Forum Fisheries Agency
P.O. Box 629
Honiara, Solomon Islands
ABSTRACT
The types of tuna interaction problems and their relevance to the central and western Pacific Ocean were considered in some detail in several papers presented at the First FAO Expert Consultation on Interactions of Pacific Tuna Fisheries, held in Noumea, New Caledonia, in 1991. This paper provides further information on the types of interaction problems that Forum Fisheries Agency (FFA) member countries are experiencing in regard to the management of their tuna fisheries. The implications of these problems and the measures that the countries are taking to address them are also considered. The paper is focused on the economic and social aspects of the problem.
1. INTRODUCTION
The sustainable harvesting of the region’s tuna resources is fundamental to the future economic health of the island countries of the Forum Fisheries Agency (FFA)1. In 1994, FFA countries received around US$60 million in fees under various bilateral and multilateral arrangements with distant water fishing interests in exchange for fisheries access to the FFA countries’ respective Exclusive Economic Zones (EEZs). The level of access fees is substantial in relation to the general size of the economies of the island countries. In many countries, the revenue received from the licensing of foreign vessels represents the largest source of recurrent government revenue.
1 The 16 members of the Forum Fisheries Agency are Australia, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu and Western Samoa.Recent studies by the World Bank have estimated that the real gross national product of the Pacific Island countries grew by an average rate of 0.1% per year in the past decade. Although there are difficulties in measuring accurate economic indicators given the extent of the non-cash economy in most Pacific Island countries, the result nevertheless indicate a generally sluggish level of economic growth in the region.
The economic development of the island countries of the Pacific region must contend with a number of significant natural barriers including geographic isolation, limited population base, small domestic markets, limited supply of natural resources and vulnerability to natural disasters. In June 1994, the Australian Minister for Development Cooperation and Pacific Island Affairs, Mr Gordon Bilney, presented a thought-provoking paper on the long-term economic prospects facing the region (Bilney, 1994). Without being alarmist, Bilney pointed to the region’s high population growth rates and the associated high internal migration from rural to urban areas as leading to growing unemployment and urbanisation problems, with government services struggling to meet the increasing demands being placed on them. He pointed to growing lawlessness and social tensions as people, particularly the young, contend with increasing social and economic expectations. He also noted the diminishing strategic significance of the region following the end of the Cold War and that there was no assurance that the level of external funding coming into the region would be maintained at current levels. Any fall in the level of external funding coming to the region would place further pressure on the economies of the island countries.
It is against this uncertain backdrop that FFA member countries are actively exploring opportunities available to them to promote their economic independence. With a few exceptions, the range of development options available are limited. Fisheries, principally tuna, along with tourism, forestry, and in some cases mining, agriculture and small-scale manufacturing, represent for most countries the only opportunities for economic growth.
2. DEVELOPMENT OF THE LOCALLY-BASED TUNA INDUSTRY
The extension of coastal State jurisdiction from 12 to 200 nautical miles in the late 1970s resulted in Pacific island nations gaining control over rich tuna fishing grounds. As an interim measure, pending the development of their domestic fishing industries, many coastal States entered into bilateral fishing agreements giving vessels from distant water fishing nations access to their extended waters in exchange for a negotiated fee. However, with few exceptions, little substantive progress was made in the following 15 years in terms of developing viable and sustainable tuna-based enterprises in the region.
FFA countries, aware of their limited development options but yet anxious to avoid the bleak futuristic outlook portrayed by Bilney (1994), are intensifying their efforts to extend their involvement in the region’s tuna fisheries. Developments are occurring in all sectors of the industry--harvesting, processing and the service sector.
2.1 Harvesting
Although the number of purse seine vessels that are permanently based in an FFA country is growing (currently there are 24), the locally-based fleet accounts for a very small proportion of the total purse seine catch. In value terms, the 1993 catch of the domestically-based vessels represented less than 5% of the regional catch, i.e., $23 million of an estimated $665 million. Furthermore, a number of the domestically-based enterprises have yet to prove their viability and continue to operate with the assistance of government subsidies.
In terms of the longline fishery, there has been spectacular growth in the number of vessels basing themselves in FFA member countries in recent years. Around 600 vessels of 100 GRT or less are now based in Palau, the Federated States of Micronesia or the Marshall Islands. The growth in domestic longlining is not confined to the Micronesian countries--three new enterprises and over 100 vessels are expected to commence operations in Solomon Islands in 1995, around 30 vessels are active in Fiji, and smaller fleets are operating in Tonga and Cook Islands. Papua New Guinea and Kiribati are also considering options for developing their longline fisheries.
The vast majority of the domestically-based longline vessels are foreign-owned. However, the fact that they are locally-based generates substantial economic benefits for the local economies through the generation of employment, both crewing and on-shore, payment of government charges and taxes, purchases of government-supplied inputs which may include air freight, electricity and water.
Unlike purse seining and longlining, there has been a decline in the number of locally-based pole and line vessels in recent years.
2.2 Processing
The central western Pacific produces around 50-60% of the world’s annual supply of canning tuna, with most of the raw material presently transported to canneries in Bangkok and American Samoa. Two canneries are based in FFA countries, Solomon-Taiyo in Solomon Islands and Pacific Fisheries Company in Fiji. Further canning facilities in the region are forthcoming, one currently under construction at Madang in Papua New Guinea and a second being considered in the Federated States of Micronesia.
2.3 Service sectors
The influx of vessels, both purse seiners and longliners, now unloading their catch in ports in the region has created a growing demand for local stevedoring services. It is also expected that as the number and frequency of vessels calling into port increases, the prospects of locally-based engine repairers, net manufacturers, gear and fuel suppliers and so on, relocating to the region will also increase.
A number of FFA countries, especially Kiribati and the Federated States of Micronesia, are training their own people to work on the foreign vessels. Training centres have been established in both countries and there are a number of I-Kiribati and Micronesian crew on Japanese, Korean and Taiwanese vessels. This is an area that offers scope for further development, given the difficulties that Japanese, Korean and Taiwanese vessel owners are having in attracting their own nationals to work on their vessels. As well as the immediate effect of increasing employment opportunities, the at-sea training of local people will facilitate the development of domestic fishing industries in FFA countries in the medium-term.
3. TYPES OF TUNA FISHERIES INTERACTION
Kleiber (1994) categorised the impacts of one fishing activity on another fishing activity into two broad groups: resource-related, whereby there is a direct impact upon the resources available for the second activity, and non-resource-related, such as physical crowding on the fishing grounds and lower market prices.
Hampton (1994) identified the key resource-related interaction issues that are present in the western and central Pacific Ocean. Three types of resource-related interactions were identified:
A. competition for the same stock in the same general area;3.1 Impact of Fishing in One FFA Member Country on Another
B. competition for the same stock but at a different stages of the life cycle; and
C. competition for the same stock but in different areas.
The migratory nature of all the major tuna resources means that the catch taken in one country may impact upon catches in other countries (type C interaction). The recognition of this likely interaction was in fact one of the principle reasons behind the establishment of the Forum Fisheries Agency, as the Pacific island countries realised that they could not manage the resource independently of their neighbours. A cooperative approach to the management of the tuna fishery was recognised as being essential to ensure the sustainability of the resource.
Regarding the purse seine fishery, a number of FFA member countries became concerned about the rapid expansion of the purse seine fishery in the Western Pacific in the late 1980s and early 1990s. The countries involved agreed that consideration should be given to the formulation of a mechanism to regulate the number of purse seine vessels operating in the region and that a cap be placed on the number of purse seine licences issued. This agreement was formalised with the signing of the Arrangement for the Management of the Western Pacific Purse Seine Fishery (known as the Palau Arrangement) in October 1992 by Federated States of Micronesia, Marshall Islands, Nauru, Palau, Papua New Guinea and Tuvalu. Solomon Islands and Kiribati signed in 1993 and the Palau Arrangement remains open for signature by the remaining FFA countries. The key provisions in the Palau Arrangement are those dealing with the allocation of purse seine vessel licences, with the countries involved agreeing to limit the number of vessels that may be licensed. The cap presently stands at 205 licences, made up of 196 single purse seine licences and nine group purse seine licences.
The Palau Arrangement also establishes the order of priority in which available licences will be issued:
a) first priority will go to domestic vessels as defined for the purposes of the Arrangement;Consistent with their stated desire of developing the locally-based fleet, in 1994 the FFA countries involved agreed to a 10% cut in the number of purse seine licences allocated to bilaterally-licensed fleets. This cut will become effective in three years time, removing 12 foreign boats from the fishery. Associated with this reduction, the FFA countries agreed that 12 new licences are to be added to the “domestic/locally-based foreign/FFA member bilateral” category. There are no regionally agreed management measures at present for the longline fishery.b) second priority goes to domestic vessels of another Party to the Arrangement, or vessels jointly operated by or on behalf of the Government of the Party in which the vessel is based and one or more other Parties;
c) third priority goes to locally-based foreign fishing vessels, including vessels operating under joint venture agreements;
d) foreign fishing vessels with established access agreements and with good records of compliance will have next priority; and finally
e) last priority will go to new entrants into the fishery and those with poor records of compliance.
3.2 Competition between the surface fishery and the longline fishery
An issue of critical importance to the region is the possible impact of the surface fishery catches on the catch of the longline fishery. This issue has assumed greater importance in recent years with the expansion in the number of locally-based vessels in both the longline and purse seine fisheries.
As previously outlined, the level of purse seine effort is controlled by the limit on vessel numbers as imposed under the Palau Arrangement, with the cap set at 205. However, with the increasing level of local investment taking place, concentrated in the longline fishery, any negative impact of the surface fishery catch on the longline catch poses the question of whether 205 is an appropriate level at which to set the cap. Should such negative impacts be established, there may be a need to determine which fishery, the surface or the longline, should have priority. This matter will ultimately depend upon the respective economic benefits that the two competing fishing operations generate for the region.
This issue is the subject of a three year research project being undertaken by FFA, the Oceanic Fisheries Programme of the South Pacific Commission (SPC) and the University of Queensland. The project, funded by the Australian Centre for International Agricultural Research, is to examine possible biological and economic interactions among the purse seine and longline fisheries in the Central Western Pacific. The objective in the study is to shed light on the likely combination of purse seine and longline activity that will generate the highest level of returns to the region as a whole. Researchers from the University of Queensland will be largely responsible for the conduct of the study. These researchers will work in close collaboration with FFA and SPC who will provide technical and policy input and guidance. The project is at a very early stage, having commenced in late 1994.
3.3 Competition between the offshore and artisanal fleets
With food-producing and income-earning opportunities limited in many of the small island countries, the artisanal sector is of key importance to many Pacific nations as a source of food and income. Developments that adversely affect the artisanal fishery therefore have implications for the social structure of the island communities.
3.3.1 Kiribati
Concern has been expressed that the increased purse seine activity in Kiribati waters in recent years has adversely affected the catch rates of the artisanal skiff vessels. Although little scientific evidence has been found to support this claim, Kiribati has imposed a limit on the number of licences available to purse seine vessels wanting access to the Kiribati EEZ. This limit, set at 65 vessels, is fully utilised. Additional vessels have sought access to the Kiribati EEZ but they have been rejected on the grounds that there are no surplus licences available.
From a regional perspective, Kiribati’s perceived interaction problem has implications for the likely implementation of any future multilateral access arrangement with the distant water fishing nations. Kiribati is a party to the existing multilateral arrangement with the United States2, involving up to 55 purse seine vessels. This means that 55 US purse seiners could legitimately operate in the Kiribati EEZ, which leaves only 10 additional licences for purse seiners of other nations.
2 Treaty on Fisheries Between the Governments of Certain Pacific Island States and the Government of the United States of America.The cost to Kiribati from implementing their 65 vessel policy is represented by any licensing revenue foregone from those vessels in excess of the limit that would otherwise have sought access to the Kiribati EEZ. These losses may be substantial, given the size of the Kiribati economy and that the fee for an annual licence is in the order of A$70,000-90,000. The benefits of the policy are represented by the improvement in the artisanal catch that is attributable to the constrained level of purse seine activity.
A separate paper (Hampton, et al., 1996) outlines the scientific work that has been undertaken to assess the evidence for interaction between the purse seine and artisanal fisheries in Kiribati.
3.4 Competition between the foreign-based and locally-based longline fleets
There has been a tremendous expansion in the number of small-scale longline vessels operating in the central and western Pacific in the last 2-3 years. These vessels are targeting yellowfin and bigeye tunas during fishing trips of around 7-10 days. Once caught, the fish are chilled in ice before being airfreighted for the fresh sashimi market in Japan.
These vessels are in direct competition with the more established foreign-based longline vessels that operate under bilateral access agreements in the EEZs of several FFA member countries. In recent bilateral fisheries negotiations, the fisheries associations that represent the owners of these vessels have claimed that their catch rates have been adversely affected by the influx of the locally-based fleet. Furthermore, they have used this argument to justify a lowering of access fees.
Apart from the increased competition for the same stock, the foreign operators have also encountered problems due to additional crowding on the fishing grounds, i.e., the non-resource related problems to which Kleiber (1994) referred. The foreign vessel owners have, for example, cited cases of damaged/stolen gear and of fish being removed from lines.
3.4.1 Palau
There are three locally-based fishing companies in Palau--Palau International Traders Incorporated, Palau Maritime Industries Corporation and Kuniyoshi Fishing Company. The three companies operate in excess of 200 longline vessels, mostly from the People’s Republic of China. Palau also has a bilateral access arrangement with four Japanese fisheries associations covering longliners, single and group purse seining and pole and lining. The number of Japanese longline vessels seeking access to Palau has been steadily declining in recent years, as shown in Table 1.
Table 1. Number of Japanese longline vessels seeking access to Palau, 1993-95.
|
|
1993 |
1994 |
1995 |
|
Longliners (< 20 GRT) |
52 |
32 |
23 |
|
Longliners (>20 GRT) |
5 |
1 |
0 |
The growth in the locally-based fleet is incurring a cost to Palau to the extent that the increased number of locally-based vessels is deterring other vessel owners from paying fees for the right to fish in Palau’s EEZ. This cost is represented by the access fees foregone. However, the locally-based vessels, in conjunction with the fishing company, generate benefits for Palau in the form of the direct taxation of the companies, indirect taxes, payments for government services, the employment of Palauan citizens and the spending and taxing of alien workers. These benefits are spread through both the public and the private sectors. The issue for Palau to consider is whether the benefits received from the foreign companies are likely to be greater than the returns that would otherwise be received from alternative users of the fish resource, namely the foreign bilateral vessels.
The Federated Sates of Micronesia and Marshall Islands are confronted with exactly the same issue that Palau has encountered: how to maximise the returns from their tuna resources given an emerging locally-based longline fleet and an established bilaterally-licensed foreign fleet. The issue is an economic matter, to be decided primarily by identifying which of the two fleets offer the greater benefit to the country concerned.
3.5 Competition between the foreign-based and locally-based purse seine fleets
The FFA member countries’ desires to develop their domestic tuna industries are not confined to the longline fishery and several countries are actively promoting growth in the locally-based purse seine fleet. In 1994 there were eight purse seiners based in the Federated States of Micronesia, five in Papua New Guinea (with many more expected when the Madang cannery is complete), 13 in Solomon Islands and one each in Kiribati and Vanuatu.
These locally-based vessels are in competition with the foreign based vessels for the skipjack stock in the central and western Pacific, and unrestricted licensing of foreign purse seiners would adversely impact upon catch rates and hence profitability of the locally-based fleet. The Palau Arrangement, described earlier, puts an upper cap on the extent of this competition by limiting the number of licences that are available to foreign purse seine vessels. Some countries, such as Papua New Guinea, exclude foreign bilateral vessels from certain waters in an attempt to lessen any adverse impacts of the bilateral fleet on their local vessels. Similarly, the policy in Solomon Islands is, in most cases, to only issue licences to purse seine vessels that are locally-based in the country. There are no licences available to foreign-based purse seiners, and foreign-based vessels operating under the terms of the Multilateral Treaty on Fisheries are denied access to around 90% of the Solomon Islands EEZ.
Similar to the situation regarding longlining, the cost to the countries involved of these policies is the foregone access fees that could otherwise have been obtained if access was unrestricted. This cost needs to be considered against the benefits that the policies generate, more specifically, the higher catch rates, and hence profits, for the locally-based fleet.
3.6 Market competition between the same fleets
In June 1993 FFA countries restricted those fishing vessels that are licensed to operate in a FFA country from unauthorised at-sea transhipment. One of the reasons for the high seas transhipment ban was the perceived need to alleviate some of the build-up in fishing pressure experienced in the late 1980s and early 1990s. Vessels are now required to steam from the fishing grounds to the designated transhipment port, and then steam back to the grounds, before they can continue fishing. It is estimated that fishing time might have fallen by as much as 20% as a result. Coinciding with the impact of the transhipment ban, there was a marked turnaround in tuna prices, as illustrated in Figure 1. Although there are a multitude of factors influencing tuna prices, it is probable that a significant portion of the price rise was attributable to the transhipment ban.
The joint FFA-SPC-University of Queensland study, discussed previously, will also examine the extent to which changes in tuna supplies from the central western Pacific affect the world price for canning tuna. If the region is found to have some degree of market power, this information can be used to identify the size of the tuna harvest and number of purse seine vessels which are likely to result in the highest level of income for the region. The development of bioeconomic fisheries models that explicitly account for the biological impacts as well as the different cost and revenue functions of the competing fishing methods will provide valuable support to managers in this regard.
Figure 1. American Tuna Sales Association (ATSA) prices for purse seine caught skipjack tuna (4.0 - 7.5 lb).
Market competition is obviously not unique to the purse seine fishery; Japan in particular claims that the growth in fresh sashimi exports emanating from the Pacific has led to a general downturn in tuna prices in Japan. Pacific island exporters have been sheltered from the price fall in the Japanese market by the continued appreciation of the yen. However, as with the purse seine fishery, more work is needed to assess the significance of the increased supplies from the Pacific on Japanese tuna prices.
4. CONCLUDING COMMENTS
As FFA countries become more involved in the tuna fisheries, their need for proper fisheries management intensifies. Management, in this sense, is both a scientific and an economic concern, involving more than resource sustainability; it also involves maximising the flow of benefits generated from the resource.
The development of the locally-based tuna industries in the FFA countries also increases the importance of understanding the various interaction effects present in the fishery. While the increased number of vessels operating in the region creates development opportunities for FFA countries, there is a point after which any additional boats start to have a negative impact on the benefits generated from the fishery. For example, concern has been expressed that many of the vessels joining the locally-based fleet are new to the region and represent an increase in the total size of the fleet rather than the displacing of existing foreign vessels. This is of particular concern with respect to the substantial growth in the locally-based longline fleet.
Greater competition on the grounds also reduces the catch rates and, hence, profitability of all vessels. Crowding is a potential problem, both at sea and in port, and increasing friction between the locally-based and foreign licensed fleets is already apparent. Environmental concerns, particularly with more vessels now using ports in the region, are also intensifying. On the marketing side, the rapidly-increasing amounts of fresh tuna being airfreighted to the Japanese market can also be expected to put downward pressure on tuna prices, to the detriment of all enterprises.
More information, both scientific and economic, is needed to counter these possible undesirable aspects of the FFA countries’ more active participation in the tuna fisheries of the Pacific. More detailed cost-benefit analyses will be required in the future so that fisheries managers will be able to incorporate the impacts of these various interaction effects into their decision-making. This should enable managers to make more-informed and, hence, better decisions.
5. REFERENCES CITED
Bilney, G. 1994. Australia’s relations with the South Pacific - challenge and change. Briefing Paper No. 34, Australian Development Studies Network, Australian National University, Canberra.
Hampton, J. 1994. A review of the tuna fishery-interaction issues in the western and central Pacific Ocean. In: Shomura, R.S., J. Majkowski and S. Langi (eds.). Interactions of Pacific tuna fisheries. Proceedings of the First FAO Expert Consultation on Interactions of Pacific Tuna Fisheries, 3-11 December 1991, Noumea, New Caledonia. Vol. 1: Summary report and papers on interaction. FAO Fish. Tech. Pap. (336/1): 138-157.
Hampton, J., T. Lawson, P. Williams and J. Sibert. 1996. Interaction between small-scale fisheries in Kiribati with the industrial purse seine fishery in the western and central Pacific Ocean. In: Shomura, R.S., J. Majkowski and R.F. Harman (eds.). Scientific Papers from the Second FAO Expert Consultation on Interactions of Pacific Tuna Fisheries, 23-31 January 1995, Shimizu, Japan. [This volume]
Kleiber, P. 1994. Types of tuna fishery interaction in the Pacific Ocean and methods of assessing interaction. In: Shomura, R.S., J. Majkowski and S. Langi (eds.). Interactions of Pacific tuna fisheries. Proceedings of the First FAO Expert Consultation on Interactions of Pacific Tuna Fisheries, 3-11 December 1991, Noumea, New Caledonia. Vol. 1: Summary report and papers on interaction. FAO Fish. Tech. Pap. (336/1): 61-73.
