Feature
Sylvester Pokajam at the National Fisheries Authority says the planned doubling of domestic tuna-processing capacity for early 2013 is only the start of a new expansionary phase. ‘This is not the end, as we still have further growth in processing planned, with thousands more jobs to be created.’ Credit: R D Tuna
Marketing sustainable tuna
Why PNG, why now? The surge in investment is motivated in part by the advantages of bringing the canning process closer to the Pacific’s fishing grounds. R D Tuna’s Pete Celso says PNG’s duty-free access to the European Union (EU) has also been a plus. Under its Economic Partnership Agreement with the EU, ratified in 2011, PNG can not only enter the European market duty-free but it has also been permitted to export processed fish to the EU from any vessel fishing outside its territorial waters, thus exempting PNG from the usual Rules of Origin compliance, provided the fish is processed in PNG. Germany, the United Kingdom and the Netherlands are PNG’s main European markets for canned tuna. Loin exports to Spain and Italy are also significant, and increasing. The increased emphasis on the fisheries industry also reflects national government priorities. The country’s Vision 2050 strategy makes frequent reference to the fisheries sector as an area of the economy requiring more development if PNG is to diversify beyond its oil and gas revenue base. The EU estimates that by 2016 some 53,000 jobs will be created in the PNG tuna industry if planned projects go ahead.
Looking ahead The industry faces several challenges, including the need to improve productivity, achieve greater scale, and deal with high operating costs and infrastructure constraints. R D Tuna’s Pete Celso says reducing the cost of freight is a major challenge, as export is a ‘volume game'.
18
PNG is also looking to export sustainably caught tuna to retailers in Europe and Australia. In 2011, PNG and other Pacific Island states achieved the first Marine Stewardship Council (MSC) certification for free school skipjack caught sustainably by purse seining methods. Retailers, who expected their first shipment of this tuna under the Pacifical label in late 2012, are still waiting. They include Switzerland’s Coop, SPAR of Austria, Dansk Supermarked from Denmark, Dutch seafood distributor Anova Seafood and Australian chain Coles. In late 2012, they raised concerns about the delay in securing ‘chain of custody’ certification, urging tuna purse seine operators to meet the demand for sustainably sourced tuna. Pokajam says this proves demand for the product: ‘This should put to rest any question of the actual demand globally for MSC tuna through Pacifical, and under the terms agreed.’ Pokajam adds that negotiations over the site of processing, and whether Parties to the Nauru Agreement control that or whether it is in the ambit of international retailers, are also continuing.
Incentives The PNG Government extends a number of incentives to fishing industry participants. Expenditure on new plants or articles for commercial fishing activities qualifies for a 100% accelerated depreciation deduction. Profits for the export sale of canned, loined and smoked fish are exempt from company income tax for the first three years of export. Additional concessions apply for a further four years. Investors may also qualify for double deductions for export market development costs and staff training. R D Tuna’s Pete Celso, who is also President of the PNG Fisheries Industry Association, says the government should consider extending tax holidays to smaller projects such as those in the fisheries sector, and not just to large initiatives like the PNG LNG gas project.