PNG invites Spanish tuna investment

By

Chris Dove, SeafoodSource.com contributing editor, reporting from Malaga, Spain

Published on
May 16, 2011

Despite simultaneously fighting Papua New Guinea’s (PNG) tuna producers over antidumping while protesting at unfair price competition, Spain’s tuna canners are lauded as PNG’s most welcome trade investor.

Papua New Guinea, in the southwest Pacific, has rich fishing grounds, multiple processing facilities and is a member of the World Trade Organization. Under a 2009 Interim Economic Partnership Agreement (IEPA) with the European Union, PNG was ensured duty-free access to EU markets, including fisheries products such as canned tuna and tuna loins.

The Spanish Association of Canned Fish and Seafood Manufacturers (ANFACO) is concerned that the deal brings PNG’s substantially lower canned tuna prices to the EU market. The group fears that PNG’s lower labor costs and the potential use of cheaper, illegally-caught tuna as raw material as a form of unfair price competition.

A root cause of friction is the IEPA’s granting of PNG global sourcing rules of origin for a range of fish products — a concession allowing them to source from any vessel regardless of ownership, flag or registration, as long as they meet EU sanitary and IUU (illegal, unreported and unregulated) fishing regulations from 1 January, 2010. This concession has directly contributed to PNG’s new investment in enhanced tuna-processing capacity.

Speaking to ATUNA, PNG’s chief negotiator countered these arguments, describing his nation as a high-cost country. “Labor costs are lower, but we lack economies of scale in canneries, packaging and services. Our shipping costs are high, so are the prices of utilities like water and electricity,” he said.

Denying ANFACO’s claim that PNG will “turn into an important ‘white washing’ of cheaper, illegally-caught tuna from the Western and Central Pacific,” he continued. “At our own cost, we have started a monitoring system with satellites and observers on every vessel. This system is stronger than required. The process is managed through the Western and Central Pacific Fisheries Convention, in which the EU is a member. It is in our best interest not to [lose] the only commodity we have.”

Highlighting PNG’s use of resources, he explained, “We have to grow up economically by creating our own industry. It is all about diversification of our economy. We need the Europeans to help us. It is absolutely critical that European investors come to our country. Actually, we would like to encourage Spanish industry to invest in PNG,” he concluded.

PNG’s fisheries contribute 1 percent to the nation’s GDP, approximately PGK 100 million (EUR 29 million, USD 41.2 million), employing some 3,000 workers in the formal fisheries sector. Total market value of its catch is estimated at PGK 450 million to 500 million (EUR 130 million to 145 million, USD 185 million to 206 million). While its fisheries in GDP is small, the sector is highly important to the overall population, and significantly so at subsistence level.

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