Solomon Islands govt make speedy changes

Transcript

Transparency Solomon Islands is asking why the government has quickly amended the Finance Institutions Act.

It says it believes this action has been taken to allow logging companies to set up their own banks after the country's three commercial banks stopped dealing with them.

Transparency Solomon Islands board secretary, John Taupongi, explained to Alex Perrottet.

JOHN TAUPONGI: Westpac and ANZ and the Bank South Pacific, they all are part of bigger organisations. And these organisations abide by the laws of whatever country they're based in, which have certain rules around anti-money laundering and all that kind of stuff. We do not know exactly who is telling them, but we do know they've been told to do something about this. It may also be people behind who are anti-loggers. But I cannot tell you for a matter of fact who is doing this.

ALEX PERROTTET: You're saying the government has gone around that by putting through this amendment, which basically means short interim banks can be set up for those logging companies. So are you saying that it's just status quo at the end of the day?

JOHN TAUPONGI: Yes. Because we are not aware of Solomon Islanders trying to set up banks. Three at the moment are sort of doing the job. Normally when you want to amend the current legislation it is because of the reserve mischief or there is a need for it in this country, but there hasn't been such a call at all. And then next thing you know this bill went to parliament without anyone knowing about it, and it was passed very, very quickly and silently. We found out later. When something like that happens, there's usually a very dodgy reason behind that. It's not because there is a need for it.

ALEX PERROTTET: What specific criticism does your organisation have of the way they've gone about passing this legislation? What do you think they need to do to have greater transparency?

JOHN TAUPONGI: At the end of the day, the government can introduce any policy it wants and it can push it through parliament because they have the numbers - that is a fact. What we don't agree with is, first of all, in terms of the justification that we are relying on the logging industry, that is a very weak one in the sense that for many, many years we have been told to diversify, widen our export base. They haven't done any of that, insert a bank for this one particular industry. If that is okay, we have to keep them around, otherwise our economy might collapse, which I highly doubt. We still believe that the way they've done this one is wrong on so many levels. One of the things that we've openly argued against is to do with the fact that in 2010 we had our evaluation here in the Solomons based on the FATF (Financial Action Task Force) - 40 recommendations plus 9. This is anti-money laundering. And we passed laws that are effectively trying to make everything more transparent, due diligence is a must. And all these kind of laws. So this move they have done completely reverses that. They've decided to take an approach that is a very under-the-table kind of approach which goes against everything we promised the international community that we're going to be like. So that is our problem with it. In terms of whether or not this will have a big impact on our economy, I'm not qualified to make any comment on that. But I believe we have given so many years to come up with other ways to keep our economy afloat, but we haven't. We haven't responded at all to any of that, because it's in the best interests of certain individuals to keep it that way.