The Parliamentary Opposition Group has rejected claims that the Solomon Islands-United States Development Finance Corporation (DFC) Investment Incentive Agreement is identical to India’s agreement.
The Opposition was responding to comments by Peter Kenilorea Jnr, National Planning and Development Coordination minister, during last week’s Motion of Thanks debate.
Kenilorea, who is MP for East Are’Are, claimed the Solomon Islands agreement was the same as India’s agreement “word for word”.
But in a statement, the Opposition said a text-based comparison identified seven material differences between the two agreements.
It said the differences relate to investment protections, taxation, damages, jurisdiction, dispute resolution and the duration of protections.
The Opposition said India’s agreement expressly preserves its right to regulate investments under its laws and policies.
It said the Solomon Islands agreement contains no comparable express protection.
“India also retains the jurisdiction of its local courts over DFC-related claims.
“The Solomon Islands agreement instead provides the DFC with an exemption from such jurisdiction.
“The two agreements also differ in their treatment of taxation and damages,” the statement said..
The Opposition said India’s agreement does not provide a blanket tax exemption for DFC operations.
“It also limits damages, including claims for lost profits or goodwill.
“The Solomon Islands agreement provides broader tax exemptions and contains no comparable cap on damages, the Opposition said.
The agreements also differ in their dispute resolution provisions.
“India’s agreement requires a 12-month negotiation period before arbitration can begin.
“The Solomon Islands agreement provides for a 90-day period.
“India’s agreement also contains a reciprocal guarantee of equal treatment in the United States.”
The Opposition said the Solomon Islands agreement contains no comparable provision.
It added the agreements also differ in how long their protections remain after termination.
“India’s agreement provides a 12-year survival period for its comparable protections.
“Article 5(c) of the Solomon Islands agreement allows provisions to continue applying to investment support provided while the agreement was in force.”
The Opposition said those provisions can remain effective while the support remains outstanding.
“They are subject to a maximum period of 25 years after termination.
“Our comparison identified seven comparable sovereignty-related safeguards.
“India retained six of the seven safeguards, while Solomon Islands retained none.”
The Opposition therefore said it was misleading to describe the two agreements as being the same “word for word”.
Kenilorea also suggested the amendment and termination provisions provide Solomon Islands with stronger safeguards.
The Opposition acknowledged that the agreement allows amendments through mutual written agreement.
It also allows either party to terminate the agreement with six months’ written notice.
However, the Opposition said those provisions do not remove the material differences between the two agreements.
It said each agreement should instead be assessed based on its actual terms.
“Our position is not based on fear of investment or partnership with the United States,” the Opposition statement said.
“It is based on the simple principle that agreements entered into on behalf of Solomon Islanders must be accurately represented and properly scrutinised.
“The public must also be given an accurate account of the agreement and whether protections secured by other countries were also secured for Solomon Islands,” the Opposition said.
