Case Holder:
Edward Bernard

Tropical Cyclone Winston: Impact on Fiji’s labour market and enterprises

Promotion of Youth Employment in Fragile Settings

Background & Context

The Disaster

On Saturday 20 February 2016, Tropical Cyclone (TC) Winston – one of the most powerful cyclones ever recorded in the Southern Hemisphere – struck Fiji as a Category 5 cyclone. A total of 40,000 homes were damaged or destroyed, and approximately 540,000 people and the livelihoods of almost 60 per cent of Fiji’s population were affected.

The losses were estimated to have the effect of reducing economic growth by 2.5 per cent. The pre-disaster baseline indicated that 64.5 per cent of the population was in the labour force with a youth unemployment rate of 15 per cent. The labour market exhibited significant gender disparities, with men representing two-thirds of the labour force.

The Impact

The findings from the Post-Disaster Needs Assessment (PDNA) revealed that the financial cost of TC Winston amounted to F$1.99 billion including F$1.29 billion in damage and F$0.70 billion in losses, equivalent to about one-fifth of the country’s gross domestic product (GDP) in 2014.

The ILO, together with its tripartite partners, led the assessment of the Employment and Livelihoods sector and estimated that TC Winston caused a contraction in labour demand, resulting in the loss of 14,450,129 workdays (equivalent to approx. 50,000 full-time jobs) and F$351.5 million in personal income across the economy. The agricultural sector suffered 57 per cent of these losses, commercial and manufacturing activities 17 per cent and 10 per cent respectively and tourism and transport 8 per cent.

The total accumulated damage to, and losses incurred by, informal small and micro Enterprises (SME), including those owned and operated by youth, was F$14.6 million. A key finding of the assessment was that there was a high risk of loss of business confidence, particularly by young micro-entrepreneurs.

The TC Winston Disaster Recovery Framework highlights the need to empower and build up resilience among vulnerable groups, particularly youth.

Objective

On 21 August 2017, through an ILO-organized echnical workshop, a field visit was organized to assess the extent of recovery, or lack of it, in disaster-affected SMEs.

The following are the profiles of four enterprises visited and the findings, including steps the enterprises took to recover and be better prepared for the next disaster.

Future Farms Ltd

Future Farms Limited trading as Rooster Poultry is a major commercial poultry grower and processor based at Navau, Ba. In 2016 Future Farms Ltd passed the ISO9001 certification for international standards for quality management systems and the ISO22000 standard for food safety management. The enterprise produces on average 500,000 rooster chickens a month and employs 300 staff. Future Farms supplies squab chicks and feed to smallholder farmers in Fiji who grow the chickens and then supply chicken meat to Future Farms. During TC Winston Future Farms Ltd did not suffer any great damages to its production premises, but still struggled with a production shortfall as the smallholder producer in their supply chain failed to deliver their produce on time.

Vueti Au Cooperative

Vueti Au Cooperative Ltd is a business arm of the Ba United Pentecostal Church and operates a poultry business in Waiwai, Nalaga in Ba, which is a supplier of Future Farms Ltd. The cooperative was established in 2014 with the support of the govern-ment’s Integrated Human Resource Development Programme (IHRDP) to encourage self-help and co-operation among the members of the United Pentecostal Church; Vueti Au has 300 members of which 150 are financial members of the cooperative, many of which are young and seasonal workers. Prior to TC Winston the enterprise had a capacity of 17,500 chickens in a 10.8m x 122.4m shed which was built with the aid of a loan from the Fiji Development Bank. During TC Winston, the cooperative’s premises were damaged and many chickens died from shock. According to the ILO’s assessment, the enterprise suffered estimated damage of F$86,998 and income losses (8 months) of F$48,000.

Tanoa Hotel Rakiraki

The Tanoa Hotel Group is a hotel chain with premises in Fiji and New Zealand, owned by the Reddy Group. The Tanoa Hotel in Rakiraki is located in Ra halfway between Nadi and Suva in Viti Levu and obtains its supplies from local farmers, fisher-folk and MSMEs. The Rakiraki Tanoa Hotel lay in the direct path of TC Winston and was badly hit: 75 per cent of its premises were damaged, forcing management to close the hotel for three months. Six months after TC Winston the hotel was 20 per cent operational; a year later the hotel had completed its renovation work and was again fully operational. Despite reduced business performance, the hotel has retained full-time employees on the payroll since TC Winston.

Tanoa Hotel Rakiraki

The Tanoa Hotel Group is a hotel chain with premises in Fiji and New Zealand, owned by the Reddy Group. The Tanoa Hotel in Rakiraki is located in Ra halfway between Nadi and Suva in Viti Levu and obtains its supplies from local farmers, fisher-folk and MSMEs. The Rakiraki Tanoa Hotel lay in the direct path of TC Winston and was badly hit: 75 per cent of its premises were damaged, forcing management to close the hotel for three months. Six months after TC Winston the hotel was 20 per cent operational; a year later the hotel had completed its renovation work and was again fully operational. Despite reduced business performance, the hotel has retained full-time employees on the payroll since TC Winston.

Fiji Sugar Corporation

The Fiji Sugar Corporation Limited (FSC) is the largest public company in Fiji and was incorporated in Fiji by an Act of Parliament in 1972. The Government of Fiji is the major shareholder of the corporation. FSC is the largest private sector employer in Fiji with a workforce of approximately 2,350 during the crushing season and contributes to approximately 1.7% of GDP. Unlike many other export-oriented industries, most production inputs are domestic and have high regional impact and substantial cross-sectoral linkages. Some of Fiji’s towns and cities depend on the income from this industry. FSC has different bio-projects, among others the production of bagasse, the by-product of sugar cane which is used as fuel in the boilers to produce high-pressure steam or as fuel to generate electricity for export into the FEA Grid. Prior to TC Winston, FSC operated four sugar mills in Fiji. However, the Penang Mill, build in 1878 and located in the province of Ra, was in the direct path of TC Winston and has remained closed ever since. About 400 cane farmers, 150 casual workers and 110 mill workers, as well as the township of Rakiraki, were dependent on the Mill.

Complexities of working in a fragile setting

The 11 ILO member countries in the Pacific comprise mostly small and remote developing States with the majority of their workforces still engaged in the rural or informal economy. The geographical spread, limited social security protection, limited access to employment services and limited markets are a daily challenge. Natural disasters are becoming more frequent and intense, the effects of climate change being particularly heavy on atoll States, impacting on rural areas more severely and presenting major barriers to progress in decent work.

Conclusion & any future variations

The ILO Pacific Office, in collaboration with the ILO Bureau of Employers (ACTEMP), is establishing Youth Entrepreneurs Councils (YEC) in Employers Organizations in the Pacific to ensure that young entrepreneurs have access to Disaster Risk Reduction (DRR) and preparedness programmes.

Source

1. Post Disaster Needs Assessment (PDNA), Fiji, 2016
http://www.ilo.org/suva/public-information/WCMS_505711/lang–en/index.htm

2. Disaster Recovery Framework, Fiji, 2016
https://reliefweb.int/report/fiji/disaster-recovery-framework-tropical-cyclone-winston-20th-february-2016

3. ILO Pacific Workshop on Working Out of Disaster
http://www.ilo.org/suva/WCMS_569510/lang–en/index.htm