The president & chairman of Papua New Guinea's Fishing Industry Association (FIA), Sylvester Barth Pokajam is calling on the new Government to reform its National Fisheries Authority policy document. This policy document provides the legal framework and guides the regulatory regime of the fisheries sector.
The policy should focus more on key areas on building basic and appropriate infrastructure such as fishing ports, having affordable and readily accessible utilities such as water, electricity and communication is vital for the growth of the industry and to foster interest amongst many individual groupings and businesses both within and outside to look at fisheries investment opportunities in PNG.
Mr. Pokajam said, “Attracting Foreign Direct Investment (FDI) has stalled since 2013 due to inconsistent and sudden shift in Government policy after Grand Chief Sir Michael Somare’s regime”.
“In fact, between 1998 and 2013, six new tuna-processing plants were built in PNG, but investment has been stalled since then”.
The FIA also refutes the claim by so called external advisors and experts that attracting investors is not the main problem.
“It is not just investment but finding the right investment. Investors must be enticed or attracted to invest where there is a win-win situation for both parties”. Said Pokajam
Mr. Pokajam emphasized on two factors that determine potential fishing operators to invest, which are;
- Fishing operators invest in processing to gain license concession. This is a conventional global practice that rewards frontrunners for investing substantially in developing the local industry and the sector.
- We need processors to invest not fishing operators to invest. This is a situation where a processor is able to put in place additional shifts in its processing operation as a result of the expansionary government policy where the negative impacts are reduced.
The FIA strongly supports the Marape Government in taking back PNG as it strives to fully involve and support the participation and inclusion of PNG in the fishing and processing business.
Pokajam said "The FIA is happy that the Prime Minister continues to support the PNG aspiration to make PNG the tuna capital of the world, a feat that is not impossible under his leadership".
"This is a quest we planned for after we were able to negotiate a Tariff free access to the EU." added Mr. Pokajam.
During Pokajam's tenure as the former Managing Director of the National Fisheries Authority from 2004 to 2014 he had seen the rush of serious proposals for on-shore investments. A lot of major investors such as Frabelle PNG Ltd, International Food Corporation Ltd, Nambawan Seafood Corporation Ltd, and Majestic Seafood Ltd were established in Lae, in addition to RD in Madang and South Seas Tuna Corporation Ltd/FCF in Wewak.
Two other investors who had already acquired land in Lae, signed project agreement with the State in 2013, but did not continue due to sudden change in Government Policy.
One of the biggest investors was Majestic sea food Ltd which is partly owned by the two world players in the tuna processing industry, Thai Union Group of Thailand and Century Pacific Food Inc of Philippines, Thai being the biggest tuna processor in the world and Century the biggest in the Philippines. Majestic Sea Food Ltd and our current tuna industry players have played a huge role in helping to boost our export to EU markets.
Pokajam explained that the Cost to operate a processing facility in PNG that competes in the world continues to be a big challenge. An ideal set up should be an entity doing fishing and processing at the same time ensuring supply of tuna for processing and the flexibility to market its products so that it can reduce the impact of high cost.
FIA was also able to secure a reputable Marine Steward Council (MSC certification scheme) ECO label for PNG.
"There is a lot more work to do. We shall work closely with the Prime Minister and his Government by providing accurate industry market information to guide the Government to enable us to achieve our aspiration". Said Pokajam.
In relation, another issue with the current Government policy is the higher prices it charges for the country’s vessel-day scheme (VDS), which governs its tuna-fishing sector.
From hard facts, other Pacific nations are charging USD 6,000 to USD 7,000 (PGK21,700 – PGK25,300) for daily access for their domestic fleets, but in PNG, the cost is USD 10,500 (PGK38,000) daily.
Investors that would like to invest in PNG look for competitive cost of license and the VDS is a scheme PNG can use to attract both local investor and foreign direct investors.
In late February 2022, the number of tuna purse-seiners (Large fishing vessels) flagged to Papua New Guinea had dropped significantly as a result of the higher prices. More PNG flagged vessels are reflagging to other Pacific countries, especially Nauru and FSM (Federated States of Micronesia).
Since 2019, a total of 28 vessels have moved to reflag to Federated States of Micronesia and 9 reflagged to Nauru. These two countries offered discounted vessel day scheme fees and facilitated access for vessels to fish in the Eastern High Seas Pocket. Only a dozen purse-seiners remain flagged to PNG.
The National Fisheries Authority (NFA) is very much aware of this dilemma and have stated that the country needed “conducive policies in place to attract vessels to carry the PNG flag and fish in the country's fishing zones.”
In addition, the FIA also shares the same sentiments as expressed by “The Farmers and Settlers Association Inc.,” that the Government should not get involved directly in the industries whether it be fisheries, forestry and downstream processing of precious metals which is something that should be discouraged at the outset.
Past experiences have shown the many failed ventures that the Government had been involved in and therefore the Government should concentrate more in supporting domestic PNG private sector entities and foreign direct Investors through an expansionary fiscal policy.
