January 26, 2018

PNG’s foreign-owned tuna canneries face closure under fishing discount cuts

Papua New Guinea (PNG)'s new policy to end discounts on tuna fishing fees will see foreign-owned canneries based on the island forced to close -- some soon -- one source told Undercurrent News.

In a recent market update the Parties to the Nauru Agreement (PNA) noted PNG fishing industry association president, Sylvester Pokajam, had been claiming the six canneries were threatening to close if they could not continue to get subsidised fishing and be allowed to take fish offshore.

However, the report added it now appeared the companies had reconsidered, and would stay open.

Under the new policy all boat owners will now be charged the full vessel day scheme fee, and the government will pay rebates at a rate of $400 per metric ton for catch processed in PNG. This incentive is double the previous incentive, but only for fish processed in PNG, thereby keeping processing jobs and product to be processed on the island.

Undercurrent's source, though -- a processor himself -- said it was not true that the canneries were rethinking their intention to close. "Most of us are firm that we will close if the new system remains as is. The processing industry cannot survive with just $400/t rebate or subsidy, due to the high cost and difficulty of doing business in PNG."

"In fact, two processing plants are ready to close by the end of February 2018. But they are now on temporary hold, since there have been some developments or back door discussions that are happening without the consultants of PNG," he claimed.

He believes there have been ongoing discussions, and that the tuna processing side has presented a counter proposal which would be a "win-win" for both sides, having been invited to present their ideas.

But if they cannot come to an agreement, he believes the two closures early in the year would be followed by more.

PNA's market roundup suggested the six canneries would all open on or around Feb. 1, at the conclusion of the annual Christmas break.

"Whilst it is argued that industry doesn’t understand the change, the PNG government notes the change was the result of several years consultation with industry, and was first announced by the prime minister in the second quarter of 2017," according to the update.

SOURCE: UNDERCURRENT NEWS/PACNEWS
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