SAMOA COCONUT OIL MILL MILLIONS IN DEBT

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By Savea Sano Malifa

APIA, Samoa (February 6, 2000 – Samoa Observer)---The government’s coconut oil mill at Vaitele owes more than four million Tala (US$ 1.29 million) to creditors, one of which is the Samoan government itself.

Public interest is again drawn on the mill now that a New Zealand company has filed a petition to wind it up. Presented to the Supreme Court on January 23, 2000, Oil Seeds Products NZ, Ltd.’s petition to declare the company bankrupt was to have been heard last Friday.

But with the petition came the disclosure by an informed source of a multi-million debt owed to some 20 creditors, the biggest four of which are:

(NOTE: Samoa Tala 3.091 = US$ 1.00 on February 9, 2000.)

But the government has not been running the company for the last five years. It was run by a company in which the late Minister of Public Works, Luagalau Levaula Kamu, was closely involved. The other principal director of that company is the former Ambassador to the United States and Member of Parliament, Tuaopepe Dr. Felix Wendt.

Before Dr. Wendt entered Parliament, he was the Dean of the University of the South Pacific School of Agriculture at Alafua. An attempt to obtain a comment from him yesterday was not successful. But the manner in which the company changed managers in 1993 aroused curiosity.

This is how it worked. The original company was called Samoa Coconut Oil Products, Ltd. (SCOPL). It produced coconut oil for export. After the cyclones in the early 90’s, which destroyed the coconut industry, the mill stopped operating for a couple of years.

In 1993, a new company, which called itself Samoa Coconut Oil Production, Ltd. (SPCOL), made a proposal to the government to take over the mill. Under the proposal, the new company was to pay rent amounting to three percent of the gross earnings for the first two years, and five per cent for the rest of the five-year contract.

But it is understood that the company paid rent for the first six months only, which was not much because gross earnings during that time “were virtually nothing.”

How much the company earned from the export of coconut oil during its term of contract is not clear, as Tuaopepe could not be reached for a comment.

But the two companies it exported oil to are Gardener Smith of Australia and Oil Seeds Products of New Zealand, which are now suing for insolvency. The source says they became creditors because they paid up in advance for oil they were never sent.

Although Oils Seeds has been trying to buy the oil mill for some time, “they were never given a fair go.” But “they were prepared to give it a go when Luagalau was shot and so they gave up.”

Luagalau was shot on the evening of July 16, 1999 during the celebration of the ruling Human Rights Protection Party’s (HRPP) 20th anniversary at St Joseph’s Hall, Lotopa. The gunman was Alatise, the son of former cabinet minister Leafa Vitale.

Leafa and another former cabinet minister, Toi Aokuso, are presently being tried jointly for Luagalau’s murder. Alatise, on the other hand, was given the mandatory death sentence, which has since been commuted to life by His Highness, Malietoa Tanumafili II.

As for the oil mill, Oils Seeds Crushing, Ltd. is now running it. This was confirmed last Friday by the company’s Quality Controller, Tupuola Su‘a, who explained “nothing has been settled yet with the government.”

He admitted, however, that they were working “24 hours processing 34 tons of copra a day” to produce 20 metric tons of oil. The company is offering two rates for copra - $800 a ton for top grade, and $750 a ton for that with over 10 per cent of moisture. Tupuola estimated that 100 tons of coconut oil are exported in three-week intervals to New Zealand and Australia. That amounts to some 1,800 tons a year. And so how much are those tons worth when they are converted to dollars?

According to the government’s budget for 1999-2000, “coconut oil exports fell by about 38.6 per cent to $4.15 million following the closure of the mill in August.

“The fall in value would have been even greater had it not been for an almost 50 percent increase in export price achieved in the early part of the year.” So why was the $1.8 million in rent not paid if those millions had been earned? That’s the question for which an answer could not be found.

For additional reports from the Samoa Observer, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Samoa Observer.

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