THE Fiji government is in the process of determining whether Air Pacific is a citizen of Fiji, as per the requirement of the Civil Aviation (Ownership and Control of National Airlines) Decree 2012.
Under the decree, no airline may operate under the laws of Fiji unless it is a citizen of Fiji. The decree also requires that at least 51 per cent of the voting interest must be owned and controlled by Fiji citizens and that at least two thirds of the board or any committee must be Fiji citizens.
Yesterday, the Attorney-General and Civil Aviation Minister, Aiyaz Sayed-Khaiyum revealed the contents of his reply to a letter from Qantas chief executive officer, Allan Joyce saying he wished to handle the Qantas shareholding discussions in a fair and transparent manner.
The board membership of Air Pacific includes four representatives each from the majority shareholder which is the government and Qantas which is the minority shareholder. Another member will be the nominee of both.
Mr Joyce had written to the minister on April 12, raising his concern on the decree, which he said was specifically targeted at Qantas shareholding (46.3 per cent) in Air Pacific.
Mr Joyce was concerned that the decree required the review of corporate governance documents by the minister who may also recommend the amendments of the documents so that they complied with the decree.
Qantas also wanted a confirmation from the government that it did not intend to amend the current provision in the Articles of Association of Air Pacific Limited, which govern the sale of shares by an Air Pacific shareholder.
"In addition, the decree suggests potential amendments to the Articles of Air Pacific may be required which could have significant implications for Qantas in relation to the corporate governance framework for the management of its joint venture investment in Air Pacific and for its investments in Fiji generally," Mr Joyce stated in the letter.
Mr Sayed-Khaiyum said the decree implemented internally accepted convention and practice which required that a country's national air carrier be substantially owned and controlled by the citizens of that country.
"...Air Pacific Limited (APL) has submitted its corporate governance documents in accordance with the decree," Mr Sayed-Khaiyum stated in the letter.
"The minister, under the decree will shortly consider the corporate governance documents submitted by APL and will make a determination under the decree as to whether APL is a citizen of Fiji and which aspect of APL needs to be amended or changed to comply with the decree.
"In making a determination on APL's citizenship, section 7 of the decree requires examination of the totality of the circumstances to determine whether a foreign citizen has or could have actual control potential to actually control or an impermissible ability to influence or substantially influence its activities."
Mr Sayed-Khaiyum added that the decree did not in any way affect Qantas' shareholding in APL.
"As previously indicated, the Fijian government remains keen to acquire QAL's shareholding in APL and is committed to negotiating a sale price with QAL in good faith and in a fair and transparent manner...," Mr Sayed-Khaiyum said.