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Economy

US clashes with island states as tuna price tumbles

A catch of pole-caught skipjack tuna in Fakaofo, Tokelau (photo by Michael Field)

An attempt by the United States to extend a treaty providing access to one of the world's greatest remaining deep sea fisheries has sparked a furious row in the South Pacific, setting some of the world's poorest and smallest states against the largest and richest.

     Fishing for migratory tuna is worth $10 billion a year, according to U.S. nonprofit group Conservation International, but provides total revenues of only a few hundred million dollars to the small Pacific island states in whose waters the fish are caught. (Most islands do not produce precise figures for fishing revenues.)

     The sustainability of the fishery is also in question, with stocks of Bluefin and Bigeye tuna, popular in Japan, already threatened. Reductions in catches will be needed. "But who makes the sacrifices?" said James Movick, head of the Pacific Islands Forum Fisheries Agency (FFA), which represents 17 Pacific island countries, including regional heavyweights such as Australia and New Zealand alongside microstates such as Kiribati, Nauru and Vanuatu.

     "Pacific Island countries don't believe they are in the position to make the cuts," said Movick, adding that fisheries were "the life blood of Pacific island communities." Tuna licensing fees accounted for 20% of government revenues in four island countries and 70% in two, he said.

     The row has been ignited by the U.S. tuna industry's desire to extend a 27-year-old treaty under which the U.S. pays the island states a fixed amount for access to fisheries on a specified number of days, together with approval to catch an agreed amount of fish.

     The treaty was renewed for 2015 after the two sides reached a $90 million deal in Hawaii in October 2014. The multimillion dollar fee, paid by U.S aid to the region and American tuna processors, is in exchange for 8,300 fishing days this year. The money is to be distributed between the island states according to an agreed formula, irrespective of where catches actually take place.

     However, talks in Auckland on a further treaty extension foundered in late March despite efforts to forge a compromise led by Shane Jones, New Zealand's Ambassador for Pacific Economic Development. It is not clear whether further talks will take place.

     Jones was seeking to bridge a widening gulf between the island states, which want higher returns, and the industry, which says the benchmark for canning-grade tuna -- the price of skipjack tuna landed at the Bangkok market -- has fallen by 50% in two years. "They can't match the price that's demanded, so common ground has to be found," said Jones.

     The amount paid by the U.S. has risen steadily from about $21 million in 2009, largely as a result of upward pressure caused by a second agreement, the Vessel Day Scheme (VDS), reached between eight Pacific nations known as the Parties to the Nauru Agreement (PNA). Since 2010 these countries have been offering fishing access to all comers for a fixed number of days, without quotas specifying the maximum amount of fish that can be caught.

     This year, the VDS is offering 44,623 fishing days for a minimum of $8,000 a day, whether the licensed boats catch fish or not. The scheme should bring in $357 million this year, but the cost to the fleets has risen 260% in the last four years. Boat owners -- particularly from the U.S. and New Zealand -- say they can no longer make a profit.

     One of the biggest U.S. tuna traders, Washington state-based Tri Marine said Pacific countries wrongly believed they were the exclusive owners of the tuna. "This has created a certain amount of greed by resource owners," said Joe Hamby, chief operating officer.

     Hamby, whose company has played a big role in Pacific deep water fishing, said historically tuna was seldom part of Pacific island diets, which had largely depended on local fish caught in surrounding reefs. Japanese fishing boats were the first to recognize the potential of migratory tuna fishing outside the reefs, in the 1950s.

     Hamby said the VDS was not properly managed and called for a quota system under which companies would pay to catch specified amounts of tuna. "We are seeing zero profits," he said. "Tuna is not a pretty picture."

'Fish elsewhere'

Transform Aqorau, the chief executive of the PNA grouping, said the U.S. and New Zealand were trying to pressure small countries. He added: "Fish elsewhere if you don't want to play by PNA rules." Aqorau asked how New Zealand farmers would react if they were pressed to reject Chinese investment in the dairy industry and sell products to the U.S. instead of China for political reasons.

     However, Rino Tirikatene, fisheries spokesman for the opposition New Zealand Labour Party, said Aqorau was "downright rude and naive." Tirikatene added: "Quite frankly the PNA are creating a reputation as Pelagic [deep water fish] czars where short-term profit is undermining sustainability."

     The issue has been complicated by a burgeoning Chinese Pacific fleet that islanders say is heavily subsidized by Beijing. An FFA study last year on Chinese support for its deep water fishing operations reported direct subsidies from Beijing in the form of fuel offsets, contributions to vessel construction costs, preferential tax treatment and 50% subsidies for fishing access fees.

     "In the course of compiling this paper, eight types of fisheries subsidies and incentives provided by the Chinese central government and provincial governments to its fishermen and fishing enterprises were identified," the FFA paper said.

     Extreme language is routinely used in the debate about China. For example, Samoa's last commercial tuna operator, John Luff, recently referred to the Chinese fleet's activities as "marine genocide."

     Charles Hufflet, chairman of the Pacific Islands Tuna Industry Association, said subsidized foreign boats were driving out local tuna boats. "The ones that are most subsidized will be the last ones standing," said Hufflet.

     Industry skepticism about the future of the industry was revealed in a study based on interviews with 25 key tuna industry stakeholders, which was released at a seminar in New Zealand recently by Conservation International.

     Speaking anonymously, fishing boat companies from four countries said the VDS deal was neither fair nor sustainable. "There's a huge overcapacity of both harvesters and processors," the report said. However, responses from government officials suggested a lack of enthusiasm for quotas, which were seen as being difficult for small countries to manage.

     "I don't know if islands can make money on quota," said an unnamed government respondent. "If [the] catch is poor or there are weather issues, how does the government get compensated? With the VDS, [fishing boats are] given a number of days and how [they] use them is up to [them]." Another respondent said quota systems required high levels of monitoring and infrastructure, and suggested that catch reports might be susceptible to corruption. "Current vessel observers are paid $50 per day. Who wouldn't buckle if paid $2,000, and turn a blind eye."

     Some respondents put the blame for the region's problems firmly on the Chinese. "Tuna price is about supply and demand, and the prices have tanked largely due to Chinese vessels putting too much supply on the market," said one. "They are heavily subsidized and can even fish in the high seas where productivity is low, whereas other vessel companies like [the] Taiwanese have to be efficient."

     The collapse of the Auckland talks has put growing pressure on both the FFA and PNA, threatening the fragile regional consensus on tuna. There are growing fears that individual nations will be lured into reaching individual agreements with the U.S. Three -- Kiribati, Samoa and the Cook Islands -- have already done private bilateral deals on fishing days, angering other island states and worrying conservationists, who fear that without regional consensus, the world's last great fish stock could be plundered.

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