Development Bank of Samoa Act – 2010

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rangement of Provisions

PART 1
PRELIMINARY

1. Short title and
commencement
2. Interpretation

PART 2
THE DEVELOPMENT
BANK OF SAMOA

3. Continuation of the
Development Bank
4. Offices of the Bank
5. Functions of the Bank
6. Operating principles
7. Bank to follow general
economic policy of
Government
8. Powers of the Bank
9. Appointment of directors
10. Terms of office of
appointed directors
11. Remuneration of appointed
directors
12. Meetings of directors
13. Disclosure of interest
14. Contracts by the Bank
15. Committees
16. Delegation of powers
PART 3
STAFFING PROVISIONS

17. Chief Executive Officer
18. Acting Chief Executive
Officer
19. Bank staff
20. Other staffing provisions

PART 4
FINANCIAL PROVISIONS

21. Capital of the Bank
22. Shares to be held by
Government
23. Disposition of profits
24. Management of Funds by
the Bank
25. Powers of the Auditor
26. Accounts, audit, and
annual report
27. Director’s responsibilities
in relation to accounts and
reports
28. Raising of funds

PART 5
OVERSIGHT AND RISK
MANAGEMENT
CONTROLS

29. Obligations of Directors
30. Directors with loans in
arrears


2 Development Bank of Samoa 2010, No. 6
31. Audit Committee and Risk
Management Committee
32. Inquiries into malpractice
33. Protection of informants
34. Protection from liability
35. Write-offs

PART 6
APPLICATION OF OTHER
LAWS TO THE BANK

36. Application of the Public
Bodies (Performance and
Accountability) Act 2001
to the Bank
37. Application of the
Companies Act 2001 to the
Bank
38. Modification of the Credit
Union Ordinance 1960
PART 7
GENERAL PROVISIONS

39. Agencies
40. Liability for tax and other
duties
41 Liabilities of directors and
employees

PART 8
MISCELLANEOUS

42. Confidentiality of
customers’ financial
information
43. Repeal of the Development
Bank Act 1974
44. Savings and Transitional
Provisions

___________

2010, No. 6

AN ACT to continue the Development Bank of Samoa
established under the Development Bank Act 1974 and to
provide for the functions, powers, and duties of the Bank
under modern and reformed arrangements, and for
related purposes. [7th April 2010]

BE IT ENACTED by the Legislative Assembly of Samoa in
Parliament assembled as follows:

PART 1
PRELIMINARY

1. Short title and commencement-(1) This Act may be
cited as the Development Bank of Samoa Act 2010.
(2) This Act commences on the date of assent by the Head
of State.


2010, No. 6 Development Bank of Samoa 3

2. Interpretation - In this Act, unless the context otherwise
requires:
“Auditor” means the Controller and Chief Auditor of the
Independent State of Samoa;
“Bank” or “Development Bank” means the Development
Bank of Samoa continued by section 3;
“Board” means the Board of the Bank as provided for in
section 3;
“enterprise” means:
(a) any person or body (whether incorporated or
unincorporated) that engages or proposes to
engage in any agricultural, commercial, or
industrial activity, or in any other activity
relating to business, economic development or
the advancement of the community, whether or
not the primary purpose of the activity is profit;
and
(b) any undertaking owned, leased, managed, operated,
or developed by the Bank by itself or jointly with
any other person or body (whether incorporated
or unincorporated).
“Government” means the Government of the Independent
State of Samoa; and
“Minister” means the Minister of Finance.

PART 2
THE DEVELOPMENT BANK OF SAMOA

3. Continuation of the Development Bank-(1) The
Development Bank of Samoa established under the
Development Bank Act 1974 is continued under this Act, and
shall operate and be managed in accordance with the provisions
of this Act.
(2) The management of the Bank shall be vested in its
Board which shall have the following directors:
(a) the Chief Executive Officer of the Ministry of
Finance who is to be Chairperson;
(b) six (6) persons to be appointed under subsections (2)
and (3) of section 9;


4 Development Bank of Samoa 2010, No. 6

(c) any representative of a joint venture partner of the
Bank appointed under section 9(4);
(d) the Chief Executive Officer of the Ministry of
Agriculture and Fisheries;
(e) the Chief Executive Officer of the Ministry of
Commerce, Industry and Labour;
(f) the Chief Executive Officer of the Bank.
(3) The Bank is a body corporate with perpetual succession
and a common seal and:
(a) may enter into contracts;
(b) may sue and be sued in its corporate name;
(c) shall have the power to acquire, hold and dispose of
real and personal property; and
(d) may generally do all such acts and things that are
necessary for or incidental to the performance of
its functions under this Act or any other law.
(4) The powers of the Bank shall not be affected by any
vacancy in the membership of the Board.

4. Offices of the Bank-(1) The principal office of the Bank
shall be in Apia.
(2) The Bank may establish such branches in Apia and
elsewhere, as the Board thinks fit.

5. Functions of the Bank-(1) The functions of the Bank
shall be to promote the expansion of the economy of Samoa for
the economic and social advancement of the people of Samoa
by:
(a) making loans and giving financial, technical, and
advisory assistance to any enterprise in Samoa,
in accordance with the procedures approved
from time to time by the Board;
(b) providing commercial, financial, banking and
insurance services as approved from time to time
by the Board;
(c) undertaking or participating in infrastructure,
residential and commercial developments as
approved from time to time by the Board; and


2010, No. 6 Development Bank of Samoa 5

(d) entering into partnerships by way of joint venture,
agency relationships or any other means
approved, from time to time, by the Board to
perform the Bank’s functions.
(2) The provision of financial, banking and insurance
services by the Bank must be in accordance with the regulatory
requirements applying to such services under any relevant law.
(3) The Bank shall have such other functions as may be
lawfully conferred on it by any law or by Cabinet from time to
time.
6. Operating principles-(1) In determining whether or not
any loan or financial, technical, or advisory assistance shall be
given to any enterprise, the Bank shall have regard to the
following considerations:
(a) the prospects of the enterprise being successful, or
becoming or remaining successful, and the
prospects of any money lent to it by the Bank
being repaid to the Bank;
(b) the degree to which the enterprise is, or will become
or remain, of value to the economy of Samoa;
(c) the degree to which the enterprise is, or will be or
will remain, owned or effectively controlled by
persons who are either citizens of Samoa, or who
are ordinarily resident in Samoa;
(d) the minimisation of impacts to the environment of
Samoa, and the extent to which the enterprise
complies with environmental requirements
applying in Samoa and to the Pacific region;
(e) the compliance by the enterprise with laws applying
in Samoa to the employment of workers, and to
their safety and welfare in the workplace;
(f) the compliance by the enterprise with all other lawful
requirements, including those relating to
planning and development controls, building
regulation, fair trading and the protection of the
rights of consumers;
(g) the contribution of the enterprise to the alleviation of
poverty; and


6 Development Bank of Samoa 2010, No. 6

(h) the extent to which the public interest of Samoa will
be otherwise served by assisting the enterprise.
(2) In lending any money or giving any guarantee in respect
of an enterprise, the Bank must obtain security for the
repayment of the loan to the Bank or for indemnity of the Bank
for any liability (actual or contingent) of the Bank under the
guarantee, in accordance with normal commercial practice in
the banking industry.
(3) Nothing in subsection (2) shall prevent the Board from
approving arrangements that are aimed to ensure that adequate
funding is provided for:
(a) the development of the agriculture sector;
(b) the development of enterprises in the primary
industry sector; and
(c) the enhancement of economic growth in other sectors
of significant national interest.
7. Bank to follow general economic policy of
Government - In exercising its functions and powers under any
law, the Bank shall give effect to the general economic policy
of the Government as communicated to the Bank from time to
time in writing by the Minister or Cabinet.

8. Powers of the Bank-(1) The Bank shall have all the
powers that are reasonably necessary or expedient to enable it to
carry out its functions.
(2) Without limiting the generality of subsection (1), the
Bank may:
(a) make loans to any enterprise, and give guarantees in
respect of any enterprise in a manner which is
consistent with the requirements of this Act;
(b) provide finance for any enterprise by investing in
equities;
(c) subscribe for, purchase, underwrite, or sub-
underwrite shares, debentures, bonds, or other
securities issued or guaranteed by the
Government, or by any enterprise;


2010, No. 6 Development Bank of Samoa 7

(d) buy, lease, or otherwise acquire, hold, manage,
improve, or develop any real and personal
property;
(e) develop, sell, let, mortgage, charge, or otherwise deal
with or dispose of any of its property;
(f) execute, make, draw, accept, endorse, discount, issue,
and negotiate cheques, promissory notes, bills of
exchange, bills of lading, bankers and other
drafts, warrants, bonds, debentures, coupons, and
other negotiable or transferable instruments, and
buy, sell, or otherwise deal in such instruments;
(g) accept money on deposit at rates of interest to be
determined by the Board;
(h) participate in the management of enterprises to
which it has given, or is to give, any loan or
financial, technical, or advisory assistance;
(i) place funds not immediately required by it on deposit
with any bank, or invest such funds in
government securities or other approved
government investments;
(j) take such steps as may be necessary to protect or
recover its financial interest in any enterprises;
(k) make such charges for the provision of its services as
it thinks fit;
(l) subject to the other provisions of this Act, borrow
money from the Government or from any bank
or lending institution (whether in Samoa or
overseas) on such terms and conditions as the
Board approves;
(m) enter into joint ventures, partnerships, agency
relationships and any other appropriate
arrangement for the performance of its functions;
and
(n) create any subsidiary and operate any special
account for the purposes of paragraph (m).
(3) The exercise of any power under this section must be in
accordance with the regulatory requirements imposed by the
Central Bank of Samoa and applying under any relevant law.


8 Development Bank of Samoa 2010, No. 6

9. Appointment of directors-(1) The directors specified in
section 3(2)(b) shall be appointed by the Head of State, acting
on the advice of Cabinet.
(2) Three (3) persons shall be appointed under subsection
(1) to represent the interests of the agriculture and fishing sector
in Samoa.
(3) Three (3) other persons shall be appointed under
subsection (1) to represent interests in commerce and industry
in Samoa.
(4) A representative of a joint venture partner of the Bank
may be appointed to the Board by Cabinet in accordance with
any joint venture agreement.
(5) No person may be appointed under subsection (1) to be a
director, or may continue to hold office, while he or she is a
person holding a full-time office in the Bank.
(6) From 1 July 2010:
(a) no Member of Parliament or a person employed in
the public service shall be a director or be
re-appointed as a director unless Cabinet
has certified that such appointment or
re-appointment, as the case may be, is necessary;
and -
(i) in the national interest; and
(ii) that the Member of Parliament or the
person has particular qualifications or
business experience which the Bank requires
on its Board and such qualifications or
business experience cannot be found
elsewhere; and
(b) where a Member of Parliament or a person employed
in the public service is appointed or re-appointed
in accordance with this section, the Member
of Parliament or person shall not receive
remuneration or other benefits from the Bank for
services as a director.


2010, No. 6 Development Bank of Samoa 9

10. Terms of office of appointed directors - Every director
appointed under section 9 shall hold office for the term stated in
the instrument of appointment or until replaced in accordance
with this Act.

11. Remuneration of appointed directors - Every director
shall be paid such remuneration and allowances as may from
time to time be fixed by Cabinet.

12. Meetings of directors-(1) Meetings of directors shall
be held at such times and places as the Chairperson appoints.
(2) The Chairperson shall call a meeting whenever required
to do so in writing by at least three (3) directors.
(3) At any meeting six (6) directors shall form a quorum.
(4) The Chairperson shall preside at every meeting at which
he or she is present.
(5) If the Chairperson is for any reason absent from a
meeting, the directors present shall elect one (1) of the directors
to preside at that meeting.
(6) In the absence from any meeting of a director appointed
under paragraphs (a), (d), (e) or (f) of section 3(2), the director
may authorise any other officer of his or her ministry or agency,
to attend the meeting.
(7) Any officer authorised under subsection (6) shall be
deemed for all purposes to be a director of the Bank while he or
she attends that meeting as authorised, but shall not preside at
the meeting.
(8) At every meeting, the Chairperson or other person
presiding shall have a deliberative vote, and in the case of an
equality of votes, the Chairperson shall also have a casting vote.
(9) Every question arising at a meeting shall be decided by a
majority of the votes.
(10) Subject to the other provisions of this Act, the Board
may regulate its procedure in such manner as the Board thinks
fit.


10 Development Bank of Samoa 2010, No. 6

13. Disclosure of interest-(1) No director shall act as a
delegate of any business interest or receive or accept directions
from any business interest in respect of duties to be performed
under this Act:
PROVIDED THAT this restriction shall not apply to a director
who is appointed to represent the interests of a joint venture
partner of the Bank.
(2) Any director who, otherwise than as a director, is
directly or indirectly interested in any arrangement entered into,
or proposed to be entered into by the Bank, shall as soon as
possible after the relevant facts have come to his or her notice,
disclose the nature of such interest at a meeting of the Board.
(3) A disclosure under this section shall be recorded in the
minutes of the meeting of the Board and the director shall not
take part after the disclosure in any deliberation or decisions
relating to the arrangement, but shall be counted as present for
the purpose of forming a quorum of the Board for any such
deliberation or decision.
(4) No director or any officer or employee of the Bank may
accept any gift or advantage for himself or herself, or for any
person with whom the member may have family, business, or
financial connections if the acceptance of it would result, or
give the appearance of resulting in a diminishment of his or her
impartial devotion to functions, duties or responsibilities under
this Act.
(5) Where any director acts contrary to the provisions of this
Act, or uses information obtained through the Bank for personal
gain (or the gain of any other person), and Cabinet is satisfied
that such a breach has occurred, that member shall be
immediately terminated as a director of the Bank.
(6) Any person terminated under subsection (5) shall not be
eligible for reappointment as a director of the Bank at any time.

14. Contracts by the Bank-(1) Contracts on behalf of the
Bank may be made:
(a) in the form of a deed which shall be in writing and be
under the common seal of the Bank;


2010, No. 6 Development Bank of Samoa 11

(b) in the form of a written contract, which shall be in
writing and be either -
(i) under the common seal of the Bank; or
(ii) signed by any person or persons
acting in accordance with a general or
specific direction of the Board.
(2) The common seal of the Bank shall not be affixed to any
document except in accordance with a resolution of the Board,
and the execution of any document so sealed shall be attested by
two (2) directors.

15. Committees-(1) To assist the Bank to discharge its
functions, the Board may from time to time appoint such
advisory, audit, regulatory and technical committees as it
determines, and the Board may:
(a) determine the functions of the committees; and
(b) delegate to the committees such powers of the Board
as are necessary for the committees to perform
their functions.
(2) Members of committees appointed under subsection (1)
may include directors, officers of the Bank and such other
persons as the Board considers appropriate for the committees
to perform their functions.
(3) Members appointed to a committee established under
subsection (1) may be paid fees, allowances and reimbursement
of expenses as determined by the Board.
(4) Subject to the other provisions of this Act and to any
directions given to it by the Board, every committee may regulate
its procedure in such manner as it thinks fit.

16. Delegation of powers-(1) The Board may from time to
time delegate to any of its committees, or to the Chief Executive
Officer, or to any other officer of the Bank any of its powers
under this Act, including this power of delegation.
(2) Subject to any general or special directions given by the
Board, any committee or person to whom any powers are so
delegated may exercise those powers in the same manner and
with the same effect as if they had been conferred directly by this
Act, and not by delegation.


12 Development Bank of Samoa 2010, No. 6

(3) Every committee or person purporting to act under any
delegation under this section shall be presumed, until the contrary
is proved, to be acting in accordance with the terms of the
delegation.
(4) Every such delegation shall be revocable at will, and no
delegation shall prevent the exercise of any power by the Board
itself.
(5) Until any delegation is revoked, it shall continue in force
according to its terms, even if there is any change in the
membership of the Board, or of any committee of the Board.

PART 3
STAFFING PROVISIONS
17. Chief Executive Officer-(1) The Head of State, acting
on the advice of Cabinet, shall from time to time appoint a
Chief Executive Officer of the Bank:
(a) for such period as may be specified in the
appointment, which may not exceed three (3)
years;
(b) and on such other terms and conditions as are
approved by Cabinet or the Board.
(2) The Chief Executive Officer shall be the administrative
head of the Bank, and shall be responsible to the Board for the
effective and efficient management of the Bank, and for the
execution of the Bank’s functions.
(3) The Chief Executive Officer may be removed from
office by a decision of Cabinet to that effect.
(4) In carrying out his or her duties, the Chief Executive
Officer shall follow any general or special directions given by
the Board.
(5) The Chief Executive Officer is eligible for re-
appointment.
(6) All remuneration and other allowances and expenses
payable to the Chief Executive Officer shall be in accordance
with any approved policy of Cabinet applying from time to
time, and shall be paid out of the funds of the Bank.


2010, No. 6 Development Bank of Samoa 13

(7) The Chief Executive Officer shall not engage in any
other business or occupation without the prior written consent
of the Board.

18. Acting Chief Executive Officer-(1) The Board may
from time to time on such terms and conditions as it specifies,
appoint a suitable person to be the Acting Chief Executive
Officer of the Bank during any temporary vacancy in the office
of the Chief Executive Officer, or while the Chief Executive
Officer is for any reason unable to carry out the duties of the
office.
(2) During any such vacancy in office or incapacity of the
Chief Executive Officer, the person appointed to be the Acting
Chief Executive Officer may exercise all the functions and
powers of the Chief Executive Officer, and shall perform all the
duties of the office.

19. Bank staff-(1) The Bank may from time to time appoint
such other officers and employees of the Bank as it may
consider necessary for the purposes of carrying out of the
Bank’s functions.
(2) Officers may be engaged under contract for fixed
periods or appointed to hold office in accordance with policies
of employment and terms and conditions approved from time to
time by the Board.
(3) The Bank may from time to time make personal loans or
advances to its officers and employees for housing and domestic
purposes in accordance with a policy approved by the Board,
which shall:
(a) ensure that the entitlements of staff are not less than
those enjoyed by employees of other government
owned financial institutions; and
(b) be adequate to encourage the recruitment and
retention of suitably qualified and experienced
staff to the Bank.


14 Development Bank of Samoa 2010, No. 6

20. Other staffing provisions-(1) The Board may approve
other staff entitlements and incentives for the purposes of
attracting and retaining experienced officers, and such
incentives may include:
(a) bonus schemes based upon performance;
(b) pension or retirement entitlements;
(c) subsidised interest on loans provided to officers of
the Bank, which may be extended to periods
after the retirement of the officer.
(2) All entitlements applying under this section must be in
accordance with any applicable determination of Cabinet and
consistent with any other legal obligation relating to the
payment of pensions and contributions to retirement schemes.

PART 4
FINANCIAL PROVISIONS

21. Capital of the Bank-(1) The capital of the Bank shall
be the amount of approved capital as at the commencement of
this Act.
(2) The Board may from time to time by resolution
recommend to the Minister that the share capital of the Bank be
increased.
(3) In any such case, the Cabinet may authorise the increase
of the share capital of the Bank to such amount as the Cabinet
determines.
(4) The share capital of the Bank shall not be increased
except in accordance with subsections (2) and (3).
(5) The provisions of this Act shall apply notwithstanding
any provision of the Companies Act 2001 and any other
applicable law to the contrary.

22. Shares to be held by Government-(1) All shares of the
Bank shall be held by the Government, or on behalf of the
government in accordance with any law.
(2) Shares of the Bank may only be transferred in
accordance with any law making provision for the
corporatisation or privatisation of the Bank.


2010, No. 6 Development Bank of Samoa 15

(3) Any transfer of any share that is not in accordance with
subsection (2) shall be void and of no effect.

23. Disposition of profits-(1) Subject to subsection (2), the
Bank shall apply its profits in accordance with any requirement
imposed under any law.
(2) The Bank shall not be obliged to declare and distribute
any profits if:
(a) such a requirement might compromise the ability of
the Bank to obtain funds for purposes consistent
with this Act from any appropriate source of
such funds; or
(b) the payment of dividends would prevent the Bank
from performing its functions in accordance with
the operating principles applying to its
operations.

24. Management of Funds by the Bank-(1) The monies
of the Bank shall be held in such accounts or Funds as the
Board may determine from time to time.
(2) The Board may approve the management of monies in
Special Funds dedicated for purposes associated with:
(a) any pension scheme or other arrangement for staff
benefits in accordance with sections 19 and 20;
or
(b) any joint venture, agency of other relationship
between the Bank and a partner of the Bank.
(3) The management of any pension scheme under this
section must not be inconsistent with the requirement for
employees of the Bank to be registered as contributors to the
National Provident Fund, and for the required contributions to
be paid on behalf of employees.

25. Powers of the Auditor-(1) The Auditor, or a person
authorised to act by the Auditor, shall be entitled at all
reasonable times:
(a) to have full and free access to all accounts, papers,
records and other documents relating to the
activities of the Bank;


16 Development Bank of Samoa 2010, No. 6

(b) to take copies of such materials, or to require copies
to be provided; and
(c) to require and receive any information or materials
from any person, for the purpose of carrying out
duties in accordance with section 26.
(2) Any person who hinders or obstructs the Auditor, or an
authorised person under subsection (1) in the carrying out of
duties under this Act, commits an offence and shall be liable
upon conviction to a fine not exceeding 50 penalty units or to
imprisonment for a term not exceeding three (3) months, or
both.

26. Accounts, audit, and annual report-(1) The Bank
shall:
(a) keep full and proper accounts and other records of its
operations at all times; and
(b) prepare a balance sheet and such other statements of
accounts as are necessary to fully and accurately
show the financial position of the Bank and the
financial results of its operations during that
year, as soon as reasonably practicable after the
end of each financial year.
(2) The accounts of the Bank shall be audited each year by
the Auditor.
(3) As soon as reasonably practicable after the end of each
financial year, the Bank shall send to the Minister:
(a) a report of its proceedings and operations for that
year together with a copy of its audited accounts
for that year; and
(b) the report of the Auditor on its accounts.
(4) A copy of the report and the audited accounts of the
Bank, together with a copy of the Auditor’s report on the
accounts, shall be laid before the Legislative Assembly by the
Minister as soon as practicable after the Minister has received
them.
(5) The Chief Executive Officer and the chief financial
officer of the Bank must sign off on all accounts and reports
kept or prepared in accordance with this section, and must
certify that:


2010, No. 6 Development Bank of Samoa 17

(a) proper books of account have been maintained by the
Bank;
(b) the accounts and reports accurately reflect the
financial affairs of the Bank, and the accounts
maintained by the Bank; and
(c) adequate procedures of internal control have been
applied by the management of the Bank.

27. Director’s responsibilities in relation to accounts and
reports – All directors must sign off on the accounts of the
Bank and the report prepared by or on behalf of the Bank in
accordance with section 26.

28. Raising of funds-(1) Subject to the provisions of this
Act, the Bank may from time to time, with the prior written
permission of the Minister, raise funds required to meet any of
its obligations or for discharging any of its functions, and may
secure the repayment of such funds in any manner the Board
determines.
(2) The Head of State, acting on the advice of Cabinet, may
from time to time guarantee, in such manner and subject to
conditions, the repayment of loans raised by the Bank, including
the payment of interest.

PART 5
OVERSIGHT AND RISK MANAGEMENT CONTROLS

29. Obligations of Directors-(1) All directors of the Bank
must prepare and submit annual disclosure statements to the
Chairperson in a form and manner required by the Ministry of
Finance from time to time.
(2) The Minister of Finance may require that such
statements from the Directors of the Bank include all relevant
details so as to make full and accurate disclosure of:
(a) the remuneration received by the director from the
Bank during the year to which the statement
applies;


18 Development Bank of Samoa 2010, No. 6

(b) the number of meetings of the Board, and any
committee of the Board of which the director is a
member, attended by the director during the year
to which the statement applies;
(c) the reasons for failing to attend any Board or
committee meeting;
(d) all disclosures made by the director of any conflict
of interest during the year to which the statement
applies;
(e) all loans from the Bank held by -
(i) the director;
(ii) any company in which the director
holds shares, a directorship or employment
of any nature; and
(iii) any spouse, parent or child of the
director;
(f) any arrears in the repayment of all loans referred to in
paragraph (e) during the year to which the
statement applies;
(g) any other position held by the director which may
give rise to any potential conflict of interest; and
(h) any other matter required to be disclosed by the
Minister, or in accordance with the requirements
of the Public Finance Management Act 2001.
(3) A director shall be deemed to be suspended from
office if he or she fails to comply with the requirements of
subsection (1).
(4) Subject to subsection (5), the matters disclosed in all
disclosure statements submitted under this section may be
reported upon in all audit and annual reports prepared by or on
behalf of the Bank.
(5) The information provided in statements submitted under
this section shall be kept confidential in accordance with the
requirements of the Public Finance Management Act 2001 or as
stipulated by the Minister of Finance from time to time.

30. Directors with loans in arrears-(1) A director shall be
deemed to be suspended from office if any loan that the director
has obtained from the Bank, or which a director has guaranteed


2010, No. 6 Development Bank of Samoa 19

for a customer of the Bank, falls into arrears in accordance with
the Bank’s usual terms for payment of the loan.
(2) The provisions of subsection (1) apply:
(a) notwithstanding that the loan was obtained at any
time before the director was appointed to that
office; or
(b) if the loan in arrears has been made to any company
in which the director is a shareholder or director.
(3) The provisions of this section apply to any loan from the
Bank to a spouse or child of a director.

31. Audit Committee and Risk Management
Committee-(1) An Audit Committee shall be established by the
Board, and its membership may include one (1) or more
qualified persons who is not a director of the Bank.
(2) The functions of the Audit Committee are:
(a) to undertake or oversee all aspects of the internal
audit of the Bank’s operations, management and
financial procedures;
(b) to assess the extent of compliance by the Bank with
the prudential guidelines and other supervisory
requirements of the Central Bank of Samoa, and
to report to the Board on any failure by the Bank
to achieve such compliance;
(c) to ensure that the Bank complies with accepted
international best practice of corporate
management and reporting, and to report to the
Board on any failure by the Bank to achieve such
compliance; and
(d) to assess any proposal by the management of the
Bank to recommend the writing off of any debt
owed to the Bank, and to provide its
recommendation to the Board on all such
proposals.
(3) A Risk Management Committee shall be established by
the Board, and shall be comprised of:
(a) such number of directors as the Board determines
from time to time;
(b) the Chief Executive Officer;


20 Development Bank of Samoa 2010, No. 6

(c) the Internal Auditor;
(d) the Bank’s internal lawyer; and
(e) any other appropriately qualified persons who are not
directors or employees of the Bank, and whom
the Board considers may assist the Committee to
discharge its functions.
(4) The functions of the Risk Management Committee are:
(a) to identify and assess all risks applying to the
operations and management of the Bank;
(b) to develop policies of risk management for the
Bank’s operations and management;
(c) to oversee and report on any matter associated with
the identified risks, and the application of the
risk management policies;
(d) to ensure that all aspects of the risk management
policies, and of their application, are disclosed to
the Board, and to its management and staff, and
are reported on in all reports required to be
prepared and submitted by the Bank; and
(e) to review any matter associated with the recovery by
the Bank of monies owed to it through the sale of
any land or other property held as security, and
any other process which the committee considers
to constitute some risk to the proper management
of the Bank’s debt recovery procedures.
32. Inquiries into malpractice-(1) For the purposes of
conducting any audit or investigation in relation to any
functions provided for in section 31, the Audit Committee and
the Risk Management Committee shall have the powers and
protections applying to a Commission of Inquiry under the
Commissions of Inquiry Act 1964, including:
(a) protections in accordance with sections 5 and 9 of
that Act;
(b) powers as provided by section 6 of that Act;
(c) power to hear persons having an interest in a matter
which is the subject of a Tribunal proceeding as
provided by section 7 of that Act; and


2010, No. 6 Development Bank of Samoa 21

(d) power to summons witnesses and require the
production of documents.
(2) Any person who, after being summoned to attend before
the Audit Committee or the Risk Management Committee, or to
produce to the Bank any books, papers, writings, or
documents:
(a) fails to appear according to the terms of the
summons; or
(b) refuses to be sworn or to give evidence or to make
answer to such questions as may be put to the
person by the Committee, or any member of
the Committee relating to the subject of the
inquiry; or
(c) fails to produce any such books, papers, writings, or
documents,
is liable for every such default to a fine not exceeding 50 penalty
units.

33. Protection of informants - No action may be taken to
affect the employment within the Bank, or the status of an
officer of the Bank, who:
(a) provides information to the Audit Committee or the
Risk Management Committee; or
(b) provides any report or information to any person
concerning a breach of section 13 or section 30.

34. Protection from liability – No action for defamation
may lie against any person who prepares a report, assists in the
preparation of a report or who provides information to assist in
the preparation of any report by the Audit Committee or the
Risk Management Committee that is consistent with a function
of such a committee under this Act.

35. Write-offs-(1) The writing-off of any debt due to the
Bank must be in accordance with:
(a) the requirements of section 120 of the Public Finance
Management Act 2001;


22 Development Bank of Samoa 2010, No. 6

(b) the requirements of any prudential guidelines and
other requirements imposed by the Central Bank
of Samoa;
(c) international best corporate management and
accounting practice; and
(d) the procedures stated in subsection (2).
(2) No debt owed to the Bank shall be written-off except in
accordance with a decision of the Board made:
(a) after a recommendation has been made by the Risk
Management Committee and the Audit
Committee supporting the writing-off of the
debt; and
(b) after all available and reasonable steps have been
taken to recover the amount outstanding.
(3) The provisions of this section do not apply to any
decision to suspend or write-off the interest component of any
loan which is in arrears, if such a decision has been made in
accordance with a policy approved by the Board.
(4) Any amount that has been lawfully written-off in
accordance with this section shall be deemed to be a bad debt
for the purposes of section 20(1) of the Income Tax Act 1974,
and subject to section 20(2) of the Income Tax Act 1974 the
Bank shall not be liable to pay tax on any such amount.

PART 6
APPLICATION OF OTHER LAWS TO THE BANK

36. Application of the Public Bodies (Performance and
Accountability) Act 2001 to the Bank-(1) The requirements
under sections 5 and 6 of the Public Bodies (Performance and
Accountability) Act 2001 for registration under the Companies
Act 2001 and for the issue of shares, shall only apply to the
Bank if Cabinet determines that the Bank is to be the subject of
a major reorganisation or is to be prepared for privatisation.
(2) The provisions of section 5 of the Public Bodies
(Performance and Accountability) Act 2001 which purport to
give prevalence of certain laws over others do not apply to this
Act, and wherever specific provision is made under this Act


2010, No. 6 Development Bank of Samoa 23

then that provision shall prevail over the Public Bodies
(Performance and Accountability) Act 2001 and the Companies
Act 2001.
(3) No provision of the Public Bodies (Performance and
Accountability) Act 2001 which applies the provisions of the
Companies Act 2001 to the management of a public trading
body shall apply to the Bank until a determination is made by
Cabinet under subsection (1).
(4) For the purposes of section 9 of the Public Bodies
(Performance and Accountability) Act 2001, the provision of
loans by the Bank to villages or village leaders for the purposes
of providing education and other infrastructure and services in
accordance with approved policies of the Government shall be
deemed to be a community service obligation performed by the
Bank.

37. Application of the Companies Act 2001 to the
Bank-(1) Despite the provisions of the Public Bodies
(Performance and Accountability) Act 2001, the only provisions
of the Companies Act 2001 which shall apply to the Bank and
its directors prior to a determination being made under section
36(1) are:
(a) the application of the solvency test to the payment of
dividends in accordance with section 28 of the
Companies Act 2001;
(b) the fundamental duties of directors under section 65
of the Companies Act 2001;
(c) the use and disclosure of information by directors as
provided for in section 69 of the Companies Act
2001;
(d) the standard of care of directors under section 70 of
the Companies Act 2001;
(e) indemnities and insurance for directors as provided
for in sections 74 and 75 of the Companies Act
2001;
(f) disqualifications of directors and managers as
provided for in sections 77, 78 and 82 of the
Companies Act 2001;


24 Development Bank of Samoa 2010, No. 6

(g) the rights of shareholders to take action as provided
for in section 100 of the Companies Act 2001;
and
(h) controls over the interests of directors in transactions
as provided for in sections 111 and 112 of the
Companies Act 2001.
(2) No obligation shall arise by reason of section 73 of the
Companies Act 2001 from any direction given under section 7
of this Act, or any other act or decision of the Minister or the
Cabinet communicated to the Bank in accordance with this Act.

38. Modification of the Credit Union Ordinance 1960-(1)
The Bank may establish and incorporate Credit Unions under
the Credit Union Ordinance 1960 for the purpose of
implementing development projects and making loans that are
consistent with the statutory objects applying to credit unions.
(2) Notwithstanding any provision of the Credit Union
Ordinance 1960 to the contrary:
(a) the Bank may hold shares in a credit union
established for a purpose consistent with
subsection (1), and may -
(i) appoint Directors, which may
constitute a majority of the Board of the
credit union;
(ii) appoint persons to comprise the credit
committee and supervisory committee of the
credit union; and
(iii) provide support of any nature for the
management of the credit union, and the
performance of any function of the credit
committee or supervisory committee;
(b) a credit union established for any purpose consistent
with subsection (1) may have less than 12
members; and
(c) the Board of the Bank may approve by-laws for the
credit union in accordance with section 11 of the
Credit Union Ordinance 1960.


2010, No. 6 Development Bank of Samoa 25

PART 7
GENERAL PROVISIONS

39. Agencies - In the exercise of its powers and the
performance of its functions, the Board may:
(a) appoint, by instrument or otherwise, or arrange with
any person to be its attorney or agent in any
place, whether within or beyond Samoa, and
such person may do any act or execute any
power or function which the person is authorised
to do under the instrument, or in accordance with
the arrangement; and
(b) approve the Bank to act as agent of the Government
or of any other Government, or of a bank or
other financial institution carrying on business
within or beyond Samoa.

40. Liability for tax and other duties - The Bank is
subject to custom and excise duties, income tax and any other
taxation or duties.

41. Liabilities of directors and employees - No director,
officer of the Bank or any person appointed to a committee of
the Bank shall be personally liable for any act done or omitted
to be done in good faith in the performance of the functions of
the Bank or of any committee of the Bank, or the exercise of
any lawful power in relation to such functions.

PART 8
MISCELLANEOUS

42. Confidentiality of customers’ financial
information-(1) Subject to the provisions of this section, the
Bank shall make arrangements for keeping the financial affairs
of its customers confidential.
(2) The Bank shall only provide information relating to the
financial affairs of its customers if it is required to do so under
an order of a court of competent jurisdiction, or in accordance


26 Development Bank of Samoa 2010, No. 6

with any law which requires that such information be provided
for the purposes of suppressing criminal activity.
(3) The provisions of this section shall not affect the
obligations of the Bank to make available information that is on
the public record, and that is required to be provided in
accordance with any law.

43. Repeal of the Development Bank Act 1974 - The
Development Bank Act 1974 is repealed.

44. Savings and Transitional Provisions-(1) The directors
of the Bank holding office at the time of commencement of this
Act shall continue to hold office as Director as if appointed under
this Act.
(2) The General Manager of the Bank holding office at the
time of commencement of this Act shall continue to hold office as
Chief Executive Officer as if appointed under this Act.
(3) All other officers and employees of the Bank holding
office at the time of commencement of this Act shall continue to
hold the equivalent office in the Bank.
(4) All references to the Development Branch of the Bank of
Samoa in any law or legal document may be deemed to be a
reference to the Bank.
(5) All acts, transactions, matters and things lawfully done,
determined or entered into by the Development Branch of the
Bank of Samoa before the commencement of this Act shall be
deemed to have been done, determined and entered into by the
Bank; and all rights and obligations of the said Development
Branch arising from such acts, transactions, matters and things
remain the rights and obligations of the Bank.
(6) All monies standing to the credit of the Development
Loan Fund are to be regarded as funds of the Bank.


2010, No. 6 Development Bank of Samoa 27

(7) All other assets (including real and personal property of
every kind) and liabilities of the Development Branch of the
Bank of Samoa are the property of the Bank, without the need
for any conveyance, transfer or assignment.

__________
The Development Bank of Samoa Act 2010
is administered by the Development Bank of Samoa.

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