Abstract
Beginning in the mid-1990s, a wave of company and securities regulation law reform flowed from New Zealand across the South Pacific. The model for reform was the Companies Act 1993 (NZ) and, to a lesser extent, the now repealed Securities Act 1978 (NZ). The Kingdom of Tonga was the first to adopt a version of the New Zealand Companies Act in the Companies Act 1995 (Tonga). Papua New Guinea looked to the New Zealand model in the Companies Act 1997 (PNG) and the Securities Act 1997 (PNG). Four other jurisdictions followed New Zealand: Samoa; Niue; the Solomon Islands, and, the Republic of Vanuatu. Some aspects of the New Zealand design architecture were especially influential such as the placing of machinery provisions in schedules, the abolition (in PNG and Tonga) of the private company/public company distinction and the carving out of securities regulation into a discrete statute following the example of the Securities Act 1978 (NZ) in PNG and Samoa.
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- 1.
Companies Act 2001 (Samoa) and Securities Act 2006 (Samoa).
- 2.
Companies Act 2006 (Niue).
- 3.
Companies Act 2009 (Solomon Islands).
- 4.
Companies Act 2012 (Vanuatu).
- 5.
In New Zealand, there is no distinction between different types of companies as regards the registration process, legal status and internal governance rules. Reporting requirements for companies differ according to size and fund raising activities. These innovations have two major consequences whose significance is not well understood. First, they facilitate significant efficiencies in establishing and maintaining an electronic company register because only one set of rules applies to company formation and maintenance. Second, abolition of the distinction between private and public unlisted companies negates any strict prohibitions on the issuing of shares by private companies and is therefore accessible to SMEs. As a result, shares can be issued provided disclosure is made and that disclosure can be customized. So, for example, equity crowd funding (ECF) in New Zealand has highly tailored disclosure rules that are not tied to company type: see Pekmezovic and Walker (2015). By contrast, the proposed ECF regime in Australia is predicated upon public company status: see Walker et al. (2016).
- 6.
See Maume and Walker (2011). It seems clear that New Zealand capital markets law was a precedent for capital market reform in Papua New Guinea: see PNG Capital Markets Act 2015.
- 7.
- 8.
This assertion requires some qualification. Definitions of MSEs and SMEs vary internationally and data on the number of MSEs and SMEs in Fiji are scant. Accordingly, we infer that the majority of companies are MSEs and SMEs from various data sources. First, according to the Annual Report 2014 of the South Pacific Stock Exchange (SPSE), there were 18 listed entities in that year, the top five of which accounted for 81.11% of market capitalization. If we assume that, consistent with international data, listed entities account for about 1% (more or less) of all companies, then about 97–98% plus of all companies are MSEs or SMEs. Second, we note that according to the Fiji Bureau of Statistics, approximately half of the Fijian population of 873, 210 reside in rural areas. This also suggests (but does not prove), a preponderance of MSEs and SMEs in such areas. The international evidence on the point is unequivocal and is supported by a study of MSEs in Fiji by Sharma and Gounder: see Sharma and Gounder (2012). Sharma and Gounder observe that the SME sector in Fiji is small implying that MSEs are most prevalent: ibid. 352. Barry Whiteside, Governor of the Reserve Bank of Fiji, has stated that the SME sector accounts for about 12% of economic activity as compared to SMEs in other developing countries where they contribute as much as 40–60% of GDP: see Whiteside (2012).
- 9.
United Nations (2002) There are many definitions of sustainable development. See Report of the World Commission on Environment and Development: Our Common Future (Brundtland Report, Oxford University Press: New York, NY, USA, 1987), This notion of sustainable development calls for the convergence between the three pillars of economic development: social equity, and environmental protection. The concept promotes sustainable development, and long-term stability of the economy and environment.
- 10.
- 11.
Beck et al. (2011). Burn and Greene, op. cit.
- 12.
The World Bank Group states: “There are 420–510 million micro, small, and medium enterprises worldwide, of which 360–440 million are in emerging markets. When asked to list their main constraints to growth, access to finance tops the list for entrepreneurs in lower-income countries. Globally, fewer than 30 percent of these firms use external financing, of which half are underfinanced. The total unmet need for credit among MSMEs in emerging markets is estimated at US$2.1-2.5 trillion, approximately 14 percent of the GDP of these countries.” United Nations (2014a).
- 13.
Ardic et al. (2011).
- 14.
These include American Samoa, Anguilla, Aruba, Bermuda, British Virgin Islands, Cayman Islands, Commonwealth of the Northern Mariana Islands, Curable at: French Polynesia, Guadeloupe, Guam, Martinique, Montserrat, New Caledonia, Puerto Rico, Turks and Caicos Islands, and the United States Virgin Islands.
- 15.
UNDP (2014b).
- 16.
These countries are located in Africa, the Indian Ocean, Mediterranean and South China Sea.
- 17.
United Nations (1994).
- 18.
United Nations (2005).
- 19.
United Nations (2010).
- 20.
See generally https://sustainabledevelopment.un.org/topics/sids.
- 21.
United Nations (2015a).
- 22.
Rising sea level is a large threat for Kiribati, Marshall Islands, and Tuvalu. The UN Framework Convention on Climate Change, adopted in 1992, recognizes the special vulnerability of SIDS to the adverse impacts of climate change.
- 23.
- 24.
Human development indicators are among the lowest in the Asia and Pacific region. Thus, of the 12 countries in Asia-Pacific with the lowest rank on the human development index, 6 are small states, and 3 are micro states. For a discussion see, IMF (2013).
- 25.
Remoteness increases transport costs and geographic isolation from regional trading partners. The Pacific Islands are by far the most remote countries in the world, according to various indicators. For a discussion see, IMF, above n 23, 4.
- 26.
- 27.
IMF, above n 23, 25.
- 28.
Ibid 4.
- 29.
Ibid. Tuvalu and Palau are the smallest IMF members in terms of population.
- 30.
IMF, above n 23, 28. See also IMF, above n 23, 1.
- 31.
IMF above n 23, 28. See also IMF, above n 23, 1.
- 32.
See generally World Bank, AidFlows Data, available at: http://data.worldbank.org/data-catalog/aidflows.
- 33.
IMF, above n 23, 11. These countries signed the bilateral Compact of Free Association agreement with the United States.
- 34.
Ibid.
- 35.
Ibid, 7.
- 36.
Ibid, 18.
- 37.
Ibid, 4.
- 38.
See ADB, e n 23, 11. These countries https://www.adb.org/countries/fiji/economy (last accessed 2 August 2016). Fijiconomyfiji/economy” ral Compact of Free Association ag2016 when a category 5 cyclone struck the country. The resulting damage and losses es nd losses ge and losses e resulting damage a’s GDP—is likely to constrain economic growth in 2016, with economic growth forecasts lowered to 2.7% in 2016, down from a pre-cyclone forecast of 4.0%. In 2017, Fiji’s economy is expected to rebound to 4.5%.
- 39.
ADB (2015) iii available at http://www.adb.org/sites/default/files/publication/172688/fiji-building-inclusive-institutions-sustained-growth.pdf (last accessed 4 August 2016).
- 40.
The MDGs included eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing child mortality, ensuring environmental sustainability, and developing a global partnership for development. See generally http://www.unmillenniumproject.org/goals/ for an overview and discussion of each MDG.
- 41.
See ADB (2011) available at: http://www.adb.org/sites/default/files/publication/29077/mdg-pacific.pdf.
- 42.
UNDP (2015) available at: http://www.fj.undp.org/content/fiji/en/home/post-2015/mdgoverview.html.
- 43.
Fiji, Ministry for National Planning, MDGs, 2nd Report, 1990–2009 report for the Fiji Islands (September 2010) 9–10.
- 44.
Ibid 10. This UN Convention is available at: https://www.unodc.org/unodc/en/treaties/CAC/.
- 45.
Sustainable development: follow-up to and implementation of the SIDS Accelerated Modalities of Action (SAMOA) Pathway and the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States (14 December 2015) available at: http://www.un.org/ga/search/view_doc.asp?symbol=A/70/472/Add.2&Lang=E.
- 46.
The SDGs can be downloaded from: http://www.un.org/sustainabledevelopment/. See also United Nations (2015b) available at: https://sustainabledevelopment.un.org/content/documents/21252030%20Agenda%20for%20Sustainable%20Development%20web.pdf.
- 47.
World Commission on Environment and Development (1987).
- 48.
Caribbean Environment Programme (2002).
- 49.
See French (2005).
- 50.
See Cordonier Segger and Khalfan (2004). Examples of treaties which use the notion of “See Cordonier Segger and Khalfan (2004). Examples of treaties whiical Diversity, the 200 Cartagena Protocol, the 1992 UN Framework Convention on Climate Change, the 1997 Kyoto Protocol, as well as the 2000 Cotonou Partnership Agreement between the European Union and the African Caribbean and Pacific Countries-.
- 51.
See Kloke-Lesch (2015).
- 52.
See SDGs generally, available at: http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/70/1&Lang=E at para (8.3).
- 53.
Maynard (1997).
- 54.
Note the Act was later amended by the Companies (Amendments) Act 2016. Regulations made pursuant to the Companies Act 2015 include: the Companies Regulations 2015; Companies (Transitional) Regulations 2015; Companies (High Court) Rules 2015 and the Reserve Bank of Fiji (Capital Markets and Securities Industry) Regulations 2015.
- 55.
Companies Act 2015, s 15.
- 56.
Ibid, s 16 (c).
- 57.
See, for example, the discussion in Walker and Fox (1999).
- 58.
See Walker and Pekmezovic (2013).
- 59.
See Personal Property Securities Act 2017 (Fiji, Panapase 2015).
- 60.
See generally Arrunada (2013).
- 61.
Personal Property Securities Act 2010 (Tonga).
- 62.
Two subsequent Regulations were enacted including the Community Interest Company (Amendment) Regulation 2009 (SI 2009/1942), and the Community Interest Company Regulation 2005 (SI 2005/1788).
- 63.
An example of a type of Community Company is the International Fund for Agricultural Development in Gambia and Malawi. It has been shown to be effective in linking women farmers to mainstream inputs and services. For a discussion see Jiggins (1989). Community companies are dealt with under Part 12 of the Solomon Islands Companies Act (2009), ss 165–169.
- 64.
For a discussion generally, see Pekmezovic and Walker, above n 7, 1–129.
- 65.
The monetary threshold on the sophisticated investor exemption is too high to make any material difference to the MMSE funding problem. As for the 20/12 rule: there is no meaningful way of ascertaining the effectiveness of this exemption since issuers who comply are not reported.
- 66.
Consider here the new NXT market on the New Zealand Exchange (NZX).
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Walker, G., Pekmezovic, A. (2018). Achieving Sustainable Development Goal 8 in Small Island Developing States by Capital Raising Law Reform: Case Study of Fiji. In: Butler, P., Lein, E., Salim, R. (eds) Integration and International Dispute Resolution in Small States. The World of Small States, vol 3. Springer, Cham. https://doi.org/10.1007/978-3-319-74573-2_4
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