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Trading company fined but allowed to profit

By Douglas Marau

HONIARA, Solomon Islands (Solomon Star, Dec. 31, 2010) – The Cabinet’s decision to allow Haizhen Trading Company to export the $4 million worth of beche-de-mer it was caught with, could see the company earn $3.2 million from its illegal dealings and the government $800,000.

Haizhen Company was fined twice this year for illegally trying to export beche-de-mers out of the country.

The Asian company was initially caught by Customs and police officers trying smuggle out a 20 feet container filled with trochus shell and beche-de-mer. The company was again caught recently by fisheries officers and last week found illegally possessing a seaweed consignment.

After the arrest of the company the Ministry of Fisheries and Marine Resources liaised with the Attorney General’s Chambers which subsequently advised that the two charges against the company be compounded and to fine the company $100,000 for each of the offences.

The company was advised about the decision in which they wrote to the former Minister of Fisheries and Marine Resources Severino Nuaiasi, asking for leniency.

Mr Nuaiasi at that time upheld the ministerial decision for the two offences to be compounded and to fine the company $100,000 for each of the two charges.

The Asian company then applied for leniency and that was when Mr Lilo was acting Minister for Fisheries and Marine Resources that he decided that the best option to deal with the issue was to take a paper on the matter to Cabinet.

"In an effort to be consistent with the advice from the Attorney General, I took a paper to Cabinet which Cabinet subsequently endorsed to compound the two offences and to fine the company SBD$200,000," Mr Lilo said.

"And consistent with the Cabinet decision and conclusions the company was allowed to export the products but on the condition that it paid 20 percent F.O.B (Free on Board) as tax to the Government."

With the 20 percent FOB tax to the government, the Solomon Star understands 80 percent of the total exports would remain the company’s assets.

Therefore, the $200,000 in total fine stamped on Haizhen Company would easily be paid off by the $3.2 million from the 80 percent profit from exports with the company easily walking away with $3 million in profit.

Meanwhile, a former head of fisheries George Boape had questioned why the Cabinet had taken the step to give the green light for the export.

He reiterated that it had been stated clearly in the laws of the country that beche-de-mer export or harvesting was banned.

[PIR editor's note: The Solomons Star is reporting is reporting that Boape has called the cabinet decision a breach of the fisheries act.]

"Who is advising Haizhen to repeatedly demand the government for leniency? There is no reason for leniency when the company is a second time offender," he said.

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