Stimulating investment in pearl farming in ... - World Fish Center

Page 21constitutes the remainder. Registered land is considered legally secure whereas land that isnot registered can be subject to dispute.6.3. Shareholding or business participationSome business operators in rural areas have successfully engendered community goodwilland support by allowing local people to become shareholders in the business and participatein its profits through payment of dividends or other forms of benefit.In one example a company in PNG (not a pearl farming company) invited local people to buyshares at a cost of 1 kina (about US 30 cents) each. The company declared a dividend ofabout 10% of the share value twice a year, and also held an annual general meeting duringwhich all shareholders were provided with information on company operations and invited toexpress their views on aspects of company business. The AGM was accompanied by customperformances and a feast, all paid for by the company. This arrangement generatedconsiderable goodwill among the local community and permitted the company to go about itsbusiness without undue obstruction or interference. The low cost of entry allowed evenmembers of the community with little money to buy a few shares and participate in bothdividends and the AGM, which ultimately became a much-anticipated community event.In another example, possibly more relevant to the present case, a pearl-farming companyendowed the local community that owned traditional fishing rights over the area where thepearl farm was located with a shareholding which entitled it to 2.5% of the gross sales valueof pearls produced by the farm. These funds were distributed to the community according torules laid down in an agreement signed by the community’s traditional leaders. In practice, aproportion of the funds were retained by the traditional leadership, and a proportion spent oncommunity projects or distributed among individuals as agreed internally by communitymembers. The community has the option to increase its shareholding through purchase ofadditional shares, at a fair cost to be agreed between the company and the community, butthis has not so far been taken up.Both of the companies mentioned above have also undertaken additional activities intendedto provide community benefits and maintain goodwill. These have included financing, in fullor in part, of community projects such as buildings and infrastructure (toilets, water pipes,solar panels, etc.), contributions to community fund-raising events, providing scholarships forpromising local students, and sponsoring youth groups to carry out beach or village cleanups.As always in such situations there is a need to strike a balance between the companyraising ever-increasing expectations within the community and being regarded as a cash cow,and ensuring good community relations.There are numerous ways in which communities can participate in or benefit from thebusiness activities of a pearl farm based in their locality. Detailed arrangements would needto be worked out through negotiation between the operator and the community, based on theneeds and aspirations of the community and the financial realities of the pearl farmingoperation. Ideally the arrangements put in place should ensure that benefits flow to allcommunity members, rather than just a few landowners or chiefs, although recognition oftraditional authority or seniority will also be important. As in the examples above, a mixtureof individual shareholding, payments to traditional or community leaders, and projects thatbenefit the community at large would seem appropriate.6.4. EmploymentPearl farming is relatively labour-intensive. In the initial set-up phases there will be a need toconstruct and set anchors, farm lines and buoys, and any over-water structures required.