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The proposed Foreign Investment Regulatory Authority Act looks to have been withdrawn, according to Papua New Guinea’s two largest business chambers.
They say the Minister for Commerce and Industry, Wera Mori, has committed instead to look at amending the Investment Promotion Act.
The Port Moresby Chamber of Commerce and Industry (POMCCI) said in a statement that its representatives had ‘made representations’ to have the Foreign Investment Regulatory Authority Act (FIRA) reconsidered.
“Minister Mori (intends) to consult with the Investment Promotion Authority (IPA), who are responsible for regulating the foreign investment but who were not consulted on the Bill,’ the statement said.
“Minister Mori assured the business community of the need to arrive at a solution where it will be conducive for people to continue to invest in the country.”
The POMCCI statement said those making representation to Mori and the Treasurer Charles Abel—including the Business Council PNG and peak bodies such as the Manufacturer’s Council, the Rural Industries Council and the SME Chamber of Commerce—‘should be congratulated for this very positive outcome.’
The Lae Chamber of Commerce also expressed relief that the Bill had been withdrawn.
“The Draft FIRA Bill (as first introduced) is now being removed, with a recognition that existing legislation, when implemented and enforced, achieves the Governments’ desired outcome,” it said in a statement to members.
The statement said that the ‘growth of PNG-owned SME’s is paramount’.
But it noted that the existing IPA Regulations are ‘likely to regulate and control foreign investments’ by reserving certain sectors (protecting them from foreign competition) in a way that will ‘match’ an SME’s capabilities and resources.
“The updated reserved activities list will be more targeted, rather than a blanket on all activities, as proposed in the draft Bill.
“The IPA will take the lead on those amendments, through an amended and strengthened IPA Act, in close consultation with business peak bodies moving forward.
“Your Chamber supports this as a go-forward plan for more secure foreign and local investment, progression for more national business owners and a more level playing field for businesses—with penalties for those who are outside, or breach, the rules.”
The proposed FIRA would have established a new Foreign Investment Regulatory Authority to regulate, certify, license and monitor all foreign investment in PNG (taking over from the IPA).
It would have reserved all investment below K10 million (US$2.9 million) for PNG citizens or ‘national enterprises’ (enterprises more than 50 per cent PNG-owned)
Non-compliant foreign-owned businesses would have been given a three-year ‘transitional period’, after which they would have been forced to cease doing business.
It would have substantially expanded the number of business activities that can be conducted only by PNG citizens and national enterprises.
The Chief Executive of the Manufacturers Council of Papua New Guinea, Chey Scovell, told Business Advantage PNG that, if it had been passed, it would have imperilled between K700 million (US$207 million) and K1 billion (US$296 million) in foreign investment in this year alone.
SOURCE: BUSINESS ADVATANGE PNG/PACNEWS
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