June 02, 2014

By Bill Jaynes
The Kaselehlie Press

May 27, 2014 Pohnpei, FSM—This afternoon the FSM’s Department of Resources and Development released a communiqué and the resolution of the Seventh State and National Leadership Conference that was held at the College of Micronesia FSM National Campus on May 22 and 23.

In his opening statement, President Mori, who served as chair for meetings welcomed each of the principals which include the Vice President, the Governors of Chuuk, Kosrae, and Yap, and the Acting Governor of Pohnpei, as well as ranking leaders of each Legislative branch in the FSM. President Mori also thanked the members of the Judiciary Branch for taking part in the year’s SNLC. He thanked Congress for passing the FSM Telecommunications Bill in April of 2014, saying that it would contribute to enhancing access to and affordability of telecommunications services in the FSM.

He said that 2023, which is the year that financial contributions in connection with the Compact of Free Association with the U.S. come to an end, would be the main issue of the 7th SNLC.

FSM Chief Justice Martin Yinug stressed during his address of the SNLC that the Judiciary Branch will play an important role as the Nation prepares for 2023 by contributing to the enhancement of the confidence of investors in the FSM judicial system.

The Governors of each of the States stressed the need for the five governments to work together to tackle the issues in a timely manner as time is quickly moving forward.

Participants in the SNLC heard presentations on several subjects during the conference.

Constitutional amendment on lowering the threshold to amend the Constitution

The Department of Justice made a presentation on lowering the threshold of constitutional amendments from 75 to 66 percent of the votes cast in ¾ of the States. A bill to place that matter before voters on the March 2015 ballot is currently before the FSM Congress.

The SNLC agreed to urge Congress to pass both the bill to lower the threshold and the bill on dual citizenship. They agreed to urge the National Government to undertake a nation-wide public education and awareness campaign on the two amendments in anticipation of the upcoming elections, and to support the appropriation of $500,000 to fund the public education campaign.

Tax Reform in relation to expected losses of Compact Funds

The Tax Reform Committee reminded the SNLC that during the 6th SNLC the body had adopted a resolution in support of the tax reform. In spite of the anticipated benefits of the proposed tax reform, and the SNLC resolution the Revenue Administration Act still had not passed in Congress. The entire bill and all of the work and agreements that went into it is destined for the scrap heap on May 31, 2014 if Congress does not repeal the sunset clause before that time.

Two of the FSM’s States have passed enabling legislation but Pohnpei and Yap have not. According to a highly placed source, the Yap legislature’s legal opinion says that Yap cannot constitutionally pass enabling legislation for that State while Yap’s Office of the Attorney General has issued its legal opinion saying that there is no Constitutional impediment. Pohnpei’s Governor has gone on record saying that he supports the tax reform but the legislation has not been able to pass in the State Legislature.

SNLC Principals raised the need to find a compromise that would allow the two States that have already passed the necessary legislation to move forward.

Congress representatives expressed the need to ensure that Congress passes laws that do not violate the FSM Constitution, and said that the body is in favor of the tax reform as long as the five Governments proceed at the same pace.

SNLC endorsed a resolution urging the FSM Congress to repeal the so called Sunset Clause and urging Yap and Pohnpei to undertake the necessary work to move the tax reform forward. FSM Petroleum Corporation

The FSMPC provided a presentation on its current activities, its financial and management performance of the FSMPC over the last six (6) years, and its expansion into conventional and renewable energy related infrastructure within the FSM such as: a new oil transshipment port, new fuel storage tanks and facilities, coconut based bio-fuels development, conventional and renewable power generation, and outer island fuel supply arrangements. The Principals also noted that FSMPC is expected to conclude a new supply agreement with Mobil Oil Guam Inc.

The Leaders inquired whether FSMPC’s main interest in taking over the FSM Coconut Development Authority (CDA) is mainly in bio-fuels or in virgin coconut oil. FSMPC responded that its interest is in any value-added coconut products that will generate high return both to the company and the producers including virgin coconut oil.

The SNLC agreed to endorse SNLC Resolution 2014-002 in support of FSMPC investment projects. (See resolution in inset item)