health and US Department of Interior officials recently, receiving approval.
Health Secretary Justina Langidrik told the Journal Wednesday the new hospital will increase the number of beds from the present 90 to 120, provide isolation ward for infectious diseases, establish new facilities for the 177 Health Plan and the Department of Energy medical program, build a new location for the Diabetes Wellness Center, and build an apartment complex at the rear (oceanside) of the hospital area to accommodate expatriate workers.
Originally there had been discussion about building the new hospital section by section as portions of the old hospital were demolished to make way for the new. But in the final, approved plan the wards, administration and other facilities will be built in the open area between the current hospital and the capital building. “We’ll start with the patient wards,” Langidrik said. “Once they are built, we can move the patients so there will be no interruption in services. Then we’ll move onto other sections.”
She expects the hospital to take two years to complete, with another year of work to build the apartment complex for expatriate staff.
The architecture work is being done by Guam-based EMPSCO. A Public Works Project Management Unit report from earlier this year notes “the new hospital (will) utilize the whole vacant lot in between JICA (the Japan-funded hospital annex) and capitol buildings. The facility will be constructed as one consolidated single story structure, each ward provided with basic requirements including adequate and secured parking space.”
Langidrik indicated the government is looking at creative ways to finance the construction work — including bank loans — since the plan calls for $5 million per year to be available from Compact infrastructure money, while the facility is estimated to cost between $20 and $30 million.
Even with the new hospital project moving into gear, Langidrik said this doesn’t change the Ministry’s focus on preventive health.


$3 million payments lets MEC order
The Marshalls Energy Company and the RMI government have paid off $3 million overdue to SK Networks of S. Korea for the last shipment of diesel, and are now gearing to order the next shipment, Chief Secretary and MEC board member Casten Nemra told the Journal Wednesday.
Support from Japan helped solve MEC’s and RMI’s fuel cash crunch.
The government chipped in more than half of that amount, MEC the balance, Nemra said. Despite it being nearly 60-days past the due date for payment when MEC cleared the bill, SK Networks did not hit the RMI with additional fees or interest, Nemra said.
Nemra expressed appreciation to SK Networks for working with the RMI and MEC, and not hitting MEC with additional charges for being late.
MEC officials indicated that an order is being placed for about 2.2 million gallons of diesel to be shipped mid-April. They report MEC still has two months worth of fuel for the power plant as well as sales to fishing vessels.

From the 3/13/09 issue of the Marshall Islands Journal

Kramer: We need grant writers now

By GIFF JOHNSON The Marshall Islands has missed out on dozens of opportunities to bring “new money” into the RMI economy, but those opportunities have not been lost forever, says a local businessman. In order to capitalize on potentially thousands of international grant options open to the RMI, the government urgently needs to establish a grant office, said PII CEO Jerry Kramer. His key point: Hiring skilled people to write grants that bring money into the RMI “grows the economy,” creates new jobs for Marshallese, and increases tax revenue for the government — without raising tax rates as the government is planning to do. Kramer says both the Federated States of Micronesia and Palau appear to be taking better advantage of European Union, Japan and US grant funding options than the RMI. This was confirmed by an article in this week’s Marianas Variety reporting that Palau will be receiving almost $400,000 from the Obama Administration’s workforce investment program that is funded under the American Recovery and Reinvestment Act. “We need to hire people able to do the (grant writing) job,” Kramer said. It will require paying high salaries to qualified grant writers, “but at the end of the day, they will bring in tens of millions of dollars.” Tax revenue collected by the RMI is down 30 percent this year and that reflects the downturn in the economy, he said. “We need the jobs (these grants) create, people need expendable income, and the government needs the tax revenue.” Kramer mentioned specifically EU funding for energy projects, Japan’s “Cool Earth” grant program, Japan “soft loans,” JICA large-scale infrastructure funding available on an annual basis (but from which the RMI has had only one project in nine years), Japan non-project funding that FSM states are using for fuel and other support, and hundreds of US federal programs waiting to be tapped. “We need to grow the economy,” he said. Kramer worries that plans to increase taxes when the economy is contracting could result in its collapse.

Cargo ruling hits customers

A suddenly enforced rule has sparked concern among local businesses and individuals who send freight on Continental. The US Transportation Safety Administration (TSA) has directed Continental to require all freight to go through a cargo agent, consolidator or freight forwarder. Mike Slinger, whose company exports tropical fish, is one of many hard hit by the sudden change. “It adds another layer of paperwork and cost that makes our products less competitive,” he said. The only approved agents who can provide freight to Continental in Majuro are DHL, TNT and Marshall Islands Fishing Venture. Slinger said Continental is working with TSA to try to find a solution to this. Human remains, small packages, tropical fish and other marine life — anything that has normally been sent on Continental — is affected by the new ruling. Slinger said TSA’s abrupt enforcement of the rule provided no time to sort out an alternative. It is affecting all Continental destinations in the freely associated states.

From the 2/27/09 issue of the Marshall Islands Journal

Jerry: ‘We’re letting millions slip away’

By GIFF JOHNSON

PII chief executive officer Jerry Kramer’s message to anyone who is listening: there is money available to RMI that is not being accessed and that means jobs, spending money and tax revenue are being lost.

“The government is not taking a holistic approach to working with its ministries and agencies to develop the economy,” he said. “The government needs revenue to provide essential services but increasing taxes takes money out of the community. Growing the economy is the direction the government needs to go in.”

The key to improving life in the country is getting disposable income into people hands by creating jobs in the business sector, he said at last week’s Chamber of Commerce meeting. His idea is to create more revenue at lower levels of taxation by increasing the volume.

Among areas where the RMI can improve, according to Kramer:

• US Compact construction money is not flowing as quickly as it could be, and this means it isn’t turning into jobs.

• The RMI is eligible for a $6 million to $10 million annually in major infrastructure projects from Japan, “but we haven’t had one project in five years.” A total of $30 million to $50 million has been available but RMI “hasn’t taken advantage of it.”

• Up to $40 million in US FAA money could be in danger because of a law passed in 2008 concerning land-filled areas. The FAA-funded airport road diversion project is being held up by the Nitijela law. “A one-sentence change in the law can bring in $30 million to $40 million for construction work and jobs.”

• The European Union, Asian Development Bank and other international donors have tens of millions of dollars available for a range of grant-related projects.

• The RMI is eligible for multiple US federal programs for which it is barely scratching the surface right now.

• The government sees funding for the Marshall Islands Visitors Authority as an expense, but Saipan and other islands see it as an investment. “Tourism brings in money, revives the culture, creates jobs and is a market for handicrafts.” Every agency, ministry and non-government group needs to buy into Japan Airlines and make it a top priority to develop the charter service.

• Encouraging yacht tourism helps the economy and the Marshall Islands is a preferred place to visit in the region, but our customs and immigration rules are keeping yachts away.

“There are other revenue sources,” he said. “If the right buttons are pushed to grow the economy we can get more money into the country.” One good way to shake loose money available to the government from overseas donors is to hire a good grant writer.

“What would the addition of $30 million a year into the economy do for us?” he asked. “That’s jobs, spending money, tax revenue.”

People talk negatively about the economy because people are feeling in poor condition, he said. “If people have money to go to the stores, they are happy.”

Hope for more yachts

During his ‘Tax According to Kramer’ speech at last Friday’s Marshall Islands Chamber of Commerce meeting, PII executive Jerry Kramer noted that there were hopes that the number of yachts visiting RMI could triple in the next few years.

Mieco Beach Yacht Club committee member Karen Earnshaw later in the meeting agreed with this statement, adding that for this to happen a number of new facilities need to be added to the lagoon’s foreshores. “The yachts need a good haul-out facility, with a ‘travel-lift’ and shower and bathroom access,” she said. As well, she explained that there is a need for the existing 90-day visa limit for non-Americans to be extended to six months. “The yachts who want to escape the South Pacific cyclone season need to be able to stay here six months, not just three months.”

In related news, a sub-committee of the Marshall Islands Tourism Association is currently preparing suggested additions to RMI’s Immigration regulations, which are currently under review by the government. The recommendations are aimed at raising tourist numbers and include an outline for a ‘cruising visa.’

From the 2/20/09 issue of the Marshall Islands Journal

Visitor numbers plummet in 2008

The number of people visiting the Marshall Islands took a dive last year compared to 2007, according to figures released this week by the Marshall Islands Visitors Authority.

A total of 6,022 people came to RMI in 2008, a 17 percent drop over the 7,200 who visited in 2007, MIVA reports.

Leading causes of the drop in visitors appear to be the cutback in Japan Airlines charter flights, the halt to diving at Bikini Atoll and the lack of flights directly from Australia, which makes it difficult and expensive for visitors from south of the equator to get to Majuro, according to MIVA’s Emelyn Simon (pictured above).

The number of visitors from Japan was down as a result of a dip in charter service. There were six JAL charters in 2007, but only two in 2008, according to Simon.

Bikini Atoll Divers called a halt to its tourism program early in 2008 after having a string of divers stuck at the atoll when AMI’s planes were grounded in late 2007 and 2008. Although Bikini didn’t account for a huge number of visitors, it was averaging more than 200 per year.

“The fact that Air Marshall Islands was down for quite a long while resulted in Bikini (canceling) fully booked diving tours,” Simon said. When Our Airline quit flying to Majuro last year, it ended direct flights from Brisbane that were a small, but significant contributor to the local tourism industry.

Simon also said the Marshall Islands cannot escape the overall global economic downturn.

The 6,022 visitors in 2008 was higher than in 2006, which saw 5,780 come to RMI.

The statistics for these years include all arrivals by plane, but don’t include incoming yacht visitors.

The ups and downs of taxes

An important missing element from last week’s report on RMI tax revenue being significantly down compared to a year ago is that historically collections pick up during the summer months, according to Ministry of Finance Assistant Secretary for Tax and Revenue Bruce Bilimon.

“The quarters are not all the same (in terms of revenue collection),” he said. “During the summer, tax collection goes up.”

He also said that there is no question that tax compliance is much improved with more aggressive action by Finance officials.

Bilimon did note that two changes in tax laws made by the Nitijela late last year to respond to the economic and fuel crisis have affected tax income for the government. The elimination of tax on MEC fuel imports and the elimination of import tax on certain staple food items have all reduced the flow of revenue to government, he said.

Coupled with these tax losses is the overall negative economic situation that is impacting not just Marshall Islands but the whole world at this time, Bilimon said. “The report seemed to suggest we are not collecting,” he said. “We’re doing our best.”

From the 2/13/09 issue of the Marshall Islands Journal

PII wins $25 million Chuuk contract

By Suzanne Chutaro

While the welcoming of 2009 has been marked with news of economic doom and gloom, Chuukese residents in the downtown Weno area have much to look forward to in 2009.

After years of being synonymous with pot-holed roads, Chuuk State is set to begin phase one of a three-phased US Compact-funded capital improvement project that will give the island a much need face lift.

In January, the Federated States of Micronesia’s national government awarded a $25 million contract to the Majuro-based construction company Pacific International Inc. to begin the first phase of the three-phased project aimed at fixing Chuuk’s road and sewage system.

According to PII operations manager Kenneth Kramer, phase one of the project involves the installation of a new sewage system under a four and a half mile stretch of road in downtown Weno.

Once all this underground work is completed then the contract calls for pavement of this same stretch of road with a nine-inch thick concrete cover. “Along this stretch of road you can only drive at about five to seven miles per hour,” said Kramer describing the current state of Chuuk’s road. “It’s like Majuro back in the 1990s where it takes you 30 minutes just to drive four and a half miles.”

Kramer said that while PII will be taking some of its key Marshallese workers from Majuro to work the Chuuk road project, PII will also hire locally from Chuuk.

Gordon Macpherson, who was PII’s project manager in the late 1990s for the Japan-funded Majuro road improvement project, will again be the project manager for PII in Chuuk.

Meanwhile in related developments, Kramer says PII is lining itself up to bid for other construction projects in FSM. These include two US Federal Aviation Administration (FAA) funded airport projects on Chuuk and in Kosrae.

With the number of US Compact capital improvement projects seemingly slowing down in Majuro and the limbo status of FAA funding available to the Marshall Islands because of the newly passed landfill law, looking at opportunities with our neighbors in FSM may be the key to survival for RMI’s construction companies.

RMI tax income sees big decline

A bleak report on RMI tax collection was issued this week by the national government.

It shows that in the first four months of fiscal year 2009 (October 2008-January 2009), only $5.5 million was collected.

This rate of collection is 30 percent down from FY2008, the government report said.

If the rate of tax collection in the first four months continues, the Ministry of Finance would collect only $16.8 million in tax this fiscal year compared to $23.8 million last year.

Of significance is that after hitting a tax collection high of $25.5 million in FY2007, collections dropped by over $1.7 million last year and look to be dropping much further this year.

“Even if some under-estimation is taken into consideration, the final (tax collection) results could be well below what was budgeted, having a severe impact on (government) expenditures,” the RMI report said.

Although the average salary went up in FY2008 to $9,706 compared to $9,523 in 2007, the report noted that the total number of jobs in RMI went down in 2008 compared to the year before.

The job picture “underscores the need to look at ways to expand employment in the private sector,” the report said.

It also points out that job cutbacks are expected to continue at the US Army base at Kwajalein this year, which, “given their higher wages, will severely impact conditions on Ebeye and Enniburr.”

From the 2/6/09 issue of the Marshall Islands Journal

Fish wish

By GIFF JOHNSON

It’s time for Marshallese to get seriously involved in commercial fishing — and the Marshall Islands Service Corporation is ready to lead the way.

The local company has hired former Marshall Islands Marine Resources Authority Director Danny Wase as a consultant to help locate joint venture partners in a soon-to-be-launched purse seine fishing operation.

“It’s time for us as resource owners to participate in the fishing industry,” Wase told the Journal Tuesday. “License fees (for foreign vessels) bring peanuts compared to what the fishing countries make.”

“This is an important project,” said MISC President and CEO Patrick Chen. “We need to get into fishing to bring money into the RMI.”

Wase said he and Chen recently spent time meeting with fishing companies in Taiwan, Japan and S. Korea. “There is a lot of interest in joint venturing with us,” he said.

Fishing company owners in Taiwan “are showing a lot if interest,” he said, but added: “We’re looking at all options.”

The preferred option for MISC is to buy a new purse seiner, Wase said. These cost in the range of $15 million.

He said the plan is to get a JV partner to kick in half of the purchase cost.

Wase believes that there is a significant difference between RMI government-funded fishing operations in the 1980s — which failed — and MISC’s current plan. “The previous fishing ventures, management was overseas so we really didn’t know what was happening,” he said. “With this, we’ll control it locally, so we’ll know the costs and the amount of sale proceeds.”

Wase said it will take 12-to-18 months to build a new vessel once investment partners are secured.

NTA signs for fiber optic cable

The Marshall Islands National Telecommunications Authority has signed a contract with Tyco Telecommunications to install an undersea fiber optic connection to Majuro and Ebeye, wrapping up six years of off-again, on-again negotiations.

More than six years in the planning, NTA has finally executed a contract with Tyco, a business unit of Tyco Electronics, to construct a Micronesian Cable System (MCS) extension to the Kwajalein Cable System (HANTRU-1). 

“The extension into Majuro and Ebeye, which is part of a larger trunk from Guam to Kwajalein, will provide high bandwidth connectivity between the Republic and the rest of the world,” said NTA General Manager Tony Muller. “The opportunity to connect to the global fiber optic network will be nothing short of transformational for an isolated country like the Marshall Islands.”

Muller added: “The extension we are deploying with Tyco Telecommunications is essential to our development and will enable us to provide services to our customers that we have only dreamed about.”

The extension will comprise one fiber pair segment, from an optical branching unit outside of Kwajalein Atoll, serving a dedicated fiber pair on the HANTRU-1 trunk.  When integrated into HANTRU-1, the Majuro and Ebeye extension will have direct connectivity back to Guam. The fiber pair will have an ultimate capacity to transmit sixteen 10 Gbps wavelengths, shared equally with the FSM Telecommunications Corporation.  Since Guam is a regional telecom hub, NTA will have a variety of onward connectivity options.

The NTA extension is being financed through the U.S. Department of Agriculture Rural Utilities Service (RUS) Telecommunications Loan Program.

“With the backing of our government, we’ve acquired an $18.5 million loan with RUS and have executed down payments to secure our participation in this project,” he said.  The contract was executed on January 12, and the project is scheduled for completion in March 2010.

From the 1/16/09 issue of the Marshall Islands Journal

UES heads to bowling alley

By SUZANNE CHUTARO

The plight of Uliga Elementary School students may soon be over.

Before departing Monday night, RMI’s Ambassador to the United Nations Phillip Muller told the Journal that his family business — Krystal Enterprises — has been in discussions with the government and they have agreed in principle to convert the Majuro bowling alley building into Uliga Elementary School.

“It’ll be a win-win situation for the government and the students,” said Muller.

Negotiations are still ongoing but he expects that by the 2009-2010 school year, the UES students will have a new home opposite EZ Price Mart.

He said they are now finalizing terms for the purchase with the Minister of Education, Internal Affairs and the Marshall Islands Development Bank — which will front the funds to allow the government to buy the facilities.

Danny Wase, who operates Awa Zero night club at the bowling alley, said he has been advised of the possible use of the facility for a new UES school and added: “Obviously we’ll have to move.” But he said he has been given no date to vacate. In the meantime, he has already started looking at other options for housing the popular nightspot.

He said the loss of the bowling alley if the new plan goes through is unfortunate because it is a unique recreation option on Majuro. “All ages can play (bowl) at the same time,” he said. “You can’t play basketball with your daughter, but you can bowl with her, and she might beat you,” he said.

Wase said the original plan for a replacement school for UES located next to Assumption was excellent in part because of the significant recreation facilities it included. “A lot of good things would happen if UES was constructed at that location,” he said.

AMI lease plane from Australia

Air Marshall Islands expects to have a Dornier-228 flying to the outer islands before the end of January — the first time in more than 17 months that a Dornier has been operating in the RMI.

AMI General Manager Bill Capelle said the company has leased a Dornier from an Australia-based firm, and the plane is expected to arrive Friday or Saturday this week. According to Capelle, from the date of its arrival it will take about a week of flight tests and pilot refresher training before it goes into regular service to the outer islands.

Since AMI’s own Dornier-228 was grounded in August 2007, about two-thirds of the outer islands with small airstrips have been without air service. The larger Dash-8 is able to service only about one-third of the available runways. The Dornier-228 is being ferried from Melbourne and was expected to leave Australia for Majuro on Wednesday this week, Capelle said.

From the 1/2/09 issue of the Marshall Islands Journal

Gas costs less in Ebeye

By GIFF JOHNSON

Ebeye and Jaluit are making history this week with gas prices lower than Majuro’s for the first time ever. By dropping its gas price at the pump 60 cents below Majuro’s lowest gas price, the ALRO fuel company is demonstrating Majuro is completely out-of-step with pricing in the rest of the world.

Even the outer island of Jaluit is enjoying gas at $4.29 a gallon.

The last time world market fuel prices were as low as they were this week, Majuro drivers were paying less than $3 a gallon for gas.

Instead, prices in Majuro on Tuesday as the Journal went to press ranged from $4.89 (Riwut) to $5.09 (SEPS) — 60-to-80 cents higher than Ebeye’s and Jaluit’s new gas price.

ALRO chief executive officer Alvin Jacklick approved the price cut for Ebeye and Jaluit gas on Tuesday this week, dropping the price from $5.84 to $4.29 per gallon.

While the bottom has dropped out of the world market price for Brent Crude oil, prices in the Majuro have not followed suit.

Last July, world market prices peaked at over $140 per barrel, and Majuro’s gas prices at the pump set a record at $6.89 per gallon. But the world market has dropped to under $37 a barrel this week.

Gas prices at the pump in the US have dropped from an average of $4.11 a gallon in July to $1.62 — a 60 percent drop, compared to less than half that percentage for Majuro.

When world market prices for a barrel of oil were $92 in November 2007 — more than double this week’s world market price — the price of gas at the pump in Majuro was still less, at $4.76 a gallon, than it is today.

Mobil cut its price to Majuro gas stations on Christmas Day by 15 cents, bringing the Mobil price to Majuro gas stations to $3.57 per gallon — that wholesale price is nearly $2.50 above the current cost to Mobil at the refinery in Singapore, where gas for the RMI originates.

This is Mobil’s second price drop in December, bringing the total reduction for December to 30 cents.

Riwut’s new price of $4.89 is a 20-cent drop on the station’s previous pump price. Ace’s One Stop, which is now at $4.94, also cut 20 cents off the price. RRE dropped by 15 cents to $4.99. SEPS, which was till at $5.09 Tuesday is expected to mirror Riwut’s price later this week.

Cabinet backs $1 million for nuclear payment

The RMI Cabinet has approved in principle a plan to provide $1 million to resume partial payments to nuclear claimants after a three-year hiatus.

The development is a result of President Litokwa Tomeing pushing the Cabinet to find an interim way to address the lack of US funding for nuclear compensation to Marshallese with personal injury awards from the Nuclear Claims Tribunal, according to officials in the Cabinet. This follows US Interior Department rejection of Tomeing’s proposal to use Compact funding as an interim measure to provide compensation until a new compensation agreement can be reached.

But there are still significant hurdles before any payment can be issued by the Tribunal, including the fact the Tribunal now has no sitting judges to issue a “determination” (decision) — a requirement for an annual payment by the Tribunal.

There is also some dissention in the Cabinet over the payment plan. Some members have raised concerns that paying nuclear test awards using RMI money could set a precedent that might undermine future attempts to obtain compensation from the US government.

“This might make it very difficult to get in the door with the US,” one official commented.

But one advisor to the President told the Journal the plan for a Marshall Islands-funded payment “doesn’t waive US responsibility for nuclear claims.” President Tomeing’s concern, he said, is that “the victims need relief. People are dying every year without receiving their full compensation. How long do nuclear test victims have to wait?”

The President’s advisor said the government has identified a source of RMI funds, with a loan application pending with Bank of Marshall Islands for $1 million.

This is about the amount that was last paid by the Tribunal in 2005, when it made a one percent annual payment for personal injury claims that amounted to about $980,000.

Tribunal Chairman Gregory Danz’s contract with the Tribunal expired in late October and currently there is no judge sitting on the Tribunal. The Judicial Service Commission, which makes recommendations to Cabinet for appointment of judges, reportedly has a recommendation with Cabinet for it to reappoint Danz.

Tribunal officials said from the point at which they are officially notified that funding is available and a determination is made, it will take at least three weeks to generate a payment.

 

From the 12/5/08 issue of the Marshall Islands Journal

EZ’s latest fresh idea

After receiving top marks from the RMI EPA, EZ Price Mart has begun selling “Ultra Purified Marshallese Rainwater” at its shop in Uliga.

Dennis Yates, Director of the Diabetes Wellness Center, has endorsed and inspected the product. He was also the first customer to get his bottle filled with EZ Price’s Ultra Purified Marshallese Rainwater.

The rainwater is collected in a 28,000 gallon tank then sent through a series of filters before being stored in a 500-gallon holding tank. Upon demand the water then goes through two “polishing” filters and an “ultraviolet” filter and is dispensed from the self-serve water dispenser located by the main entrance of the store. Neal Skinner, owner of EZ Price Mart, said he wants to give the people of Majuro a quality product at a reasonable price. The price per gallon will be fifty cents.

But to launch his new water business, Skinner is offering a special, introductory price of twenty-five cents per gallon until December 14.

In order to keep the cost down, customers must bring their own containers. The dispenser will provide water in one, three, and five-gallon quantities.

“Make sure you bring clean containers so that the water does not get contaminated by dirt in your container,” said store manager Liz Rodick.

US slows worker flow

Business and government officials say they are having an increasingly hard time recruiting workers from the Philippines because of problems obtaining US transit visas through the US Embassy in Manila.

Health Secretary Justina Langidrik told the Journal, “Ebeye has been having problems getting people already approved for recruitment because of the visa problem.”

Anil Construction CEO Carlos Domnick said even when Philippines workers he recruits have all of their documents in order, the US Embassy is rebuffing them.

“For Ebeye, even one doctor is a lot,” Langidrik said. “If there is no ophthalmologist, then there is no service because they have very limited staff.”

Until recently, the Ministry of Health — which recruits medical doctors and nurses regularly from the Philippines — experienced few problems with the US Embassy in Manila, she said. “Now, there are long delays,” she said. “When that happens, sometimes people who’ve been recruited change their mind and we have to go through the recruitment process again.”

For workers from the Philippines to get to Marshall Islands, they must travel through either Guam or Hawaii, both of which require that they have US transit visas. Guam, obviously, is the most convenient and cost-effective transit point for workers coming from the Philippines to the Marshall Islands. Depending on flight scheduling, transit time can be as little as three hours on Guam. But since September 11, 2001, all visitors require transit visas, even for brief stop offs such as the one at Guam.

“I have been very frustrated with the US Embassy in Manila,” Domnick said. “They give our hired workers from the Philippines a hard time.”  Domnick said US officials in Manila ask Filipinos recruited by Anil Construction why “they do not transit via Japan.  Maybe they heard about the chartered flights from Japan and think that our workers should either not come to Majuro or hope to book a seat on the not-so-definite JAL chartered flights.”

The result of delays or denial of a transit visa by the US Embassy in Manila “is very frustrating because our hired workers have worked very hard and spent a lot of money to get their police clearance, health certificate, HIV clearance, school transcripts, etc. and we do a lot of work and spend a lot of money from this end to advertise the position, get the entry permit, get the work visa, etc.” 

Domnick said frequently US Embassy officials “deny the worker his/her transit visa for stupid reasons like ‘take the Japan route.’ And worst is our workers just need the US transit visas to transit through Guam and they will stay at the Guam airport for only three hours, they do not leave the airport.” 

He said he’s asked for help from the US Embassy Majuro, but isn’t seeing much result.

“How can our construction industry grow and be successful when we cannot bring in the skilled workers that we need?” he asked. “How can our businesses be more accountable when we cannot bring in the skilled accountants that we need?”  

The RMI Foreign Ministry is also talking to the US Embassy in Majuro about the situation in Manila, according to officials there.

From the 11/28/08 issue of the Marshall Islands Journal

Local embassy to contact Manila colleagues on issue

In response to concerns expressed by government and business officials in Majuro, the US Embassy is preparing a briefing paper on the Marshall Islands for the US Embassy in Manila that officials hope will provide better understanding of employment needs in the Marshall Islands.

But US Embassy Majuro Charge d’Affaires Doug Morris made it clear that the Majuro embassy has no authority to involve itself in decisions of the Manila embassy.

“A vice consul has full legal discretion to make a decision (rejecting or granting visa applications),” Morris told the Journal. “An ambassador cannot go to a vice consul and tell him to issue a visa.”

Anyone applying for a US visa is assumed to be an intending immigrant to the US unless they can prove otherwise and the way regulations are structured, the onus is on the applicant to prove they are qualified for a visa and are not planning to illegally migrate to the US.

Morris said that he worked as a vice consul in the US Embassy in Manila, and he saw 250 people per day seeking visas to the US. Of this huge number, perhaps one or two per week were Filipinos attempting to come to Micronesia or the Marshall Islands, he noted.

“We’ve been engaged with the Manila embassy for the past year (on this issue),” Morris said, adding the Majuro embassy has attempted to develop better understanding of the situation in RMI for visa-issuing staff at the Manila embassy.

But Morris pointed out that there are also many human factors that come into play in the process. “We might hear that the visa applicant is the perfect guy for the job, but he may present himself poorly at the US Embassy in Manila,” he said.

“We’re attempting to create for Manila a description of the circumstances here, including salary ranges for the government and private sector,” Morris said.

The aim is to provide perspective on the RMI that may be missing from the evaluation of people who’ve been recruited to work in RMI. For example, Morris said that if a refrigeration engineer couldn’t get a transit visa so couldn’t go to work on Ebeye and if there’s no one else with the skill to handle refrigeration there — which could easily be the case — it could end up causing a major health/humanitarian situation triggering the need for a more costly US response, he said.

Generally, he added, medical doctors have an easier time getting visa applications. But nurses “are trickier,” largely because there is such a huge demand for nurses around the world, including the US.

Would a nurse making $12,000 in the Philippines want to go to the US where she could make $70,000? he asked. This is the type of decision facing US embassy officials worldwide, he added.

But the bottom line is that it is the Manila embassy’s decision. “They make the call, and we can’t do more than what we are doing,” Morris said.

As to why this is more of a problem now than in the recent past, Morris observed, “the reality is it is a human system and it is human beings making decisions about other human beings.” Vice consuls are appointed on two-year rotations and are likely not to have much knowledge of US-affiliated islands since very few of the visa applicants they see want to head to the islands.

Cable chances looking brighter

Developments on the proposed fiber optic cable are “considerably more optimistic than reported recently in the media and in public discussion,” said US Embassy Chargè d’affaires Doug Morris in a statement provided to the Marshall Islands Chamber of Commerce earlier this week.

The cable project, which is expected to involve both the Marshall Islands National Telecommunications Authority and the Federated States of Micronesia Telecommunications Corporation, was discussed during last week’s Micronesian Chief Executives meeting in Pohnpei, Morris noted, adding that the negotiators are more optimistic than has recently been presented.

“Perhaps of most significance is that the 10 years versus 25 years issue has been satisfactorily resolved,” he said.

The recent sudden reduction in the time period of the proposed agreement was seen as a major obstacle to moving forward for NTA.

Morris said the Pohnpei meeting was told that the US Rural Utility Service has approved in principle an RMI loan request for the cable, pending their review of the final contract. “This is a major step forward as the RUS loan is regarded as essential to RMI’s participation,” Morris said. “I understand that the negotiating parties are now focused on the one major issue yet to be resolved, namely the required $3 million escrow account for (cable) maintenance in the unlikely event of a cable failure due to the RMI and FSM branching units. This escrow account can be jointly funded by FSMTC and NTA.

“The US government is open to receiving a proposal from the government of the RMI to direct Compact infrastructure funds toward RMI’s share if the government of the RMI indicates that it does not have other funding available for this purpose.”

Clarifying who is negotiating with who in this complex project involving multiple parties, Morris said:

• According to US Army officials, Hannon Armstrong, owner of the cable and the main financier for the Army project, has been in the picture since day one. The company is not just arriving on the scene. TKC Communications and Hannon Armstrong did agree several weeks ago to shift the lead for negotiations to Hannon Armstrong, but they have both been involved from the start.

• There have been discussions, but never negotiations, between the Army and FSMTC and MINTA. TKC and Hannon Armstrong are not managing the bidding for the Army.   The Army contract signed on June 11 was negotiated by the Defense Information Systems Agency (DISA) and its contracting entity, the Defense Information Technology Contracting Organization (DITCO), on behalf of the Army. The DISA contract is with TKC and Hannon Armstrong, but the Army was not a direct party to those negotiations and is not a party to the current negotiations. Nor is DISA/DITCO a party to the present negotiationsThese are parallel business negotiations, not an effort coordinated by the US government or the Department of Defense.

“I hope that this updated information helps to dispel some of the rumors and misconceptions circulating around the Marshall Islands in recent days,” Morris said.

SK fuel on its way to Majuro

About 2.1 million gallons of diesel fuel were loaded on an SK Networks tanker this past weekend for shipment to Majuro.

MEC General Manager Billy Roberts told the Journal that this fuel shipment is less expensive than the last one ordered in October, which will lead to further reductions in electric rates starting January 1. After the arrival of last month’s diesel shipment, MEC began selling diesel retail at $2.92 per gallon, about three dollars less per gallon than the retail price in local gas stations that rely on Mobil for diesel supply.

The MEC shipment of diesel is expected to arrive from S. Korea the second week of December.

But unlike many previous shipments over the past three years, MEC is not facing a countdown to running out of fuel at its Delap fuel farm, Roberts indicated. As of earlier this week, it global market prices for oil were hovering around $50 a barrel, down from about $150 per barrel in July.

From the 11/21/08 issue of the Marshall Islands Journal

Wanted: RMI hotel workers

By GIFF JOHNSON

Encouraged by a first group of Marshallese workers doing well, American labor recruiters are back in Majuro looking to recruit another 60-to-80 Marshallese for hotel jobs in the US.

Practical Employee Solutions Director of Operations Veronica Strickland and a team of officials representing her company and Starwood Hotels is currently in town to interview and select a second “pilot group” of Marshallese workers who will be flown to jobs in the US from January.

Marshall Islands workers remain “an unproven option” for US hotels so future jobs depend totally on how well the current Marshallese group works out, Strickland said.

For US employers, the fact that Marshallese don’t need visas to get into the US is a big advantage to hiring people from the RMI. But the current program also requires hotels to make a big upfront payment for one-way airfares that cost at least $1,500, which is then deducted from the workers’ salaries. For the first group, it cost more than $75,000 in airfares. “That’s a huge investment on a pilot program,” Strickland said.

“I hope it will develop,” she said, adding that there is a big need for foreign workers in the US. “It all depends on the success of the people who go. If just one or two don’t work out, it’ll be a problem.”

Despite some initial teething problems with the first group, things have gone well, she said.

The aim for this second group is to send some to the US in January, and the second batch in June.

Strickland said they are hoping to meet with bank officials while on island to discuss opportunities for loans for airfares to support recruitment of workers locally.

Practical Employee Solutions currently recruits 7,000 to 8,000 foreign workers annually for hotel jobs in the US and fast food restaurants in Canada, Strickland said.

Although the group has focused on Majuro in its initial efforts of recruiting, Strickland said they aim to add Kwajalein to their recruiting in the future. Strickland, Danny Eaton of Practical Employee Solutions, and Nancy Campbell and John Boulanger, who are both human resource directors with Starwood Hotels, are here through Friday to recruit the new group of workers. Russell Langrine is the group’s local agent. The group is working at the RRE complex conducting interviews.

Stevedore fixes problem

Chamber of Commerce Public Affairs Committee chairman Sam Smith reported good news back to local businesses that import container loads of goods.

Last week, DAR CEO Carlos Domnick had complained about a new Stevedore policy imposed without consultation that prevented local businesses with their own trucks from hauling containers from the Stevedore yard at Delap Dock.

Smith took the issue up with Stevedore General Manager Clyde Heine.

“Clyde read my e-mail and then called me that he has cancelled this policy,” Smith reported to Domnick and other interested businesses by email. “All is back to normal again.”

In related developments:

• Heine announced that effective this week, Stevedore has eliminated its fuel surcharge that had been placed on all container delivery since the summer.

• Stevedore has requested approval from the RMI Ports Authority to increase charges for some of its services. The request is pending with the Ports

From the 10/31/08 issue of the Marshall Islands Journal

Gas rip-off

The Marshalls Energy Company this week dropped its diesel price to under $3 per gallon, but local gas stations report that they are still paying more than $5 per gallon for gas and diesel from Mobil Oil Micronesia.

But a Mobil official disputed this, saying the wholesale price to local dealers is less than $5 while the gas stations are charging more than $6 per gallon.

Worldwide fuel prices dropped to their lowest level in two years this week.

As of Friday last week, the gas price at the refinery in Singapore — where fuel used in the Marshall Islands originates — was $1.49 a gallon, virtually identical to the refinery price in November 2006, when gas was selling in Majuro for $3.80 to $3.85 per gallon.

As of Wednesday, fuel prices in Majuro ranged from $6.09 to $6.20 per gallon despite the continuing fall of world market prices.

“How come MEC can sell diesel for $2.92 a gallon and we’re paying over $5 a gallon from Mobil?” said one station manager who asked not to be named. “Yes, Mobil has been dropping prices, but they’ve been smaller five-to-ten cent drops.”

The price at the Singapore refinery has dropped from a July 14 peak of $3.42 per gallon for gas to $1.49 as of last Friday. From July 25 to Monday October 27, Mobil has dropped its price to local dealers by 87 cents.

While a Mobil official contends that gas stations are marking up prices by more than $1 per gallon, gas station managers say they add just a small markup. “I know the stations are not making a lot of margin (profit),” RRE’s chief executive Ramsey Reimers said. “We follow Mobil up and down.”

Local gas stations, though they have dropped their prices, have also not kept pace with Mobil’s 87 cent drop. In mid-July, gas prices at the pump here peaked at $6.85-$6.89 per gallon. On Wednesday they were $6.09 at Riwut, $6.12 at RRE and Ace’s One Stop, and $6.20 at SEPS.

Reimers said one explanation for Mobil’s prices to Majuro stations being higher today than in 2006 is the generally higher cost of doing business. This may account for why Mobil isn’t reducing its wholesale price to dealers to the level two years ago, he indicated. But, Reimers reiterated, his station and the others “are making only a small margin to survive.” His comments were echoed by other station managers.

A Marshalls Energy Company official told the Journal that this week MEC has dropped its selling price for diesel from over $5 per gallon to under $3 — a more than $2 dollar per gallon drop.

In Kiribati, according to the government’s newspaper, the retail price for gas at the pump is about US$3.90 per gallon. The government enforces price control in Kiribati on certain food items and fuel products.

In Pohnpei, gas prices have been reported to be consistently about $1 lower per gallon than in Majuro.

$1.8 million for MALGov staff and council members

Majuro Atoll Local Government’s rejected fiscal year 2009 budget shows $1.8 million is planned for salaries for the 192 workers, council members and mayor. The projected salary budget amount is 47 percent of the total proposed FY2009 budget of $3,870,045.

MALGov budget documents prepared by Mayor Titus Langrine’s administration show that of the 192 employees of MALGov, nearly half — 90 — are in public safety. A total of 89 are police and one is a mechanic. Another 37 are in the parks and recreation department, which is in charge of both sports and garbage collection. Another 16 are in administration and 12 are in the finance department.

MALGov indicates that it collected $3,446,521 in tax revenue from October 1, 2007 through September 17, 2008 (all but two weeks of the entire fiscal year 2008).

Although it collected $3.4 million in FY2008, MALGov projects it will collect $400,000 more this fiscal year, and has projected its budget at $3,870,045.

The budget figures prepared by MALGov also show that FY2008 spending outpaced its $3.4 million revenue, leaving MALGov with a more than $500,000 deficit for this past fiscal year.

From the 10/24/08 issue of the Marshall Islands Journal

The $17 million

Kwajalein landowners have less than two months left to their crucial $20 million deadline for US rent money.

But the National Telecommunications Authority and the Marshall Islands is facing a more pressing deadline — in less than a month, the initial payment is due to secure a contract for an underwater fiber optic cable to connect Majuro and Ebeye with the outside world. The cable, while costly, will provide the RMI with a huge communications upgrade.

“Cabinet has already endorsed it,” Minister of T&C Dennis Momotaro told the Journal Wednesday. “We really want it to happen. I’m going to push for the government to guarantee the loan. We’ll finalize it either this week or next week.”

NTA General Manager Tony Muller told the Journal, “roughly $2 million will be required upon signing (of the contract).”

The NTA board and the RMI Cabinet have endorsed the cable project. The US Army is spending $100 million over a 10-year period to bring the cable from Guam to Kwajalein, and the Ebeye/Majuro leg will cost the RMI about $17.9 million.

NTA has talked to the US Rural Utility Service about loan options, and reportedly RUS has indicated its willingness to refinance NTA’s existing loan, provided NTA has a guarantor. Muller said November 21 is the deadline for NTA to make the first payment confirming the deal.  The Federated States of Micronesia’s telecom company has reportedly already signed up for its portion of the cable project with the firm handling the project for the US Army.

MEC cuts 8 cents off KW hour

Electricity rates will drop November 1 in Majuro, giving Majuro residents, businesses and the government some needed relief.

Minister of Public Works and MEC board Chairman Kejjo Bien told the Journal that MEC will be reducing the price of electricity next month.

MEC will reduce for all consumers by eight cents per kilowatt hour.

This means that lifeline customers (who use under 500 KW hours per month) will pay 31 cents, down from the current 39 cents per KW hour; regular residential customers will pay 33 cents, down from 41 cents per KW hour; businesses will pay 39, down from 47 cents; and government will drop to 40 from 48 cents.

The drop has been made in line with the drop in world market fuel prices that have plummeted from a high of around $150 a barrel earlier this year to around $80 a barrel as of last week.

From the 10/17/08 issue of the Marshall Islands Journal

RMI tax laws being revamped

The Marshall Islands tax law was passed nearly 20 years ago and needs overhaul and change.

That’s the mandate for the Tax Reform and Modernization Commission set up recently by the Cabinet, Ministry of Finance assistant secretary Bruce Bilimon told Friday’s meeting of the Chamber of Commerce.

Bilimon said the goal is to improve both the tax system and compliance.

He outlined the plan of action for the Commission, saying that it will be consulting with businesses, government officials and others over the next couple of months to help it formulate a new tax plan. The plan will be provided to the Minister of Finance Jack Ading next year.

“We’re seeking a partnership with everyone,” he said.  Bilimon asked people to submit their ideas and comments directly to him or the Commission’s chairman Carlos Domnick.

Domnick told the group, “we’ve been complaining a lot about enforcement.” With five members from businesses on the Commission, it gives the private sector some clout in recommending improvements, he said. “It’s an opportunity to make the system right.”

Tony against NTA into television

In a presentation made during what was supposed to have been the last day of the current session of Nitijela, Foreign Minister Tony deBrum addressed the subject of the National Telecommunications Authority’s plans to begin providing a television broadcast service in Majuro.

He explained that in his view, due to the fact that a private concern has been providing such a service for a considerable time, NTA should not enter the market to compete.

He said NTA operates under conditions of exclusivity and would gain an unfair advantage over the current private sector endeavor.

A cable operation, owned by Marshalls Broadcasting Company, provides TV service in Majuro now.

From the 10/10/08 issue of the Marshall Islands Journal

Bank must cut rates

The RMI Banking Commissioner ordered all local banks to reduce consumer loan interest rates to a maximum of 15 percent — a move that will have the most impact on Bank of Marshall Islands, which currently uses a 17 percent maximum rate for most consumer (personal) loans.

Banking Commissioner Ann Marie Muller issued the order September 30, more than six weeks after getting Cabinet approval of the measure, and ordered that the banks implement the change on Monday this week (October 6).

BOMI President Patrick Chen said the reduction in interest will reduce bank earnings by $1.5 million a year. He said the bank is now gearing to reduce hours of operations and of staff, and possibly cut back on various other services, including community donations, to reduce its costs to the mitigate losses.

Muller said the “new lower rate is to assist the Republic of the Marshall Islands’ citizens to cope with the higher cost of living as a result of increases in the price of fuel, foods and other commodities.” The directive to the banks to reduce their unsecured consumer loan interest rates to 15 percent follows an unsuccessful effort earlier this year by some Nitijela members to pass legislation reducing the current interest rates allowed by the “usury” law of 24 percent.

Chen expressed surprise that there was no prior consultation with the bank, since the provisions of the RMI banking law — which give the commissioner the power to issue orders setting maximum interest rates — requires consultation with local banks.

Chen indicated that in discussions with Muller after receiving the letter, she has given the banks additional time to implement the new directive. Bank officials said that they are gearing to implement the new interest rate, but as of Wednesday this week did not have a date for it to go into effect.

BOMI dropped its maximum rate from 18 to 17 percent two months ago in response to the RMI government’s declaration of a state of economic emergency.

“It’s not a problem to follow the instructions (from the Banking Commissioner),” Chen said. “We’ll find a way to deal with it.”

MISC ready for fishing launch

The Marshall Islands Service Corporation (MISC) is gearing to launch a Marshallese-owned and run fishing business.

Bank of Marshall Islands President and MISC President and CEO Patrick Chen told the Journal that following endorsement of the fishing proposal by the Marshall Islands Marine Resources Authority, MISC is now aiming to raise $3 million in capital to launch fishing activities with two purse seiners.

Chen said that MIMRA Director Glen Joseph attended a MISC board meeting last month, and said MIMRA is prepared to issue licenses for two purse seiners operating under MISC.

“He gave us the green light,” Chen said. “We’ll try to raise $3 million working capital and locate a partner to join us (in the fishing business).” Chen said they are starting to look for used or new purse seiners, possibly from Taiwan.

Chen said MISC is now offering 300,000 shares of common stock at $10 each in an effort to come up with the $3 million.

“There will be a lot of benefits from (Marshallese-owned and run) fishing,” he said. “There will be jobs, tax revenue, training opportunities.”

Chen said as a Marshall Islands corporation, “we’re in it for the long-term. We want to preserve and maintain the fishing resources and increase benefits for the Marshall Islands.”

Looking back at the failure of a Marshall Islands government-supported fishing effort in the late 1980s — that included a purse seiner purchase and longliners operated by local businesses — Chen said he believes that “times have changed.”

“Today the timing is good,” he said. The skill and experience levels in Marshall Islands are much better today than they were 20 years ago, he added.

Chen said he does not think it will be hard to raise the working capital through sales of MISC shares.

From the 10/3/08 issue of the Marshall Islands Journal

US sees US health break down

A US Department of Interior report issued Friday describes health services in the Marshall Islands and other US-affiliated islands as being near a “total breakdown.”

The report says Majuro Hospital is not properly handling dangerous hospital wastes, medical records management remains problematic, training opportunities for staff are limited, and hemodialysis treatment is not provided despite diabetes being the number one cause of sickness in the country.

The three-page report on Majuro Hospital that is included in the DOI report on all of the US-affiliated islands focuses heavily on the waste management problem, with photos (similar to ones that been printed in the Journal over the past two years) that show the problem of bags of waste piled high.

“Open industrial-size trash cans overflowing with red biohazardous waste bags are scattered across the rear of the hospital,” the report said. “Used syringes and latex gloves mixed with soda cans and Styrofoam cups are piled in a soggy mess from the recent rain. No fence or wall prevents community access to the piles of biohazardous trash and medical waste.”

The report also commented on the state of medical records at Majuro Hospital.

“Two years ago, the (hospital) began implementing an electronic medical records system and began to transfer its inventory of records online,” the report said. “This process was halted when the hospital’s server reached capacity and staff also realized they had a database that contained over 100,000 medical records for a population of only 57,000.” Supporting the report’s contention that residents of many different islands are jumping on planes to get treatment in US hospitals, the report concludes on diabetes in RMI: “Despite the fact that the Ministry of Health’s Secretary classified diabetes as the number one cause of morbidity (sickness) in the Marshall Islands, the (hospital) no longer provides hemodialysis services. Hemodialysis is the most common method used to treat advanced and permanent kidney failure.” Hospital staff said “they eliminated this service years ago because it was not economically feasible to provide. They also stated that they had no idea how many citizens in Majuro needed this service because this population had either died or left the island for a place where this service is available.”

JICA aid stymied

By GIFF JOHNSON

Confusion reigned in Nitijela debate Monday over aid being sought from Japan to support multi-million dollar projects in the RMI.

Government and opposition leaders traded shots over planned projects that have been sidelined in favor of new priorities of the government. But no definitive priority list was offered by government officials during Monday’s debate.

Acting President Christopher Loeak confirmed in his comments that outer islands ships are now a top priority for the RMI government.

In April, President Litokwa Tomeing made a state visit to Japan and presented a list of three priority projects to Japan International Cooperation Agency (JICA) officials for consideration. The list was headed by a water reservoir project, which was to be switched from Majuro to Ebeye, making it a new project. Second on the list was funding for a new USP campus in Majuro and the third item was support for outer island runway improvements.

According to Japan Charge Dr. Kazuyuki Ohdaira, following receipt of this list in April, the Japan government repeatedly requested more detailed information from the RMI government, including budget estimates, which is a required step in the JICA process, but no follow up information has been provided by RMI to date. Until this information is received, JICA cannot move forward on these projects, he indicated.

But a new development has further delayed Japan funding of projects here.

Chief Secretary Casten Nemra confirmed to the Journal this week that late last month, the Cabinet revised the project priority list to be proposed to Japan for funding consideration.

He said that ships to improve outer island service is now number one, and renewable energy is the second priority. This is followed by the water reservoir project for Ebeye and the USP campus.

Ohdaira told the Journal Wednesday he had been informed verbally of these changes by RMI officials but has not received the information in writing. “We’re waiting for written information on this,” he said.

Nemra indicated that the new priority list would be submitted to the Japan Embassy in the near future.

Historically, it has taken about two years of discussions, design work and negotiation between the two governments to launch a new project.

Ohdaira explained that Japan only responds to requests from recipient governments. “It is not Japan who decides the projects,” he said. “The ball is always in the RMI government court.”

From the 9/19/08 issue of the Marshall Islands Journal

OTEC plan waiting for RMI decision

By SUZANNE CHUTARO

The Marshall Islands could become the first energy sufficient country in the Pacific within the next three years.

A company prepared to build an Ocean Thermal Energy Conversion (OTEC) plant in Kwajalien and/or Majuro made its pitch to both Kwajalein and Majuro senators on Tuesday, proposing a 10 megawatt land-based OTEC plant at the cost of about $250 million.

Robert Nicholson, III, of Sea Solar Power International, LLC and associate Hunter Johnston of Steptoe & Johnson LLP Attorneys at Law told government leaders that the OTEC technology is “ideal for the Marshall Islands” and that the “Marshall Islands participation will lead to the success of the project.”

Foreign Minister Tony deBrum has promoted the OTEC plan as a way to power both Kwajalein and Ebeye. Nicholson said the proposed plant would be capable of this.

According to Nicholson, OTEC, which is a low temperature reverse refrigeration system, is technology which will not only provide for Ebeye or Majuro’s electricity needs at a much lower cost than a diesel power plant but the proposed 10 megawatt plant will produce as a bi-product three million gallons of fresh drinking water per day.

In Majuro, MWSC pumps out one million gallon of water into the city during water days, which is currently only two days a week. Meanwhile, Marshalls Energy Company is capable of producing 24 megawatts in Majuro, but its peak power use now is only 10 megawatts. Ebeye on the other hand only uses only a little over one megawatt.

Nicholson adds that positive off-shoots of establishing an OTEC plant include the possibility of maricultural farming for meeting food security needs and the replacement of the islands auto fleet from gasoline powered to electric plug-in cars that are better for the environment.

Nicholson said that the OTEC technology is ready and his “team” is ready to get started. He said his company has also just signed with Hawaiian Electric Co. to build a 100 megawatt OTEC plant to serve Oahu.

He said now it is just a matter of getting an okay from the government, identifying a site for a land-based OTEC plant and securing agreements to allow Sea Solar Power International to provide the RMI with electricity and water.

“We’re prepared to build, own and operate the plant,” said Nicholson. “We’ll put our money where our mouth is.”

But he adds that ideally he’d like the RMI to own the OTEC plant so that the money made from the plant stays in the RMI.

Although his company can fund the project itself, Nicholson believes the project will need support from the RMI government to assist coordination between his company and the US government.

Normally OTEC plants are offshore — with facilities similar to that of a drilling rig. But the proposal for the RMI is forland-based plants — a first for this sort of technology and it will need about four acres of land.

NTA dominates Chamber forum

Marshall Islands Chamber of Commerce vice president Mike Slinger at the outset of last Friday’s monthly meeting made it clear that Chamber President Hirobo Obeketang and other members of the NTA board are not there representing the Chamber.

He made the comments in relation to recent controversial NTA board approval of a plan to launch TV broadcasts in competition with MBC, a private business. “They are not representing the Chamber,” Slinger said. “However NTA board members voted is up to NTA shareholders to respond to.”

Later in the meeting, NTA board member David Strauss was asked a number of questions about NTA services. Asked why NTA offers only one Internet plan, Strauss said some board members had suggested lowering the “outrageous prices” of the dedicated lines to encourage more customers but had been told by management that it would need to spend $100,000 on a study to assess the cost-benefit of the idea. “Some board members say that ‘trial and error’ should be considered,” he said.

As to the reduced dial up Internet charge of $1.80 per hour that the board earlier this month voted to resume effective October 1, Strauss said the public won’t know if it will happen or be changed since in the past, board meetings have reversed decisions reached by earlier meetings when some members were off-island.

In response to questions about NTA lowering its prices, Jerry Kramer said, “NTA is a private company. We don’t have the right to tell NTA what to charge.” Instead, Kramer said, “we should be supporting competition.”

Ben Chutaro asked about the fiber optic cable plan, to which Strauss said NTA has submitted a loan application to the US Rural Utility Service that the RMI government is supporting.

Strauss added that there is a board meeting this week at which the annual NTA budget is to be discussed, including the expected drop in revenue from the reduction in Internet dialup rates.

EZ Price’s Liz Rodick said the company has been experiencing repeated problems with its land lines, which NTA repair crews explain is to do with deterioration of the underground cable. “If we still depend on these underground cables that are deteriorating, it won’t matter if we have (the new) fiber optic cable,” she said.

Strauss said that at the NTA meeting earlier this month, Bank of Marshall Islands Chief Information Officer Jim McLean had delivered an excellent presentation about moving to a wireless system and dropping the old copper system (now in use for land line phones). Strauss indicated that McLean’s recommendations were “ignored” by NTA officials.

“It’s a very real problem, especially in the downtown area,” McLean said of the poor quality of the underground phone cables. “For us to use broadband (that the proposed fiber optic cable will offer Majuro) we need a significantly more reliable” system, he said.

McLean recommended to NTA that as soon as the contract is signed for the fiber optic cable to be installed to Majuro and Ebeye, “the focus should shift to the distribution system so it is ready when the new (fiber optic) system is turned on (in 2010).”

A wireless system can handle broadband for an unlimited number of users, he said. “Once the cable deal is signed, don’t relax,” McLean said. “Deal with distribution.” NTA’s customer service manager Colin Allen, who attended the meeting, said he was there to listen to complaints and suggestions to take back to management to resolve.

He said he wanted to work together with Chamber members.

“On the Internet dial up package, we can work something out,” Allen said.

From the 9/12/08 issue of the Marshall Islands Journal

Digicel wants RMI

Digicel Chairman Denis O’Brien flew in to Majuro Sunday on his jet with top company executives to meet with President Litokwa Tomeing and members of his Cabinet — demonstrating Digicel’s interest to get into the Marshalls’ market.

O’Brien and the government leaders huddled at Long Island Restaurant for a 90-minute get-together before the Digicel group took off to continue its island-hopping.

O’Brien, ranked “number two” this year in Pacific Magazine’s annual Pacific “Power 10” listing, was here to lend weight to Digicel Pacific’s pitch to get government approval to provide competition in the cell phone sector.

With him was Digicel Pacific CEO Vanessa Slowey, chief legal counsel David Dillon, and several board members.

Tomeing, who earlier expressed concern to the Journal over the poor quality of NTA-provided cell phone services, told the Digicel group that he was delighted with their visit and hoped that it would lead to improvements in telecommunications in the RMI.

“We believe that broad use of cell phones is the first step to an information society,” O’Brien said. The Digicel founder said that the company has reduced cell phone costs by more than 40 percent in Samoa, the first Pacific market it entered. “We keep our promises,” he said. In addition to Tomeing, attending the gathering were Ministers Dennis Momotaro, Christopher Loeak, David Kramer, Jack Ading, Amenta Matthew, Nidel Lorak and Kejjo Bien. Iroij/Senator Mike Kabua and presidential advisor Fred Pedro also joined in.

Who will be GM of MEC?

Hiring of a new general manager to replace Marshalls Energy Company GM Billy Roberts is moving forward with the short-listing of candidates.

Three MEC board members — Casten Nemra, Fred Pedro and Ben Graham — are rating the 31 people who responded to MEC advertisements earlier this year. The expectation is that the list will be reduced to about five of the top candidates, after which job interviews will be conducted before a decision is made. At MEC’s board meeting next Wednesday, the shortlist will be reviewed.

Roberts has been GM of MEC since 1986, and worked for the company since the early 1980s. He tendered his resignation effective October 2006, but was kept on by the board in a temporary arrangement until the post could be advertised. Since 2006, he alternates several months on and off island.

From the 9/5/08 issue of the Marshall Islands Journal

It’s the NTS show

By GIFF JOHNSON

NTA’s board of directors this week, after evidencing a serious split in opinion, flexed its muscles, refusing Cabinet directives to halt starting wireless TV in competition with a Majuro private company and to eliminate a credit card with a $250,000 limit.

Last week, Transportation and Communications Minister Dennis Momotaro issued a letter to NTA board chairperson Hilda Heine outlining seven issues that the Cabinet wanted action on, including eliminating the TV plan and credit card. But the NTA board split over the Cabinet orders — matters that Momotaro called the Cabinet’s “grave concern on a number of MINTA’s initiatives that are inconsistent with the policy of the government.”

Foreign Minister Tony deBrum told the Journal Wednesday that he was “perplexed” by the board’s votes against Cabinet directives after “instructions had been given under the minister’s signature and the Cabinet had held discussions with members of the board.” He noted that the government owns a majority of the shares in NTA.

NTA at its Tuesday board meeting did agree with one of the seven Cabinet directives, to reduce Internet rates to $1.80 per hour, which will be implemented starting October 1, according to Heine. Most other directives were rejected by a 4-3 vote, reportedly with Heine, Momotaro and David Strauss supporting the Cabinet positions and board members Alex Bing, Hirobo Obeketang, Lynn Milne and Jelton Anjain voting against. One other board member, Patrick Chen, was not at the meeting.

Though the board did not agree to drop the single location “call center” for each outer island, it did agree to review the plan.  Heine told the Journal that three of these “call centers” were budgeted for in the current fiscal year, so NTA is going to move forward with these in Enewetak, Mejatto and Santo (Third Island) on “a trial basis and then reevaluate the plan for the other islands.”

She said NTA is faced with high costs to provide full cell phone services to every outer island and rather than provide nothing at all, has launched the call center option with plans for later “upscaling” the outer islands service.

The Cabinet also raised concern over NTA’s $250,000 credit card, objecting for risk of abuse and questionable purchasing without proper review. The NTA board voted 4-3 to maintain the credit card.

Cabinet also directed NTA to abandon plans for digital wireless TV service in Majuro, saying it needed to “improve its primary service sector first” and noting there is already one TV service in Majuro. The Cabinet recommended if NTA could not get reimbursed for its TV equipment investment, then the operation was to be redirected to Ebeye and Kwajalein markets. But the board vetoed the directive, maintaining its plan to launch wireless broadcast TV for Majuro and Arno.

The NTA board agreed to establish smaller sub-committees to review key telecom issues, a move Heine believes will generate more active participation by the board as well as better informing the members.

“We didn’t get everything we hoped for at the board meeting,” Heine said. “But we are making some progress.”

NTA management has filed a loan request with the US Rural Utility Service for an approximately $15 million loan to support a new fiber optic cable to Ebeye and Majuro. NTA is awaiting the reply from RUS, but in the meantime, the deadline for engaging with the US Army’s installation of the fiber cable from Guam to Kwajalein has been extended from this month to November. This gives NTA and the RMI government breathing room on the loan application, she said.

Stayman: “No way delay Kwajalien money cutoff”

The Journal sent email inquiries to US Senate Energy and Natural Resources Committee staff member Allen Stayman concerning the Kwajalein rent escrow account that is expected to be about $20 million by December.

The Journal learned the actual deadline for a new land use agreement (LUA) to prevent this large sum returning to the US Treasury is December 17, not December 18 as earlier reported.

“Any funds in the escrow account revert to the US Treasury on midnight December 17 unless the RMI has concluded, and notified the US that there is, a new LUA,” Stayman, told the Journal last week.

RMI Foreign Minister Tony deBrum told the Journal “the part (of the US law) of extreme interest is the language ‘unless otherwise mutually agreed,’” because it suggests an opportunity for the two governments to ensure the funds don’t disappear on December 17 even in the absence of a new LUA.

The Journal further asked Stayman how a provision allowing two governments to come to an agreement regarding the funds would affect or delay the December 17 deadline.

“I can’t foresee any way to waive the requirement,” Stayman said.

“The exploding deadline concept may be what is first and foremost in the minds of many who want to use the language to coerce an LUA,” deBrum said. “But I think reasonable people can make reasonable decisions of mutual benefit when good faith efforts to reach a successful agreement are at work.”

US Ambassador Clyde Bishop indicated that the provision in question relates to a possible reprogramming of the escrow funds upon mutual agreement of the two governments. “It (the law) allows, as an option, the reallocation of the escrow funds upon mutual agreement between the two governments, if the signing of an LUA is not possible by the deadline.” But, Bishop said, this section “does not imply or directly suggest that a waiver or delay in the deadline for the return of the escrow funds are an option.

“This section is intended to suggest that, in lieu of a signed LUA, upon agreement of both governments the money in escrow can be used for other purposes. The US government, however, would be inclined to consider suggestions that would enhance the possibility of achieving a signed LUA that corresponds to the condition already spelled out in the (Compact’s) Military Use and Operating Rights Agreement.”

DeBrum said “we are looking at all options. If we are engaged in bona fide discussions on a new LUA in whatever form, we should be able to mutually agree on disposition of the escrow either by way of postponement of the drop dead date, alternate use, or directed use for Kwajalein public services as the landowners might suggest. Or best yet, pay it while the LUA is being negotiated.”

From the 8/29/08 issue of the Marshall Islands Journal

Chen looks to micro loans to help RMI atolls

Patrick Chen (pictured) is enthusiastic about new global micro loan and grant opportunities for helping remote communities get telephone equipment so they can be linked to the outside world.

He attended an international micro loan convention in Bali earlier this month, meeting with many people involved in the small loan industry worldwide.

Chen came away from the event particularly interested in a village mobile phone system that is being promoted by the Grameen Foundation, an internationally recognized leader in micro finance.

Chen, who in addition to being President of Bank of Marshall Islands sits on the National Telecommunications Authority board of directors, said that this relatively inexpensive communications equipment must be provided to people on the outer islands who currently have no phone communication.

The Grameen Foundation is promoting a “village phone grant competition” that offers up to $10,000 in support of a village phone program, with details available at www.villagephonedirect.org. Communications technology is changing rapidly, and the RMI must get in step with what is happening for other parts of the world, where many isolated communities are gaining access to modern communications equipment, which is being funded through micro financing, Chen said.

Editorial: Opening performance

The Commission of Inquiry report on the 2007 national election has given us a snapshot of the hiring process by the government’s Public Service Commission.

The hiring process is supposed to be independent of government influence or interference, based on merit and ability. Instead, we learned, it was exactly the opposite in the case of the appointment of the Chief Electoral Officer.

The problem, however, is that this appears to be the norm, not the exception to the rule when it comes to PSC hiring. Ministers routinely get their relatives appointed to key positions in government, even though they may lack qualifications for the jobs.

Dating back many years and continuing to today, government jobs have been widely seen as a way to share the wealth of foreign aid, the benefits being passed onto various family members or political cronies of those who control the strings of government.

Historically, not much was required of people being hired into these government positions — particularly in the Trust Territory days, when headquarters was 1,500 miles away in Saipan.

In the past three years, there’s been much more talk (and some action) on the need for better government worker “performance” — a word that has only lately come into our vocabulary. But our machinery (PSC) for hiring, firing and disciplining workers in government still reflects the old, backroom back-scratching style of operation.

The 2007 election showed us the folly of that policy. But every day, in a hundred small ways, local people are confronted with equally incompetent or unmotivated “public servants” in a score of government offices who were hired through this same process — protected by higher ups, they have little expectation or incentive to perform.

As anyone who builds a house knows, if the foundation isn’t right, the rest of the building won’t be stable. That’s our situation with PSC and the national government.

The question is, do we want to get it right? The answer is a simple question: can we afford not to?

From the 8/22/08 issue of the Marshall Islands Journal

NTA’s disconnect

Our monopoly telecommunications supplier NTA has offered three good reasons for allowing competition in this sector in recent weeks and months: It has returned Internet rates to $3.60 per hour, one of the highest in the Pacific region, after reducing the rates to $1.80 from last November through July; it is taking a hands-off attitude to a communications system for Likiep and other atolls that is being provided free to the RMI by the International Telecommunications Union; and it is aiming to compete with the private sector in TV transmission.

NTA lowered the Internet rates last year in an effort to boost Internet use. According to NTA, it didn’t see an increase in usage, so it returned to the old, higher rates. Consider this: NTA’s action in increasing its rates back to $3.60 per hour was done as the Cabinet declared a state of economic emergency for the country. As part of that emergency declaration (which has just been extended), the RMI government is now moving to cut import taxes on food to help RMI citizens whose pocketbooks have been assaulted by high fuel and power prices. To say the government-controlled NTA is out-of-step with its parent is to be guilty of a gross understatement.

And how should Likiep people feel about NTA’s attitude of “we’re not for it, we’re not against it” — meaning, no help from here. Likiep and several other islands, which don’t have the money in their communities to make extending telecom services financially viable on the scale of, say, Kili or Jaluit, are in line to get free telecommunications equipment from the International Telecommunications Union, which is working with the Ministry of Transportation and Communications to link up to the world’s remote and unconnected communities.

Moreover, the equipment for Likiep is here on island. The Ministry of T&C wants NTA to assist with satellite links, so calls to/from Likiep will be domestic, and thus less expensive. Nope, NTA isn’t interested because it has its own plan to put one phone, one computer and one fax machine on Likiep sometime between now and 2013.

It may be difficult for Likiep islanders — who could be “chatting” via Internet or phone with relatives in Springdale or Federal Way — to understand why they can’t get a hand from NTA.

There are so many technological developments our outer islands are missing out on, and for Majuro and Ebeye Internet customers to be paying $3.60 an hour — high even by Pacific standards — in this day and age is ridiculous.

Finally, that NTA can compete with the private sector — for example, with Marshalls Broadcasting Co. — but the private sector can’t compete with NTA is simply an anachronism that shouldn’t continue if we want to progress.

It’s time to legalize competition in telecommunications.

Campbell: Guam buildup a benefit

The military buildup on Guam is likely to result in greater use of Reagan Test Site (RTS) facilities at Kwajalein, according to a top Army general.

“Once the Marines have moved from Okinawa to Guam, I would anticipate that RTS would be an excellent location for them to train with their air defense capabilities,” said Lt. General Kevin Campbell, head of the Army’s Space and Missile Defense Command that operates RTS.

The US Air Force “Expeditionary Bomb Squadron” based on Guam has already used Kwajalein at least twice this year for B-2 and B-52 practice bombing operations.

“When the distance from the mission partner to Kwajalein is shorter than to some other major ranges, there is good economic sense for using Kwajalein for training,” Campbell said.

The Air Force exercises and potential Marine training interest are just two in a range of non-missile testing operations that Kwajalein supports.

Campbell described two of these:

• “Due to its location near the equator, RTS has an important competitive advantage over the other US Pacific Ranges when it comes to space launch missions,” Campbell said. “This is one part of our mission set that is expanding and, based on inquiries we are receiving about RTS capabilities to support space launches, we expect more space launch companies to begin using RTS in the near future.”

In addition to potential new business, Kwajalein supports NASA and Space Shuttle operations.

• Kwajalein is involved in supporting the US global war on terror. “Evolving to meet new threats and exploit key opportunities is a continual process,” Campbell said. “While I can’t go into specific detail, RTS is currently providing significant direct support to our combatant commanders involved in current operations in Iraq and Afghanistan and this is a mission area that we are constantly trying to expand.  Providing key support to our war fighters is very high in the Space and Missile Defense Command list of mission priorities.”

From the 8/15/08 issue of the Marshall Islands Journal

The path ahead will be painful

By SUZANNE CHUTARO

There was no sugar coating of the global economic situation hurting the Marshall Islands at Monday’s Nitijela opening when President Litokwa Tomeing told the nation that the “path ahead will be painful.”

In his address to Nitijela, Tomeing delivered sobering remarks that flatly reminded everyone that the Marshall Islands is not out of the woods yet.

“Our government is burdened,” said the President, adding that while the government is thankful to its citizens for doing their part during the State of Economic Emergency, “people still need to be conservative and work harder.”

Tomeing produced a thumbnail of challenges ranging from the high cost of fuel, energy and food to job losses at the US missile range at Kwajalein, which have impacted the government since his administration took office in January.

“There was nothing we could do other than to declare a State of Economic Emergency,” said Tomeing. “We needed to declare it to get some breathing room and find both short and long term solutions.”

Job losses at Kwajalein will continue to hurt government tax revenues, he said. “$1 million in tax revenues will be lost to our government as a result of the job cuts at Kwajalien,” said Tomeing.  “There is no question that the changes at Kwajalein will impact us further.”

Highlighting how the Marshall Islands is not separated from the rest of world, Tomeing talked about how external factors have not only impacted his administration but have also greatly impacted average citizens —”we were quick to experience hardship from these sharp price rises,” he said.

Tomeing told the Nitijela bluntly: “we are faced with challenges.”

While the immediate problems impacting the Marshall Islands are caused by external factors, Toeming said it his strong belief that the solution to solving the nations problems lie within the Marshall Islands and its own people to change their attitudes.

“This will be a painful path, payroll is too high and too many of us rely on outside help,” he said. “But, I believe the answer to our problems lie within us — God only helps those who help themselves.”

Tomeing warned: “we need to prepare the RMI for 2023  — the Compact (with the US) will end so we need to be prepared.”

Possibly reacting to speculation that the opposition party may be gearing for a motion of no confidence, President Tomeing repeatedly urged not only the senators but the entire Marshall Islands to work together.

“We need to work together to overcome our challenges,” said Tomeing. “We still need to reduce government’s payroll, cut travel, improve the standards of education, improve the situation in Ebeye, and revive the Nuclear Claims Tribunal.”

Tomeing reiterated his administration’s goal of “armij mokta” (people first) for improving government efficiency and service to the people warning that the RMI has a long way to go and repeated the “path ahead will be painful.”

“People need to benefit from government services,” he said. “Our efforts and unity is for the good of the people.”

RMI students face language crisis

By GIFF JOHNSON

Seven out of 10 public school fourth graders cannot read, speak or understand English and Marshallese adequately, the scores on the latest RMI tests show — and the problem is getting worse.

A total of 73 percent of all public schools either got worse or did not improve between 2005 and 2007, according to the results of the Pacific Islands Language Literacy (PILL) test results released by the Ministry of Education earlier this month. But in math there are evident improvements: 63 percent of public schools did better in math during the same period.

The PILL test is given to fourth graders in both public and private schools throughout the RMI. It tests English, Marshallese and math proficiency. Of the 17 biggest public elementary schools tested — ranging from Lae Elementary (113 students) to Ebeye Public Elementary School (1,064 students) — 11 of them did worse in English and 13 of them did worse in Marshallese in 2007 than in 2005.

The results show the percentage of students “at risk” — which means the students who are not meeting the standards/requirements for each of the subjects.

Ebeye Public went from having 84 percent of its students at risk in 2005 to having 91 percent of its fourth graders at risk last year — meaning nine out of 10 fourth graders are not doing well in English. The result in Marshallese language for Ebeye Public fourth graders shows the same poor result.

The main bright spot in English among the 17 bigger public schools is Delap Elementary School in Majuro, where fourth graders improved from 34 percent at risk in 2005 to just 19 percent at risk last year — meaning that eight out of 10 fourth graders at DES are doing well in English. DES students didn’t do quite as well in Marshallese, but still outpaced all other large schools with an improvement from 36 percent at risk in 2005 to 28 percent in 2007 — meaning seven of ten fourth graders at DES are doing well in Marshallese. Six of the 17 biggest public schools improved from 2005 to 2007 (DES, Lae, Rairok, Rita, Uliga, and Ujae) — but some of these improvements were marginal.

Lae, for example, went from all its fourth graders being at risk in 2005 to 90 percent at risk in 2007. A little better, but nothing to write home about when nine out of 10 students are doing poorly. Similarly, Ujae “improved” marginally from 79 percent to 75 percent at risk.

Only three of the big schools managed to have fewer than half of their students at risk — 14 of the big schools had a majority of their fourth graders at risk in English, while 12 of the schools had a majority of their fourth graders at risk in Marshallese language.

Of the medium-sized schools — those with enrolment from 50-100 students — seven got worse, nine repeated their poor results from 2005, and nine (36 percent) improved. More than half of these medium-sized schools — 13 of 25 — had all of their fourth graders at risk in English, and nine of them had 100 percent of their fourth graders at risk in Marshallese.

The bright spots for 2007 in English among these medium-sized schools included Wodmej, Wotje, which had no fourth graders at risk (all five met English standards), Ejit Elementary had only 13 percent at risk (meaning nearly nine of 10 students did well) although the percentage worsened slightly from the low eight percent at risk in 2005, and Kilange, Arno went from 67 percent at risk in 2005 to just 22 percent in 2007 (meaning nearly eight out of 10 fourth graders are doing well).

The only other school to have fewer than half its students at risk is Aur, Aur, which improved from 67 percent at risk in 2005 to 40 percent last year (meaning six of 10 fourth graders are doing well).

In Marshallese language, Ejit out-performed all other medium-sized schools, with all eight of its fourth graders performing well. Aur also had all of its five fourth graders doing well, a continuation of its 100 percent success rate since 2005.

A total of 17 (almost 70 percent) of the 25 medium-sized schools had more than 50 percent of their students at risk in Marshallese. Of the 25 small schools tested — enrolment below 50 students — virtually all of them (23) had 100 percent of their fourth graders at risk in English. In Marshallese, way over half — 17 — had 100 percent of their students at risk.

Of the 25 small schools tested, nine got worse in English, 13 repeated their poor results from 2005, two improved, and one maintained its same good record over the period.

Only two bright spots were evident in English: Jebal, Likiep’s two fourth graders in 2005 and one fourth grader in 2007 all did well, and on Wotho, the single fourth grader also did well in English in 2007.

From the 8/8/08 issue of the Marshall Islands Journal

NTA to hook up all atolls

By 2013, 96 percent of the Marshall Islands’ estimated population of 60,000 will have access to telecommunication services.

Presenting at the mayors’ annual conference at the International Conference Center on Monday, National Telecommunication Authority General Manger Tony Muller (pictured) laid out NTA’s bold six-year plan to have all outer islands connected with one phone, one fax and one internet computer on each atoll. According to Muller, an outer island tele-center “will replace the current HF radio system.” Connected via satellite, the solar-powered tele-centers will provide each of the remaining 17 outer islands with one telephone, one fax and one computer for internet/email access.

Choosing the Marshallese word “Anidreb” (a Marshallese version of hackey sac) as an analogy to describe how NTA will be able to bring 21st century communication ability to the outer islands, Muller and NTA officials say each outer islands tele-center will connect directly to Majuro, which will be the gateway to other atolls or overseas destinations.

According to Muller, based on the 1999 census which pegs the population at 57,000, only 75 percent of the RMI’s population has access to telecommunication services because a majority of the RMI’s population live on Majuro and Ebeye.

Telecommunication services are currently only available on seven of the republic’s 24 municipalities namely Majuro, Ebeye, Wotje, Jaluit, Enewetak, Rongelap and Kili.

T&C request for help rejected

The sustainability and reliability of the proposed Secretariat of the Pacific Community (SPC) funded KU-Band communication pilot project slated for Likiep Atoll through the Ministry of Transportation and Communication is reason for concern, according National Telecommunication Authority’s General Manager Tony Muller.

When asked by Likiep Mayor James Capelle for NTA’s opinion on the proposed pilot project, Muller said “our concern is sustainability.”

“It’s a two-year study and if it doesn’t work they’ll drop it,” he said. “This is not acceptable to NTA. We have shareholders who need a return on their investment.”

Muller confirmed that NTA was asked by T&C to assist in the pilot but it declined.

“T&C has been working on this pilot project for the past seven years,” said Muller. “NTA has gone past the pilot stage. We’ve moved on and we are already (providing communication services) to outer islands.  We don’t want to wait for a pilot because we already have a plan.”

According to Muller the proposed pilot system is inferior compared to what NTA is proposing with its outer islands tele-center network. Explaining the difference between the SPC pilot and NTA’s system Muller says communications through the KU-Band system on Likiep will have to be transmitted to Hawaii then re-routed back to RMI.

“It will take three satellite hops and this will delay service,” said Muller. “Quality will be further compromised by the weather — if it’s a cloudy day or you have stormy weather it won’t work.”

NTA assured Likiep’s mayor that although it’s not going to partner with T&C and SPC in their pilot project: “NTA will not disrupt the project.”

From the 8/1/08 issue of the Marshall Islands Journal

Digicel ready to spend $17 million

Digicel Pacific is stepping up efforts to gain entrance to the Marshall Islands telecommunications market.

David Dillon, Digicel Pacific’s general counsel, spent several days in Majuro last week meeting with top government and private sector officials.

Dillon, who is based in Fiji, met with President Litokwa Tomeing and other Cabinet officials, as well as local business people to advance Digicel’s pitch to launch mobile telephone service in the Marshall Islands.

Dillon told the Journal that he was encouraged by the meetings with government officials.

Nitijela law establishes the National Telecommunications Authority as the monopoly provider of all telecommunications services. For Digicel to enter the RMI market, either the Nitijela must amend the law to allow competition or Digicel needs to buy NTA.

Digicel last month applied for a license to provide cell phone services, saying it is prepared to invest $17 million to provide phone coverage to 80 percent of the Marshall Islands.

Sand joins private sector

Long-time Majuro Hospital official Sandy Alfred is set to go private.

In anticipation of opening up his own pharmacy business in Majuro, Alfred has already erected a stylish new sign in Uliga announcing the establishment of MediSource Pacific.

Alfred told the Journal this week that he has given his 90-day resignation notice to the Ministry of Health and will leave its employ at the end of September.

Alfred was trained in the U.S. as a pharmacist, and on his return to the RMI in the early 1990s, took over as Majuro Hospital’s pharmacy manager.

Later he was promoted to hospital administrator, a post he held for nearly 10 years until  he resigned to return to the pharmacy last year.

From the 7/4/08 issue of the Marshall Islands Journal

No quick solution to RMI’s fuel crisis

By SUZANNE CHUTARO

Discussions at Friday’s business and government forum emphasized the point that there is no easy short-term solution to the country’s fuel woes.

While government officials and private businesses floated a number of mid- and long-term possible solutions for tackling Majuro and Ebeye’s energy crisis and food security issues, what was missing is a plan to address MEC’s urgent need for $8.5 million to pay for fuel by a July 10 deadline.

The questions arising out of the forum were best summed up by Pacific International Inc’s. CEO Jerry Kramer who asked: “What’s our strategic plan?” Foreign Minister Tony deBrum took the lead for the government saying that President Litokwa Tomeing was scheduled to declare a state of emergency over the weekend — the Cabinet approved a state of emergency last Thursday, but the President’s announcement had not materialized as of Wednesday evening this week.

At the forum, deBrum said once a state of emergency over MEC’s fuel situation is declared “a lot of things will be triggered” and the RMI along with other donor countries who choose to respond have a 30-day window to come up with solutions. In the event nothing is solved, the government would extend it for another 30 days.

In the meantime, deBrum said President Tomeing has instructed the government to “send out feelers to Taiwan and Japan” for immediate help with the nation’s current energy crisis. He also said that Australia is sending an alternative energy consultant to work with the government.

“RMI has requested solar power companies in the US and USDA for solar energy packages to bring to RMI,” added deBrum. But plans for alternative solar, wind or ocean thermal energy conversion (OTEC) are solutions that won’t meet the current energy crisis.

“We need an interim solution for power,” admitted deBrum. “We can’t afford to have power shut down. We don’t even have a plan for sewage (treatment in the urban centers if power is disrupted).” deBrum acknowledged that sewage is an immediate worry that needs to be considered.

He alluded to possibilities of loans or an advance from the government of Taiwan but nothing was definite.

What the Cabinet members attending the meeting were able to confirm is that their immediate areas of focus for power needs are now Majuro, Ebeye, Jaluit, Wotje, Kili and Rongelap.

Without electricity everything will come to a standstill

The government is facing its biggest challenge to raise enough money to buy shipments of fuel to keep power running in the two urban centers in the face of skyrocketing world prices, Finance Minister Jack Ading told an Asian Development Bank/RMI government review meeting Monday.

But, said Ading, “without electricity everything will come to a standstill.”

This was an essential point to stay focused on as the ADB and the RMI work to align policies that address the problem.

“The adverse effects of this global fuel crisis, its intensity and severity, are even more acute and destabilizing on small island states like the Marshall Islands with practically no means to protect itself from external pressures and shocks,” Ading said Monday.

“The high costs of fuel and food around the world have already begun to severely hurt our government as well as the people of the Marshall Islands.”

The most “frightening concern” is how the rising prices for food and fuel are hurting “people at the grassroots level, those with less financial means, the most disadvantaged and most vulnerable among us.”

The RMI government is struggling to fund fuel shipments, he said.

“Our ability to find enough cash to continue to pay incoming shipments of fuel has been shown to be severely limited as the price of fuel continues to go up,” he said, adding there is one simple truth about the current situation: “without electricity everything will come to a standstill (causing) a national disaster of unimaginable proportions and magnitude.”

Ading expressed grave concern about schools and hospitals not being able to function, and the possibility of outbreaks of disease if water and sewer systems stop working for lack of power.

Businesses on Majuro and Ebeye will suffer large losses on perishable foods if electricity is cut off, which would have the unfortunate result of increasing the price of food, worsening the already high prices that have been caused by world market problems.

If power in Majuro and Ebeye is rationed, it will “increase hardship and poverty in our community.”

But, Ading said, there is a “window of opportunity for our government to take bold measures in preventing the impending crisis from happening.”

Reducing dependence on diesel fuel is one way to help, he said.

He also blamed earlier governments for the RMI’s inability to address the current problems.

“Our country would have been able to insulate itself against this energy shock but because of our lack of action over the years, although we have been informed many times in the past by the ADB, International Monetary Fund, Government Accountability Office and others that we need to implement structural reforms, and cut our government expenditures to maintain a sustainable fiscal situation, we did not take those recommendations seriously,” he said. This has resulted “in the situation that is facing us now. We simply cannot respond adequately to these global shocks.

“If we had taken that advice seriously two to four years ago and followed them by implementing necessary reforms, by now the RMI would have been able to withstand these external shocks that are coming from the ongoing global fuel and food crisis.”

The meeting this week between ADB and RMI officials “is an excellent opportunity for (us) to see how we can align the Bank’s current program in this country, and how we can align its future assistance,” he said.

The meeting is timely and it fits with ADB’s commitment to make itself become a “client-oriented development bank, so as to respond to diverse needs in a proper and efficient manner.”

Kiyoshi Nakamitsu, an education specialist and the RMI desk officer at the ADB, is in Majuro for the meetings this week.

From the 6/27/08 issue of the Marshall Islands Journal

Digicel ready to pay  $17 million

By GIFF JOHNSON

Digicel Pacific, the region’s fast growing mobile phone network, says it is ready to invest $17 million in the Marshall Islands if the government will open the telecommunications sector to competition.

For Digicel to operate here, the RMI government must amend laws that establish the National Telecommunications Authority as a monopoly in the telecommunications field.

Digicel Pacific applied Friday for a license to operate mobile phone service in the Marshall Islands, its first north Pacific initiative after establishing business operations in Samoa, Papua New Guinea and Tonga since 2006.

Digicel Pacific director of business development David Borrill said the company will launch service in Vanuatu this week and expects its new mobile network to be ready for service in Fiji by October, bringing to five the number of South Pacific countries where Digicel is active.

“We’ve proposed a direct investment of $17 million for the Marshall Islands,” Borrill told the Marshall Islands Chamber of Commerce Friday after briefing the Cabinet. “We want to establish a mobile phone network that will provide 80 percent coverage of the population from launch.” If it happens, it would expand coverage for remote outer islanders than is presently offered by the National Telecommunications Authority.

Borrill indicated that “eight to 10 islands” would be covered for mobile phone and related services if the Marshall Islands gives the company the nod to conduct business in the country. He said that the company’s policy is to provide cell phone coverage to 80 percent of the population on start up and then increase coverage to more customers over time.

“We don’t penalize customers for living away from the center,” he said. Currently, only four islands outside of Majuro and Ebeye have mobile phone and Internet access.

Borrill is based in Nadi, Fiji. He said he believes the government is supportive of opening telecommunications to competition.

Borrill’s visit to Majuro follows a visit to Digicel Samoa headquarters earlier this year by Marshall Islands Transportation and Communications Minister Dennis Momotaro, who is also a member of the National Telecommunications Authority board of directors, and Minister in Assistance to the President Christopher Loeak. Digicel paid for their visit.

Digicel now has more than 500,000 mobile phone users in Samoa, Papua New Guinea and Tonga, Borrill said, adding that this number will increase substantially as Vanuatu and then Fiji come on line this year.

Before launching operations in Samoa two years ago, Digicel established itself in the Caribbean and Central America in the early 2000s and now provides mobile phone services in 26 countries in that region. 

“The Pacific looks like the Caribbean did six years ago,” Borrill said. “There are a lot of monopoly (telecommunications) companies.”

“Competition is good for monopolies,” Borrill said. “None (in the Pacific) have failed because of competition and all have grown. It’s an opportunity to change the way they do business. And people are looking for other options.”

Borrill also confirmed that Digicel Pacific has held talks with officials in both the Federated States of Micronesia and Palau, but has yet to file for a license to operate in these two other United States-affiliated islands in the north Pacific.

A critical issue for the Marshall Islands, FSM and Palau is that their government-owned telecom companies are saddled with multi-million dollar debts to the US government that were obtained in the early 1990s to fund telecommunications infrastructure. The large loan debts are a driving force behind the three governments protecting their telecommunications companies against competition. NTA owes about $14 million to the US Rural Utilities Services.

“The only way we’d get involved in the loans is if we purchase the National Telecommunications Authority,” Borrill said. “But we haven’t discussed that.” He also said Digicel Pacific prefers to establish its own facilities and compete with existing firms.

Streetlight hurt our hip pocket

Majuro’s streetlights are costing MEC more than $200,000 a year to operate — so in this energy crisis period, should they all be turned off?

That’s a question that MEC has wrestled with, since Majuro Atoll Local Government hasn’t been actively looking to take on new expenses.

“We’ve talked to Public Safety about the concern for crime increasing if the lights are turned off,” MEC General Manager Billy Roberts told the Chamber last week.

As an alternative option, the MEC board has now approved hiring a grant writer to seek funding for solar-powered streetlights, he said. These will not just be for Majuro, but also for Ebeye, Wotje and Jaluit.

Diesel usage ‘insane’

The proposed state of emergency over fuel problems “is the only way to wake everyone up to the fact that diesel is not a sustainable source of power in the long run,” MEC board member and Ambassador Ben Graham told the Chamber of Commerce Friday.

Graham pointed out that MEC and KAJUR together will spend more than $30 million on diesel fuel to run Majuro and Ebeye power plants this year. “That’s 30 percent of the RMI’s gross domestic product,” he said. “It’s insane.”

In the outer islands, many homes now have solar. “But we need to get really serious about other alternative energy options,” Graham said.

The state of emergency recommendation from the RMI Disaster Committee is “calling policy attention to a situation we and most of the world are in,” he said.

From the 6/20/08 issue of the Marshall Islands Journal

8.5 million crisis

By GIFF JOHNSON

The RMI Disaster Committee on Monday approved a recommendation to Cabinet that it declare a national state of emergency because of an impending crisis in the energy sector. The Cabinet was expected to meet on the recommendation Wednesday or Thursday.

The state of emergency recommendation is based on Majuro and Ebeye’s utility companies being on the verge of financial collapse, and without a big injection of funding are expected to suffer an $18 million shortfall this year.

A nine-page report issued late last week by the MEC board of directors to government presents a sobering view of the financial problems facing the Marshalls Energy Company and Kwajalein Atoll Joint Utilities Resources (KAJUR) as a result of the continuing rise in fuel prices globally.

The report also says that MEC/KAJUR are facing a July 10 deadline for payment of $6.5 million for the fuel delivered earlier this month from SK Networks.

Snapshots of the problem were provided by the board:

• In 2004, MEC spent a total of $6.1 million on diesel fuel and lubricants. But spending on fuel is expected to top $32 million this year — a more than five-fold increase.

• Fuel used to account for just half of MEC’s total expenses every year. In 2008, fuel accounted for 82 percent of MEC’s total spending, putting the “entire RMI energy sector in a very precarious and risky position.”

• From 2004 to 2007, MEC expenses increased by 52 percent but revenues only went up by 11 percent, rendering the government utility “nearly insolvent” (almost bankrupt).

• MEC has raised electric rates, but actual power use has gone down.

• MEC generates about $1.1 million per month from electricity billings and fuel sales to fishing boats, but is spending $2.2 million each month on fuel, debt service to banks and operating expenses. Based on the price of fuel in April, “this translates into a shortfall (for 2008) of around $13.7 million.”

• The Ebeye power company, KAJUR, operated at a loss of $325,280 in April, which would mean it will lose $3.9 million this year.

The MEC paper recommended that government address energy needs through a combination of funding and off-setting measures, such as tax exemptions.

Specifically, MEC is asking the RMI government for $8.5 million by July 10 in order to pay for the 1.5 million gallons of diesel fuel that arrived on June 6, and to provide a down-payment for the next fuel shipment needed by early August. MEC is proposing to increase the fuel order to two million gallons, an increase of half a million gallons over the June 6 order, “allowing MEC to sell the extra supply of fuel” to increase revenues.

MEC is also asking for an exclusive tax holiday for gross revenue and import taxes, which it estimates will reduce MEC expenses by $1 million a year and allow MEC to become competitive for fuel sales and to supply less costly fuel for outer island shipping service.

MEC is asking the Cabinet for action to defer its loan payments to the US Rural Utility Service, which amount to about $1 million annually, to provide MEC and KAJUR with protection as the sole suppliers of grid electricity within their areas of operation, and to protect and expand MEC’s fuel sales operations.

In the longer-term, the RMI government must “vigorously pursue alternative and more sustainable energy sources” so the country can “reduce its dependence on imported fossil fuel energy.”

MEC said bluntly that without a cash injection to meet the July 10 deadline, “power rationing will immediately come into effect to conserve fuel stocks for power generation.” The MEC board paper noted that it will be able only to supply power to Majuro with present fuel stocks and on a rationed basis until early August.

A consequence of the problems MEC is facing is that “various fuel suppliers will advance the RMI fuel stocks in return for RMI assets (fuel storage tanks, etc.) at garage sale prices,” the MEC board said. “These actions will place undue hardship upon the RMI and its people.” MEC’s board said that the “ability within the combined utilities to resolve these issues has been exhausted. The situation in the coming months is clear. We need immediate assistance to ensure survivability of our communities…into the future.”

A state of emergency is expected to allow government to tap emergency funding as well as make policy or legislative changes needed to reduce taxes and other costs to MEC and KAJUR to keep them afloat.

President, Cabinet to get credit cards

The Ministry of Finance is in the process of setting up credit card accounts for President Litokwa Tomeing and all members of the Cabinet.

The Cabinet recently approved a measure to open a new credit card account with First Hawaiian Bank in the amount of $80,000 in order to provide a corporate credit card for the President and each of the 10 Cabinet members.

The Cabinet has authorized a maximum card limit of $55,000 for the President and $2,500 limit for each Cabinet minister. “The policy for a government credit card for the use of the President as head of state and government was approved many years ago,” said a Cabinet paper prepared by Finance Minister Jack Ading in April that was approved recently. “The credit card makes it easier for the President to pay for official expenses especially when traveling and as stipulated in the card regulations including air ticket costs, hotel, meals, laundry and miscellaneous expenses as determined by the President.”

Individual Cabinet members will have “sub-accounts” under the corporate card, and separate billings and accounts are to be set up by the Ministry of Finance.

An existing credit card for the President with First Hawaiian Bank was established with a “reimbursable account” in which the Ministry of Finance deposited $55,000 and the bank deducted funds each month to pay for card charges.

Cabinet approval for a new corporate account was needed for two reasons:

• The Cabinet paper explains that it has not been possible to get original receipts and card charges of former President Kessai Note and “unless and until card charges and receipts are found and reconciled, the Ministry of Finance is unable to replenish the current account.” The Cabinet paper said that it “would be totally unjust for the current President to be denied the privileges due his office by and on account of action by others.”

• The plan to expand the credit card account to provide for individual members of the Cabinet.

The Ministry of Finance is now setting up internal procedures for use of the credit cards and talking with First Hawaiian Bank officials for issuance of the credit cards.

From the 6/13/08 issue of the Marshall Islands Journal

Price Crisis

If “middle class” urban islanders in Majuro — that is, households earnings $10,000-$15,000 a year — are increasingly hard-pressed to put food on the table in Majuro, let alone use the luxury of air conditioners or refrigerators, where does this leave people who are making just $2 an hour — or are unemployed?

Skyrocketing costs in Majuro and Ebeye, coupled with job layoffs by the Army and its contractors, are forcing everyone to make lifestyle changes that reduce comforts that once made the urban centers the envy of islanders living on outer islands without electricity, running water or vehicles. The increasing hardships in Majuro and Ebeye may add a surge to a major trend of the 2000s — heavy out-migration to the United States.

Electricity rates for homes have risen 78 percent since November last year, rising from 23 cents a kilowatt hour to 41 cents as of June 1. Businesses, which pass their costs on to customers, are now paying 47 cents per kilowatt hour, a 62 percent jump since last November.

The government statistics office reported in late May that inflation made its first-ever double digit jump in the first quarter of 2008, as prices increased over 10 percent — more than double the 4.4 percent inflation for all of 2007 — and there has been no relief this quarter.

Word of wisdom for JHS graduates

Last Saturday about 80 students graduated from Jaluit High School. Senior class valedictorian Mimi-Darlin Alex used the opportunity in her remarks to remind not only her classmates but the hundreds of guest and parents that today’s Marshall Islands is facing many challenges.

Challenges, which she says are not insurmountable so long as individuals pursue their education.

“Remember the cost of living in the Marshall Islands has risen four-fold since we all started high school,” said Alex to her fellow JHS graduates. “We must also understand that our country’s population continues to grow and it’s not going to reduce anytime soon. Let us also remember that salaries in our country are very low and they won’t be enough to provide for our families needs.

“What is the solution to these problems?” she asks. “There is no question that the correct answer is: seek higher education.

“Remember without an education, you will not get a job, without a job you will have no money, without money you can not pay for the things you need.”

From the 5/30/08 issue of the Marshall Islands Journal

Jaluit goes back in time

Jaluit, which just a year ago, seemed to be heading boldly into the 21st century has now reverted back to the 1980s — though one businessman described it as more like the 19th century.

With power rationing imposed by the Marshalls Energy Company beginning two weeks ago, businesses have suffered losses in frozen goods, bank services have been curtailed, and cell phone and Internet services have been disconnected.

MEC is rationing power to just 10 hours daily: from 6-10 am and in the evening from 4-10 pm. MEC has operated Jaluit’s power plant since the mid-1990s, providing 24-hour power to the community at Jabor Island. But MEC said it can’t afford to buy fuel from ALRO, the fuel company managing the former Mobil tank farm on Jabor, forcing MEC to ration power until it can arrange for alternative sources of fuel.

NTA pulled the plug on its telecommunications services because of the threat of damage to its equipment as a result of power turning on and off. Jaluit is now like most outer islands in that it can only communicate to Majuro via high frequency radios, and is no longer able communicate with the world.

Jaluit business people told the Journal they are now scrambling to get generators down to Jaluit to power their freezers and refrigerators around the clock.

Bank of Marshall Islands has been offering daily banking services at its Jabor branch since 2007, with two staff using Internet connections to transact business for local customers, including deposits, loans, wire transfers, and MoneyGram.

That’s stopped as of two weeks ago.

BOMI will begin this coming Monday to offer banking services every other week by sending a staff person from Majuro on Air Marshall Islands on Mondays who will return Friday. Services will be available while the BOMI staff is on island.

BOMI President Patrick Chen said it will be difficult for the bank to provide these services without the benefit of Internet access. “But we’ll do it through radio,” he said.

He expects the current situation will be temporary and once power is back to normal on Jaluit, BOMI will return to its regular daily banking service.

Power bill hurts pocket book

Everyone in the Marshall Islands is feeling the heat of rising electricity and gas costs.

The Journal calculated a comparison of what percentage of their salaries people were paying for fuel and electricity in 2004 as compared to now.

But it’s going to get worse the beginning of June, when MEC will raise rates again, possibly by nine cents per kilowatt hour across the board.

In 2004 MEC was charging 11 cents per kilowatt hour for lifeline (under 500 KW hours) and 12 cents for regular residential (500 and up).

In April and May 2008, the costs had nearly tripled, with MEC charging 31 cents and 33 cents, respectively, for lifeline and residential.

In 2004, the average salary for private sector workers was $4,322, for RMI government workers $13,221 and for local government workers $7,188.

In 2007, those average salaries changed to $5,052, $12,410 and $6,840, respectively.

How much of those salaries that fuel and electricity ate up in 2004 and are eating up today are listed below.

Lifeline rates:

• Private sector workers in 2004 paid 15 percent of their salaries for lifeline power use at the maximum level of 499 KW hours per month. At the 2008 rates, the percentage paid for lifeline jumped to 37 percent of annual wages.

• Government workers in 2004 were paying an average of five percent of their salaries at lifeline rates. That number jumped to 15 percent of wages last month.

• Local government workers paid eight percent of their salaries for power in 2004. That leaped to 27 percent this year.

However, if you are like hundreds of residents and use an air conditioner, chances are that you cannot keep your power use under 500 KW a month, so you’re paying the higher residential rate.

If you used 750 KW hours of power ($247.50) in April and May, and you are: a private sector worker, then you were paying 59 percent of your salary for power (based on the average 2007 salary levels); an RMI worker, you paid 24 percent of your salary for power; and a local government worker, you paid 43 percent of your salary for power.

If you live in Laura, gas is killing you

The Journal estimated the percentage of people’s salaries that are going toward buying gas today at $6 a gallon compared to 2004, when the price was under $3.

If you live in the DUD area of Majuro, and are not wasting gas by jamboing around town, but instead drive just 15 miles per day (to school, work, lunch, etc.), six days a week, that comes out to 90 miles a week.

At an estimated 20 miles to the gallon, you’ll need four-and-a-half-gallons per week to run your car.

At $6 per gallon, that’s $27 a week or $1,404 for a year.

If you’re in the private sector (average wage last year $5,052), the $1,404 for gas amounts to 28 percent of your salary; an RMI worker (average salary $12,410) is paying 11 percent; and a local government worker (average salary $6,840) is paying 21 percent of their salary for gas.

If you live in Long Island and drive your car 120 miles a week, that’s six gallons per week, costing you $36. On a yearly basis, you’re paying $1,872.

If you’re in the private sector the $1,872 for gas amounts to 37 percent of your salary; an RMI worker is paying 15 percent; and a local government worker is paying 27 percent of their salary for gas.

If you live in Laura, you’ve definitely got a problem.  You’re going to average a minimum of 65 miles a day or 390 for the week. That’s going to take you 19.5 gallons per week, and cost you $6,084 annually.

If you’re in the private sector that’s more than you make on average in a year; for an RMI worker, it’s half their salary; and a local government worker is paying 89 percent of their salary for gas if they live in Laura.

From the 5/23/08 issue of the Marshall Islands Journal

EPA approves GFB fish farm project

The proposed fish-farming business for Majuro’s lagoon has received partial approval from the RMI Environmental Protection Authority (EPA) board, which issued a long-awaited decision Wednesday.

The EPA board has given the okay to Good Fortune Bay (GFB) RMI’s commercial fish-farming plan for every species listed in GFB’s environmental impact assessment except for “cobia” — which was given conditional, small-scale approval for cobia during a 12-month review period.

“Because of the controversial claims of its existence in the area and its unknown potential impacts on the lagoon environment and also on the native species should there be escapees in the lagoon, RMI EPA recommended that this species, cobia, be allowed to be cultured in the lagoon under a pilot scale project with limited production that may not exceed 2 percent (1,000 tons) of the proposed total project’s production of 50,000 tons,” the EPA said in a release. “This pilot project of the cobia will be enforced for 12 months. Upon completion of this trial period and with full satisfaction of RMI EPA that the pilot project has proved not detrimental to the RMI environment and all the (mitigation) conditions have been met, the EPA will then allow for commercial operation of this species.”

On the other fish species, RMI EPA said it is satisfied that such species are reported to be present in the country. “The humpback grouper, although rare, is known to have been caught by local fishermen in isolated cases.”

In approving the EIA report, RMI EPA is reviewing and revising the Environmental Management Plan to ensure that the project will not only be safe for the environment but also bring benefit to the nation.

EPA said among the conditions is insurance coverage of the company’s operation for any unforeseen environmental damages,  and covering the cost of monitoring.

Hundreds apply for US hotel jobs

Hundreds of hopeful job seekers are vying for job openings at three hotels in the US.

Earlier this month recruiters representing Practical Employee Solutions and Imperial Palace Casino Resort flew into Majuro to interview potential employees.

Over the past months Russell Langrine of Majuro Man Power, a local employment agency owned and operated by Langrine, has been coordinating efforts to prepare job seekers with resumes, medical checks and interview tips. The weekend prior to the arrival of the two recruiters, Langrine conducted a final group meeting at Majuro Middle School with job seekers answering questions and giving a pep-talk about living in the US and what is expected.

“You’re going to America,” Langrine told a room full of job seekers, “You will live by their laws. You will struggle for now but in the future your children will succeed.”

Interviews were held earlier this month with the recruiters.

While in Majuro the recruiters met with Justice Minister David Kramer, the Chamber of Commerce and Continental Airlines to discuss a possible charter to fly out all the successful job seekers.

From the 5/16/08 issue of the Marshall Islands Journal

Fuel price leads to power cuts

Jabor, Jaluit residents are facing power rationing as MEC announced Tuesday that power will be limited to 10 hours per day because of high prices from ALRO’s Jaluit bulk plant.

Prices for diesel bought from ALRO at Jaluit leaped from $5.13 per gallon to $6.97, MEC said Tuesday.

“The MEC power plant (on Jabor) has very limited fuel tank storage capacity and has always relied upon getting its fuel from the old Mobil bulk plant, which is now operated by ALRO,” MEC said in a public announcement. “Negotiations with ALRO have so far not been able to lower the price from $6.97 per gallon to a workable level.”

MEC said it is responding to these costs by expanding storage capacity of the Jaluit power plant tanks. The Majuro power company can supply fuel directly from its Majuro storage facility to Jaluit, the same as it supplies the Wotje power plant.

MEC said its cost to get fuel to Wotje is less than $5 per gallon.  Jabor power will be on from 6am to 10am, and then again from 4 pm to 10 pm daily.

“These new hours of operation will remain in effect until the new tanks are installed and may be further adjusted to suit the supply and cost of fuel to Jaluit,” MEC said. Hours of operation at the Wotje power plant are unchanged.   With the increase in fuel price, Jaluit’s monthly fuel bill is running at about $60,000, with collections from local residents, businesses and Jaluit High School amounting to less than half this amount, according to MEC.

Why on how to clean up town

Waste problems such as littering and the bad habit of tossing rubbish in the lagoon are not due to a lack of awareness about waste, contends a Majuro Atoll Waste Company board member. “It’s not because people lack awareness,” MAWC board member Steve Why told the Chamber of Commerce Friday. “It’s a lack of infrastructure.”

With only about 11 of the large red bins still usable, people from Rita to the airport do not have waste bins located conveniently near them anymore.

To underline his point, Why asked the 50 or so people at the meeting if they were to promote awareness in the community, what would the message be? The response: “Throw your trash in the dumpsters.”

But, said Why, “there aren’t many dumpsters left.”

MAWC has developed plans and is ready to improve collection in Majuro — including to Laura, which currently has no government service — but needs donor assistance to make it happen.

Why made two important points:

• Donors are standing by, with funding ready, to support various MAWC waste improvement projects.

• These requests simply need national government approval and endorsement.

“There will be an emergency here in a few months, with trash piling up in the streets and in the lagoon (because of a lack of equipment),” Why said. “Beaches? What beaches? They are all full of trash.”

MAWC is already developing recycling programs that pay for themselves. “We can sell steel in Australia and earn $2,000 per container load,” Why said. Because of the high fuel prices, Asian countries will buy all our PET plastic bottles, he said. But MAWC needs $150,000 for a bailing machine to make it commercially viable to ship these plastics off-island.

“The solutions are all there,” he said. “It just comes down to political will.”

From the 5/9/08 issue of the Marshall Islands Journal

Digicel courts RMI T&C

Digicel Pacific Limited, a mobile telecommunications network based in the Caribbean, invited RMI officials to visit Samoa Digicel, one of the countries in the region in which Digicel is operating. The site fact-finding trip was a follow-up to several meetings with and presentations by Digicel to the RMI government that started in early 2007. 

Minister of Transportation and Communications Dennis Momotaro led a RMI delegation that included Minister in Assistance to the President Christopher Loeak, Anono Loeak, Daisy Alik-Momotaro, Assistant Secretary of T&C Wallace E. Peter, and Nixon Elisa, representing government-owned radio V7AB. The trip was sponsored and funded by Digicel Pacific Limited, including the airfare, accommodation and other incidentals required during the trip, according to a release from the Ministry of T&C.

The visit to Apia, Samoa included a tour of Digicel Samoa’s main operation center and the equipment control facility. Digicel told the RMI group its goal is to develop a state of the art telecommunications network, provide world class service in emerging telecommunications markets and to provide coverage, care, choice and value for money.

“The presentation showed that Digicel has positively impacted the lives of the people of Samoa,” the T&C release said. “The calling rates in Samoa are very low as a result of open competition by two main local telecommunications service providers.”

Digicel now covers up to 95 percent of Samoa, including the rural areas, which had no previous telecommunication services. The government-owned telecommunication network Samoa Tel also increased its subscriber and profits since the launching of Digicel Samoa. A meeting with Samoa Prime Minister Tuilaepa Lupesoliai Sailele Mailelegaoi showed government support for the services provided by Digicel, T&C said. “The Prime Minister stated that since the launch of Digicel in Samoa, there has been great improvement in communication services throughout Samoa.  He also noted that Digicel has contributed to Samoa’s economic development.”

The PM said in an interview with the local newspaper, the Samoa Observer during the launching of Samoa Digicel in November 2006 that “Samoa is now the envy of Pacific neighbors” due to its economic growth. The development of the private sector and open competition among service providers are key elements to economic growth in Samoa and the Pacific, the release said.

Fiber optic cable deal ready to be design

The US Army and its prime contractor, TKC Technology Solutions LLC, could sign an agreement this month to officially launch the multi-million dollar submarine fiber optic cable project to Kwajalein.

Although the US Embassy in Majuro told the Journal that the agreement signing could be as early as Thursday this week, National Telecommunications Authority General Manager Tony Muller said he’s doubtful the Army and TKC will sign this quickly “based on the current discussions” between the two parties.

Still, dates aside, once the agreement is signed, “it will be a positive and significant milestone indicating the military truly is moving forward,” Muller told the Journal. “It will also enable NTA to finally wrap up everything, in terms of its participation.”

Kwajalein Commander Col. Stevenson Reed told the Journal earlier this year that the Army expects the fiber optic cable to be in operation in fiscal year 2010.

“NTA will need to finalize arrangements shortly after TKC and the Army conclude their negotiations and execute a contract,” Muller said.

“The signing of contracts by all of the different parties does not need to be a simultaneous event,” said the deputy chief of mission Doug Morris. “FSM Telecommunications Corporation and Marshall Islands National Telecommunications Authority have been talking to the prime contractor for many months and have negotiated draft contracts, which is standard operating procedure.”  Neither FSMTC nor NTA can finalize anything until after the Army actually awards a contract.

Once a contract is awarded, “all sides will need to firm up their drafts and funding and sign formal contracts for their parts of this project,” Morris said.

“Our understanding is that FSMTC is all lined up to do what is needed at this point —the RMI and NTA are going to have to make some decisions and move forward in a timely fashion in order to be included.” The Majuro and Ebeye portions of the cable are estimated at about $16 million.

At last month’s Chamber of Commerce meeting, NTA board member David Strauss expressed serious concerns about the costs of the fiber optic cable project.

From the 5/2/08 issue of the Marshall Islands Journal

General Fund deficit balloons to $2.7 million

The Marshall Islands General Fund deficit ballooned in fiscal year 2007, more than doubling over FY2006, according to preliminary figures issued in the RMI government’s FY2007 Compact report to US President George W. Bush.

Tax and fishing revenues fell far short of projections and while the government reduced spending by about $200,000 from the budgeted amount, the government ended the year with a nearly $2.7 million deficit (shortfall) in the General Fund. This deficit was for the financial year that ended September 30 last year.

The RMI government has run a deficit in its General Fund for the past three years, accumulating debt of more than $5.5 million since FY2005. In 2006, the deficit was $1.2 million and in FY2005 it was nearly $1.6 million.

Revenues in FY2007 were $2.9 million under what was expected for the year by RMI budget planners, according to the report issued last week.

The RMI government blamed the shortfall on “poor revenue forecasts (and) also the under-performance of items such as fishing licenses and fuel taxes.” The RMI said it has reviewed how it forecasts next year’s budget to improve accuracy and avoid the shortfall that occurred last year.

All types of tax revenue — income, import, gross revenue, fuel — fell short of predictions, while fishing rights income only produced $1.25 million, half a million dollars less than expected. Only the ship registry and past due tax collections as a result of Finance audits produced significantly more than expected, with $583,000 and $660,613 more coming from these two, respectively.

Meanwhile, the government’s budget was hard hit by fuel costs for the Marshalls Energy Company, costing $1.7 million more than planned.

Meanwhile, other over budget items included utilities ($854,685), land leases payments ($531,713) and travel ($432,673).

“The government again experienced difficulties in FY2007 due to a continuation of the problems from the previous year resulting from increased energy costs and the corresponding impact on MEC,” the government’s report said. “These difficulties required the government to continue to support MEC’s financial position and placed substantial pressure on the General Fund.”

Training phase at loining plant

Pan Pacific Foods loining plant is up and running, with 234 Marshallese workers now in training in various parts of the plant.

Zuliang Zhang, president of the company, told the Journal that the plant currently has only a small amount of fish that is being used to train the new staff. Operations are expected to step up significantly later in May with the arrival of a purse seiner shipment of skipjack tuna, and to further increase in June and July as the plant moves toward its goal of running a day and night shift.

Zhang and field technician Mimi Taboada gave the Journal a tour of the now-operating plant earlier this week.

From the 4/25/08 issue of the Marshall Islands Journal

AMI re-links the outer islands to the world

Air Marshall Islands flew its first commercial revenue-generating flights Tuesday afternoon, bringing passengers in from Jaluit and Kili.

“We had a full flight inbound,” said an obviously delighted AMI general manager Dan Fitzpatrick.

AMI’s Dash-8 conducted a successful test flight on Monday, followed by flights to Kili, Jaluit and Namdrik on Tuesday to inspect runways.

Fitzpatrick said the Kili and Jaluit runways checked out fine, allowing the plane to transport passengers on the flight back from these two islands.

On Wednesday, the Dash-8 was to fly to the other four outer island runways in question for inspections: Wotje, Likiep, Elenak (Mejatto, Kwajalein) and Aerok (Ailinglaplap).

Fitzpatrick said the plan is to fly to Kiribati on Thursday.

The Jaluit/Kili return flight, and the planned Kiribati service are the Dash-8’s first commercial flights since October 10 — more than six months with no service.

“The test flight went really well,” Fitzpatrick said. “Things are looking good.”

All outer island runway checks should be done by Friday, which is the day that the Dash-8 will return fully to scheduled service.

Currently, only captains Albon Jelke and Jason Langidrik can fly the plane.

Two more AMI pilots will leave Majuro at the end of next week for flight training in Seattle, Washington to fly the Dash-8, Fitzpatrick said.

Pilots Lorak Lorak and Miles Watak will both train to be first officers on the Dash.

The training is expected to take one month, and will give AMI four pilots who can fly the Dash-8.

“In the meantime, I’m trying to get one more Dash-8 pilot” on a short-term contract as a backup until Lorak and Watak make it back from their training, he said.

RMI doesn’t use all its Compact grant money

Since Compact II started four years ago, every year the RMI government has had leftover money that was returned to the US government. But all of the “carryover” funds have been re-granted to the RMI for use in later fiscal years, Interior Department grant program specialist Alan Fowler told the Journal.

FY2007 — which ended September 30 last year — produced the largest level of unused funding since Compact II started in FY2004, with $1,385,690 unspent by the RMI government, mainly the Ministries of Education and Health.

“These unused Compact funds are not taken away from the RMI,” Fowler said.

“They become ‘carryover funds’ and are re-granted to the RMI government in the following fiscal year.” 

The $256,091 unused in FY2004, for example, was re-granted to the RMI in FY2005, Fowler said.

“Since Compact funds are a permanent appropriation, these funds do not lapse and the RMI does not lose these funds,” he said.

Generally Compact funding unspent by one sector — such as health or education — will automatically return to the same sector, though Fowler said the RMI government can request Interior approval of reprogramming to other areas. 

Compact infrastructure funding is treated separately from Compact grant funds, Fowler said. The infrastructure money remains “available from year to year until used and therefore is not part of the carryover process,” he said.  Since Compact funds are a permanent appropriation, these funds do not lapse and the GRMI does not lose these funds.

The “carryover” amounts for the past four years: FY 2004 — $256,091, FY 2005 — $739,897, FY 2006 — $573,768, and FY 2007 — $1,385,690.

From the 4/18/08 issue of the Marshall Islands Journal

All Shipping Corporation ships in port

An unusual sight witnessed at Uliga Dock this week has brought to reality the vulnerability of the RMI to external conditions. The sight of all Shipping Corporation ships in port is a sign of the times. The problem, however simple, runs like many stories of late — rising fuel cost compounded by a government cash flow crunch.

An official with the Shipping Corporation told the Journal that they have been trying to negotiate a lower fuel price with Marshalls Energy Company but the terms of that deal which will give the Shipping Corporation a price break if it buys bulk is still out of reach.

Meanwhile, the Shipping Corporation receives a subsidy from the national government of $200,000 a quarter. For this quarter starting April 1, however, it’s only received $20,000.

This is not a story of finger pointing, it’s merely the reality of the situation, according to officials from both the Shipping Corporation and the Ministry of Finance.

Secretary of Finance Jefferson Barton said the government does its best to meet its obligations and is hopeful that before the end of the quarter it will pay its full obligation to the Shipping Corporation. The challenge is juggling payments for government subsidies, which are all due at the same time, for government agencies, authorities and corporations.

“It’s the same situation every year,” said Barton. “But the issue of meeting (government expenses) is becoming more challenging. Cost of operations are going up yet resources and revenue haven’t changed therefore there will be a slowness in providing services.”

Barton said the problem hurting government budget is rising fuel costs. “We can’t continue with the ‘business as usual attitude’ with fuel prices rising,” he said. “We need a strategic approach.”

Another hurdle for the Shipping Corporation is that all its vessels are long overdue for repairs and maintenance in the dry-dock. It has been unable to secure a scheduled time with PII for the dry-dock.

Despite these multiple problems, however, the Shipping Corporation official said it’s working to maintain the schedule. The Lañdrik, which needed a replacement generator, had a standby generator installed to make its rescheduled Wednesday departure.

Aemman is scheduled to depart on Thursday this week but it doesn’t have money to buy fuel following a large payment to MISSA for its 80 employees.

Members query phone policy

The view on NTA’s cell phone billing policy appears to be split.

Despite questions opposing the current system of making the caller pay the 10 cents per minute charge, several speakers said they favor the current “sharing” system.

Kirt Pinho said being out on Rong Rong when he runs out of minutes on his cell phone, he’s happy that he can still receive incoming calls so he can talk to the outside world instead of having to get in a boat and riding 30 miles back to town to buy a new card.

The current system charges whoever is making the call to or from a cell phone.

Carlos Domnick also voiced support of the current system, saying “I don’t want to pay for others’ calls.”

NTA general manager Tony Muller explained the 10-cent charge as a fee “to access the wireless network.” He said the board of directors can take the matter up for consideration.

Bill Weza asked why charge landlines additional to call cell phones when they are already paying a monthly fee for their service?

David Strauss, who was emceeing the forum and is also an NTA board member, said “we’ll think about it” in response to Weza’s query.

From the 4/11/08 issue of the Marshall Islands Journal

The Rice Crisis

By SUZANNE CHUTARO

The cost of living in the RMI is about to go up another notch as fuel surcharges, freight rates and world prices on essential staple foods such as rice and flour are skyrocketing.

Local importers and wholesalers, who keep a close eye on world prices of food, warn that these external factors compounded with the recent domestic price rise in fuel and power are going to further burden residents.

According to Pacific Basin’s Robbie Chutaro, rice prices were relatively stable until February when wholesalers noticed a 35 cent price spike in the cost of a 20 pound bag. Since then the price of rice has steadily increased with every shipment into Majuro.

The latest shipment of rice will likely jump to $8.10 a bag at wholesale  — a 15 cent increase from the last shipment.

Chutaro warns, however, that the sharpest increase in prices is still to come in May. Based on rice prices out of Australia, Chutaro says by May, the Majuro wholesale price for rice will likely be $9.30 a bag — this does not include the local government’s four percent tax or the additional mark up local retailers will add.

“Australian rice prices have risen drastically,” confirms Payless Supermarket manager Ray Bandy, adding that the wheat market has also been “volatile” adding pressure to the price of flour.

Bandy says his company has seen the price of flour rise by $4.23 per 10kg bag in a six-month period.

“I’ve been doing this (grocery business) for 38 years,” said Bandy. “The last two years is the worst I have ever seen.” And it’s not getting better.

On Friday, BBC reported that many rice producing countries have “stopped export completely,” safeguarding stocks for their own citizens. Meanwhile, countries like China have imposed export quotas.

Local wholesalers say they have been searching the world for a supply of affordable rice. Most recently Majuro has seen the introduction of Pearl Rice, a Chinese brand sold out of the Philippines. It has been selling at $6.45 a bag but is expected to increase. 

“Doesn’t matter where you go to buy rice now,” said Bandy. “It’s all increased.”

ROC helps AMI with rescue grant funding

Taiwan Ambassador Bruce J. D. Linghu presented a check for $600,000 to Foreign Minister Tony deBrum and assistant secretary of Finance Jemi Nashion Tuesday this week.

It’s a special grant from the Republic of China (Taiwan) to the RMI government for the restoration of Air Marshall Islands (AMI) flight services. The Ceremony was witnessed by Acting Secretary Kino Kabua and a representative of AMI.

“Over the years, bilateral relations between RMI and Taiwan have been further strengthened through many joint efforts,” Linghu said. “In response to the financial assistance need for the AMI’s recovery plan, the government of the Republic of China acknowledged the importance of the airline to RMI’s infrastructure as it provides essential services for transportation, health, education and welfare as well as economic development in the communities of the outer islands.”

Taiwan provided a $1 million check for AMI on January 18.

From the 4/4/08 issue of the Marshall Islands Journal

AMI woes

As soon as Air Marshall Islands fixes one problem with the Dash-8, another crops up.

The latest is the uncertainty caused by the unannounced departure from Majuro of one of only two local pilots currently certified to fly the Dash-8, forcing AMI general manager Dan Fitzpatrick to attempt to hire at least one qualified pilot from outside on a short term contract until AMI can send out additional local pilots to be re-certified at the Seattle-based facility.

Parts to fix the exhaust pipes on the 34-seater Dash were expected to arrive Wednesday night this week, and Fitzpatrick told the Journal this is expected to take just a few minutes to install, meaning that the airline aims to have flight testing of the plane starting from later this week — but that depends on having two pilots to fly the plane.

One of the two Marshallese pilots who was recertified in February at a cost to AMI of $9,000 refused to sign an agreement that would require his service to AMI, according to both Fitzpatrick and board members. Then last week, this pilot left the islands without communicating with airline management, which had earlier expected to begin flight-testing on Monday this week.

Fitzpatrick told the Journal on Wednesday that he has 14 possible options with certified pilots who may be candidates to be brought in quickly to fill pilot positions.

He said the aim is to send more Marshallese pilots to be re-certified, but the first available slots available at the Seattle flight facility are early May and the airline can’t wait that long to get the Dash-8 flying.

Meanwhile, the delayed part situation and continued grounding of the Dash-8 is wreaking havoc on the Bikini dive program.

A group of 12 divers arrived in Majuro Tuesday from England with paid-for plans to fly to Bikini on Wednesday to scuba dive for a week — a plan that is, of course, not happening, much to their unhappiness.

Niedenthal said “we’ve begun discussion about pulling the plug on the Bikini dive program.”

Bikini’s concern is not just to see the Dash-8 flying, but to have assurance that there will be a flight every week. The problem with only one plane in operation is that if it breaks down on an outer island — or even in Majuro — the divers and other passengers on outer islands may be stranded for an unknown length of time.

Migration hurdles

By GIFF JOHNSON

What is different about the current situation of heavy out-migration of Marshallese and Micronesians to the US is that leaders in the freely associated states are now engaging with Hawaii state officials to address the many issues that have largely been ignored until recently.

That is the view of Hawaii state Senator Kalani English, who spent the weekend in Majuro to meet with American Samoa Congressman Eni Faleomavaega, US Ambassador Clyde Bishop and RMI officials.

“Our side is open and willing, and now the Marshalls side is, too,” English told the Journal. “Good progress between Hawaii and the Marshall Islands can get results and it will be difficult for the federal government not to support it.”

The three freely associated states (RMI, Palau, Federated State of Micronesia) and Hawaii “are on the same page and now (Congressman) Eni is on the page,” English said. “I’m excited because things are lining up. Our combined forces are much greater than one alone.” English said his aim is to create a situation where “we have measurable outcomes. It will give more ammunition for the Hawaii (Congressional) delegation.”

English and the Hawaii delegation are pushing to get the federal government to eliminate the $30 million cap on Compact impact funding so that the federal government begins picking up the tab of the Compact, which it approved with the freely associated states.

Asked about attitudes of people in Hawaii toward Marshallese and Micronesians with recent media coverage of homeless islanders, English said attitudes “are still open. That’s why it’s important for Marshallese/Micronesians to engage.”

He noted that at least one Samoan-run church in the Waipahu area has been very active in providing services to Marshallese, which he sees as a good sign. “It’s one immigrant group helping another,” he said. “Everyone in Hawaii was an immigrant at one time.”

He said he wants to see Marshallese and Micronesians integrate well into Hawaii, and is keen to see more get job training so that they can climb up the ladder. He noted that the five-star Four Seasons Hotel in Kona and Lanai has been actively hiring Kosraeans because of their good work ethic.

“The business community recognizes the potential of Micronesians,” he said.

From the 3/28/08 issue of the Marshall Islands Journal

RMI Average Wages

Average individual wages in the RMI declined very slightly in FY2007 compared to FY06, according to a new EPPSO report. The report shows that the average wage in RMI in FY07 was $9,544, compared to the slightly higher $9,654 in FY06.

The report demonstrates that based on average annual salaries, the banking sector pays the highest average at $17,353 in FY07, up about two percent over the previous year.

Next highest average wages are paid to workers at Kwajalein, who earned an average of $15,818 in FY07 — also down from FY06 level of $16,262.

National government agencies paid $14,696 on average in FY07, down from a record high of $15,731 in FY06. Foreign embassies paid the next best at an average of $13,181.

The RMI national government came in at $12,606, up very slightly over FY06. RMI public enterprises paid an average of $11,765 to their workers, down from $12,154 in FY06. Local governments paid an average of $7,876 in FY07, compared to $7,694 in FY06.

Private sector paid an average wage of $5,078 in FY07 — its highest since FY01, the last time that the private sector’s average wage topped $5,000 per year. Non-governmental organizations paid their staff an average of $5,058 per year in FY07, up a bit on the $4,996 in FY06.

Kwajalein Wages Crash by 6.5%

Salaries for Marshallese working at Kwajalein declined by 6.5 percent in fiscal year 2007, according to the RMI government.

An employment statistics report issued by the Economic Policy, Planning and Statistics Office (EPPSO) shows that total wages earned by Marshallese at Kwajalein declined to $18.7 million FY2007 from a record high of $20.1 million in FY2006.

The drop in Kwajalein salaries went against a national trend of a slight overall increase in wage earnings in the RMI. EPPSO said that total salaries rose to $96.8 million in FY2007, up 1.2 percent from FY06’s $95.7 million. The 1.2 percent increase was the smallest salary increase since salary levels actually dropped by one percent in FY98. Since FY99, salaries increased from as little as 2.5 percent (FY03 and FY05) to 8.3 percent (FY00), the EPPSO report showed.

Overall, total employment was up by just over two percent in FY07, which was not as good as FY06 when the number of jobs in the RMI increased 3.5 percent. The 2.3 percent job increase in FY07 meant 231 new jobs, of which 171 were in the private sector. All told, there were 10,149 people employed in the RMI in FY2007 — the highest total ever.

The breakdown of the 10,149 jobs in FY07:

• Private sector, 38.5 percent.

• National government, 23.5 percent.

• Government public enterprises, 7.2 percent.

• Government agencies, 4.5 percent.

• Local governments,10.5 percent.

• Kwajalein base, 11.7 percent.

• NGOs, 3.9 percent.

• Foreign embassies, 0.2 percent.

The 10,149 jobs reported in FY07 is an all-time record, with the last highest record year being FY04, when 10,070 people were employed.

The EPPSO report noted that there was a four percent drop in Kwajalein jobs in FY07 — 49 jobs were lost between October 2006 and September 2007 — leaving the total Marshallese workforce at Kwajalein at 1,187 on September 30 last year.

From the 3/14/08 issue of the Marshall Islands Journal

MITA’s Ambitious Plans for Tourism

Details of the Marshall Islands Visitors Authority’s new four-year tourism action plan for the RMI were disclosed at the first national tourism symposium that kicked off Monday in Majuro as part of National Tourism Week.

“Tourism is vital to the nation’s economic growth,” said R&D Minister Fred Muller at the event. The Minister urged tourism industry people to ensure that the plan is focused on fostering development that “puts the needs of Marshallese first.”

He also acknowledged that tourism has “not received a fair share of the (government’s) budget,” and pledged to change that in the future so “as tourism grows, so will government support to MIVA.”

Dr. John Salas, who teaches international tourism and hospitality management at the University of Guam, said there is a huge opportunity for tourism growth in the Micronesian area. But the essential — and at the moment missing — element is solid regional cooperation promoting a “Magnificent Micronesia” theme that pools the small resources of each country into strength, and lower costs, for overseas marketing. He said that the Micronesian chapter of the Pacific Asia Travel Association — in which the RMI is a member — is playing an increasingly important role in promoting the region. “Like in a canoe, we need to row together,” Salas said to encourage greater Micronesian cooperation.

Salas also said that each destination has to identify what it has to offer visitors that is different from what they can get elsewhere. “We need to create global awareness (of the islands) and be different from other destinations,” Salas said.

MIVA consultant Ben Graham then described the basics of the MIVA four-year plan, and a new ABC — Awareness, Beautification and Cleanup — campaign to be led by a consortium of local groups, including MIVA, Marshall Islands Tourism Association, Majuro Atoll Waste Company and Marshall Islands Conservation Society.

Graham described the new tourism plan as “the first national level tourism plan that is homegrown.” The four-year plan is specifically timed for the political cycle of elected leaders, he said, adding that once finalized in the next few days, it will be submitted by Minister Muller for Cabinet blessing.

“Tourism is a way to harness growth and generate development,” he said. It is estimated that visitors to the RMI now spend between $4 and $5 million a year, with about 300 jobs catering to visitors in local hotels, restaurants and diver operations.

Three key elements of the plan are to:

• Develop Majuro as an attractive gateway to the rest of the country, operating as an effective hub.

• Develop Kwajalein as a destination and a hub for nearby islands.

• Facilitate outer island tourism by improving transportation and infrastructure.

“It’s an ambitious plan,” he Graham. “We’ve identified many areas and problems that need to be addressed.”

NTA Increases Channels

NTA has increased the number of cell phone channels and improved coverage in the Laura and Ajeltake areas.

In response to questions from the Journal about problems with the cell phone system in recent weeks, NTA general manager Tony Muller provided a rundown on developments in the past several weeks.

“With the arrival of equipment and an engineer, we’ve replaced our old OMC server with the new one in Majuro,” Muller said. “We encountered a bit of a link problem but have resolved it. This discrepancy would have caused drop calls in the DUD area” at the end of February. This, too, was resolved, Muller said.

Laura’s upgrade was to test omni-antenna coverage with more capacity. But during the tests, “coverage deteriorated with this setup, so we reverted back to sectorized coverage,” Muller said.

This means that Laura and Ajeltake have both gone from 14 to 21 sectorized channels.

From the 3/7/08 issue of the Marshall Islands Journal

Money Moving Big Biz

Workers in the Marshall Islands sent $22 million overseas in 2007, according to the chief executive officer of Media Communications, James Matayoshi.

“And that’s just through the registered operations,” Matayoshi told the Journal. On the flip side, Matayoshi said that just $400,000 makes its way into the Marshall Islands.

These figures are key to the mayor of Rongelap Atoll Local Government because of his new partnership with the Levinia family and their remittance and Visa debit card company, which is located above Payless Supermarket near the Women United Together in the Marshall Islands office.

The new company was set up a couple of months ago, but is now “officially open” and being run by secretary and manager Lenny Laviña.

“We are networked with Kwik Remittance Hawaii LLC,” said Matayoshi. “They provided us with the platform to deal with remittances. Compared to Western Union, our rates are 40 percent less.”

Using the remittance system, people can send money to, for example, the Hawaiian islands, Australian, Hong Kong, and Singapore. “We also have a link with Taiwan, which will be great for our students over there,” he said.

The Delap company also provides customers with Visa debit cards. “There’s no minimum balance,” he said. “You put $100 in, you spend $100. I use mine to buy groceries.”

Matayoshi believes the new service will be of benefit to all Micronesians. “We will be opening offices in Kosrae, Chuuk, and Pohnpei,” he said.

Currently, the company is logging movement of about $20,000 a week, mostly from Filipinos, with the hope that this will rise to $50,000 to $60,000 in remittances a week. 

Paul Allen's Jet Denied Access to Kwaj

Although the US Army turned down Paul Allen’s request to briefly transit Kwajalein on his way to Bikini last Friday, the billionaire computer mogul showed “where there’s a will, there’s a way.”

His 414-foot mega-yacht Octopus, which had been at Bikini Atoll since last Thursday, moved to within helicopter range of Majuro, dispatching one of its two helicopters to Majuro Saturday. The helicopter was positioned at Amata

Kabua International Airport overnight Saturday, and Allen’s private jet flew him into Majuro Sunday.

He was then whisked by helicopter to his waiting yacht, arriving Bikini Sunday.

US Army Kwajalein Atoll public affairs official Marcos Morales told the Journal that “the US Army Aeronautical Services Agency in Washington denied

Allen’s request (to have his plane and helicopter land at Kwajalein) last Friday.”

The Octopus arrived in Majuro late afternoon last Tuesday, spent about four hours here, and then headed out to Bikini.

Allen is the third richest American, having made his fortune in computers as an early partner with Bill Gates at Microsoft.

From the 2/29/08 issue of the Marshall Islands Journal

Strauss, Obeketang on Revamped NTA Board

A new-look board was appointed for the RMI National Telecommunications Authority Tuesday night at its annual general meeting.

Significant developments of the new board include only one elected official, Transportation and Communications Minister Dennis Momotaro, and new business sector members including Marshall Islands Chamber of Commerce President Hirobo Obeketang and outspoken private attorney David Strauss. The RMI government controls NTA’s board appointments because it owns a majority of NTA stock.

Other new NTA board members include Hilda Heine, Lynn Milne and Sheldon Anjain. Continuing members rounding out the eight-member board are Bank of Marshall Islands President Patrick Chen and RMI Taiwan Ambassador Alex Bing, who has been NTA’s chairman for many years.

Other developments on the NTA front include Bank of Marshall Islands plan to purchase $240,000 worth of NTA stock later this week.

Chen told the Journal that the BOMI board approved the stock purchase at its board meeting Wednesday.

Our Airline Again???

Foreign Ministers from the Marshall Islands and Nauru signed an air service agreement last Thursday that is part of an effort to resume flights into Fiji by Nauru’s Our Airline.

The signing Thursday in Taipei by the Ministers Tony deBrum and Kieren Keke also highlighted the multi-million dollar aid that Taiwan has supplied to national airlines of both nations.

Taiwan in 2006 bought Our Airline’s Boeing-737 at an undisclosed cost, and has injected $3 million into Air Marshall Islands for the purchase of a 34-seat Dash-8 and maintenance.

Up to the end of 2005, Nauru linked four western Pacific nations with Australia and Fiji. But when Air Nauru’s single Boeing-737 was repossessed for lack of lease payments in December that year, Fiji’s national carrier Air Pacific stepped into the lucrative Nadi, Fiji-Tarawa, Kiribati route and has been operating two flights each week since.

Last year, Fiji rebuffed efforts by Nauru’s new carrier, Our Airline, to resume service to Fiji, said Keke.

The business that Our Airline could generate from the Fiji route is critical to the economic survival of the struggling new carrier, airline officials say.

Keke said Our Airline is covering its costs largely because of charter services it operates in Australia.

The Marshall Islands, however, has an air service agreement with Fiji, which it hasn’t used since halting flights to the South Pacific by Air Marshall Islands in the late 1990s.

The aim is to have Our Airline provide the service to Fiji for Air Marshall Islands, Keke said.

The Marshall Islands last month submitted a request to the Fiji government to revive its air service agreement utilizing Our Airline, but has not received a response, officials here say.

“It is usually a regulatory formality to apply for the license to operate once you are ready to take up use of the rights,” Keke said.

But a return of Our Airline to servicing Fiji and Kiribati threatens to cut into Air Pacific’s monopoly on the Fiji-Kiribati route. Still, Marshall Islands and Nauru officials expressed optimism that the new service will get the okay from Fiji.

“The memorandum (signed Thursday in Taipei) will see the pooling of air service rights with the right aircraft types, in commercial code share agreements between Nauru’s and the Marshall Islands’ airlines,” Keke said at the ceremony in a prepared statement.

“This high level of cooperation will result in an expansion of air services in our region again linking several of Taiwan’s allies together and with more destinations.”

Our Airline currently flies from Brisbane, Australia, to Tarawa, Kiribati, with stops in Honiara, Solomon Islands and Nauru enroute twice a week. Mounting losses forced it to halt service to Majuro in mid-2007.

From the 2/15/08 issue of the Marshall Islands Journal

MALGOV Told Not to Harass Mobil

By GIFF JOHNSON

The High Court ordered MALGov not to issue fines or take any punitive action against Mobil Oil Micronesia in the ongoing dispute over MALGov debt to the Marshall Islands Social Security Administration.

Mobil filed suit Friday against MALGov and High Court-appointed receiver Philip Okney, asking the court to prevent the fuel company from being caught in the middle of a battle over who should get the monthly sales tax payments.

In November, the High Court appointed Okney as receiver to sort out MALGov’s multi-million dollar debt to MISSA.

In January, Okney obtained sales tax payments directly from Mobil and two other businesses, paying $131,000 to MISSA and returning the balance of $19,000 to MALGov.

But MALGov is objecting to Okney’s action, and last month sent letters to Mobil and other tax payers threatening them that failure to pay taxes directly to MALGov is “a violation of MALGov ordinances (and) is a ground for reconsideration and where necessary revocation of licenses.”

MALGov has appealed the issue to the Supreme Court and argues that until the Supreme Court resolves the matter, tax payments should continue as in the past — directly to MALGov.

Mobil filed suit to get court action in advance of this week Thursday’s monthly tax payment deadline.

On Tuesday, Mobil received the response it was requesting from Chief Justice Carl Ingram, who ordered MALGov and Okney not to take any punitive action against Mobil until the matter is resolved.

He specifically told MALGov not to send any letters, “threatening or otherwise,” to Mobil.

On Wednesday, after attorneys for the parties had agreed, Ingram directed Mobil to pay its MALGov sales taxes directly to receiver Okney, and Okney is to pay MISSA what it is due and turn the balance over to MALGov, which is restrained from penalizing Mobil.

Airline Back by March

Air Marshall Islands is expected to back in the air by early March but that doesn’t necessarily mean air services will return to the way they’ve been in the past.

AMI general manager Dan Fitzpatrick, while unwilling to declare an actual date the national carrier will be back in the air, told members of the Marshall Islands Tourism Association at their general monthly meeting last Thursday that it’s possible the Dash-8 will be back in service sometime between the end of this month and early March.

But not all outer island destinations should expect service even after the planes are flying again, the AMI GM said. “AMI will focus on commercially viable routes and rebuild itself that way,” said Fitzpatrick.

While there is a schedule for the Dash-8, Fitzpatrick indicates that getting the Dornier operating will “be a challenge.” The Dash can only service the bigger runways, while the Dorner services the smaller outer island runways, He said AMI is considering to send both Dorniers off island for maintenance.

“The (Dorniers’ age) are less than half-life,” he said. “They should be sent off Island to extend their longevity.”

Meanwhile, as a result of the ROC/Taiwan $1 million grant received in early January, Fitzpatrick reports that parts for the Dash-8 have already been ordered, pilots were scheduled to depart Majuro over the weekend for re-training and AMI is now advertising vacancies for engineers and mechanics.

From the 2/8/08 issue of the Marshall Islands Journal

AUDIT:  MEC at Risk

The dire financial condition of the Marshalls Energy Company in the 2005 and 2006 period prompted Deloitte and Touche auditors to raise questions about its ability to continue in business.

“MEC’s recurring losses from operations and net deficiency raise substantial doubt about its ability to continue as a going concern,” said the fiscal year 2006 audit presented to Nitijela last week.

Even MEC’s own overview statement included with the audit makes the point that “an increase in net assets over time normally indicates an improvement in financial condition” — and in the next item shows that MEC plunged from positive net asset worth of nearly $4 million in 2004 to minus (deficit) net assets of $3.2 million in 2006.

That’s a loss of $7.2 million over two years.

The 2005-06 period was marked by several major financial developments:

• Skyrocketing world market prices for fuel that pushed utility costs from $11.8 million in 2004 to $17.1 million in 2006.

• Increasing revenue from electrical customers, as MEC hiked its rates substantially. Utility revenue rose from $8.6 million in 2004 to $11.5 million in 2006.

• A reduction in revenues from fuel sales, as MEC was forced to halt sales to fishing vessels — sales that previously helped to subsidize costs of electricity. Revenue from fuel sales dropped from $14 million in 2005 to $9.8 million in 2006.

The audit shows that MEC was owed more than $4.3 million in 2006, of which the auditors said $2.1 million is “uncollectible accounts.”

“MEC has sustained substantial operating losses in recent years,” the audit said. “Management acknowledges that it is currently dependent on RepMar and its ability to pay for actual services rendered in order to maintain MEC as a going concern.”

If the government chose not to continue subsidizing MEC, the utility may need to consider raising electricity and fuel rates “to maintain MEC as a going concern.”

The audit noted that MEC received a $12 million bank loan on May 25, 2007, after the period of the audit.

The loan was guaranteed by the RMI government.

The report also noted that in October 2006 and March 2007 — after the audit period for FY 2006 — the RMI provided money advances of $1 million and $1.7 million, respectively.

The Chamber Plays the Mnopoly Game

 How much power do monopolies have in Majuro? This question comes to mind as efforts to accommodate the busy schedules of business people is proving to be more of a challenge than the Marshall Islands Chamber of Commerce bargained for.

A mini-survey taken in January to find a suitable time to host monthly chamber meetings resulted in a can of worms with complaints from members whizzing their way through the world wide web to Chamber secretary Jim McLean on why such and such a day is not suitable.

Take Continental Airlines and its monopoly over our international air access. Turns out Continental’s Salome Andrike, who is an executive member of the Chamber, can’t make the Tuesday meetings because it conflicts with flight schedules. So to accommodate that, several members decided Wednesday would be appropriate. But then this day conflicts with the Journal’s monopoly over producing the RMI’s only weekly dose of the “world’s worst news.”

The reply sent to the Chamber: “If you want us to cover stories on your activities then it ain’t gonna happen because Wednesday its production day!”

Back to the drawing board.

Mondays don’t work simply because of ‘blue Monday’. Tuesday and Wednesday are already out, that leaves Thursday but still that conflicts with Continental’s schedule and it seems to be another popular day for other meetings of other organizations. That leaves Friday.

“Provided it doesn’t eat into my T.G.I.F happy-hour time, I got no problem with it,” said ace reporter Mary Robinson. “You know how these chamber meetings have a way of dragging late into the afternoon.”

Technically, it appears all except Mary seem okay with this new Friday Chamber meeting schedule.

According to new Chamber President Hirobo Obeketang, the Friday, February 15 meeting will be held at the Melele room. It will feature, much to Mary’s delight, the young men’s group Antoone 2020.

From the 2/1/08 issue of the Marshall Islands Journal

JAL Halts March Charter

By SUZANNE CHUTARO

Japan Airlines has cancelled its only scheduled charter flight for 2008, prompting many locals to wonder if this is the end of the direct Japan-Marshall Islands JAL service.

But Marshall Islands Tours’ President Satoshi Yoshii says the cancellation is due to a lack of lead time to sell seats on the direct charter. The joint decision by leading wholesaler Marshall Islands Tours and Japan Airline executives was made earlier in January in the interest of ensuring the future sustainability of the direct Japan-Marshall Islands charter.

Yoshii told the Journal last Thursday that both parties agreed to cancel the flight to avoid failure.

“If we fail (now) then we have to reset the market,” said Yoshii. “It will be difficult to keep interest in the charter.”

According to Yoshii the decision was necessary as travel wholesale companies like MIT, JALPAK and the five other smaller wholesalers who sell block seats on the JAL charter say they need at least six months to successfully sell the Marshall Islands as a destination.

“Customers are interested in coming but giving notice of a charter only two-to-three months ahead is not enough lead time for planning,” said Yoshii. “(Japanese) customers tend to make their plans six-months in advance” plus wholesalers need to create flyers and other promotional materials to compete for customers in Japan’s hotly sought after travel market.

Knowing this problem, however, raises the question of why Japan Airlines has been announcing its charters only two-to-three months in advance.

The solution, although simple, is technical said Yoshii.

Since JAL started its direct charter flights into Majuro, Yoshii said there has been discussion with the Ports Authority and then Transportation Minister Michael Konelios on JAL’s need of turning lights at the end of the runway.

According to Yoshii the JAL charter flight is a 767 series aircraft and because of its wider body, the turning path is “just enough” to make its turn at the end of the Amata Kabua International Airport runway in day light.

Ideally though, he said, JAL would prefer night time arrivals and departures. JAL flights are already scheduled to handle their regular day time schedules, Yoshii said adding that JAL can only schedule a charter if one of its regular daily flights are cancelled or if there’s an opening.

“If JAL can arrive and depart at night then they can schedule the flights half-a-year in advance,” said Yoshii.

During the first two JAL charters, all 200 seats were booked solid because wholesalers had a five month lead time to sell the flights but after that, the passenger numbers started to lag bringing in between 150 and 180 passenger in the last four charters.

“JAL is  okay with the the last six charters,” said Yoshii, but he adds: “they’d like to do better. We want to get back up to 200 passengers. We’re looking at scheduling proposal of eight to 10 charter flights flights between July and December this year,” he said.

This, of course, is all dependent on the Marshall Islands installing turning lights at the end of the runway.  According to Yoshii, JAL executives told him they are keen on seeing the Marshall Islands become the next Palau.

“They want to see this succeed,” said Yoshii. “JAL would like to develop a strong relationship with the Marshall Islands.

“I believe that if we have the turning lights, it will be no problem for JAL to make its (charter) schedule decision — JAL’s  policies require 100 percent safety and they need these lights to operate at night.” On Friday Yoshii, the Marshall Islands Visitors Authority and Marshall Islands Tourism Association’s Chairman Ben Graham, met with newly elected Transportation Minister Dennis Momotaro to inform him of this issues.

Airline Adds Bonus Flight

Continental Micronesia has added an additional one-stop Island Hopper flight connecting Majuro with Guam and Japan for the peak summer months.

The one-stop Island Hopper will operate twice a week on Tuesdays and Saturdays during peak period: The one-stop will operate on Tuesdays beginning June 10 and ending August 12, and on Saturdays beginning June 14 and ending August 16.  The current Saturday one-stop flight will end on June 7, 2008 and re-start on August 23.

“The new timing on the one-stop will continue to let passengers make their connections onward to US mainland cities, and in some cases, the timings allow for better connections,” said Continental Micronesia Asia and Micronesia Director for Sales and Marketing David Kendell, who is based in Guam. The flight will operate twice a week on Tuesdays and Saturdays during peak season, and once a week during off peak season on Saturdays.

From the 1/25/08 issue of the Marshall Islands Journal

Cabinet Tackles Cars

President Litokwa Tomeing’s new administration has hit the ground running announcing on Monday two new Cabinet approved policies to cut government expenses.

The first announced by Minister in Assistance Christopher Loeak was a complete ban on government funds paying for alcohol at government functions or parties.

“Government money will not be used to buy alcohol,” said Loeak.

“All government functions will have a no-host bar and individuals can buy their own (alcoholic) drinks.”

The second policy he announced regarded government paid-for vehicles for the ministers.

Highlighting a lack of government funds and need to reduce expenses Loeak clarified that Cabinet ministers will be provided with vehicles to use while they are in office, but once they are out of office they have the option to purchase the vehicle or return the asset back to the government.

“If (the outgoing Ministers) don’t want to buy their vehicle then return them (to the government),” he said.

“This policy applies to all Ministers, Speaker and the Vice-Speaker who are provided with a government vehicle.” Following on from Loeak’s policy announcement, Minister of Finance Jack Ading asked for the former ministers under Kessai Note’s administration to return their vehicles which were issued to them. On Tuesday, it became evident that not all vehicles for ministers had been returned to the government.

Minister of Foreign Affairs Tony deBrum who was responding to a slew of questions by members of the UDP who wanted to know status of RMI’s foreign policy with respect to the Republic of China-Taiwan said that policy issues would be addressed after a proper review by the government of the nation’s current situation but he added the new ministers didn’t even have the basic tools such as computers in their offices or vehicles to carry out their day-to-day operations.

Former president Note then questioned this vehicle policy saying that the past practice has been for former Ministers to keep their vehicles.

“Some former ministers still have their vehicles, they never returned them,” said Note.

“But if this is your new policy then well see.”

Taiwan Helps AMI with $ 1Million

Taiwan Ambassador Bruce Linghu presented a check for $1 million to RMI Ministers Jack Ading, Dennis Momotaro and Tony deBrum last Friday.

The funding is to assist Air Marshall Islands to get its planes back in the air after more than three months with no service.

Linghu told the ministers that after he informed Taipei about AMI’s situation, he received a quick response, with President Chen Shui-bian promising funds to help. It took just over a week from Chen’s promise to the delivery of the funding.

DeBrum thanked the ambassador, saying he knew that it took significant “bureaucratic know how” to get the funding issued so quickly.

The airline is “developing a full recovery plan, which will be provided to the Embassy, so you can see that you are not throwing good money after bad,” deBrum said.

“You can count on our commitment and partnership,” Linghu said.

In a release, the Embassy said that “Taiwan attaches great importance to this cooperative and mutually beneficial relationship with the people and government of the RMI.”

From the 1/18/08 issue of the Marshall Islands Journal

Silver Shadow Coming to Town

A first big event kicking off the New Year for the local tourism industry is next month’s visit to Majuro of the Silver Shadow, a cruise ship run by the Silver Seas cruise line.

Its more than 300 passengers and 300 crew will hit town Saturday February 16 for a five-to-six hour visit that is expected to provide a shot in the arm for local businesses.

The cruise ship will anchor in the lagoon, and use RRE’s Shoreline for a staging area, company representative Bill Thayer told the Journal last week. He has been in town meeting with various officials in preparation for the first visit by this cruise ship company to Majuro.

Various handicraft and other local vendors are expected to set up booths for the arrival next month.

Majuro Marine’s Bori Ysawa is agent for the cruise liner.

Thayer explained that the number of passengers is small because this is a “high end” group on board, with an almost one-to-one crew-to-passenger ratio.

He’s hoping that this initial visit will stimulate more port calls by the company in the future.

“This region is poised for increased interest in cruise ship port calls,” Thayer said.

Majuro will be the vessel’s first port call in the Micronesian area. After Majuro it heads onto Pohnpei, Guam and Saipan, and then to the South Pacific and Asia.

Tony to Taiwan:  We’re Still Pals

By GIFF JOHNSON 

Marshall Islands Foreign Minister Tony deBrum last Friday reassured a visiting Taiwan government envoy of the new government’s support for relations with Taiwan. It is the strongest sign of support for links with Taiwan issued since the new government took over on January 7.

Although the relationship was called into question with the election of President Litokwa Tomeing, who before the vote had called for shifting recognition to the People’s Republic of China, deBrum, speaking for Tomeing Friday night, told Taiwan Vice Minister of Foreign Affairs Elizabeth Y.F. Chu that the Marshall Islands “cherishes the relationship” with her country.

Tomeing and most of his Cabinet turned out to welcome Chu Friday at a reception at the RRE compound hosted by the Taiwan Embassy in Majuro. Chu arrived in Majuro Thursday to meet the new President, and was to depart Saturday, but extended her visit through Monday to attend Monday’s inauguration for Tomeing. The two countries have had diplomatic ties for 10 years.

Taiwan President Chen Shui-bian in a telephone call to Tomeing Wednesday promised “all help” for the government’s ailing national airline, whose two planes have been grounded for more than three months. Chu confirmed Taiwan’s plans to inject a multi-million grant for the airline, and objected to this funding being labeled “checkbook diplomacy.”

Getting the planes flying again is “urgently needed for medical care because people (on remote islands) cannot get to hospital,” she told the Journal in an interview. “We come to help. It shouldn’t be criticized as so-called checkbook diplomacy.”

Taiwan Ambassador Bruce J.D. Linghu said Saturday that he expected the urgently needed funding to begin arriving this week. The funding will “take care of the costs to repair both planes and to cover airline bills that need to be paid,” Linghu said.

“We promise to repair Air Marshall Islands planes,” Chu said at Friday’s reception, sparking applause from the gathering of government and business leaders, including President Tomeing. “This is the most urgent need for everyone.”

At least one child from a remote rural island died late last year with no planes available to evacuate patients to the hospital in the capital, and the country’s flagship tourism business — scuba diving on the World War II fleet of warships sunk in Bikini Atoll’s lagoon — is in danger of being closed without the airline.

An airline official indicated that Taiwan had committed to providing $2 million needed to pay for parts and repairs of the 34-seat Dash-8 and 19-seat Dornier 228 aircraft. The airline official said they should be able to get the Dash-8 back in service within about three weeks from receipt of funds.

Linghu confirmed that the funding for the airline is outside the normal $10 million annual grant provided to the Marshall Islands. Taiwan is the second biggest aid donor to the Marshall Islands behind the United States.

From the 1/11/08 issue of the Marshall Islands Journal

Airlines Ready to Fill in for AMI

Three private airlines are interested in providing service in the Marshall Islands, the Marshall Islands Chamber of Commerce was told Tuesday at the Marshall Islands Resort.

But none can come in without the approval of the government. And Air Marshall Islands’ situation only complicates matters, with no quick fix in sight for its two grounded aircraft.

The current limbo of domestic air services prompted the Chamber to agree that it will await the appointment of the new Minister of Transportation and invite the new Minister to the next meeting to discuss possible options available to improve domestic air service.

Two weeks ago, the Cabinet approved a $1 million guarantee for AMI to seek a bank loan to resolve problems with both planes — but with a new government just taking over, the earlier government guarantee will have to be reviewed. Ben Chutaro questioned putting further money into AMI in its current status because the airline should be privatized, otherwise continuing to inject money is a waste of resources. Jerry Kramer said that Island Air, Cape Air and Freedom Air all have expressed interest in servicing the domestic market. “The government has to say ‘we’re out of the airline business’ to get a private airline in,” Kramer said.

Bikini Atoll Dive chief Jack Niedenthal said that the lack of AMI service is about to start costing the Bikinians large sums of money. “By the end of this week, I’ll have to cancel February’s dive schedule,” he said. “That will cost us about $60,000 in refunds.”

RMI Losing $8 million a Year

The Marshall Islands could be collecting $8 million to $10 million more in local revenues every year if it enforced tax laws already on the books.

That’s the conclusion of Ministry of Finance and International Monetary Fund (IMF) officials.

IMF official Raphael W.K. Lam estimates that 30-to-40 percent of available tax money is not being collected. “The potential loss (of revenue) is huge,” he said in a presentation to RMI government officials last month in Majuro.

He said there is a need to step-up tax compliance so tax collection is fair. But he also said that there are policies in the current system that need to be fixed, including such problems as the gross revenue tax being an unfair tax that favors low-turnover, high-profit businesses. He also pointed out that the duplication of tax collection and auditing by both national and local governments needs to be changed and simplified.

Lam commented on the unfairness of the present tax non-compliance level, the income and gross revenue taxes, and taxes withheld at the employer level but never filed or paid.

“Some tax policies contain inequities and distort incentives,” he said. “Import duties encounter difficulties in classification and valuation, GRT on revenue instead of net profit favors the business with a low turnover but a high profit margin, income tax is neither progressive nor regressive, and the deductible allowances are not applicable to every employee.”

Lam said that because of the weaknesses in the tax system there are a number of things that the government should keep in mind when designing tax reform.

He recognized that the government, “especially the customs, tax and revenue division, has undertaken some key steps in improving the tax system. To extend and multiply their positive efforts, we think there are certain key principles to follow in designing the future tax system.”

These boil down to simplicity and fairness, with the recommendation for one tax schedule, one collection authority, and simple but effective audit.

Four specific recommendations were offered by Lam:

• Continue the improvements in tax administration, which is the key to the proposed tax reform (especially on the non-compliance issue and duplicate efforts across revenue collection agencies).

• Involve key stakeholders for an open discussion of tax issues, addressing the major concerns and difficulties. Keep it transparent and circulate proposals among everyone involved.

• Harmonize tax collection by eliminating duplicate and dual efforts at the national and local levels, establish a sound and easy-to-manage sharing system to avoid arrears, develop effective auditing and collection, and enhance cooperation in compliance. Solve the tax debt that is owed between the national and local governments.

• Penalize repeated cases of non-compliance. Concentrate efforts on tracing the repeated and severe cases. This can be done by establishing and communicating to the public and business that the authorities are taking serious efforts to get businesses paying their required taxes. Share and learn from the success stories in MISSA. Show strong determination that the authorities are active for tax reform.

From the 12/28/07 issue of the Marshall Islands Journal

Will JAL Stick with the RMI?

 By GIFF JOHNSON

Two Japan Airlines flights this month is good news for local hotels and businesses, and it brings to six the number of charters this year. But after a hiccup-filled 2007, is JAL going to halt its charter service in 2008?

That question is being asked by some people involved, and last month’s charter that had only 100 passengers — half the number of previous charters — is fueling concern.

Marshall Islands Resort general manager Bill Weza, who describes himself as “Mr. Optimistic,” told the Journal that “no one has given up on it.”

But the latest “hiccup” to hit the still tenuous JAL-Marshall Islands relationship was a Ports Authority billing for landing fees that none of the tourism-related people wants to talk about publicly — but which was serious enough to spark a meeting with President Kessai Note late last week over concern that it could have a negative affect on JAL.

Both the November flight and the group that arrived last Friday were smaller than the three previous charters earlier in the year — only about 100 full-paying passengers.

Weza said that the Marshall Islands Resort used last week’s flight as a familiarization opportunity for JAL employees and others in the Japan tourism industry, which means very discounted rates for hotel accommodations. The lower revenue is a trade off with promotion: it gets more people involved from the Japan side clued into what the RMI can offer visitors.

But this weekend’s flight that will be over the New Year’s holiday is “solid” with passengers, Weza said.

Meanwhile, JAL has not scheduled any flights in January or February, with the first for 2008 now set for March 4-8. JAL sent a group to Majuro last month to evaluate the destination and to make recommendations about the airline’s long-term plans for Majuro.

What many people may not realize is the extent to which dive and tourism entrepreneur Satoshi Yoshii is going to make the JAL charters a long-term reality. For any flight that is not filled, Yoshii covers JAL’s costs out of his own pocket.

Local operations, including Yoshii, are also working hard to meet JAL needs. Weza said that JAL had asked Yoshii for upgrades on the dive boats and better-trained staff — both of which have been done.

Weza said that it is always a challenge getting a major airline like JAL into a new destination. “The stakeholders (hotels, restaurants, visitors authority) are trying like hell to make it work,” Weza said, adding that support from government is also key to its success.

 

Taking Care of our Heavy Metals

 Majuro’s dump is ready to export its first shipment of scrap steel, reports Roger Cooper, general manager of Majuro Atoll Waste Company.

“17.5 tons of scrap steel from the dump has been packed up into a container and is ready  to depart Majuro come January 8,” said Cooper.

An additional 60 tons, or three containers full of scrap steel, is expected to be packed up before the shipment date and sent to South Korea via an Australian company.

According to Cooper, MAWC may just break even on the cost of exporting the scrap steels off island.

“We expect these exports will have a minimum break even with a possibility of a little profit,” he said. 

Most of the scrap steel slated for export is from the dump but once that area has been cleared of scrap steel Cooper says they plan on targeting Majuro’s coast line.

Cooper also reports that MAWC is in the process of negotiation with an off-island company to export a 20 foot container of car batteries.

While the plans to export recyclable waste off Majuro is positive news, Cooper admits that the plan’s execution is heavily dependent on MAWC’s ability to get some funding for “desperately needed metal cutting and compacting equipment.”

From the 12/21/07 issue of the Marshall Islands Journal

We’re Watching the Fiber Optic Cable

 We have been reading about (and reporting on) the fact of substantial downsizing of the Kwajalein missile range operation, with more Americans (and a few Marshallese) leaving to Huntsville, Alabama as work of the range is “outsourced” to the US.

The fiber optic submarine cable that is supposed to be in place by 2009 will further reduce the US presence at Kwajalein, allowing more of the missile work to be done from the US. The point here is that what we’re watching happening at Kwajalein has a direct negative financial impact on the RMI, as fewer Marshallese will be employed by a reduced US presence, and fewer Americans means fewer tax dollars going to the RMI government.

So why are we participating in our own demise? First and foremost, under what provision of the Compact can the US government simply decide to run a cable through the RMI’s 200 mile exclusive economic zone? Here’s the current situation: the US government is going to install the cable to Kwajalein to improve communications there and reduce US presence there, reducing revenue to RMI. If RMI wants this cable that will revolutionize communications for Ebeye and Majuro, we’ll have to pay about $15 million, which will force the National Telecommunications Authority into further debt to the US. Isn’t there something wrong with that picture?

We’d be the last to begrudge the US government improved communications. But if it wants to plug into a cable that is going to mean a long-term economic decline for the RMI, then we should at least get some benefit from the cable. Our simple suggestion is a trade. The US can have its cable, provided it delivers a branch to Majuro and Ebeye at no charge.

 

Ebeye Inflation up 6%

Ebeye’s inflation rate grew at about one percent more than Majuro for fiscal year 2007, according to the latest consumer price index report issued by the government’s Economic Policy, Planning and Statistics Office.

The EPPSO report said that Majuro’s inflation rate grew slightly over one percent for the last quarter of 2007 (July-September), giving Majuro a 5.3 percent inflation increase for the whole year.

On Ebeye, prices rose by about 1.7 percent this past quarter, giving Ebeye an annual inflation increase of 6.14 percent, EPPSO said.

Main features in the price increases during this last quarter for Majuro were price hikes in food, utilities (though lower than the third quarter) and fuel, which jumped from $4.45 a gallon to $4.75.

For Ebeye, the main increases were in the housing/utilities/major appliances group, clothing and fuel. Food prices did not change significantly.

For both Majuro and Ebeye, no price increases were noted for alcohol.

Ebeye is still a more expensive place to live than Majuro, but the gap between the two is lower than a year ago. The government’s planning office has an 18-item “basket” for which it collects prices every quarter.

The basket includes such staple foods as rice, flour, a variety of canned meats, sugar, ramen, soy sauce, kerosene stoves/lamps, kerosene, gas, cigarettes and mosquito coils. That basket cost $126.40 on Majuro in October 2006 and $154.70 on Ebeye. The percentage different was 22.4.

The quarter ending September 2007, the same basket cost $130.60 in Majuro and $157.97 in Ebeye.

The percentage difference between Majuro and Ebeye shrank slightly to 20.9 percent.

From the 11/30/07 issue of the Marshall Islands Journal

Imata Kabua Looks to China

By GIFF JOHNSON

Although the postal absentee votes are still to be counted, AKA party leader and former President Imata Kabua told the Journal late last week that former UDP Speaker Litokwa Tomeing will be the next President of the Marshall Islands, and once in power in January the new government plans to recognize China, ending a nine-year relationship with Taiwan.

Kabua was President when the Marshall Islands switched diplomatic ties from China to Taiwan in 1998. But despite their earlier support for relations with Taiwan, both he and Tomeing say it’s time to adopt a “one China” policy recognizing the People’s Republic of China.

But the decision may not be final. Despite talk from Aelon Kein Ad party leaders of an imminent switch of diplomatic ties from Taiwan to China if they win control of the Nitijela, Kwajalein Senator Tony deBrum told Reuters this week that AKA will continue to support Taiwan if it wins an expected 20 to 22 seats in the 33-member Nitijela and forms a new government.

“There has been no change, no China item on our platform,” said deBrum, who describes himself “the architect” of his country’s nine-year-old relationship with Taiwan, Reuters reported.

The RMI shifted to Taiwan in late 1998 when deBrum was finance minister under President Imata Kabua’s government.

If the Aelon Kein Ad candidates’ leads hold up through the rest of the vote count, President Kessai Note will be out after eight years as President.  By law postal absentee ballots from the thousands of Marshall Islanders living abroad cannot be counted until December 4. With many of the races decided by only a handful of votes, no results can be final until after the postal votes are tabulated starting this coming Tuesday.

Bruce:  ROC is a “True Friend of the RMI”

By KAREN EARNSHAW

If the Aelon Kein Ad party takes power in the Marshall Islands, according to Iroij Imata Kabua, it will recognize the People’s Republic of China, putting the country’s nine-year diplomatic relationship with the Republic of China (Taiwan) at serious risk.

Responding to this possibility, the ROC Ambassador to RMI, Bruce Linghu, told the Journal this week that “of course this kind of news may sabotage our relationship with RMI, and this is of grave concern to us.”

But Linghu emphasized that the ROC works with the elected government of each country it recognizes.

Reaffirming ROC’s commitment to the people of the Marshall Islands, Linghu said: “There are many ways people here can feel we are a true friend. For nine years, I believe he have a given good help.

“In that time we have done three or four hundred projects. I believe the people can see the goodwill and value of this help and also that our relationship is based on mutual respect.”

On why mainland China is so eager for their ‘One China’ policy to become a reality, Linghu said: “It’s a doctrine; a dogmatic thing to the leaders. No-one can soften their attitude to Taiwan. It’s a national chauvinism.

“The so-called One China policy is a myth.”

In October, Taiwan celebrated its 96th anniversary of sovereignty. “Taiwan has prospered since the 1940s. It has become a modernized, democratic country enjoying freedom of speech and human rights.”

In contrast, Linghu said that mainland China “has a big gap between the rich and poor. And maybe they should be spending more money on solving their over problems, including the living standards of their people ... rather than spending money making missiles that are pointed at Taiwan.”

On China’s desire for the reunification of Taiwan: “China says that it wants one country with two systems, but Taiwan is not Hong Kong or Macau. They were colonies, we have our own constitution, sovereignty and military.”

The Taiwanese government is planning on holding a referendum next year asking the people if they are behind having a seat in the United Nations. “We think it’s not justifiable that our 23 million people have had no representation at the UN since 1971,” Linghu said.

“It’s really inconvenient to not be in the UN as it’s such an important organization. The referendum is to show the world that our people want international status. We want to be a contributing member of the international society.”

Speaking on the history of China and Taiwan in the Marshalls, Linghu pointed out that it was Imata Kabua’s government that recognized the Republic of China in 1998. “At that point the Chinese walked out,” Linghu said. “They walked away from the Marshalls.”

When asked if the AKA party wins the national election and chooses to support mainland China, will Taiwan walk away from the RMI table, Linghu stressed he wasn’t going to answer a hypothetical question of this nature. Instead, the Ambassador said: “We used to be good friends with AKA.

“There’s no-one in government that we can’t work with. And we have always been appreciative of RMI’s efforts internationally.”

From the 11/16/07 issue of the Marshall Islands Journal

Bruce Bilimon: Together We Can Do It

Ministry of Finance’s Customs and Revenue chief Bruce Bilimon wants to level the playing field for all businesses in Marshall Islands.

And the way he wants to make it happen is through direct approaches with the head of each business to gain their cooperation.

“Consultation is the way to go,” Bilimon told the Journal. “I want each manager to personally understand the process.”

Since pushing a new import policy into place last month, Bilimon said that he’s met with the managers of most businesses here to explain the plan. Bilimon said he explains the conditions. “If you play by the rules, everything is okay,” he said. “If you break the rules, here’s the policy we follow.”

Bilimon said the Custom’s office ranks businesses as low, medium or high risk, with a preference on speedy processing of imports given to the low risk group.

“The treatment Customs provides is based on the data that they provide,” Bilimon said.

Bilimon said when businesses send their lower level staff, he’s told them to have their top managers come by because “I want to meet face-to-face with the manager of each company so they understand the process.

“If their company breaks the rules, that means (their next shipment will get) inspections. If they break the rules, they lose privileges.”

The goal of this is to “level the playing field for businesses,” he said. “It’s not our intention to penalize businesses.” The message that Bilimon stressed he wanted get across to businesses is that “if they follow the rules, it’s good. If they do things illegally, there will be a penalty.

“Some people say that it is impossible (to get businesses to cooperate). No, it’s not. It’s just because no one has tried. If I can get it to 80 percent (compliance) that’s great. The next guy can bring it to 100.”

 Will We Lose Guam Job Boom Opportunities?

Opportunities for Marshallese workers may disappear with the plan of the US Congress to make it easier for Filipinos and other non-US citizens to get temporary work visas to work on Guam, the head of the Marshall Islands Chamber of Commerce said this week.

Responding to a report in Pacific Daily News last week, Chamber President Jack Niedenthal said the opportunities for islanders from the freely associated states promoted by US officials at a big conference on Guam last month may not materialize. A US House of Representatives committee last week voted to exempt Guam and Saipan from the limit on “H-2” visas. Guam officials welcomed the development because Guam does not have the labor to support the estimated 15,000-20,000 extra workers needed for the upcoming construction boom for US military expansion there. The US limited H-2 work visas to just 66,000 nationwide, with Guam getting only 1,400 this year. The advantage that Marshallese and other freely associated state citizens have is they do not require work permits to enter Guam and the US. “If they loosen the visa restrictions it will limit the availability of FAS citizens to get better jobs on Guam,” Niedenthal said.

He also expressed concern over the fairness of this proposed easing of the law in regards Guam and Saipan while Marshall Islands employers “have all these problems getting Philippine workers here. It seems unfair.”

 From the 11/2/07 issue of the Marshall Islands Journal

Dash-8 Landing Gear Corroded

Air Marshall Islands kept its two month run of bad luck unbroken this week, when mechanics discovered additional problems with the Dash-8 that mean it is not going to get back in the air anytime soon.

Although the Dash-8 has been grounded since October 10, it wasn’t until Wednesday this week that mechanics found additional problems — corrosion — in the landing gear of the plane, which means the entire landing gear, not just some parts, need to be replaced.

AMI general manager Dan Fitzpatrick called said it will result in a huge replacement cost and much more down time for the Dash. “It should have been known in the first few days after the plane was first grounded, not three weeks later,” he said.

But this followed the equally “devastating news” that Fitzpatrick received earlier on Wednesday this week that a key part for the Dash that just arrived is the wrong one.

Because of these new problems, AMI has changed its plan of action from attempting to get the Dash in the air first to getting the Dornier fixed.

All the parts needed to fix the Dornier are here, and it could be in the air in as few as 10 days if “we get all hands on deck,” Fitzpatrick said.

All of the mechanical woes have been complicated by the move from the old hangar and airport office area out to the lagoon side hangar, Fitzpatrick said. The computer that housed the parts inventory for the airline blew up when it was plugged in at the hangar, he said — just one of the problems they’ve faced.

“I can’t believe our run of bad luck,” he said, adding that AMI’s woes since August have resulted in essentially two months of no revenue for the airline.

EU Okays RMI Fish Exports

A big breakthrough in talks with the European Union (EU) will pave the way for fish exports from the Marshall Islands for the first time.

R&D Minister John Silk told the Journal Saturday that the opening of the EU market to the Marshall Islands and other small islands in the region promises a big economic boost for the islands.

Up until last month, the EU — which represents 27 European countries — had set fish export regulations that prevented most Pacific islands from any possibility of ever exporting the one big resource available for export: fish.

This is because the EU was demanding that for fish to be exported into the EU it had to meet “rules of origin” that included that 50 percent island ownership of the fishing boats and a 50 percent local crew.

Silk said for the Marshall Islands and other small islands, this requirement prevented any possibility of exports to EU countries, despite the fact that fish handled and processed in Majuro is now being exported to the US and Japan.

Marshall Islands Fishing Venture, which handles the export of sashimi-grade tuna from Majuro to the US and Japan, has for several years been keen to gain access to the big EU market.

Last month, the EU negotiators changed their position, and dropped the requirement of 50 percent ownership and crew.

“We’ve been negotiating with them for three years on this,” Silk said. “It’s a big breakthrough.”

An agreement is expected to be signed next month that will open the EU doors to fish exports from the RMI and other islands.

Silk said it has the potential for increasing employment to Marshall Islanders as the demand for fish transshipped out of Majuro will grow tremendously with the opening of the EU market.

From the 10/26/07 issue of the Marshall Islands Journal

Bishop Gives us a Jump on the Guam Jobs

By GIFF JOHNSON

US Ambassador Clyde Bishop wants Marshall Islanders to cash in on the economic boom that is about to strike Guam in the form of a $14 billion military expansion.

“There is a need for a considerable amount of labor on Guam,” Bishop said to Finance Minister Brenson Wase last week during a Compact funding presentation.

“I’d like to see the Compact states get the benefit.”

There is an urgent need to get Marshallese trained so they have marketable skills in construction-related trades, he said.

An estimated 15,000 workers will be needed over the next several years, and Guam does not have the population to provide this number of new workers, Bishop said.

There is still time for Marshallese to take advantage of the opportunity, because the US military is now in the planning stages for relocating the 8,000 US Marines and their families from Okinawa to Guam.

Bishop indicated the construction boom on Guam will kick in in about two years.

Bishop attended the Department of Interior-sponsored Business Opportunities in the Islands conference held earlier this month on Guam, where he, along with the other attendees from the Marshall Islands including R&D Minister John Silk representing the national government, received an update on Guam military developments.

Wase noted that Pacific International Inc. already had skilled workers who had worked on a variety of construction projects with PII on Guam.

For non-skilled Marshallese, “we may need to restructure our vocational program,” he said, adding that the US-based Job Corps program has produced very highly skilled Marshallese graduates.

Islanders from the RMI, Federated States of Micronesia and Palau have one big advantage over non-US laborers recruited from such places as the Philippines — they don’t need visas to enter Guam to work.

“Bishop said this should make workers from the freely associated state nations “attractive to the contractors.”

He also said that there is a push to get contractors to agree to designate a certain number of the estimated 15,000 new jobs for workers from the three island nations, Bishop said.

“I’d like to see people (in the RMI) who are now sitting around looking at the ocean get trained and skilled so they can get jobs (in Guam),” he said.

Construction companies and other firms that will be hired to develop Guam for the US military will likely try to recruit most of their labor from the Philippines, and may be seeking to increase the US quota for temporary visas for workers.

But getting a visa in the Philippines now takes as much as six-to-eight months of lead time because of more stringent security precautions in effect — making recruitment of labor from RMI, FSM and Palau all the more attractive.

Guamanians will get first priority for jobs, “but there are no where near the numbers needed for this project on Guam,” Bishop said.

“There are still two years until the construction begins, so there’s time to train people,” Bishop said. “We need to increase awareness of the opportunity and then move to training. If we have the skill levels (in the RMI) I can’t see contractors not getting their labor from here.”

 

Internet for 3 Cents a Minute

The National Telecommunications Authority is set to slash its Internet prices starting next Friday.

NTA general manager Tony Muller told the Marshall Islands Chamber of Commerce in an email that beginning on November 2 through the end of February, NTA will greatly reduce Internet rates.

“We’re doing the four month trial to see if the business volume and individual subscriber base increases as a result,” Muller told the Journal this week.

He noted also that NTA was the only utility that has consistently reduced its prices to the public.

NTA’s significant debt, with the possibility of additional debt for the new fiber optic cable, makes it extremely difficult for NTA to discuss changing prices, Muller said.

During this trial period, regular dialup Internet, which now costs customers $3.60 per hour (or six cents a minute), will be cut by 50 percent to $1.80 per hour or three cents a minute Business rates for various speeds of Internet connection will also decline sharply.

Muller said the following rates will apply for the different levels of business service:

• 64kbps line will drop from $800 to $600/month.

• 128kbps line will drop from $2,000 to $1,100/month.

• 256kbps line will drop from $3,000 to $2,100/month.

• 384kbps line will drop from $4,000 to $3,000/month.

• 512kbps line will drop from $5,000 to $4,000/month.

The NTA wireless system will not change from the current 10 cents a minute ($6/hour) charge. Wireless service is now available in the Marshall Islands Resort area, at NTA, RRE and its Shoreline area, Payless and Long Island Hotel area. Compared to Internet dial up service, which runs at a 56K pace, the wireless service operates at a speedier 512K pace.

From the 10/19/07 issue of the Marshall Islands Journal

Air Tugaru Rescues Stranded Divers

By GIFF JOHNSON

For the second time in as many months, scuba divers are being evacuated from Bikini Atoll, following the grounding of all of the national airline’s planes.

The Bikini Atoll Dive program chartered an Air Tugaru Casa aircraft from neighboring Kiribati to get the eight divers off Bikini and back to Majuro.

But lest you think a successful evacuation with an off-island air carrier is a foregone conclusion, think again.  Air Tugaru flew from Majuro to Kwajalein early Tuesday, and — like Air Marshall Islands Dash-8 a week ago Wednesday — suffered a mechanical problem while on the ground at Kwajalein and was forced to abort the flight to Bikini and return to Tarawa, Kiribati for repairs.

The Air Tugaru flight returned on Wednesday to collect the divers and got them to Majuro by early afternoon. But there is no indication when AMI will get its planes back in the air.

The Bikini dive program has already cancelled the scuba dive group that was scheduled to fly to Bikini next week Wednesday because of the uncertainty about AMI service, said Bikini official Jack Niedenthal.

Not everyone, however, was anxious to get off Bikini, according to Niedenthal and Bikini Atoll Dive manager Lani Kramer.

Two divers from The Netherlands were enjoying their diving at the northern atoll so much that — despite the uncertainty over service by AMI and now Air Tugaru — they extended for another week. The fleet of World War II US and Japanese naval vessels on the lagoon floor has drawn thousands of divers to Bikini over the past 11 years. Niedenthal estimates the latest airline disruption will cost the Bikinians $50,000 in refunds to disgruntled divers — some of whom have come from as far away as Europe to dive on the World War II fleet of sunken naval vessels at this former nuclear test site.

Coupled with the $100,000 that the dive program lost through cancellations and refunds following a halt to air service in August, the airline woes have cost the Bikinians nearly their entire anticipated profit for 2007, money that is used to support the islanders who 60 years after the first nuclear tests are still living in exile.  “We were completely sold out from August to November,” said Niedenthal. Since the August stranding of divers at Bikini, there have been 27 cancellations of fully paid reservations and other divers who couldn’t get to Bikini had to be reimbursed, he said. “Although we have no control over the problem, it’s really hurting our reputation,” said Niedenthal.

Both AMI planes were grounded with engine problems for three weeks in August and September, and have been down again since last Wednesday, October 10. In late August, the government was forced to dispatch its marine surveillance patrol boat to Bikini to bring back a group of visitors from Australia, Canada and Europe — a 36-hour trip over the open ocean.

But Kramer said that the earlier group of evacuees actually enjoyed the extended boat ride back from Bikini on Lomor. “They said they loved the trip on the patrol boat,” she said.

From the 10/12/07 issue of the Marshall Islands Journal

ROC Spends Big on Majuro Summit

By GIFF JOHNSON 

Taiwan is sparing no expense to ensure a successful second Taiwan Pacific Allies Summit this weekend in Majuro — and Marshall Islanders have been out in force beautifying Majuro for this weekend’s influx of international summit representatives.

With the exception of Palau President Tommy Remengesau, Jr. and his delegation, everyone is being flown in by Taiwan government-chartered planes.

Taiwan is chartering a Jetcorp Australia plane to fly in heads of state and their delegations from Nauru, Solomon Islands, Kiribati and Tuvalu on Thursday, bringing President Chen and an entourage or more than 120 on a China Airlines chartered airbus 340 on Friday, and then chartering a Continental Airlines plane to fly the presidents and prime ministers to the annual Pacific Islands Forum leaders meeting in Tonga that begins immediately following the three-day summit in Majuro this weekend. Palau’s delegation arrived on Continental’s regular flight Wednesday.

It’s not only been a logistical challenge to get the delegations from five scattered island countries to Majuro, which is not on any air route from south of the equator. In addition, because of its small tourist base and few hotels, Majuro has proved a logistical challenge to organizers handling local arrangements because of the large number of summit attendees, media covering the event and security and other support staff. The visiting island delegations range in size from six to nine.

The $5 million International Conference Center funded by Taiwan will be officially opened Friday morning to host the meetings. The magnificent meeting facility is a showcase addition to Majuro and while there may be a few construction details to complete in the weeks to come, Pacific International Inc.’s Herculean effort has produced a spectacular meeting venue in just seven months’ time.

“We’re creating a Majuro miracle,” said Majuro-based Taiwan Ambassador Bruce J.D. Linghu.

The last time the Marshall Islands hosted a similar, though bigger, regional event — the Pacific Islands Forum in 1996 — it had accommodation help from an Australian naval vessel that anchored in Majuro’s lagoon.

This time, every hotel room at the Marshall Islands Resort, Long Island and Robert Reimers is booked out, with some of Taiwan’s advance staff having to double up or stay in ROC Embassy staff quarters.

For organizers, the summit has come down to solving three transportation issues, which Linghu calls the “three dimensional challenge”:

• Air transportation to get the delegations to and from Majuro.

• Vehicles to move the VIPs and their delegations from airport to hotels to the conference center and to other events.

• Boats for Sunday’s leaders fishing tournament — the latter, no doubt, the most easily solved.

“Through good coordination we’ve gradually solved all the logistics,” said Linghu.

Meanwhile, RMI government workers and many local residents have been hustling a big cleanup in preparation for the arrival of the many foreign dignitaries and the international media contingent.

From the 9/28/07 issue of the Marshall Islands Journal

Engine Checkup Rules Airline's Activity

The Dornier operated by Air Marshall Islands is expected to be back in the air by this weekend, following the return of an overhauled engine from the US.

Air Marshall Islands Dornier is the primary plane for servicing smaller runways throughout the country. It has been grounded since August 18, or more than five weeks, as mechanics have worked to find problems with one engine that caused the plane to be grounded. Transportation Minister and AMI board chairman Mike Konelios had told the Nitijela late last week that the Dornier was expected back in service on Wednesday this week, but a string of “hiccups,” unrelated to the Dornier’s engine, have delayed service until this weekend at the earliest.

AMI general manager Dan Fitzpatrick told the Journal that the airline paid off a bill for a spare engine that was overhauled recently in Los Angeles, and that engine is in the process of being installed but because of an engine problem on the Dash-8, which caused the cancellation of flights on Monday, AMI mechanics were pulled off the Dornier to work on the Dash-8 to make it serviceable again.

Following that, AMI’s mechanics were again unable to continue installing the Dornier’s engine on Tuesday because the portable generator AMI uses to operate at the new Airport hangar burnt up.

In the next few days, two components from the engine on the plane that reportedly shut down during a flight on August 18 are to be sent off to the Los Angeles factory to be checked. Despite extensive tests by AMI mechanics since August 18, “all our ground tests have been negative for everything (the manufacturer) asked us to do,” he said. But to get the engine back in service, the airline has to have the manufacturer run tests on these two parts, which are expected to cost up to $15,000 each.

AMI’s plan is to get these parts back after testing, fix the engine, and then reinstall it to replace the other engine that will soon be due for its regularly scheduled overhaul at the LA facility. This should minimize “down time” for the Dornier, he said.

JAL Visit helps up Tourism numbers to 4,000 in 2007

In the first six months of 2007, nearly 4,000 people visited the Marshall Islands, according to data collected by the Marshall Islands Visitors Authority.

This is a 55 percent rise on the same period in 2006 and is mainly a result of three Japan Airlines charter flights.

The 3,842 visitors do not include yacht or fishing vessel skippers and their crew.

Of this figure, 1,182 of the visitors are considered to be ‘true’ tourists (as opposed to business-related visitors), compared to 527 last year.

The MIVA data shows an increase in the number of holiday visitors from Australia, Korea and Taiwan, but this trend will change in the second half of the year due to the discontinuation of Our Airlines flights.

The MIVA statement continued: “On the bright side, the total number of Japanese travelers for the first two quarters of 2007 has already exceeded the amount for all of 2006 and JAL has scheduled another three charter flights before the end of the year with an anticipated 200 passengers for each flight.”

The average length of stay for the holiday visitor was approximately five days with an estimated daily expenditure of $150.

MIVA said this equates to “about $775,000 being injected into the local economy during the period.”

From the 9/21/07 issue of the Marshall Islands Journal

Allotments Don't Leave a Lot in Your Paycheck

Can you imagine a paycheck in Majuro that doesn’t have money deducted for one or more allotments?

Life in the RMI is generally one big allotment, particularly for government workers.

On average, national government employees receive only 25 percent of their biweekly pay. That’s because the other 75 percent of the total $1.2 million biweekly RMI payroll bill is paid directly by the Ministry of Finance to banks, utilities and private businesses.

But in the private sector not all companies provide allotment service to their employees.

When Payless took over from Gibson’s more than two years ago, it stopped letting employees do allotments except to banks largely because it was a headache for the accounting staff. “It was a lot of work for our accounting staff,” said Payless general manager Jason Burgess. “That’s why we scrapped it when we took over and only deal with the banks.”

Burgess said that the deductions required by the banks are “never too excessive,” so “we have no issues” with employee allotments to the banks.

Another private business views allotments as a service to its workers. Momotaro Corporation’s Dennis Momotaro says “it’s a service we provide for our staff to make it more convenient for them.” Momotaro acknowledges that allotments create more work for the company and that he would rather give employees their full pay. But Momotaro’s decided to offer allotment services as a benefit for its employees.

“It helps our employees,” he said. “For employees it’s harder for them to get around in a taxi to pay bills or go to the bank — this systems helps with their time. With allotments you have one check that covers the payments of 10, 20 or more people. Can you imagine the lines at the utility companies or the banks if everyone had to go make payments?”

Pacific Basin Wholesale’s Michelle Stanley-Chutaro said, however, her company stopped allowing allotments last year because it came to the point where it began to “cross the line between parenting and being an employer.”

She said she “chose not to be a parent.” Now time is saved on preparing payroll and she’s happy that Pacific Basin’s employees are managing their own finances.

Maji and Map Vision stores have a slightly different policy on employees need for loans.

Because of a high rate of staff turnover, Maji and Map Vision’s Leander Leander says his companies do not offer allotments. Instead they will offer advances on pay but only up to three weeks.

Ace Hardware allows employees to have allotments and doesn’t limit how much an employee’s paycheck is applied to allotment. But manager Yuichi Yamaguchi says as a rule of thumb he makes sure that employees at least have $10 in their pay check at the end of a pay period so that employees can at least taxi to work the following week.

Yamaguchi sees the allotment system as a way to help employees with their big purchases.

“If they ask for an allotment and it’s possible we’ll allow it,” he said.

Grant Labaun of G&L Enterprises said that, like Payless, he limits employee allotments to the banks. But he expressed concern about employees who allot out their paychecks to the point where they have only a few dollars — or pennies — in a paycheck. “How can you live with only $10 net pay?” Labaun asked.

 

Peleliu Visit Nets RMI $1.5 milion Worth of Smiles

The 10-day humanitarian assistance visit of the USS Peleliu injected an estimated $1.5 million into the local economy, according to US and RMI officials.

Navy statistics tell an impressive story of both economic and non-economic benefits for RMI’s approximately 52,000 residents, the US Embassy said in a release. 

US Navy doctors and medics, NGO volunteers and foreign medical staff performed 65 surgeries, provided dental treatment for 288 adults and 297 children, distributed 2,098 prescription eyeglasses, and treated more than 5,000 individual patients. The grand total of 20,470 medical services provided to the RMI included primary care, pediatric care, immunizations and prescriptions, the Embassy said.

Navy SeeBee engineers completed a variety of construction and renovation projects. While the value of labor and transportation has not been calculated, the cost of construction materials alone totaled more than $162,000.

Seven projects were completed on Majuro.

On the outer atolls, the engineers installed nine solar panel systems at outer island health clinics. The systems include medical refrigeration units, AM transmitting radios, and lights. The nine include one on Mili Atoll, four on Maloelap Atoll, one on Aur Atoll, and three on Arno Atoll. The particular atolls were selected because they are all located within helicopter range of Majuro.
On nearby Arno Atoll, twelve Navy SeeBees teamed up with four Indian engineers and Marshallese workers to renovate the Arno Elementary School, installing a new roof, windows, doors and a rain catchment system. The team resided on the atoll for a week in order to accomplish their mission.

While in Majuro, the Navy purchased port logistic services, including waste and garbage removal, local security support, cell phones and communications services, piloting fees, rental of vehicles and other equipment, and a variety of other services. The Navy calculates that a total of $600,225 was infused directly into the RMI economy, and another $300,000 worth of medical and construction materials was expended during the mission, the Embassy said.

Significantly, these numbers do not include the pocket money that the ship’s company, some 1,600 people in all, spent at local businesses during their six days of shore leave. The Marshall Islands Visitor Authority has estimated a total, based on responses from only half of the businesses queried, of over $400,000.

Capping off the visit on September 5, Project Handclasp donated 30 pallets of new clothing, medical supplies, toys, and schoolbooks. These were distributed to three RMI nonprofit organizations: RMI chapter of the Salvation Army, KIO Club and Marshall Island Council of NGOs.

From the 9/14/07 issue of the Marshall Islands Journal

Marshall Islands Chamber of Commerce Airs Concerns About Telecommunications in the RMI

Chamber of Commerce members said they want telecommunications service that is quicker, less expensive, and more reliable. They also expressed the urgent need to extend Internet access to public and private school students from kindergarten to 12th grade.
The current situation with the National Telecommunications Authority is “denying the whole country the miracle of this century,” said Pacific International Inc. head Jerry Kramer.
A major stumbling block to expanding Internet use in the RMI is that NTA is now out of bandwidth, which means that adding more customers simply leads to slower and slower service as everyone competes for the limited amount of room for traffic in the limited communications “pipe.”
“We're out of capacity,” said Bank of Marshall Islands Jim McLean. “We're fully using the bandwidth. Everyone who has leased lines (for Internet service) is fighting against each other.”
On the cell phone front, TSL Enterprises manager Mike Slinger said the government could direct NTA to contract out the cell phone service to make improvements.
A key stumbling block for NTA is its large debt to the US Rural Utility Service (RUS), which lent it money in the early 1990s for telecommunications upgrades in the RMI. NTA now owes about $14 million on the loan.
But people at the meeting questioned the policy of government, which controls the NTA board, in allowing regular dividends to be paid despite the large debt.
Brian Vander Velde commented that globally in the telecommunications business, the goal is to keep the price of service going down, while the volume of use is going up. The point is telecom companies keep excess capacity that they fill with more users, and drop the price as the volume increases, he said. But NTA may be trapped because of debt and other issues so it's holding prices and capacity steady. Vander Velde said there are a number of business possible opportunities for RMI in attracting overseas telemarketing “but to do this, the volume has to be going up and the price down.” US Ambassador Clyde Bishop asked if NTA's debt to the RUS was “contributing to the ineffectiveness of NTA.” “Absolutely,” was the reply of several people. Commenting on the debt issue, David Utter said that a few years ago, a proposal was circulated by government to allow for Internet service competition by 2007.
But when he asked government officials about progress on this, NTA's debt situation was used as the reason competition cannot be allowed, he said. “What about selling NTA outright and paying off the debt?” he asked. Senator Gerald Zackios said the government needs to address NTA's debt situation.
He said that in 11 of the last 17 years, NTA has paid a dividend to its shareholders. A majority of shares are held by the RMI government.
“Why is the government allowing dividends to be paid when NTA has outstanding debt,” Zackios asked.
Kramer said the lack of competition in communications was a big concern because “without communications, we're completely out of business.” He also said that he understood the problems affecting NTA management, adding that the issue is the ownership of NTA by the government.

Responding to questions from the Journal, NTA general manager Tony Muller totally disputed the contention that there is an Internet capacity problem in the RMI and said plans are in place to reduce Internet charges.
In an email response to the Journal, Muller commented on the RMI's high Internet charges compared to other islands in the Pacific.
“We have a plan in place, pending board approval, to continue reducing Internet tariff, especially to our schools,” Muller said. “NTA has continued to improve service, upgrade equipment, discount rates, and expand services on the urban centers and outer islands.”
Among issues for NTA are “the volume loss of fax and international traffic, under-priced local service tariff (based on International Telecommunications Union costing exercise performed in FY98), the mounting losses from outer island radio operations, coupled with the higher cost of fuel, utilities, newly imposed taxes and operations in general” - all of which mean “the company relies on certain sector earnings to support the business.”
Muller added that “our vice chairman (Charles Dominck) assured the Chamber of Commerce that a board review on tariffs is forthcoming. The board is scheduled to meet on the 21st of this month.
As to numerous business and education representatives commenting about limited bandwidth for Internet, Muller said simply: “This is an untrue statement.” He didn't offer any additional information.
As to why NTA pays dividends when it has a $14 million loan debt to a US agency, Muller said “NTA meets the requirements of the RUS security and mortgage agreement for dividend issuance.” He also said “the company has over 600 Marshallese private shareholders; why wouldn't we declare a reasonable return on their investment?”

Senator Tomaki Juda Calls for NTA Competition

By GIFF JOHNSON

A bill to allow competition in telecommunications for the first time was introduced Wednesday this week into the Nitijela by Kili/Bikini Senator Tomaki Juda.
Speaker Litokwa Tomeing assigned the bill to the Resources and Development committee that is chaired by Senator Nidel Lorak.
Currently, RMI law bans competition in telecommunications in the RMI, with the National Telecommunications Authority (NTA) designated by the government as a monopoly.
The bill, which aims to amend the NTA law, would specifically “allow, encourage and enlist private sector participation in the delivery of telecommunications services to persons in the Republic.”
It would also change NTA's “exclusive” rights in the telecommunications sector to “non-exclusive” to allow competition.
Introduction of the bill comes on the heels of increasing concern and complaints over NTA-provided Internet, email and telephone service in the RMI, as well as the cost of Internet in the RMI compared to other Pacific island countries.
A forum on telecommunications sponsored by the Chamber of Commerce Tuesday produced an outpouring of concern from business and education officials. NTA management did not attend despite an invitation from the Chamber, but board members Charles Domnick and Patrick Chen did.

From the 9/7/07 issue of the Marshall Islands Journal

Companies Hit Hard by Internet Woes

By GIFF JOHNSON

Government, business and private customers using NTA’s Internet and email system have been beset with a variety of difficulties since the company’s Internet server suffered a major problem at the end of July.

But since August 23, virtually all emails containing attached documents either could not be sent or took days — instead of seconds or minutes — to arrive at their destination.

This sparked numerous complaints to NTA, and Marshall Islands Chamber of Commerce president Jack Niedenthal said in a letter this week to Transportation and Communications Minister Mike Konelios “I have never received so many phone calls and complaints about the Internet and cell phone systems here in the RMI (during the past month).”

The problem since at least August 23: NTA’s service became embedded in an Internet zone used heavily by spammers, which all Internet services globally filter out to protect their customers from the unwanted email. “The bottom line is that Internet Protocol (IP) addresses on which our mail server and gateways now reside is being blocked by many servers,” Muller said last Friday.  “The end result is that NTA customers, especially the ones with attachments will be rejected by most Internet mail gateways.”

On Monday, NTA general manager Tony Muller in an email for Chamber of Commerce members said “we are currently approximately 90-95 percent back to full capacity.”

On Wednesday, further improvements were made but “.mil” — US Defense Department — addresses and a few others were still a problem and stuck in NTA’s server because they were still being rejected by the recipient Internet servers. NTA last week began changing its IP address, to avoid the spam rejection problem, but the process to change it and, more importantly, to get it recognized by Internet servers worldwide could take up to three weeks, Muller said Friday.

Muller noted that NTA information technology staff had been working late nights to fix the problems, and Niedenthal told Konelios that “we very much appreciate these efforts,” though he added that “these glitches and problems have had an enormous impact on the business community.”

Niedenthal also told Konelios that the Chamber is sponsoring a forum on telecommunications at next Tuesday’s business meeting at Marshall Islands Resort, in part to offer “ideas for making telecommunications better in the RMI, including the allowance of private sector competition with NTA.”

He added that NTA’s Internet prices are “by far the highest in the Pacific” and the “business community would like to see this change as soon as possible.”

Money Mover Opens

The Western Union Company is expanding its services in the Marshall Islands with the signing of an agreement with the Marshall Islands Postal Service, the company announced late last week.

“The partnership will further enhance our coverage in the Marshall Islands, connecting the people of the island state to the world and vice versa,” said Chris Cruzado, Western Union’s Pacific Islands director. “Doubling our partners’ location network in the Marshall Islands overnight demonstrates Western Union’s market leadership and our commitment to our customers in the region.”

Partnering with Marshall Islands Postal Service adds three locations: in Ebeye, Uliga and Delap.

At any of the Marshall Islands Postal Service locations, customers can buy Western Union money orders or send money by Western Union’s wire transfer service.

“The Marshall Islands Postal Offices occupy prime locations across the islands, covering major business and tourism districts,” said postmaster Sailass Andrike in a statement issued by Western Union.

“Our partnership with Western Union enables us to reintroduce the money order service, which has proven highly popular with our customers in the past, and to benefit more people directly by providing fast, reliable money transfer services conveniently where they live, work and travel,”

Western Union’s services have been available in the Marshall Islands for over 10 years, through two existing locations in Ebeye and Uliga operated by agent Robert Reimers.

From the 8/31/07 issue of the Marshall Islands Journal

Loining Plant Update

Construction work at the future loining factory in Majuro is on track to be completed by the end of September, according to company officials.

Pan Pacific Foods (RMI) Inc., owner of the under-construction facility, will start testing its equipment next month, according to plant manager Don Xu. That testing is a key step prior to the plant being able to open and, depending on how quickly that moves, will determine when the plant can actually begin processing fish.

Xu indicated that that the Marshall Islands Marine Resources Authority (MIMRA) is helping the company in a number of areas to speed the process.

He said that the company hoped to begin recruiting local workers next month and then to begin a training process. He is also hopeful that Pan Pacific Foods will be able to hire some of the workers who worked at the loining plant when it was run by PMOP because he expects that they will have a higher level of expertise that will assist the plant in its operations.

He reconfirmed earlier promises that the plant will be bringing in expatriates only as supervisory staff, but will hire all other labor locally.

He said the company has just signed an agreement with a Philippines-based company to provide six supervisors to oversee equipment and production at the factory, as well as train local workers. He said he was hopeful that this group of supervisors will receive their work permits expeditiously, since the training program — which must be done before the plant can get into operation — depends on their arrival.

From the 8/17/07 issue of the Marshall Islands Journal

President Note creates Economic Council

A new Marshall Islands Economic Development Advisory Council is being established to improve communication and the exchange of recommendations between the business sector and the national government.

Last week, President Kessai Note asked the Chamber of Commerce to name two representatives and the Marshall Islands Business Association to nominate one member to the six-member Council.

At Tuesday’s Chamber of Commerce meeting it was unanimously agreed that the president and vice president of the Chamber will represent the organization.

That will put Chamber head Jack Niedenthal and vice president Hirobo Obeketang on the new Council.

In a memo to the two organizations, Note asked them to fast track their nominations.

“The sooner (nominations) can be accomplished, the sooner we can begin working together to help find solutions and recommendations to the economic challenges that we all face,” Note said.

The Cabinet will appoint two members at large, and the sixth member of the panel is the director of the Economic Policy, Planning and Statistics Office who is Carl Hacker.

The President said that the membership of the Council needs “to be able to take into consideration some of the views and ideas from business interests on Ebeye,” Note said.

US Postal Service will be returning the RMI to a domestic postal designation

As foreshadowed in last week’s state of the nation address by President Kessai Note and confirmed by US Ambassador Clyde Bishop at this week’s Marshall Islands Chamber of Commerce meeting, the US Postal Service will be returning the RMI to a domestic postal designation.

USPS official Leo Tudela informed RMI and US officials on a recent visit to Majuro that the US plans “to reinstate domestic status,” Bishop said. But, he added, it will take about two months to actually implement the change.

The move by the USPS to give the RMI international postal status has been criticized strongly by businesses here because of its negative impact on the economy.

Senator Gerald Zackios, speaking to the Chamber this week, said the return to domestic status is “welcome” but he added a note of caution. “I hope that it doesn’t impact how Compact sector grants are used,” he said, adding his concern is if the US wants to take Compact funding to use to subsidize the USPS for the service here. “I hope that this (USPS service) is above and beyond Compact grants.”

 

From the 8/10/07 issue of the Marshall Islands Journal

NTA Server Crashes

An NTA Internet server crash over the weekend produced some high blood pressure for customers who couldn’t get their email over the weekend and required NTA technicians to work overtime to solve the problem.

For three days, from Saturday through Monday, customers found it nearly impossible to download email and attachments sent through the NTA system, or to open NTA’s Tilmake web site that serves customers, both locally and when they are off-island. NTA’s Internet system, not noted for speed generally, was down to a snail’s pace before NTA was able to restore services on Tuesday this week.

NTA technician Michael Sawej told local customers that files on NTA’s mail server were “corrupted” and “it was much faster to rebuild the server than try to find and recover corrupted files.”

On Tuesday, Sawej said that NTA staff started working on the problem over the weekend and were “still tweaking” the system.

NTA received numerous complaints from customers, among them local attorney David Strauss, who was in Honolulu when the problem started last weekend.

Strauss said it was such a problem that he was forced to open a new “gmail” account to receive email communication through a different server.

“I would like to apologize to all of you for the inconvenience and also would like to assure you that we are working hard to bring up mail services back to normal,” Sawej said Tuesday.

From the 8/3/07 issue of the Marshall Islands Journal

MALGov to Pay MISSA $1 Million

In a key ruling in the MISSA lawsuit against Majuro Atoll Local Government, the High Court ruled last week for MISSA, finding that MALGov must pay the social security agency more than $1 million.

The ruling orders that this money be paid to MISSA at a nine percent interest rate until paid off.

MALGov owes MISSA $1,043,097.26. The suit was originally filed in 2004 against the current MALGov administration, but MISSA returned to court recently to get court help in getting MALGov to pay after MALGov filed motions in the court blaming its lack of ability to pay MISSA taxes on the Ministry of Education, Marshall Islands Resort, Pacific International Inc., and the RMI national government for lack of payment of taxes and other revenues.

The ruling by Judge Richard Hickson also orders the Attorney General Posesi Bloomfield to halt his legal representation of the Marshall Islands Resort, and says the Ministry of Education must respond to MALGov allegations that it failed to pay promised education funding to the local government in the 1990s, which resulted in MALGov being unable to pay the social security taxes of teachers then under its authority. He gave the Ministry 20 days to reply.

The judge’s ruling gives MALGov a foot in the door to possibly collect funding that was to be provided to the local government pursuant to a 1993 agreement with Education.

In response to other motions by MALGov attorney Rosalie Konou, Judge Hickson denied her attempt to remove Marshall Islands Social Security Administration attorney David Strauss from the case. She had requested his removal because he also represents Pacific International Inc. (PII).

But Hickson said there was no conflict of interest for Strauss to represent MISSA and PII.

He also denied MALGov’s claims against both PII and Marshall Islands Resort that the two companies owe back taxes.

Hickson said his dismissal of MALGov’s motion “does not of course prevent MALGov from enforcement of its (tax) ordinance or from referring the matter to the Attorney General for appropriate action.”

The judge also directed AG Bloomfield not to continue representing the government-owned MIR hotel.

This was because MALGov provided evidence that indicates that MIR may be collecting local government hotel room taxes while maintaining its position that it is exempt from paying the room tax to MALGov and therefore not passing this money onto the local government. “This evidence requires investigation by the Office of the Attorney General as to possible criminal liability,” Hickson said.

Because of this, “it is inappropriate for the AG to represent MIR,” Hickson said, adding that Bloomfield could continue to represent the Ministry of Education and its officials.

On MALGov’s claim that it is owed fines collected by the national government against fishing vessels using Majuro’s lagoon, Hickson said like MALGov’s claims against PII and MIR, they are not dependent on the outcome of the main claim and so must be dismissed.

 

From the 7/27/07 issue of the Marshall Islands Journal

Subsidies Cost $3.7 million

Government subsidies have averaged nearly $3.7 million annually from fiscal years 1997 through 2006.

According to an EPPSO report, the lowest amount of annual subsidy given out to “public enterprises” was $2.3 million in FY2004. The high was more than $6.3 million in FY2002.

The first three years of the Note administration, from FY2000, annual subsidies jumped significantly from the late 1990s. In FY2000, the government injected $5 million to government entities, in FY2001 it went up to $5.1 million and in FY2002 to $6.3 million.

The subsidies dropped off significantly in FY2003, to $3.2 million, in large part because funding to Marshall Islands Development Bank was eliminated, and funding to Majuro Water and Sewer Company and KAJUR, Ebeye’s power company, was reduced dramatically.

Subsidies declined to $2.3 million and $2.5 million, respectively, in FY2004 and FY2005, before popping back up to $3.4 million last fiscal year. The FY2006 figure ballooned because MEC was given more than $1 million more than it had received in subsidy in FY2005.

Government entities receiving subsidies at some point from 1997 to 2006 were Air Marshall Islands, KAJUR, MWSC, Marshalls Energy Company, Marshall Islands Airports Authority, MIDB, Marshall Islands Ports Authority, Outrigger Marshall Islands Resort and Tobolar.

Government Employee Growth

There is some eye-opening information contained in the latest statistics provided by the RMI government’s Economic Policy, Planning and Statistics Office (EPPSO).

On the government workforce, the report shows that:

• The Ministry of Education grew from 472 workers in 1999 to 1,029 this year.

• Public Works and Transportation and Communications ministries both increased significantly, though they declined somewhat over the past year. Public Works had 52 workers in 1999 and 91 this year (though it was as high as 115 in 2003), and T&C went from 33 workers in 1999 to 66 this year (though had as many as 108 in 2005).

• The Judiciary went from 22 workers in 1999 to 41 this year.

• The only two ministries or departments whose number of workers went down from 1999 to 2007 are the Ministry of Resources and Development and Council of Iroij. R&D dropped from 61 to 29 over the period and the Council went from 17 to 15. The R&D drop is accounted for largely by MIMRA staff being separated from the Ministry.

The cost of government salaries jumped from $16 million in 1999 to $30 million last year.

On average salary levels, the report shows that:

• The five highest payment departments or ministries ins government are: Compact II capital $32,153, President and Cabinet $22,979, Public Service Commission $22,667, Foreign Affairs $22,419 and Nitijela $20,590.

On cost of living in Majuro, EPPSO reports that:
• In fiscal year 2004, prices went up two percent. In FY2005, prices went up 3.5 percent and last fiscal year they went up 5.3 percent.

From the 7/20/07 issue of the Marshall Islands Journal

New Bank to Open in Majuro

By SUZANNE CHUTARO
A $5.6 million Japanese investment is about to pump up Majuro’s financial sector with the introduction of a new commercial bank that is expected to be in full operation by year’s end.
The First Micronesia Bank Incorporated is the brainchild of international investment entrepreneur Sardha Rasaputra, who initiated the idea for Japan Airlines direct service to Majuro in early 2000. Local businessman Prianga Fernando, who has been acting as an interim local agent for the First Micronesia Bank Inc. group, said that all the paper work has been submitted to the Banking Commission and now it’s just a matter of paying the banking license fee.
“Everything is processed,” said Fernando. “They just have to pay their $8,000 license fee, which I expect will be paid this week.”
According to Fernando the Japanese investors are mostly employees of Citibank and they are investing $5.6 million to establish the First Micronesia Bank — which he says will be a fully insured commercial bank with a focus on outer  islands development.
Banking Commissioner Ann Marie Muller confirmed last Friday that her office has been responding to queries from the First Micronesia Bank Inc. since February of 2006.
“We encourage more banks to be establish,” said Muller. “We are concerned about interest rates and competition will be good (for customers). I hope that people will embrace this as an additional bank and not a threat.”
With the inquiry process reaching a wrap up phase, both Muller and Fernando say they expect the bank could be up and running by the end of the year. 
“It’s still far off but it’s possible that we’ll see something more concrete within the next six to nine months,” said Muller.
A four-member team representing the investors is expected to be in Majuro in early August to finalize arrangements to establish the First Micronesia Bank Inc.
After this, Fernando said construction of a two-story building is expected to commence in downtown Uliga, just parallel to the Kitco Apartments building, to house the First Micronesia Bank. Once established in the Marshall Islands, the First Micronesia Bank Inc. also plans to establish a bank in Palau, he said.

 

From the 7/13/07 issue of the Marshall Islands Journal

Kiwis to Bump up Trade

Visiting New Zealand businesspeople and government leaders promoted trade ties with the Marshall Islands during a two-day visit earlier this week.
But the numbers tell the story: last year, New Zealand exported more than $6 million in goods to the RMI, but Marshall Islands companies only sent $4,000 worth of products south.
“It’s all about shipping and air service,” said Richard Maugueret, the executive officer of the New Zealand Pacific Business Council, that was set up two years ago to promote trade ties in the region. About 10 New Zealand business people joined the Chamber meeting on Tuesday. They were part of a 70-strong delegation led by Foreign Minister Winston Peters. New Zealand’s Minister for Community and Voluntary Sector, and the Associate Minister for Pacific Island Affairs Luamanuvao Winnie Laban told the Chamber of Commerce Tuesday that “we’re committed to two-way trade.”
“It’s really important to focus on how best we can support our Pacific cousins to grow their business and trade better,” she said, adding that this is why New Zealand sent up the Business Council to “link with and better support each other.” She said that the government’s role is to support the private sector to develop for the benefit of the country. Business leader Gilbert Ullrich told the group that last year’s big trade show in New Zealand included good participation from the Marshall Islands, and they are hoping for an even bigger presence at a big trade conference being planned for New Zealand in 2008.
Both Ullrich and Laban confirmed that it’s not only US-affiliated islands taking a strong look at business opportunities with the huge American military build up on Guam.Ullrich also commented about the poor state of shipping and airline service linking north and south Pacific, and with the halt to service by Our Airline earlier this month, it’s significantly worse. “There’s a desperate problem with shipping and air service” that inhibits trade between the RMI and New Zealand, he said.
But Ullrich thinks that developments in Guam, particularly port expansion, may offer some opportunities for the RMI and other parts of Micronesia. He said that New Zealand companies that are supplying Guam may be able to shoot larger volumes into Guam, which then be transshipped into RMI to improve the trade situation.

300 New RMI Jobs in 2006

By GIFF JOHNSON

 The Marshall Islands government has increased the number of people working for it by nearly 25 percent since 2004 — and nearly 50 percent since the late 1990s.
A report issued this week by the RMI government shows that as of March 2007, there were 2,415 people working for the national government — a 23 percent leap from the 1,959 employed in early 2004.
Since the third quarter of 2004, the number of people hired to work for the national government has continued to steadily increase, with nearly 300 of the new workers hired in 2006.
The payroll costs of this large and expanding government workforce demonstrate why the government has often faced cash flow problems over the past two years in meeting its by-weekly payroll.
While the payroll cost was $26,438,000 in fiscal year 2004, the cost jumped to $30,107,000 last year. And this year, it is already on a record-setting pace to outdo last year’s record level of salary payments.
In FY2004, quarterly (three month) salary disbursements never exceeded $7.1 million, and in one quarter were as low as $5.6 million. But the days of quarterly salary costs of under $6 million are long gone.
By the second quarter of last fiscal year, salary costs hit the $8 million mark or the first time. Last quarter, ending in March this year, another record was set with a quarterly salary figure for government workers of more than $8.2 million. In the mid- and late-1990s, the RMI government reduced its government workforce to fewer than 1,700 workers. But since 2000 under President Note’s administration, the number of workers has risen by nearly 50 percent.

From the 7/6/07 issue of the Marshall Islands Journal

PII’s import tax flight

A dispute over the Taiwan-funded convention center has broken out that could jeopardize completion — or quality of completion — of the facility prior to the Taiwan Pacific Allies Summit scheduled for October 12-16 in Majuro.
Attorney General Posesi Bloomfield told the Journal that he has told contractor Pacific International Inc. (PII) that it cannot import construction materials for the project duty-free.
PII is seeking an exemption from import taxes that would save the company hundreds of thousands of dollars.
“Our contract is guided by certain specifications, and a budget,” Kramer told the Journal.
“There was an expectation of tax exemption. We are applying pressure in every direction to seek every possible conservation and input of funds to deliver the highest quality that we can within the limitations of our contract and the budget.
“As is usual, we find proponents in the government giving us the maximum support, and opponents who for various reasons have been a challenge to deal with.”
The fast-track project that started in March is being funded at $5 million provided by Taiwan. “When PII signed the contract it knew it would have to pay import tax,” Bloomfield said.
Former Taiwan Ambassador Lien-gene Chen is reported to have told PII officials that he would lobby to get an import tax waiver But Bloomfield said “even the (RMI) government is not exempt (from import tax).”
He indicated that PII has threatened to cut back on quality of the construction if it doesn’t get an import tax exemption. But “the law speaks for itself,” Bloomfield said. “We can’t change the law.”
Kramer has a different view.  “The Taiwan-funded project will be a proud show piece and a tribute to the more than 100 Marshallese supervisors, workers and craftsmen along with the Australian supervisor, Filipino engineers and artisans, English surveyor, sub-contractors and the coordination and leadership of a local company,” Kramer said.
“This sophisticated accomplishment is proof that we have the capacity in the Marshall Islands to achieve excellence and compete in major design construction projects.”
Kramer said if construction goes as planned, “this project will be ready for ribbon cutting in early October this year.”
He described the work on the project as “an extraordinary accomplishment of the people intimately involved in the remarkably short period of design and construction.  There would normally be a one-year design phase.  We are accomplishing the design and construction in just over eight months at a price substantially less per square foot than the school projects we are working on.”
Kramer praised many people for “this monumental task,” including Taiwan, President Note’s administration for awarding us the design construction contract and for support of various RMI agencies, Ministry of Public Works and especially engineer Herculano Langunay and the talented work of all those involved in the actual construction.

Matson raises prices

Matson Navigation Co. announced this week that it will raise its freight rates for the Republic of Palau, Federated States of Micronesia, and the Marshall Islands by $185 per westbound container, effective September 2, 2007, according to a report in the Saipan Tribune.
In addition, a transshipment fee will increase by $65 for cargo destined for Palau, FSM, and Marshall Islands via Guam.
The company said these increases are being taken to offset escalating costs, including cargo handling costs. The increases will be filed with the Federal Maritime Commission.
Matson customers are urged to contact their local sales representative or the company’s Customer Support Center for more information.

From the 6/29/07 issue of the Marshall Islands Journal

New RMI Postal Authority’s board of directors Begins Work

The new RMI Postal Authority’s board of directors has launched its orientation and begun an initial review of postal operations.
Postal services board chairman Casten Nemra told the Journal this week that the PO board held its first meeting on June 15. It was established as part of a new law that sets up the Postal Service Authority.
Nemra, who is also the government’s Chief Secretary, said the first meeting was largely focused on reviewing the provisions of the law and the board’s role. Following the June 15 meeting, the board toured the Majuro post office and lunched with the postal employees so the board and employees could meet.
The next board meeting is set for July 3, with a follow up meeting tentatively scheduled in late July to meet with US Postal Service official Leo Tudela. Nemra also said that he’s requested reports from the USPS regarding the RMI postal service to assist the board in its work.
Postmaster Sailass Andrike is a non-voting, ex-officio member of the new postal board. But he missed the first meeting when he had to fly out to the US with his wife, reportedly for medical reasons.
Nemra said Ebeye postmaster Action Riklon will be flying to Majuro to be at next week’s board meeting. He added that the board has already been in communication with him.
Nemra said although the board was in the early stages of organization, all the members are anxious to improve the service of the PO.
“Things need to improve,” he said. “We haven’t addressed specific cases of accountability and so forth. We’re still assessing the situation and the role of the board.”
But he said he expects that at next week’s meeting, the board “will get into issues (about) procedures and how mail is managed and handled.”

Micronesian Shipping Agency Inc. Going Out of Business

A major player on the local shipping scene is closing up shop in a week, saying that there is not enough business in Majuro to sustain the operation. As of July 7, the Delap-based Micronesian Shipping Agency Inc. will no longer function in the Port of Majuro.
MSAI general manager Phil Welch said the closure was “due to decreasing revenue and reduction in the overall fishing vessels that we have worked with in the past.”
PII’s Majuro Marine will take over as liner agent for Swire Shipping (Kiribati Chief) from July 7 onward. FedEx, also currently handled by MSA, will suspend shipments into Majuro on June 30 until a suitable replacement can be found, Welch said.
The Majuro shipping agency was hard hit by problems affecting its largest off-island customer, Japan Tuna, which was forced into bankruptcy reorganization more than year ago. That development greatly reduced the flow of vessels into Majuro, and forced the decision that Welch announced late last week about the agency’s imminent closure.
MSA has been in operation since January 2002.
He acknowledged that “it was a shock to most people that we are not able to survive,” Welch told the Journal. But he said it was impossible for the agency to maintain the same level of service that it has been providing without a solid revenue base. “If you’re in shipping here, you’re either big or you’re gone,” he added.
Aside from Majuro Marine, other companies who handle vessels are KMI, Koo’s Fishing, Luen Thai and RRE.

From the 6/22/07 issue of the Marshall Islands Journal

Government Accountability Office Questions Trust Fund Viability

By GIFF JOHNSON

 There is an increasing likelihood that the RMI government’s trust fund will not have enough money in it to distribute the maximum level of funding allowed under the Compact after 2023 and may “be unable to disburse any income” at all in some years, according to a Government Accountability Office (GAO) report issued last Friday.
With the heavy RMI reliance on US grant funding, the GAO report calls into question the ability of the trust fund to support basic government services when the Compact’s grant funding ends in 2023.
The GAO report evaluates both the RMI and Federated States of Micronesia’s trust funds. The report also reveals a serious difference in understanding between island leaders and the GAO on one hand, and Bush administration officials on the other about the purpose of the trust funds.
The State Department criticized the GAO report for repeatedly questioning the “adequacy of the funds to replace expiring grants.” This is not the goal of the trust funds as agreed in the Compact.
“This is a dangerous misreading of the international agreements and is likely to build up unwarranted expectations that are not supported by the agreements reached,” the State Department said last month in its response to the report. “So long as the trust funds are a source of annual revenue, they have met their agreed and stated purpose,” the State Department said.
But FSM officials disputed the US position. “This trust fund was negotiated from our side of the table to provide a smooth transition, in the year 2023, from the annual US grants into a regime of annual trust fund income that would equal or better the level of US grants at the time of transition,” James Naich, the FSM’s Charge d’Affaires in Washington said.
“We are aware that certain parties on the US side would now prefer to state that there was never such an undertaking by the US, and that the trust fund represents nothing more than a handshake by the US in 2023 to the FSM, with best wishes for the future.” He said the FSM “strongly disagrees” with the US view of the trust fund’s purpose.
GAO also “strongly disagreed” with the State Department’s contention that GAO misunderstood the Compact.
“Our report clearly stated that the purpose of the trust funds is to provide an ongoing source of revenue,” GAO said.
The GAO makes the point that the stock market performance over the next 16 years could lead to wildly differing levels of funding in both trust funds in 2023. This means that the trust funds “may not provide sustainable income to the countries after annual Compact grants end in 2023,” the GAO said.
If the RMI chooses an aggressive (and more risky) investment strategy, market volatility — the ups and downs on Wall Street and international stock exchanges — could produce trust fund revenue ranging from as low as $438 million to $1.4 billion in 2023, the GAO said.
The trust fund agreement allows the RMI to distribute annually no more than the total of the US grant funding in 2023, which will be $27.7 million (adjusted upward for inflation).
“We found increasing probability that income from the trust funds cannot sustain the maximum disbursement level allowed,” the GAO said.
“Furthermore, the trust funds face increasing probability of providing no income at all in some years.”
RMI Ambassador Banny deBrum said the RMI wants 100 percent inflation adjustment of annual US contributions to the trust fund that, if provided, will “have a substantial impact on the sustainability” of the trust fund.
Aggravating the worsening financial picture for the RMI and FSM is “both governments’ budgets face growing wage expenditures, heightening the negative fiscal impacts they will face as Compact grants decline,” while both RMI and FSM “have not undertaken many reforms needed for economic development.” GAO said that reinvestment of interest generated back into the trust fund would reduce the likelihood of years without revenue, but this will also mean that annual distributions to support government services will be lower. The Compact sets a limit on the maximum amount that can be paid out of the trust fund after 2023, but does not guarantee or set a minimum payment level.
The RMI government has not yet fully established the trust fund, the GAO said. FSM has fully established its trust fund, but as of March, the RMI had not appointed an independent auditor and any money managers — the latter in part “because the trustee (First Hawaiian Bank) and the investment advisor (Goldman Sachs) disagree over the assignment of custodial rights to the fund,” according to GAO. The GAO criticized the joint US-RMI and US-FSM trust fund committees — which are controlled by the US — for not taking steps to improve their management and decision-making processes to speed things up.
Foreign Minister Gerald Zackios told the Journal that the trust fund committee is meeting Thursday this week and he hopes it will resolve the money manager issues.
GAO also noted that with Compact grant funding dropping every year, more Marshallese and Micronesians may move to America, reducing the burden on the governments to pay for health, education and other services and possibly leading to more money coming into RMI from Marshallese working in the US. But “FSM and RMI emigrants have limited earning opportunities abroad, owing to inadequate education and vocational skills, and may therefore not remit significant amounts (of money),” GAO said.

Missa Pays Out $10 million

Last year was MISSA’s first since 2000 that benefit payments and administrative costs exceeded tax collections. But the Marshall Islands Social Security Administration’s administrator Saane Aho told the Journal that the agency “does not expect any problems with cash” this year. In fact, she said, collections in 2007 are up and this allowed MISSA to invest $300,000 earlier this month with its US-based fund manager, Investor Solutions Inc.
MISSA financial statistics show that the retirement agency had a shortfall of about $240,000 in FY 2006 (October 1, 2005 to September 30, 2006) when benefit payments and administrator costs are subtracted from tax collections. But MISSA was able to use what Aho described “other income” — various penalties and fees collected — and revenues from the previous year to cover the shortfall from tax collections. “That’s why we didn’t need to liquidate any of our assets because we had cash on hand from previous years,” she said.
Benefit payments jumped over the $10 million mark for the first time in the history of MISSA in 2006.
MISSA paid out a total of nearly $10.7 million last year. Its tax collections also remained steady in the 2004-2006 period, at over $11 million annually — but this was down from the record set in 2003 when slightly over $13 million was collected in taxes. “We’ve been doing well with our auditing (of businesses),” she said. “This has generated additional revenue.” Aho said that the RMI government is paying on time, which is also assisting cash flow.

 MISSA money matters

                                                FY ’02       FY ’04        FY ’06

Tax revenue                        9.9            11.4          11.6
Benefit payments            8.6            9.7            11
Administrative costs            .69            .86            .89
Number of beneficiaries            2,859        3,105        3,278

Note: Data provided by MISSA

From the 6/1/07 issue of the Marshall Islands Journal

Business of Politics
Marshall Islands Chamber of Commerce president Jack Niedenthal said he wants to make it very clear that the organization is not going to endorse political parties in the election.
He made the comments to the Journal in response to some criticism that the Chamber had lost some of its members because it was “becoming political.”
“We don't want to support one party or the other,” he said. “But for the business community to survive, we have to take political positions and encourage platforms that support business.”
He said this is particularly true in relation to legislation that affects businesses.
“We think we can help the government be more efficient with taxes,” he said. “We want the government to be successful because we have such a huge public sector.”
He said what the Ministry of R&D did last year by coordinating review of the proposed labor law by everyone concerned, including Chamber members, was a very positive effort.
There are problems with the legislation as passed, but the process worked well.
Commenting specifically about the fact that the Marshalls Energy Company and National Telecommunications Authority have decided not to continue membership in the Chamber because of the “political” change, Niedenthal said that was fine, since they are “public agencies.”
But, he added, “we have to do what's best for business.
“We are at a point in our history where we have to be a more effective lobby group. If we lose some members (as a result), so be it.” During the past 18 months, the Chamber's goal has been to increase public dialog, which is why it has sponsored many forums, he said. “We're happy to sponsor forums (because it gets) people talking about the issues,” he said. Referring back to several of last year's forums with government ministries, Niedenthal said “even though the questions were hard and pointed, the participants always came out looking good because they addressed the concerns directly.” His main point is to urge the continuing flow of open discussion on important issues to businesses and the community.

VIPs to speak at Chamber events in June
The Marshall Islands Chamber of Commerce is sponsoring three public forums over the next 10 days.
This coming Tuesday, Samoa's Deputy Prime Minister Misa Telefoni Retzlaff will be speaking about private sector and economic development in his county, which is ranked high by the Asian Development Bank in “good governance” ratings for the Pacific region.
He will speak and answer questions at 12 noon Tuesday at the Melele Room.
The following week, Chamber forums will feature both high-level local and Washington speakers.
On Tuesday, June 12 the Chamber will have the Kwajalein leadership talk about Kwajalein issues and answer questions from 11:30-1:30.
The following day, June 13, US Secretary of Interior Dirk Kempthorne will spend an hour with the Chamber, from 11:30-12:30.
Both these events will be at the Enra Restaurant.
“We want the Kwajalein landowners to tell us what their issues are,” said Chamber president Jack Niedenthal.
He said it will be like the forums the Chamber sponsored with various government ministries last year - the public is invited and anyone can ask questions.
Kempthorne has been given a list of questions by the Chamber, and is expected to answer some or all of them.

From the 5/25/07 issue of the Marshall Islands Journal

JAL Tug Woes Mount

Will Majuro lose the Japan Airlines charter service after just two flights?
The future of JAL appears to be hanging on whether or not the RMI Ports Authority wins a bid for a second-hand airport tug that the military is selling on Guam in a few days. But while this might be a stopgap to ensure that the June 30 JAL flight proceeds, JAL officials have informed RMI leaders that the Guam tug does not meet the Boeing-767 requirements which the originally-purchased tug - now stuck in Jakarta and enmeshed in a bankruptcy proceeding - did.
With the original tug tied up in the bankruptcy problem, the chances of it being released in time to make a ship to Majuro before June 30 are slim.
“The receiver in New Zealand is presently attempting to broker a settlement for the release of the tug with the Indonesian company holding the tug,” Ports Authority director Jack Chong Gum told the Journal. Ports authority paid for the tug in full to the New Zealand firm MacTec .
“Apparently MacTec had a joint venture with the Indonesian company and they have refused to release any of MacTec's assets, including the tug, until such time amounts due to them from MacTec are paid,” Chong Gum said.
He said Ports Authority told the receiver of the importance of the tug to be in Majuro before June 30. “We still have a chance to get the tug here in time before the June 30 JAL charter flight, but the window is closing in really fast,” he said. “We should know by early next week if this is not possible.”
Pacific International Inc. officials located a similar tug that the US military on Guam is auctioning through a bid process that closes on June 4. So obtaining of this airport tug depends on the luck of the bidding, if Ports Authority decides to bid.
But a JAL official informed Majuro officials that if the runway is wet or in a rainy condition, then the Guam tug “may slip” while pushing the Boeing-767. This situation will force JAL to take off with weight restrictions, the JAL official said.
The President's Office told the Journal that it is aware of the situation and has received brief updates from the Ports Authority and Foreign Affairs. “Although we understand that the situation is unfortunate, we do realize the urgency and the need to continue the JAL charter flights,” the President's Office said in a statement to the Journal. “We are aware that the RMIPA is currently looking at all possible avenues in getting the tug to Majuro at the earliest time possible or seeking other options that would supply the equipment to Majuro on time.”
The President's Office added that “the government sees the potential in tourism and has worked very hard to bring the JAL flights to Majuro. The President's Office will continue to monitor the situation and will work closely with the Ports Authority and JAL to ensure that the service is not disrupted.”
Chong Gum said that on the deal with the now bankrupt MacTec, “the Ports Authority hasn't lost any money. In fact, we have informed the receiver that if the tug does not arrive Majuro before June 30, that we intend to cancel the order for the tractor and will thereafter file a formal claim for a full refund of all the amounts paid to MacTec for the tug.”

US Secretary of Interior will visit the Marshall Islands in June

The US Secretary of Interior will visit the Marshall Islands in June as part of an island-hop through US-affiliated islands in the region.
Dirk Kempthorne will be the highest-level American government official to visit the RMI since previous Interior Secretary Gale Norton visited in January 2004.
Kempthorne made the announcement at last week's meeting in Washington with the leaders of US-affiliated Pacific islands.
He will be traveling to the US island territories of Guam, American Samoa, and the Northern Marianas, as well as to Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
“I can't begin to tell you how much I'm looking forward to visiting these places that are such an important part of the work of my Department,” Kempthorne said in remarks at Pacific island night in the National Geographic Society's Explorer's Hall. “I look forward to visiting the schools, the health care clinics, the villages, the work places. I look forward to meeting as many people as possible, and getting as full an understanding as I can get of their lives, their concerns, their aspirations.”
Kempthorne took over as Interior Secretary in June 2006, a few months after Norton resigned. He also announced that Interior's Office of Insular Affairs will host the fourth Conference on Business Opportunities in the Islands on Guam on October 8 and 9.
The conferences provide an opportunity for US businesspeople to meet with entrepreneurs and business owners and managers from the US-affiliated islands and explore ways of working together that will strengthen the economies of the islands.
Most US financial assistance to the Pacific islands - more than $300 million per year - comes through the Department of the Interior in the form of grants for schools, hospitals, roads, power plants, environmental protection, law enforcement, financial management, immigration control, worker protection, refugee protection, economic analysis and other purposes, according to the Interior Department.
Pacific island night, an annual event held this year in conjunction with the Pacific Island Council of Leaders, is hosted by the embassies of Pacific island nations and the congressional delegations of US island territories in the Pacific.
The Department of the Interior hosted its own island festival last Thursday to celebrate Asian Pacific American Heritage Month and underscore Interior's special role in supporting island communities.

From the 5/18/07 issue of the Marshall Islands Journal

Wilbur Replaces Jorelik

A three-way move has RMI government secretaries shifting around, and is giving Internal Affairs its third secretary in four years.
The Public Service Commission confirmed that former Internal Affairs Secretary Wilbur Allen is now Secretary for the Ministry of Transportation and Communications, while assistant secretary of Internal Affairs Amram Mejbon is now acting Secretary at Internal Affairs.
Meanwhile, former T&C Secretary Jorelik Tibon has shifted to become the deputy Chief Secretary working with Chief Secretary Casten Nemra.
Internal Affairs has had three secretaries at its helm since Minister Rien Morris took over as Minister four years ago - the most changes of any Ministry in the RMI.

The RMI's Immigration Division has a new head.
Former national police trainer Tarry Paul is director of Immigration. His assistant is Elmer Lejjena, who formerly was a staff member within Immigration. The two were recently confirmed in their posts by the PSC.

$10 part gets AMI in the Air

The Dash-8 was down for five days, losing thousands of dollars in revenue for lack of a $10 part, confirming the difficulty of aircraft operations in this remote location.
The part was flown in Monday afternoon and installed immediately so the Dash-8 could get back into operation on Tuesday this week.
AMI general manager Dan Fitzpatrick said the part is something that in his experience is never an issue, which is why the airline didn't have a spare on the shelf, although it now has an extra.
“It's really not common to have a problem with this fitting,” he said. “This was a one in a million occurrence.”


On the good news front for AMI, Namdrik is expected to be the ninth outer island airfield that can handle the Dash-8.
AMI made a trial landing at Namdrik Tuesday afternoon, following a report from the RMI Directorate of Civil Aviation giving the thumbs up to the runway.
The DCA's report issued Monday this week follows runway clearing and cleaning improvements by Pacific International Inc. (PII), said AMI general manager Dan Fitzpatrick.
“If we could land the Dash-8 at more outer island runways, we'd save money and provide better service,” he said.
Currently, the Dash-8 can land at eight outer island runways, with Namdrik now the ninth, in addition to Majuro and Kwajalein.
Fitzpatrick said that he's hoping that Tarawa, Maloelap and Majkin, Namu will be the next runways to accept the Dash, once they are improved.

From the 5/11/07 issue of the Marshall Islands Journal

General Fund Revenue up for 2007

General Fund revenues are about three percent up for the first seven months of the current fiscal year compared to the same period last year.
Chief Secretary Casten Nemra told the Journal this week that taxes and other revenue have reached slightly over $16.9 million through April 30 this year.
That is “an increase of three percent for General Fund revenue over fiscal year 2006 for the same period,” he said.
Nemra said overall, collections have been steady for FY2007. Although he acknowledged that the FY2006 General Fund revenue was about four percent lower than projects at the start of last fiscal year, he indicated it was “still too early to tell for FY2007” whether revenue will meet the projections.
A significant development on the spending side is that expenditures for salaries are down five percent over the same period for last year, he said. This is an example of “attempts to put fiscal controls in place,” he said.
Budget planning for fiscal year 2008 is already well in progress, with a draft budget outline to be submitted to Finance Minister Brenson Wase in the next couple of weeks for presentation to Cabinet.
Once Cabinet has approved the budget plan, it will be put out to government ministries and agencies for them to fill in the details, Nemra said.

Mission Imppossible: New News about the JAL Flights

By GIFF JOHNSON

Most people probably believe that, after two flights, the Japan Airlines charter service is now a settled, foregone conclusion.
But an old, thought-to-be-resolved problem reared its head this week, threatening not only the scheduled June 30 flight, but all future JAL flights.
The tractor tug required by JAL for its Boeing-767, purchased more than four months ago by the RMI Ports Authority, did not arrive before the first JAL flight in February, and missed its April 30 Ports Authority promised arrival date - and as the Journal went to press Wednesday was not booked to arrive on the only two vessels that can deliver it to Majuro before the June 30 JAL third charter arrival.
Throwing the entire situation into further disarray, the company that Ports Authority bought the equipment from in New Zealand is bankrupt and has gone into receivership.
“We sent several email messages to follow up on the tug but to date have not received any response from the company,” Ports Authority director Jack Chong Gum told the Journal on Wednesday. He said he heard earlier this week that the company had gone bankrupt, but only confirmed it on Tuesday this week through a phone call to New Zealand.
“The Ports Authority must get the tug here before the June 30 flight or there will be no more JAL flights,” Marshall Islands Resort general manager Bill Weza said at Tuesday's Chamber of Commerce meeting. “Despite promises that the equipment would be here by January 30, it's still not here.”
Tour and dive operator Satoshi Yoshii, who is currently in Japan, told Foreign Minister Gerald Zackios by email this week that the “RMI Ports Authority must take immediate action to replace a tug before the June 30 flight. Otherwise Marshall Islands would never have any more JAL flights.” Yoshii said the June 30 charter is already sold, with 180 passengers having purchased their tickets, and JAL is planning five-to-seven additional flights over the next several months - but will not commit to dates until the tug is on island.
“This is an extremely significant matter for RMI tourism development,” Yoshii told Zackios in what may be the understatement of the year.
Zackios, who is in Washington, told the Journal by email Tuesday: “I cannot over-emphasize the importance of maintaining the JAL charters.”
JAL's Koji Mochizuki, who is supervising development of the Majuro charter service, said simply: “If RMI Ports Authority is unable to allocate (the tug) at Majuro by June 30, we can't fly.”
Meanwhile, Weza and shipping agent Phil Welch, whose company is agent for the vessels coming from Asia, said the tug is sitting in Jakarta, Indonesia, and no booking has been made for it to come to Majuro.
But that is news to Chong Gum, who told the Journal: “The last advice we received from the vendor was that the tug had left for Brisbane on March 12 and was expected to arrive Majuro on April 28. If the tug is in Jakarta, I am not aware.”
Still, Chong Gum said that Ports Authority is “trying to contact the company to arrange for immediate shipment of the tug.” But he is not optimistic that it will be here before the scheduled June 30 flight.
“We made an honest effort to acquire the equipment but due to factors beyond our control such as the vendor being put under receivership, the equipment is not here and most likely won't be here before the June 30 flight,” Chong Gum said.
“RMIPA is currently considering other options, such as sourcing a tug from other vendors. The bottom line is that RMIPA will get the tug here. When, where and how? I can't say.”
Welch said if a booking is made in the next few days for either one of the two vessels that is coming from Asia with arrival dates before June 30, then the tug will make it before the deadline.
Chong Gum told the Journal that he believes that the Ports Authority is “being unfairly criticized” over the tug issue.
“The RMI PA invested considerably in the airport equipment required to make (JAL) happen - probably more than any other entity, public or private,” Chong Gum said. “We made this investment knowing we wouldn't see an immediate return. We took this risk because we support the development of tourism in the RMI.”
Weza said the RMI has just one opportunity to make a success of the JAL situation. “If there's no tug here by June 30, we might as well close up and write tourism off (as an industry) for Marshall Islands,” Weza said.
“The RMI government made a commitment to JAL and the private sector, and RMI PA will do its part to ensure that the required equipment is here,” Chong Gum said. “On timetable, I can only say we will do all that we can to get the equipment here.”

From the 4/20/07 issue of the Marshall Islands Journal

Tony Muller: 'The fiber optic cable is a go'

By GIFF JOHNSON
A new fiber optic cable linking the Marshall Islands with the world is expected to be operational in 2009, according to NTA general manager Tony Muller.
NTA, whose board of directors is “100 percent behind the project,” has already submitted a draft loan application to a US government lending agency for the project, and is talking with the India-based communications company that will carry traffic from Guam to the rest of the world in preparation for the cable.
But the project that is being touted as revolutionizing communications in this isolated part of the world is waiting for the August 2007 appointment by the military of its so-called “third party” that will own and operate the military's portion of the cable from Guam to Kwajalein.
“The military can't own it,” Muller said. An Alaskan firm is being brought in to handle it for the military, and until the company is officially on the project in August, both NTA and the Federated States of Micronesia's Telecom agency have to wait to conclude agreements on the cable, Muller said.
Since the submarine fiber optic cable was first proposed about four years ago, the RMI cost to run cables to Ebeye and Majuro has dropped from about $22 million to $15 million, he said.
“Once we sign a contract (with the military's third party operator) it will be 12-to18 months to be operational,” he said, adding that early 2009 is the target date for completion.
While the new cable will open up bandwidth - a fancy way of saying a lot more information can flow and talking can happen faster through the cable - it will more than double NTA's current debt (it owes the US Rural Utility Service about $14 million on a previous loan).
“Everyone is thinking that the rates will go down with the fiber optic cable,” Muller said. “But we will have two loans to pay then.” He said that most likely the rates will stay the same, but with the increased bandwidth, people will get much more done for the time used. “The business community will enjoy it,” he said.
He also said that for NTA to successfully bring the cable to the RMI, “we still need government support.”

From the 4/13/07 issue of the Marshall Islands Journal

Mobil Oil Micronesia Sells Fuel to the Marshalls Energy Company to keep the Lights on

Mobil Oil Micronesia has sold fuel to the Marshalls Energy Company for the first time since mid-2005, helping the power company keep the lights on in Majuro until the arrival of an SK Networks tanker this weekend.
MEC general manager Billy Roberts confirmed that MEC had purchased 40,000 gallons of diesel from Mobil's Uliga bulk fuel operation in two installments - one last Friday and again on Monday this week - and was considering the possibility of an additional purchase at mid-week, depending on the arrival date of the SK tanker.
The SK fuel tanker is expected to arrive either this Friday or Saturday, depending on how much time it can make up following delays forced by a major storm in the Guam and Saipan area last week.
MEC would have run out of fuel earlier this week without the Mobil purchases.
This situation resulted because MEC was forced to delay placement of a planned order to SK by 10 days last month when funds from the government were not immediately available to pay for the purchase.
After a long-standing fuel supply contract between Mobil and MEC ended in 2004, the two companies became embroiled in disputes over continuing supplies that resulted in a final shipment to MEC in mid-2005 -for which MEC and the government are still making payments, with about $3 million still due to Mobil.
“Business is business,” said Roberts of the new sales by Mobil to MEC. “Mobil accommodated our need at a reasonable price.”
MEC has been using local vessels Charlie's Angel and Neidaga to deliver diesel from Mobil to the Delap Dock, where MEC has pipes into its oceanside tank farm.
MEC uses from 12,000 to 15,000 gallons of diesel per day to operate its two power plants.

RMI? Where is that?

Compact II postal problems continue to multiply for local customers.
Majuro attorney Dennis Reeder has been unable to receive payment through the mail from a client overseas because the US Postal Service is rejecting a letter sent from England to Majuro.
According to an email received this week, Reeder's client in England said that he “wrote to you on 9 February enclosing an International Money Order in settlement of your fees for preparing a Foreign Legal Opinion.” The letter was addressed to Reeder at his local post office box number, RRE Commercial Center, 96960 Majuro MH, Marshall Islands “but has been returned to us marked 'mis-sent to Honolulu, Hawaii - 3 times' and 'registered mail service discontinued,'” the email said.
“Can you please let me have an address where I can send the Money Order?”
No explanation was provided as to why the US Postal Service would “mis-send” a letter for the Marshall Islands to Hawaii and not simply send it onto Majuro, and also why it would reject a letter registered from a foreign nation - England - to the RMI, since the USPS eliminated registered mail service only within the USPS system, which doesn't include England (the two countries separated in about 1776).
The Marshall Islands Journal was advised on Wednesday this week by a US-based company that has provided printing supplies to the Journal for many years that it cannot use “1000 Oceanview Dr., Majuro, Marshall Islands 96960” because that “address is no good.”
“Can you please fax me a corrected address so we can … get the order on its way,” said the vendor.
Prior to the US government changing the RMI from a domestic to an international destination in January of 2006, many local residents gave themselves “street addresses” for mailing purposes - Box 14, 1000 Oceanview Dr., Majuro - since some US vendors will not mail to a post office box.
But now it's not the box or street address that is being rejected by US vendors. It's the “Majuro, Marshall Islands MH 96960” that is being rejected as “no good.”
In related news, the US Department of Interior states that a primary aim of Compact II is to support development of the private sector in the RMI.


From the 4/6/07 issue of the Marshall Islands Journal

WASC Gives the Majuro Cooperative School a Big Thumbs Up

A visiting accreditation team from the United States gave Majuro Cooperative School a big thumbs up last week.
“There have been an awful lot of accomplishments since the last visit,” said Louise Wong, who headed the two-member Western Association of Schools and Colleges accreditation team. “This school has a bright future.”
Wong is the associate superintendent of Hawaii Catholic Schools. She was joined by Gaylien Fujioka the principal at Na'alehu Elementary and Intermediate School in Kona, on the Big Island of Hawaii.
Wong and Fujioka delivered a 30-minute “exit report” to Coop staff and parents following two days of reviewing the school.
Wong said that in preparation for her first visit to Majuro, she read the school's 2004 progress report to WASC. “I thought, oh my, there's a lot of work (that needed doing),” she said of her reaction to reading the earlier report before arrival. “Coming here I'm very pleased (with what I see). I'm amazed at what's going on in the classrooms.”
Fujioka went down a punch-list of areas that were identified three years ago for improvement, indicating that in every one major advances had been made.
She said the WASC team was pleased to see that the school had adopted “expected school-wide learning results” and was using them to measure progress. She also praised the use of new textbooks and the articulation of studies and curriculum from one grade to the next.
The school was seriously working on upgrading its facilities, addressing management and governance issues, providing an excellent special education program, and developing partnerships in the community among other activities, Fujioka said.
“As a Hawaii school administrator, I go through lots of training related to 'best practices,'” Fujioka said. “There's no such formal training here, (but I see) best practices happening. A lot of good things are happening on this campus.”
She added that she will take things she learned from her visit to Coop School back to her own school for use there.
Wong said that an important element in Coop's success is that there is “a lot of cooperation and people committed to addressing the needs of the school.
“The students are just wonderful, and the teachers need to be recognized - they are just terrific,” she said.
A report from the visit will be issued to the Western Association of Schools and Colleges. The WASC commission will meet in June to review it and decide on future accreditation. Wong said Coop can get anywhere from a one-to-three-year extension, after which a new cycle requiring a complete “self-study” will begin.



RMI Gov Wrist Slapped by DOI

By GIFF JOHNSON

An RMI government violation of the Compact's fiscal procedures agreement caused alarm bells to ring in Washington, DC last week, prompting the Interior Department to issue a letter warning the RMI that the US was fully aware of the improper action by the Ministry of Finance.
The ongoing RMI-Marshalls Energy Company fuel crisis prompted national government officials to “borrow” Compact funds designated for other purposes to help meet a payment deadline to fuel supplier SK Networks.
Tom Bussanich, the director of budgeting and grant management at Interior's Insular Affairs Office, wrote Minister of Finance Brenson Wase late last week telling him that the use of Compact funding for an MEC fuel purchase was a violation of the Compact agreement. Finance Secretary Jefferson Barton declined to comment on the matter.
According to Journal sources, Bussanich informed Wase that the US is aware of the RMI's inappropriate use of Compact funds and he asked for a full explanation.
Multiple sources told the Journal that the RMI borrowed $500,000 from Compact funds to make up the difference needed to meet the next SK Networks fuel shipment now scheduled to arrive next week Thursday. Between the RMI, MEC and the “borrowed” Compact funds, SK Networks was paid nearly $1.8 million dollars to meet this quarter's fuel shipment.
Initially the RMI had applied for a loan with the Marshall Islands Development Bank to make up the MEC cash flow shortfall, but funds from MIDB weren't available in time to meet the SK Networks payment deadline.
Although the money was only borrowed for about 24-hours and paid back into the Compact fund account, one US official said it was a violation nonetheless and the US wants to ensure that this sort of infraction doesn't set a precedent for similar action in the future.
As of Tuesday this week, US officials indicated they were still waiting for a response.
Under the fiscal procedures agreement of the Compact, improper use of Compact funds could result in Compact money being put on hold or suspended.

Editorials by Giff Johnson

Are we going backwards?
New legislation was introduced last week to amend the RMI Postal Service law.
As we all know, a change in the structure of the RMI Postal Service is long-overdue, in light of many years of embezzlement and related problems - which are partly responsible for the detrimental US action of changing the RMI from a US domestic to an international postal designation.
Our question is quite simple. What are the drafters of bill number 141 thinking when they write legislation that names the RMI President as chairman of the new Marshall Islands Postal Service Authority? The President as chairman of the PO? Doesn't he have a few other things on his plate as CEO of the country? And why politicize a board this way, given the good results produced by boards here that have no politicians on them?
The President as chairman is the only named board member: the other four members are to be appointed by the Cabinet.
To show just one of the problems with this legislation, after naming the President as chairman, the bill goes on to say: “The Board is to function as an independent entity. The Cabinet may, in writing, issue directions to the Board with respect to policy matters, but shall not be involved with the day-to-day workings of the Board.” Say what?
The bill says the board is supposed to be independent of the Cabinet - with the President as chairman? Guess he'll have to leave his President's hat at the door.
Just by saying something is “independent” or “accountable” or “transparent” does not make it so. It's the action that says more than the words. And this is a bill that's definitely in need of some corrective action.

Do we get it?
Continuing on the thread of independent boards, the College of the Marshall Islands came in for some grilling from Ministry of Education-aligned people concerning to whom the college's administration/staff report. This was at the recent Rethinking Education in the Marshall Islands conference. The reply from CMI staff present was that they are responsible to their board of regents. “But who is the board responsible to?” was a follow up question.
Well, it was explained, the board is appointed by the Cabinet, but it is completely independent of government, with no high-level government or elected officials as members. This independence from government didn't seem to sit well with some people attending the conference, who felt there should be a direct line of authority that ends with the government, or at least requires the college to report to a Minister or the Cabinet, etc.
But we could use some fresh ideas, and even possibly look to examples of things working here for reference. Is CMI just months away from full reaccreditation by WASC? The answer is “yes.” In contrast, why aren't the changes so needed at our elementary schools here moving more quickly? A lot of it is to do with government bureaucracy and lack of accountability within government - which has so much control over decisions necessary for the Ministry of Education, and public schools, to improve.
Maybe the answer is independent, highly qualified boards of directors that can demand high-quality work performance and accountability within the organizations that they oversee - not boards run by politicians. Anyway, it's just a thought.

From the 3/30/07 issue of the Marshall Islands Journal

MEC, SK Networks Proposal

Responding to an RMI government proposal regarding the takeover of the MEC fuel farm and electric utility, SK Networks this week presented RMI with a proposal offering $12 million for a 51 percent share in a new company to be established to own the fuel tank farm as well as an obligation to arrange for a $9 million loan to be used to pay off the current RMI liability to the US Rural Utility Service (RUS).
Late this week the proposal was received which also lays out additional conditions.
The proposal calls for establishment of a completely new company to include full ownership of the existing MEC fuel tank farm, as well as exclusive bunkering (fueling) rights in the RMI.
A five year tax exempt status, followed by a five year 50 percent tax liability is called for, as well as the requirement that the RUS loan be repaid by an equal payment method, agreed to mutually by SK Networks and RMI.
The proposal includes a requirement that the RMI negotiating team respond to the offer by March 28, 2007.

From the 3/16/07 issue of the Marshall Islands Journal

Training a bonus for businesses

Marshall Islands High School principal Gary Ueno and teacher Richard Li briefed the Marshall Islands Chamber of Commerce on a new student work-training program that will start in Majuro next month.
They asked the local business community for its support to place as many senior MIHS students as possible in the four-to-six week program.
Ueno said that awareness of time and work ethics are two important values for students to learn as they get ready to enter the job market. “In any form of employment, it's important for them to understand that time is a must,” he said. And “we want to instill in our students the need for proper work ethics. These are the two reasons to introduce the practicum program for seniors.”
Li said that potentially 100 of the 167 current seniors could qualify for the program, but the number placed depends on the ability of government and business offices to give students a good work opportunity. The plan is for the students to work in the afternoons from Monday to Thursday, with Friday a day for evaluations with the program at MIHS. The program is to start April 17.
Li and Ueno asked for support from local businesses to help place the students in work assignments starting next month.

Network upgrade set for next month

Some possibly good news on the cell phone front was provided by lawyer David Strauss, who told this week's Chamber of Commerce meeting that the National Telecommunications Authority is planning a major upgrade of the Majuro cell phone system that will be completed in May.
NTA is spending $800,000 for improvements in the capital and a new switch for Ebeye. Currently, Ebeye cell phones are all routed through Majuro, increasing the congestion on our cell lines, Strauss explained.
By giving Ebeye it's on switch, it will free up “bandwith” (think of having extra phone lines to get through on).
NTA has more than 6,000 cell phone subscribers in Majuro, and local users complain that congestion usually requires callers to dial a number dozens of times before getting through.
Strauss reported that NTA general manager Tony Muller told him that NTA's target foor the Majuro upgrade is May 1 - which is NTA's 20th anniversary of operations.
But if it's not completed by May 1, it will be done within that month, he added.
The upgrade is expected to double the capacity of the cell system in Majuro.

From the 3/9/07 issue of the Marshall Islands Journal

The RMI owes the ADB $1.4 million

The Marshall Islands government is seriously delinquent on its loan payments to the Asian Development Bank, with its last payment made on November 20, 2006.
In response to inquiries from the Journal, ADB officials confirmed that the RMI government as of February 26 owed $1,430,940.96 to the ADB for past loans. Most of the debt is older than 90-days, according to the ADB.
Loan delinquency can hold up loan draw downs, but since the ADB and the RMI government agreed in the current country strategy that there will be no additional loans, this is not an issue.
Technical assistance can continue but lack of improved policy decisions by government can hold up additional technical assistance funding from ADB.

The RMI EPA will respond to Delap landowners

The RMI EPA said it will respond to Delap landowners who oppose the planned dry-dock after it has had the chance to get legal advice from Attorney General Posesi Bloomfield.
A large group of Delap residents signed a letter to the EPA last month challenging EPA's environmental okay of the dry-dock project.
An EPA press release faxed to the Journal at 6:49 pm last week Wednesday said that the EPA will respond after staff have talked with Bloomfield, who was off-island when the statement was faxed.
“Whilst the environmental impact assessment report has been approved by the EPA board, the EPA wishes to make it clear that this does not provide the developer with the final approval for commencement of construction,” the EPA statement said.
There are additional legal, environmental and administrative procedures that Ching Fu is “required to adhere to before approval of the proposed development,” the EPA said. “These procedures include approval for the construction of the dry-dock from the relevant landowners, which is outside the control of the EPA.”
EPA said that is also requiring Ching Fu to follow “a number of environmental permitting processes, which build on the initial phases of the EIA report process and are necessary before the EPA grants approval.”
EPA management said it “is committed to ensuring that Ching Fu exhibit 'best practice' environmental standards.” Because of this, “granting of environmental permits will be subject to implementation of a robust and detailed environmental management plan (EMP), which will require approval by all parties.”
EPA said the “EMP” “is a legally binding document that ties the developer to a series of mitigation measures identified in the EIA to prevent or minimize environmental impacts, with the sole purpose of protecting the environment.”
EPA further said that if Ching Fu is granted approval, “EPA intends to strictly control Ching Fu's construction and operation activities through auditing the project for compliance with the environmental management plan.”
The EMP will be used to identify any violations of environmental procedures that will subject the company to violations, financial penalties and potential removal of its permit, the EPA said.

From the 3/2/07 issue of the Marshall Islands Journal

Which Part of "No" don't you get? MISSA Still Won't Bail Out MEC

By GIFF JOHNSON
Last week, it was the short version of 'no'. This week, MISSA delivered a four-page letter to the Cabinet's special committee on MEC with the same message: 'No'.

The special committee, chaired by local businessman Charles Domnick, had requested that MISSA reconsider its initial rejection of the committee's request for $12 million. MISSA board chairman Jack Niedenthal responded to the special committee with a letter earlier this week in which he said 'no' in a few more words. “The MISSA board of directors, which has fiduciary relationship to the assets in the retirement fund, is both unable and unwilling to lend any portion of its retirement funds to MEC,” he said.

The Cabinet-appointed committee was set up to review the situation of the Marshalls Energy Committee and make recommendations to the government as to how it should be reorganized and how it should deal with its current financial problems.

The special committee told the MISSA board that “it is now our firm opinion that MISSA's financial assistance is the only viable option we have left to prevent MEC being put under private management and/or privatized to the proponents, which are funded by off-island interests.” But retirement fund chairman Niedenthal said this was “both erroneous and short-sighted.” He said there were several options, “including, in no particular order, sale of MEC to SK, employment of the PII consortium to manage MEC, and reprogramming of RMI government funds to operate MEC. “If the special committee truly believes that its only remaining option is to raid the reserve funds and trust funds of other government agencies in order for MEC to survive, then a new special committee should be formed.”

Niedenthal said he serves on boards for MISSA and the College of the Marshall Islands, which “have faced similar, seemingly impossible situations.” He said the same restructuring steps worked for both:
o The board of directors must be changed and filled with “independent, responsible, proven, non-elected officials.”
o The chief executive officer and other top management must be replaced by the new board, where necessary.
o The board, working closely with the new CEO, “must change the culture of the institution.”

“MEC appears to have been managed into bankruptcy in that it is currently unable to pay its debts as they become due,” he said. “For this reason, so long as the management of MEC remains the same, it is unlikely that any outside institution, bank or individual will be willing to provide the required funding. In short, it appears that immediate, drastic and fundamental organizational changes must be made before MEC can be made into a financially sound institution.”

Minister Wase signs Funding Agreement

An event of major significance to Marshall Islands non-governmental organizations took place Tuesday this week at the Ministry of Finance. There, Finance Minister Brenson Wase and European Union official Malcolm Ponton signed agreements that will soon provide funding through the Ministry to the Marshall Islands Council of NGOs for a program of developing the capacity of civil society and NGOs in the country.

But the signing ceremony held far greater significance for the RMI that is not limited to the NGO sector. The agreement sets in motion the first large-scale funding from the EU since the Marshall Islands government joined the EU's Africa, Caribbean and Pacific (ACP) grouping of countries in 2000. The Euro 500,000 NGO funding translates to about $625,000 at current exchange rates. Ponton arrived Tuesday from his Suva headquarters to complete the funding agreement, which has been negotiated over a period of nearly four years.

From the 2/23/07 issue of the Marshall Islands Journal

MISSA Won't Bail Out MEC

By GIFF JOHNSON
The MISSA board of directors has turned down a government request for a $12 million loan to the Marshalls Energy Company.
A Cabinet-appointed committee last week asked for the funding to help bail MEC out of its serious financial problems, which include about $4 million left on a high-interest loan to Mobil Oil Micronesia.
MISSA officials said that the retirement fund has no authority under the law to lend money. Board members also balked at signing confidentiality restrictions required before being able to review MEC financial documents.
In a letter last Friday to Charles Domnick, who heads the special committee appointed by Cabinet to review options for MEC and to advise Cabinet, MISSA board chairman Jack Niedenthal said that the board “is unable to approve the request from your Special Committee.” He also said that the confidentiality demanded by the government of a public agency led the board to decide “not to review the documents,” which Niedenthal said were returned without opening or reading.
In response to questions from the Journal, Niedenthal said: “The MISSA board decided long ago that we will not lend anyone money because there are no provisions in the Social Security Act that permit us to do so. According to the law this money belongs to people and businesses who have worked hard to contribute to our system. MISSA is not a lending institution.”
He confirmed that the special committee was seeking $12 million, but said “the negotiations never even came close to any discussion of 'terms.'”
Several of the MISSA board members had conflicts of interest in reviewing the loan request. Saeko Shoniber works for MEC, David Paul works for Mobil and Finance Secretary Jeff Barton works for the government and is also a member of the special committee making the request. In the end, only board members Niedenthal and Maria Fowler could vote on the matter without conflict, according to Niedenthal.
“Only members who were not conflicted were actually involved in the decision, but all members, even the Secretary of Finance, were allowed to stay for the deliberations.”
In a letter to Niedenthal shortly after this decision, Barton told Niedenthal that he disagreed with the MISSA decision because of the importance of ensuring that MEC stays a government-run utility firm for the benefit of the people of the RMI.
“While we feel sorry about what is happening at MEC, we don't feel that MISSA can be part of the solution,” Niedenthal told the Journal.

From the 2/16/07 issue of the Marshall Islands Journal

MISSA: The Majuro Atoll Local Government should be in receivership

The Majuro Atoll Local Government is in serious risk of going into receivership for failing to pay over $1 million worth of its employees' social security and health fund taxes to the Marshall Islands Social Security Administration.
MISSA attorney David Strauss filed a complaint to the High Court early this week seeking judgment against MALGov and defendants Mayor Riley Albertter, as the Mayor, executive councilmen Titus Langrine, Ladie Jack. Jisam Kaisha and MALGov's accountant Joseph Batol - all of whom are individually liable because they are responsible for ensuring that the quarterly social security and health fund taxes which they deduct from MALGov's employees pay checks are paid to MISSA,”
MISSA's filing notes that for the four quarters ending December 2005 through September 30, 2006, MALGov filed a return but failed to make any payments. Then, for the quarter ending December 31, 2006, the local government didn't file or pay their employees' social securities or health fund taxes.
MISSA administrator Saane Aho, explained to the Journal that it is important, especially now, for MISSA to collect on owed taxes.
“Huge debts like this put a real strain on MISSA's cash flow,” said Aho. “With a significant debt like this MISSA may be unable to meet it current benefit payments.”
MISSA is asking the court not only for payment of back taxes, which total $1,043,097.26, but also that MALGov pays daily interest of 12 percent per annum or $320.21 daily from the February 12 filing date until a judgment is made; court costs of $130; reasonable attorney's fees; interest on the entire judgment of 9 percent per annum until the back payments are paid in full and to appoint a receiver for MALGov and the other defendants listed in the suit
MALGov has 20 days to respond to MISSA's complaint.

First JAL charter flight arrives

The first of what is intended to be a series of special charter flights direct from Japan to the Marshall Islands began this week with the arrival, early Sunday morning, of approximately 200 visitors from Japan.
The flight, which only took four and a half hours from Japan, arrived just after 8:30 am. This was the first significant arrival of tourists from Japan to the Marshalls since the end of WWII. By and large the incoming visitors appeared to be dive oriented, and by local reckoning some several hundred thousand dollars were injected into the economy as a result. A JAL customer service representative from Japan, who was here to oversee operations, said that she was very pleased with the processing and handling of JAL's first batch of passengers and their bags.
She noted that the Marshall Islands appeared just as keen as JAL to make this first trip a success.
“Everything is moving smoothly and because everyone (from JAL to local businesses and the RMI government) wants this to work it's making the process much easier,” she said.
Observations on Sunday proved that advance cooperation and coordination between local tourism businesses along with the government and JAL paid off as passengers were not only seated on the plane according to their respective hotel, but their bags also had color coded tags. Copies of all the passengers' passport details were supplied to immigration authorities prior to the flight's departure from Japan.
The three Major hotels on island also eased transportation logistics by helping each other. The hotels shared busses to ensure passengers and bags made it safely to the various hotels.
The visitors were expected to depart Majuro for a return to Japan Thursday. After three days of special banquets, diving, and adhering to a schedule, the last day was left to free wandering, souvenir purchases, and relaxed sightseeing. Despite a general shortage of water on island, special preference was given to hotels involved in hosting the guests, and the weather proved friendly with breezy winds and bright sunshine in abundance.

JAL visit businesses

Hoping to cash in on the presence of 200 Japanese visitors, local restaurants put on special buffet dinners and live shows to give the tour group something special to do in the evening hours.
On Sunday, the Marshall Islands Resort splashed out on a full spread including lobster, fresh fish and prime rib. On Tuesday, the RRE Tide Table organized a Luau night with all the trimmings including scrumptious local foods served on local plates made out of palm fronds, entertainment by a local Fiji singing trio, and Polynesian tamure dances by the Chicky Girls (which, by the way, were a real crowd pleaser). But the big 'attention getter' award has to go to President Kessai Note, who attended the luau at the Shoreline area.
The arrival of the head of state at the Tide Table Luau was like the 'cherry-on-top of your ice-cream' for the Japanese visitors who were thrilled to be having dinner with the President of the Marshall Islands. This treat topped off a near perfect day spent enjoying the view of our little islands and diving in our pristine lagoon. (Hats off to you, Mr. President, for the sake of tourism development: You may have to sacrifice your nights during future JAL visits as you're obviously a “tourist sight” yourself.)
Meanwhile just down the road, the Long Island Hotel organized a Valentine's Day special: A candlelight dinner with dancing. Long Island Hotel's Manager Alan Chien said he's been really pleased with the visit as he's received positive feed back from his guests. “They're saying that they're really enjoying themselves, they love the diving, they liked the land tour and they really love our beach in front of the hotel,” said Chien.

From the 2/2/07 issue of the Marshall Islands Journal

Labor Law Causes Uproar with the Marshall Islands Business Community

Marshall Islands businesses are in an uproar over public law 2006-60, a new labor law passed by the Nitijela late last year that has revamped procedures for alien workers.
Business people say that none of the revisions discussed and agreed to between businesses and government officials over months of talks on the draft legislation last year were included in the final document.
Marshall Islands Chamber of Commerce leaders met with Foreign Minister Gerald Zackios last Friday to express their concerns. Zackios' ministry oversees labor.
“We wanted the government included in the requirements so that they know what we go through in hiring outsiders,” said Chamber president Jack Niedenthal, adding that during the meeting last Friday, Zackios expressed surprise that the government was exempted.
Another issue is the law's requirement that aliens to leave after two years. “These are serious issues,” Niedenthal said. “They really hurt the private sector.”
Niedenthal said everyone in the Chamber wants to hire Marshallese workers. But there are positions where there are no qualified local people and “we shouldn't have to go through a tortuous process to get them here.”
“None of the important changes to the original draft proposed by the Chamber were evident,” said a Chamber statement after last Friday's meeting. “This is unacceptable to the Chamber of Commerce.” The business group said that if the laws aren't amended to include these changes, the Chamber will take the position that the law should “be revoked and rewritten.”
Of particular concern to local businesses who have aliens working for them are the provisions that:
o Require alien workers to be sent home after two years and being unable to return for a three-year period.
o Set a $10,000 fine or a maximum jail term of five years for any employer who employs a person without a work permit.
PII chief executive officer Jerry Kramer called the labor law the “worst piece of legislation ever passed by the Nitijela.” He said the final version ignored substantive recommendations from the private sector, and if enforced could result in the shut-down of many businesses in the RMI who rely on skilled alien labor.
“We don't think the law as passed is fair to businesses,” Niedenthal said. “I'd like to thank Minister Zackios for meeting with us and for giving us the impression that there will be amendments to make it a fairer law.”

The RMI Attorney General Weighs in on the Labor Law

The RMI Attorney General said that Chamber of Commerce criticism of the recently passed Nitijela labor law is “patronizing and extremely offensive” to the Nitijela and the legislative process.
AG Posesi Bloomfield, responding to questions from Journal, said if the Chamber of Commerce says that none of its recommendations were included in the new law, they're wrong because “most of them were.”
“What the Chamber should appreciate is that this was one law that did go through much consultation and not just the Nitijela public hearing as is with the huge majority of laws proposed by government,” he said. “It's unfortunate if they were led to believe that every one of their recommendations would just sail through without further review.”
He said Chamber recommendations not put into the new law included provisions to make their importation of foreign labor easier, less stringent and also to "level" the playing field with the Government. “As to that last recommendation, I will not go into the specifics of that argument except to say it is ludicrous,” he said.
“They should also appreciate that no matter what law is discussed and consulted upon, no interest group should be able to dictate to the Nitijela what law to pass simply because they worked so hard on recommendations. We work extremely hard on all legislation, but at the end of the day this is a democracy. What the Nitijela passes in the interests of the people must be respected as such.”
Bloomfield said the Chamber is only one of the “interest groups” with which the Nitijela deals.
“The Nitijela at the end of the day has to consider all factors that influence legislation,” he said. “Who represents the interests of local Marshallese workers whose jobs may be at risk? Does the law they want fit in with the other national policies of the government? Even if this is good for their businesses, is it good for all businesses?”
He said it is discouraging to see the complaints “given the much improved operations of the labor division. I certainly would be wary of consulting with the Chamber on any other piece of legislation given their high expectations and swiftness to criticism.”
Bloomfield said “it's patronizing and extremely offensive to me that there is an inference here that laws given to the Nitijela must either have their recommendations included without further review by the Nitijela, or that somehow that their recommendations were taken out and that the Nitijela was not savvy enough to want to bring them back in. We all worked extremely hard on this piece of legislation but let's respect the legislative process.”
Chamber officials indicated their hope that amendments can be made to the law.
“If they are trying to influence amendments already, that's very much their right,” Bloomfield said. “But ultimately the legislative process ends with the Nitijela. If the Chamber influences amendments and they are passed at this session, I certainly will respect the legislative process and you won't hear any complaining from me.”

The following is a press release from the RMI EPA provided to the Journal on Thursday January 25:
“The RMI Board of Directors unanimously approved the updated and final Environmental Impact Assessment (EIA) Report by proponent, Ching Fu Shipyard Co., Ltd. of Taiwan, in relation to the proposed floating dry dock development at Delap, Majuro, Republic of the Marshall Islands.
“The decision to approve the revised and final EIA Report was finally made after considerable review of both the original and updated documents, and technical advise from EPA staff. The Board felt that the revisions made adequately addressed the issues that were raised during the two public hearings May 16, 2005 and September 15, 2006 at the Nitijela Conference and at the MALGovt Conference Room, respectively.
“Furthermore, the Board also held a series of meetings throughout 2006 to give substantial attention to the proposed project and concerns raised with the view that much time was needed for assessment of the hearings and revisions made by the Company representatives.
“A major factor of the decision process included considering the potentially significant effects of the dry dock project by looking at certain criteria. These include the degree to which public health and safety will be affected, potential risks to the natural functions of the ecosystem, fish and wildlife resources, threats to the existence of endangered species and their critical habitats, and the degree to which cultural, natural, scientific and historical resources will not be threatened, all of which are outlined in the regulations. The highlighted issues were reviewed against the project's waste management plan, storm water management plan, contingency and emergency plans, including EPA's own regulations. To this end, the Board felt that these are adequate tools to monitor, control, and prevent further degradation to the Delap lagoon environment.
“It is important to note that the RMI EPA can only consider projects of such magnitude once request is made by proponents or companies backed by the government. The proposed floating dry dock target the 300-foot deep-sea vessels that currently carry out transshipment services here in Majuro and hope to expand in the future to include other international operating vessels in the Pacific region.”

High Court Ruling on Drydock

A ruling by High Court Judge Richard Hickson on whether or not to order the RMI EPA to hold a further public hearing on the proposed dry-dock plan for Delap is expected to be issued this Friday.
Attorney General Posesi Bloomfield and attorney Scott Stege were to file their closing arguments at mid-week, and Hickson promised a ruling by the end of the week.
A motion by Ben Chutaro, now represented by Stege, last week Monday asked the High Court to halt a public hearing announced by the RMI EPA last week and order another hearing, with enough notice so the public is aware of the hearing.
Chutaro said in his complaint to the court that the EPA was not following its own regulations that require adequate notice for public hearings related to environmental impact assessments (EIAs).
At Monday's court hearing on the motion, Judge Hickson made it clear that the hearing was not about the dry-dock, but focused narrowly on the question of the process involving the EIA.
Bloomfield confirmed early on that last Monday's meeting was not a public hearing according to EPA EIA rules, but rather was called by the President's Office. EPA general manager John Bungitak, who issued the notice for the meeting, also confirmed this under questioning by both Stege and Bloomfield.
“We're asking the court to consider whether the rules governing EIAs have been conformed to or given lip service (by EPA),” Stege said. Later, he added: “The revised EIA that came in from Ching Fu has not been received, considered, reviewed and understood by the general public since it was leaked or announced at the January 22 public hearing.”
But Bloomfield said simply that the court had to decide if it had jurisdiction in the matter since last week's meeting was not called according to EPA EIA rules. The court was now aware that the meeting was called by the President's Office. For what purpose would a public hearing be called now since the EPA has approved the EIA? Bloomfield said to the court.
Under questioning by Stege, Bungitak defended the EPA's public hearing process for the Delap location of the dry-dock. He said there was a hearing on September 19, 2006 and that the EPA used comments from the public to advise Ching Fu of revisions it needed to make to its EIA. He specifically mentioned that Ching Fu had done a marine survey of the Delap site in response to concerns expressed at the September public hearing. Questioned about the hearing being called with just one day notice, Bungitak noted that he was off-island at the time but his staff “should have followed normal procedures (for public hearings).”
He said there was no revised EIA at the September 19 hearing because “we wanted to hear what Delap residents concerns were. Then we could advise Ching Fu on the (requirements) for a final EIA.”
Bungitak also said that he didn't receive an electronic copy of the 144-page revised EIA until January 8 this year, though Ching Fu had advised him they mailed it from Australia in December. The EPA board approved the project in a board resolution dated January 12.
As Stege's questioning of Buntigak continued, Bloomfield objected a number of times, at one complaining that it was getting off track. “This is a temporary restraining order hearing,” Bloomfield said. “(But) I believe this is turning into a judicial review of the EPA board's decision. That's not within the scope of this hearing.” He said Chutaro and Stege could make another complaint to go into that issue. “They're free to make their arguments but not at this hearing,” he added.
Judge Hickson said that the issue was whether or not there is the need for another public hearing with proper notice.
Later, in response to Stege's questioning, Bungitak indicated that following the September 19, 2006 hearing the board had asked Mayor Riley Albertter, who is a member of the board, to consult further with people in Delap. He noted that many of the people who live near the proposed dry-dock site are the Mayor's family, so the board felt it was appropriate.
Bloomfield asked Bungitak if the dry-dock was a government or private sector project. He said he believed it was simply a Ching Fu project because no government officials had appeared with the company.

Why I Filed Suit over the Drydock: Ben Chutaro

The dry-dock is not the focus of this week's court complaint. “It's about the rule of law and due process,” said Ben Chutaro in explaining why he filed a complaint in the High Court about the EPA public hearing process.
“Out of fairness to the people of Delap, will they be given the same opportunity as the people of Uliga (to comment)?” he asked.
The reason for the rules regarding public hearings and requirements to give people notice of the meetings is “to make it fair.” The government and the courts should give the people that opportunity, he said. “In a democracy it is key that the government follows its own laws and especially on major development issues that it ensures that people are consulted and have the opportunity to have their say,” he said.
He asked what is the motivation for rushing the approval process? Chutaro told the Journal that “it's not the public's fault that Ching Fu just submitted a revised EIA in December or January.”
He noted that EPA general manager John Bungitak didn't circulate the revised EIA from Ching Fu to the EPA board until January 9 and the decision was made less than a week later with no public hearing on the revised document.

Mishandled from the start: An Editorial from the Marshall Islands Journal
It is remarkable how clumsily the RMI government has handled management of the Taiwan dry-dock project since mid-2004. And the government's ineptness hasn't improved as last week's fiasco at the Nitijela conference room - a so-called “public hearing” - proved.
Although a Ching Fu consultant told last Monday's meeting at the Nitijela that the Monday meeting was “the fourth public hearing” and that the review of the dry-dock was “more extensive than anywhere else in the world,” the fact is there has been only one properly announced and conducted public hearing by the RMI Environmental Protection Authority since the dry-dock first appeared on the radar screen in mid-2004.
That properly conducted public hearing was on May 19, 2005. Two weeks prior to that public hearing, RMI EPA began advertising the availability of the Ching Fu-produced environmental impact assessment (EIA) for the public to read, publicly announced the May 19 hearing well in advance, and also publicly announced a public comment deadline of June 2, 2005. This was done according to EPA procedures.
Three months earlier, on February 24, 2005, the Catholic Church on its own initiative had called people together to talk about it because, despite a lot of unofficial information circulating in the community about the dry-dock, no government action had been taken to present this proposal to the community for review. Government and Ching Fu people can't claim that this was an “official” public hearing, though certainly it did tell us something: The vast majority of the people present did not like the project and criticized the government for the lack of information and public review of the project.
After the RMI EPA rejected the Uliga Dock location at the end of June 2005, little was heard officially, although the EPA had advised Ching Fu that it could offer a different location and the EPA would consider it.
The only “public hearing” held on the proposed Delap dry-dock site was a hastily-called hearing on September 19, 2006 - that was not advertised publicly in the Journal, as the May 19, 2005 hearing was, and was called with just one day notice, after a previously announced public hearing for August 8, 2006 had been called off allegedly because EPA board members were not on island and available to attend. But the September 19 hearing was of little value for two reasons: 1) no one from Ching Fu was present to answer questions from the public and 2) the EIA did not contain any information specific to the Delap site - so how, in fact, could the public evaluate the new proposal with no information? Also, only one EPA board member was in attendance - Mayor Riley Albertter - which brings into question EPA's announced reason for postponing the August 8, 2006 public hearing.
Last Monday's purported “public hearing” was equally bizarre and a study in how not to conduct a public hearing. First of all, it was not a “public hearing” if that term is defined as an opportunity for members of the public to have input before a decision is made by government.
In reality, it was a meeting called to allow the proponents of the project to offer information about the dry-dock and field questions about the project moving forward. The letter issued on RMI EPA letterhead on Friday January 19 announcing the Monday January 22 “public hearing” was disingenuous. The President's Office had called for the meeting to happen, so why didn't the announcement come from the President's Office? This misled the public to believe this was an EPA-sponsored public hearing to get public comment on the proposed Delap site.
Secondly, and perhaps far more to the point, the RMI EPA board had already approved the Ching Fu EIA for Delap. Why was that decision not publicly announced before this so-called “public hearing?” The lack of transparency in EPA's decision to approve the EIA angered many people who attended because they were misled by the government and the EPA about the true purpose of the hearing and the already-made decision by EPA.
In fact, this important EPA decision wasn't even announced at the outset of last Monday's meeting with the public. It was mentioned in passing - as a sort of “oh, by the way” - by EPA general manager John Bungitak about one hour into the meeting - when in actuality it was the most important point of the entire event.
Finally, it is ironic that the “public hearing” was not broadcast live on V7AB until Majuro Senator Jurelang Zedkeia demanded to know why it was not on the air. This meant that the first hour of the meeting - in which the Cabinet ministers and Ching Fu officials promoted the project - did not get out to the public at large, another misstep by the government, which one would assume wants its own message to reach the public.
Even with EPA approving the environmental side, access to land appears to still be a major hurdle. The dry-dock must connect to land somewhere. As recently as the end of last week, government officials who claim to be going all-out to help Ching Fu get the dry-dock moving, still didn't know who has authority (or a lease) for property in Delap next to where Ching Fu wants to locate the dry-dock. It's truly amazing that the President and Cabinet ministers say they want the dry-dock to move forward, but in the more than 18 months since EPA rejected the Uliga site they still haven't resolved the key issue for Ching Fu, which is access to land at the proposed Delap site.
If you're a dry-dock opponent, there is certainly much to sink your teeth into. If you're for the dry-dock, well, good luck. You'll need it to make this long-stalled project come to fruition.

A dry-dock chronology
…From the pages of the Journal


2004

July 30 Taiwan's Ching Fu Shipyard RMI Ltd. places advertisement in the Journal offering job training opportunities for Marshallese “in the field of shipyard, dry-dock and repair.” After six months training in Taiwan, trainees to join “an elite team” to work for Ching Fu Shipyard RMI Ltd.

August 6 “Uliga chosen as site for giant dry-dock” is the page 3 headline, the first news article carried on the project. RMI Ports Authority board of directors has already approved use of Uliga Dock site for the dry-dock. Port Authority officials say it is under construction in Taiwan and will arrive in Majuro in nine months.

2005
January 4 “T&C facing eviction by Taiwan dry-dock?” is the page 1 headline. Ministry of Transportation staff were surprised to find out that the proposed dry-dock is moving forward when a company official was discovered last Friday inspecting property on the Uliga dock that currently houses Ministry offices, the Journal reported, adding that a planned dry-dock building is to occupy the same location where the T&C office is. “We're here and we don't know what's going on,” said T&C official Betwel Lekka. In the same article, EPA general manager John Bungitak said he had informed the RMI Ports Authority that Ching Fu must file an application for an EPA permit. He said he had been asking for this repeatedly since mid-2004 without result. “We need more detail on the project,” Bungitak said.

February 18 “Chen: Uliga is perfect for the ROC dry-dock” is the page 3 headline. Steve Chen, president of Weelee International Co., Ltd., the parent company of Ching Fu Shipbuilding Co., said the Uliga location offered everything needed for the dry-dock. He described the company as “environmentally conscious” and said they will comply with all EPA requirements. He also said the dry-dock will benefit the greatly RMI economy.

February 25: “Kessai: We're not hiding dry-dock facts” is the p 31 headline. Speaking at the Nitijela earlier in the week,Note said that the dry-dock is not a new idea and information hasn't been hidden. He made extended remarks about the dry-dock partly in response to a pamphlet provided to all Nitijela members entitled “just say no to the Taiwan dry-dock in Uliga.” He confirmed that the dry-dock is expected to arrive in Majuro in May. The reason that the government hasn't talked to uliga landowners about the dry-dock is because the dry-dock isn't using their land, he said. It's only using government-leased property and the lagoon.

March 4 “Big crowd turns out to question dry-dock” is the page 2 headline. About 200 people show up to Assumption Church-sponsored public meeting on the dry-dock. RMI EPA officials didn't show up, but Ministers John Silk and Mike Konelios and RMIPorts Authority officials Jack Chong Gum and Joe Tiobech were there. Silk said the main purpose of the dry-dock is to promote economic growth and train Marshallese. Ports Authority officials said it will operate 24-hours-a-day, seven days a week except when the winds are blowing the west and when Mobil fuel tankers are at Uliga Dock. Opponent Ben Chutaro said the government was not following the proper process to evaluate and review the dry-dock before moving forward. Ramsey Reimers asked if the government was considering how it will affect the tourism industry? Moses Samuel asked why not move it somewhere else? While not endorsing the project, Silk said he'd visited the Ching Fu shipyard in Taiwan and found it very clean and advanced. Carlos Domnick said if environmental enforcement is weak, then Majuro will see new health problems from the dry-dock.

March 18 In a letter to the Journal, EPA GM John Bungitak confirms that “the needed information (from Ching Fu) has finally arrived in my office.” He said it wil be shared with the board, and if their decision is more details are needed or a public hearing should be held, “we will head toward that direction as this is the normal procedure to conduct business in our agency.”

March 25 Ching Fu RMI Shipyard Co., Ltd. advertises for a shipyard manager, assistant and pump manager, finance manager, head mechanic and executive supervisors.

April 1 “EPA insists on Ching Fu dry-dock study” is the page 8 headline. EPAGM John Bungitak explains that he's advised Ching Fu about the environmental impact assessment (EIA) required.

April 8 “Dry-dock halted awaiting study” is the page 3 headline. Taiwan Ambassador Lien-gene Chen said that Ching Fu has hired a company to conduct the environmental impact assessment for the RMI EPA, and said the arrival of the dry-dock has been postponed. He also expressed concern about rumored possible demonstrations against the dry-dock during the visit at the end of April by Taiwan President Chen Shui-bian, which he said would negatively impact any future Taiwan business development in the RMI.

April 8 “Bungitak still GM” is the headline of a sidebar to the dry-dock story. A government official said that because John Bungitak “followed the book” when enforcing EPA rules on the dry-dock, some people complained to elected leaders, which led to rumors that a change in EPA leadership was being considered. An EPA official said Bungitak was still GM.

April 15 “Info to start flowing on Taiwanese dry-dock” is the page 4 headline under stories about Taiwan President Chen Shui-bian's impending visit to Majuro. Ching Fu head Steve Chen said the company fully supports the EPA's EIA process. “Even though it delays the timetable for the project, the EIA process provides the ideal opportunity to communicate the enormous benefits of this project to the community and to demonstrate beyond any doubt the environmentally sensitive nature of the development,” he said. “This process provides the opportunity for us to properly address legitimate concerns while at the same time dispelling some of the misinformation currently circulating.”

May 6 “Report gives thumbs up to floating dry-dock” is the page 3 headline. The Australian company AEC Group Ltd. filed an EIA with the RMI EPA that said the dry-dock will not only not harm the environment, it may actually lead to improved waste management in Majuro. The report said the dry-dock is an $18.6 million facility, the largest private sector foreign investment in the RMI to date, and will inject more than $11 million annually in salaries, taxes and sales. The Uliga Dock site is identified as the best for the dry-dock.

RMI EPA announces that Ching Fu's Environmental Impact Assessment (EIA) report is available for the public to review, and requests written comments through June 2, 2005.

May 13 RMI EPA announces that it will hold a public hearing the following week at the Nitijela Conference Room on May 19 to review the dry-dock EIA.

May 20 “Why bring the dry-dock to RMI?” is the page 2 headline. The story reports on the Chamber of Commerce meeting, at which businesspeople had numerous questions about the social and environmental impact of the facility. A related story notes that officials from Ching Fu and the AEC Group, that did the EIA, will be at this Thursday's public hearing sponsored by EPA.

May 27 “Testimony outlines flaws in Ching Fu dry-dock plan” is the page 2 headline reporting on the EPA public hearing. Members of the public challenged Ching Fu's contention that no dredging is needed at Uliga to accommodate the dry-dock, saying the lagoon area is too shallow. Critics said Uliga is not an “industrial area” but rather a residential and light commercial area. “It's a great sales pitch,” said Uliga resident Matt Holly of the EIA report. “But you need to work on it.”

“Dry-dock firm outlines its plan” is the page 6 headline that describes the Ching Fu EIA. AEC Group's Carey Ramm said Ching Fu chose Majuro for the dry-dock because it is positioned near the main fishing grounds, has good air and sea connections and is politically stable. He said it will generate 80 jobs and an annual revenue injection to the RMI of about $11 million. “It will give a substantial boost to the economy.” He also listed a variety of environmental precautions that will be part of the dry-dock operation, and said all RMI EPA guidelines will be followed. “The dry-dock will be operated to an international standards.”

June 3 “WUTMI: We don't want the dry-dock.” Representatives of the national women's group meet with EPA officials to announce their opposition to the dry-dock for Majuro Atoll. WUTMI head Carmen Bigler said the company is exaggerating the economic benefits because based on experience, Taiwanese fishing companies buy from other Taiwanese companies.

June 10 “KMI joins Stevedore in dry-dock venture” is the page 3 headline. Stevedore is leasing property between Cost Price and its former office to KMI for $1 a year as part of a joint venture deal between the two companies to develop a building that will include accommodations for fishermen whose vessels are being worked on in the dry-dock.

Various local residents object to the dry-dock in Uliga. “I hope that the RMI EPA and our government leaders will realize the possible damages to our fragile environment resulting from the operation of such a facility,” said Dolores deBrum-Kattil, general manager of the Marshall Islands Visitors Authority. “We find it unlikely that Uliga is the best location for the dry-dock, due to its proximity to our Pacific Pure Water plant, and the proximity to Hotel Robert Reimers,” said RRE chief executive officer Ramsey Reimers.

The EPA board held its first meeting on the proposed Uliga dry-dock on June 8, and will schedule a second and final board meeting on the issue in about two weeks, according to EPA GM John Bunitak.

June 24 RMI EPA expected to make a final decision on the proposed Uliga site for the dry-dock at its meeting on June 28. In the same issue, R&D Minister John Silk supports the dry-dock, saying he doesn't want the RMI to project an unfriendly image to foreign investors from Asia. He also argues that it is the first time a foreign company is putting its own money into an investment in the RMI. Uliga resident Ben Chutaro argues in another story that Uliga is the wrong location and will undermine tourism development in Majuro. “There is an over-emphasis on fisheries now,” Chutaro said. “Tourism is starting to fall by the wayside. That's a policy mistake.”

July 1 “EPA rules against dry-dock in Uliga” is the page 3 headline. The EPA board (chairman Chief Secretary Bobby Muller, and members Mayor Riley Albertter, Health Secretary Justina Langidrik, Transportation Secretary Jorelik Tibon and former MIVA GM Mark Stege) voted at its meeting Wednesday this week to reject a permit for the dry-dock in Uliga but said it is open to other site ideas. “The RMI EPA board would be prepared to accept a revised memorandum of understanding regarding an alternative location that removes the operation from the central DUD residential and commercial areas of Majuro, where its industrial nature is more compatible with the surrounding environment and its human uses,” the EPA board said, adding that it “is important to make clear that the only reason this assessment is being refused is the proposed location.”

July 8 “Ching Fu sets ultimatum” is the page 2 headline; the story quotes Ching Fu's Steve Chen saying “there's now a limited window of opportunity for the RMI government to secure this project.” He gives the RMI four weeks to come up with an alternative site or “we will have no option but to shift our main focus to other locations where governments have expressed an enthusiastic interest in hosting the floating dry-dock project.” He mentions Fiji, Kiribati and the Federated States of Micronesia as possibilities. Chen said the “challenge is for the RMI government to put together an acceptable package - covering all of the elements required to secure this project.” He said the RMI must “act quickly.”

R&D Minister John Silk said that despite the EPA's decision against the Uliga site, the government is still keen to bring the dry-dock to Majuro. He said the government was hopeful that within the next few weeks it can assist Ching Fu to find a suitable site. He against stated the potentially large economic benefit to the RMI if the dry-dock is based here.

August 5 “Ching Fu looks into PII location” is the front page headline over a story explaining that the dry-dock company has contacted Pacific International Inc. about the possibility of locating the facility at PII's rock quarry site just past the Majuro bridge. “We're interested to provide a site for the Ching Fu dry-dock,” says PII chief executive officer Jerry Kramer.

November 18 “Dry-dock? What dry-dock?” is the page 2 headline. It reports that Port Authority board chairman James Bing and R&D Minister John Silk said they weren't aware of any new developments with the dry-dock. Silk said Chief Secretary Bobby Muller is the point man for the government on the project. Muller said there was no updated information on the plan.


2006

July 28 “EPA to review dry-dock plan - Ching Fu still pushing for Uliga location” is the page 1 headline. A year after the EPA rejected the proposed dry-dock for Uliga, the plan is back on the table with the EPA. EPA board chairperson Yumi Crisostomo confirmed that the board will meet Thursday (July 27) to review the proposal from Ching Fu. She indicated location was the main issue in last year's rejection. She said questions about whether this will require additional public hearings cannot be answered until the board meets and reviews the Ching Fu presentation. Taiwan Ambassador Lien-gene Chen said the project is “too important for the Marshall Islands to ignore.” He said Uliga remained the best location for the dry-dock.

August 4 “Delap to get the dry-dock?” a page 3 headline is the first time that Delap is identified as an alternative to Uliga. In a statement issued to the Journal, the RMI EPA said its board met several times in the past week to consider Ching Fu's request for reconsideration of the Uliga site. But the EPA said the board refused to change its earlier decision. But the board did consider an alternative site just to the east of the Delap Dock. “With regard to the proposed Delap site, the board has decided to call a public hearing per EIA regulations section 27, which allows for hearing or hearings to be called 'at any time in the EIA process,'” the EPA said. “The reason for this hearing is that the proposed alternative site was not detailed in the originally released public EIA document of last year, and the opinion of the board is that it would only be reasonable to hear to hear if residents at the alternative location had additional comments prior to the formalization of a final EPA decision.” The public hearing is scheduled for next Tuesday, August 8, at the MALGov city hall. The EPA said it aimed to have a final decision on the Delap dry-dock proposal by August 11.

On page 6 of the same edition, the EPA had an advertisement announcing a public hearing on the Ching Fu EIA with a new proposed location “east of the Delap Dock.” The public hearing is set for Tuesday August 8 at MALGov.

August 11 The RMI EPA delayed the scheduled August 8 dry-dock public hearing this week, but did not announce a new date. EPA GM John Bungitak said the public hearing was delayed indefinitely to allow all EPA board members to attend. He said several of the five members were off-island and he wants them to hear the public comments first-hand before making their decision. But another hurdle has appeared for the dry-dock in Delap. The Taiwan company late last year decided it didn't want to engage with PII for use of a possible PII site for the dry-dock. But, the Journal reported, officials were surprised this week to find out that the land in Delap from which Ching Fu aims to use as the link to the lagoon-positioned dry-dock is under lease by Jerry Kramer, the PII chief executive officer. Kramer said Ching Fu hasn't consulted with him, and while he supports a dry-dock for Majuro because it will be good for the economy, the proposed Delap location “is not the best place.” Kramer said “we offered better sites where there was no interference” with residential areas.

September 22 “Critics dominate dry-dock hearing” is the page 3 headline. All but one person at the public hearing on September 16 objected to the dry-dock being located in Delap. But several people made the point that Ching Fu did not provide any specific information about the new site for people to comment on. “The public hearing is about the new proposed location,” said Don Hess. “How can we have a hearing on it when the EIA does not address this location?” Another asked: “How can this be called an 'alternative' site with no study or documentation?” Others complained about the short one-day notice for the hearing and the fact that no one from Ching Fu was present to discuss the Delap plan. Mayor Riley Albertter, the only EPA board member present, said that no decision had been made by the EPA board and said the board wanted to hear opinions of people on the plan. PII's David Kramer presented a copy to EPA officials of his company's lease on the property where the dry-dock is supposed to be linked to shore; he said no one from Ching Fu or the government had talked to PII about using the property.

December 15 “Dry-dock talks delayed” is the page 2 headline. The story reports that a decision on the dry-dock ahs been delayed by the EPA board following a November 30 meeting. Acting GM Ted Tarkwon told the Journal that the board decided another public hearing was needed on the proposed new site in Delap, and also that Ching Fu needed to amend its earlier EIA to make it specific to the Delap site. The board had proposed another public hearing for next week (the week of December 18), but then cancelled it.

2007

January 5 “EPA still waiting for Ching Fu info” is the page 2 headline. Although President Kessai Note said at the opening of Nitijela this week that he expects action on the dry-dock in 2007, EPA GM John Bungitak said EPA is still waiting for additional information from the Taiwan promoters of the floating dry-dock before it will make a decision on the matter. The board at a meeting last November instructed the staff to communicate with Ching Fu to advise it that information specific to the new, proposed Delap site for the dry-dock be incorporated into the EIA that was earlier produced focusing on Uliga. He said the board was responding to concerns expressed at a public hearing on the matter. Bungitak said that EPA has not received information back from Ching Fu. Once the relevant information is received, “the board can meet again,” he said.

January 12 EPA board of directors approves Ching Fu EIA for the proposed Delap site (to be located between the fish base and Evelyn Konou's property). The four EPA board members (chairperson Yumi Crisostomo and members Health Secretary Justina Langidrik, Mayor Riley Albertter and Nitijela staff Ken Kedi sign a board resolution approving the EIA dated January 12, 2007, but doesn't officially announced it until Thursday January 25.

January 19 The RMI EPA faxes a letter of invitation to a “public hearing” on the proposed dry-dock to be held Monday at 10 am at the Nitijela conference room. The invitation notes that Ching Fu officials will be present at the public hearing.

January 22 Cabinet members lead a public hearing in support of the dry-dock, with Ching Fu and AEC Group officials, who explain the benefits of the dry-dock and why they chose Majuro for the investment. During the meeting, EPA GM John Bungitak mentions that the EPA board has already approved the Ching Fu EIA. Many members of the public question the rush, why information about the Delap site has not been provided to the public and why the public was not informed that the EPA board already approved the Ching Fu EIA.

From the 1/26/07 issue of the Marshall Islands Journal

Drydock a Go

By GIFF JOHNSON
The long-delayed $18 million Taiwan dry-dock received its environmental stamp of approval from the RMI EPA earlier this month.
This big news was revealed at a meeting held Monday at the Nitijela conference room - a meeting that included outspoken objections from some Delap residents and others, two High Court orders (one halting the hearing; another letting it continue), and strong endorsement of the project by the RMI Cabinet, which turned out in force for the meeting.
The EPA approval clears a key environmental hurdle that had held up the project since it was first proposed in mid-2004. The four-member EPA board on January 12 unanimously approved revisions submitted by Ching Fu (RMI) Shipyard Co. to place the football size dry-dock in Delap - to be located about 100 meters out in the lagoon roughly between PII and Evelyn Konou's property.
At the meeting Monday, R&D Minister John Silk praised Ching Fu's investment plan and the jobs it will create. “This is not donor money, it's new money and this is the only way our economy can grow,” he said. “A democracy needs to find opportunities for its citizens; without opportunities we don't have a democracy. Based on this we're trying to bring in direct investments.” Silk said Ching Fu will pay utilities and fuel that will help the Marshalls Energy Company, as well as other sectors of the economy.
Mid-way through a public hearing at the Nitijela conference room Monday, following comments by Minister Witten Philippo, Silk, and Ching Fu official Steve Chen, EPA general manager John Bungtitak mentioned that the board had already approved the revised Ching Fu plan for Delap the week before. “The board felt all the issues were adequately met,” he added.
“When we heard of RMI we had to think of the best project that would help the Marshalls,” Chen told the meeting Monday as background for why the company wants to place the dry-dock here. “Environment is a big issue so we hired a company to do an EIA. Normally we don't do this in other countries but we did it here because of concerns.”
About 30 people turned out for the Monday morning meeting, and those that spoke voiced concern and opposition to the revised Delap plan and expressed surprise that the EPA had approved the plan but had not previously announced its decision.
Majuro Senator/Iroij Jurelang Zedkeia asked the panel: “Why are you guys rushing this? How can the public make assessments and make educated comments if the public has nothing to review? I don't know what I'm talking about, because all I have with me is a cup of coffee. Where are the reports?”
Zedkeia added: “First EPA said it's bad for Uliga based on environmental reasons. But if it's bad for Uliga then why isn't it bad for Delap? The real problem here is where is the suitable site?”
Ching Fu was represented by consultant company AEC of Australia official Thor Lyster who said: “We are using technology that would pass environmental regulations around the world.” He also added, in response to comments from the audience: “This is the fourth public hearing” about the dry-dock, and these hearings provided a more extensive review of the project than would happen anywhere else in the world. “We've been transparent.”

Tensions High at Drydock Hearing

Tensions were high last Monday as proponents and opponents of the proposed Ching Fu dry dock met in the Nitijela conference room for what many participants referred to as a “rushed” public hearing.
The hearing, which was announced by fax only minutes before the clock struck 5pm on a Friday, was hosted by Cabinet and the RMI Environmental Protection authority and the Ching Fu dry dock company.
“The request for this hearing came from President Note and Iroij and Majuro Senator Jurelan Zedkaia,” said Majuro Senator and Minister in Assistance to the President Witten Philippo.
But later during the question and answer session of the hearing Zedkaia, who was the first audience member to address the panel of cabinet ministers, EPA general manger and Ching Fu officials, criticized the hearing.
“Why are you guys rushing this,” asked Zedkaia. “There is no paper work for us to review, how can the public make assessments and make educated comments if the public has nothing to review.
“I don't know what I'm talking about, because all I have with me is a cup of coffee. Give us copies of all the documents we're here and we have no idea what's going on. were are the reports.”
Zedkaia's request for more information on the new proposed dry dock in Delap was echoed by other audience members including


Witten:
The EPA finding was that the dry dock was not conducive to the Uliga environment so other sites were considered but in the end we're looking at what's best for the company

John Silk discussed opportunities:
Goal of the government is to push economic development for our children in the future, provide opportunities and jobs.

A democracy needs to finds opportunities for its citizens, without opportunities we don't have a democracy, based on this we're trying to bring in direct investments.

This company will pay utilities, fuel these are spin-offs that can help MEC.

This is not donor money, it's new money and this is the only way our economy can grow

The gov't proposes the drydock because we see investment to help the economy - live up to democracy and if it means outside investment so be it. This is direct fund investment. No subsidy from the government (is being asked), this is the first time in the history of the RMI.

Steve Chen:
Family has over 60 yrs of experience in fisheries. Most fish is here so that's why we want to come here. My family is the type of family that wants to give back. Whenever we take we want to give back.
When we heard of RMI we had to think of the best project that would help the Marshalls. But the RMI has limited land and skilled labor is very limited so we thought very hard to find a project that would help the RMI.

Environment is a big issue so we hired a company to d a EIA, normally we don't do this in other countries but we did here because of concerns.

There are risks in this kinds of operation and we're willing to take these risks.

AEC Groups' Thor Lyster
Who has a science, aquacuture and economic background.
Acknowledge mis-communications about the environmental impact of a dry dock.
Assured that the technology C. Fu will use are safe and the environmental impact will be low.

Described the dry dock as a foam cup and used a pen cap to resemble a ship, placed the cap in the cup and to describe how the dry dock will contain a ship and all the work, e.g. sandblasting, It will all be contained.

C.F will used secondary environmental measures, every bit of waste will be filtered.

Only concern is copper paint but its no big deal.

There will be environmental monitoring programs.

Disposal of waste will be another issue; it may be that waste will be sent back to Taiwan.


John Bungitak:
“This was also rushed for EPA in truth.”
Board believed Uliga was not appropriate. There are only two possible locations for this dry dock and they are Uliga and Delap.

On Firday I was going to make a final notice that the EPA Board had approved the final EIA for C. Fu.

Remember the regulations state that if a company doesn't comply we can revoke.

EPA had concerns and C. Fu addressed our concerns: regarding paint chemicals, we have a POPS regulation.
There are concerns which were raised over hazardous waste, solid waste…risidual waste will it be contained, air pollutions? Waste metals will be recycled, we also raised questions on noise pollution and C Fu said they will use sound proofing materials so the noise is reduced.

The board felt all the issues were adequately met, only problem in delap is they didn't do a marine study.

Jurelan:
Concern as a Majuro Senator and landowner but first is this on the air? Why not? This is a public hearing, why isn't the public hearing it?

Break to get on the air…..

Jurelan “The idea of a dry dock is good but the problem is where it's appropriate”
“Based on all the precautionary measures your taking means that there a lot of potential harm to the community.”

“How come there is no paperwork that came to the public for us to make our assessments?”

“I don't know what I'm talking about because I have nothing to base it on.”

“Why are you guys rushing this? We need to understand.”

“I understand investment needs but (the company)need to involve the landowners with if there is a landlease. Landowners need to be involved (in the process) with the company not just the government.”

“If the dry dock is going to Delap, people are going to have to relocate, where are they going to go?”

“Give u copies of all the documents, we have no idea what's going on.”

“So we can ask educated question.”

“We need to know more, no matter how long (the process) takes, we have concerns.”

“First EPA said it's bad for Uliga based on environmental reasons but if it's bad for Uliga then why isn't it bad for Delap?”

“The real problems here is where is the suitable site?”

“Looks like you guys are rushing it, that's why we're not happy, there's not enough information.”

“If it is harmful I want to know why?”

“Government give us documents to review, I can't comment, we should have something to review before this hearing.”

“As I hear about all these precautionary measures that you have to take it makes me question if infact Delap is actually the best site for the dry dorck



Maria Fowler:
Agreed with every thing Jurelan said.

“My concerns I brought up in previous hearing on Uliga are the same ones I have for here. You need to talk to the people of Delap.”
“Delap is not appropriate.”
“We didn't get any information (on the Delap site).”


Evelyn Konou:
Commented about marine and environmental concerns and risk to population living in the area.
Questions was the notice of the hearing was so late, forcing people to scamble around all weekend looking for information that wasn't' available.
“How come it was so late for you to inform us? You need to provide us with information, we didn't' have time. This is not a democracy.”

“This is the second hearing on the Delap site and again the people of Delap aren't aware of it. How did EPA approve this with out letting people comment?”

12:15 Balif from High Court arrived w/issue to stop meeting but AG filed counter motion to allow meeting to continue based on 1) EPA was taking minutes and 2) it was being broadcasted.

Jibe Kabua:
Offer Ejet Island. “If it's bad for Uliga and Delap than why not Ejet?
“How much benefirt will this provide to the economy?
What about the social dimensions?
The only political solution is Ejit Island - suggest to President Kessai Note that he remove the Bikinians from Ejit and give it to Ching Fu.


Carmen Bigler:
EPA already approved the EIA, Did you have a quarom? Is there anything in the regulations that says you need to inform the public?

Did anyone consider social impacts of this project? Who's responsible for the social impacts?

We know the gov't is doing it's best but we're concerned about the social issues.

There are precautionary measures but there are always accidents. How much will that cost the people and the environment? Has there been a study?

Why are we rushing? But then again why have this hearing if EPA has already approved the EIA?

WUTMI has said that we don't want this project in Majuro or anywhere else in the RMI. There are other projects that are environmentally and socially better.


Steve Chen:
300 vessels are already coming in and out - it's happening without nay control and they're already doing repairs.

The floating dock can help. We will expand the market to worldwide but in order to this we need people with the skill set to do these jobs. It will take time to get local people to that level. They will have to be trained and training will be ongoing until we have the skill set available here. 15 Marshallese have been trained so far.
We will bring in people until we have the local skill base available.

Benefits: Keep ships and their crew in Majuro longer that means they will spend in the local economy.

Thor Lyster
We are using technology that would pass environmental regulations around the world. Maybe some ships that we service will have traces of lead but the paint we use will only be copper based.

Consideration of the economy, environment and social issues taken into account and ideally this fits the dock location, its an industrial site and not many people live there.

We're interested in the RMI because there is already a large base of ships not because of the cheap labor but because of the location. There are already a lot of ships here.

If the RMI can get ahead now, your at an advantage. For shipping services this is a good location.

As for the EPA approval, it's up to the EPA to assess the facts. We provided everything that's been asked. EPA is entrusted with this decision, EPA makes the decisions and we believe EPA made the right decision.

Steve Chen:
In terems of the Economy, the impacts are large. The direct impact and what we call the fisrt round impacts such as wages and spending add up to about $30 million. Annually Ching Fu will pay half a million into the economy - no body disputes the economic impacts.
This project is not just for us. We need everybody to make it work. There are so many sectors that can be affected by this project including the phone company, retails, hotels and restaurants.

Thor Lyster:
This is the fourth public hearing. This is more extensive than anywhere else in the world.
Ching Fu has always been helpful in providing all the information. We've been transparent.

AEC group has been involved in a number of significant number of economic and environmental impact assessments. The states and government of Australia rely on our results.

Steve:
Why so quickly? Because this project can help the economy. Time is valuable, we've already trained some locals but they are not working.


John Bungitak:
Yes the board met on Thrusday (January 18th 2007) they made a decision and yes we had a quorum.
Friday I was supposed to make an announcement but decided to have a hearing first.

We reviewed everything that would harm the environment. Ching Fu has answered. They have a monitoring plan.
EPA will make sure that everything they promise will is met.
If they break the law or regulations, then EPA can issue a cease and desist order. In the even that happens EPA will host another public hearing to assess whether the company stays or goes - if they fail to comply.

We made sure they would follow our regulations. I'm sorry that the documents didn't come out. We only received three hard copies. Digital copies are now available for anybody that wants a copy.

Steve Chen:
Targeting the 300 vessels that already here but we will also be marketing internationally to bring revenue generation here.
The Fiji dry dock works 365 days a year.


Witten Philippo:
This meeting was organized by the president and Iroij and Majuro Senator Jurelan Zedkaia. They want todisiminate information and share ideas and concerns.


Ken Kedi:
As a board member, I signed the EIA. I signed because this project doesn't harm the environment our policies and regulations. The EIA met all the regulations so I signed. The decision of EPA is not to pass off land and we can't because we're not the boss of the land. The board's job was to look at the EIA.

On January 12, 2007 I signed the EIA. It's environmentally and economically sound so I signed the project.

This project will bring in S12.2M, 80 jobs that translates to about 15 members per household that will live off this.

I signed because Ching Fu has a reputation of being environmentally safe.

I'm not afraid to say this but we call Americans our friends but look at us (Rongelap people), we still have problems.

I consider Taiwan as a true friend. They help us out with out any strings attached.

I've been on this board for a month and a half and our experts showed us that this is a safe project. If you don't agree than give me a different project that can help the thousands of people in need.

I'm an EPA board member and a Nitijela staff and I didn't even hear about this.

The people who are suffering are the ones that will suffer.

Ken to Steve & Thor:
I wil not accept $1.50 an hour. If you come here and request for less than forget it. I won't allow it.

I acknowledge what Jurelan said, distribute those documents. My understanding was that these documents would be released to the public. John do your job.

As a victim from Rongelap its hard for me to allow a repeat.

Carlos Domnick to John Bunigtak
Q: Is it true that and EIA has been approved but not a site?
A: The EIA is for Delap
Q: Is it true this dry dock can service government vessels and local private vessesl?
Chen:
A: Yes, but it will depend on the nature of the job and we're more focus on bigger ships.

Witten:
The RMI dry dock has been shut down

Carlos:
As a believer of balance between the environment and the economy, what about the tourism sector, how will this affect the other existing sectors.
No doubt this project will have visual impacts considering its industrial nature…

Thor:
We've painted it Pacific Blue and it will sit low in the water. Ching Fu will beautify an already industrial site

Chen:
This will compliment exising industries.

Fred Pedro:
Order from the court, not enough time to inform the general public. Did the court know that EPA had already approved the EIA?

Possesi:
Yes the courts knew that the EIA was approved

Fred:
What's the point of all these hearings? Is EPA going to change it's mind.

Where's the cost-benefit analysis. Can we get investments that's people friendly? Can we reconsider other sites such as Ejit or Kora Islands?

Understanding of the Fiji Dry Dock is that you can swim there because its so polluted, and Fiji's tourism sector is located on other islands.

Can we be provided with information so that we can judge for our selves if it is environmentally and economically sustainable?

Thor:
Look at a number sites in the end we chose a few good sites, the Delap site rates highly.
The environmental impact of a dry dock are vey low, just a couple of tons of scrapings per year. It's not going to make a difference because were going to an area that's already industrial.

The current environment is already degraded, we will introduce environmental monitoring programs that will be the baseline study for future projects.

Chen:
I believe that this project is good sustainably and it's economically a viable project. We are already investing a lot of our own money into this project.
Industry and tourism are working alongside in places like Australia, Taiwan and Fiji. Project still has a long way to go I'm here for comments.

Witten:
Closed hearing said it will continue 10 am on Monday January 29 unless otherwise notified. This is one project that no question the is valuable for the government.


…… Ken Kedi on the Phone

January 12 I signed a resolution that were delivered for me to sign.

We met in November and decided that we were going to approve this project provided Ching Fu met our requirements.

Nov. we called for more information on the delap site. I received an electronic copy, a motion to approve the EIA was delivered after amendments made.

If there was a meeting on the 18th I wasn't there. I didn't know about it. There was supposed to be one scheduled but it was cancelled.

I din't even know about today's hearing.

From the 1/19/07 issue of the Marshall Islands Journal

The Marshallese Business Association (MBA)

The Marshallese Business Association (MBA), the newest local business organization in the RMI, will be holding its inaugural meeting this week Thursday (January 18) at 6 pm at the Robert Reimers Enterprises Boknake meeting house in Uliga.
The MBA intends to provide the Marshallese business community the means to articulate and promote its collective economic interests and enhance its joint negotiating capacity on all major national and international economic issues in the Republic, and promote economic and technical cooperation among the international business community, said interim head Carlos Domnick.
Featured speakers at the January 18 meeting will be Grant Labaun and Katina Peter.
They will join members of the association's founding committee in a panel discussion, providing a descriptive presentation on the emergence and purpose of this new local business association.
All are welcome to attend.

US postal rates for the Marshall Islands will jump again this year

By GIFF JOHNSON
US postal rates for the Marshall Islands will jump again this year, as part of the Compact's phased-in international rate increase - a development that a major Marshallese businessmen says is crippling the ability of local companies to get goods from the US through the post office.
The one ounce letter rate from the US to the RMI and the Federated States of Micronesia is set to rise from the current 48 cents to 61 cents, a 27 percent increase. As part of a proposed revamp of its international package service, air mail parcels are set to nearly double in price, with the one pound package rate to jump from the current air parcel post rate of $5.90 to $10.20 - a 73 percent increase.
“This is really affecting the economy of the Marshall Islands and revenue for the government,” said G&L Enterprises owner Grant Labaun. “The US government should really look at this.”
He said RMI businesses will not be able to do business with US vendors using air mail if the rates keep increasing like this. But sea mail takes far too long to arrive, with vendors demanding payment before merchandise arrives and can be sold, he said. Even the increased frequency of Matson has not improved sea mail delivery, he said, adding that his businesses - which includes Midtown Shop and Division 7-12 - are supplied almost entirely from US vendors through the postal service.
The USPS is proposing changes for its international products including changes in prices and mail classifications, according to a Federal Register announcement on December 20, 2006.
Full international rates are being phased in over five years. This is year two.
The plan must still be approved by the USPS board of directors, but that is considered largely a formality.
According to a review of the USPS revamp of its international service by Yokwe Online's Aenet Rowa, “with the Postal Service's restructuring, all international services will come under four categories. Postage costs for packages to the (RMI and FSM) will rise significantly under the special Group Ten designation of the newly proposed international mail categories and for the two new categories, Express Mail International and Priority Mail International.”
Global Express Mail services will be renamed Express Mail International. Current rate for five pounds and under to the Marshalls is $15 up to $177.90 for 70 pounds. The new rate will be $19.65 up to $255.75.
USPS is planning to combine three services - air parcel post, Global Priority Mail, and economy parcel post - into a single service called "Priority Mail International." Currently, to send a parcel for one pound and under by air parcel post to the RMI and FSM, it costs $5.90. The new one-cost Priority Mail International rate will begin at $10.20.
The proposed rate for postal cards and post cards to the Marshalls and FSM will increase from $.34 to $.52, a 53 percent hike.
Local business people and the Marshall Islands Chamber of Commerce have complained about the international designation change for the RMI.
"The recent designation of the Marshall Islands as international rather than domestic combined with the inability to ship or to receive registered, certified or insured mail has severely limited business, government, educational, and personal purchases from the US," wrote the Marshall Islands Chamber of Commerce, in a letter delivered to then U.S. Ambassador to the Marshall Islands Greta Morris last summer.
Last month, President Kessai Note brought the postal issue to the attention of new US Ambassador Clyde Bishop during presentation of his credentials.
Rowa reports that during 2005, the RMI received approximately 385,000 pounds of mail (44 percent more than the FSM) and sent out approximately 73,000 pounds.

From the 1/12/07 issue of the Marshall Islands Journal

Imports Down by a Third

A crisis in the economy was touted out for discussion by a local businessman this week as the Chamber of Commerce skirted the need for an election of officers (they decided to keep the current group of officers for another year by acclamation) and concern for the RMI's ability to have critically needed ground handling equipment on island for the intended visit in February by tourists from Japan, was expressed.
Explained by Neal Skinner, owner of EZ Price store, sales for his firm were down significantly over previous years. In an informal survey of the attending business representatives, the slump was confirmed as being widespread and over many sectors. It was only vehicle sales and apocryphal stories about jumps in spending for gasoline, offered by Jim McLean of Bank of the Marshall Islands, that any counter observation was vetted.
In a startling revelation on the deteriorating condition of the economy, Jerry Kramer of PII, who also has interests in Majuro Stevedore's operation, explained that imports to Majuro, which are almost exclusively handled one way or another by the stevedore operation, were down by as much as 30 percent over previous years.

Economy Moving Says President Note

President Kessai Note says the RMI government is moving forward with economic development plans and is seeking the support of regional and international partners.
In a posting to the President's Office web site this week, the President highlighted actions on the economic front. Among the points he made:
o The Taiwan-supported micro credit program started late last year.
o A new Taiwan-supported farmers market opened recently in Majuro, giving opportunity to local farmers, fishermen and craft people to sell products.
o The College of the Marshall Islands opened its first aquaculture project supported by Taiwan for growing grouper, parrot fish and shrimp.
o The monthly copra production average has increased from 387 tons to 485 tons, which the President attributes to the recent bump-up in copra subsidy that raised the price from 12 to 15 cents per pound.
o Wotho and Wodmej, Wotje are now solarized, with more solar units for the outer islands coming from Taiwan and the European Union.
o The long-talked about dry-dock from Taiwan is still on the table and will be brought up during this Nitijela session.
o The new fish processing plant in Delap will begin construction later this month by a China-based company, “and will be ready to open for operation during the April/May time frame,” Note said.

From the 1/5/07 issue of the Marshall Islands Journal

Nitijela Opening

The 27th Constitutional Regular Session of the Nitijela convened Tuesday, January 2, calling members together to begin yet another year of discussion and deliberation.
Convened in the main chamber of the national body, an audience of international diplomats, representatives of the House of Iroij, and the general public, joined by three choirs from various locations throughout the islands witnessed the opening and closing prayers offered by the Reverend Jude Samson of Uliga Protestant Church.
The keynote address offered by President Kessai Note followed brief remarks by House of Iroij chairman Kotak Loeak, who, along with Nitijela Speaker Litokwa Tomeing, joined the President and Rev. Samson on the chamber dias.
President Note's address, which focused on economic development undertaken throughout the preceding year, was singularly important in a statement affirming the government's intention to continue examining the option of privatization of the Marshalls Energy Company. He indicated that a new round of talks with the Korean firm SK Networks are scheduled in a few weeks' time.
In a comprehensive review of the different departments and Ministries of the RMI he touched on developments in education (emphasizing new statistics of teachers qualification), the National Vocational Training Institute options for students, and the availability of $50 million in funds targeting education, including $10 million left over from FY 2006. He said that the College of the Marshall Islands was in line for as much as $8 million in support for much needed capital improvements at the school.
With regard to shipping, he touched on the establishment of the new shipping agency, while indicating substantial funding has been set aside for provision of spare parts for the national airline. Additionally, new paving projects are slated for Amata Kabua International Airport as Majuro readies for the arrival of exploratory passenger flights from Japan on Japan Airlines. He noted that increased frequency of shipping from Guam has translated into greater quantities of Asian goods into the islands, and summarized the extent that communications via the relatively new GSM system have been implemented on several outer island locations such as Ebeye, Kili and Jaluit.
The president identified so-called “micro-credit” accessibility for farmers, fishermen and handicraft makers as a boost to earning potential for many, and elaborated on intended copra production figures as a sign of improvement in this basic industry.
Touching on the provision of solar power units to various outer island locations, he moved to mention of the advent of possibly more than 600 local jobs as the former fish loining plant in the Delap area is expanded by a new private sector operator.
Calling the newly established trust fund for RMI an important development, he also made mention of the as yet unpaid multi- billion dollar awards granted by the Nuclear Claims Tribunal. Satisfaction of this obligation has not yet been undertaken by the US and negotiations are continuing to satisfy the parties concerned.
Other miscellaneous items, such as the planned correctional incarceration facility in Laura Village, the controversial adoption program affecting Marshallese infants, and agreements such as the surveillance pacts with Papua New Guinea, Australia and the US were also mentioned.
A unique feature of this year's grand opening of the Nitijela was the happy welcoming of newly assigned US Ambassador Clyde Bishop and his wife, Cynthia, coupled with the sad note of departure of ROC Ambassador Lien-gene Chen who finishes his tour of duty here next month.

l.
The only thing that has saved the local council from being forced to make tougher budget decisions this year is that a US bank has agreed to give them a year holiday from paying the principal amount due on a loan, he indicated.
These costs for fuel “have to come out of somewhere,” Niedenthal said. The council is attempting to grow its trust fund reserves by trimming its local government operations budget.
At Bikini, with all but three weeks of 2006 already booked out by international divers, the Bikinians' dive company cannot raise prices to recover its increased fuel expenses.
“We're anticipating raising our prices a little for 2007,” he said.

From the 12/1/06 issue of the Marshall Islands Journal

Small firms get help


Micro loans have opened the doors to new small business opportunities, said a visiting business expert Tuesday. The next step is to get the micro loans turned into true development loans that don't require payroll deductions, Casey Jeszenka, director of the Pacific Islands Small Business Development Center Network, told a staff development workshop in Majuro.
“Without money there is no hope,” he said. “Now there is hope.”
Jeszenka was here with network staff from RMI, Kosrae, Yap, Palau and Guam. Secretary of R&D Fred Muller recognized the Network for its strong support of local small business development, and Robert Pinho, who is the RMI's representative on the Network's advisory board, welcomed the group to Majuro.
Dr. Anita Borja Enriquez from the Pacific Center for Economic Initiatives at the University of Guam spoke about a new, US-funded project that aims to build up business capacity, particularly among younger islanders, and to support a variety of feasibility and market studies. Her program is developing a variety of programs aimed at middle and high school students to start reaching people on business at an early age.
Enriquez and Jeszenka both indicated that banks and other local business are being approached to fund various school-focused business programs.
“Our aim is to leverage expertise on the UOG faculty and student research assistance and internships” to support business development in the region, she said.
Joining the opening of this two-day workshop were officials from Bank of Guam and Bank of Marshall Islands, including BOMI president Patrick Chen, Taiwan Ambassador Lien-gene Chen, and WUTMI executive director Daisy Momotaro.

From the 11/10/06 issue of the Marshall Islands Journal

JAL News

The RMI Ports Authority's board of directors has approved purchasing ground-handling equipment for Japan Airlines Boeing-767s, and the Ports Authority is now reviewing proposals for the equipment.
Ports Authority director Jack Chong Gum said that his agency will be funding the purchase of the equipment, and is currently looking at various payment options including outright purchase, monthly installments on a long term basis, or a bank loan.
“It is our intention to execute a purchase agreement with the supplier whose proposal meets RMIPA's needs and requirements in terms of parts support service, commissioning and training of operators and maintenance staff, and on-time delivery, to name a few,” he said.
“Our goal is to have the equipment delivered to Majuro before the first JAL charter flight in February 2007.”

Marshall Islands Resort general manager Bill Weza and Marshall Islands Tours owner Satoshi Yoshii briefed the Majuro Chamber of Commerce Tuesday on the impending start-up by Japan Airlines of charter flights to Majuro.
The first charter flight is scheduled for February 11, with one per month for until mid-summer when the airline will look at increasing to two-to-four flights per month.
The charter flights aim to bring between 180-to-200 passengers per flight, according to Weza.
“I want to stress the economic impact on cottage industries here,” Weza said talking about the potential money to be made by handicraft, tour operators and others from the increase in Japanese tourists. He also said that restaurants will make money because only breakfasts are included in the package deal for the Japanese, so they will be looking for places to eat other meals.
The three hotels that will be used initially by JAL are Long Island Hotel, Marshall Islands Resort and RRE Hotel.
Weza and others said that cleaning up the island is important for this latest development in the fledgling tourism industry.
Weza said that as soon as the purchase of ground handling equipment by Ports Authority is confirmed, JAL will start selling seats for the first charter.

From the 11/4/06 issue of the Marshall Islands Journal

Nitijela's bill targets MISSA

By Suzanne Murphy
A newly proposed Nitijela bill, which aims to revamp and change the composition of the Marshall Islands Social Security Administration board of directors, was the subject of a fiery debate last week Tuesday afternoon with a large number of young people showing up to testify against the bill.
Luckner Abner representing the retiree association strongly supported bill number 114, which had current MISSA chairman Jack Niedenthal questioning “what have we done wrong for you to introduce a bill against us?”
Introducer and supporter of the bill, Majuro Senator Alik Alik backpedaled on the bill saying that: “Just because you introduce a bill doesn't mean you have to agree with it.
“Will this be the gift I leave behind for my grandchildren and family living in the US?” Asked Alik. “I don't support it, I can't.”
This led David Paul, a young member of the population and a MISSA board, to ask Senator Alik how he could introduce a bill and then turn around and say that he doesn't agree with it.
“You say you don't support it yet your signature is there as a supporter,” said Paul. “We need to demand better judgment by our elected leaders - don't just make changes because it's an election year, but really think about and consider the future of the Marshall Islands.”
Retiree Alee Alik, however, stepped forward in support of the bill saying that since 2000 MISSA has been in a “receivership status” and the current board did a great job bringing MISSA to the stable state it is in now. “But the problems are fixed so they should step down and give it to those who are entitled to run it now,” he said.
Bruce Bilimon, one of the younger testifiers at the hearing questioned making changes.
“I don't agree with these changes,” said Bilimon. “Why are we trying to change a system that's working fine?”
The retiree's own representative Cradle Alfred, who sits on the MISSA board, spoke up against the bill. “All the MISSA board has done is everything it can to improve the system for all of us,” she said.
Youth Congress president Terry Mote also stepped forward to testify against the bill asking if the aim is a “geographical representation” on the MISSA board then why isn't there a seat for the youth of the Marshall Islands?
“The youth should be included because we are the ones putting the money in the system now,” said Mote. “I fear, however, that if this bill passes then my family will lose out because I have a lot of relatives who are overseas and this bill will make sure that they don't have a right. If that's the case then maybe my family shouldn't contribute to this system.”
Alson Kelen raised his concerned over the bill passing precedence for other government agencies. “What's to stop other agencies from adopting a similar requirement that will discriminate against many of my relatives who were born and are living overseas. If this bill passes they won't be eligible to represent these boards,” said Kelen.
Businessman Jerry Kramer, who's companies will pay about $600,000 into the social security system this year alone, said that he had no problem paying into the system now because he believes in it.
“This system now has the best operating board in the Marshall Islands,” said Kramer. “Seven years ago the system was almost bankrupt. But the current law and the board have worked perfectly; the fact that they were able to strengthen the system is evidence of their skills. I wouldn't try to fix something that's already good.”
V7Emmon radio personality Fred Pedro noted that this was the third MISSA-related bill hearing that he'd seen in a matter of weeks.
“Why do these bills (against MISSA) keep coming up?” asked Pedro. “Is this symptomatic of a greater problem - maybe the government and services providers are not being attentive to the needs of our senior citizens?”

NOTE: This Bill did not pass.

From the 10/27/06 issue of the Marshall Islands Journal

MISSA: Sell the planes to pay us

By GIFF JOHNSON
Social Security filed suit against Air Marshall Islands late last week for more than $600,000, and asked the High Court to seize AMI's planes and sell them to pay its debts. The suit is also asking the court to appoint a receiver to take control over AMI's finances.
The suit, filed by MISSA attorney David Strauss, might have been prevented, had it not been for the ongoing Marshalls Energy Company debt crisis.
In an August 28 letter to Minister in Assistance to the President Witten Philippo, Strauss proposed a plan for AMI to use a portion of a government-provided CD at Bank of Marshall Islands to clear its then about $250,000 MISSA debt - a plan that he told Philippo was already okayed by AMI, MISSA and the bank and merely needed government approval. The government would benefit, said Strauss, by having $250,000 in debt it owes to AMI erased by AMI's use of the government funds in the bank CD.
But MISSA received no reply for seven weeks from Philippo or any other government officials to its proposed plan for erasing AMI's tax debt dating back to June 2005. MISSA's suit in the High Court has doubled the amount due from AMI - since one of the penalties of not paying MISSA taxes is that the amount owed can be doubled.
Philippo told the Journal that he received Strauss' AMI proposal, but said that the funds that MISSA wanted to use to clear AMI's tax dbet had to be devoted to a more urgent need. “It was a matter of balancing priorities,” Philippo said. “Keeping Majuro lit up was (seen as the most) urgent need.”
He said that a portion of the funds that were in the government's Bank of Marshall Islands CD were used to help MEC pay for a recent shipment of fuel.
As of October 17, AMI owed MISSA $612,818.94 - with interest adding up at a rate of $188.42 per day, according to Strauss.
The suit asks the High Court for action that is “just and proper, including seizure and auction of the two Dornier airplanes owned by AMI and appointment of a receiver for AMI.”

Bill 114 intended to sack Jack Niedenthal

The latest Nitijela effort to change the law governing the Marshall Islands Social Security Administration (MISSA) was introduced last week in the form of bill number 114 by Senators Alik Alik, Norman Matthew and Fountain Inok.
This bill seeks to remove current MISSA chairman Jack Niedenthal, require that two of the board members be officers of the Retirees Association board, and allow people to receive more than one type of benefit.
Bill 114 follows several other bills that attempt to change various rules now in place.
MISSA is frequently cited by President Note as one of the best-run government agencies in the RMI.
The bill seeks to require that:
o Two of the current seven members be the chairman and secretary of the Retirees Association board.
o All MISSA board members must have been “born and raised in the Republic and would therefore be sympathetic to the unique circumstances in the Republic.”
o In contrast to the current situation, which prevents beneficiaries from receiving more than one benefit, that “a person may receive more than one type of benefit…or more than one benefit of any type.”
The bill also seeks to eliminate MISSA taxes having legal priority over all other claims, and to eliminate the earnings test requirement on multiple benefits.

Jack on 114

Reacting to Nitijela bill number 114, MISSA board chairman Jack Niedenthal said the current board is responsible for an overhaul that has put MISSA in its best financial situation ever - developments that benefit current and future retirees.
“Our board is responsible for almost tripling MISSA's assets in seven years and cutting the expenses in half,” he said. “We have also had four perfect audits in a row. In 1999 (MISSA expenses) were $1.5 million on a little over $5 million in revenues; now expenses are about $800,000 on over $10 million in revenues.”
Niedenthal said that while he believes the intent of the bill's language is to remove him as chairman, “what it does is remove anyone who was born or raised outside of the Marshall Islands - even if both the person's parents were Marshallese - from being on this board.”
He commented that the bill proposes to remove two current MISSA board members and replace them with two members from the Retirees' Association - “even though our board already has two people of retirement age.”





Young ri-Majol oppose
Nitijela's MISSA bills


By Suzanne Murphy
The Marshall Islands Social Security's retirement fund is being threatened by what participants of an Antoone 2020 forum consider are a number of “self-interest bills” which were introduced by Nitijela members who not only have coincidentally reached their early retirement age, but appear to be using the bills to gain support in next year's elections.
More than 20 participants of the Antoone 2020 Young Citizens Forum on Social Security at RRE's Mon Bokenake last Thursday, expressed strong concern over the current members of parliament and their introduction of bills that could “collapse the Social Security system” and leave the current generation with no future retirement benefits from a system that they are currently paying into.
Concerns over the retirement fund were brought to light during a presentation by Social Security Administrator Saane Aho, who was presenting on the organizational structure of MISSA and its miraculously turn-around since 2000, when a new board of directors was appointed and she was hired to reverse the retirement trust fund's “death spiral.”
“MISSA has a good footing now,” said Aho. “But the (retirement trust fund) is facing constant challenges by our own government with bills that will hurt the organization and the fund.”
Nitijela Bill number 50, which was introduced by Senator Hiroshi Yamamura, will, if passed, allow one person to receive two benefits - their own retirement benefit and their deceased spouses'. Another Nitijela Bill number 104, which is sponsored by Senator Nidel Lorak and Senator Alik Alik, aims at removing MISSA's ability to re-examine disabilities beneficiaries.
“This bill is ridiculous,” said Aho. “It implies that MISSA has to continue to pay a person who may have recovered and has gone back to work and MISSA won't be allowed re-examine them - we'll have to pay them for the rest of their life.”
Meanwhile, Vice Speaker Ruben Zackhras has sponsored Bill number 57, which seeks to eliminate the earnings test.
The earnings test in a nutshell reduces the benefit amount paid to early retirees who've applied for MISSA benefits but continue to work. “Early retirees” are between the age of 55 and 59. With the earnings test in place early retirees receive six percent less for every year that they are under the age of 60. MISSA has calculated that to eliminate the earnings test the administration is looking at additional payments of $2 million annually from the retirement fund.
“MISSA does not support the passage of these bills as they will increase the cost of benefits by millions of dollars,” said Aho. “None of the senators consulted us before they introduced these bill. It's always been after the fact that we learn about them.”
Not wanting to sit by and just discuss the issues that could put the nations social security at risk, the Antoone 2020 participants ended the forum by organizing a petition, which was signed by all the participants to oppose all three bills pending in Nitijela.

Aho's aim to protect the retirement fund

“The MISSA board's main responsibilities are to set policies, appoint an administrator and most importantly to be fiduciaries of the retirement trust fund,” explained MISSA's Saane Aho, who introduced a new word to most to the participants of last Thursday's Antoone 2020 conference.
“Fiduciary,” she said. “Means to protect, the board protects the retirement trust fund - and, because of this fiduciary role, the MISSA board is the toughest board on island when it comes to getting expenses passed. They scrutinize and nitpick every expense line item by line item, and they eliminate any unnecessary and extravagant item.”
In essence, Aho believes that the fiduciary role needs to be extended to the government and Nitijela members to ensure that the nation's retirement trust fund is safe guarded for the benefit of current and future generations.


From the 10/20/06 issue of the Marshall Islands Journal

Editorial

How we measure freedom

In the past week, the Journal has been accused by some Nitijela members of being irresponsible, lacking manners and purveying inaccurate information over articles on the MEC board shakeup and the salary increase for some senators, and letters to the editor.
What's the ruler for measuring the accuracy of information? The Nitijela senators can say anything they want 1) without anyone being able to respond in the same forum, and 2) without any liability for anything they say. The Journal, and indeed any newspaper, has to follow a much higher standard in reporting news, which includes such things as attempting to get as many views as possible on a given subject, and publishing corrections for inaccuracies. And the higher standard includes the fact that we not only allow, but encourage, any citizen to publish signed letters in the newspapers. Do we always get it right? Of course not. But we'll let you know when we make a mistake, and many others will too - or offer counter viewpoints in their letters to the editor.
The argument often put forward by people in power who don't like a report or viewpoint carried in the independent media is “We support freedom of the press but it must be used responsibly.” While we believe the Journal makes every effort to exercise its constitutionally guaranteed rights responsibly, we'd like to remind everyone that the Bill of Rights does not restrict freedom of speech, press, etc. with the word “responsibly.” There is no constitutional provision that demands free speech be conducted responsibly. That's just what people like to say when they don't agree with what's being said.
As to the lack of manners (or violation Marshallese custom), maybe the people saying this should take a look at the bigger picture.
Does the fact that the Marshall Islands government has not paid electric bills, keeping the national Alele Museum in the dark for four months preventing the promotion of island culture and likely wrecking exhibits and photos constitute a lack of manners (or violation of Marshallese custom)?
In this matrilineal society, does the government's ongoing refusal to broadcast the major conferences of the national women's organization WUTMI strike you as lacking manners (or violation of Marshallese custom)?
In terms of free speech, almost anything one says openly that is critical could be said to be lacking manners (a violation of Marshallese custom) since the emphasis in a small island culture is on getting along as a group. But here's the rub. If that “custom” is used in an effort to prevent people from airing grievances or finding solutions or criticizing government leaders, is the “custom” just becoming a means by people in power to maintain their control? By the ruler employed by some folks here, even the foregoing comment is probably a serious violation of cultural etiquette.
Recently, a group of younger Marshallese people who wrote the Juumemmej report and carried out the national household survey were accused variously of being non-Marshallese and lacking in manners for their very blunt report. That's because the report made statements that put people in power on the spot about the need for action on important matters affecting the health of the RMI.
If that's lacking in manners (or violation of Marshallese custom) then we are delighted to be associated with this younger group of Marshallese citizens who see problems, point them out and suggest ways to resolve them.

Dark times ahead?

By GIFF JOHNSON
The sobering reality of the Marshalls Energy Company's financial woes was brought home at Tuesday's Chamber of Commerce meeting.
MEC board chairman and Public Works Minister Matt Zackhras briefed the Chamber on challenges facing the capital's power utility company.
He explained that MEC is facing huge financial hurdles just to get fuel in for daily power plant operations.
He said a SK Networks fuel tanker was loading Tuesday with diesel for MEC, with an expected travel time of 11-12 days before it arrives Majuro at the end of October.
As of Tuesday, MEC had 180,000 gallons of usable diesel in its tanks. MEC uses 12,000-18,000 gallons per day to operate the power plant, so the diesel on hand gives Majuro a maximum 15 days supply on hand, but at the highest power use level, just 10 days.
Zackhras didn't sugarcoat or evade the challenges MEC is facing, delivering straightforward comments that, despite the depressing nature of the information, were well-received by those in attendance who left the meeting extremely well-informed.
Zackhras confirmed that the SK fuel shipment arriving soon has a price tag of about $3 million, but that MEC has only raised $1.5 million and “is now working on the other half.” Asked what SK will do if MEC doesn't come up with the other $1.5 million needed, Zackhras said it “will unload the amount of fuel paid for.”
To keep current with loan payments to Mobil, the Bank of Guam, and the US Rural Utility Service, as well as to pay for its operations costs, MEC spends about $800,000 per month. For the four months June through September, MEC collected an average of $1.1 million per month, though the amount dropped to about $850,000 last month - suggesting why MEC is having difficulty raising cash to pay for fuel shipments in the absence of fuel sales to fishing boats.
Historically, MEC has used revenue from fuel sales to fishing boats to subsidize the cost of power, but it has been forced this year to limit fuel sales to ships to conserve fuel for power plant operations. Zackhras said to break even on power costs, MEC would need to charge 24.5 cents for residential, 29.5 for business and 31.5 for government (it now charges 20.5, 25.5 and 25.5, respectively). He said a new Cabinet-approved fuel template allows MEC to adjust rates up or down depending on world market prices; two years ago when fuel prices were first skyrocketing, MEC could not immediately increase its rates in response and this “hurt MEC,” he said.
Zackhras said the goal is to return to how MEC operated before, with fuel supplied on consignment, meaning it could sell it and pay the supplier after it was sold. “Without the consignment system it totally changes the situation,” he said. “We can only bring in the fuel we can afford (to pay up front).”
Asked why the government had agreed to pay Mobil at a rate of 18 percent interest on the $5 million debt to the Guam-based company, Zackhras said the government tried to get it reduced. “It wasn't like we said 'good' and just agreed to it,” he said.
A 13-year fuel contract with Mobil ended in late 2004. Zackhras explained that by August 2005, MEC was in danger of running out of fuel, and it didn't yet have a contract with another supplier. So it worked out a plan to buy one shipment from Mobil, for which Mobil required a letter of guarantee by the government that included the 18 percent interest rate in the event of a default. “We took the recommendation to bring in the fuel with the letter of guarantee,” he said. “Otherwise Mobil wouldn't deliver fuel.”
Soon after this large diesel shipment was delivered to Majuro, MEC had to stop selling fuel to fishing boats to hold fuel for power plant operations until it could negotiate an alternative fuel supply contract - which compounded MEC's growing financial problems since it wasn't bringing in extra revenue from fuel sales. The SK Networks contract wasn't confirmed until January this year.
When MEC couldn't pay Mobil, company officials approached the government to work out a debt payment arrangement or go to court, he said. The government tried to negotiate the 18 percent down, with offers to Mobil of first right of refusal on a new fuel contract or lease options on MEC tanks, but “we ended up with the 18 percent interest,” he said, adding that he viewed this as a “punitive” action by Mobil. The High Court routinely sets interest payments at just nine percent.
Zackhras also confirmed that Mobil has given the government notice of its plan to turn over control of its tank farm operations in both Jaluit and Ebeye. He said that he's requested through the Chief Secretary that Mobil retain an independent company to survey the condition of Mobil tanks in these two islands, costs to fix them and other issues before any decision is made.
Mobil's proposal did not include its Majuro facilities. “The government's position is that if Mobil is going to give these facilities to the RMI - I hope they are not liabilities - then it should include Majuro facilities in the package and a contract to supply fuel,” he said.
Zackhras said general manager Billy Roberts will stay on for a temporary period of possibly three months, until the currently ongoing corporate audit of MEC is completed. He also noted President Kessai Note's request to keep Roberts on until power plant fire insurance process, fuel supply, and debt issues are resolved. “We need someone with the institutional knowledge,” he said.

From the Marshall Islands Journal Friday, October 20, 2006

Cabinet okays solid
waste corporation


The Cabinet has approved a plan to establish a solid waste company to manage waste in the capital, according to Public Works Minister Matt Zackhras.
It comes not a minute too soon, with the current Batkan dump expected to be filled to capacity by January, and most of the waste heavy equipment used by MALGov and Public Works at the end of its useful life, according to a report delivered by Ben Chutaro to Tuesday's Chamber of Commerce meeting. Chutaro showed about 30 photos of Majuro's pressing rubbish problems, commenting that “it's very tough to develop tourism under these conditions.”
Zackhras said that the Cabinet endorsement of the plan is a response to recommendations from both the government's Solid Waste Task Force and the Asian Development Bank's recent study on waste in Majuro.
“The details are being worked out through the ADB consultants as to how to make this new utility viable,” Zackhras told the Journal. “In the meantime, we will carry out the current solid waste system and everyone will operate as is until such time as the utility is ready to stand on its own.”
The new corporation is to be jointly owned by the RMI government and Majuro Atoll Local Government, according to the Cabinet decision of October 5. It is to oversee collection, recycling, reuse and disposal of solid waste.
The Cabinet directive names the new corporation as Majuro Atoll Waste Company, Inc.
Zackhras said that the government will need to subsidize the utility at first, “but the goal is to make it self-sustainable by involving all parties.”
Among the details that need to be acted on are establishing a board of directors and hiring a general manager, Zackhras said.
Establishing the new corporation has “solved the biggest problem” preventing improvements, businessman Jerry Kramer said. “We need to have one person responsible for waste management. Right now, everyone's responsible, so no one's responsible.”
In response to questions and concerns of the business community and local residents at the Tuesday meeting, Zackhras said he will ensure that all areas of the former dump are covered.
Marshall Islands Conservation Society official Steve Why said that group is just days away from launching a green waste recycling program at the dump and in the community to separate grass, bush and tree cuttings to produce compost material that can be used both for covering garbage areas at the dump and for fertilizer.
Roger Cooper, who is working with Why, said green waste accounts for 35 percent of what's going into the dump now.
People also expressed concern about the large numbers of children and adults who daily sift through garbage at the Batkan dump looking for aluminum cans and other usable goods.

Minister on possible sale of
power company


Local business people want to know if MEC is going to be sold.
“Does anyone want to buy MEC,” MEC board chairman and Minister Matt Zackhras said in response at Tuesday's Chamber of Commerce meeting. “Give me an offer.”
On a more serious note, Zackhras said that before the RMI government “can decide to release (or maintain partial) control, or have a private sector company manage MEC, it needs a corporate audit - which is now being done.”
He said a draft report is expected in November. The US Interior Department is funding the corporate audit of MEC at the request of the board.
The recommendations from the audit will “allow the government to make decisions to entertain proposals submitted for our review,” he said.
Proposals for various investment and management schemes have been submitted by Pacific International Inc., SK Networks and TaiPower.
“Will it be sold?” he asked. “I don't know. Will it remain under government control? Perhaps some. Will MEC sell stocks? I hope so. It's all under discussion.”

Find it out in the Journal

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What about an entire newspaper packed with all the latest news about the Marshall Islands!
The digital version of the Marshall Islands Journal (MIJ) recently celebrated its second birthday, with our subscription database growing weekly.
The pdf of the MIJ is emailed to clients each Monday morning (RMI time). It includes all the news that appears in the hard copy newspaper, but the advertisements are deleted so that the pdf is a manageable size.
The Journal Online costs $1 an issue on an annual basis of $52. Short-term subscriptions (less than six months) are available for $2 an issue. Clients can sign up for the Journal by emailing journal@ntamar.net or by snail-mailing a check to the Journal at PO Box 14, Majuro, Marshall Islands, including a note stating what the check is for.
Occasionally clients have a problem receiving the Journal, which is believed to be a result of some Internet providers rejecting 'ntamar.net' emails. This problem is solvable, but it helps for clients to have the Journal's email address in their provider's contact/address book. Clients also need to have Acrobat Reader 7.0 or later (which is a free download off the Internet).
As well as providing clients with the Journal Online, the Marshall Islands Journal has a number of other services available:
o On the Record: The Journal provides 'On the Record' packages to a number of Marshall Islands businesses and government agencies. The packages contain all stories and photos relating to that business or agency in digital and paper form. This information is useful for a myriad of purposes, such as background material for grant writing; for placing on a Web site; or for building an archive. The packages can be tailored to each client's individual needs and are provided on a quarterly basis. 'Live' packages, meaning the information is emailed to the client weekly, are also available.
o Research: The staff of the Marshall Islands Journal began storing digital copies of the newspaper, the stories contained in the paper, and photographs in the second quarter of 2002. The stories and photos have a corresponding 'log', which our staff uses to research various topics for clients. For example, if a client needs to know what's been happening on solid waste in Majuro, all stories and photos relating to that subject can be compiled into one digital package (with or without print outs of the stories and/or pages from the newspaper).
If you are interested in any other above Journal services, you can email us a journal@ntamar.net.

Caption: Douglas Henry turns the Marshall Islands Journal into a pdf, which will be emailed to Journal Online clients.

From the 10/13/06 issue of the Marshall Islands Journal

JAL schedules first flight for February

Japan Airlines (JAL) has set its first charter flight to Majuro for February 11 - moving the much-discussed plan for direct air service between Tokyo and Majuro into a final countdown to the first flight.
The airline is scheduling two initial charters, one in February and one in March, according to Koji Mochizuki, JAL's manager of international sales, planning and marketing for the Japan region.
“Majuro, you're on the edge of something really big,” Dave Carlstrom, an aviation consultant who helped set up direct JAL flights from Tokyo to Fairbanks, Alaska two years ago.
He said the situation of Fairbanks and Majuro are very similar in terms of airport challenges, current difficulties in getting Japanese visitors here, etc.
“You could not do better with another airline partner,” he said in praising JAL and its relationship with Fairbanks. “JAL has a vested interest in your success. They are not doing this on a whim. They've made many visits to Majuro, and it's a big deal to put a wide-body airplane into (Majuro) airport. It's a big investment.”
He said the Fairbanks charters started with three groups in the first year, seven the second year and this year there are plans for 10. Similarly, Carlstrom and the JAL officials who met with Marshall Islands Chamber of Commerce officials Friday said JAL started with two flights a year in Palau 10 years ago and is now flying in 70 times a year.
Mochizuki said JAL's aim is to bring in 200 Japanese visitors on each of the two scheduled charters early next year. Most are expected to be divers.
Carlstrom said that the JAL charters have given a big boost to business in Fairbanks. “In the first year, there was $1 million in direct economic benefits to hotels, the airport, fuel suppliers and other service providers,” he said. “You'll have the same experience here. And it's not just the big players, but the small businesses that earn money (from JAL visitors).”
Although there are still hurdles to leap - specialized ground handling equipment for the planned Boeing-767 plane to be used must be brought in, there are issues with the arrival and departure facilities for such a large group, and most of the visitors will need translation assistance - “there is enough energy here to make this happen,” said Marshall Islands Resort general manager Bill Weza.
“Some say 200 visitors is too much for us,” observed local tour operator Satoshi Yoshii, who has been a key player in getting JAL interested in Majuro. “But I don't agree. We had 160 Japanese here in December for four days, with a lot of activities.”

From the 10/6/06 issue of the Marshall Islands Journal

Talley's tally of five new computer specialists

Five Marshall Islanders graduated last week with a level three computer certification from computer engineer Joe Talley's training program. This certification program is coordinated with the RMI's National Training Council.
The five graduates are Piermy Eknilang and Erickson Arelong from Rongelap Atoll Local Government, Ernest Lepton and Boji Jeik from Marshalls Energy Company, and Albert Talley who will be attending CMI in January.
After working at their regular jobs during the day, the students spent two nights a week for eight weeks with Joe Talley in his computer lab, an extension built onto his home in Delap. The students completed the first phase of this specialized computer training.
The first phase involved three levels and concentrates on computer literacy, computer operations, and computer repair, troubleshooting and maintenance. The next phase begins with computer networking and moves into the professional level of Web site design, voice-over-internet-protocol (VOIP), audio-video conferencing, and computer programming.
“As a person who works with computers a lot, I'd like to thank Joe Talley for sharing his knowledge, and I am planning to continue the next levels here with him,” said Lepton.
Talley, a native of Kosrae, worked for 13 years in the US military as a computer programmer, supervising many other programmers. He went on to study computer engineering and then worked for computer and software companies for many years before returning to Micronesia and moving to Majuro. After identifying a need for specialized training, Talley recently began his certification program.
Rongelap Mayor James Matayoshi has decided to open the training opportunity to his staff. A few years ago, Talley visited Mayor Matayoshi who challenged Talley to fix a computer whose malfunctioning system had perplexed others who had attempted to fix it for three months. Talley had the computer operating in a matter of minutes. So when Talley returned to Matayoshi and explained the new computer certification training program he had set up, the mayor gathered his staff and encouraged them to register and learn. Eknilang and Arelong are the first RALGov staff to attend this training.

Chamber to focus on Public Works, power


Public Works Minister and MEC board chairman Matt Zackhras will speak to next week Tuesday's Marshall Islands Chamber of Commerce meeting at the Melele Room.
The monthly Chamber forum will cover issues involving the Ministry of Public Works, Marshalls Energy Company and the Majuro Water and Sewer Company.
The forum will run from 12 noon to about 2 pm and is open to the public.
Zackhras said he is attempting to bring in an official from Ebeye's power company, KAJUR, to join the forum.
Ministry of Finance officials had originally been invited to speak at next week's Chamber forum but said they were too busy with the new fiscal year starting in October to make the forum.

From the 9/12/06 issue of the Marshall Islands Journal

Bridging the gap: An Editorial by the Marshall Islands Journal

It was great to see Minister Donald Capelle, Attorney General Posesi Bloomfield, Police Commissioner George Lanwi, Majuro Councilman Ladie Jack, and both national and local police turn out for Tuesday's Chamber of Commerce forum on crime and the justice system.
Ben Graham also helped to inform the large group that turned out by delivering a short presentation titled, “Trouble Ahead: Urban Delinquency, Crime and Social Problems.” An important point that Graham made was about a group he called the “Lost Boys.” He explained that this is a growing group of young men who are neither in school nor in jobs in the two urban centers. The 1988 census showed this number was 491 in Majuro; the 1999 census showed that the there are 760 such young men in Majuro and 319 on Ebeye. “There are over 1,000 urban males with nowhere to go and nothing to do 365 days of the year,” Graham said, noting that obviously the number is getting larger. The implications of this factual data for crime and other social problems in the urban centers is obvious.
The main specific item that came out of the meeting from Minister Capelle was his firm conviction that despite budget problems in the past, the new budget will contain funding for major improvements in the downtown jail facility.
Though the officials didn't answer many of the questions tossed their way, it was important that they were there to hear criticisms and complaints from the public about crime in the capital.
The Marshall Islands Chamber of Commerce is to be commended for continuing to bridge the gap between the business community and government on issues of importance to the community.

Sievers: 'Is the RMI safe for volunteers'

By GIFF JOHNSON
The subject was crime, and representatives of the local and national police and the Attorney General's office, led by Justice Minister Donald Capelle, participated in Tuesday's Marshall Islands Chamber of Commerce meeting.
They fielded questions ranging from the uninformed - what number do we call in an emergency? answer: “911” - to the pointed. An Australian woman who formerly worked for RMIEPA said in 2003 she was violently assaulted at knife-point in her Uliga home and little was done by police to bring the perpetrator to justice. “What's been done to change this attitude (among police)?” asked Nicole Baker.
Capelle said he didn't have details of this case and would need to look into it.
CMI president Wilson Hess commended Baker for having the courage to talk about her attack. He then commented that Chamber president Jack Niedenthal had opened the forum by remarking on the fifth anniversary of the 9/11 attacks and the “moral outrage” this generated. He commended the police for their action in the case of a CMI teacher who was recently assaulted in Ajelake. But, he added, “it would be helpful if the police could demonstrate some of that sense of outrage” over assaults against women. He offered the college's resources to provide awareness training to police.
WorldTeach director Helen Claire Sievers flew out from Boston this week because of the ongoing problem of assaults against female volunteer teachers. “We have 1,500 volunteers working in 12 countries, and the Marshall Islands is the only place where our teachers have been sexually assaulted,” she said. Sievers said she is here to address the problem and she is asking the question, “is it still safe” for World Teach volunteers to be here.
Marshall Islands Resort general manager Bill Weza complained about a “career criminal” who breaks into the hotel all the time. “The police are over-taxed by arresting this guy so many times,” he said. “There's no deterrent. We need to do something about punishment. I feel sorry for the police because they are running around after the same group of guys.” He suggested locating a prison on an isolated island.
Concerns were raised about criminals being given work release from prison. AG Posesi Bloomfield said there are clear rules about work release, and convicts are not given work release without a process of review. “Clear guidelines are followed in each case,” he said.
Capelle said there is a plan to refurbish the Uliga jail with money in the 2007 budget, and a plan for building a bigger prison in the Laura area of Majuro.
Problems of takeout stores selling alcohol was brought out. Hotel Robert Reimers manager Colette Reimers reported that their third guest this year was bitten by a dog while walking on the mainroad. “This is not good for promoting tourism,” she said. Local police sheriff Carney Terry said his officers have killed dogs reported by the public as biting people. But MALGov doesn't have a holding facility for stray dogs and “we have no place to bury them. We can't just kill dogs and dump them in the dump.”
Kenneth Kramer commented on increasing violence against women, which affects teachers, tourism and other areas. He suggested that leaders reach out to the community to underline how serious the problem is.
Kristin Romberg, who directs the Dartmouth teaching program here, said a big part of the problem with sexual assaults is that most Marshallese women, for a variety of reasons, don't report them. “How can (leaders) encourage citizens to report crimes when the perception is that justice won't come from doing this?” she asked.
Bank official Jim McLean commented that the government and public safety are trying to do something about the problems, but that missing elements in the response to these problems are the churches and traditional leaders. He asked about engaging these “two most important” parts of Marshallese society.
More than 70 people turned out for the forum at Melele Room.

From the 8/4/06 issue of the Marshall Islands Journal

Interior hosts business conference

The Department of the Interior will be holding a Conference on Business Opportunities in the Islands in November in Hawaii and wants people interested to attend to register.
The conference will showcase business opportunities in the seven island jurisdictions for which the Department of Interior has responsibility, said a release issued by conference organizer Angela Williams.
The conference will be held on November 13-14, 2006 at the Waikiki Marriott in Honolulu, and will include industry experts and local businesspeople speaking on tourism, tourism and real estate development, infrastructure development, tax incentives, utilities and telecommunications, among other topics.
This conference is the latest in a series of events sponsored by the Department of the Interior aimed at stimulating private sector-led economic development in the US-affiliated island areas.
Contact the Majuro Chamber of Commerce for details about registering.
Interior has hosted two previous conferences and led three business opportunities missions to five island jurisdictions over the last three years. These events have included a diverse sampling of the American business community, from industry leaders like Fluor, Microsoft and Starwood Hotels to smaller, specialized technology and tourism firms.
The goal is to stimulate private sector-led economic development in all of the island areas through stronger links to the Hawaii and mainland business community, the Interior release said.
The Secretary of Interior has administrative responsibility for coordinating Federal policy in the territories of American Samoa, Guam, the US Virgin Islands, and the Commonwealth of the Northern Mariana Islands and the responsibility to administer and oversee assistance provided to the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

From the 7/28/06 issue of the Marshall Islands Journal

Nidel: 'Limits to freedom of speech'

By GIFF JOHNSON
Three Nitijela members used a special investigation hearing Tuesday this week to blast the Majuro Chamber of Commerce for sending a letter to Speaker Litokwa Tomeing that “condemned” a visit by several members of the Nitijela to China last month.
Senator Hiroshi Yamamura chaired the Special (Interim) Committee on the Condemnation by the Chamber of Commerce and was joined by Senators Fountain Inok and Nidel Lorak. All three grilled Chamber president Jack Niedenthal over the letter.
Yamamura opened the hearing by reading a prepared statement. He told Niedenthal that the hearing “is not about freedom of speech. It's about you going out in the media and ruining the reputation of Nitijela members.” His statement itemized numerous criticisms of the Chamber's letter, and particularly expressed concern about the issue gaining publicity through the Journal, Radio New Zealand and the Yokwe Online Internet Web site.
Niedenthal, in a statement delivered in both Marshallese and English, said the reason the Chamber expressed concern about the China trip is that local businesses recall when the RMI had relations with China. “They never did anything to get money into our economy,” he said. Businesses were worried that the agenda behind the trip was a change in ties from Taiwan. “Economically, it would be bad for RMI businesses (to switch to China),” he said.
Niedenthal said the Chamber didn't break any laws with the letter. But, he said, “we broke Marshallese custom by using harsh words.” He extended apologies for this, and added “our mistake was not going straight to the Speaker to address the problem.” He expressed appreciation that Speaker Tomeing's door is open for the Chamber. He extended apologies several times for the tension between the Chamber and Nitijela created by his letter.
Senator Lorak, who commented: “The RMI believes in freedom of speech, but there are some limits. You need to get your facts right before you tarnish reputations.”
Later, Senator Inok launched a machine gun-like attack on Niedenthal, asking if he was so smart and involved in many government agencies, how could he do such a stupid thing as writing the letter to the Speaker? He asked Niedenthal why he said the China trip didn't have approval of the national government and asked if he had talked to the President or Foreign Minister? Niedenthal said “no,” that the information was obtained from various articles in the Journal, including the Foreign Minister's criticism of the visit. “Do you believe that the Journal wouldn't lie and make up stories,” Inok asked.
The letter to the Speaker was like telling the Nitijela “you're a bunch of idiots,” Inok said, adding that it insulted them.
“We did not write the letter to insult anybody,” Niedenthal said. “But you did,” replied Inok. “We did not write the letter to insult anybody,” Niedenthal said again.
Inok said that outsiders who come to the RMI need to respect the government and our people. “When in Rome, do as the Romans do,” he said. “And when you're in the Marshall Islands you need to respect us and the way we do things.”

Nitijela infringes on free speech

Letter to the Editor by Ben Chutaro

The Special Committee on the “Condemnation” by the Chamber of Commerce held a hearing on Tuesday demanding that the Majuro Chamber of Commerce explain their condemnation of members of Nitijela going to China. The Committee said it believed in free of speech, but said the Chamber did not have the right to condemn the Nitijela and it violated customary practices in the RMI. The Chamber's President Jack Neidenthal was present to answer questions from the committee. I was also present as an observer.
I want to commend Jack. He presented the Chamber's position in a professional and respectful manner. Jack has certainly earned the respect and gratitude of our community for his service to the people of the Marshall Islands. So Jack, thank you.
Clearly certain members of the Nitijela took the Chamber's letter to the Speaker completely out of context. Also, the Committee's handling of the hearing was heavy-handed. The Committee on many occasions throughout the hearing cited disrespect for the Nitijela and culture. I don't believe what the Chamber wrote violated any accepted cultural practices in the Marshall Islands. I've consulted with my Iroijs on the matter and they too agree that Chamber did not violate any cultural practices. Additionally, the Committee failed to state what specific customary practices were violated under law or the Constitution. The Committee also failed to state what law would bar the Chamber from criticizing members of the Nitijela in the strongest terms possible. I know the Speaker to be a man of integrity and in my experience he has always encouraged the public to speak their minds to the Nitijela membership even when it involves difficult issues. So why the heavy- handed response from this Special Committee?
It does not matter if you agree or disagree with the China (PRC) sponsored trip because that's not the issue. The issue is whether the Chamber of Commerce has the right and even the duty to express its collective opinion on matters affecting the economy, because the private sector is the most important component of the economy. The key issue is the right to free speech. I say the Chamber as a legally chartered NGO has the right to express its opinions, which are protected under the Constitution. Even when the Chamber uses the word condemn, it is protected under the Constitution. My concern is the Committee's actions on Tuesday could be construed as an attempt to infringe on free speech in the Marshall Islands. However, if the matter was before our Courts, I have no doubt our Courts would uphold the right of the Chamber to say what they said in their letter about certain members of Nitijela going to China. As the famous author George Orwell once said, “If liberty means anything at all it means the right to tell people what they do not want to hear.”
Ben Chutaro

Nitijela investigations: an Editorial by the Marshall Islands Journal

The message that came through loud and clear from the Nitijela's special hearing to “investigate” the Majuro Chamber of Commerce held on Tuesday is that Nitijela members do not like strong criticism aimed at them, particularly when it is projected to an international audience through print, radio and Internet media.
The irony of this week's hearing is how it contrasts with the Nitijela's welcome focus and effort in so-called “good governance” by seeking input, information and opinions from government officials, business leaders and the wider community.
If we want community engagement, criticism, argument and debate goes with it. Decisions of government leaders in a democracy - even one such as the Marshall Islands where custom is an important part of how everyone conducts their business - are always subject to scrutiny, comment and, often, disapproval by people who disagree with the decision.
The Nitijela took umbrage at the Chamber's use of the word “condemn” in its letter to Speaker Litokwa Tomeing. But the word simply means “to express strong disapproval of.”
In fact, in an article in this week's newspaper, the Aelon Kein Ad party is condemning the national government concerning its response to Ebeye.
Chamber President Jack Niedenthal apologized for not talking to the Speaker before issuing the letter, and said he was sorry that the strong English words caused a bad feeling between the Nitijela and the Chamber.
All in all, we look forward to see continuing engagement with community leaders - including a willingness to accept and consider criticism.

From the 7/21/06 issue of the Marshall Islands Journal

Jack stands up for freedom of speech

By Majuro Chamber of Commerce president Jack Niedenthal who was speaking at last week's Chamber-sponsored forum with the Ministry of Health

Today I stand before you wearing a US Air Corps flight jacket that is over 60 years old. At the young age of 18, my father wore this jacket in WWII as he flew 35 missions over Germany with the 8th Air Force. Most of his missions were spent strapped all alone into a totally exposed ball turret gun beneath a B-17 bomber.
He used to tell me that for the entire bombing run - that would sometimes last for many hours - he felt like the whole world was trying to kill him. During the course of the war, 26,000 men lost their lives from the 8th Air Force, which sustained the heaviest losses of any military unit of the war. An additional 21,000 men from the 8th Air Force wound up in POW camps.
When I was a teenager, before he died, he unceremoniously gave me this jacket. Until this month, I never really understood why. Now I know. The sweat of fear and bravery that was poured into the insides of this jacket from his body was the result of him, and many young men like him, putting life on the line to protect democracy and freedom the world over. And that same struggle for democracy continues today with Marshallese men and women now wearing the uniform of the United States of America.
Last year, when SSG Paul Lejjena, a young Marshallese man, was badly wounded in the war in Iraq, President Kessai Note stated, “Lejjena should be commended for his dedication to freedom and for his willingness to stay engaged in Iraq to ensure that the Iraqi people could experience what we experience on a daily basis…Let me state that the Marshall Islands is proud to be a close and firm supporter of the democratic ideals of freedom.”
One of those democratic ideals that both my father and Paul Lejjena were fighting so hard to protect was that of free speech.
As everyone probably knows by now, this Chamber will be investigated by a Nitijela committee on July 25th because we publicly gave our opinion on a single issue. I can save the Nitijela committee some time and effort by telling you today what the Chamber of Commerce is.
The men and women of the Majuro Chamber of Commerce all believe that the Marshall Islands is a great country, but that it can be greater. We respect, honor, indeed, we cherish our government, our Constitution, our Nitijela, and our elected leaders. We encourage our members to be good citizens, to pay their taxes and to follow all the laws of the Republic.
Many of us wake up early, work long past closing time even on holidays, yet we find the time to care about and support our community, our families and our friends. We are many different kinds of people: We are Marshallese, Americans, Chinese, Taiwanese, Filipinos, Fijians and other nationalities, and we enjoy and celebrate in these differences and the varied opinions that we all bring to our table. All of us, collectively, employ over 2,000 workers, the vast majority of whom are Marshallese. Tonight, and every night, 365 days a year we put food on the table, not for hundreds, but for thousands of Marshall Islands citizens.
Yes, we at the Majuro Chamber of Commerce believe that the RMI is a great country, and this is one reason why: Today, with these microphones before us, all of you, every man, woman and child in this room regardless of nationality, will celebrate a right that billions of people on Earth today don't have, nor will ever have. And that is the right to ask public officials questions about our government in an open forum. Free speech helps foster the creativity that is so essential for economic development, and moreover, human development.

Nitijela hearing

A Special (Interim) Committee on the 'Condemnation' by the Chamber of Commerce has scheduled a hearing for next Tuesday, July 25 to investigate the local business organization for its criticism of a recent trip to China by several senators.
Senator Hiroshi Yamamura is chairing the Special (Interim) Committee set up by Speaker Litokwa Tomeing to investigate the reason why the Chamber wrote a letter critical of the trip to China. The hearing is supposed to be held in the Nitijela Chamber.

Chamber focus on health

Majuro Chamber of Commerce held its third major forum with government officials last week, focusing on the Ministry of Health.
Minister Alvin Jacklick opened the forum by saying the Ministry over the past several years has focused on improving hospital facilities in Majuro and Ebeye (Japan-funded new hospital section opened in Majuro in January; US-funded Ebeye hospital opened in 2002) and dispensaries on the outer islands, stepping up training programs for outer island health assistants, and reducing off-island medical referral costs by improving services in Majuro Hospital.
Jacklick pointed to the dramatic reduction in off-island medical referral spending as a major accomplishment of the current government.
“We gave the medical referral committee sole power to decide who goes off-island for treatment,” he said. “In the past, political referrals were the reason why we spent more money on referrals than we collected (through health taxes).”
Jacklick emphasized that “today, there are no political referrals at the Ministry of Health.”
The Ministry is also developing plans for the phase two work on Majuro Hospital that Jacklick estimated will cost about $36 million.
Questions and discussion at the health forum focused on a variety of issues:
o The problem that many problems in the RMI relate to preventable illnesses, and what is being done to focus on these. Assistant secretary Russell Edwards said that the Ministry does a lot of school and community outreach, and has begun working more closely with the Ministry of Education to improve immunization levels for children. But, he said, many issues went beyond the Ministry and needed community support. He said, for example, that the Ministry cannot successfully combat the high levels of TB without the support of the community and churches.
o Acknowledging that funding for preventive health programs has gone down, Acting Secretary Dwight Heine said this is because of the Ministry's focus on improving its hospital services and care. The aim, he said, is to make care at Majuro and Ebeye hospitals “almost comparable to off-island care.” He indicated that once the phase two work on Majuro Hospital is completed the Ministry will be able to step up spending on prevention programs.
o The mammogram machine is now working after many months of problems, according to hospital administrator Sandy Alfred. However, the radiologist at the hospital recently left and the Ministry is working to recruit another person in this highly specialized field to make the mammogram program fully functional.
o Ministry officials said that the plan developed to deal with bird flu is one that can be used for other emergency health situations.
o The number of cases of typhoid are on the decline. Most of the cases were seen in the April and May period, which prompted the Ministry to call in the Centers for Disease Control to assist with identifying the source of the problem. Dr. Kennar Briand said there have been no recent new cases of typhoid.

From the 7/7/06 issue of the Marshall Islands Journal

The Speaker strikes back

Nitijela Speaker Litokwa Tomeing has set up a 'Special (Interim) Committee on the 'Condemnation' by the Chamber of Commerce' to investigate the local business organization.
A June 23 letter from Utrik Senator Hiroshi Yamamura, who is chairing the Special (Interim) Committee on the 'Condemnation' by the Chamber of Commerce, stated that “it is unacceptable for the Chamber of Commerce to condemn the Nitijela.”
Yamamura continued: “The outright condemnation of the institution that is representative of every Marshallese and also serves as the highest law making body is premature. As such, the Speaker has set up a committee to investigate this action on your part.”
Yamamura's letter to Chamber president Jack Niedenthal also indicates that the Chamber by “condemning” a visit of Nitijela members to China is violating the rule of law in the RMI.
“While it is the custom of this Nitijela to encourage freedom of speech from every citizen and person of the Republic of the Marshall Islands and, in pursuit of this custom, foster democracy in all its forms, it is also the hope of the institution that every citizen and person uphold the rule of law in the RMI.”
The chairman of the Special (Interim) Committee on the 'Condemnation' by the Chamber of Commerce requested that Chamber officials present themselves to the Special (Interim) Committee at 11 am on July 25 in the Nitijela chamber “to explain your actions and answer pertinent questions from members of the committee.”

Free speech angers Nitijela

The Majuro Chamber of Commerce's executive board sent a letter in early June to Speaker Litokwa Tomeing criticizing the decision to send a delegation to China.
The letter, signed by Chamber president Jack Niedenthal, said, among other things, that “the purpose of this letter is to convey, in the strongest possible terms, our unanimous condemnation of this decision” (to send a delegation to China).
The Chamber's executive is composed of more than 10 members representing different business interests in Majuro, ranging from banks and airlines to hotels and construction.
The letter said that the decision to visit China when the RMI diplomatically recognizes Taiwan, and without the support or endorsement of President Kessai Note and the Cabinet “would sully the reputation of the Marshallese people and have adverse economic effects that the private sector can ill-afford at this time.”
Niedenthal's letter concluded by thanking Tomeing for considering the Chamber's views on the China trip.

Alik impressed by trip China

By GIFF JOHNSON
If the reaction of Majuro Senator Alik Alik to the recent visit by Nitijela members to China is any indication, the Chinese hosts got their money's worth by bringing the Marshall Islands senators to China.
“Before I went, I was totally biased against Beijing,” Alik said. But spending a week in China opened Alik's eyes to the changes in China, and erased the many preconceptions he had of the Chinese. “I'm
glad I went,” he told the Journal.
He was impressed to see that Beijing is no longer closed off to the world, with budding capitalism evident to the observer. “They've got McDonald's, Coca-Cola and other US companies are there,” he said, adding
that on the TV in his hotel room, there were so many different cable channels giving him access to news and information that he had not expected.
His attitude had been totally against China because of its record of human rights abuses - Alik mentioned the late 1980s repression of students in Tianamen Square as an example of human rights abuse. But from the visit, Alik said he believes those abuses are beginning to change for the better.
“The country is very clean and they've developed their infrastructure in a short time.” The visit, he said, “really changed my thinking about China.”
He also came away quoting the mantra of the Chinese, which is that China and Taiwan will be unified at some point. “Unification will happen,” he said. “It's inevitable.”
This probability led him to point out countries such as New Zealand and Australia, both of which diplomatically recognize China and support the so-called “One China” policy, also have trade ties with the Taiwanese. The RMI recognizes Taiwan and, except for last month's visit to China by the Nitijela delegation, has few official contacts with the Chinese government.
He said that the RMI should “not close the door” to China.

'We only got $1,000
per diem … not $12,000'


“It's totally not true,” Majuro Senator Alik Alik told the Journal in response to an Around Town item in last week's paper indicating that the senators who went to China last month received $12,000 each.
“We received a $1,000 per diem in China,” Alik said. “That's all.”
He said all trip expenses were also paid for by their host, the National People's Congress of the People's Republic of China.
But, he added forcefully, any reports that the senators received $12,000 and their wives another $7,000 are false. He described it as “a free trip” and also said they did not receive any money from the RMI government for the travel.

From the 6/30/06 issue of the Marshall Islands Journal

High school grads don't
make the grade at CMI



Virtually all Marshallese high school graduates do not qualify for credit level courses at the College of the Marshall Islands, said a senior official at the college.
Ninety five to ninety nine percent of incoming freshmen do not score high enough on CMI entrance tests to qualify for credit level courses, vice president for academic and student affairs John Tuthill told the Majuro Chamber of Commerce recently.
This sobering fact was tempered slightly by Tuthill's follow up observation that this is not just a problem for the RMI. Even in the United States, as many as 70 percent of all high school graduates must take pre-credit college courses before they qualify for college-level work, he said.
“Is it a problem for the Marshall Islands, CMI and the Ministry of Education?” Tuthill asked. “Yes, but it's not unique to the Marshall Islands.”
He also observed that while Assumption High School graduates tend to do better than their Marshall Islands High School counterparts on the CMI entrance test, the difference “is not enormous. There are a large number of private school graduates who go into the developmental program, too.”
Tuthill said a problem facing many students who must attend developmental courses for two or more semesters is that often their Pell grant eligibility runs out, so they drop out of school and don't finish college.

Kids' second chance

Education Secretary Biram Stege acknowledged that Marshall Islands public high schools have been producing “poor quality graduates” in response to questions at the Majuro Chamber of Commerce meeting earlier this month.
Among “stop-gap” responses aimed at improving education results, Stege said the Ministry has started a “pre-nine” class this past year to give students who didn't pass the high school entrance test “another chance to raise their skills.” In addition, public schools launched the first kindergarten program during the just finished school year.
She noted that the law requires public education be provided to students aged four-to-18. “Resources wise, we're not there yet (for four year olds),”she said. “We've just piloted kindergarten.” Kindergarten is for students aged five.
The focus on curriculum development now is to get the elementary, middle school and high school curriculum to work together so there is a smooth transition from grade level to grade level, she said.
Finally, she said the Ministry is working to develop an “exit test” for high school seniors that they are required to pass in order to receive their diplomas. The aim is to step-up the expectations of the teachers to reach the required academic standards for graduation.

MOE'S $27 million budget

The Ministry of Education has a $27 million operating budget in this year's national budget - about one-third of which ($10.8 million) is funded by the Compact of Free Association.
Only about 15 percent of Education's budget comes from the Nitijela (General Fund), according to a breakdown provided to the Chamber of Commerce meeting earlier this month by Education official Richard Bruce. The balance of the $27 million is funded through US federal programs.
The $27 million budget does not include the approximately $12 million being spent on infrastructure, mostly the building of new elementary and high schools.

From the 6/24/06 issue of the Marshall Islands Journal

Matson adds Guam route

Matson Navigation Company announced this week that it is increasing its service to eastern Federated States of Micronesia (FSM) and the Marshall Islands , effective August 4, by introducing a new bi-weekly liner service from Guam.
Matson is chartering a 425-foot vessel for the new feeder service, which will service Ebeye, Kwajalein, Majuro, Kosrae, Pohnpei and Chuuk on a 14-day basis. Matson currently offers a monthly service to the Marshall Islands from Honolulu via the container barge Islander and a 21-day service from Guam to Kosrae, Pohnpei and Chuuk via a connecting carrier agreement.
“With this new service, Matson will offer these Pacific islands the best frequency ever offered in the region,” said Dave Hoppes, senior vice president, ocean services.

From the 6/17/06 issue of the Marshall Islands Journal

From the Majuro Chamber of Commerce "Forum on Education in the RMI," 6/14/06

Our hungry kids

Call for school lunch program

By GIFF JOHNSON

Majuro business leaders strongly endorsed starting up a lunch program for public schools in response to a principal saying many students don't attend school because they are hungry.
At Wednesday's Chamber of Commerce meeting, Education Minister Wilfred Kendall and Secretary Biram Stege brought a lineup of top Education officials to answer the Chamber's “20 questions.”
The problem of student truancy and absenteeism sparked a lively exchange about why so many Marshallese children are not in school at all, or don't show up to class regularly.
“A lot of kids don't come to school because they are hungry,” Delap Elementary School principal Evelyn Konou said bluntly. She said there's no question about the importance of a lunch program for the school.
When Majuro Coop students, who have a lunch program as do most private schools, came to visit DES recently, Konou said it was easy to see how much taller and healthier the Coop students looked compared to the same grade level of DES students.
Business people and Education staff commented on the large number of children who have not attended school or, as Konou pointed out, want to start attending school for the first time at age 10 or 11.
“We need to make it desirable for kids to go to school,” PII owner Jerry Kramer said. He asked if the RMI is eligible for USDA food, and said he'd like to see the Chamber push the school lunch program.
US Embassy official Tom Maus said that the USDA food program for local schools was phased out in the late 1980s.
Seventh Day Adventist teacher Samuel Ngala said during a year of teaching at Ailinglaplap, “I ended up feeding my students because if you want students to do well, they need a full stomach.” He said he ended up $1,000 in debt from doing it.
He also said that Taiwan's gift of rice to private schools last year helped SDA to avoid having to raise the price to students for the lunch program. ROC Ambassador Lien-gene Chen responded that Taiwan is happy to help provided it has the support of the government and businesses, since it doesn't want to undermine the private sector.
Waan Aelon in Majel's Dennis Alessio backed Ngala's comments, saying “if the kids get better nutrition, they get better grades.” Several other attendees urged bringing back the school lunch program.
Marshall Islands Resort general manager Bill Weza asked, pointedly, “how much is the MOE budget?” and added school lunches could be produced for $1.50 per student each day. MOE officials said this year's budget is $27 million, close to 20 percent of the national budget.

From the 6/2/06 issue of the Marshall Islands Journal

Survey paints picture of RMI

By GIFF JOHNSON
The preliminary results of the first large-scale household survey conducted in the RMI were released in public presentations late last month.
The survey, which recorded information from nearly one out of five homes nationwide , focused on seven islands and atolls - Majuro, Ebeye, Eniburr (Kwajalein), Wotje, Jaluit, Arno and Ailuk.
“Because of the Jenrok survey (in 2004), which was small and showed startling results, EPPSO wanted to survey a larger sample to see how people are doing,” said Ben Chutaro, a co-manager of the project for the Economic Policy, Planning and Statistics Office.
It was also the first survey of its type in the Pacific region to use the “geographic information system” (GIS), according to EPPSO chief Carl Hacker. Using aerial photographs of the islands, houses were randomly selected from the different islands surveyed.
Among the findings:
o Unemployment: In Majuro, it ranges from 25 to 39 percent ; on Ebeye, from 26 to 38 percent. An interesting finding of the survey is that although there were 5,594 people in the working age group over the age of 16, only 2,507 - or less than half - said they were trying to get a job. “Many people are not looking for work,” said co-manager Ben Graham in explaining this situation. “They get fatigued and quit looking.” He added that on Ebeye, people who say they're not looking for jobs could be landowners who receive regular US rental payments. The household survey results were compared with the last two censuses (1999 and 1988). The survey report said that “using either estimate (noted above), unemployment in almost all areas is very high and appears to be increasing over time.”
o Household income: Ebeye has the highest average household income in the country, at $22,463. Next is Majuro at $19,080. Eniburr is $14,854, Arno $9,521, Jaluit $8,803, Wotje $6,767 and Ailuk $3,463. Graham and Chutaro said that Ailuk results are likely similar to what would be found on other isolated outer atolls in the RMI, and it showed that with a per capita income of $533, people on Ailuk survive on about $1.50 per day, compared to Majuro and Ebeye, where per capita income is about $2,542 and $2,475, respectively - or about $7 a day.
o Quality of life: Eight of ten households on Ailuk said their quality of life was “worse” or “much worse” than three years ago. Almost no one on Eniburr felt their quality of life had declined. In Majuro and Ebeye, 30 percent and18 percent , respectively, said their quality of life had gone down.
o Top social problems: People on each island identified very different problems. For example, in Majuro, people surveyed listed alcohol, stealing, pollution, no jobs and poor education as their top five concerns, which “alcohol” being named by almost three times more houses than any other problem. On Ebeye, however, the top five problems identified were reliable power, fresh water supply, high cost of living, overpopulation and sanitation facility. On Wotje, the top problems identified were high cost of living, no jobs, price of copra, poor transport and alcohol; on Ailuk, high cost of living, price of copra, infrequent shipping service, sanitation facilities and lack of food.
o Education: The survey found that in most areas, student attendance in school has improved since 1999. Arno reported the highest attendance rate at 97 percent, with Jaluit 96 percent, Ailuk 92 percent and Wotje 90 percent - all higher than the urban centers of Majuro (87 percent), Ebeye (85 percent) and Eniburr (88 percent). All of these were improvements from 1999, except for Eniburr, which stayed the same.But this was tempered by the finding that the “vast majority of public school students did not score above 60 percent on the high school entrance test in 2005.” The survey also said that for “most of the seven areas surveyed, a majority of public school teachers did not pass the Marrshall Islands literacy and language test administered in late 2004.” Nevertheless, 63 percent of those surveyed said the overall quality of their local school is “good.”
o Health care: Nearly 70 percent of people surveyed rated their hospital or dispensary as “good.” But a startling finding for Ebeye and Majuro came from the survey relating to immunization. Surveyors asked the parents to produce the two year old child's “yellow card” (issued by the Ministry of Health to record immunizations given). Fewer than half of the households with two-year-old children were able to produce the card. On Ebeye of 78 homes, 50 said they had no card and the two-year-old had not been immunized. In Majuro, 34 out of 95 households - or more than 30 percent - similarly didn't have yellow cards and said their two-year-olds had not been immunized. On Eniburr and Arno, a majority of parents reported they had no yellow card and their two-year-olds were not immunized. A slight majority on the three other outer islands were immunized.
o Teen pregnancy: Ailuk was the only one of the seven surveyed that had no births to teenage mothers in the past year.
o Food to eat: Households were asked if they had enough food for their family at mealtimes. In Majuro, Ebeye, Jaluit and Arno about one out of three houses said they “sometimes” or “often” did not have enough to eat. Two-thirds of Ailuk households said they sometimes or often didn't have enough to eat, while Enniburrr's percentage was the lowest at 25.
o Women's representation in local councils: Jaluit has the highest percentage of women in the council, with one in five members female. Ailuk is next at 19 percent, Majuro 14 percent, Wotje 11 percent, Arno six percent and Kwajalein with zero. Asked if they'd support more women in Nitijela, 84-94 percent of the people surveyed said “yes” on the seven islands. “A lot of countries, including the RMI, recognize that increasing participation of women (in elected roles) is important,” Graham said, adding that the RMI is among many international signatories to the “millennium development goals” that aim to improve the quality of life throughout the world.
o Government responsiveness: A majority of people on all islands said they believed the government was responsive to their needs. About one third of the people surveyed on Ailuk, Ebeye and Arno said they felt the government was not responsive. Other islands were much lower.
o Direct election of the president: The survey showed that there is broad public support for direct popular election of the president. Between 70 and 95 percent of those surveyed on each island supported this development.


Ailuk residents bemoan lack of transportation

Transportation, or the lack of it, is the main concern for residents of Ailuk Atoll. This fact and many others were highlighted last Thursday by a newly released community survey that's just been completed by the Economic Policy, Planning and Statistic Office (EPPSO).
According to EPPSO's director Carl Hacker, the Ailuk results provide a snapshot of what could be the case for many of the more isolated outer islands.
Nearly 80 percent of the households on Ailuk were surveyed and asked questions ranging from household demographics, health and education to economic activities, food sources and government responsibilities.
Notably, just from looking at the numbers alone on the gender issue it appears that Ailuk women are faring better than their urban counterparts.
Ailuk has a 97 percent attendance rate of elementary school age girls. The female labor force participation rate is about 73 percent - these are women who are working full time on income generating activities. And, women are earning over three times more than Ailuk men. Also, Ailuk had a zero percent rate of teen pregnancy in 2005.
The flip side of the coin, however, is that working age is counted from the age of 16 years thus the reality is that teenage girls are not in school but are now participating in the labor force. And, despite making more money then the men of Ailuk, the whole population is still living on just over a dollar a day per person.
“Compared to the US, Ailuk is 100 percent below the US poverty level,” said local Asian Development Bank consultant to EPPSO Ben Graham.
Over 80 percent of the respondents felt that the quality of life on Ailuk was worsening, a feeling which Graham attributes to the high cost of living on Ailuk.
“Lack of shipping is what's making life difficult (on Ailuk),” added Hacker. “There is no money because they can't sell their copra and there are no goods and supplies available to buy.”
In terms of government services, 95 percent of Ailuk's respondents ranked sea transportation as a number one priority whereas only five percent thought that health was important and education was only ranked a priority by three percent of the respondents.
According to the survey, 100 percent of Ailuk's population relies primarily on local food sources for fruit and vegetables and 98 percent rely on local sources of fish or livestock for their protein.
Generally the numbers indicate the on Ailuk people are working harder just to survive as nearly 70 percent of the respondents said that there was not always enough to eat at meal times.
“There is dissatisfaction and a lot of it has to do with their feeling of isolation,” said Hacker. “(Transportation) contributes to quality of life and it shows what a contribution this services adds to a community.”

From the 5/5/06 issue of the Marshall Islands Journal

RMI $1m debt to MISSA leads BOMI to halt loans

By GIFF JOHNSON
A $1.5 million RMI debt to the Marshall Islands Social Security Administration (MISSA) forced Bank of Marshall Islands to temporarily halt processing loans to RMI government employees last week and produced a scramble at the Ministry of Finance to bring tax payments up to date.
MISSA officials indicated that the government made large payments late last week, on Tuesday this week and was expected to make another payment on Wednesday as the Journal was going to press that would bring the RMI government current through March 31.
Historically, the RMI Ministry of Finance has paid MISSA retirement and tax fund deductions from its employees after every biweekly payroll period. But Finance only paid taxes for two of the seven January-March pay periods in early April, leaving about $1 million due. The final payment due this week to bring the government current through March 31 was estimated at about $185,000.
Bank of Marshall Islands temporarily cut off processing loans for RMI workers because of the high risk of not being able to collect on loan payments. MISSA, under the law, gets first priority over any other agencies or companies to collect required taxes - meaning that MISSA taxes must be paid even before employees are entitled to be paid their salaries, which could jeopardize a bank's ability to receive allotment loan payments.
BOMI agreed to continue processing loans Friday based on assurances from top government officials, but reportedly has given the government a May 12 deadline to come current with its MISSA dues or loan processing could again be halted.
The financial crisis with MISSA prompted meetings between President Kessai Note and MISSA officials last Friday.
Late last week, Finance Secretary Jefferson Barton appealed to BOMI president Patrick Chen to resume loan service to government employees. “When I received words from my good friend, the MISSA administrator last week Friday (April 21) about RMI's overdue tax payments for our employees to MISSA, I soon set out to find out the situation and when I found out we were indeed holding some MISSA payments for more than necessary, I immediately ordered my staff to disburse some of that to MISSA,” Barton told Chen.
Barton added that “Finance is on the way to clear these arrears and this is our immediate goal, which we aim to achieve in the next two-to-three weeks, if not a month from now.”
Barton promised Chen once RMI clears its MISSA tax debt, it will remain up-to-date on its future payments.
MISSA has also reportedly been assured by Note and other high level RMI officials that the government will clear its back due taxes to MISSA and remain current. Because the payments were late, the government is required to pay interest to MISSA in addition to the retirement and health taxes.

Spear aims to do the hardware business best

By GIFF JOHNSON
American Tracey Spear bought Do It Best hardware store from Almon Chen this week in the biggest business deal to hit the capital in several years.
Spear took over ownership effective Monday and is planning a grand opening for July.
Bringing in new hardware products, lowering prices and improving customer service are Spear's aims for the Delap-based business.
Spear has already slashed prices on a number of items to move hardware product.
He described himself as a “very hands-on owner” who really enjoys the hardware side of the construction business. While he is now based in Majuro full time, he is maintaining his ties with his Oregon-based business, Dateline Exports.
Spear has been involved in supplying construction materials to US-affiliated islands, including Guam, for some 24 years. He's also been active in setting up stores in the region or helping existing stores become affiliated with Do It Best, which is based in Indiana.
“This is a great business with great employees,” said Spear of the Do It Best operation.
Among other plans that Spear has is to set up a contractors' desk at the back of the store where local construction companies can get price quotes and quick service. He also aims to have the store open earlier, from 7:30 am, to accommodate contractor needs.

From the 4/28/06 issue of the Marshall Islands Journal

Smugger gets hit with $2,500 fine

The first successful prosecution of smuggling in 15 years resulted in a $2,500 fine to a local business.
Yanlin Qin of Marshall Islands Red Coral Company pleaded guilty to one of three smuggling counts, and Judge Richard Hickson fined him the maximum $2,500. The other two counts were dismissed.
He was prosecuted by assistant attorney general Jack Jorban for failing to declare fireworks that were imported more than a year ago.
“This is the first Customs' smuggling case with a guilty judgment issued by the court in nearly 15 years,” said Casten Nemra, assistant secretary for Customs, Tax and Revenue at the Ministry of Finance. Customs “is very pleased with this outcome and will continue to work closely with the Office of Attorney General on smuggling cases.”
Nemra noted that with the amended penalty section of the Import Duties Act, the Red Coral Company faces higher monetary fines and possible suspension of its business privilege if it violates import requirements again.

Weza: Resort in the black for the first time

By GIFF JOHNSON
For the first time in its short 10-year history, the Marshall Islands Resort turned a profit in 2005.
Resort general manager Bill Weza showed the just-received Deloitte and Touche audit for 2005 that confirms a net profit of $24,606 last year.
But, he added, the 2005 profit is based on only nine months, so in all likelihood the profit is higher. Marshall Islands Resort (MIR) switched from a calendar year to the RMI's October-September fiscal year, so last year's audit only tracks January-September.
“Last year could have been better, but we spent a lot of money on equipment,” Weza said. “We replaced old air conditioners, putting in 60 split units that greatly reduced our electric costs.” The departure of Outrigger Hotels in early 2004 also relieved the hotel of paying about $400,000 annually in management fees to the Hawaii-based company. Pacific International Inc. (PII) took over management of the resort following Outrigger's departure through an agreement with the RMI government.
“We also saw a dramatic increase in our bar business in 2005,” he said. “We have a good customer base because of our customer service.”
Other positive developments have been increases in food business and use of the pool area for parties.
On the negative side, Weza sees a decrease in the number of large meetings and conferences happening at the hotel - which have brought in large amounts of revenue over the last several years. He also noted that the government has reduced its spending so that compared to past years where it might host two dinners or receptions during a week-long event, it has cut back to just one.
He doesn't expect 2006 to be as strong as 2005, “though our revenue should be within a few thousand dollars of 2005. I still think there will be a profit.”
An audit report to the Nitijela showed the hotel had an operating loss of $675,888 in 2003. In 2004 that operating loss ballooned to more than $5.8 million, largely because of the “impairment loss” (depreciation) of the value of the hotel property by $5,590,012 in 2004. Without depreciation factored in, the operating loss of the hotel was $253,155 in 2004.
Weza also sees room occupancy on the rise after a big drop off in 2004. He attributes the drop off in part to the transition from Outrigger management to the hotel being locally operated by Pacific International Inc. in conjunction with the RMI government.
Hotel occupancy hit its highest level in 2002 at 47.5 percent, but dropped to just 30 percent in 2004. It rebounded to 38 percent last year. The average room rate also increase from $58.12 in 2000 to $67.33 in 2005.


From the 3/10/06 issue of the Marshall Islands Journal

New destination saves hospital thousands of dollars

In just two years, the referral service to hospitals in the Philippines has saved Majuro Hospital thousands of dollars and has become a preferred choice of many supplemental patients.
“We started in 2004 and word of mouth has been so good that people are coming to us and asking for the hospitals in the Philippines,” said Rosabella Marty, assistant secretary of health for Medical Referral Services.
Two years ago, Marty and a team of administrators and medical specialists visited several hospitals in the Philippines to investigate the services available, evaluate the skills of the medical professionals and determine whether or not Marshall Islands patients would be comfortable there.
Compatibility with US standards was a primary reason that the Philippine hospitals were considered.
Marty said that the team learned useful lessons from a previous Philippine referral program that was run under the Marshall Islands Social Security Administration.
“They used a third-party administrator who didn't know Marshallese customs or the language, and people felt very uncomfortable,” she said. “We decided that we needed a patient coordinator on site who spoke Marshallese and would visit the patients every day to make sure their needs were being looked after.”
As a result of the fact finding mission and success with the first referral patients, the program was expanded to include four hospitals in the Philippines: Saint Luke's, Medical City Hospital, Philippine Heart Hospital and Asian Hospital.
“One thing we are really starting to appreciate is the service for burn patients,” Marty said. “The Straub Clinic in Hawaii costs $7,000 a day to treat a burn patient. In the Philippines, full treatment for a month would cost $7,000.”
Deb Atwood, director of the Bureau of Offshore Medical Care concurs, adding, “By law, there is a $100,000 cap on any medical treatment for an individual,” she said. “For a burn patient, the money would get used very quickly just for the urgent treatment in Honolulu, whereas in the Philippines, we can provide a complete continuum of care, from critical burn treatment to skin grafts and on through physical therapy for the same amount of money.”
The Philippine hospitals offer greater options for RMI patients, providing a fuller range of services for the same expenditure and resulting in cost savings on the less intense treatments, according to Atwood. She said the savings are being applied toward providing increased capacity and treatment for patients in Majuro.
But just because treatment is cheaper in the Philippines does not mean all patients are sent there. Each offshore referral is treated individually, Marty explained. Many factors, including the nature of the illness or injury, whether or not a patient can handle the flights, the urgency of the case and where the best specialists are located all contribute to the decision of where to send a patient.
The referral service has a long-standing contract with the Tripler Medical Center in Hawaii, and non-urgent cases are first listed with them, because if Tripler can take the patient, the service is free to the RMI. Otherwise, the Bureau determines which hospital is best for national health care patients.
Supplemental health care patients (those who pay an annual premium for additional medical care options) can choose which hospital they prefer. A popular supplemental program is the Executive Checkup. Previously, Hawaii had been the preferred destination for these diagnostic evaluations, but Marty says that this year, nearly all of the patients have preferred to go to the Philippines.
Jack Niedenthal is currently in Manila, capital of the Philippines, for an executive checkup. “Word of mouth was excellent - many people I respect have been there and said that the service was very good,” he said. “What impressed me most, was that I contacted Rose Eckes at the hospital referral service and we had the whole thing booked, including the flights and all of the hospital arrangements, in 30 minutes. It would have taken days to get that organized for Hawaii.”
In-patient treatment was one of the factors Niedenthal preferred. In the Philippines, the Executive Checkup includes room and board at the hospital for the duration of the tests, while in Hawaii, everything is handled on an outpatient basis, so there would be additional costs for a hotel room, meals and transportation to and from the hospital. “I'm getting the whole series of diagnostic tests for what it would cost me to rent a car in Hawaii,” Niedenthal said.
Niedenthal has taken his camera and intends to write up his experiences and make the information available on the Chamber of Commerce website (www.majurochamber.net).
“We have been very pleased with the Philippine hospitals so far, and usually our national healthcare patients are happy,” said Marty. “But now, even the supplemental patients are coming back with satisfaction, and that is very gratifying.”
Perhaps the best endorsement for the referral service comes from Atwood herself. “I am actually flying my daughter from Honolulu to the Philippines for medical treatment, because I think she will get better health care there.”

From the 3/3/06 issue of the Marshall Islands Journal

MEC joins forces with Micronesian Petroleum
An agreement to join forces in search of cheaper fuel prices in the region was signed on Monday between the Marshalls Energy Company (MEC) and the Micronesia Petroleum Corporation (MPC).
Kosrae's Lt. Governor Gerson Jackson and Senator John Martin along with Microneisa Petroleum Corporation's general manager Weston Luckymis were in Majuro this week to sign the agreement with Minister of Public Works Matt Zackhras and MEC general manager Billy Roberts.
“We are leading the way,” said Zackhras. “We can now buy bulk fuel from any supplier in the region.”
Because MEC and MPC own their own tank farms, the memorandum of understanding will allow both companies to collaborate in sourcing out competitive fuel prices and piggy-back on fuel shipping costs to the two countries.
“This agreement will have a long-lasting impact on the future of our two countries,” said Jackson. “We are now taking the lead and I hope that other countries in the region will follow through.”
Jackson and Zackhras are hopeful that countries such as Kiribati, Nauru, Palau and the rest of the Federated States of Microneisa join in to create a stronger fuel purchasing body within the region to save money on the ever-increasing price of fuel.


Hopes for return of Air Nauru
Majuro-based travelers to the South Pacific may gain respite from the present lack of service by the news that Nauru has submitted a bid to buy back the Boeing 737 from the EXIM Bank that repossessed the plane in mid-December 2005, according to the airline's commercial manager John Goulding.
The plane is still in Melbourne, making it relatively easy to put back into service.
“The bank has to wait until they assess all offers,” said Goulding. “It's likely there could be quite a bit of interest in the aircraft as it has a number of features not standard on most Boeing 737s and has been fully serviced and maintained by Qantas all its life.”
Goulding also said Air Nauru officials are assessing a number of aircraft in the US: “Other aircraft options are also being considered, but there are very few suitable aircraft around that have all the right technical specifications that we require for the sort of places that we fly to.
“You just cannot take a "domestic" aircraft that has been used for 60 to 90 minute hops around the US or Europe and put it into service in the remoteness of the Pacific.”
The purchase or leasing of a plane would be made possible through a grant from the Republic of China, which was announced following a meeting in Taipei last month. According to Radio New Zealand International on February 10, the ROC is giving Nauru about $12 million to help Air Nauru get back in the air.
In the meantime, it is possible to get to Australia without first flying north by booking on Air Marshall Islands to Tarawa on Thursday, then catching the Saturday (or Sunday) flight from Tarawa to Brisbane. “Whilst this is not ideal,” said Goulding, “it's still a lot less than going via Honolulu or Guam.”



From the 2/24/06 issue of the Marshall Islands Journal

Agencies to share tax information

Concern by government over what is perceived as serious shortfalls in overall tax collections has resulted in the formation of a memorandum of agreement (MOA) between three key entities to share taxpayer information.
The agreement, which took effect on February 15, stipulates that the Ministry of Finance, the local governments of Majuro and Ebeye, and the Marshall Islands Social Security Administration will provide each other with information obtained in dealings with businesses. The information will consist of tax filings for employers and employees, license issuance, and gross sales and receipts information. The idea behind the agreement is to institute a system of cross checking between the different entities to see that all appropriate taxes are being paid. Finance Secretary Jefferson Barton, Mayors Riley Albertter and Johnny Lemari of Majuro and Kwajalein respectively, and MISSA administrator Saane Aho formally signed the MOA last week.
In remarks Finance Minister Brenson Wase called the agreement “a step toward closer coordination to address common non-tax compliance issues.” Committees representing the three agencies will be set up to ensure implementation of the agreement.

Online boarding passes

Continental Micronesia, which is based in Guam, last week announced that customers can check-in online at www.continental.com and receive their boarding passes online or by fax.
Web check-in has been available to the airline's customers in Guam since April last year, but now the service has been extended to flight originating in Majuro, Kwajalein, Manila, Palau, Yap, Saipan, Rota, Chuuk, Pohnpei, and Kosrae.
According to the airline's chief executive officer Mark Erwin: “This technology will help reduce wait times and will lead to a faster check-in process.”


From the 2/3/06 issue of the Marshall Islands Journal

First SK fuel delivery

After 14 years of depending on Mobil Oil Micronesia as its sole fuel supplier, the Marshalls Energy Company has switched to a South Korean supplier.
The arrival of the SK Networks fuel tanker 'Oram Glory' in Majuro Sunday confirmed the Marshalls Energy Company's switch to a new supplier. The tanker pumped 1.6 million gallons of diesel into MEC's nearly empty tanks, which have a total holding capacity of six million gallons - but were down to their final 100,000 gallons as the last fuel shipment was in September.
MEC and SK Networks closed the deal for a one-year fuel supply contract in mid-January, with the help of a Bank of Guam loan and Marshall Islands government guarantee.
The break with Mobil follows accusations from the government's Chief Secretary and MEC board member Robert Muller that Mobil was “price gouging” in the Marshall Islands. He asked US Interior Department deputy assistant secretary David Cohen for an investigation of Mobil's negotiating tactics - an investigation Mobil officials said that they welcome.
With MEC's switch to SK Networks, Mobil has lost its biggest customer in the Marshall Islands. MEC is estimated to import upward of 14 million gallons annually at a current wholesale cost of about $28 million.
Mobil operates its own bulk fuel plant in Majuro, with storage for gas and jet fuel as well as diesel.
“Mobil Oil Micronesia, Inc. has been in the RMI 40 years,” said Cecile Suda, the company's Guam-based manager of public and government relations, in response to MEC's move. “We welcome competition from other suppliers of petroleum products.” She said it is Mobil's policy to “compete at the highest level, and in accordance with all applicable laws, rules and regulations, to ensure the people of the RMI receive a reliable supply of product in a safe and environmentally conscious manner.
Suda cautioned that “long-term supply reliability is important to consider when shopping around for supply.” Commenting on whether MEC's switch would impact Mobil's other fuel sales in Majuro, Suda said “Mobil is a business and we will adjust our risk in doing business to meet a return on our investment in the Marshall Islands.”
SK was chosen after evaluating proposals from five different fuel supply companies, MEC general manager Billy Roberts said.
The initial shipment of 1.6 million gallons received from SK Networks Sunday will save MEC about $90,000 over the price that Mobil was asking MEC to pay in a new supply contract, Roberts said.
The deal is structured to provide MEC with fuel shipments about every six weeks, depending on fuel sales to fishing vessels. Fuel sales is the way MEC generates revenue to keep the cost to consumers, government and business lower than the actual cost to produce power and to pay for fuel.
But its finely tuned sales operation fell apart in 2005 when new contract talks between Mobil and MEC floundered, and, as a result, regular shipments of fuel from Mobil stopped. With only two fuel shipments in 2005, MEC halted fuel sales to fishing boats for about three months in the July-September period, and from December 15 until Tuesday this week, when fuel sales resumed following the SK Networks tanker delivery. Roberts said MEC lost $700,000 in revenue by not selling fuel since mid-December.
Currently, MEC owes Mobil $6.2 million for a fuel shipment provide in September. “We're working out a payment schedule with Mobil,” he said.
Aside from a lower price, another benefit of the agreement for MEC is that fuel shipments can be organized from S. Korea on short notice. While Mobil needed 60-day advance notice for a new shipment, SK can get fuel to Majuro in under three weeks. “If we get a rush on sales, we don't need a 60-day lead time like we did with our previous supplier,” he said. “It only took 17 days from order to last weekend's delivery.”
Roberts said SK Networks operates one of the largest refineries in the world.
“MEC is also looking for other cost saving strategies for lubrication oil,” Roberts said.

From the 1/27/06 issue of the Marshall Islands Journal

Yachties to descend on Bikini

On March 7, 1946, the 167 people of Bikini Atoll filed on board a US Navy landing craft and left their home “for the good of mankind and to end all world wars.” The arrangement, according to the then military governor of the Marshalls, Commodore Ben Wyatt, was necessary for the testing of his country's nuclear weapons and, he said, would be temporary. History has shown otherwise but the ongoing tragedy of this era has -been - albeit in a relatively small way - assuaged since 1996 by the opening up of Bikini Atoll to international divers, which provides an annual income to the local government and its people. Exactly sixty years after the Bikinians' exodus, another small step is being taken that may result in a new group of people visiting Bikini Atoll on an annual basis.
By Karen Earnshaw.

On March 7, 2006, at least 10 international yachts will make history by being the first cruising group to be invited to Bikini Atoll.
'Yachties Week in Bikini' is being organized by Bikini Atoll Local Government liaison officer Jack Niedenthal in conjunction with the Mieco Beach Yacht Club.
The idea was sparked when Niedenthal was told a booking for the week of March 1-8 had fallen through. Niedenthal has long been “fond” of yachties, since his days as a volunteer on Namu a few decades ago: “When you are 22 years (old) and haven't had an ice cold drink for seven months and then a yachtie shows up with cold beer and steak, well...”
Despite this, Niedenthal and the local government have never openly welcomed individual yachts to visit Bikini.
The dive sites are precious to the atoll's economy and it has always been considered, reasonably, that only 'controlled groups' should visit the atoll to preserve the treasures beneath the lagoon.
However, the 2005-06 cruising season has seen the largest ever fleet of yachts in the Marshall Islands, leading Niedenthal to the idea that the skippers could be invited to sail to Bikini as a group and take part in the atoll's 'controlled' dive program.
On January 10, the yacht club invited Niedenthal to speak at their monthly Tuesday Tales, which is held at the Boknake in the grounds of RRE Hotel, to air the idea. Over 40 people, mainly cruisers, subsequently were entranced by Niedenthal's tales of volunteering on the outer islands and the horrors of the 'nuclear age' in RMI.
Then he moved onto the outline for 'Yachtie Week in Bikini,' with many of the interested cruisers throwing questions at him.
The result is that at the time of going to print, 10 boats are planning to make the voyage northwest, with 16 members of the crews planning on diving.
All the divers will take part in the mandatory introductory dive on the USS Saratoga, which Jack explained is a world-class dive. This first dive is designed so that the dive guides can be sure of their clients' abilities under water.
In his 'flyer' on the trip, Niedenthal said: “If all works out well, we will do it again next year.” This is a key statement, as if in fact it does 'go well' (how could it not?) chances are strong that the word will spread around the extended yachting community, enticing more yachts to the Marshalls in coming seasons.
And with luck, some of those yachts will be of 'mega' variety, all of which will add much-needed tourism dollars to both Bikini and the Marshall Islands as a whole.


ROC supports Air Nauru
Air Nauru says that positive developments for restoring its central Pacific air service are now on the horizon, thanks to the Taiwanese government.
In recent high-level meetings with Taiwanese government officials, the governments of Nauru and Taiwan have reached agreement in principle in relation to restoring Air Nauru's air services.
The outcome of the meeting, which took place earlier this month Taipei, was applauded by the Nauruan Minister for Transport Dr. Kieren Keke, who said he was grateful for Taiwan's support at this difficult time.
“The Government of Nauru is confident that these discussions will lead to the restoration of normal air services that were in place prior to the repossession of Air Nauru's Boeing 737 aircraft in mid-December 2005,” said Minister Keke.
“Nauru's reliance on a regular air service is essential to assist the national development programs, and this was understood by our friends in Taiwan. Their response to our request for help is appreciated by the government and people of Nauru,” the Minister said.
It is expected that over the next few weeks the details of the assistance offered by Taiwan will be formalized, said Air Nauru chief executive officer Geoffrey Bowmaker. This will allow for further negotiations that will return jet services to Nauru and to its neighboring countries, which also rely heavily on the services provided by Air Nauru.
In the interim, Bowmaker said Air Nauru will continue to provide essential air services connecting Nauru, Kiribati, Fiji, the Solomon Islands and Australia through ongoing charter and lease of available aircraft.
Air Marshall Islands has been providing a weekly flight to Tarawa on Thursdays since Air Nauru halted service between Majuro and Tarawa in mid-December.
Bowmaker said that since the repossession of the aircraft, Air Nauru management has worked tirelessly to ensure that travelers' needs are met in the region. “Those who are reliant upon our services may rest assured that Air Nauru is making real progress to return to full service as soon as possible,” he said.

From the 1/13/06 issue of the Marshall Islands Journal

Nitijela focus on quality, safety of goods

A consumer protection bill that has been mostly collecting dust for the two years since it was first introduced has been revived for Nitijela action this session.
The amendment to the Consumer Protection Act, originally introduced in January 2004 by Utrik Senator Hiroshi Yamamura, was the subject of a public hearing last Thursday.
It has been put back on the table by mounting concern over unfair business practices.
The summary attached to the bill is unusually candid in its expression of the problem that the bill is supposed to correct. “Today with the influx of business into the Republic,” the summary says, “complaints from various sectors of the community have surfaced in relation to the quality, genuineness and safety of goods and services and the type of business practices that are being perpetrated in our communities.”
The bill summary criticizes the existing legislation, saying that it's not clear if the Consumer Protection board mandated by the original law was even ever set up. “What is clear is that if government does not take steps immediately to place a greater vigilance on practices of businesses in the community and to punish those who indulge in fraudulent business practices, many consumers in the Republic will suffer as a result, and the businesses that violate the Act will not be held to account,” the summary says.
It noted public complaints about expired goods, imitation products and other material hazardous to people's health.
A consumer protection board, established by the existing law, would be abolished in favor of a three-member Commission for Consumer Protection in the Ministry of Justice, which would be headed by a commissioner appointed by the Public Service Commission. The other two members would be members appointed by the Speaker from the Nitijela membership, “in the hope that a smaller body will be able to organize quicker to enforce the provisions (of the law).”

From the 12/23/05 issue of the Marshall Islands Journal

USPS price hike looms
“Mail to the Republic of the Marshall Islands is no longer treated as domestic mail,” states the final decision of the US Postal Service issued recently.
The change goes into effect at 12:01 am January 8.
The decision by the USPS removes the Marshall Islands and the Federated States of Micronesia from the domestic mail zone designation and moves them instead to the “International Mail Manual.”
“We will revise the Domestic Mail Manual to remove references to the RMI and FSM,” the USPS said in the Federal Register.
Although both will retain their respective zip codes, the RMI and FSM will be treated as international mailing zones.
People and businesses in US domestic mail zones will see increased costs for mailing to the RMI, while RMI residents will experience higher costs and reduced service options.
The USPS information, which was provided to the Journal by Hawaii-based postal officials, shows that from January 8 the cost to send a one ounce letter to the RMI from a US domestic mail zone will rise to 48 cents. It is currently 37 cents; domestic rates are also rising on January 8 to 39 cents for one ounce letters, so the change for RMI equals a 23 percent increase in cost.
Air mail rates for packages up to one pound will be $5.90 as compared to the current rate of $3.90 - a 51 percent jump in cost.
The USPS said that the rates will be increased - phased in - each year over at least five years.
Aside from the increase costs, what stands out is the services that the RMI will lose on January 8 by moving to an international mailing destination.
Of services currently provided, only “certificates of mailing” (a 95 cent charge) will still be available.
In the “not available” list provided by the USPS are the following: COD and certified, insurance, business reply service, money orders, reply coupons, recorded delivery, registered mail, restricted delivery and return receipts.

Regular mail up to 48 cents
A Journal report in the December 9 issue indicated that international airmail rates for one ounce letters could rise in January by as much as 35 cents.
That report was based on information provided by a USPS official.
Subsequently, the USPS clarified the exact rate, which will rise by nine cents for the first ounce compared to domestic rates (48 cents compared to 39 for domestic).
A two ounce letter will cost 85 cents compared to 63 cents for domestic, a 22 cent increase for the RMI. Each subsequent ounce up to eight ounces increases by 35 cents compared to 24 cents for domestic mail - a 46 percent increase over domestic rates.


From the 12/16/05 issue of the Marshall Islands Journal

Two weeks of fuel left in MEC tanks

By GIFF JOHNSON
At current rate of power plant fuel use and sales, the Marshalls Energy Company has enough diesel to keep the lights on in Majuro for about two more weeks.
Without a new delivery of fuel to MEC before month's end, the company will have to either halt sales of fuel to fishing vessels - which will reduce revenue needed to pay off its bill to Mobil for the last shipment in August - or ration power in order to maintain electric services in Majuro beyond the end of December.
A major difficulty facing the utility company is that fuel sales to fishing boats account for a major portion of the revenues needed to pay Mobil for an August delivery of $7 million worth of fuel.
MEC is facing an impending fuel crisis because it has been unable to agree to terms for a new shipment of fuel from Mobil.
Because of concern over fair pricing, MEC's board is making a move to shift from Mobil to a new supplier after more than 13 years of fuel supply exclusively from Mobil. A new supplier has been lined up, but financing is now the hold up.
Delivery of a new shipment of fuel is currently dependent on a loan application that is pending with Bank of Guam.
“We are doing whatever we can to secure a contract with a supplier mainly because of our experience with Mobil's price formula,” MEC board chairman and Public Works Minister Matt Zackhras told the Journal.
“Any person would know that the more requirements that come with a certain contract and the less transparent the pricing formula, you know full well that profit margins will most likely be much higher,” Zackhras said in reference to the reason that contract negotiations with Mobil stalled.
As well as attempting to solve the current diesel supply problem, MEC officials said they are continuing to make large weekly payments to Mobil to clear the $7 million bill for fuel delivered in August. MEC said that the debt must be cleared by January.
Zackhras said a new supplier is standing by to provide fuel, once payment details are worked out. “It would take up to 12 days to get fuel into Majuro from the ordering date,” he said.

MEC passes papers to US Ambassador

MEC officials indicated this week they have provided supporting documentation to the US government concerning their request for an official investigation of the Mobil-MEC fuel negotiations.
The RMI government formally requested a US review of the situation recently. MEC said that US officials asked for documentation for the review, which has now been transmitted to Interior deputy assistant secretary David Cohen through US Ambassador Greta Morris.

From the 12/9/05 issue of the Marshall Islands Journal

Postal rate hike

The first severe economic blow of the new Compact will start being administered to the Marshall Islands on January 8.
That is when the initial phase of the US Postal Service Board of Governors-approved decision goes into effect moving the Marshall Islands from a domestic to an international mailing destination, according to a USPS official.
The decision by the USPS made late last month is widely expected to hurt both business and government, which rely heavily on US vendors for critical supplies for the hospital, schools, stores and government offices.
The change is to be implemented in 25 percent increments over a four-year period to bring the price of RMI mailing rates equal to US international mailing rates, the USPS official said. Mail rates are expected to effectively quadruple in four years.
Despite strong objections from the business community in the Marshall Islands to the postal change when it was under negotiation - business people said a tripling of postage rates would damage the economy by particularly hurting local companies that import many products from the US - the postal change was demanded by the US government and agreed to by Marshall Islands government negotiators as part of the amended Compact that went into effect in May 2004.
A last minute plea by Finance Minister Brenson Wase to the USPS in late October asking for to delay the change was fruitless. Wase said that the change will undermine the Compact's goal of promoting “economic advancement” for the RMI.
Although the rate hike is being phased in over a four year, the actual increase starting on January 8 will be close to a 100 percent increase over current rates. The domestic rate for a one ounce priority mail letter will rise to 39 cents in January; the international rate for the same weight is $1.80. The Marshalls will be making up the difference of about $1.40 in the rates over the next four years, with the rate increase on January 8 at 25 percent or about a 35 cent increase - which should make one ounce letters cost about 74 cents each to mail to and from the US; with similar increase at every weight level.
This increase is also affecting the FSM, but not Palau since its existing Compact does not expire until 2009. Negotiations between Palau and the US, which will include postal issues, are reportedly scheduled to start next year. The USPS official confirmed that despite the increase in the rates to align with US international rates, the RMI will keep its domestic “96960” (Majuro) and “96970” (Ebeye) zip codes for the life of the Compact, until 2023.

Money orders to end soon

The RMI and Federated States of Micronesia post offices will not be allowed to issue US postal money orders after December 31.
A US Postal Service official confirmed this week to the Journal that the service that has been provided for many years will stop at the end of this month.
The USPS has been negotiating with the Bank of Guam to take over the money order service so that the post offices can continue to provide the money order service - but through the bank instead of the USPS. Those discussions with the Bank of Guam are continuing and no agreement has yet been reached for the money order service to continue, the official indicated.

From the 11/25/05 issue of the Marshall Islands Journal

Ship registry: It's not gross, it's great

International Registries, Inc. (IRI), the maritime and corporate administrator for the Marshall Islands, opened International Registries (Far East) Limited Japan Branch office in early June and has seen a strong response from ship owners now that it's offering full services, the company reports.
“Shipowners can conveniently register ships or record mortgages in a matter of minutes via our wide area network (WAN) which means saving time and expense for our customers,” said Captain Yasushi Higuma, deputy commissioner of maritime affairs, who is responsible for the overall administration of the Tokyo office.
The Marshall Islands Registry is now the fifth largest open registry in the world, having exceeded the 2005 year-end goal of 30 million gross tons. The Registry now has 30.8 million gross tons and 1,063 registered vessels.

Frank breaks the 'rules'

Frank Armstrong is not your typical Wall Street investment moneyman. For one thing, he lives and works a long way from New York City and Wall Street, way down south in Coconut Grove, Florida.
For another, he's an outspoken critic of Wall Street and what have been accepted investment “norms” for many years.
His company, Investor Solutions Inc., focuses on global diversification - which means investing in many different types of companies so as to reduce the risk of investing heavily in just one or two areas.
“Global diversity is the way to manage risk,” he said. If funds in the Marshall Islands had been invested with this strategy, “they wouldn't have had the disaster here of 2000 to 2002” (when the stock market declined, and most RMI nuclear and other trust funds sustained multi-million dollar losses).
He criticized the major Wall Street investment firms for what he describes as outrageous fees and conflicts of interest, facts that most investors know little about.
“There are so many conflicts of interest in traditional brokerage models,” he said. 'It's corrupt.”
A big problem is that most investments are not adequately spread out in many sectors (diversified) and everyone involved in the investment is getting a piece of the profit, greatly reducing the return to the investor.
A recent Department of Labor/Securities and Exchange Commission report on the audits of selected retirement pension consultants showed that more than half of their income came from participating fund managers, Armstrong said. “They chose fund managers who kick back fees, instead of the best managers,” he said.
The point of this is that the big companies are perpetuating a system that is corrupt and not in the best interests of their clients, he said.
The SEC has issued a set of 10 questions relating to conflict of interest and fees for fund trustees to use with their investment managers.
“It would be interesting for the various fiduciaries around the Pacific to demand answers to these questions from their investment managers,” he said. “They probably will not be happy with the answers.”
Armstrong noted that he had turned in the answers to MISSA board of directors and management so that they can see that “we have no allegiance to any entity except our clients.”
As far as fees charged, Armstrong said that his company charges the lowest fees of any investment firm in the Pacific. “We're obsessed with low costs,” he said.
Armstrong said that the market only produces so much, and the more that is taken out in fees and charges, the less the investor gets.
“Our investment strategy is sounder, the risk is lower and there are no conflicts of interest,” Armstrong said. “What's wrong with that?”
People who oversee investment funds in the Pacific islands and elsewhere need to understand the meaning of fiduciary responsibility and “demand that they get it (from their money managers),” he said.


From the 11/18/05 issue of the Marshall Islands Journal

Frank boosts MISSA millions

By GIFF JOHNSON
The Marshall Islands Social Security Administration's investments have performed phenominally well, nearly doubling in size in fewer than three years.
Investor Solutions Inc. head Frank Armstrong was in Majuro earlier this week to report on the significant growth in the retirement program's trust fund. In late 2002, Armstrong's firm was hired by MISSA and given $23.7 million to invest. As of September 30, the fund stood at $42.5 million - an 80 percent increase in less than three years.
Armstrong said the tremendous increase was due to the investment style of his company, which maintains very diversified investments in the US and internationally to manage and reduce the risk of investing. “It's a sound strategy for the long-haul that has paid off beyond my expectations in the short term,” he told the Journal.
A very pleased MISSA administration and board of directors shared the success in comments to the Journal.
“The government should be commended for always asking for and respecting (the MISSA board's) opinions when bills are introduced (to Nitijela) regarding the Social Security system,” said MISSA chairman Jack Niedenthal. “They have left us alone to do our jobs.”
He also praised Armstrong's management of MISSA's money.
Niedenthal said that MISSA has continued to pump extra money into its investments, not take funds out like previous management in the late 1990s. “The MISSA board has never touched the corpus,” he said. “Indeed, we have invested several million dollars over the years.”
In addition to its off-shore investments of $42.5 million, MISSA maintains investments of about $9.5 million in the Bank of Marshall Islands, bringing its total assets as of September 30 to slightly over $52 million - which is about one-fourth of its actual retirement liabilities.

Casten takes over helm at Customs


By GIFF JOHNSON
Assistant secretary of Finance Casten Nemra walked into the lion's den last Thursday - the monthly Majuro Chamber of Commerce meeting - and walked out not only unscathed but with a high measure of respect from the assembled business men and women.
Nemra briefed the Chamber on changes in the customs side of the Ministry of Finance, delivering a substantive report on reforms within this often-criticized department and answering dozens of questions.
Nemra has been in the position for just one year and oversees the now separated divisions of customs, and tax and revenue.
His initial review of customs regulations on enforcement confirmed that they were “weak,” said Nemra, adding “the penalties for smuggling were very discouraging (to him).”
The previous fine structure called for a fine limited to $1,000 for the first smuggling infraction; after three violations it rose to a maximum of $5,000.
Nemra said that's being changed to a first fine starting at double the value of the smuggled goods with a minimum fine of $2,500 and possible jail time. The second violation doubles the minimum fine, include jail time and a three month suspension of the business. If it's done a third time, the minimum fine goes up to $10,000 and the business can be permanently closed.
“We've passed five cases to the Attorney General this year for prosecution,” he said. “It's the most in the last six years.” One was filed in the courts, one was settled and three are still with the AG's office, he said.
“Smuggling cigarettes is a big issue,” said Nemra, getting down to specifics.
“It's highly taxed and easy to conceal.” The change in the law requiring a license to import tobacco and alcohol will help in enforcement, he said.
Nemra said that earlier this month customs officials started a Laura-to-Rita survey of stores and are doing a similar survey on Ebeye now, with the questions targeting the source of tobacco and alcohol products. “This information will help us understand the market,” he said. “We're also working with tobacco and alcohol distributors (from off island) to find illegal importers and stop them.”
In response to questions about why customs does not publicize the names of the stores that are caught smuggling, Nemra said that they are working on the regulations that will establish a process that currently does not exist within the Ministry.
“We're keen to get the regulations set up so we can say, 'here's the process,'” Nemra said.
Responding to whether he and his staff are pressured by “higher ups” in government to be lenient on certain businesses caught smuggling, Nemra said “yes,” adding “this just encourages us to speed up the process to file (with the Attorney General's office).”
Another development Nemra touched on is his effort to establish a “code of ethics” for the staff in the customs division. He noted that seven of the 10 staff in the division are new in the last several years, and added that some staff have been put on suspension for violating rules.
Talking about bribery, Nemra said “we have to root it out from customs. For everyone who gives a bribe, there's a bribe taker.”
He said he hoped that the public and local businesses will call him and customs head Daniel Timothy if they have information on bribery or other suspicious import activity. “There is a reward in the law for people who provide information that leads to a successful prosecution,” he said.
Nemra said the office is getting some calls “but I'd like to see more. Give us specific names, times, places.”
He said that he is taking this seriously and intends to “take action against businesses and individuals in our office (who smuggle or engage in bribery).”

From the 11/11/05 issue of the Marshall Islands Journal

Minister objects to USPS rate hike

The RMI government has called on the US Postal Service not to change the Marshall Islands to an international mailing zone beginning in January.
Finance Minister Brenson Wase said that the change from domestic to international will hurt the private sector, reduce possibilities for foreign investment from American companies and undermine the free association relationship.
“There is no requirement that the US Postal Service change its rate structure from US domestic to international, nor is there any requirement that any such change start taking place in 2006,” Wase said in an October letter submitted to USPS.
The USPS announced in September a proposal to begin phasing in a change to international postal rates for the RMI and Federated States of Micronesia. According to the USPS proposal, this would initially raise rates by about 50 percent. The agreement allowing the USPS to change the RMI from a domestic to an international designation is included in the Compact of Free Association that was approved by the RMI and US governments in 2003.
In his objection to the USPS, Wase said that the Compact provision about postal services says that the USPS “may” change the system from domestic to international, but it's not required. “This provision is discretionary on the part of the USPS,” he said.
The government “believes that this proposed rule undermines (the free association) relationship,” Wase said.
While the Compact uses the word “may” - which means it's up to the USPS to decide whether or not to actually implement the change - it also provides for a five-year period for any changes to be phased in.
Wase objected to USPS announcing its plan to implement the change in early 2006 “at the earliest possible date under the postal agreement.”
Wase said that if USPS wants to exercise its discretion to change the rates, “it would make more sense to do so in the context of all the freely associated states in the future.”
This is apparently a reference to Palau, whose Compact agreement with the US does not expire until 2009, and which is not currently included in the USPS proposed change.
Wase said that the USPS action goes against the US and RMI agreement in the Compact “to promote the economic advancement and budgetary self-reliance of its people.”
“The fact that US domestic postal rates apply to the RMI and that the RMI has USPS zip codes has done much to facilitate US-RMI commerce,” Wase said.
This has helped the RMI to “overcome the disadvantage of our size and remoteness since US domestic postal rates are widely known,” Wase said.

Ministry of Health spreads the word on bird flu

Reacting to continuing cases of “bird flu” in Asia, the Ministry of Health has established a national task force to combat the illness.
“We've begun weekly meetings and are putting out information on the radio,” said Health Secretary Justina Langidrik.
Bird flu is called that because the virus originates in animals. In several Asian nations, people have become infected by chickens and ducks. Many of the people infected by birds have died because it is the first time for humans to be exposed to this type of flu and therefore they have not yet built up any immunity to it - in contrast to the resistance that most people have to regular strains of flu that infect - but kill only a small percentage of - people every year.
Millions of flu-infected chickens and other birds have been slaughtered in several Asian nations in the last year in an effort to control the problem.
Scientists studying the illness report that to date, the strains of bird flu identified do not spread easily from person to person.
But the World Health Organization and most countries in the world are now initiating major vaccine production programs and gearing programs to combat possible spread of bird flu.

From the 11/4/05 issue of the Marshall Islands Journal

Finance officials, cops chasing forgery fiend

Majuro businesses have been hit with a series of forged RMI Ministry of Finance checks - and the scam has been going on for at least three weeks.
Two local businesses identified the person doing the forgeries as an employee at the Ministry of Health. They said she is forging and altering RMI checks and using them for purchases at stores and restaurants around Majuro, but there has been no prosecution because police say they are still investigating the matter.
Maji's, Tide Table, Kitco and Pacific Basin Wholesale are among the stores that have accepted checks that were subsequently rejected by local banks that identified the checks as forgeries.
Finance Secretary Jeffer-son Barton told the Journal Wednesday that he wasn't aware of the forgeries until Tuesday afternoon “when one of my staff brought a check forged and cashed by the so-called MOH staff to my attention.” He indicated that he has instructed his staff “to be on the chase now.”
The RMI government checks are obvious forgeries, with the forger having typed in names and amounts that are obviously not computer-generated as in genuine RMI government paychecks.
National police CID chief Vincent Tani indicated that Maji's reported a forged RMI check to the national police about three weeks ago. Since then, many other forged checks have been cashed at local stores, but later rejected by the banks.
“The problem with the stores is that they do not require identification,” Bank of Marshall Islands manager Heran Bellu said.
Tani confirmed that he had talked with Bellu and BOMI officials about the forgeries last month and requested copies of all checks, which he said have not been provided. A forged check spent at Pacific Basin Wholesale was made out to “Carleen Jarom,” but it was not Jarom who brought the check to Pacific Basin to cash it, according Robbie Chutaro, the store's owner.
Another check passed at Kitco Restaurant this week was typed to “Emitha Jormile” - but various sources told the Journal that Jormile is in America. “Somebody else is endorsing the checks,” Winton Rakin, who works at the front desk at the RRE Hotel, and told the Journal about several of the forgeries.
The amounts of the checks ranged from $100 to $300.
Bellu expressed concern that despite notification to RMI officials, the forgeries continue to appear.
Barton said the Ministry of Finance is “in the process of setting up measures to prevent such fraud from happening again in the future.”

Fake bills hit businesses

A bunch of fake $20 and $50 bills have suddenly appeared in Majuro, and the US State Department has been asked to help with an RMI police investigation into the source of the counterfeit money.
Many local businesses have reacted to the problem by having their cashiers use special marking pens that can detect fake paper money.
Use of these special marking pens saved EZ Price from accepting a fake $50 bill last week. “The customer was very upset about it,” said manager Liz Rodick. “She obviously didn't know it was a counterfeit bill.”
Police Commissioner George Lanwi said one $20 bill and one $50 bill have been brought into the national police for investigation. He said he provided one to a US State Department official for analysis and further investigation.
Payless manager Manner Iseia said Payless accepted two counterfeit $50 bills that were rejected by the bank last week. Since the bank bounced the checks back to Payless all cashiers at Payless have begun using the markers to check large denomination notes.
Crazy Price officials indicated that in September their cashiers accepted a counterfeit $10 bill, but added that it was an obvious fake that should have been rejected by their cashiers.
At Flame Tree last week, a Marshallese teenager was caught trying to pass a fake $50 bill. He said his mother gave it to him, according to Flame Tree staff.
That action by Flame Tree may have had an impact on people passing counterfeit money, according to one local business official. “Since Friday, when Flame Tree caught the person, we haven't seen anymore (fake bills),” said Payless' Iseia.
In addition to using the special marking pens to detect counterfeit money, another way to identify fake money is by holding it up to the light.
On real money, “watermarks” show up when the reverse side of the bill is held to a light. On the $50 bills seen in Majuro, there is no watermark visible on the back.
Also, holding $20 and $50 bills up to line a “threadline” is visible in genuine bills.

From the 10/28/05 issue of the Marshall Islands Journal

The Pacific power crunch

Skyrocketing fuel prices could seriously undermine development progress in most urban centers in the region, says the chairman of the Pacific Power Association, Billy Roberts. Being just a drop in the bucket for oil companies, island governments and utility companies have scant leverage in bargaining for better fuel deals - and many believe that oil companies are using world market increases to unfairly increase profit margins at the expense of small markets, although fuel companies vehemently deny this.
To focus attention on the latter concern, the 27-member utility companies of the Pacific Power Association (PPA) at their August annual meeting in Guam called for a regional investigation into fuel pricing. The PPA is seeking the help of the Pacific Islands Forum to tackle the problem of fuel prices in a systematic way.
The PPA, jointly with the Forum, is also promoting sub-regional fuel buying to give groups of small islands more price clout. While these efforts - and moves by such islands as Guam and Saipan to join American state attorneys general in action against the oil companies for what they charge is “price gouging” by the oil companies, as well as the RMI's recent request to the US government for an investigation of Mobil Oil Micronesia - may help in the long-term, most islands are facing a huge cost crisis today.
“It's a real worry,” says Roberts, chairman of the PPA and general manager of the Marshalls Energy Company in Majuro.
“The biggest problem is the ability of small island utilities to adjust to the enormous price increases in the last 12 months. There's a good danger they (costs) will be setting people back 30 years. People just won't be able to afford power.”
With minimum wage workers in the region earning from less than US$1 up to about US$3 per hour (in the Marshalls, it's $2), there's little room in their paychecks to absorb the electricity price hikes that are hitting every island in the Pacific.
“Local people increasingly can't afford the combined costs of food, electricity and water,” Roberts says. “People have to eat.” And increases in power costs have a domino affect on the price of rice and corned beef, as well as other services.
But it's not just that fuel prices are rising, it's the trauma of a near doubling of the cost to produce power in a matter of months. It's not only hitting the pocketbooks of island residents like never before and putting power companies into debt, but it's straining government budgets to pick up the slack in a number of islands where power costs have historically been subsidized by government subsidies - to say nothing of just paying to keep government offices lit up in the face of public demand for government spending on health and education improvements.
Although Papua New Guinea, with its own refinery and fuel purchases amounting to about $350 million last year, and Fiji, with fuel imports of $160 million, have a modest measure of clout with multinational fuel companies, at the other end of the spectrum are islands such as Niue, Tuvalu, the Federated States of Micronesia and Kiribati with annual imports ranging from less than $1 million up to just US$4.4 million. The RMI, at $12.8 million annual fuel purchases, is only a marginally larger market.
This has prompted the PPA and the Forum to talk up the possibility of bulk fuel purchases by islands grouping together in sub-regions. Roberts, wearing his hat as GM of MEC, and Public Works Minister and MEC chairman Matt Zackhras recently met with Federated States of Micronesia Vice President Redley Killion in Pohnpei to begin discussions of joint Marshall Islands-FSM fuel buying.
The FSM, however, is disadvantaged by the fact that it owns none of its fuel tanks, decreasing its already minimal leverage in negotiations.
Forum Secretariat fuel expert Jared Morris has been conducting workshops around the Pacific to increase understanding of fuel pricing and how to negotiate with the fuel companies. Key to this, he says, is engagement by island governments to have “fair, sound working relationships with suppliers to ensure that the 'best solution' is achieved for the people, the government and the investor.”
In most islands, “there is a mechanism in place (to determine) how prices are to be built up,” said Morris recently. While some islands have opted for multiple fuel suppliers, others contract with sole suppliers. “There's no single 'right' answer,” Morris says.
American Samoa's government owns the fuel storage facility, and bids it out for use by two oil companies to provide a measure of competition; neighboring Samoa also owns its tanks and bids out a contract to one supplier for a five year period that has produced the lowest fuel prices in the region; Fiji has three suppliers, but the government uses price control to maintain prices; the Marshall Islands has a single supplier (Mobil) that owns its tank farm, although the power company also owns its own tanks that allow it to import large volumes of fuel at lower prices and to sell excess fuel to fishing vessels, which in turn helps to subsidize the cost of power production.
“Each island has to decide the most cost-effective means for achieving a fair price,” says Morris.
But essential to this is understanding fuel companies' pricing 'templates' so that island negotiators - who are already at a disadvantage by virtue of their miniscule markets - are not further hurt by the high-powered fuel companies.
“The PPA is working with the Forum to look at pricing and options for each country,” says Roberts.
The past year has shown that the Pacific is at the mercy of global events that impact fuel prices. But Roberts is hopeful that regional efforts by the PPA and Forum will provide a modest counterbalance to the current situation facing most islands.

Govt. works on Mobil debt

Foreign Minister Gerald Zackios said the RMI intends to work on two tracks in regard to fuel: One is to immediately come up with a plan to retire MEC's debt to Mobil; the other is to seek independent US government review of the Mobil-MEC negotiation situation.
US Interior Department deputy assistant secretary David Cohen told business and government officials in July that he was willing to review the situation.
“Debt resolution is critical for both short and long-term power generation,” Zackios said.
While the government and MEC “have to address this (debt) immediately,” the government also needs to look at long-term sustainability issues related to power supply. “When we don't have the resources, we have to look at policies to provide the mechanisms to provide services and economic growth,” Zackios said.

From the 10/21/05 issue of the Marshall Islands Journal

MEC told to drop 'price gouging' Mobil
By GIFF JOHNSON
The Marshall Islands government is accusing Mobil Oil Micronesia of “price gouging” and has directed the Marshalls Energy Company to switch fuel suppliers.
In a letter to Guam-based Mobil officials last Friday, Chief Secretary Bobby Muller told Mobil that the oil company “has taken full advantage of its de facto monopoly in fuel products in our region by using exploitive and price gouging tactics in providing essential fuel products to our nation.”
Muller told Mobil that because of this situation, the RMI government has instructed MEC to seek alternative sources of fuel.
Mobil has been the sole supplier of fuel to MEC for 14 years.
Muller also called on the US government to investigate Mobil's actions in negotiations with MEC (see story page 6).
MEC general manager Billy Roberts confirmed that MEC has reviewed offers from five different fuel suppliers, and is likely to make a decision about switching from Mobil at a board meeting tentatively scheduled for Thursday this week. “If we don't make a decision at this week's meeting, it will be made in the very near future,” Roberts said.
About the imminent switch of fuel suppliers, Roberts said: “It's nothing against Mobil. My job is to get the best price.” Roberts also announced another electric rate increase at two cents across the board, following another world market rise (see MEC notice, page 7).
Muller told Mobil that it was obvious “the current arrangement is not working” and that action needs to be taken to fix the situation.
Muller praised Mobil as being “an important part of the RMI economy for a long time,” and added he hoped that Mobil and the Marshall Islands “can work together through these current problems toward a more mutually beneficial relationship.”
In addition to providing diesel fuel to MEC, Mobil also imports gas, diesel and jet fuel that it sells to local gas stations and air carriers from its two fuel depots.

Lin: 'The spirit of Formosa is to serve RMI'
By GIFF JOHNSON
The new owners of the former RRE main store spoke with the Journal at the weekend about their plans for the store.
Hsueh Ming Lin and his wife Meng-Chun Fan-Ching said their aim is to continue with the grocery and retail business where RRE left off.
“The spirit of Formosa is to serve the Marshallese people,” Fan-Ching said. “We request the faithful customers of RRE to support Formosa Supermarket as before.”
RRE ended 55 years of retail business - and about 34 years at its present location in Uliga - when it shut its mainstore doors on Monday this week for inventory. Formosa opened the store under its management on Wednesday this week.
The new store will be called 'Formosa Supermarket Inc.'
The new owners indicated their plan to continue the popular Deli fast food operation and maintain grocery operations, with a mix of other retail goods.
They also indicated that they were keeping on all of the existing RRE workers and would review the workforce situation as they begin actual operations.
Asked about plans for the warehouse, where RRE used to operate a wholesale supply business, Lin said there are no plans for a wholesale store. “We need to review the business first,” he said. “But we don't exclude the possibility (of wholesale) in the future.”
He also indicated that they would maintain the status quo of the building, with the possibility of renovating and refurbishing the facility in the future.
The Formosa owners have been in the RMI for eight years and are both naturalized Marshall Islands citizens. They own stores in Delap and Long Island.

From the 10/14/05 issue of the Marshall Islands Journal

RRE store sale 'unbelievable'
After being the symbol of the private sector to several generations of Marshall Islanders, Robert Reimers Enterprises retail store is being sold to Formosa Store.
The sale is expected to be effective as of next week, with Formosa taking over operation of both the retail mainstore and the attached warehouse behind the post office building. Formosa officials indicated that they expect to begin operations on Thursday next week.
The sale of the main store ends retail dominance by RRE that dates back to the 1950s. The store this past July marked its 55th anniversary of operations.
While it's been common knowledge that RRE's retail operation has been struggling for years - and received a $4 million recovery loan from the Marshall Islands Development Bank two years ago - news of the impending sale prompted a combination of shock, sadness and, in some, simply a dazed consternation.
“Kabwilonlon” (“unbelievable”) was what one long-time Marshallese customer said Wednesday morning as he wandered around the mainstore ailes whose shelves are emptying of product as RRE continues its blow out sale across the street in anticipation of next week's turnover to Formosa, a well-established crosstown rival retail store owned by Hsueh-Min Lin and Meng-Chun Fan-Ching.
RRE will continue operating a hotel, restaurant, numerous office and apartment rentals, and its Pacific Pure Water bottling company. RRE officials didn't disclose the sale price.

'It's time to wake up'
Reaction from private sector people to the sale of RRE's mainstore ranged from concern about government policies and worry about the future of Marshallese-owned business to praise for RRE's contribution to the RMI and the need for Marshallese to patronize locally-owned firms.
“It's an end of an era,” PII owner Jerry Kramer. “We join with the vast majority of Marshallese citizens that are saddened by the loss of this long-term family company that has served the Marshall Islands for many years.”
“It's very sad,” said Clora Milne of Bilimon's store. “We're used to having RRE as our neighbor. At times when we're out of certain stock we'd buy it from RRE and if they were out they would buy from us.”
Robbie Chutaro, owner of Pacific Basin Wholesale, said RRE's sale will hurt their operations. “RRE was a major purchaser from Pacific Basin,” he said.
“So this is going to really affect us. Formosa has never bought from us.”
He called on the people of the RMI “to wake up.” Chutaro said “everything is going to be owned by foreigners.
“People have the right to shop where they want to shop, but you can tell that the money is going out of the country. That's why you need to support your local businesses.”
Chutaro also believes that the government has to do something about evening the playing field for all business. “It's so plain to see that there is smuggling going on,” he said. “For example cigarettes. I'd bring in cases to sell but that would cost me over $30 a carton (10 packs) just to bring in, yet I can buy a pack on island for $3.”
Foreign businesses have big financial backing and they're not playing fair, Chutaro added. “Things need to change for local businesses to thrive equally.”
“RRE has been a super power for a long time,” said Dennis Momotaro of Momotaro Corporation. “If they're closing down then imagine us small guys. Our days are numbered.”
Momotaro commented that “it's very sad. It's hard for the local companies to compete against these foreign companies.
“I don't understand it, there are restrictions, retail is listed on the reserve list but there are so many foreign retail stores.
“Take a count,” Momotaro said. “There are about six local retail stores left, the majority of them are foreign owned. Also majority of the take-outs are foreign owned.”
He said the government could help by provisioning from locally-owned stores.
“Things are tough,” he said. “There is too much competition and the price of doing business is high. Look at the rising taxes and fuel prices and there isn't much money in the economy.”
Momotaro also observed that “our economy is mainly retail and wholesale.
“We need other types of industries to bring in money into our economy, because the money is going out - it's not circulating in the economy.”
Carlos Domnick, president of the Majuro Chamber of Commerce, said “I would have thought that RRE would have been the last company to sell, but now we've reached that point. It shows the hardship of Marshallese businesses.
“I hope the incoming business (Formosa) will be able to retain the employees of RRE.”
Domnick is concerned that the RMI is heading the way of Nauru. “I think from this incident, this country needs to reassess how it wants its future because the way it is going, we are looking at another Nauru in the making,” he said. “This country is like a person who refuses to take full advantage of what he is given.”
The Marshall Islands needs “to make sure that money that comes in to this country is reinvested in this country,” Domnick said.
He added that during a recent private sector retreat, Minister John Silk talked about a future law that would categorize citizens of the Marshall Islands according to whether they are indigenous or naturalized “thus providing our government leverage to protect indigenous citizens. It is my sincere hope that the government and Nitijela will be proactive in this effort.”

From the 10/7/05 issue of the Marshall Islands Journal

Government pay up 50 percent, 40 percent out of work

While unemployment in the Marshall Islands gets worse, government workers have had their salaries raised by nearly 50 percent since 1997.
A 2005 Economic and Social Report issued by the RMI last week says that employment has hit 40 percent, meaning four out of 10 working age people don't have jobs. The number of jobless people has skyrocketed since 1988, when unemployment was at 12 percent.
Unemployment among young people is far worse. “Youth unemployment is about double (the RMI figure),” said Satish Chand of the Australian National University who, with RMI Economic Policy, Planning and Statistics Office's Ben Graham, wrote the report.
Meanwhile, while the job market is getting worse, government workers are being much better paid.
Government statistics show that government salaries rose from an average of $9,091 in 1997 to $13,275 last year - or a nearly 50 percent increase.
Wages of employees in government-owned agencies or so-called “public enterprises” didn't rise as much as national government, but did increase significantly.
In public enterprises, (such as the utility companies) wages rose 11 percent, from $10,019 to $11,287 during the same period.
Government agencies (such as EPA, MIMRA, etc.) rose 28 percent, going from an average of $10,185 in 1997 to $13,025 last year.
But wages in the business sector have been going in the other direction. From an average of $5,957 per employee in 1997, private sector wages dropped to an average of $4,865 last year.
Chand and Graham made the point that deteriorating social conditions in the RMI are due to a largely stagnant economy that is based on government employment that is at nearly unsustainable levels.
“There's no way for the government to be the source of new jobs in the future,” Chand said. “These must come from the proviate sector.” They added that to improve social conditions in the RMI, economic growth in the private sector is essential.
But they also made the point that the RMI has not produced accomplishments in many areas despite large levels of foreign donor funding. There is a high level of donor funding to RMI, but it was ranked number eight out of 12 Pacific countries on a “Human Development Index” (HDI) produced by the United Nations Development Program. The HDI ranks countries based on many factors including health, education and economic levels.
“The Marshall Islands has a reasonable amount of resources, but it has not done very well,” Chand said, adding that the RMI has “done poorly compared to itself,” having slipped from fifth place on the Human Development Index in 1994 to eighth at the end of the 1990s. The challenge, they said, is to raise productivity in the government while containing salaries, and transform the spending in health and education into increased literacy levels so there is a more skilled and educated population, which will in turn lead to improvements in social conditions.
“Reforms are risky,” said Chand, but they can work. He pointed to the Marshall Islands Social Security Administration as an example of reform that worked, with fewer workers and lower spending producing greater results.
There are three ingredients to success: Tough decisions (40 percent), hard work (40 percent) and luck (20 percent). “When you do a lot of work, luck tends to follow,” he said.



$146 mmillion budget gets Nitijela nod

The Nitijela took the fiscal year 2006 budget down to the wire, and then passed a slightly revised $146 million national budget for this year last Thursday evening.
The bill was approved September 29, just a holiday (Culture Day) away from the start of the new fiscal year, October 1.
There were a few changes before the budget won Nitijela approval. These included:
o Land lease funding was cut from $1 million to $665,000; Jaluit and Wotje power subsidies were reduced by $25,000; and funding for a constitutional convention was halved, from $50,000 to $25,000.
o RMI EPA was cut by $40,000.
o The Ministtry of Transportation and Communication was cut from a nearly $2.3 million budget to $1,997,801 largely because responsibility and funding for two landing craft vessels was moved to two other ministries.
o Ministry of R&D's budget increased on the strength of funding for the LCM landing craft being added to its budget.
o Public Works' budget increased from $1.2 million to $1,428,017 as $200,000 funding for the YFU82 was added to its budget.
o Ministry of Finance's budget increased from $2.1 million to over $2.5 million the government more than doubled what it will pay for electricity, from $340,000 to $790,000.
Otherwise, there were no changes.
The education sector will receive the most funding, of about $41.2 million, which includes funding for the College of the Marshall Islands, Ministry of Education, National Training Council and other educational programs, including about $13 million for construction of new school buildings. The Ministry of Health funding level is next highest at about $17.7 million.
Most of the $146,357,862 budget is funded by the US government.
The Compact is providing $65,547,080; US federal grants are providing $7,658,906; US Federal Aviation Administration is providing $26 million for airport work - for a US funding total of $99,205,986, or 68 percent of the budget.
Other grants - $6 million from Taiwan, and $312,183 from the Food and Agriculture Organization - account for about four percent of the revenues.
The balance is based on project revenues from local sources. This estimated local revenue totals $40,839,693 - about an estimated $34.9 million to the General Fund from various taxes as well as fishing licenses ($2.4 million), Taiwan ($4 million) and ship registry ($1 million), and another estimated $5.8 million from special revenue funds, which is mostly from the Health Care Fund ($5 million).
The $34.9 million General Fund estimated revenue is about $5 million above the FY2005 projected revenue of just under $30 million, even though earlier 2005 revenue projections didn't materialize as the government had to shut down spending on August 12 - a full seven weeks before the end of the fiscal year.

From the 9/30/05 issue of the Marshall Islands Journal

Fuel prices up a third over 2004

Fuel price hikes are hitting Majuro, Ebeye and the outer islands like never before.
In the 15 months since June 2004, gas prices at the pump have jumped 33 percent in Majuro - going from a range of $2.73-2.83 per gallon to $3.65-3.77 this week. Meanwhile, Air Marshall Islands has been hit with a 50 percent increase in fuel costs since August 2004, when it was paying $2.26 a gallon for fuel. Today, it is paying $3.38 a gallon.
In 2005, electricity rates have risen twice - in January and earlier this month - for a combined 17-28 percent increase. Business and government have increased from 16 cents per kilowatt hour in December 2004 to 20.5 cents. Residential has risen from 12 to 15 cents per KW hour and lifeline (below 500 KW hours per month) has jumped from 12 to 14 cents.

Costs crippling Bikini dive operation
Bikini Atoll's scuba dive operation is “in jeopardy” because of rising fuel costs that threaten to price the destination out of the market.
The Bikini Atoll Local Government has seen its costs for power use on Bikini, Kili and Majuro rise between 40 and 80 percent - at Kili, the 2006 costs are estimated to be $900,000 compared to $500,000 for the year ending this month, according to Bikini liaison Jack Niedenthal.
The only thing that has saved the local council from being forced to make tougher budget decisions this year is that a US bank has agreed to give them a year holiday from paying the principal amount due on a loan, he indicated.
These costs for fuel “have to come out of somewhere,” Niedenthal said. The council is attempting to grow its trust fund reserves by trimming its local government operations budget.
At Bikini, with all but three weeks of 2006 already booked out by international divers, the Bikinians' dive company cannot raise prices to recover its increased fuel expenses.
“We're anticipating raising our prices a little for 2007,” he said.

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