New Era for Solomon Islands: Prime Minister Jeremiah Manele's Administration Poised to Tackle Legislative Reform and Governance Challenges
By Dirk Heinz
Jeremiah Manele has now been officially sworn in as the Prime Minister of the Solomon Islands after successfully convincing members of his OUR Party, as well as a number of independents, that he was the right person to lead the 12th Parliament of the Solomon Islands. Now that the top job has been decided, it is time to see how Mr Manele’s government will get on with running the country for the next four years. Ignoring the tiresome din of foreign commentary on the geopolitics of whether Solomons will cozy up to China more under Mr Manele or whether it might pull back more towards more traditional partners like Australia, there is a power of actual governance and home affairs in Solomon Islands laying ahead of Prime Minister Manele and his team.
For starters, pressure will be on the new government to finalise and push through a number of key pieces of legislation that have been languishing in the twilight zone of “further consultation and amendment” for the best part of the last 18 months. In late May last year, we published a short summary of three important amending bodies of legislation that were, at that time, being touted as being close to finalisation. Almost a year on, and all three of those bills are still at various stages of review with no sign of when they might come before Parliament for debate. In his inaugural speech upon being confirmed as the next PM, Mr Manele flagged as a priority that he and his government would get straight to work ensuring the fast passage of these bills. While the rest of the world concerns itself with geopolitical shadowboxing, Solomon Islanders will be watching with interest to see if Mr Manele delivers on his promise to strengthen laws in Solomon Islands and (hopefully) reduce institutional financial and environmental exploitation by passing these bills. A recap of the bills in question is set out below.
Mineral Resources Bill
The existing Solomon Islands’ Mines and Minerals Act is now three decades old and has failed to keep up to date with advancement in other sectors. A better framework regarding royalties and benefits which need to be paid to customary landowners and communities, better methods for delineation of customary landowner boundaries, vastly improved environmental practices and enforcement and more appropriate taxation on mineral exports is long overdue in the Solomon Islands and you can expect the new Bill to overhaul existing frameworks for regulation of these issues. To help it prepare the Bill, SIG engaged foreign public law and legislative drafting advisor Professor William Kosar. Professor Kosar has worked with governments across Africa and Central Asia. It is unclear (based on publicly available information) what mining sector experience Professor Kosar has. Timing for the tabling of the Mineral Resources Bill to parliament is still unclear
Value Added Tax Bill
A new Value Added Tax Bill is currently said to be in the final stages of development which, if passed, is expected to make considerable reforms to the current tax framework in Solomon Islands. Both Ministry of Finance and the Solomon Islands Inland Revenue Department have said that under the new Bill a standard single VAT of 15% is proposed to be charged on most goods and services. SIG has stated that the VAT rate under the proposed Bill has been calculated to provide sufficient revenue to replace import duty (except for motor vehicles and items that would be excisable if domestically produced), goods and sales tax, stamp duty and accommodation levy. Customs will collect VAT on imports, and most businesses will charge VAT on the goods and services they sell. All supplies of goods and services will be subject to VAT unless a specific concession is included in the Act. Some industries will be exempt for VAT such as Education, Medical services, Church groups, financial services (including life insurance) and local buses and taxis but not hire cars for tourists and tour buses. The Bill was due to be tabled in April 2023 but that was postponed and it is not clear when it will be introduced in Parliament.
Forestry Bill
The long awaited Forestry Bill was set to be tabled before Parliament before the end of 2022 but it is still yet to be finalised. Some argue that reform of the current legislation governing the forestry sector is perhaps the most overdue of any laws in the Solomon Islands. Those that are more cynical argue that it may be too little too late, considering the damage foreign mining companies have already wrought on the Solomon Islands for the past 50 years. Details of what reforms will be included in the bill are few, but many Solomon Islanders would expect far more strict licencing requirements, enforcement of logging malpractice and higher penalties for breaches, as well as enormous improvement to environmental monitoring and ecosystem management to be at the centre of new reforms. An updated timeline for the tabling of this Bill is not currently clear.
