Day three of the FICAC trial against the former Chief Executive and General Manger of the Fiji National Provident Fund began this morning with the Prosecution calling the second witness to the stand.

Amalaini Kuruvakadua, the former Manager of the Higher Salaries Commission (HSC) who is now the Acting Director for International Cooperation for the Ministry of Foreign Affairs was called to give evidence.

Kuruvakadua stated that she joined the Ministry of Foreign Affairs in February 2011 and before that she was with the HSC, joining the Commission in 2005 and then operated as the Manager from 2007 to 2011.

FICAC Prosecutor Shalini Sanmogam questioned Kuruvakadua on whether HSC was responsible for all the submissions on the remuneration packages and performance payments as well as board fees and other payouts to the executive positions governed under HSC in terms of remuneration.

Kuruvakadua answered that the remuneration policy outlined different package components that could be considered by the Commission for the executive remuneration of all executive positions under it. She clarified the procedure of determining the remuneration of the executives of various institutions under the HSC guide and procedure.

She further stated that the main function of the HSC was to determine remuneration packages for executives and senior executives for government bodies, public service, statutory bodies, government corporations, government commercial entities and local government.

The Court then heard that five of the executives of FNPF were governed under the HSC in terms of remuneration. Namely; the General Manager/ Chief Executive Officer, the Deputy General Manager, the Assistant General Manager IT & Research, the Assistant General Manager Properties & Administration and the Assistant General Manager Benefits and Customer Services.

Under Chief Examination, Kuruvakadua emphasized to the Court the need to first get approval of the HSC before making any changes to the remuneration packages. She also stated that the instances where changes can be accommodated for executive packages are when new positions are created or when a contract is renewed. However, the approval of the Commission must be granted before a new package can be implemented.

The witness clarified that remuneration includes salaries, allowances and benefits payable to an officer for the duration of his contract. She testified that the alterations of these have to come from the Board or the employer of the person holding an executive position to the HSC and that HSC would not accept written submissions from officers who are subjects of the remuneration packages.

Sanmogam then showed the witness the Contract of Olota Rokovunisei and asked if she could identify any clause regarding a responsibility which the witness could not find.

Sanmogam then asked if a payment could have been made to the executive as a responsibility allowance or acting allowance without a provision for it in the contract. The witness answered no to this.

Witness then informed the Court that in order for a payment to be made to executive positions under HSC, a formal request has to come from the relevant boards or the employer of the executive to the Commission for its decision before any payment is made.

Before concluding the Chief Examination, Sanmogam asked the witness if a CEO could approve any payment which is not part of the contract of another executive to which the witness answered no.

On that note, the witness was shown the contract of the former FNPF Deputy General Manager, Foana Nemani. When questioned if there was a clause in Nemani's contract regarding a responsibility allowance approved by the HSC, the witness could not find any.

Cross Examination

Rokovunisei's Lawyer Samanunu Vaniqi began with the point that if there was any difference between the Contract and the guidelines of HSC, then HSC overrules. She also established the point that it is the board alone that has an audience with the HSC.

The witness then explained to the Court that a performance bonus or a bonus pay is paid based on the key performance indicators for the executive positions. She agreed that the CEO of different organisations is in charge of the whole organisation whose contracts are usually for three years.

Vaniqi then put to the Court that when her client signed his contract in 2004 there was no way to predict that he might be acting in a certain post a year later. The witness responded to this saying that she was of the view that as a CEO there was no higher position for his acting.

Defence counsel then illustrated that in theory, if an executive is on an overseas leave for two weeks her client could take those responsibilities for that executive for two weeks and perhaps claim an allowance for that time. However, the witness was not in a position to agree.

Vaniqi then highlighted to the Court the difficulty that her client would have to face, that each time he had to run to claim an allowance because the HSC policy states that each time the HSC has to be approached. She submitted this stating that it was an impractical procedure.

Witness then reiterated the fact that there was no mention of a responsibility and acting allowance in the contracts of Rokovunisei and Nemani.

Vaniqi then put to the Court that her client as CEO of FNPF was receiving a base salary of $135,778 per annum and a total package of $291,929 with all benefits included. The Court also heard that FNPF Deputy General Manager, Foana Nemani was receiving $110,901 per annum and a total package of $227,836.

In contrast, Vaniqi then stated that Thomas Cotton filled the vacant position of Chief Investment Officer at FNPF with a base salary of $250,000 and a total package of $394,755. Witness could not recall the details of these remunerations however; she stated that the Commission usually allows a higher remuneration package for positions filled by expatriates to that of locals.

Vaniqi then tendered a letter from the HSC telling the FNPF Board to revise the fringe benefits of the top two executives downwards. Stating that according to the letter HSC said that fringe benefits should not exceed $240,000 and $200,000 respectively and a request for an increase needed justification.

Defence counsel highlighted the fact that the negotiations for the salary of her client had lasted from 2003 to 2006. She then asked the witness if a reason for fringe benefits and allowance to be given was for acting in a post and if that could have been an agreement brought forward to HSC. Witness responded to this saying that acting allowances and responsibility allowances has never been a justification for increase in remuneration packages.

Re-examination

Sanmogam reiterated the point that during cross examination, witness had told the court that responsibility allowance and acting allowances have never been justification for remuneration packages.

Sanmogam asked the witness why was a responsibility not part of the contract of the CEO. Witness answered saying that there is no other higher responsibility that the CEO is required to in addition to his responsibility as CEO.

Witness was asked why was this type of allowances not part of the Deputy General Manager's contract. She responded stating that the components of the remuneration package as outlined in the contract document are the confirmed benefits and allowances of the officer during the term of contract and any addition to this would need another approval from the Commission.

The matter will resume tomorrow at 9.30am.