KIRIBATI, TUVALU IN DEAL WITH CHINA FISHING COMPANY

Two nations to run own tuna cartel

SUVA, Fiji (Islands Business Magazine, Sept. 13, 2010) - Small in land mass but big in fishing resources, Kiribati and Tuvalu have started their own quest to run a tuna cartel to help beef up their diminishing state coffers.

The two nations, members of the Parties to Nauru Agreement (PNA) group, have already publicly admitted their wish to get more out of their tuna resources.

At present, both nations issue licenses to foreign fishing vessels to simply fish and have their way with the tuna-be it value added or exported raw to various markets around the world.

The European Union estimates that each year 3 billion euros [US$3.9 billion] worth of tuna are caught in the Pacific and sold on the world market, leaving only three percent of this to the resource owners.

Hence, leaders like President Anote Tong of Kiribati, a visionary of the cartel, told Islands Business in August that they were already speaking to a Chinese fishing company Golden Ocean, operating out of Fiji, to enter into a joint venture.

[PIR editor's note: Golden Ocean has been operating in Fiji since 2000. The company is comprised of 26 tuna long-line fishing vessels that fish within Fiji and other neighboring island's 200 nautical mile exclusive economic zone.]

"Now we have a joint venture with a company from mainland China in fisheries so we are interacting well with them," Tong said.

"Golden Ocean in Fiji is expanding with us and in that sense, trade is good. We are very happy with this prospect.

"Talks actually started some time back and we have concluded talks, so we expect the actual commencement shortly.

"We have always been disappointed with the returns for our tuna resource which has always been through fishing licensing."

Tong said Kiribati wanted value adding and employment for their people through their resource instead of allowing fishing companies to export to Bangkok.

"I cannot give you the details on how much we will get out of the partnership at the moment, but it is a very reasonable amount and definitely much better than licensing," he said.

"We get value for our resource and that is very important."

In the past, skipjack from purse seiner fishing boats would offload onto a mother ship destined for Papua New Guinea which holds the key to the lucrative European markets.

Golden Ocean Director Xue Jun Du said the company planned to produce fresh fish for export (by plane) and frozen fish by (cargo ship) to their overseas markets.

He said they would send 20 new fishing vessels to Tarawa where they would rebuild a packing factory and have appropriate cold storage facilities.

Over 100 locals are expected to be employed in the new venture.

"We also expect to collect fish from 1000 local fishermen who will use their own boats to catch tuna for us," Du said.

"We employ locals in this project because it will be cheaper for us but for key positions in our boats we will have to bring expertise from outside as teaching people to control a ship like this does not happen over night.

"In this joint venture with government, we will share profits in the partnership.

"We are putting working and investment capital into the company and they (Kiribati) are contributing to the current factory."

He estimates an additional investment of over FJ$6 million [US$3.2 million] into rebuilding the factory, installing equipment and building a cold storage facility.

"We are one of the leading fish companies in the region and we have two factories in Fiji, and we teach our people fish processing and managing resources," Du said.

While a tuna corporation based in Papua New Guinea was mooted in June 2009, it is understood the islands are going their own way. The idea was to run parallel with the initial phase of establishing the Parties to the Nauru Agreement which involves the Federated States of Micronesia, Kiribati, Marshall Islands, Nauru Palau, Papua New Guinea, Solomon Islands and Tuvalu.

However, it seems the two nations do not feel the same way about sending their fish to a processing plant in Papua New Guinea and are going their own way.

Sam Finikaso, Fisheries Director of Tuvalu, said Tuvalu has gone into joint ventures with a Taiwanese company, Ching Foo and Friendly Tuna from Korea.

Finikaso estimates they should be getting FJ$2 million [US$1.1 million] a year from the Taiwanese venture alone, compared to the FJ$30,000 [US$15,800] license fee they charge on each purse seiner.

"I guess this is the only way where we could maximize the economic benefits from our tuna resources," Finikaso said.

He said the companies will also set up infrastructure for them which was another benefit from the partnership.

The two joint ventures are also good opportunities for them to employ the many school leavers who enroll at the School of Maritime and the ones who graduate this year.

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