One of the Pacific islands’ biggest and potentially the most lucrative resources is fisheries. We say potentially because the region collectively is yet to leverage the industry to its full commercial advantage. Many extraneous players and countries from outside the region benefit from Pacific fisheries far more than the islands themselves do.
The reasons for this are varied and range from poor infrastructure, lack of economies of scale, muscling in into the region by superpowers and global mega corporations, corruption in ministries and departments dealing with fisheries and maritime resources in the islands and poor policing of illegal fishing, besides many others.
The Pacific islands net only a tiny fraction of the annual revenue the Pacific fisheries industry generates. For instance, the tuna industry alone is estimated to be worth about US$3 billion.
The Pacific islands region collectively receives a tiny fraction of this amount, not to speak of the potential revenue lost because of rampant illegal fishing going on with or without the knowledge of islands governments.
Last month, a meet on Pacific fisheries in Auckland sought to shine the light on the challenges the fisheries and maritime live resources sector faces. Expert presenters also discussed the existing and emerging opportunities that could be tapped to sustainably grow the industry in the region.
The Fisheries Forum 2012, themed Hand in Hand, Investing Beyond Our Shore, brought together industry leaders from across the Pacific islands region and New Zealand to discuss future partnership opportunities.
Speakers at the event discussed many of the problems and challenges that have existed in the region, some of which have been addressed collectively and singly by countries, and others that continue to fester because of a variety of reasons.
Among the problems that have existed and continue to challenge the region are the lack of skilled manpower in tuna fishing and canning; inefficient work habits of local labourers; and the high cost structures in tuna production and processing of canned tuna.
Moreover, fishing vessels tend to be small and combined with the lack of modern equipment compared with foreign competitors, fishing in the territorial waters of most Pacific islands countries by their own vessels offers no economies of scale for Pacific operators. This reduces the commercial efficiency of Pacific fisheries when compared with bigger players because of tiny installed capacities. With the result, profitability is low, impacting on the ability of the indigenous industry to grow.
The cost of doing business is notoriously high in the Pacific islands region. This holds for infrastructure and labour intensive fishing industry as well, putting it at a further disadvantage. Financing costs in the region are higher than elsewhere.
In Tonga, for instance, access to finance is almost impossible, according to a delegate from that country. And business insurance, whenever available that is, comes with extremely high premiums with many businesses operating without adequately being insured. In Tonga, again as in some other islands nations, it is hard if not impossible to obtain insurance for fishing vessels.
Over the years, the region has come up with several initiatives to address the multiple challenges facing the industry including overfishing and the over-exploitation of marine resources, illegal fishing, the establishment of codes of conduct and lists of do’s and don’t’s and, so on. Some of these regimes like the Parties to the Nauru Agreement have been fairly successful. Other regimes have been less effective.
But the elephant in the room is the Asian fishing conglomerates, notably China. This was quite openly aired at the fisheries forum. Tiny, powerless islands governments are quite at the mercy of the Chinese juggernaut when it comes to the exploitation of marine resources in their own sovereign territorial waters.
Unlike powerful western nations like the United States, the small Pacific islands states are unable to offer any resistance or raise their voice to the Chinese authoritiesmoves that can put Pacific fisheries at a severe disadvantage. As can only be expected, the Chinese government heavily subsidises its fishing, particularly the tuna industry.
Subsidies from the Chinese Government to the Chinese tuna industry put Pacific businesses at a severe disadvantage in selling their produce on the world market.
Subsidies help Chinese tuna fisheries bring the price of tuna products substantially lower than the production costs that unsubsidised Pacific businesses have to incur, thereby creating a skewed playing field loaded against local operators.
The United States has fought off such tactics by China in other industry sectors like automobile tyres and other commodities. In recent months, the United States has decided to put up import tariffs against selected Chinese products, much to the chagrin of the Chinese authorities.
While this goes against the grain of free world trade, the United States is left with no alternative but to impose tariffs to protect its own domestic industry against Chinese manufacturers’ low prices, thanks to government subsidies. Pacific islands governments, unlike the United States or other western countries, are powerless to do so.
Also, Pacific labour costs are higher compared to what the Chinese and Korean companies pay their fishermen. This again puts Pacific fisheries at a disadvantage.
Pacific islands governments also seem to drag their feet when it comes to tackling corruption in their own countries. The lack of political will to tackle corruption came up for discussion at the forum.
Last month, the media in the Cook Islands carried stories about an independent body looking into the matter of controversial fishing licences offered to Chinese fishing operators by its Ministry of Marine Resourcessomething that has been raging in the media for many months. Similar stories of suspect deals have been reported from several other Pacific islands countries that smack of cozy relationships between government officials and foreign fishing companies.
The forum speakers also identified the lack of leadership in the Fishing Industry Association. However, a number of opportunities were identified. Among these were access to Asia Pacific markets, especially Japan, Hong Kong and other European countries. Exporting value added products instead of raw tuna to non-Japanese markets was seen as a possible move to bump up revenue for the islands.
Close collaboration of various agencies such as the Pacific Islands Forum Fisheries Agency and the Fishing Industry Association in the Pacific Islands to discuss issues, challenges, and strategic thrusts in the region was also mooted.
2007 Islands Business International