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“If we achieve increased domestication of foreign longline fleets, we won’t need global sourcing derogation”

06 July 2013

An interview with Maurice Brownjohn, OBE

Maurice Brownjohn is the Commercial Advisor to the Parties to the Nauru Agreement (PNA) based in Majuro, Marshall Islands, and is also the Commercial Director of Pacifical, which markets MSC sustainable skipjack tuna products from the Pacific for PNA nations. He was previously Chair of the Papua New Guinea Fishing Industry Association for 2 decades, has been a director of the National Fisheries Authority of Papua New Guinea since 1995 and was previously a major player in the domestic tuna longline industry of Papua New Guinea.

Q: The Pacific ACP countries and the EU are still negotiating an EPA, in which the extension of global sourcing for fresh and frozen tuna products is a major focus of attention. What’s at stake for the Pacific?

Fish products – particularly tuna – are the only shared resources of value that the Pacific trades with the EU. In my view, there may be few benefits in extending global sourcing, as proposed under a comprehensive EPA. But very big costs, in as much as discussion topics now also include access to fisheries resources. Pacific ACP countries may end up with a trade agreement that provides extended global sourcing for fisheries products, but where we lose control as well as our rights, over our tuna resources.

In terms of the benefits that can be drawn from extended global sourcing, we have to remind ourselves that the EU has an increasing array of requirements and what are in effect “non-tariff barriers”, and the costs to comply with them are disproportionate for many Pacific ACP countries. For many islands, these compliance costs typically exceed the country’s GDP – they have small fleets yet, individually, lack the capacity to meet and maintain EU recognition of competence.

For example, most Pacific Islands do not have a national competent authority, or EU recognition for IUU measures with their ships’ registry, and therefore local vessels and processing factories are not eligible to supply the EU, nor benefit from any potential tariff concessions. So while we may negotiate improved market access through the extension of global sourcing, and trade-offs under a comprehensive EPA, we may be unable to access the EU market anyway because of such constraints. This does not mean our standards are inferior, but rather they are not EU acknowledged.

Such non-tariff barriers are not going to be lowered just because of global sourcing. Indeed, from what we hear concerning the reform of the EU fisheries regulations, they are likely to become even more stringent, and increasingly cross-linked to other EU sectoral policies. To the layman this looks like a return to our colonial past.

What is key for us is to diversify our trade partners and markets. It is true that the European market potentially offers higher prices – provided you can comply with SPS, IUU, etc. standards – but other markets like Japan, USA, China and Australia, which are closer to the region, are more accessible. Considering also airfreight costs to Europe, the benefits of accessing these other regional markets are considerable: flying Pacific fish products to Europe costs us double vis-à-vis flying it to Japan.

It is the net return that is important to domestic trade.

Q: You mention Pacific ACP countries may lose control over their resources through the signing of the EPA, which is a trade agreement. How is that?

The interim EPA negotiations didn’t include any discussions about giving fisheries access. However, it seems that to get the extended global sourcing concession, under a comprehensive EPA, we must now include obligations to deliver access rights on request, and on how the region manages access to tuna resources. Previously there had even been mention of allocating a 5% share of the region’s tuna fishing rights to the EU.

It is a development we are much worried about. This is the same EU that, at the same time, refuses to apply Pacific ACP fisheries management arrangements to EU vessels fishing in our waters through bilateral FPAs. In both their EPA negotiations and bilateral agreements, the EU challenges national laws, regional fishery agreements, such as the Palau Arrangement and the Nauru Agreement under which VDS (Vessel Day Scheme) and other minimum terms and conditions have been agreed upon. We even see that the competence of the Western and Central Pacific Fishery Commission and the Secretariat of the Pacific Community as the science providers are challenged. Yet it is clear our region remains the best managed. Where would we be if we defer our governance to the EU oversight? Sadly the Mediterranean is not a model we wish to accede to.

Q: This issue, that the access negotiated by the EU doesn’t respect the VDS put in place by the Parties to the Nauru Agreement (PNA), is being raised by the European Parliament in their current discussion about the EU–Kiribati FPA…

Clearly I cannot speak on behalf of any country.

The VDS objective is an effort-control regime aimed at ensuring the sustainable exploitation of our tuna resource. In this regard we are working towards setting reference points and other measures to ensure sustainability. Additionally, by restricting effort, it strengthens income derived from fishing access for PNA members.

PNA regional income generated from VDS access now stands at about US$200 million, for purse seiners alone, and is expected to rise, as fishing day price goes from US$5,000 to US$6,000 a day.

When we look at what is being offered under EU bilateral FPAs globally, if you take out the aid component, the price per day actually paid by the EU, is significantly less than what is being paid by other distant-water fishing nations under the VDS.

Under the VDS, currently one fishing day at US$5,000 allows a 50–80m length vessel to catch on average 30 tonnes of tuna, which would fetch a total market value of around US$60,000. Some larger EU vessels can catch double this.

Access fees, therefore, represent about 10% of the value of the fish, which serves to pay our fisheries management costs and to support our vulnerable economies. Such income does provide substantial financing to the national treasury of our members, but still, the bulk of the profits go to foreign fishing companies and governments.

Q: Is that why PNA has also emphasised the need to domesticate foreign tuna fleets?

Currently, the overwhelming majority of the 270 tuna purse seiners in PNA waters are foreign. Almost 85% of our tuna is caught by fleets from USA, Japan, Taiwan, Korea, Philippines, China and Spain, but increasingly we see these vessels based locally in the islands where jobs are created. Yet only a small amount of our tuna remains in the region for processing – unlike in other tuna-rich regions, processing capacity doesn’t match the availability of tuna resources in the Pacific. It is clear that Asian – Thailand, Philippines, Korea, China – and Latin American canneries are heavily reliant upon our resources. Thailand takes over 90% of its supply from our region.

Therefore, beyond organising the sale of access rights through the VDS scheme, PNA’s objective is also to look at how the value of the tuna products can be improved, and how the local people might benefit. We need more foreign partners’ participation in onshore job creation and manufacturing. We would also like to see more joint fishing ventures between local and foreign fishing companies, including from the EU, whose investment is currently conspicuous by its absence in our region.

PNA should control where the tuna caught in their waters ends up – it should be landed and processed in the region – and our employment options increased, rather than acting as a donor of raw materials to industrialised economies.

In that context, keeping raw material prices high through the VDS scheme helps to ensure PNA industries are competitive. It also maintains healthy access fees relative to the fish prices, puts value to tariff concessions and sees enhanced industry profits.

If we can achieve increased domestication of fleets in Pacific ACP countries that also has a bearing on the trade agreement with the EU. If, for example, the foreign longline fleets were domesticated and flew local flags they could provide fish for the EU market without needing global sourcing. But this will take time, and meanwhile most fishing effort will remain foreign owned.

In this context it must be noted that most Pacific island nations while resource rich, cannot support canneries, so they must look to smaller-scale processing of fresh and frozen fish – typically from longliners – to participate.

As to be expected, such moves in the region, especially for purse seine and canning, have been strongly opposed by those operators, including EU operators, who have already invested and formed joint fishing ventures elsewhere– like in Ecuador – but still expect to be able to source their raw materials cheaply from our region.

Q: Is the recent eco-labelling of PNA skipjack tuna also part of the strategy to increase local benefits?

Indeed. There are clear signs in the EU, the USA and in Asia that consumers are becoming more aware of sustainability issues, and the MSC has been setting the highest global standard for eco-labels – MSC is the only certification that meets FAO standards for eco-labelling wild catches. The retailers are increasingly aware of this, and put pressure for a sustainable tuna supply – guaranteed sustainably sourced tuna is increasingly a prerequisite for international trade.

MSC eco-labelled skipjack tuna provided by PNA is ready to supply the global markets for sustainably harvested canned tuna, after attaining the long awaited MSC Chain of Custody certification for the catch, processing and supply of sustainable PNA free school skipjack tuna.

As I mentioned earlier, we feel it is important to reward those fleets who are fishing free school tuna sustainably, and who land their catch locally for domestic processing. That’s why PNA has set up Pacifical, an initiative that helps such fleets market their MSC-certified skipjack products at a premium price, promote PNA globally through Pacifical Co branded products, and offer traceability from the tuna can back to the net.

A further PNA initiative is that our processors are working towards SA8000 social accountability certification. This will be yet another first for our region, and highlights the high social standards we already follow (no child labour is used, etc)

The development of domestic landing and processing has a significant multiplier effect for local economies – direct, but also indirect jobs (including can making and cold storage). Revenues from direct and indirect taxes are increased, and food security is improved. We get none of these benefits if we only sell access rights to foreign nations to take our fish away.

Q: How is this initiative progressing?

Already, major US tuna companies have begun to join the global demand to source MSC skipjack from PNA. One issue they have to deal with is the ‘dolphin safe’ label, which is provided for canned tuna by the Earth Island Institute. PNA does not work with that labelling programme, since there are no dolphin mortalities in relation to our MSC-free school skipjack fisheries. Moreover, the MSC logo carried by our skipjack goes further than claiming to protect a single species like dolphin. MSC standards include 100% observer coverage and verification of ecosystem-wide sustainability.

PNA governments are very supportive and proud of attaining the only purse seine skipjack tuna certification globally through MSC. In March this year, PNA ministers issued a formal statement to encourage all fleets operating in the PNA waters to start fishing for free school MSC-certified skipjack. PNG has since gone a step further, and requires, from July 2013, that all vessels fishing in their EEZ should start landing MSC-free school skipjack to be processed in their, or other, canneries working with Pacifical. That is an important step forward. Our region takes pride in its tuna governance and continues to champion sustainability and the participation of its people!

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