A report on the implementation of the RoO ‘global sourcing’ derogation in the Pacific IEPA, commissioned by the EC, has been published. It considers developmental effects on the PNG economy, including on the conservation and sustainable management of fishery resources (including compliance with the SPS regulation), and support for combating IUU fishing in the Western and Central Pacific Ocean (WCPO), as well as the impacts of the RoO derogation on the EU market for canned tuna and EU fishing and canned-tuna processing industries.

The report highlights the fact that the impact on the development of the PNG economy has been ‘negligible’, as there has been little use of the derogation by the canners to date. With the planned development of five new processing plants, the derogation will become more important. However, ‘expansion of onshore processing is currently driven largely by PNG’s National Fisheries Authority (NFA) policy of linking fisheries access to onshore processing, rather than duty-free access to the EU market and global sourcing per se’. Global sourcing will help to achieve economies of scale, so that ‘if and when PNG’s margin of preference (24%) to the EU gradually erodes in light of more favourable trade preferences garnered by PNG’s major competitors (e.g. Thailand, the Philippines), global sourcing will be a contributing factor in sustaining PNG’s processing sector in the future’.

Compliance with EU SPS and IUU Fishing Regulations by fishing vessels and processing plant should not be a major constraint on the sourcing of adequate raw material supplies by PNG’s processing facilities. Rather, the fact that many vessels operating in the region have long-standing supply arrangements with non-PNG trading companies and processors could be the biggest obstacle to sourcing tuna raw material: ‘To combat this issue, PNG will need to consider implementing arrangements which guarantee supply to proposed future plants, such as compulsory offloading being incorporated into vessel licensing conditions’.

However, the study also points out some key challenges: the necessity for PNG to make efforts to ensure that fishing effort level restrictions are fully respected under current fisheries management systems; and the need to address negative social and environmental issues associated with tuna-processing developments.

The study also shows that global derogation is not harming the EU processing sector, or the fishing sector.

Fish Information & Services reports that, in response to these findings, at the occasion of the second EU–Pacific interim EPA Trade Committee, the EC presented the final version of the study to the PNG authorities. The latter outlined the steps already taken and their plans to further strengthen the sustainable management of fish stocks; the review of their domestic labour legislation aimed at bringing it fully into line with the eight core ILO conventions; and the measures already in place and further steps to improve environmental monitoring.