TVM Economic Study: Phase 1 Report MRAG Report Phase 1.pdf · TVM Economic Study: Phase 1 Report...

Enhancing Economic Returns from the

Southern Longline and Other Fisheries

Phase 1 Report

May, 2011

TVM Economic Study: Phase 1 Report

ii

Table of Contents

TABLE OF CONTENTS ................................................................................................................ II

LIST OF FIGURES ....................................................................................................................... III

LIST OF TABLES ......................................................................................................................... III

1. INTRODUCTION .................................................................................................................. 1

1.1 STRUCTURE OF REPORT ............................................................................................................................ 1

2. PHASE 1 ISSUES FOR CONSIDERATION ............................................................................... 2

2.2 REGULATORY FRAMEWORKS IN TVM ..................................................................................................... 2

2.3 CURRENT FISHERIES AND FUTURE PROJECTIONS ................................................................................... 9

2.4 FUTURE MARKET DEMANDS AND ACCESS ............................................................................................. 18

2.5 PAST BUSINESS AND DEVELOPMENT ACTIVITIES IN TVM .................................................................... 20

2.6 CURRENT VALUE CHAIN DYNAMICS ...................................................................................................... 21

2.7 SIMILAR FISHERIES IN OTHER AREAS ........................................................................................................ 22

2.8 OTHER FISHERIES OF INTEREST ............................................................................................................... 27

3. SUMMARY OF COUNTRY CONSULTATIONS ..................................................................... 28

3.2 COOK ISLANDS ......................................................................................................................................... 28

3.3 NEW ZEALAND ........................................................................................................................................ 31

3.4 NIUE ........................................................................................................................................................... 37

3.5 SAMOA ....................................................................................................................................................... 40

3.6 TOKELAU ................................................................................................................................................... 47

3.7 TONGA ...................................................................................................................................................... 49

4. SOME INITIAL CONCLUSIONS ........................................................................................... 54

4.2 OVERALL .................................................................................................................................................... 54

4.3 OTHER CONCLUSIONS ............................................................................................................................ 56

5. OPPORTUNITIES FOR CONSIDERATION IN PHASE 2 ......................................................... 58

ANNEX 1 .................................................................................................................................. 61


iii

List of Figures

FIGURE 1: MAP OF THE TVM REGION. ....................................................................................................................... 1

FIGURE 2: VALUE OF CATCH TAKEN FROM TVM EEZS AT POINT OF FIRST SALE. (DATA SOURCE: SPC) ...... 9

FIGURE 3: PROPORTION OF FOREIGN VERSUS DOMESTIC CATCH IN THE EEZS OF TVM PARTICIPANTS

BETWEEN 2005 AND 2009. (DATA SOURCE: SPC) ............................................................................................... 10

FIGURE 4 CATCHES OF ALB IN THE TVM EEZS IN COMPARISON TO CATCHES WITHIN FFA MEMBER

WATERS AND THE WCPFC REGION. (DATA SOURCE: SPC) .............................................................................. 11

FIGURE 5: CATCH OF ALB BY AREA AND GEAR TYPE (GREY = LONGLINE; ORANGE = TROLL) DURING THE

PERIOD 2000-2009. (SOURCE: HOYLE AND DAVIES, 2009) ................................................................................ 11

FIGURE 6: TOTAL TUNA CATCH WITHIN THE TVM PARTICIPANT EEZS (ALL SPECIES / ALL GEARS). ............. 13

FIGURE 7: TOTAL ALB CATCH WITHIN TVM EEZS .............................................................................................. 13

FIGURE 8: TOTAL YFT CATCH WITHIN TVM EEZS .............................................................................................. 13

FIGURE 9: TOTAL BET CATCH WITHIN TVM EEZS .............................................................................................. 13

FIGURE 10: TUNA CATCH BY TVM-FLAGGED LONGLINE VESSELS BETWEEN 1997 AND 2009. ...................... 14

FIGURE 11: VALUE OF TUNA CATCH BY EEZ. (DATA SOURCE: SPC) ................................................................. 14

FIGURE 12: PROPORTION OF FRESH VS FROZEN ALB REPORTED FROM THE WCPFC AREA BETWEEN 1997

AND 2009. ................................................................................................................................................................... 15

FIGURE 13: TUNA PRODUCTS VALUE LADDER. ....................................................................................................... 18

FIGURE 14: TUNA VALUE LADDER, SHOWING MEANS OF VALUE ADDING. ........................................................ 43

FIGURE 15: TUNA CATCHES IN TONGA‟S EEZ, 1997-2009. (DATA SOURCE: SPC) ........................................ 51

FIGURE 16: GENERALISED TUNA VALUE CHAIN MODEL. ....................................................................................... 54

List of Tables

TABLE 1: PRELIMINARY PROJECTED PERCENTAGE CHANGES IN CATCHES OF SKIPJACK AND BIGEYE TUNA,

RELATIVE TO THE 20 YEAR AVERAGE (1980-2000). (REPRODUCED FROM SPC, 2011) ................................... 16

TABLE 2: PROJECTED PERCENTAGE CHANGES IN THE PRODUCTION OF COASTAL FISHERIES DUE TO

CLIMATE CHANGE. (REPRODUCED FROM SPC, 2011) .......................................................................................... 17

TABLE 3 MONTEREY BAY AQUARIUM (MBA) “SEAFOOD WATCH” .................................................................. 19

TABLE 4: ASSESSMENT OF ALBACORE TUNA “VALUE LADDER” ............................................................................ 20

TABLE 5: SUMMARY OF NEW ZEALAND LONGLINE FISHERIES PRODUCTION. ................................................... 32

TABLE 6: NIUE 2007 FISHERIES PRODUCTION SUMMARY. ..................................................................................... 38

TABLE 7: SAMOA FISHING VESSELS 2007-2010 ....................................................................................................... 40

TABLE 8: SAMOA ANNUAL CATCH BY MAIN SPECIES 2007-2010 ........................................................................ 41

TABLE 9: SAMOA ANNUAL FRESH-CHILLED EXPORTS 2007-2010 ....................................................................... 41

TABLE 10: OVERVIEW OF TONGA‟S CURRENT FISHERIES ...................................................................................... 49

TABLE 11: INITIAL LIST OF OPPORTUNITIES FOR FURTHER ASSESSMENT IN PHASE 2. ........................................ 58


Page 1 of 65

1. Introduction

This report presents the results of Phase 1 of the study Enhancing Economic Returns from the Southern

Longline and Other Fisheries. The TORs for the study are provided at Annex 1.

The main aim of Phase 1 was to generate background information to provide context and supporting

material for the study, as well as identify opportunities for assessment under Phases 2 and 3. Two

approaches were used to generate background information: desktop literature reviews and in

country consultations. For the purposes of the country consultations, site visits were undertaken to

the Cook Islands, New Zealand, Samoa and Tonga. Consultations were also undertaken

opportunistically at regional meetings and other fora. A list of persons consulted is provided in each

of the country reports, as well as in other relevant sections.

Data relevant to the fishery was also provided by the Secretariat of the Pacific Community (SPC).

1.1 Structure of Report

This report is presented in four main sections. Following this introduction, section 2 addresses the

issues highlighted for examination in the Phase 1 TORs and follows the same format.

Section 3 provides a summary of the consultations in each country, including the main issues and

opportunities raised during discussions and implications for later Phases of the project.

Section 4 outlines some initial conclusions from Phase 1 that provide context for the assessment of

opportunities under Phase 2.

Finally, Section 5 provides a draft list of opportunities identified during Phase 1 for assessment in

Phase 2. These are broken down by sector in the supply chain – catching, processing/distribution

and marketing – and are provided to allow TVM participants the opportunity for input/comment

before the project team commences assessments under Phase 2.

Figure 1: Map of the TVM region.


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2. Phase 1 Issues for Consideration

2.2 Regulatory frameworks in TVM

2.2.1 International frameworks

All Te Vaka Moana (TVM) participants are parties to the United Nations Law of the Sea Convention

(UNCLOS), the Agreement for the Implementation of the Provisions of the United Nations

Convention on the Law of the Sea of 10 December 1982 Relating to the Conservation and

Management of Straddling Fish Stocks and Highly Migratory Fish Stocks 1995 (The UN Fish Stocks

Agreement) and the Convention on the Conservation and Management of Highly Migratory Fish

Stocks in the Western and Central Pacific Ocean, 2000 (WCPT Convention).

UNCLOS provides the basic legal framework that regulates all marine sector activities, including: the

utilisation of the resources of the sea, the preservation of the marine environment and relations

among States in so far as marine sector activities are concerned. The stated objective of the UN Fish

Stocks Agreement is “to ensure the long-term conservation and sustainable use of straddling fish

stocks and highly migratory fish stocks through effective implementation of the relevant provisions of

the Convention” (Article 2).

The UN Fish Stocks Agreement provides the basis for the WCPF Convention that aims to ensure,

through effective management, the long-term conservation and sustainable use of highly migratory

fish stocks in the western and central Pacific Ocean. The activities of the Commission (established by

the WCPF Convention) are focused on the high seas, with a requirement for “compatibility” of

arrangements in the high seas and waters under national jurisdiction. Among other things, the

functions of the Commission include establishing limits to fishing for tuna within the Convention

Area.

With respect to longline fishing, catch and effort limits have been set for a number of target species

including bigeye, albacore and swordfish. However, in general, limits applied in all Conservation and

Management Measures (CMMs) do not apply to Small Island Developing States (SIDS) members

undertaking responsible development of their domestic longline fisheries. Under Resolution 2008-

01, bigeye catch limits have been set well above historical catch for SIDS.

As members of the United Nations Food and Agricultural Organization (FAO) as well as WCPFC,

TVM members are obligated to develop and implement the (non-binding) International Plans of

Action (IPOA) instruments relating to: sharks, seabirds and illegal unreported and unregulated fishing

(IUU). In addition WCPFC members have made a commitment to develop and implement a

management plan for sea turtles. All TVM participants have developed National Plans of Action

(NPOA) for IUU. The Cook Islands and New Zealand have developed NPOAs for sharks, seabirds

and the Cook Islands has a sea-turtle mitigation plan based on the FFA regional mitigation plan.

2.2.2 Regional frameworks

As members of FFA, TVM participants have developed a number of fisheries management tools and

strategies for application in their national regimes as part of the common effort to manage shared

fish stocks on a regional basis. These include:


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Harmonized minimum terms and conditions for foreign fishing vessel access (MTCs) which

were first adopted in 1982 and last reviewed in 2010 to support sustainable exploitation by

foreign fishers and to leverage maximum benefits to FFA members from licensing

arrangements;

The Niue Treaty on Cooperation in Fisheries Surveillance and Law Enforcement in the

Pacific Region (Niue Treaty) which provides for joint and reciprocal MCS and provides a

framework for sub-regional activities to monitor and enforce conservation and management

measures;

The Regional Tuna Management and Development Strategy, 2009-2014 (RTMDS) that

establishes a regional framework for national and sub-regional tuna management and

development strategies aimed at ensuring sustainable exploitation of the region‟s tuna

resources and maximizing benefits from that exploitation for the peoples of the Pacific

(chiefly through domestic development). National tuna management and development plans

have been modeled on RTMDS; and

The Regional Monitoring Control and Surveillance Strategy (RMCSS)which establishes a

regional framework for effective MCS built on coordinated and enhanced national

monitoring and enforcement capacity with the backbone of an integrated information

management system. The development of National MCS strategies based on RMCSS is

expected to be initiated 2011.

At present the only participants that license foreign fishing vessels are the Cook Islands and Tokelau.

All countries have however implemented requirements for foreign fishing vessels to be in good

standing on the Regional Register and to be compliant with the Vessel Monitoring System (VMS)

requirements. In general, MTCs have been incorporated into fishing access arrangement and/or

conditions of license. The 2009 MCS audit conducted in the region did note however that the

requirement for pre-fishing inspections was only implemented in Papua New Guinea and that this

MTC could be a powerful mechanism to ensure matters such as vessel markings, authorized gear

(eg. no wire trace), operational ALC and mitigation measures. In 2010, FFC 74 adopted additional

MTCs including a measure for members to legislate the requirement for any unlicensed fishing

vessels that intend to transit a zone to be VMS compliant and to manually report entry and exit.

The Niue Treaty is currently under review and TVM has already developed the Te Vaka Toa

arrangement for consideration as a sub-regional subsidiary arrangement.

2.2.3 National frameworks

In general the national regulatory frameworks of FFA member countries uniformly incorporate the

principles, rights and obligations of the Convention and 1995 Fish Stocks Agreement. In recent years

countries have undertaken legislative reviews to ensure alignment with the WCPF Convention and

since 2009 tuna management plans have been developed in alignment with the RTMDS and the

Ecosystem Approach to Fisheries Management (EAFM) risk assessments completed for each

member country. Tuna management plans are the main mechanism used for regulating the longline

fishery and, as with the RTMDS, are based on two principles: sustainable exploitation and

maximization of benefits.

Cook Islands:

Legislation


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The principal legislation regulating offshore fishing in the Cook Islands is the Marine Resources Act,

2005 and under this Act the Marine Resources (Longline Fishery) Regulations, 2011 have been

enacted. The Act itself is currently being reviewed in order to strengthen enforcement provisions as

well as to cater for recent conservation and management initiatives including the MTC relating to

reporting requirements by unlicensed vessels wishing to enter the EEZ. Also under review is a draft

Distant Water Fishery Plan relating to the management of flag vessels operating beyond national

waters. The other piece of legislation of importance is the Territorial Sea and Exclusive Economic

Zone Act, 1977 that establishes the various maritime zones.

Management Plans

The Marine Resources (Longline Fishery) Regulations, 2011 covers tuna management and has the

force of law. The plan establishes vessel caps at 40 foreign vessels and 10 domestic vessels and

allows flexibility to adjust these caps. A Total Allowable Catch (TAC) has not been stipulated but if

catch should reach 8,000mt (in any one quarter) a review is required and measures such as

time/area closures may be implemented. To encourage domestic development, preferential access is

applied to nationals (including though lower license fees) and incentives are provided to foreign

enterprises to base operations locally and to unload catch in Rarotonga to licensed processing

establishments.

The latest plan continues the policy of Government dealing directly with foreign vessel operators

seeking a license to fish. Until 2008 a system of demise charters was in effect as a way to support the

development of local industry. This model however failed to achieve the desired outcomes and the

demise charter experiment was discontinued from 2008. The current plan instead establishes a

Development Fund for local fishers to draw on for development purposes. The fund is supported

through a levy on all foreign fishing vessel licenses.

Mitigation plans for IUU, seabirds, sharks, turtles are in place in accordance with WCPFC

obligations.

Maritime Boundaries

The Cook Islands shares boundaries with Kiribati, French Polynesia, Niue, American Samoa and

Tokelau. Boundaries with French Polynesia, American Samoa and Tokelau have been formally

agreed.

Niue

Legislation

Offshore longline fishing in Niue is regulated by the Territorial Sea and Exclusive Economic Zone

Act, 1977. The Act applies to all foreign fishing vessels and craft within fishery waters and requires

that all commercial fishing be licensed. The Act allows Cabinet to declare designated fisheries and

direct fisheries officers to prepare and implement management and development plans for these.

Licenses may be issued by Cabinet to the owners of individual vessels and fishing access agreements

can be made with foreign governments and entities. The Domestic Fishing Act, 1995 provides for

the regulation of local fishing vessels


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The Territorial Sea and Exclusive Economic Zone Act, 1977 has been reviewed and an Oceans Bill

developed for consideration. The draft legislation provides for offshore and coastal fisheries

conservation, management and development.

Management Plans

A tuna management plan is currently under draft and at this stage includes the regulation of

commercial longlining, artisanal (pelagic and demersal) fishing, the sport fishery and onshore

processing. The Department of Agriculture, Forest and Fisheries (DAFF) Corporate Plan, 2009-

2013, stipulates that the tuna development plan be aligned with the EAFM outcomes and that MCS

capacity be enhanced. The Corporate Plan also identifies the re-establishment of the Government

joint venture with the Reef Group as a priority. This joint venture agreement aims to fulfill the

fisheries development aspirations of Niue through the establishment of a company to acquire,

process, market, distribute and sell catch taken from the fishery.

Niue has an NPOA-IUU developed in 2008.

Maritime Boundaries

Niue shares maritime boundaries with the Cook Islands, Tonga and American Samoa. The boundary

with American Samoa has been delimited.

Samoa

Legislation

The principal legislation regulating longline fishing in Samoa is the Fisheries Act, 1988. The Act has

been reviewed and the consequent Fisheries Bill, 2010 is being finalized (by the Attorney General‟s

Office) for consideration by the legislature in 2011. The Fisheries Bill covers both offshore and

coastal fisheries conservation, management and development. Other pertinent legislation includes

the Maritime Zones Act that establishes the maritime zones and continental shelf as well as the VMS

Regulations that requires foreign fishing vessels to be VMS compliant in accordance with the MTCs.

Management Plans

The Samoa Tuna Management and Development Plan 2011-2015, has been formally adopted. The

plan has both policy and legally enforceable provisions. The plan establishes five categories of vessel

size limits and reserves the EEZ for the exclusive use of Samoa flag vessels. Vessel numbers are

capped as follows:

Class Vessel Size Cap Zone

A Up to 11 m 100

B From 11m to 12.5m 10

C From 12.5m to 15m 10 Outside 50nm

D From 15m to 20.5m 5 Outside 50nm

E Over 20.5m 5 Outside 50nm

Currently there are no Samoa vessels operating in grounds beyond national waters but sections 17

& 18 of the plan allow for the authorization of category C, D and E vessels to fish on the high seas

or in another EEZ in compliance with WCPFC and the appropriate foreign State requirements.


Page 6 of 65

Development aspirations elaborated in the plan include encouraging private sector led domestic

development through fleet enhancement, value adding and export market expansion as well as joint

ventures with foreign enterprises. Towards this end further research is to be conducted into new

and niche markets, the establishment of a Competent Authority, foreign investment and the

feasibility of establishing a loining plant. A development aim is to increase fish production through

securing access to other EEZs and possibly enhancing the domestic fleet through demise charter

operations utilizing Samoan crew.

Samoa has an NPOA-IUU (2008) that is scheduled for review in 2011. Plans for sharks, seabirds and

turtles have yet to be developed although shark and sea turtle mitigation methods are required

under the tuna plan.

Maritime Boundaries

Samoa shares maritime boundaries with Niue, Tonga, Wallis and Futuna, Tokelau and American

Samoa. Delimitation agreements are in place with the United States in respect of American Samoa

and France in respect of Wallis and Futuna.

Tokelau

Legislation

Key legislation in Tokelau regulating longline fishing is the Territorial Sea and Exclusive Economic

Zone Act, 1977 and the Tokelau (Exclusive Economic Zone) Fishing Regulations, 1988. The

regulations establish the licensing regime for foreign fishing vessels and allows for regional/multi-

lateral licensing as per the treaty on fishing with the United States. Updated fisheries legislation has

been drafted to ensure compliance with international and regional obligations and is now under

review before formal adoption.

Tokelau has an open access fishing license system and currently licenses 10 foreign longliners and 6

foreign purse seine vessels through access arrangements that include license terms and conditions in

line with MTCs. Access fees are stipulated by regulation and these are up-dated periodically by

authorization from the Tokelau Parliament.

Management Plans

A draft Tuna Development and Management Plan covering artisanal, commercial longlining and

onshore processing is under development. This plan is intended to be the instrument through which

WCPFC conservation and management measures are implemented. Main goals of the draft plan

include:

Sustainable development;

Increasing the benefits to Tokelauans from the exploitation of fisheries resources;

Maintaining customary decision-making processes.

The strategies for achieving these objectives include:

Establishing a joint venture arrangement with a reputable fishing company in the region;

Establishing a limited entry regime for foreign fishing vessels;

Exploring sub-regional longline licensing arrangements;


Page 7 of 65

Developing appropriate onshore processing; and

Strengthening MCS.

Tokelau has yet to develop IPOAs.

Maritime Boundaries

Tokelau shares maritime boundaries with the Cook Islands, American Samoa, Wallis and Futuna and

Kiribati. Delimitation agreements have been signed with the Cook Islands, France and USA.

Tonga

Legislation

Tonga's fisheries are managed under the Fisheries Management Act 2004 and associated Regulations.

A Tuna Management Plan exists, although is non-statutory in nature. The other main relevant parts

of the regulatory framework are the Maritime Zone Act 2010, which defines Tonga's EEZ and

applies some UNCLOS provisions, Special Management Orders, which provide for, amongst other

things, 12nm closures around islands, and license conditions, which are broadly in line with the FFA

Minimum Terms and Conditions and updated annually. The main management measure applied is

limited entry licensing. Conditions are also applied to licences depending on the nature of the fishery

and the objective to be achieved - for example, stainless steel trace is banned in the longline fishery

to reduce shark bycatch. Licences are issued annually.

Other relevant legislation includes the Fisheries Management (Processing and Export) Regulations,

2008 covering the licensing of processing plants, food safety standards and fish exports, and the

Fisheries (Vessel Monitoring System) Regulations, 2009 which establishes VMS system requirements

for vessels. Draft Fisheries (Tuna Management and Development) Regulations are currently under

consideration for adoption.

Management Plans

The Tonga National Tuna Fisheries Management and Development Plan, 2010-2014, covers activities

inside the EEZ as well as the activities of flag vessels operating outside the EEZ and presents key

management, development and compliance strategies including plans for future activities. A TAC of

4,000mt and a vessel cap of 50 have been set but it is noted that the TAC has never been reached

and currently 11 vessels are licensed three of which are active. One Tongan longline vessel is

currently licensed to fish in Tokelau.

Development objectives and strategies include:

Securing access to other EEZs;

Expanding the national fleet including through joint ventures and demise charters;

The establishment of a Competent Authority; and

Improving infrastructure including wharf development to support commercial fishing vessels,

investigating the feasibility of a loining plant, establishing a cold storage facility at the airport.

Tonga has an NPOA-IUU (2004) and this is scheduled for review.


Page 8 of 65

New Zealand

New Zealand longline fisheries are managed within the framework of the Fisheries Act 1996 and

under the Western and Central Pacific Fisheries Convention (WCPFC) and the Convention for the

Conservation of Southern Bluefin Tuna (CCSBT). Longline fisheries in New Zealand fall in to two

regulatory categories: those operated under the Quota Management System (QMS) for which

Individual Transferable Quotas (ITQs) have been allocated and those outside of the QMS which can

be harvested commercially by any fisher with a permit issued under section 89 of the Fisheries Act

1996. The latter category includes albacore tuna and skipjack tuna. Fishers are obliged to report

their catch of these two species accurately to the Ministry of Fisheries but there is no catch limit

either individually or in aggregate.

Relevant quota species include big eye tuna, southern bluefin tuna, pacific bluefin tuna, yellowfin tuna

and swordfish. Fishers who catch these species must also report catch accurately but must balance

that catch with Annual Catch Entitlement (ACE) which is the tonnage quota right applying to that

fishstock in that year. If the fisher is unable to balance catch with ACE within the month of harvest,

they must pay a deemed value to Ministry of Fisheries (usually considerably higher than the market

value of ACE). The deemed value payment is returned to the fisherman if they subsequently obtain

the necessary amount of ACE within the fishing year.

New Zealanders, New Zealand flagged vessels or New Zealand registered vessels wishing to fish

outside of the New Zealand EEZ require a permit from the Chief Executive of the Ministry of

Fisheries issued under section 113A of the Fisheries Act 1996. In practice, this regulatory control is

far more stringent than that applying to most other distant water vessel operators.

All fishing vessels in New Zealand must be registered as a New Zealand vessel. Fishing vessels are

either New Zealand flagged or fishing under charter to a New Zealand company. For instance, the

Japanese long line vessels fishing for southern bluefin tuna in New Zealand are under charter to

Solander whilst there. Longline vessels in New Zealand must operate mandatory seabird bycatch

mitigation devices and strategies.

New Zealand has developed IPOAs for IUU, shark and seabirds and deals with sea-turtle mitigation

by regulation. In addition to these plans, an industry code of conduct is in place as a self-regulating

mechanism to support mitigation compliance.

Previous Longline Multilateral Proposal

During the mid-1990s a group of FFA member countries (Cook Islands, Fiji, Niue, Samoa, Solomon

Islands, Tokelau, Tonga and Vanuatu) attempted to negotiate a multi-lateral fishing agreement with

the Taiwan Deep Sea Tuna Boat Owners and Exporters Association (TDSTBEA). All these countries

except Tonga had a history of licensing TDSTBEA longline vessels and saw merit in establishing a

single licensing regime which would be administered by FFA. Two options were proposed: a single

arrangement covering all countries or a header and two sub-regionals (Polynesia and Melanesia).

The goal was to achieve the same level of management and compliance as the US Treaty vessels as

well as to maximize fee levels. Vessels would be required to be VMS compliant and report catch and

effort to FFA as well as accept (regionally certified) observers. The advantage for TDSTBEA would

be that there would be a single fee for multi-zone access (Tonga was to be a party but its waters

would be closed to fishing).


Page 9 of 65

To try and force TDSTBEA into action Cook Islands, Niue, Solomon Islands and Samoa terminated

bilateral arrangements. However, after three years of negotiation, TDSTBEA pulled out of talks and

bilaterals were resumed. In response, the FFA members resolved to cooperate more closely with

respect to bilateral arrangement with Taiwan including through observing one-another‟s access

negotiations, share vessel activity reports and to include in bilateral arrangements measures to

ensure:

accurate and timely reporting

adjacent high seas catch reporting

the banning of at-sea transhipment

VMS compliance (costs)

employment of nationals

training of nationals

joint development projects that are sustainable

Countries also resolved to develop a coordinated longline observer program.

2.3 Current fisheries and future projections

2.3.1 Current fisheries resources and activities

Main fisheries

The main fisheries and fishing activities in each of the TVM participant countries are described in the

country reports (see section 3).

Essentially, fisheries can be divided into oceanic fisheries and coastal (or inshore) fisheries. Oceanic

fisheries are dominated by the longline fishery for tuna (albacore – ALB; yellowfin – YFT; bigeye –

BET) and like species (e.g. broadbill swordfish – SWO). The main bycatch species vary by location

but are typically wahoo, sharks (species), mahi mahi, opah and billfish. A significant troll fishery for

ALB also exists in New Zealand. The value of the catch at first sale for the main target species in

TVM EEZs has remained between US$30-55m during the period 1997-2010 (Figure 2). Catches

from the New Zealand EEZ have contributed between 39-54% of overall catches during the same

period.

Figure 2: Value of catch taken from TVM EEZs at point of first sale. (Data source: SPC)

-

10

20

30

40

50

60

USD

(m

illio

ns)

Value of TVM Oceanic fishery catch

Tonga

Tokelau

Samoa

Niue

New Zealand

Cook Islands


Page 10 of 65

The offshore fisheries of all TVM participants are dominated by domestic fleets, except for the Cook

Islands1 and Tokelau who license foreign fishing vessels (Figure 3).

Figure 3: Proportion of foreign versus domestic catch in the EEZs of TVM participants between 2005 and

2009. (Data source: SPC)

Inshore and coastal fisheries are largely those for:

Demersal fisheries (e.g. deepwater snapper, live reef fish)

Targeted invertebrates (e.g. beche-de-mer)

Inshore pelagics.

Data held by SPC

SPC receives data on oceanic fisheries in TVM countries from a range of sources. The main ones

are:

Catch and effort logsheet data supplied by licensed fishing vessels;

Independent observer data;

Port sampling data, principally catch composition, fish sex and length-weight information.

Additional information is received through fishery-independent work such as tagging experiments.

Price information is also collected from a variety of sources on the main target species and product

variants (fresh/frozen). For example, fresh YFT and BET import prices are collected from Japan

Customs (www.customs.go.jp/index_e.htm), frozen BET prices at selected Japanese ports are

collected from the US National Marine Fisheries Service and Thai frozen albacore, skipjack and

yellowfin import prices are collected from the Thai Customs Department (www.customs.go.th).

Data on coastal and inshore fisheries is dependent on national reporting arrangements, and is

typically held by countries themselves, rather than SPC.

1 Since 2008

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cook Islands

New Zealand

Niue Samoa Tokelau Tonga

Foreign Vs domestic catches - (2005-2009)

Foreign

Domestic

http://www.customs.go.jp/index_e.htm

http://www.customs.go.th/


Page 11 of 65

Main trends

This section outlines some of the main trends in SPC catch and value data of relevance to the

current work. The section focuses on oceanic fisheries – and in particular on the longline fishery –

given its importance to the TVM countries.

TVM countries control only a portion of key regional stocks.

Current catches in TVM EEZs represent only a small proportion of regionally important target

stocks. In perhaps the most important stock to TVM countries – ALB – TVM catches have

represented only between 25-33% of the total catch taken from FFA member waters over the past

five years, and only 5-8% of the total catch in the WCPFC (Figure 4). Significant catches are taken

both to the west (Fiji, Vanuatu, Solomon Is) and the east (French Polynesia) (Figure 5) of the TVM

countries, as well as north of the equator.

Figure 4 Catches of ALB in the TVM EEZs in comparison to catches within FFA member waters and the

WCPFC region. (Data Source: SPC)

Figure 5: Catch of ALB by area and gear type (grey = longline; orange = troll) during the period 2000-2009.

(Source: Hoyle and Davies, 20091)

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

(t)

Regional ALB catches

WCPFC Total FFA Member Total TVM Catch


Page 12 of 65

The fact that TVM control access to only portion of the ALB stock has important implications for its

strategic positioning in the supply and value chain that are discussed in later sections.

Overall catches in TVM EEZs have been stable or declining over the past decade

Overall catches of tuna in the TVM EEZs have been generally stable or declining since 1997 (Figure

6). Catches in New Zealand and Tokelau have seen significant inter-annual variation, while catches

in Tonga and Samoa have generally declined (although the latter has seen some increase since 2005).

Catches in the Cooks have increased in recent years with the reintroduction of foreign fishing in

2008.

Stable or declining catch trends are broadly consistent across the three main target species. ALB

catches have declined across all EEZs except the Cook Is (Figure 7). Despite an overall decline, a

small increase in ALB catch has also occurred in the Samoa EEZ since 2005. YFT and BET catches

have declined slightly over time, albeit from a relatively low base (Figure 8 and Figure 9).


Page 13 of 65

Figure 6: Total tuna catch within the TVM participant EEZs

(all species / all gears).

Figure 7: Total ALB catch within TVM EEZs

Figure 8: Total YFT catch within TVM EEZs

Figure 9: Total BET catch within TVM EEZs

Longline catch has generally declined in the TVM EEZs in the past decade

Longline catch across all species has declined across the majority of TVM EEZs, being most

pronounced in Samoa between 1997 and 2005 (Figure 10). Catches in New Zealand and Tonga

grew from 1997 to the early 2000s before declining thereafter. No significant catches have been

recorded in Tokelau or Niue.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

(t)

Tuna Catch by EEZ (all species/all gears)

Cook Islands New Zealand Niue

Samoa Tokelau Tonga

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

(t)

ALB Catch by EEZ


Samoa Tokelau Tonga

-

200

400

600

800

1,000

1,200

1,400

(t)

YFT Catch by EEZ


Samoa Tokelau Tonga

-

100

200

300

400

500

600

700

(t)

BET Catch by EEZ


Samoa Tokelau Tonga


Page 14 of 65

Figure 10: Tuna catch by TVM-flagged longline vessels between 1997 and 2009.

The value of TVM catch has remained stable over the past decade

Total value at the point of first sale has generally remained stable across TVM EEZs (Figure 11).

Slight reductions have been seen in Tonga and Samoa‟s EEZ, while an overall rise has been seen in

the Cooks EEZ since the early 2000s. Tokelau and New Zealand have seen strong inter-annual

variability in catch value.

Figure 11: Value of tuna catch by EEZ. (Data source: SPC)

There has been a trend from frozen to fresh ALB

The percentage of ALB reported as frozen product has consistently declined from just under 50% in

the late 1990s to just over 10% in 2009. Fresh ALB may be later frozen onshore.

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

(t)

Total LL catch by TVM vessels

Cook Islands

New Zealand

Niue

Samoa

Tokelau

Tonga

-

5

10

15

20

25

30

US$

Mill

ion

s

Value of Catch by EEZ

Cook Islands

New Zealand

Niue

Samoa

Tokelau

Tonga


Page 15 of 65

Figure 12: Proportion of fresh vs frozen ALB reported from the WCPFC area between 1997 and 2009.

2.3.2 Future projections

Oceanic fisheries

Short term (0-10yrs)

Albacore

Anecdotal information from SPC (discussions with Drs Simon Hoyle and Graham Pilling) indicated

the main factors likely to affect availability of ALB in the TVM countries in the near term are (a)

natural seasonal and inter-annual variability in distribution/abundance and (b) total fishing mortality

on the stock, including catches outside the TVM countries.

ALB show a natural seasonal movement pattern with fish moving southwards during the winter

months to feed in the sub-tropical convergence zone (STCZ) at about 400S. Catch rates tend to be

highest in sub-tropical areas in December-January and May-July as fish migrate south during early

summer and north during winter.2 Migration tends to correspond with the movement of the 23-

280C isotherm.

Some El Nino/La Nina impacts exist, although their impact on catches and catch rates are marginal

compared to factors such the catching capability of the individual vessel. In sensitivity analyses for

the 2011 ALB stock assessment, „big picture‟ weather patterns explained approximately 10-15% of

the overall variability in catch rate, while the individual vessel involved (e.g. skipper skill,

technological capability, etc) explained approximately 60%.

The main influence on stockwide abundance of ALB will be total fishing mortality. The draft 2011

ALB stock assessment notes that the recent high levels of catch across the whole south Pacific stock

have continued and biomass estimates have continued to decline (albeit the stock is not subject to

overfishing, nor is it overfished). Declines in overall biomass of the stock will influence abundance

and catch rates in the TVM countries. Highest catches in recent years have been take external to

2 Ibid, Hoyle and Davies (2009)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% Fresh Vs Frozen ALB (WCPFC total)

% Fresh

% Frozen


Page 16 of 65

the TVM countries, most notably in Fiji, Vanuatu, American Samoa and French Polynesia. Catch rates

of DWFN vessels have fallen across all four regions of the ALB assessment.

The fact that catches of ALB external to the TVM participants can have a significant influence on

catch rates inside the TVM region underscores the strategic need for TVM countries to examine

alliances with external countries to exert a higher degree of control over access and management.

Other stocks

The most recent stock assessment for BET concludes that current levels of catch are not sustainable

and that the stock is approaching an overfished state, if it is not already slightly overfished.3 A 29%

reduction in fishing mortality is required to bring catches back to sustainable levels. For YFT, the

most recent assessment estimates that MSY is higher than current levels of catch, although the „core‟

region of the fishery in the western Pacific is considerably more depleted than other regions.4

Availability of these stocks is likely to be driven by the effectiveness of management measures to

constrain effort, as well as inter-annual variation in distribution associated with El Nino/La Nina

patterns.

Long term (25-90 yrs)

The main longer term determinant of oceanic fish stock availability is expected to be global climate

change. SPC has recently undertaken a range of simulations on likely impacts on Pacific fish stocks

from climate change. The assessments have focused on two future timeframes – 2035 and 2100 –

and two emissions scenarios outlined in the 4th Assessment Report of the Intergovernmental Panel

on Climate Change (IPCC) – the B1 (low emissions) scenario and the A2 (high emissions) scenario

(which approximates the current level of global emissions)5.

Simulations to date have focused on the impacts on SKJ and BET. The assessments indicate that

there will be higher catches of SKJ in both the eastern and western Pacific by 2035, however the

increases in the east will be much greater (Table 1). Catches in the TVM countries are expected to

be between 40% and 69% higher than the 20 year (1980-2000) average. However, by 2100 catches

of SKJ in the western part of the Pacific are expected to decline substantially. Catches of BET are

expected to decline from 2035 across the Pacific, including declines in the TVM countries of

between 4% and 18% under the A2 scenario.6

Table 1: Preliminary projected percentage changes in catches of skipjack and bigeye tuna, relative to the 20

year average (1980-2000). (Reproduced from SPC, 20117)

PICT Skipjack Bigeye

B1/A2 - 2035 B1 - 2100 A2 - 2100 B1/A2 - 2035 B1 - 2100 A2 - 2100

Melanesia

Fiji +26 +24 +33 +0.8 +0.7 -1.4

New Caledonia +22 +19 +40 +1.1 +1.2 +6.0

PNG +3 -11 -30 -4.5 -13 -27.9

3 Harley, S.J., Hoyle, S., Wiliams, P., Hampton, J. and Kleiber, P. (2010). Stock assessment of Bigeye tuna in the Western

and Central Pacific Ocean. WCPFC-SC6-2010/SA-WP-04. 4 Langley, A., Harley, S., Hoyle, S., Davies, N., Hampton, J. and Kleiber, P (2009) Stock assessment of yellowfin tuna in the

western and central Pacific Ocean. WCPFC-SC5-2005/SA- WP -03 5 SPC (2011). Assessing the vulnerability of fisheries and aquaculture in the tropical Pacific to climate change – an update.

Information paper to the 7th Heads of Fisheries Meeting. Noumea, New Caledonia. 6 Ibid, SPC (2011) 7 Ibid, SPC (2011)


Page 17 of 65

Solomon Is +3 -5 -15 +0.1 -2.9 -7.3

Vanuatu +18 +15 +26 -3.0 -6.1 -9.7

Micronesia

FSM +14 +5 -16 -3.5 -11.5 -32.5

Guam +16 +10 -8 -6.7 -12.7 -32.7

Kiribati +37 +43 +24 --0.7 -5.4 -16.6

RMI +24 +24 +10 -3.1 -9.6 -26.9

Nauru +25 +20 -1 -1.4 -6.6 -19.5

CNMI +23 +22 +13 -0.3 -4.9 -22.6

Palau +10 +2 -27 -3.9 -11.2 -45.2

Polynesia

American Samoa +41 +48 +58 -5 -8 -18

Cook is +40 +50 +47 -3 -8 -15

French Polynesia +41 +49 +77 -2 -8 -12

Niue nea -5 -8 -15 Pitcairn Is nea -2 -4 -4

Samoa +44 +49 +55 +1 +1 -4.2

Tokelau +61 +69 +63 -3 -6 -16

Tonga +47 +50 +58 -4 -5 -10

Tuvalu +37 +41 +25 +3 +2 -6

Wallis and Futuna +44 +49 +46 +0.4 -0.4 -7

Regional

Total Fishery +19 +12 -7 +0.3 -9 -27

Western fishery* +11 -0.2 -21 -2 -12 -34

Eastern Fishery** +37 +43 +27 +3 -4 -18

nea = no estimate available; * 15°N to 20°S and 130°E to 170°E; ** 15°N to 15°S and 170°E to 150°W

Modelling for ALB and YFT is now underway. The trends for YFT are expected to be similar to SKJ.

Coastal fisheries

Simulations on climate change impacts on coastal stocks – comprising demersal fish, near shore

pelagic fish, invertebrates targeted for expert and invertebrates gleaned from subtidal and intertidal

habitats – have also been undertaken by SPC. Productivity of all four categories is expected to

decline with climate change (Table 2). The projected declines and main impacts are outlined in Table

2.

Table 2: Projected percentage changes in the production of coastal fisheries due to climate change.

(Reproduced from SPC, 20118)

Category 2035 2100 Main effects

B1 A2 B1 A2

Demersal fish -2 to -5% -2 to -5% -20% -20 to -

50%

Habitat loss, and reduced recruitment (due to

increasing temperature and reduced water

movement)

Near shore pelagic fish 0 0 -5 to -

10%

-10 to -

15%

Reduced production of zooplankton in food

webs for non-tuna species

Targeted invertebrates -2 to -5% -2 to -5% -10% -20% Habitat degradation, and declines in aragonite

saturation due to ocean acidification

Shallow subtidal and

intertidal invertebrates

0 0 -5% -10% Declines in aragonite saturation due to ocean

acidification

Total coastal fisheries Negligible Negligible

8 Ibid, SPC (2011)


Page 18 of 65

VA

LU

E

2.4 Future market demands and access

2.4.1 Semi-processed & shelf-stable tuna products

The bulk of the Pacific albacore catch eventually finds its way into shelf-stable tuna products such as

canned tuna and laminated foil pouches. The existing market for canned “white meat” (albacore)

tuna is almost exclusively in North America. This is not likely to change any time soon, though a

small volume of eco-labelled canned albacore is now being distributed to Europe. Although of higher

value than “light meat” tuna, primarily canned from purse seine caught tuna, canned “white meat”

(albacore) tuna is still a commodity that lies lower on the “Value Ladder” than frozen retail products

(Figure 13).

Fresh sashimi

Frozen sashimi

Frozen retail products

Shelf-stable retail products

Semi-processed products

Dressed fish

Whole round fish

Figure 13: Tuna products value ladder.

It is probably not feasible for TVM nations to set-up their own canning facilities, simply because the

volume of albacore tuna is insufficient to justify the investment cost. However, TVM has excellent

indirect access to the US market because of its close proximity to major US tuna processing

facilities in American Samoa and Fiji. There have been some recent changes however, that may be of

advantage to TVM.

Thai Union, the world‟s largest processor of shelf-stable tuna products, recently divested its interest

in their processing plant in American Samoa. Most of the albacore for the Chicken of the Sea (COS)

label in the USA was produced at this facility. It is likely that Thai Union may be interested in

securing a regular supply of albacore, probably in the form of cooked tuna loins to be exported to

their canning facility in Georgia, USA. This would involve moving up the value ladder from selling

whole or dressed fish into intermediate processing of loins intended for canning.

The COS facilities in American Samoa were taken over by Tri-Marine International (TMI). Tri-

Marine has long been a major player in the tuna industry, primarily in fishing and logistics. In recent

years, TMI has become increasingly involved in the processing side of the business, including loins

and canned tuna. TMI has declared that it is their intention to produce high-valued canned and

frozen tuna products at their American Samoa facility. This presumably includes albacore, which

bodes well for TVM.


Page 19 of 65

It may also serve TVM well to expand their horizons beyond American Samoa and sell fish and/or

loins to Southeast Asia. This region, especially Thailand, produces more shelf-stable tuna products

than anywhere else in the world. There are some specialty packers in this region who focus on

albacore tuna. It would make good sense for TVM to explore the possibility of forming strategic

alliances with such processors. Finding labor is a problem for tuna processors, even in Southeast

Asia. Most would be open to the possibility of buying semi-processed loins, because the firmer

muscle texture of albacore makes it better suited to canning from loins than skipjack.

2.4.2 Fresh & frozen retail tuna products

The pinnacle of the tuna value ladder is air freighting fresh sashimi to Japan and elsewhere. This

option is limited within the TVM region for two basic reasons. First, access to air freight is limited to

most SIDS. Second, the demand, hence value, of albacore tuna for sashimi is considerably less, as

compared to bigeye or yellowfin.

The next step down on the value ladder would be frozen sashimi. However, this requires low-

temperature (< -40°C) handing of the fish throughout the handling chain, from the fishing vessel

through the shipping container. The facilities and equipment required to accomplish this simply are

not available to most (all?) TVM nations.

This leaves the processing of frozen tuna products for the export to international retail markets as

the best option open to most TVM nations. Demand for such products is increasing in most

developed nations.

The USA is the largest market for tuna steaks. For this market, the steaks are treated with “tasteless

smoke” (carbon monoxide gas), a component of wood smoke. This process extends the shelf life of

fish products for suppliers and retailers, as it slows the tendency of tuna to discolor or “chocolate”

as it is known within the industry. Treated products to the USA generally have a higher value than

untreated steaks and loins to the EU.

Increasingly however, buyers of such products are limiting their purchases to suppliers who can

demonstrate that the fish have been caught in a sustainable manner. Some major buyers in the USA

indicate this on the package via a colour-code system developed by the Monterey Bay Aquarium

(MBA) “Seafood Watch” or Blue Ocean Institute (Table 3). Both institutions use a green-yellow-

red-not rated system, with green being the best choice and red being the worst.

Table 3 Monterey Bay Aquarium (MBA) “Seafood Watch”

Best Choices Abundant, well-managed and caught or farmed in environmentally friendly ways.

Good

Alternatives Are an option, but there are concerns with how they‟re caught or with the health of

their habitat due to other human impacts.

Avoid For now, these items are overfished or caught in ways that harm other marine life or the

environment.

Unfortunately, Pacific longline caught albacore tuna are rated as red (avoid) because of “the large

quantities of bycatch, including threatened or endangered species such as sea turtles, sharks and

seabirds”. Thus, there is a major challenge ahead regarding the sustainability of the TVM longline

albacore tuna fishery.

http://www.blueocean.org/


Page 20 of 65

The EU market presents similar challenges with the Marine Stewardship Council (MSC) often used

as the standard of sustainability. In addition, many TVM nations have yet to register competent

authorities with the EU. Each country must have two (2) competent authorities.

The first competent authority is to certify compliance of catch details with EU requirements to

prevent, deter and eliminate illegal, unreported and unregulated fishing (IUU). This is usually the Port

Authority or fisheries agency and should be a relatively straight forward matter to establish.

The second competent authority is to ensure that fishery products and processors comply with the

conditions specified in 91/493/EEC. This is likely to involve considerable training and can be a lengthy

and involved process, which will also require that individual processors are certified.

Until such issues have been addressed, sales of retail frozen tuna products will be limited.

Thus, for the short term, it is likely that the bulk of the TVM albacore tuna catch will continue to be

directed into the tuna canning industry, with the production of semi-processed loins as the best

opportunity to add value to the catch (Table 4).

Table 4: Assessment of albacore tuna “value ladder”

Frozen sashimi: limited access to air freight

Frozen sashimi: lack of low-temperature facilities

Frozen retail products: must resolve issues of sustainability & EU requirements

Shelf-Stable retail products: catch volume insufficient to justify investment in canning

facilities

Semi-processed products: excellent access to major processing facilities in the region

Dressed fish: quickest and least expensive way to add value to the catch

Whole round fish: lowest value sales option

In recent years, Viet Nam has developed a lucrative market in Russia for their seafood products.

This possibility is certainly worth investigating. It is a very large market and likely to be less

susceptible to pressure from issues such as sustainability. Other emerging markets should also be

investigated; e.g., Brazil, Argentina, Middle East, Eastern Europe, etc.

2.5 Past business and development activities in TVM

The past business and development activities within individual TVM members are discussed in the

country reports in section 3.


Page 21 of 65

The general lessons learned in country, and the reasons for business success and failure, are broadly

consistent with those outlined by Philipson (2008).9 These included:

Business acumen, managerial skill and corporate governance are critical to the success of

fishing businesses;

State owned and operated enterprises have generally not fared well;

Strategic partnerships are a better approach than formal joint ventures;

Direct foreign investment, which brings with it pre-existing managerial skill and marketing

and supply chain networks, has proven the most effective development approach;

Domestic investment has been hampered by poor managerial skill as well as government

and cultural constraints.

Additional reasons for business success identified during in country consultations were the ability to

adapt to change – essentially a product of managerial skill – and diversification. Many of the

businesses that have been able to remain operating in a difficult fisheries business environment were

those that invested in other sectors of the economy – for example hospitality, agriculture, shipping,

and freight.

2.6 Current value chain dynamics

Current value chain dynamics, including changes in the main costs of doing business in TVM

countries, are discussed the country reports in Section 3.

Interviewees reported that the main operating costs of longline businesses - fuel, bait, ice and freight

– were increasing across the board and were generally higher than regional competitors (e.g. French

Polynesia, Fiji). Additional costs for land-based processors – electricity and water – were also

increasing. Many of the operating costs are directly dependent on the fuel price – electricity is

largely diesel-generated, the production costs of ice depend on the electricity price and freight costs

are linked to fuel costs. One interviewee indicated their electricity costs alone had doubled over

the past 2 years. Labour costs were considered reasonable, though skilled labour was not always

available. Interviewees accepted that trends in operating costs were not likely to change markedly in

the foreseeable future.

TVM participants are at a disadvantage in freight availability and cost in comparison to neighbouring

countries – e.g. Fiji, French Polynesia – which serve as well-established regional transport hubs.

Additional freight costs influence other costs of production given almost all manufactured goods

need to be imported. Additional freight costs are also incurred, for example, through the

requirement to pack extra ice in shipments from locations outside transport hubs given the extra

time to market.

Additional, less obvious but significant costs arise from the absence of a well-developed service

sector in many of the TVM participants (New Zealand notwithstanding). The inability to outsource

service functions (e.g. construction, maintenance, some administrative tasks) at a competitive price

means that TVM fishing and processing businesses are likely forced to carry much of this burden „in

house‟ which brings with it capital and labour costs.

9 Philipson, P. (2008). Lessons learned: a review of success and failures in tuna fisheries development in the Pacific Islands.

A report to FFA, PIF and SPC. 38pp.


Page 22 of 65

The absence of access to capital was also a recurring theme amongst industry participants, largely as

a product of the decline of the fishery since the early 2000s.

2.7 Similar fisheries in other areas

2.7.1 Background to other country initiatives

A number of non-TVM country case study interviews were undertaken to identify various

constraints and initiatives and summary lessons learned. The interviews were undertaken in the

week commencing 9 May by Richard Banks.

Summary points

Market opportunities and initiatives

Western Central Pacific countries French Polynesia and Fiji focus very much on the sale of

fresh albacore fillets (and loins) to Europe (almost exclusively France), North America and

Japan. This is in recognition of the high demand for quality product from these markets, but

also market access is guaranteed by advantageous air freight linkages to the main market

outlets.

Second tier frozen product may be exported via refrigerated containers. The main market

outlet is to Spanish canneries, which reportedly offer higher prices than the plant in Pago

Pago (American Samoa) and Thailand.

French Polynesia, as a territory of France does not incur export duties. Fiji is in the process

of agreeing an Interim Economic Partnership Agreement with the EU, as part of a

multilateral arrangement with Papua New Guinea and the Solomon Is.

Strong markets also exist in Japan and USA (Hawaii and San Francisco) for Bigeye and

yellowfin tuna loins.

Producers, both Fiji and French Polynesia, are seeking to certify their fisheries with the

Marine Stewardship Council (MSC). This is demand driven by retailers in France and USA.

Domestic processors have no great expectations on price premiums, but seek to advance

certification more to promote increased access to markets. Experience from the US

Albacore market has shown a market premium of 32% for MSC Certified product.

Processors are looking to encourage TVM boats to land into French Polynesia and Fiji. This

development is fairly small scale at present, but 2 Cook Island boats are reportedly landing

into French Polynesia, and 2 Tongan boats into Fiji.

Because of the high demand for product, and constraints in sourcing supply from a limited

fleet, one French Polynesia processor has entered into market access partnership with a Fiji

based processor. This allows for filling of orders, when there are specific shortfalls from one

or other supplier.

Market constraints

The main marketing constraint is lack of both sanitary inspection and EU catch certificate

Competent Authorities in the TVM countries. This reduces the opportunities for export of

such products to the USA, or Japan only.

EU market access requirements are quite onerous, requiring catch certificates and

guaranteed traceability.

The distances to European markets (up to 28 hours travel time) require more packaging


Page 23 of 65

The suitability of specific markets is very exchange rate dependent.

French Polynesia, and to a lesser degree, Fiji, have access to input subsidies (fuel, bait and

other inputs – boat and engine parts)

French Polynesia is also looking to evaluate vessel cost efficiencies (propeller design,

changing from freezing to RSW, hull design and cleaning and gear deployment methods) in

order to reduce carbon emissions. Though it is unlikely that this would ever reduce the

emphasis on fuel subsidy.

Vanuatu is seeking to encourage investment into domestic canning allied to tax incentives for

foreign investment

Fisheries management issues

French Polynesia realises the danger of isolation in management decision making. It would

welcome a strategic partnership with TVM countries in developing management decisions

that are responsive to preserving the stock status. It is felt that without a shift in approach

towards joint management decision making, it will be quite hard to promote responsible

fishing practices as a single entity;

French Polynesia has a highly responsive approach to ecosystem orientated policies, and has

banned the catching of most pelagic sharks, but will extend this to include all pelagic sharks

(including the highly prized short finned mako), in the future.

2.7.2 Specific country profiles

French Polynesia10

French Polynesia has a fleet of 68 tuna longliners operating within its EEZ, but extensively fishing

North of 20°S. The territory‟s annual production of albacore is 3,600mt with a bycatch of yellowfin

tuna (350mt) and bigeye tuna (315mt). Other lesser species include blue marlin and wahoo.

Traditionally, most product has been landed either fresh (from 33 boats) or frozen (from 35 boats)

with both accounting for approximately 50% of landings. More recently there has been a change in

emphasis to fresh product, partly because of higher demand, but also because freezers prefer not to

have to steam to more distant grounds. The albacore is largely in the size 18-20 kgs.

Average prices achieved for the main species are market sales from US$ 2,605 (frozen round

albacore) to US$ 8,300/t (fresh albacore loins), US$7,069/t (bigeye) and US $6,560/t (yellowfin).

There are five processing companies producing fresh fillets and loins for export, two of these also

process for sale as frozen product. Exports are valued at US$ 5.9 million.

Approximately 75% of the landed (1,800 t product weight) by longliners is exported, the remainder

is consumed locally. Exports comprise fresh whole (21%), fresh loins (29%), frozen whole (14%),

frozen loins (20%) and smoked (16%).

10 Contacts: Cedric Ponsonnet, Service de Peche ([email protected] )and Jean-françois Virmaux, SARL Pacific

Aquaculture Services ([email protected])


Page 24 of 65

Present market situation identified as Europe (58%), North America (36%), Pacific (6%). Sales to

America comprise almost entirely fresh fish fillets and loins, whereas sales to Europe represent a

mixture of fresh and frozen fillets, loins and whole fish. Market prices for fresh fillets in the European

market are around 40% higher than those from USA.

Present advantages are listed as follows:

Market for albacore is very strong:

France has very high demand for premium fresh albacore fillets (Intermarche being the main

buyer);

In Spain the demand from the canneries results in higher prices than those offered from

Pago Pago – US $ 2,600-$ 3500/t. Demand has increased significantly because of higher levels

of compliance scrutiny on Spanish vessels within Europe;

USA also strong demand for fresh fish fillets.

Excellent access to air freight with daily flights to Paris, Los Angeles and Hawaii. Freight

costs are US$ 2.08/kg to Europe, US$ 0.7 to USA, the price per kg reducing as volumes

increase. There is also a regular flight to Japan (three times/week);

Competitive container rates (for frozen product) – 20ft container US$ 2,600; 40 ft US$

4,800;

French Polynesia, as a French territory does not incur export duties;

Access to domestic competent authority;

Domestic fleet fuel costs are subsidised – paying US$ 0.30/litre, as compared with the

domestic rate of US $1.78/litre;

Good market opportunities exist for Bigeye and Yellowfin tuna in the US – San Francisco,

Japan and Hawaii;

Present constraints identified as:

Insufficient throughput from the domestic fleet to support export market demand

Perception that there are limited opportunities in supplying the canning market e.g. Pago

Pago, which pays a low price for a premium quality product.

Present initiatives include:

Would like to operate as a regional hub, but lack of competent authority for sanitary

controls and EU catch certificate from other potential supplying countries – Cook Is, Samoa

– is a constraint.

Are also developing strategic partnership with a Fiji based processor (Shared access to key

markets). Fiji will have preferential access to European markets through the Interim

Economic Partnership Agreement (IEPA).

Encouraging Cook Is boats to land directly – presently only two, but opportunity limited to

US/Japanese market only (as opposed to Europe) because of a lack of a competent authority

to sanction EU CCs and conduct sanitary verifications in these countries.

Focus on moving to MSC - European and US markets for fresh fillets and loins insisting on

sustainability sourcing. Strong pressure now exerted by French large and smaller scale

retailers, Walmart and Cost Co. Anticipate that it is a necessary step in order to sustain

markets, but only expect fairly marginal premiums 2%-5%;


Page 25 of 65

French Polynesia is presently putting in place a strategic Action Plan, including a management

strategy for longline and other fisheries;

Strategic development initiatives also include an assessment of carbon emissions as a means

to save key input costs on board fishing vessels;

French Polynesia is open minded to discussing joint management and conservation strategies

in the context of strengthening SIDS‟ influence on WCPFC management, especially given

concerns on fishing effort now from Vanuatu and Solomon Is. Officials suspect though that

fishers will be against shared access. They jealously guard against foreign intrusion – e.g. deny

any form of DWFN access (especially from the EU!).

Fiji11

Fiji has a fleet of 117 domestic long liners operating exclusively in its EEZ. Almost all of these vessels

are fresh boats. The annual production of albacore is 7,166 t, with a bycatch of yellowfin tuna (2,564

tonnes) and bigeye tuna (689 tonnes). Other species include blue, black and striped marlins as well

as swordfish.

Average prices achieved for the main species are US$ 7,488/t (albacore), and up to US$ 9,900/t for

the Japanese market. Higher prices are a result of more reddish meat and larger fillet sizes (from

20kg fish).

Present advantages are listed as follows:

Large variety of air freight options with wide bodied jets available with direct connections to

key markets – USA and Japan, with ability to export around 30mt/day. Current freight costs

are US$1.80 to USA, US $ 2.20/kg to Japan.

Favourable fuel concessions – 3% above the duty free rating

Minimum import duty applied to bait supplies (sardines/pilchards from South Africa)

Competent authority with capacity to approve establishments and ensure HACCP

compliance

Reasonably strong business acumen compared with other island nations

Present constraints identified as:

Accessing European markets is not presently that attractive given the high level of

compliance requirements – 5-6 vessels to fill one 25t frozen container requires excessive

documentation

Extra packaging costs to cover 28 hours freight transfer time

Proposed strategic initiatives include:

Fiji going for MSC certification. This will give more market options. No huge expectation on

premium prices.

Other issues are as follows:

11 Contacts: Russel Dunham ([email protected], Fiji Fish Marketing Group Limited): Radihka ([email protected],

Solander Fisheries).

mailto:[email protected]

mailto:[email protected]


Page 26 of 65

Do not see any strategic advantage in linking to TVM. Fiji has more to offer TVM, than TVM

Fiji. Tongan boats (those that are left), benefit from landing into Fiji.

Have no desire for shared access arrangements. Existing access within the EEZ is self

sustaining.

Vanuatu12

The Vanuatu discussions have still to take place. Initial contact was made with the Vanuatu Fisheries

Department.

Some preliminary comments received are as follows:

Vanuatu is focussing on a Joint Venture arrangement with a Taiwanese Company. The focus seeks to

promote domestic processing – with possibly two canning factories to be built. The Joint Ventures

will seek to encourage employment and revenue through spot license fees. Some tax concessions

are expected.

A present constraint is:

Flight accessibility – flights are to Nadi and Australia only, with limited cargo space for direct export

of fresh product.

Present opportunity is:

Vanuatu is quite advanced in developing a Competent Authority – Food Sanitary checks, and

implementation of the EU Catch Certification scheme.

Mauritius13

The Albacore fishery in Mauritius is all small-scale, based on vertical longlines (5 hooks attached to a

buoy) using livebait. Most of the fishing is done in proximity to anchored FADs. Outboard-powered

open boats about 9m long are used. The bait fishery, using castnets, is usually done by a separate

crew.

This fishery has largely diverted fishing effort from the lagoons offshore and the fresh fish is

appreciated in hotels and by local consumers. The fishery produces a bycatch of tuna and tuna-like

species (bigeye, yellowfin, wahoo, dolphinfish). Availability of livebait is likely to be a constraint.

Fishers have access to loans to purchase boats and motors. The fisheries authorities run a training

school as well as setting and maintaining FADs. It is planned to import frozen bait, but this is likely

to be less effective than live fish.

Fishers derive an excellent income, often better than senior government staff. This has permitted

them to break loose from the fishmongers who, previously, owned the boats and motors and

provided loans at usurious rates to the fishermen.

12 Contact: Moses Amos, Vanuatu – 23119 23621; [email protected]

13 Contact: David Ardill; [email protected]


Page 27 of 65

No failures encountered, but government assistance in FAD deployment, loans and training appear

necessary in the absence of private initiatives.

These techniques should be quite easy to transfer.

2.7.3 Other initiatives

There are a number of North American pole & line albacore fisheries and with one troll fishery

(New Zealand) having undergone MSC assessment. The latter is in its final stage of certification. The

former examples have witnessed some fairly substantive gains in albacore price premiums (by 32%14).

It is noteworthy that the product is different to that of Western and Central Pacific Albacore, being

generally smaller in size.

2.8 Other fisheries of interest

Summaries of other fisheries of possible interest are included in the country summaries below.

14 http://www.msc.org/documents/fisheries-factsheets/net-benefits-report/American-Albacore-tuna.pdf


Page 28 of 65

3. Summary of Country Consultations

3.2 Cook Islands

3.2.1 Introduction

The Cook Islands offshore longline fishery and processing capacity includes:

A license cap of 40 foreign and 10 local vessels. If catch should exceed 8,000mt (north of 15

South) at any time, time/area closures can be applied;

Two 15 meter local fresh fish vessels operating close to Rarotonga unloading (broadbill,

mahimahi, albacore, yellowfin, marlin) in Rarotonga mainly for the domestic market and

occasional airfreight fresh fish to USA and Japan. One vessel is owned by Tapi Taio and the

other by Bill Dogerty (Ocean Fresh). Taio runs an inter-island shipping business;

Ocean Fresh Ltd owned and operated by Bill Dogerty, operates one of the longliners based

in Rarotonga and a retail outlet selling fish caught from that vessel. Annual turn-over from

the shop is NZ$1m. Ocean Fresh has also airfreighted fresh fish to Japan and USA and the

last shipment was 2 years ago. Bill also operates one of the main construction companies in

the country and this enables him to ride out any troughs in the fish business;

Blue Pacific Foods Ltd, a food processing operation owned and operated by Jack Cooper and

Chris Douglas, that retails fresh/frozen fish fillets and smoked fish (mainly marlin). Blue

Pacific Foods also does catering for major functions. Fresh fish has been exported in the past

but the last shipment was over a year ago. Jack Cooper operates a bar/restaurant “Trader

Jacks”;

Kai Moana, owned and operated by Tony Armstrong has a retail outlet on Rarotonga where

he sells fillets and “ika mata” (raw fish marinated in lemon/lime juice and mixed in coconut

sauce). Tony is also associated with fishing vessels operating in the northern fishery. He

assists in license processing and in return has the vessels unload by-catch in Rarotonga for

the retail shop. Tony‟s main line of business is freight forwarding;

Smoke Pacific Seafoods Cook Islands Ltd is a newly established fish processing operation

aimed at providing gourmet smoked/dried seafood products (marlin, mahimahi, wahoo and

tuna) to the local market and eventually a variety of products for export. The smoking unit is

capable of producing 15 mt of product per week. The business has been in operation since

November 2010 and supplies product to the local market.

Rarotonga currently has 18 flights a week to Auckland and 1 to Los Angeles. Talks are

underway to have Air Pacific schedule a weekly flight from Nadi.

Cook Islands has 25 vessels on the WCPFC Vessel List some based in Samoa, Fiji and

Vanuatu the bulk operating in and around the Cook Islands. Two flag trawlers targeting

orange roughy operate in the Indian Ocean. Cook Islands has an allocation under interim

measures for the South Pacific Regional Fisheries Management Organization (SPRFMO) to

fish snake mackeral in the Southern Pacific Ocean.

3.2.2 Points from the interviews

The Ministry of Marine Resources:

Has a program to undertake exploratory purse seine fishing as well as bigeye longline fishing

in the north (including high seas) and swordfish fishing in the south (including high seas). Data


Page 29 of 65

will be conducted over three years and a decision on whether or not to develop the

fisheries will be made following analysis and stakeholder consultations;

The tuna management plan has just been approved by Executive Council and includes

increased license fees for foreign vessels along with incentives for these vessels to invest

domestically and unload 20mt of fish per vessel annually at Rarotonga. The intention is for

vessels to work through local processing ventures to supply export markets. The Ministry

considers it possible to export 20mt (freight space is available) per week.

A roundtable discussion between Government and Yuh Yow Fishery Co Ltd,Luen Tai Fishing

Venture Ltd, Distant Water Branch of China Fisheries Association and Tri Marine Group

took place in March 2011. MOUs were signed to affirm the common desire for fisheries

cooperation and partnership development.

o Tri-Marine has taken over PagoPago cannery and will establish a fresh fish processing

facility

o Luen Tai have the US Postal contract to PagoPago and have the capacity to airfreight

fresh fish

Multi-zone access may be of interest. The principle of nobody being worse off would apply.

It should be noted that Cooks already has some of the highest license fees in the region.

3.2.3 Industry Perspective

The two vessel operators based in Rarotonga have been longlining around Rarotonga for 10 years

and believe that with investment in larger vessels (more hooks in the water), the southern fishery

can support a NZ$20m industry. The boom/bust experience in the early 2000s has meant that

access to necessary capital has been impossible. Ocean Fresh has investigated the economics of

having a retail outlet in South Auckland and believes that the break-even point is 7mt per week of

fresh fish. As long as fish supply and quality were sustained, the Auckland outlet is the way to go.

Their competitive edge is selling only fresh fish (not frozen) and Ocean Fresh has developed

customer loyalty because of this. He controls quality from boat to shop to customer and wants it to

stay that way.

Of concern is the lack of focus by Government on trying to develop the fishery in the south. Too

much effort is being put into relations with foreign interests and not enough into increasing the

supply of fish to Rarotonga. One of the problems in Rarotonga though is that people aren‟t

commercially minded and don‟t have the resources to run a business like commercial fishing. Ocean

Fresh for example is backed up by Landholdings Ltd., Taio Fishing is supported by Taio Shipping,

Pacific Blue has Trader Jacks. It takes hard work and dedication to run fishing vessels and processing

facilities. Another issue is that a lot of Cook Islanders don‟t have a high work ethic and don‟t like

going to sea.

Costs of operating are high due to the price of fuel. Electricity consequently is also a high cost. Bait

is also increasing in price (NZ$5/kg). There is no levy on fuel or bait and there are no export taxes.

Airfreight is still pretty reasonable although it runs at about NZ$4.50/kg.

There is a real concern that the Spanish vessels targeting swordfish in the south are destroying the

southern fishery (there has been a noticeable decline in swordfish catch in recent times).

Following the announcement of MOUs with Tri Marine and company, concern has been expressed

about established local enterprises being cut out of business if big companies like LuenTai become


Page 30 of 65

involved in Cook Islands fisheries. At the same time there appear to be advantages in getting into

partnership with that sort of company.

Apart from arrangements with the longliners operating in the north, Kai Moana also buys fish from

certain artisanal fishers (who ensure high quality fish handling). Efforts are being made to cultivate

suppliers of lagoon and pelagic fish from the outer islands. The issues here are fish handling, ice,

freezers, maintenance and spares as well as the need for regular shipping. Mention was also made of

the potential to process and market the meat from the black lip pearl oyster currently being farmed

in the Northern Group for black pearls.

3.2.4 Conservation lobby

The announcement of exploratory fishing plans and the recent signing of MOUs with Tri Marine et

al, sparked off passionate negative responses from various environmental interests. The newspapers,

TV and radio have been busy with letters to the editor, talk-back sessions, documentaries (on

destructive fishing methods including trawling). MMR held a public consultation recently and

presented its proposals on trial fishing (PS, BE, SWO). No local industry representatives turned up

but some artisanal and sports fishing interests did. The majority of participants were

conservationists. From the various interjections it was clear that those present had very little

understanding of the various fisheries, the regional tuna fishing scene or what happens in and around

the Cook Islands EEZ. Even the fact that trawl fishing is not purse seine fishing escaped most. The

consultation may have been useful as an educational exercise if nothing else.

The upshot of the consultation is that the trials will go ahead. The conservationist group TIS has

approached MMR to ensure that they are part of the monitoring component of the trials.

3.2.5 Persons consulted

Josh Mitchell, Director, Offshore Division Ministry of Marine Resources (MMR)

Pamela Maru, Data Manager, MMR

Anthony Jones, Observer Coordinator, MMR (formerly of Ocean Fresh Ltd)

Bill Dogerty, Manager, Ocean Fresh

Chris Douglas, Manager, Blue Pacific Foods Ltd

Tony Armstrong, Manager, Kai Moana/Hawaii Pacific Maritime.

Wez Norris, Director, Fisheries Management Division, Forum Fisheries Agency

Jacqui Evans, Te Ipukariea Society (Conservation)


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3.3 New Zealand

3.3.1 Introduction

This report is a synthesis of feedback comments and observations collected by Tom McClurg from a

series of face to face or telephone conversations with the contacts appended in the week leading up

to 26 April 2011. The purpose of these interviews was to generate an initial overview of the current

nature and extent of New Zealand involvement in the trans-boundary tuna and other longline

fisheries that are the focus of the study. Discussions also touched upon the potential for improved

economic performance from these fisheries and the foreseeable obstacles to that development.

3.3.2 The New Zealand Seafood Sector

The New Zealand EEZ encompasses 4.4 million square kilometres and commercial catch from this

area is approximately 410,000 tonnes (greenweight). Seafood exports in 2009 had a FOB value of

$NZ 1.42 billion excluding aquaculture exports of $NZ 279 million. There are 1,278 commercial

fishing vessels, 1,556 quota owners and direct employment in the commercial fisheries and

aquaculture sectors was 5,680 (full time equivalent jobs)15. Longline fisheries of interest to this study

account for a small proportion of fisheries production (approximately 2.6% of greenweight ).

Furthermore, New Zealand is located at the southern extremity of the natural range for tuna

species and swordfish and their availability is quite variable depending upon oceanic conditions.

3.3.3 Regulatory Frameworks in the New Zealand Exclusive Economic Zone (EEZ)

New Zealand longline fisheries are managed within the framework of the Fisheries Act 1996 and

under the Western and Central Pacific Fisheries Convention (WCPFC) and the Convention for the

Conservation of Southern Bluefin Tuna (CCSBT). These fisheries are also subject to four

Management Plans prepared by the Ministry of Fisheries. These are:

National Fisheries Plan for Highly Migratory Species (HMS) 2010-2015

Operational Management Plan for Large Pelagic Species 2010-2015

Operational Management Plan for Skipjack Tuna 2010-2015

Operational Management Plan for Albacore Tuna 2010-2015

Longline fisheries in New Zealand fall in to two regulatory categories: those operated under the

Quota Management System (QMS) for which Individual Transferable Quotas (ITQs) have been

allocated and those outside of the QMS which can be harvested commercially by any fisher with a

permit issued under section 89 of the Fisheries Act 1996. The latter category includes albacore tuna

ALB (Thunnus alalunga) and skipjack tuna SKJ (Katsuwanis pelamis). Fishers are obliged to report

their catch of these two species accurately to the Ministry of Fisheries but there is no catch limit

either individually or in aggregate.

Relevant quota species include big eye tuna BIG (Thunnus obesus), southern bluefin tuna STN

(Thunnus maccoyii), pacific bluefin tuna TOR (Thunnus orientalis), yellowfin tuna YFN (Thunnus

albacares) and swordfish SWO (Xiphias gladus). Fishers who catch these species must also report

catch accurately but must balance that catch with Annual Catch Entitlement (ACE) which is the

tonnage quota right applying to that fishstock in that year. If the fisher is unable to balance catch

15 Ministry of Fisheries, www.fish.govt.nz


Page 32 of 65

with ACE within the month of harvest, they must pay a deemed value to Ministry of Fisheries

(usually considerably higher than the market value of ACE). The deemed value payment is returned

to the fisherman if they subsequently obtain the necessary amount of ACE within the fishing year.

New Zealanders, New Zealand flagged vessels or New Zealand registered vessels wishing to fish

outside of the New Zealand EEZ require a permit from the Chief Executive of the Ministry of

Fisheries issued under section 113A of the Fisheries Act 1996. In practice, this regulatory control is

far more stringent than that applying to most other distant water vessel operators.

All fishing vessels in New Zealand must be registered as a New Zealand vessel. Fishing vessels are

either New Zealand flagged or fishing under charter to a New Zealand company. For instance, the

Japanese long line vessels fishing for southern bluefin tuna in New Zealand are under charter to

Solander whilst there.

Longline vessels in New Zealand must operate mandatory seabird bycatch mitigation devices and

strategies.

3.3.4 New Zealand Longline Fishery Production

Table 5: Summary of New Zealand longline fisheries production.

Species

ITQ (Year) TACC (T) Catch 09/10

(T)

High

(Year)(T)

Low (Year)(T)

Quota

BIG 04/05 714 237 (00/01) 459 (07/08) 140

STN 93/94 413 500 (09/10) 500 (05/06) 238

SWO 04/05 885 537 (00/01) 1014 (04/05) 320

TOR 04/05 116 16 (03/04) 50 (07/08) 13

YFN 04/05 263 5 (02/03) 169 (09/10) 5

Non Quota

ALB none none 2168 (02/03) 6569 (06/07) 2067

SKJ none none 7141 (06/07) 10762 (01/02) 4127

Total 10,604 19,523 6,910 16

These fisheries are carried out by more or less distinct industry sectors: skipjack, troll albacore, SBT

and swordfish.

Skipjack

Skipjack is not actually a longline fishery in New Zealand. Sanford operates three „super seiners‟ (61

-79m) in the western and central pacific fishery. These also catch skipjack in New Zealand waters

during the summer and account for the largest proportion of the catch above. Talleys operate one

super seiner, primarily in New Zealand waters. In addition, Sanford operates 4 small seiners (25m)

that catch skipjack and other pelagic species such as mackerel and kahawai. Two other seiners in

this class target these species from Tauranga.

16 From The Atlas of Area Codes and TACCs 2010/2011, Clement and Associates Limited, Vickerman Street,

Nelson, New Zealand.


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Troll albacore

The troll albacore fishery has averaged around 3000 tonnes per annum over the last 5 years. The

short summer season for this fishery is highly variable and the main fishing grounds extend down the

west coast of New Zealand from Onehunga to Greymouth. Approximately 50 vessels participate in

this fishery and the core fishing plan for these vessels is not ALB but a wide range of inshore species

taken by trawl, line, net or pot. A good albacore season represents the difference between

economic survival and healthy returns.

Prices to fishermen in this fishery are currently $NZ2.50 per kg. Fish taken by this method are

generally small (less than 5kg) and are preferred to the larger sizes available from, say, Fiji or even

the north-east of New Zealand where albacore are frequently over 10kg. Talleys is the main buyer

of small albacore in New Zealand and these fish are exported to Spain for canning outside of the

main period of landings from the Mediterranean (May onwards). These exports attract a 22% levy

and the implication is that albacore exports from TVM to this market that could avoid this

imposition would be profitable. No information is available on the size of this market opportunity

however.

The New Zealand albacore tuna troll fishery is undergoing MSC certification by Moody Marine Ltd.

The International Seafood Sustainability Foundation (ISSF) objected to this certification. These

objections have been lifted following agreement that the certification is subject to the Regional

Fisheries Management Organisation (RFMO) developing both target and limit reference points for

the wider albacore fishery and also adopting harvest control rules within five years (2016). The

interests of albacore troll fishers are represented by the New Zealand Tuna Management

Association (Peter Ballentyne, President)

Southern bluefin tuna

Southern bluefin tuna catch is dominated by one company (Solander) which charters four large

Japanese longliners for the New Zealand late autumn/early winter season of around three months.

Outside of this period, these vessels fish Japanese CCSBT quota. The last two years have seen

unusually strong catches from the Tasman Sea. The market for STI is Japan and prices (in real terms)

over the last twenty years have gradually reduced by approximately 50%. New Zealand quota can

be taken outside of the New Zealand EEZ, provided it is taken by a New Zealand vessel licensed to

fish in that locality. The balance of STI is taken by the domestic longline fleet while targeting large

tunas and swordfish.

Swordfish

New Zealand had developed a target swordfish fishery of over 1,000 tonnes per annum by the

1990s. The small domestic longliners in this fishery also simultaneously targeted large tunas

(BIG,STN,YFN). However, for reasons never adequately explained, when these species and

swordfish were introduced to the QMS in 2004, different criteria years were used for swordfish to

the associated species. This generated a considerable „surplus‟ of swordfish quota above catch

history, which was tendered by the Government but the net result was that many longliners

dropped out of the fishery rather than buy swordfish quota. Those that remain are stable but the

overall effect has been a significant reduction in SWO catch, especially from the more distant

Kermedec grounds.


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3.3.5 Government Attitude to Project

All officials indicated support for the study and also expressed a willingness to support regulatory

change proposals necessary to implement any recommended courses of action. In particular, this

included a willingness to revisit standard procedures relating to food safety certification and vessel

licensing. This does not guarantee that such changes could be delivered but there is a recognition

that duplication of administrative and compliance costs is detrimental or even fatal to sustainable

commercial joint ventures in the sector.

3.3.6 Successful Models

The nearest thing to a successful regional model is provided by the Solander operation in Fiji. This

comprises 11 Fijian owned long line vessels, employs 400 personnel including local senior

management who are Fijian nationals and owns and operates a slipway engineering support business.

Factors underpinning this success include:

Local engineering services, port services and a fishing training school (7-8 engineering cadets

per year).

Motivated and capable local fishermen.

Ability to use offshore expertise when required (approximately half of the senior engineers

are Indonesian.

Management support from Nelson in vessel maintenance planning, stores maintenance,

financial and commercial management.

Access to long term Solander market relationships (supports movement of supply even

during sluggish markets).

Twice weekly airfreight of chilled fish Nadi –Auckland.

Economies of scale (freight rates are considerably lower for individual consignments over 1

tonne).

Fiji has preferred supplier status into the EU and food safety certification has just been

approved.

Many of these factors are not replicable outside of New Zealand within the TVM group.

3.3.7 Unsuccessful Models

There are several:

Tonga. Only two long liners currently operating. Approximately 12 long liners tied up and

unserviceable.

Niue. Reef Fishing onshore operation unsuccessful. Operation by Reef Fishing of the newly

purchased Daniel Solander as a mother ship has also been halted. It is not necessarily the

case that the concept was flawed but the vessel is aged and has a high maintenance

requirement.

Cook Islands. Chilled fishing ventures by Hawkes Bay Seafood and Sealord Group failed.

(The surviving Cook Islands and Samoan fishers are supplying frozen fish to Pago Pago). This

can work with very low overhead businesses but does not obtain good prices for species

not specifically demanded by the cannery.


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3.3.8 General Observations

From a New Zealand perspective, there is some confusion about whether this TVM initiative is

intended to be an exercise in aid or commerce. If „commerce‟, then any joint venture fishing across

TVM EEZs needs to recognise the existence of ITQ in some species and seek to involve the New

Zealand owners of that quota in any discussions from the outset. Failure to do so will create

unneeded suspicion within the industry. Many New Zealand fishers are already concerned about the

implications for them of an „aid‟ initiative that they see will subsidise operation of regional

competitors in shared fisheries where they are struggling to achieve reasonable rates of return

already. Preliminary investigations suggest that successful collective commercial initiatives may

involve groups of parties that are either smaller of larger than the complete TVM group. For

instance, a swordfish focussed initiative might only affect a southern groups (say New Zealand,

Tonag and Cook Islands) whereas an effective albacore fishery programme would logically include

Fiji, Vanuatu and probably French Polynesia.

3.3.9 Possible Opportunities for Further Investigation

The commercial opportunities in the TVM appear to be relatively modest and marginal in nature.

The primary species opportunities at present are:

Albacore. Small albacore from New Zealand are commanding a sufficient price that they can

be sold in the EU after paying the EU tariff.

Swordfish (and bycatch). The Kermedec fishery in New Zealand is probably underutilised

and there is strong DWFN fishing of this stock west and north of this area by European,

Taiwanese and Korean vessels. There is a swordfish catching opportunity from the north of

the New Zealand EEZ to south of the Fijian EEZ.

For these theoretical commercial opportunities to be realised several critical success factors must be

simultaneously present:

1. The proper vessel(s) selected and fishing gear in good condition

2. Adequate funding (modest debt levels)

3. Established market expertise and relationships

4. High standards of ongoing operational management, equipment maintenance and personnel

training

5. Excellent support services especially logistics, engineering, finance and administration

6. Low regulatory and compliance overheads

7. Free market access and associated food safety certification (low tariff and non-tariff barriers

to products).

3.3.10 People consulted

Government

Ministry of Fisheries

Arthur Hore

Fisheries Manager HMS/Pelagic

Ministry of Foreign Affairs and Trade

David Mar,

New Zealand Food Safety Authority

Chris Kembell

Industry

Solander Maritime Limited

Charles Hufflett, Managing Director

New Zealand Seafood Industry Council

Alastair Macfarlane


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Peter Ballentyne

General Manager Trade & Information

Bruce Chapman

Principal Advisor Fisheries Management

Sanford Limited

Vaughan Wilkinson

Moana Pacific Limited

Jason Ashford

Market Manager – Export

Talleys Limited

Doug Saunders-Loder

Others

Pacific Islands Trade and Investment

Commission

Chris Cocker, Trade Commissioner


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3.4 Niue

3.4.1 Introduction

This country summary is based on discussions with Niue Head of Fisheries, James Tafatu, Peter

Phillipson, FFA and Industry representative Graham Marsh as well as recent studies relating to

foreign fishing activity and Niue Fish Processing Ltd., the Niue Government Joint Venture with the

Reef Group. Although a visit to Niue was initially agreed this had to be called off due to national

elections, cultural events and the various regional meetings that took place in April/May.

3.4.2 Regulatory Arrangements

Offshore longline fishing in Niue is regulated by the Territorial Sea and Exclusive Economic Zone

Act, 1977. The Act applies to all foreign fishing vessels and craft within fishery waters and requires

that all commercial fishing be licensed. The Act allows Cabinet to declare designated fisheries and

direct fisheries officers to prepare and implement management and development plans for these.

Licenses may be issued by Cabinet to the owners of individual vessels and fishing access agreements

can be made with foreign governments and entities. The Domestic Fishing Act, 1995 provides for

the regulation of local fishing vessels

The Territorial Sea and Exclusive Economic Zone Act, 1977 has been reviewed and an Oceans Bill

developed for consideration. The draft legislation provides for offshore and coastal fisheries

conservation, management and development.

A tuna management plan is currently under draft and at this stage includes the regulation of

commercial longlining, artisanal (pelagic and demersal) fishing, the sport fishery and onshore

processing. The Department of Agriculture, Forest and Fisheries (DAFF) Corporate Plan, 2009-

2013, stipulates that the tuna development plan be aligned with the EAFM outcomes and that MCS

capacity be enhanced.

Currently Niue has an open access policy with respect to fishing vessels and has an indicative TAC

of 4,000mt. From 2004 to 2009 Government policy focussed on the joint venture with Reef Group

with the establishment of Niue Fish Processors Ltd (NFPL) to acquire, process, market, distribute

and sell catch taken from the fishery. In order to supply the 6,000mt capacity processing plant

associated with the joint venture, only Reef Group vessels were licensed to fish. Since the moth-

balling of the processing plant and up until mid-2010, foreign longline vessels targeting albacore, were

once again allowed access.

Niue shares maritime boundaries with the Cook Islands, Tonga and American Samoa. The boundary

with American Samoa has been delimited.

3.4.3 Offshore Fisheries

Niue‟s fisheries are primarily oriented to subsistence, but there is some small-scale commercial

fishing and sporadic offshore industrial-scale fishing. The 2007 production can be summarized as:


Page 38 of 65

Table 6: Niue 2007 fisheries production summary.

Coastal

Commercial

Coastal

Subsistence

Offshore

Locally-Based

Offshore

Foreign-Based17

Volume of Production

(metric tonnes)

10 140 640 0

Value of production

(USD) 58 824 617 647 1 844 118 0

Source: Gillett (2009)

Currently only the domestic longline vessel Monuina (9.5m) is actively fishing. In 2010, Niue licensed

4 Cook Islands flag longliners as part of the joint venture operation and up to 10 Vanuatu longliners

that were foreign based. Catch and effort information for the Vanuatu longliners has yet to be

submitted.

Unpublished data from Customs Niue indicates that fish exports were 88.5 tonnes in 2005, 403.6

tonnes in 2006, and 602.2 tonnes in 2007. The provisional 2007 export data suggests that fishery

exports made up over 90% of the value all exports in that year. With the closing of the processing

and associated longline fishing activity in December 2007, this level of fish exports has fallen

considerably.

3.4.4 NPFL

In 2004, the Government of Niue, in joint venture with NZ company, Reef Group, developed a

fisheries industry with a large “state-of-the-art” fish processing factory at Amanau - Alofi South. The

operational NFPL/Reef Fishing strategy involved:

Targeting sashimi tunas stored chilled on board the catcher vessel and landed to NFPL fresh

for air freight to sashimi markets;

Reef Fishing owned and operated the long line vessels supplying NFPL. The vessels were

Cook Islands flag and also operating in the Cook Islands from 2008;

Albacore was frozen and shipped by reefer container to PagoPago via Auckland; and

By catch was loined and frozen for sale to export markets.

In 2008 NFPL effectively ceased due to a variety of problems including the difficulty and unreliability

of unloading fish at the Alofi wharf. The tuna processing facility has been mothballed, with some of

the plant and equipment stripped and sold. Other factors working against NPFL included:

A strategy based on sashimi quality fish;

Limited commercial air freight space and high cost Reef airfreight operation;

Supply problems. The aim of NFPL was to process at least 3,000mt of sashimi grade tuna

annually and in order to do this it was estimated 15-20 vessels would be required. At most 6

17 Licensing of foreign longline vessels ceased in 2004.


Page 39 of 65

vessels were operating to supply the plant at any one time resulting in supply peaking at

around 1,000mt; and

High fuel costs and consequent high cost of operating the processing plant and fishing

vessels.

3.4.5 Recent Developments

The NFPL processing plant has been moth-balled since 2008 and the Reef Group has since sold its

fishing vessels. In a bid to revitalize operations, the Government has been considering options for

the development of the wharf to better cater for fishing vessels of around 25 meters as well as the

smaller artisanal craft. In addition, interest has been shown from a reputable fishing operator in

reactivating the processing facility but this would have to be packaged with fishing access to other

fishing grounds in the area (access to other TVM EEZs).

The main trends in the sector include:

A decreasing subsistence catch with the declining population;

The rise and fall of locally-based longliners and tuna processing;

Maintaining an active fish aggregation device (FAD) deployment programme;

A decline in the frequency of air service to the island, impacting on the exports of fish and

the imports of tourists, many of which come for recreational fishing and diving; and

Increasing attention to the use of fisheries management plans and to the ecosystem approach

to fisheries management.

3.4.6 Development Issues

Some of the major issues in the fisheries sector are:

Niue is a high cost location from which to operate longline vessels;

Labour is scarce and expensive; and

Infrequent and costly air cargo constrains export opportunities.

Although it is recognized that wharf infrastructure constrains some opportunities, there is

reluctance to spend money on this upgrading – which could be wiped out in a cyclone.


James Tafatu

Head of Section

Fisheries Division

Graham Marsh

Industry Representative

Peter Philipson

Regional Economic Investment Facility (REIF)

Forum Fisheries Agency


Page 40 of 65

3.5 Samoa

3.5.1 Introduction

This country summary is based on a site visit to Samoa undertaken by Christopher Lord between

24th and 29th April, 2011. Meetings were arranged by the Fisheries Division of the Ministry of

Agriculture and Fisheries (MAF) with interested stakeholders including relevant Ministries and

industry representatives. A list of people consulted is included at Annex I.

3.5.2 Management

Samoa‟s fisheries are managed under the Fisheries Act 1988, which is scheduled to be repealed this

year and replaced by the Fisheries Management Act 2011.

A new non-statutory Tuna Management and Development Plan 2011-2015 (TMDP) was also recently

published. This plan is the result of a “stakeholder consultative process that engaged the tuna

industry, government organizations, non- government organizations, regional organizations such as

FFA and SPC, the Commercial Fisheries Management and Advisory Committee (CF-MAC) and the

Fisheries Division of the Ministry of Agriculture and Fisheries”.

“This plan describes the intent of the Government of Samoa over the five (5) year period of 2011 to

2015 with regard to the development and management of the long term economic and social

benefits derived from the utilization of the resource for the people of Samoa”.

“The plan generally covers two main areas:

The management of the tuna resources of Samoa, particularly the licensing arrangements for

the domestic longline fishery; and

The future development of the tuna industry in Samoa to sustain and maximize the

economic benefits and participation of Samoans in the fishery”.

3.5.3 Current Status

The number of vessels fishing in Samoa is summarized below:

Table 7: Samoa fishing vessels 2007-2010

Year Class A

≤ 11m

Class B

> 11m & ≤

12.5m

Class C

> 12.5m & ≤

15m

Classes D & E

> 15m (20m)

2007 43 1 2 14

2008 25 1 2 13

2009 30 2 2 11

2010 28 2 3 10

TMDP

2011-2015 unlimited 10 10 12/5


Page 41 of 65

As detailed in the TMDP, the focus of the MAF is clearly on the development of the tuna industry in

Samoa, in particular the domestic longline fishery. This is validated by the fact that Samoa has no

access agreements with foreign vessels.

The domestic fleet is divided into two sectors: individually owned alia vessels, less than 15m in

length, and commercial fishing companies who operate relatively large Class D & E vessels (>15m).

The commercial longline fishery operates all year round and accounts for the bulk of the catch. The

alia vessels switch gear and fishing methods according to the season.

During Albacore season (Apr-Oct), they longline. The fish they catch are dressed as G&G onboard

the fishing vessel, air blast frozen onshore and then sold to StarKist in American Samoa for tuna

canning. The alia fishermen must sell thru one of the commercial groups, usually Apia Export Fish

Packers, as they have no freezing or storage facilities and, as an association, do not have the legal

right to import/export.

By-catch, primarily yellowfin and bigeye tuna, as well as mahi mahi and wahoo, is sold in the local fish

market, at quite attractive prices, in the range of USD 5.00 to USD 7.50 per kg. Thus, the typical

business model for an alia fisherman is to cover costs with the sales of Albacore, but make money

on the by-catch.

In the off season, most alia fishermen troll and bottom-fish. They catch a variety of snapper and

other fish that also fetch good prices in the local fish market and from hotels/restaurants.

Table 8: Samoa annual catch by main species 2007-2010

Year ALB YF BE Other Total CPUE

2007 3,114 305 101 237 3,755 58

2008 2,343 317 106 212 2,977 54

2009 2,816 410 90 287 3,602 55

2010 2,527 355 242 235 3,359 45

About 100 tons of fresh bigeye and yellowfin tuna were air freighted last year, primarily to LAX. This

total has been declining, and is likely to decline further this year with the closure of Air New

Zealand‟s AUK-APW-LAX route.

Table 9: Samoa annual fresh-chilled exports 2007-2010

Year Tons Pct of Total

Catch Value (WST)

2007 176 4.7% $2,322,476

2008 125 4.2% $1,739,625

2009 122 3.4% $1,683,828

2010 100 3.0% $1,396,137


Page 42 of 65

3.5.4 Future Opportunities / Harvest

The offshore fishery in Samoa does not offer a lot of new opportunities. No access is allowed for

foreign vessels (DWFN), so there is no potential for earning thru licensing fees. The number of

domestic vessels is stable or declining. The EEZ is small and fishing tends to be focused around

FADs, so problems with entangled lines and gear sabotage have already been encountered.

Cetacean depredation

One point that stands out is cetacean depredation. Although losses due to cetacean depredation are

considered as a “high-risk issue in the EFAM process, significant catch loss as a result of either

depredation of hooked tuna by whales or theft of bait by dolphins” is a problem. Samoa MAF

statistics indicate that this loss is in the range of 16% of the total catch, which equates to about WST

3.0 million per year (USD 1.4 million).

Fisheries Division is working with license holders to collect better information of the prevalence of

depredation, which has already resulted in an impressive collection of photos. A project is planned

for later this year to trial gear that releases a bundle of spaghetti-like filaments when a fish is hooked,

in an effort to deter whales and dolphins by taking advantage of their natural fear of entanglement.

Alia Fishermen Association

The Alia Fishermen Association (AFA) in Samoa suffers a variety of problems. When authority over

the fishing port was transferred from MAF to the Samoa Port Authority (SPA), docking facilities

allocated to alia fishermen were reassigned to commercial fishing companies, relegating AFA to less

convenient facilities at the far end of the port. Now, even these facilities are under threat as a new

company Samoa Fish Export has applied for space. This may leave AFA with no landing facilities at all.

In addition, ice-making equipment allocated by MAF to AFA has been inoperable for nearly 18

months. As an association, AFA does not have the legal right to buy their own gear, bait, etc. In the

end, ice, bait and gear are purchased thru Apia Export Fish Packers, who of course adds on a

handsome margin. With no freezing or storage facilities, AFA also must sell their fish to the

commercial groups, primarily AEFP, at lower prices than they could fetch by exporting directly.

In short, the Alia Fishermen Association in Samoa is desperate need of assistance. They require:

Organizational assistance with the structure of their association;

Legal assistance establishing the right to their fair share of the facilities at the port;

Financial assistance to procure required equipment; e.g., ice-makers, freezers and cold

storage.

Management assistance to establish a business arm of the association that can import gear,

bait, etc., and export fish directly to overseas markets.

The “heart” of the Fisheries Division is with the Alia Fishermen, but the authority and the

resources to truly help them are lacking.

Sailing alia

One project that is included in the Tuna Management and Development Plan 2011-2015 (TMDP

Project 7) is the development of a sailing alia. The objective of this project is “to design a sailing

system that will enable alia to sail to the wind without added mechanical propulsion while being light

and unencumbered”.


Page 43 of 65

While it may be unrealistic to have an effective fishing alia with only sail power, it would seem to

make good sense to have a hybrid vessel that could save fuel costs by sailing to/from the fishing

grounds, while using the engine only when required to set/haul gear.

3.5.5 Future Opportunities / Post-Harvest

Post-harvest opportunities in the Samoa longline fishery can best illustrated with a “value ladder”

(Figure 14). At the bottom of the ladder is selling whole-round fish. At the top is air freighting fresh

fish to Japan for sashimi. In between, increasingly complex levels of dressing and/or processing, add

value:

Figure 14: Tuna value ladder, showing means of value adding.

Dress frozen tuna intended for canning

Nearly all Albacore exported from Samoa to the tuna canners in American Samoa are shipped

whole-round or G&G (gilled-and-gutted). Dressing the fish further would save costs and could be

implemented immediately without the need for capital investment.

Two possibilities are “HGT” (head off, gutted and tail off) and “quarter loining” (removing the four

loins from the frame prior to freezing). Either would have the effect of significantly reducing freezing

and shipping costs, as unwanted parts such as heads, fins, guts and frames (backbones) would have

been previously removed.

The only requirement would be to negotiate the pricing formula with the buyers in American Samoa.

For example, the price of quarter loins might be calculated by dividing the whole-round fish price by

60%. The precedent has already been established as such a formula has already been agreed for

G&G.

Level 1

Processed Tuna for Frozen & Fresh Products

Increases value by processing fish into ready-to-eat frozen & fresh products

Highest value option

Level 2

Semi-Processed Tuna for Canning

Increases value by adding intermediate processing costs to products intended for canning

Level 3

Dressed Tuna

Increases value by reducing freezing & shipping weight/cost

Lowest value option

Fresh/frozen(e.g., steaks)

Fresh sashimi(air freight)

Canned tunaFrozen cooked

tuna loinsFrozen rawtuna loins

Quarter loinsDressed tuna

(e.g., G&G, HGT)Whole round fish

Frozen sashimi


Page 44 of 65

Process frozen tuna loins for canning

Intermediate processing of tuna into loins is of interest to the buyers because the labor-intensive

steps of the process would be concluded in Samoa.

The simplest form of loining would be to hang the fish, strip the skin, remove the loins from the

frame and then remove the red meat from the loins. These raw loins could then be individually

frozen on a plate freezer or packed into plastic tubes and frozen in a plate or air-blast freezer. The

frozen loins could then be packed in woven PP sacks or in cardboard cartons.

Producing cooked loins is more complex and would require capital investment in boiler, cooker(s),

trolleys and trays. Cooking also produces a wastewater fraction that would require disposal or

treatment. These are relatively minor concerns however, considering the small volume to be

processed.

A price formula, plus a processing fee, would have to be agreed with the buyer. For example, a

common price formula for frozen cooked skipjack (SKJ) tuna loins is: WR price x 40% + $500

process fee.

Process canned tuna & "atule" for domestic sale

The introduction of cooked tuna loin processing would result in cooked tuna by-products, fine flakes

or shredded and red meat. In the Solomon Islands, these two materials are combined and canned

with oil, chili or soy sauce. The finished canned product is marketed as “Solomon Blue”. It is very

popular and sells at attractive prices.

Adding a small canning line to the processing plant mentioned above would open up the possibility of

producing such a product in Samoa.

The retail price of canned fish in Samoa is quite high. One 185g can of tuna costs about WST 4.50

(USD 2.00), while the cost of a tall 400g can of pilchards or sardines is about WST 4.00 (USD 1.75).

It should be quite feasible to produce a “Samoan Blue” canned tuna product well below that price

level. The projected production from such a line and the size of the market appear to be a good

match.

Another possibility would be a follow-up to TMDP Project 6. The objective of this project is to

“assess the development of a sustainable fishing technique for the capture of Selar and Decapterus

species in Samoan Waters”.

These species are commonly canned as mackerel in Southeast Asia. If this project is successful, it

creates the possibility of canning mackerel in Samoa as well. Once again, it should be quite feasible to

produce a domestic canned mackerel product well below the retail price of imported pilchards and

sardines.

This project may also have additional benefits including contributing to enhanced food security and

improved health of Samoans by providing low-cost sources of protein to the domestic market.

Process value-added frozen products for export

With access to air freight diminishing and a limited market for local fish sales, processing frozen tuna

products (e.g., steaks) for export may be represent the best post-harvest opportunity for Samoa.

Fisheries Division addresses this point in TMDP Project 3 “Promoting Value-Added Tuna Processing”.


Page 45 of 65

The first step would be constructing a small processing plant for this purpose. It should include a

receiving area, processing room, ice-making equipment, air blast and plate freezers, cold storage

rooms and a packaging/loading area. Considerable technical assistance will be required to train staff

to produce products in compliance with international quality and safety standards. Assistance with

marketing and sales will also be a requirement.

One possibility would be forming a strategic partnership with a company such as Hawaii

International Seafood (HIS). Bill Kowalski, an owner of Hawaii International Seafood, has developed a

US FDA approved process to treat tuna with carbon monoxide gas, a component of wood smoke.

This process extends the shelf life of fish products for suppliers and retailers, as it slows the

discoloring process.

Hawaii International Seafood has reached agreements with some processors in Southeast Asia to

install the equipment required for treatment, supply the gas and train staff, in exchange for the

marketing rights to the products they produce.

This would be a relatively quick way to get started, that resolves issues with equipment, training and

marketing, and would have a good chance of success.

Beverly Levi (Tradewinds) expressed interest in financing such a project, as long as technical training

of staff is included.


Page 46 of 65

3.5.6 Annex I / Contacts

Ministry of Agriculture and Fisheries / Fisheries Division

Atonio P. Mulipola, Assistant Chief Executive Officer

Phone: +685 20369 ext. 112

Ueta Junior Faasili, Principal Fisheries Officer

Offshore

Phone: +685 22624

Lucille Aukusitino, Fisheries Officer

Phone: +685 20369 ext. 122

Ministry of Agriculture and Fisheries / Policy, Planning & Communication Division

Peseta Frank Fong

Assistant Chief Executive Officer

Phone: +685 28097

Jasmine Sila

Principal Officer

Phone: +685 22561

Ministry of Commerce & Labor / Industry & Investment Division

Pulotu Lyndon Chu Ling

Mobile: +685 759 7752

Toefuataina Faagai

Assistant Investment Promotion Officer

Commercial Sector / Alia Fishermen Association

Eteuati Eteuati

President

Phone: +685 751 8301

Tosia Leau

Phone: +685 751 8596

Commercial Sector / Tradewinds Fishing Company Limited

Beverley Levi

Managing Director

Phone: +685 20088 / 26034


Page 47 of 65

3.6 Tokelau

3.6.1 Introduction

Consultations with Tokelau officials were undertaken by Chris Lord during his visit to Apia between

26th and 29th April. This section provides a summary based on those discussions, as well as

additional background information (e.g. Tokelau annual reports to the WCPFC SC).

Additional consultations will be undertaken in Tokelau during Phase 2 of the study.

3.6.2 Overview of Tokelau’s fisheries

The following overview is taken largely from Tokelau‟s most recent Annual report to the WCPFC

Scientific Committee18.

Tokelau‟s fisheries essentially comprise two components: the domestic artisanal fleet and the foreign

purse seine and longline fleet. The domestic fleet comprises “small aluminium boats/dingies ranging

from 12 – 16 ft in length with power outputs ranging from 15 – 30hp outboard motors”. These

vessels use troll and handlines and target skipjack and YFT for the domestic market. All artisinal

fishing activity occurs within 4nm from shore. Some fishing is undertaken around FADs.

In recent years the foreign fleet has comprised a mix of New Zealand purse seiners, US purse

seiners operating under the US Multi-lateral Treaty (USMLT) and a small number of Chinese Taipei,

US and Vanuatu flagged longline vessels. Currently twelve (12) vessels have been granted access,

with license fees in the range of USD 10,000 to USD 15,000 per vessel. Despite these licensing

agreements, activity in this sector has been very low with a reported high catch of just 15t in 2005.

Catch and effort have fluctuated substantially in the purse seine fleet over the past decade. Catches

by the US fleet have varied from a high of 5,983t (primarily SKJ) to a low of 62t during the period

2002-2009. In 2010, income from the US purse seine fleet was only about USD 2,500. Because of the

relatively low return from their licensing agreements, Tokelau is very interested to learn whether

the value of their longline fishery might be enhanced by a vessel day scheme (VDS), similar to the

one PNA has implemented for purse seine fishing vessels.

3.6.3 Infrastructure and market access challenges

Access to markets and a lack of infrastructure are key constraints to domestic fisheries

development. Tokelau has no port, wharf or mooring infrastructure in place and access to the

islands is only by boat. No large scale tuna processing facilities exist on the islands.

3.6.4 Current developments

Tokelau notes in its Annual Report to the WCPFC SC that it is in the process of upgrading its tuna

management capabilities. Specific initiatives include: “strengthening the capacities of the Department

of Economic Development, Natural Resources and Environment; reviewing of the National Tuna

Development and Management Plan; reviewing of the Vessel Licensing regimes through legislation,

establishing a Statistical Database; and the continuous upgrading of the national facility for the

18 Tokelau Department of Economic Development, Natural Resources and Environment (2010). Annual Report to the

Commission. Part 1: Information on Fisheries, Research and Statistics. WCPFC-SC6-AR/CCM-23


Page 48 of 65

operation of the FFA VMS”. MFAT is funding a senior expert to assist in the process of capacity

development.

3.6.5 Future opportunities

Tokelau officials interviewed in Apia mentioned that they have been asked to revive six (6) alia

fishing vessels Tokelau obtained from Samoa in the 1990‟s. They also noted that there is a tuna jerky

processing plant on one of the islands that has been derelict for a number of years. Facilities there

include a processing area, blast freezer(s) and cold storage room(s). The combination of these two

factors presents an interesting possibility.

The six vessels should catch a considerable amount of Albacore tuna, with the usual by-catch.

Assuming the same annual catch rate as Samoa (~ 40 CPUE), each vessel should catch about fifteen

(15) fish per week, or a total of about ninety (90) fish. These fish could be off-loaded at the

processing plant, which may have to be relocated. There, workers could quarter loin the fish (i.e.,

remove the four (4) loins from the frame). Quarter loining should result in about 60% of the weight

of whole-round fish, thereby reducing freezing and transport costs by 40%. The loins could be frozen

and stored until sufficient quantity has been collected for shipment. By-catch, which would consist

primarily of yellowfin and bigeye tuna, as well as mahi mahi and wahoo, could also be transported to

Apia for sale in the local market. Such an operation would probably employ 25-50 people, both

onboard fishing vessels and at the processing plant. The same facility could be used to store fish from

the domestic artisanal fleet for local sale and consumption.

The ideal outlet for fresh-frozen Albacore tuna quarter loins would be specialty packers in Viet Nam

and Thailand who produce single-cook canned albacore for eco-friendly brands in the USA. Tri-

Marine International, who recently took over the Chicken of the Sea International plant in American

Samoa, also asserts the intention to produce such high-value products. The small size of this fishery

would make it relatively easy to certify, further enhancing the value of the loins.

Realistically however, Tokelau would require considerable financial and technical assistance to be

able to make this “dream” become a reality. Both the alia vessels and the processing plant are likely

to require significant investment and effort to re-commission. Additional facilities and equipment

may also be required (e.g., wharf, moorings, ice-making equipment, etc.). Technical training for fish

handlers onboard fishing vessels and at the processing plant would also be a necessity.

3.6.6 People consulted (to date)

Mose Pelasio, Senior Policy Advisor, Natural Resources & Environment

Ailani Tanielu, Senior Policy Advisor, Economic Development (Fisheries)


49

3.7 Tonga

3.7.1 Introduction

This country summary is based on a site visit to Tonga undertaken by Duncan Souter between 26th

and 28th April, 2011. Meetings were arranged by the Ministry of Food, Forests and Fisheries with

interested stakeholders including relevant Ministries, industry representatives and finance

institutions. A list of people consulted is included at 3.7.6.

3.7.2 Regulatory Arrangements

Tonga‟s fisheries are managed under the Fisheries Management Act 2004 and associated Regulations.

A Tuna Management Plan exists, although is non-statutory in nature. The other main relevant parts

of the regulatory framework are the Maritime Zone Act 2010, which defines Tonga‟s EEZ and

applies some UNCLOS provisions, Special Management Orders, which provide for, amongst other

things, 12nm closures around islands, and licence conditions, which are broadly in line with the FFA

Minimum Terms and Conditions and updated annually.

The main management measure applied is limited entry licensing. Conditions are also applied to

licences depending on the nature of the fishery and the objective to be achieved – for example,

stainless steel traces are banned in the longline fishery to reduce shark bycatch. Licences are issued

annually.

3.7.3 Current Fisheries

The main fisheries in Tonga are summarised in Table 10.

Table 10: Overview of Tonga’s current fisheries

Flag Fishery Licenses Target species Gear

Tonga Longline 11 (2-3

active)

YFT, BET, ALB, SWO Pelagic longline

Tonga Deepwater snapper 12 Deepwater Snapper, Dropline

Tonga Beche-de-mer 23 BDM Hand collection

Tonga Aquarium 5 Coral, finfish,

invertebrates

Hand collection

Tonga Live Reef Fish 2 Grouper Handline

Two - three longline vessels are currently operating, mainly targeting YFT and BET for the fresh

chilled market in Japan and the US. One operator also targets SWO on favourable moon phases.

The main bycatch retained and sold are mahi mahi, wahoo, opah and marlin. Bycatch is either sold

on the domestic market or in Hawaii.

The deepwater snapper fishery uses hand hauled droplines and markets fish exclusively in Hawaii.

One interviewee provided anecdotal information to indicate that Tonga supplies approximately 37%

of the Hawaii snapper market.

The beche-de-mer fishery reopened in 2008 following a 10 year moratorium to rebuild overfished

stocks. 23 licenses were issued in 2010, considerably more than recommended by MAFFF. SPC

advice indicates the fishery should again be closed for 2-5 years to promote recovery. The aquarium


Page 50 of 65

fishery targets a range of products, though has declined in recent years since the decision to ban the

take of „live rock‟.

No access has been granted to foreign vessels since 2004 as a measure to encourage development of

the domestic industry.

All businesses are privately owned. Many of the longline businesses are vertically integrated to the

extent that they have small land-based processing facilities. Several also have associated and support

businesses such as ice making, while some have also diversified into other sectors of the economy

such as hospitality and agriculture.

Some businesses had Government involvement however these are no longer operating.

3.7.4 Current State of Fisheries in Tonga

Fisheries in Tonga are almost uniformly in a depressed state. The number of active longline vessels

has reduced from 27 in the early 2000s to just 2-3 now. The deepwater snapper fleet has reduced

from a peak of 30 in 2004, to 12 currently. The BDM fishery has a history of boom and bust, the

aquarium fishery appears in decline and the live fish licences have not been renewed in 2011. Many

of the processing facilities and support operations (e.g. ice making plants) have been shut down. The

value of the tuna catch has fallen from US$4.5-6.5m in the early 2000s to $US1.6m in 2009 (and

likely less in 2010-2011).

Interviewees reported that operating costs – particularly fuel, bait, ice, freight – are increasing across

the board and are generally higher than many alternative Pacific locations (e.g. Fiji, Pago Pago). Apart

from rising operating costs, key reasons for business failure have been reduced catch rates and a lack

of management skills (or a lack of application due to social customs). Those businesses that remain

in operation tend to be diversified across different sectors of the economy (e.g. fishing/farming;

fishing/retail/hospitality).

The decline in the fishing industry has both direct (e.g. through a narrowing of the tax base) and

indirect (e.g. through tied up fishing vessels causing congestion at the wharf) costs to the Tongan

economy.

One important positive to come out of the consultations was that there appears to be consensus

across all sectors of Government and industry that the current arrangements are not working and

that new approaches are required to enhance Government revenue and stimulate private sector

investment. To that end, all interviewees welcomed the current study, and thanked the TVM

participants‟ for initiating the work.

3.7.5 Future opportunities

No „silver bullet‟ solutions were offered by interviewees to address Tonga‟s current fisheries

troubles. Rather, the perception was that action would be required on a range of fronts to improve

the general operating environment for the private sector investment, domestic and foreign. This

could take the form of measures to reduce operating costs, liberalising the regulatory environment

and supporting the targeting of sustainable longer term markets. The main possible opportunities

raised by interviewees are discussed below:


Page 51 of 65

DWFN access: DWFN access to Tonga‟s EEZ was banned in 2004 as a measure to

encourage domestic sector development, however the initiative has not have the effect

intended. MAFFF are now interested in re-opening the EEZ to DWFN vessels to provide

direct foreign income. The immediate problem is that because of the decline of the local

industry, the evidence for profitable longlining in Tonga‟s EEZ is weak. MAFFF are

considering whether incentives should be provided to a new group of „pioneer‟ FFVs to help

demonstrate profitable catch rates with the intention of increasing competition for (and

revenue from) access rights in the longer term. DWFN access may also have spin-off

benefits to the local fleet by bringing improved technology (e.g. fish finding);

Multi-zone access arrangements (MZAA): Both government and industry in Tonga are

strong supporters of the concept of multi-zone access arrangements for domestic vessels.

The benefits most consistently identified by interviewees were the ability to „follow the fish‟

through other EEZs to maintain higher catch rates and to keep capital assets occupied for

longer periods. Secondary benefits included being able to potentially access cheaper fuel and

supplies in other countries (although largely vessels would land in Pago Pago or Fiji, both of

which are not TVM participants), and to fish closer to unloading ports. All interviewees

recognised that arrangements would be required within a MZAA to ensure equity between

TVM participants;

Refocusing on frozen albacore – The majority of the domestic Tongan tuna fleet are

geared towards primarily targeting YFT and BET for the fresh/chilled market. This style of

operation has become less viable over time, such that the majority of the fleet has

voluntarily tied up or gone out of business. Albacore catches in Tonga‟s EEZ have declined

significantly over the past decade (Figure 15). The majority of operators see the future as

refocusing efforts towards supplying frozen ALB to canneries in Pago Pago and Fiji.

Investments would be required in new vessels, or advantage taken of the new bareboat

charter arrangements.

Figure 15: Tuna catches in Tonga’s EEZ, 1997-2009. (Data source: SPC)

Improved coordination amongst industry – several industry participants raised the

prospect of improved cooperation in purchasing (e.g. bait, fishing equipment, etc) and freight

to reduce costs;

-

500

1,000

1,500

2,000

2,500

(t)

Tonga - Tuna catch 1997-2009

ALB

BET

YFT

Total


Page 52 of 65

Addressing energy costs – High and increasing fuel costs are a central contributor to the

Tongan industry‟s lack of profitability. Fuel is obviously a direct cost and also indirectly

influences costs of freight and electricity (all power in Tonga is currently diesel generated).

Electricity in turn influences the costs of refrigeration, ice making, running of processing

plants, etc. While little can be done to influence global fuel prices, the Tongan Government

has identified a number of opportunities exist to reduce the marginal costs of fuel. These

are all assessed in Tonga‟s Energy Roadmap and include expanding the current fuel depot

(this would allow a tanker to come direct from Singapore, rather than running „feeder‟ ships

from Fiji which increases freight costs – the potential cost saving was quoted as between

$0.10-0.16/l), upgrading Tonga‟s energy distribution network (currently 20-25% of power is

lost through „line leakage‟ – the savings from which could be passed on by Tonga‟s

Government controlled power authority) and increasingly moving to renewables (which may

help stabilise, rather than reduce, prices);

Liberalising regulation – a number of interviewees talked about the need to reduce

regulatory impediments to investment and profitability surrounding the industry. The

Ministry of Labour, Commerce and Industry discussed the need to adopt a more aggressive

approach to attracting investment including reviewing foreign investment laws, while industry

identified a number of current laws which they were keen to review (e.g. the licence

condition requiring all product from domestic vessels to be landed in Tonga; the prohibition

on transhipment at sea).

Improving technology – many industry interviewees identified a need to upgrade fishing

technology. In the tuna fishery, difficulties in finding fish meant that additional fuel and labour

costs in searching. In the deepwater snapper all interviewees expressed concern they were

using the same technology „as 20 years ago‟. Improvements in fishing efficiency may need to

be balanced by additional regulation to ensure sustainability;

Strengthening domestic tourism – several interviewees stressed the need to promote

tourism in Tonga as a means of improving freight availability as well as strengthening the

domestic market for seafood;

Other issues

Access to credit: Conflicting opinions were expressed about access to credit for private

sector investment in fishing. Several industry participants indicated that „the banks‟ would

not lend to the industry, however the Tongan Development Bank indicated they were

certainly prepared to lend – and even had “excess liquidity” – but had not received

proposals from the industry;

Government-industry partnership – While not a view shared by all interviewees,

several suggested the current situation would benefit from a stronger working relationship

between Government (across all relevant Ministries) and industry. This could take the form

of regular forums to discuss regulatory/industry issues and give all participants an improved

practical understanding of the needs and constraints of other parties. Challenges (e.g. high

compliance costs; prohibition on landing product externally) could be worked through

collaboratively and solutions developed that removed potential barriers to profitability and

efficiency, while maintaining the intent of Government policy;

Other species – the main other species/fisheries identified by interviewees that might

generate revenue in Tonga‟s EEZ are bluenose (Hyperoglyphe antarctica) for which


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exploratory fishing permit has been granted, swordfish, which are currently being targeted

by one operator and sportfishing. There are currently 7 sportfishing charter vessels

operating out of the Vava‟u group.


Government

Lord Vaea, Minister for Agriculture and Food, Forests and Fisheries

Dr Sione Vailala Matoto, CEO, MAFFF

Vilimo Fakalolo, Deputy Secretary for Fisheries, MAFFF

Viliami Mo‟ale, MAFFF

Ana Taholo, MAFFF

Silivenusi Ha'unga, MAFFF

Mosese Lavemai, Acting General Manager, Ports Authority Tonga

Iketau Kaufusi, Operations Manager, Port Authority Tonga

Inoke Vala, CEO, Ministry of Public Enterprises

Tatafu Toma Moeaki, CEO, Ministry of Labour, Commerce and Industry

Tiofilusi Tiueti, CEO, Ministry of Finance

Industry

Failo Taufa, Quan Jang Tongan Fishing Co.

Siotame Taumaholo, Quan Jang Tongan Fishing Co.

Semisi Fakahau, (consultant), Quan Jang Tongan Fishing Co.

Va‟inga Palu, Tonga National Fisheries Assoc./Quality Fishing Co

Halaevalu Palu, Tonga National Fisheries Assoc./Quality Fishing Co

„Ofa Fakahau, Tonga National Fisheries Assoc.

Sio Teiano, Vice President, Tonga National Fisheries Assoc.

Viliami Afimeimounga, Tonga National Fisheries Assoc.

Daniela Feao, Tonga National Fisheries Assoc.

Tima Tupou, Fishing Industry Assoc. of Tonga (FIAT)

Lavinia Fangupo, South Pacific Paradise Exports

Dave Edwards, Culture Fisheries Ltd

Jimmy Chow, Owner, Haapai Seafoods (previously Pacific Blue)

Chin Chow, Managing Director, South Pacific Resources Co. Ltd

Tricia Emberson, Director, Alatini Fisheries Co. Ltd

Others

Simione Sefanaia, Managing Director, Tonga Development Bank

Rob Solomon, Economic Adviser to the previous Prime Minister


54

4. Some initial conclusions

4.2 Overall

This primary focus of Phase 1 analysis has been the longline fishery, especially the albacore tuna

fishery. While this is an important species within the Exclusive Economic Zones (EEZs) of TVM

members, TVM countries achieve very low levels of benefit from this fishery. If the stylised value

chain of the albacore value chain below (Figure 16) is used as an analytical framework, the reasons

for this unsatisfactory situation become fairly clear.

Figure 16: Generalised tuna value chain model.

A simplified snapshot of the status quo is as follows. The albacore fishery extends well beyond the

EEZs of TVM and is taken by longline vessels that also target yellowfin and bigeye tunas. Many of

those vessels are foreign owned and licensed by countries from outside the TVM Group. They

often fish under contract to large international tuna broking companies such as FCF Fishery Co. Ltd.

When foreign owned vessels land fish in the wider South Pacific region it is predominantly to foreign

owned processing plants such as PAFCo in Suva (owned by Bumblebee). Product from PAFCo is

sold by Bumblebee into the US market.

In short, TVM:

Does not control the albacore fisheries resource,

Does not control entry to the longline/albacore fishery,

Does not effectively direct or regulate the activities of longline harvesters in the region,

Does not include the countries that are the established albacore processing/logistics hub for

the South Pacific (Fiji, American Samoa, French Polynesia)

Therefore, does not participate in the main regional albacore processing activity as investors

or partners


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Does not have access to global wholesale and retail markets through such processing joint

ventures with large tuna broking or marketing entities.

The places where the generation of economic rents within the stylised value chain below are most

likely is at the beginning and at the end. Satisfactory returns in the middle from harvesting,

processing and wholesaling are dependent upon very high levels of efficiency or the ability to

arbitrage a wide range of flexible opportunities. Efficient harvesters need access to a suite of species

and multi-zone (plus high seas) harvesting sites. Efficient processers need access to a very wide

range of factors of production and support services of international quality and competitive cost.

Efficient wholesalers need the flexibility to cross match a wide pool of buyers and sellers and to

source new product forms as soon as new customer demands and tastes emerge.

Well established brands can achieve premiums but those returns naturally reside with the owner of

the brand intellectual property, normally a company that „owns‟ the customer base of the brand.

The lessons from the Quota Management System (QMS) in New Zealand and the evolving Vessel

Day Scheme (VDS) of the Parties to the Nauru Agreement (PNA) are that the capacity to act like

the owner of a fisheries resource can generate substantial wealth for those who control the quantity

and terms of access to that resource. For instance, the value of ITQ in New Zealand is three to

four times the combined value of fishing vessels, processing plants and seafood brands there.

Furthermore, the ability to effectively control harvester access to a limited access fishery confers

substantial leverage over all other steps in the value chain.

The achievement of increased control over access to the albacore longline fishery is the pre-

requisite for the establishment of sustainable businesses and development opportunities. The

absence of this control explains much about the general lack of historical success in the TVM group

of harvesting and processing investments. The albacore fishery is effectively an open access fishery.

An open access fishery generates no fisheries rents. Without those rents underpinning them, local

investments in harvesting have to compete with DWFN fleets that have substantial competitive

advantages in (multi-zone access that allows the flexible pursuit of good catch rates and composition,

flexible labour arrangements, low fuel costs, economies of scale, integration into multi-national value

chains). Similarly local, stand-alone processing investments in TVM are at a substantial disadvantage

with, say, PAFCo which can source product from outside of the region, is located in an existing

logistical hub and enjoys tariff free access to EU markets under the aegis of an approved competent

sanitary authority.

The competitive situation for TVM countries could be transformed if they were part of a regional

grouping of fisheries resource „owners‟ who worked together to maximise the value of „their‟

fisheries. The achievement of a substantially increased level of regional fisheries access control

should be the first priority of TVM. Given the extent of the longline/albacore fishery, this could only

be effectively achieved in conjunction with a wider list of partners including Fiji, Vanuatu and (ideally)

French Polynesia.

Once TVM and its partners are in a position to more effectively control access to the tuna/longline,

the value of access rights will climb even if TVM (and its partners) may choose to place more

stringent conditions designed to support local development or sustainability than is currently the

case. An agreed share of a larger, yet lower risk, flow of longline/albacore fishery access revenues

will underwrite the ability of individual TVM members to invest in local added value activities. In

those situations, investments will be sustainable if they have a local (rather than global) comparative


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advantage in the activity contemplated. These individual investments will be more profitable if they

are made as part of a regional plan that allows each country to call on resources, or provide services

beyond the boundaries of its EEZ.

The ability of TVM to benefit from adding value to the longline/albacore fishery is proportionate to

its effective status as „owner‟ and controller of the underlying fishery resource.

4.3 Other conclusions

Flexibility in the operating environment surrounding the fishing industry will

assist the private sector adapt to change

The TVM fisheries sector exists in a dynamic environment - fish abundance and distributions change,

markets evolve and operating costs fluctuate, usually upwards. While governance and regulatory

arrangements are necessary to exert a degree of control over the industry, flexibility is necessary to

allow industry to adapt to change. In the TVM region this could mean multi-zone access

arrangements to allow fleets to track fish movements to maintain high catch rates and alternative

means of controlling catch (e.g. quotas, days) to allow industry to upgrade to more efficient fishing

gear.

Regulatory impediments to profitability and compliance costs should be

minimised.

Interviewees across a number of TVM countries identified regulatory arrangements and compliance

costs – principally at the national level – that were a potential constraint to profitability. These

included constraints on catching and landing arrangements (e.g. bans on foreign landing and

transhipping at sea), as well as inefficiencies in administrative systems (e.g. time consuming

administrative processes for export approval). While most regulations have a logical basis, in an

environment of high operating costs and few significant competitive advantages over similar regional

countries, it becomes increasingly critical that TVM countries have regulatory and administrative

systems that minimise unnecessary constraints on profitability.

Operating costs are high relative to regional competitors

The main operating costs in the fishing sector – fuel, freight, ice, bait – are high in most TVM

participants relative to other countries in the region – e.g. Fiji, Pago Pago, French Polynesia. Partially

this is a result of subsidies and other measures provided by other governments (e.g. French

Polynesia‟s fishing fuel subsidy), but many are simply a product of TVM countries‟ geographic location

and economic structure. High operating costs will affect the types of opportunities in which TVM

countries can viably compete with neighbouring countries, and those in which TVM participants

should simply seek to capitalise on the other countries competitive advantages.

Distribution networks exist, but they are fragile

Networks to distribute fish along the supply chain exist in TVM participants (with the exception of

Tokelau), however many are relatively fragile and dependent on factors outside the control of the

fishing sector. For example, air freight space and frequency is largely dependent on domestic and

tourist travel and important niche markets have been lost because of changes to flight routes. It is

unlikely the fishing sector in any of the TVM countries will have sufficient critical mass in the short


Page 57 of 65

term to justify additional freight and future initiatives to enhance returns should seek to build in

resilience to fragility.

The status quo is not serving to support profitable, viable fishing industries in the

TVM countries and governments (and industry) must be prepared to embrace

change

Despite a period of relative success in the TVM longline fisheries in the late 1990s and early 2000s,

many parts of the industry are now in decline. The overall value of the TVM longline catch has not

improved since the late 1990s and – notwithstanding some isolated areas of growth - many parts of

the private sector are now shrinking. A depressed private sector has resulted in both direct (e.g.

loss of tax revenue) and indirect costs (e.g. increased welfare support) to TVM participant

governments. The circumstances that have led to decline – e.g. high fuel prices, variable catches and

catch rates, high freight costs – are not likely to change in the foreseeable future. Governments at

the highest levels must recognise the situation will not change on its own and be prepared to adopt

different approaches to stimulate private sector growth and generate benefits from fishing.

TVM participants should consider which areas they are comfortable pursuing

collectively, and which areas they would prefer to pursue individually

Several of the opportunities raised during Phase 1 would require a degree of collective action (and

perhaps altruism) on the part of TVM participants. For example, multi-zone access arrangements for

domestic longline vessels would benefit those vessels that are not currently achieving viable catch

rates – and may lead to a higher overall TVM level of catch with more domestic vessels fishing in

areas of higher catch rates – but may disadvantage domestic fishers already fishing in areas of highest

catch rates. The question of how far individual countries are prepared to go to benefit the collective

is an important one for TVM.

Partnerships are critical

Even in the most advanced economies, few companies or countries have the internal wherewithal to

fully exploit commercial opportunities alone. Partnerships with parties who hold complementary

ambitions are often critical to bringing in new assets, skills, knowledge and resources. Within the

TVM group partnerships might be at the national level – e.g. between Government and domestic

industry to review and reduce regulatory impediments and compliance costs, or between

Government and reputable foreign companies to help efficiently harvest and market domestic

resources - at the group level – e.g. multi-zone access for domestic vessels to enhance catch rates –

or between TVM and external groups – e.g. with parties such as PNA, the Melanesian Spearhead

group and French Polynesia to enhance control over albacore (and other) stocks.


58

5. Opportunities for consideration in Phase 2

Table 11 provides an initial list of opportunities that have been identified in Phase 1 of the study for

assessment in Phase 2. The initial list has been provided for the purpose of seeking TVM participants‟

feedback prior to the commencement of Phase 2.

Consistent with the TORs we have taken the approach that 'any and all' opportunities should be

assessed, whether they appear immediately attractive or otherwise. This is important in ensuring

that those people who have participated in the study, and who have contributed ideas, feel like their

input has been valuable.

The opportunities below come from a number of sources, including TVM government officials, TVM

industry participants, other stakeholders consulted, background reviews and the team members own

knowledge. We expect that some of the opportunities will be 'stand alone' while others will be

complementary or synergistic (i.e. one is needed to support the other, or one would work better or

deliver more return if the other was in place).

We also expect that additional opportunities will emerge following further investigation of

opportunities during Phase 2.

Table 11: Initial list of opportunities for further assessment in Phase 2.

Regional opportunities

Catching sector

Multi-zone access arrangements for TVM vessels

Multi-zone access arrangements for DWFN vessels

Establishing a sub regional management framework to enhance control over the ALB (and other) fishery

Strengthening harvesting rights through a TVM (or wider) VDS/quota (perhaps linked to framework above)

National/multi-lateral partnerships with established companies to better utilise domestic resources

FAD deployment & maintenance (for inshore LL)

Mothershipping for the domestic TVM ALB fleet

Reducing whale and shark depredation

Energy efficiency audits (to reduce fuel costs/emissions)

Strengthening fisher's associations

Reviewing manning requirements/maritime code

Development of the Southern SWO fishery

Processing/Distribution

Establishment of Competent Authorities to promote EU access (Catch Certification and Sanitary compliance)

HACCP training for domestic processors/exporters

Sign up to the Interim Economic Partnership Agreement

Establish regional trading partnerships, which might not be exclusive to TVM - French Polynesia, Fiji and

American Samoa


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Marketing

TVM MSC certification for ALB to strengthen market access for fresh fish products to the EU and North

America

Developing a TVM 'brand' for retail

Developing markets in Japan and Australasia

Establishment of a TVM retail outlet in New Zealand

Strategic partnership between TVM and large processors (e.g. Thai Union) for ALB supply

Exports of fish/loins (including semi-processed) to SE Asia

Exploration of emerging markets (e.g. Russia, Brazil, Argentina, Middle East, Eastern Europe)

Enabling Environment

Establishment of a Pacific Fisheries Fund (similar to European Fisheries Fund)

Establishment of a domestic fisheries development funds

Establishing favourable tax/duty arrangements

Strengthening business management capacity in the fishing sector

National opportunities

Cook Is

Development of the „southern‟ fishery

Establishment of a retail outlet in NZ (Auckland)

New Zealand

Competing in the sthn SWO fishery

Developing the 'red' fish sector (e.g. alfonsino)

Export of ALB to Europe

Niue

Provision of ice machines/chilli bins

FAD deployment and maintenance

Establishment of a Niue retail outlet in NZ

Samoa

Upgrade alia to 'super alia' fleet

Introduce sail-powered hybrid alia (TDMP Project 7)

Assist alia fishermen‟s association

Dress frozen tuna intended for canning

Process frozen tuna loins for canning

Can tuna by-products from loining & „atule‟ from TMDP Project 6 for domestic sale

Process value-added frozen fish products for export

Tokelau

Revival and development of the alia fleet

Re-commissioning of the tuna jerky facility/reconfiguring for loining

Tonga

Reintroducing DWFN Access


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Refocusing on frozen ALB

Addressing energy costs

Liberalising regulation

Upgrading technology/use of bareboat charters


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Annex 1

Terms of Reference for a Consultancy to Enhance Returns from the Southern Longline and other Fisheries

Introduction TVM Arrangement Participants (“TVM”) have agreed to a feasibility study to identify and evaluate sustainable business and development opportunities involving the catching, processing and marketing sub-sectors of longline and other fisheries of the TVM19 to enhance the returns to their domestic economies. The objective of the study is to identify effective ways to enhance the returns to those economies by way of access, harvesting, supply, processing, transportation, marketing, creation of employment opportunities or otherwise. The study shall identify new and innovative approaches to the fisheries, including possible cooperative structures, including but not limited to joint branding, eco labeling, hygiene standards and regulation, marketing and development. This work will include an examination of subregional models of cooperation for achieving the objective of this study. Background

Domestic tuna fisheries in the southern sub-region are at a turning point. Existing operational models that served the industry well in its formative years (1993–2003) no longer provide the commercial returns necessary to sustain or grow the sector. Previous efforts to build a national commercial fisheries sector have focused on encouraging domestic catching capacity, but studies have shown that such developments are not necessarily best initiated by just focussing on the creation of a domestic catching sector. Such studies concluded that the quantum of returns from the sector is most directly influenced by the operational model adopted, and that policies should be aligned to ensure that this is optimized, including potentially allowing direct foreign investment (DFI) wherever this is most beneficial to the industry, and to the national economy. Therefore, new operational models, facilitated by innovative commercial, administrative and resource management and development frameworks are required. Frameworks may be at the national or bilateral or subregional level. This consultancy, which will include the use of value chain analysis, is designed to identify and evaluate such models. Methodology and Tasks

The work will be conducted in three stages, as follows

19 TVM Participants are: Cook Islands, New Zealand, Niue, Samoa, Tokelau and Tonga.


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PHASE 1: BACKGROUND DATA ACQUISTION AND ANALYSIS

The consulting team (“the team”) will visit each TVM participant during Phase I and consult with all relevant stakeholders, including domestic industry. The Team will also acquire data, and other material that may be considered relevant to the objective of this study. Assistance will provided in terms of the provision of documentary material for this purpose by the FFA and TVM. The work of the team shall include but not be limited to:

Conducting a stock take of relevant regulatory frameworks for fisheries resources in TVM and previous proposals for multi-zone access arrangements

Determining current fisheries resources and activities in TVM, and a summary of scientific and catch data held by SPC, analyze trends

Generating projections on likely future fisheries resources in TVM EEZs

Assessing future market demands for longline caught tuna and swordfish and other fisheries for pelagic fish species, considering alternative market chains

Assessing existing TVM access to retail/distribution/cannery/loining operations including high value fresh markets

Drawing on approaches taken in other sectors, with a focus on New Zealand.

Examining relevant past business and development activities within TVM, both successful and unsuccessful, including any relevant reasons why.

Reviewing current value chain dynamics, including the increasing costs of doing

business, demand and supply etc, in TVM

Examining similar fisheries in other geographical areas (e.g. Mauritius and French Polynesia)

Identifying other fisheries of interest to TVM– noting the objective of this study. Output one: At the conclusion of phase I the team will provide a brief interim report on phase I, to TVM through the TVM Chair and seek confirmation of the findings of phase I with TVM before moving on to phase II PHASE 2: IDENTIFY WAYS TO ENHANCE RETURNS FROM LONGLINE AND OTHER FISHERIES, FOR BUSINESS AND DEVELOPMENT Taking into account the findings of phase I, the team will explore and evaluate any and all opportunities wherever they might occur both cooperatively and nationally, giving


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equal weight to all sub-sectors (catching, processing, marketing), and actively secure and incorporate the views and concerns of all stakeholders, including TVM domestic industry participants. The team shall:

Identify a variety of sustainable business and development options

Assess each identified business and development option against general business and development considerations

Assess the viability of multi-zone access arrangements

Prepare a shortlist of business and development options with reasons for selection

Identify additional measures, including regulatory measures, required to create an enabling environment that may complement the short listed business and development options.

Output II: At the conclusion of phase II the team will provide a report to TVM through the TVM Chair and will make a presentation to a TVM Governing Committee meeting to seek direction from TVM participants, so as to guide the work of phase III. PHASE 3: ANALYSIS AND EVALUATION OF PROPOSED SUSTAINABLE BUSINESS AND DEVELOPMENT OPTIONS In the final phase, the team, as directed by TVM, shall further investigate business and development options and additional measures (including development and investment in infrastructure) and provide an assessment and recommendations on the commercial viability of the selected options and the extent to which they might attract private sector investment, including if possible, identifying potential investment partners. The team shall comment, where appropriate, on:

Political considerations

Social welfare considerations

Commercial viability

Potential assistance required from other development partners

International competitiveness

Revenue sharing arrangements

Tariff advantages/disadvantages


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Availability of supply/purchasers

Governance arrangements, including whether co-operative structures could be utilized at any points of the value chain, cost saving or sharing mechanisms and other arrangements including joint branding, certification.

The sequence/priority of the considerations and arrangements as listed above

Output III: At the conclusion of phase III the team will provide an initial report to TVM through the TVM Chair and will make a presentation to a TVM Governing Committee

meeting seeking discussion and guidance from the meeting. This discussion and guidance will be used in the production of a draft report which will be provided to TVM participants through the TVM Chair. This report will then be finalized on the basis of comments received (from TVM Participants) and will be provided to TVM Participants through the TVM Chair.

Travel

During Phase one, at least one member of the consulting team shall visit each of the TVM participant countries and consult with all relevant stakeholders, including domestic industry. Alternative innovative travel and consultation solutions which will improve value for money and time utilization will be considered favourably, for example the use of national consultants for preliminary country-level work.

Outputs Within two weeks of contract signature and before starting to compile the report:

An agreed work plan, methodology, and travel plan, based on the bid document but amended as necessary following an exchange of emails with the Manager, FFA REI Unit.

At the end of Phase One:

At the conclusion of phase I the team will provide a brief interim report on phase I, to TVM through the TVM Chair and seek confirmation of the findings of phase I with TVM before moving on to phase II

At the end of Phase Two:

At the conclusion of phase II the team will provide a report to TVM through the TVM Chair and will make a presentation to a TVM Governing Committee meeting to seek direction from TVM participants, so as to guide the work of phase III..

At the end of Phase Three:


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At the conclusion of phase III the team will provide an initial report to TVM through the TVM Chair and will make a presentation to a TVM Governing Committee meeting

seeking discussion and guidance from the meeting. This discussion and guidance will be used in the production of a draft report which will be provided to TVM participants through the TVM Chair. This report will then be finalized on the basis of comments received (from TVM Participants) and will be provided to TVM Participants through the TVM Chair.

Within 1 month of the conclusion of the consultative meeting to be arranged at the end of Phase 3:

A draft report of not more than 50 pages Within two weeks of receiving comments on the draft

The final version of the document in MS Word. Timing: The study will commence in March, 2011 and should be completed before the end of July 2011. It is recognized, however, that collecting the necessary information may result in delays, and some flexibility will be allowed if necessary. Reporting:

The consulting team will report directly to the FFA Manager – REI Unit or other FFA staff as designated on administrative matters and to the TVM participants on substantive consultancy matters, through the TVM Chair (or his designate).

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