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April - June 2014
Finance Workshop for Deep Sea Minerals: Making sure the
Pacific Islands are not left short-changed
Deep sea minerals have the potential to be
a game changer for the Pacific, but whether
that will be a change for the good or the
bad will depend on many factors including
financial management by Governments.
If revenue is managed transparently and
prudently, deep sea minerals could greatly
improve the economies and livelihoods of
the Pacific Island countries
Though deep sea mining is yet to
commence, Pacific Islands are well
positioned to put essential policies, laws
and procedures in place now before mining
begins. To assist this, the SPC-EU DSM
Project held the 5th Training Workshop
in their technical training series themed:
‘Financial Aspects of the deep sea minerals
industry’ in the Cook Islands from the 13 –
16 May 2014.
The workshop focused on promoting
good governance of revenue management
and looked back at past experiences
around the world with the aim to improve
management. The workshop focused on
the Norway Sovereign Wealth Fund, a
managed national savings fund that invests
in the country’s oil and gas income into
property, stocks and bonds to generate
revenue for the benefit of present and future
generations. Although this is a positive
example, the workshop also discussed
mismanagement of revenue from extractive
industries, emphasising the potential pitfalls
associated with improper management of
mineral resource wealth.
The event was co-hosted with the Pacific
Financial Technical Assistance Centre
(PFTAC) – a subsidiary of the International
Monetary Fund (IMF) – that brought together
world-leading financial experts and regional
experts to discuss the implications of this
potential new source of wealth for Pacific
Island countries.
The Assistant Attorney General of the
Republic of the Marshall Islands, Jonathan
Kawakami stated that, “the trip to the
Cook Islands was most educational
indeed. The financial aspect of Deep Sea
Mining is one of the core areas that need
minds to scrutinize and examine the best
possible financial regime for the Country.
During the Conference, vast group of
professionals brought into the discussion
the various thoughts on what may be the
best possible financial regime there may be.
It is important that the subject of Financial
Management and implementation of best
possible mechanism for trust and security
purposes should always be aimed for”
Jonathan Kawakami, Assistant Attorney
General, Marshall Islands.
The workshop attracted a wide range
of stakeholders from South Sudan to
Norway, Mauritius to Washington D.C who
were willing to share their experiences
and professional expertise portraying the
promising possibility of turning the minerals
on the deep ocean floor to visualised
economic opportunity for the benefit of all.
The workshop was also the first step
to producing a ‘Pacific Regional DSM
Financial Framework’, a template/guideline
document that the Pacific Islands can use
as a point of reference when drafting their
financial fiscal regimes.
The Deep Sea Minerals industry has the
potential to make a positive impact on the
lives of Pacific people, but at the same time
there are issues, risks and uncertainties that
need to be addressed. The DSM Project
stresses the importance of engagement
and participation among a wide variety
of stakeholders, from local communities
all the way to regional non-governmental
organisations, to enable Pacific countries
to make well informed decisions for their
economy, their people, and their country.
Participants at the Financial Workshop
Participants being attentive at one of the workshop presentations