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FWC COM 2011 - LOT 1 

EuropeAid/129783/C/SER/MULTI 

<strong>Report</strong> on the Implementation of the derogation to the standard 

rules of origin granted to the Pacific ACP States in the framework 

of the Interim Economic Partnership Agreement 

FWC COM 2011 RFS 2011/266449 

Amanda Hamilton 

Antony Lewis 

Liam Campling 

December 2011 

A project financed by the 

European Union 

A project implemented by LINPICO

Final <strong>Report</strong> 

RoO Derogation under the PACP-IEPA 

DISCLAIMER 

This report was commissioned and financed by the European Commission. The views expressed 

herein are those of the Contractor, and do not represent the official view of the Commission. 

ACKNOWLEDGEMENTS 

The consultants gratefully acknowledge and extend their sincere thanks to all persons who kindly 

assisted in carrying out this review by making the time available to meet with members of the 

consultancy team during in-country visits and/or providing valuable insights and data. 

Linpico s.a.r.l. 

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TABLE OF CONTENTS 

1 INTRODUCTION .................................................................................................................... 8 

1.1 Background ........................................................................................................................... 8 

1.2 Methodology ......................................................................................................................... 9 

1.3 Stakeholder consultation .................................................................................................... 10 

2 RULES OF ORIGIN DEFINED ................................................................................................. 13 

2.1 What are preferential rules of origin ................................................................................ 13 

2.2 The ‘global sourcing’ rule of origin under the PACP-EU Interim EPA ................................. 14 

3 PNG CANNED TUNA INDUSTRY ........................................................................................... 18 

3.1 PNG Tuna Fishing Fleet ....................................................................................................... 18 

3.2 PNG Processing Sector ........................................................................................................ 25 

3.2.1 Existing Operations ................................................................................................ 25 

3.2.2 New planned investments ..................................................................................... 31 

3.2.3 Potential future investments ................................................................................. 36 

3.2.4 Competitiveness of PNG processors ...................................................................... 38 

3.3 PNG Tuna Trade .................................................................................................................. 41 

3.3.1 Exports ................................................................................................................... 41 

3.3.2 Domestic Market .................................................................................................... 45 

3.4 Projected Production - 2012-2016 ...................................................................................... 46 

3.4.1 Implications of global sourcing on PNG processing sector expansion ................... 47 

4 DEVELOPMENT EFFECTS ON THE PNG ECONOMY ............................................................... 48 

4.1 Definition of ‘Development Effects’ .................................................................................... 48 

4.2 Income Generation ............................................................................................................ 49 

4.3 Employment Generation ..................................................................................................... 50 

4.4 Labour/Working Conditions ................................................................................................ 52 

4.4.1 Cannery Labour Profiles ......................................................................................... 52 

4.4.2 Cannery Labour Conditions .................................................................................... 54 

4.5 Other Social Issues .............................................................................................................. 66 

4.5.1 Corporate social responsibilities of tuna processing companies ........................... 66 

4.5.2 Spin-off businesses ................................................................................................. 68 

4.5.3 PMIZ development ................................................................................................. 70 

4.5.4 Other concerns ....................................................................................................... 71 

4.6 Environmental Issues .......................................................................................................... 72 

4.6.1 Management of environmental risks ..................................................................... 72 

4.6.2 Existing environmental risks .................................................................................. 74 

4.6.3 Potential environmental impacts ........................................................................... 77 

4.7 Impact of RoO derogation on PNG development ............................................................... 79 


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5 MANAGEMENT OF TUNA RESOURCES IN THE WCPO .......................................................... 80 

5.1 Tuna Stock Status ................................................................................................................ 80 

5.2 Catch and effort trends ....................................................................................................... 82 

5.3 Profile of WCPO purse seine fishing fleets ......................................................................... 84 

5.4 Fisheries Management Frameworks and Institutions ........................................................ 89 

5.4.1 Regional level institutions ...................................................................................... 89 

5.4.2 Sub-regional level institutions ................................................................................ 94 

5.4.3 National level (Papua New Guinea) ....................................................................... 99 

5.4.4 Current effectiveness of management institutions ............................................. 101 

5.5 IUU Fishing ........................................................................................................................ 104 

5.5.1 Incidence of IUU fishing in WCPO ........................................................................ 104 

5.5.2 Evaluation of monitoring, control and surveillance (MCS) capabilities for 

combating IUU fishing .......................................................................................... 105 

5.5.3 Implementation of the EU- IUU Regulation 1005/2008 ...................................... 110 

5.6 SPS Regulations ................................................................................................................. 113 

5.6.1 Background .......................................................................................................... 113 

5.6.2 PNG Competent Authority ................................................................................... 114 

5.7 Impact of RoO Derogation on Tuna Resource Management ............................................ 120 

5.7.1 Stock sustainability ............................................................................................... 120 

5.7.2 IUU fishing ............................................................................................................ 120 

5.7.3 SPS compliance .................................................................................................... 121 

6 IMPACTS ON THE EU MARKET AND EU-CENTRED INDUSTRY ............................................. 122 

6.1 EU Retail Market for Canned Tuna ................................................................................... 122 

6.2 EU Market for Pre-cooked Frozen Tuna Loins .................................................................. 125 

6.3 Major Suppliers of the EU Canned Tuna Market .............................................................. 129 

6.4 Intra-EU ............................................................................................................................. 129 

6.4.1 Extra-EU ................................................................................................................ 132 

6.5 EU Distant Water Fleet (EU DWF) ..................................................................................... 134 

6.6 EU-based Processors ......................................................................................................... 142 

6.7 Third Country Processors .................................................................................................. 146 

6.8 Impacts of the Derogation on the EU and Third Countries .............................................. 148 

6.8.1 Projecting PNG exports: data and assumptions ................................................... 150 

6.8.2 Impacts on the EU Distant Water Fleet................................................................ 151 

6.8.3 Impacts on EU-based Processors and their Canned Tuna Markets ..................... 153 

6.8.4 Impacts on Third Countries and their EU Canned Tuna Markets ........................ 158 

7 OTHER CONSIDERATIONS ................................................................................................. 169 

7.1 Fiji ...................................................................................................................................... 169 

7.2 Direct and Indirect Preference Erosion ............................................................................. 169 


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7.3 GSP+ Reforms .................................................................................................................... 170 

7.4 PACP-EPA Negotiations ..................................................................................................... 171 

8 CONCLUDING COMMENTS ............................................................................................... 171 

9 REFERENCES ..................................................................................................................... 173 

APPENDIX 1 TERMS OF REFERENCE (ANNOTATED) ................................................................. 182 

APPENDIX 2 LIST OF PERSONS CONSULTED ............................................................................. 187 

APPENDIX 3 DETAILED DATA FOR PNG PRODUCTION AND EXPORT PROJECTIONS ................ 190 

APPENDIX 4 PROFILE OF EU CANNED TUNA PROCESSORS, 2011 ............................................ 193 


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LIST OF TABLES 

Table 1.1 List of stakeholder organisations consulted .................................................................... 12 

Table 3.1 Vessels licensed to fish in PNG by flag and permitted operating area - 2008, 2011 ....... 18 

Table 3.2 Catch in PNG waters a by vessel access category (mt), 2006-2010 .................................. 19 

Table 3.3 PNG fleet catch in PNG waters and beyond (mt), 2006-2010 ......................................... 19 

Table 3.4 Catch in PNG archipelagic waters (mt), 2006-2010 ......................................................... 20 

Table 3.5 Market/processing destination of fish caught by vessels in PNG waters, 2011 .............. 22 

Table 3.6 Profile of PNG’s Existing Tuna Processing Operations, 2011 ........................................... 26 

Table 3.7 Production Capacity of PNG’s Tuna Processing Plants (2006-2011) ............................... 30 

Table 3.8 Status of New PNG Tuna Processing Investments, October 2011. .................................. 35 

Table 3.9 Total PNG Tuna Exports (mt), 2006-2010 ........................................................................ 42 

Table 3.10 PNG Exports of Canned Tuna and Cooked Loins (HS 1604) to EU, 2000-2010 ................ 43 

Table 3.11 PNG Exports of Canned Tuna and Cooked Loins (HS 1604) to US, 2000-2010 ................ 44 

Table 3.12 PNG Exports of Canned Tuna to other markets (non-EU, US) (mt), 2000-2010 .............. 44 

Table 3.13 PNG Domestic Market for Canned Tuna (Estimate) – 2006-2010 (mt) ........................... 45 

Table 3.14 

Medium-term projection of the production capacity of PNG’s tuna processing plants, 

2011-2016 ........................................................................................................................ 47 

Table 4.1 Income Generation by Existing Tuna Processing Plants to PNG Economy, 2007-2010 

......................................................................................................................................... 50 

Table 4.2 Projected Income Generation by Tuna Processing Plants to PNG Economy, 2011-2016 

......................................................................................................................................... 50 

Table 4.3 Estimated Employment Generation in PNG from Tuna Processing, 2006-2010 ............. 51 

Table 4.4 Projected Employment Generation in PNG from Tuna Processing, 2011-2016 .............. 52 

Table 4.5 Labour profile of existing tuna processing operations - 2011 ......................................... 54 

Table 4.6 PNG ratification of eight ‘fundamental’ ILO conventions ................................................ 55 

Table 4.7 Issues with PNG implementation of ‘fundamental’ ILO conventions .............................. 56 

Table 4.8 Overview of Working Conditions in PNG Tuna Processing Facilities – September, 2011 ... 

......................................................................................................................................... 58 

Table 4.9 Socio-Economic Benefits Generated by PNG Tuna Processors, 2011 ............................. 69 

Table 4.10 Potential environmental risks associated with fish processing plants ............................ 74 

Table 4.11 <strong>Report</strong>ed environmental issues associated with tuna processing plants in PNG ............ 75 

Table 4.12 Status of environmental approvals for planned PNG processing facilities, 2011 ........... 77 

Table 5.1 Current stock status of skipjack, yellowfin and bigeye in WCPO, 2011 .......................... 81 

Table 5.2 No. of vessels and catch for major fleets operating in the WCPO, 2010-2011 ............... 85 

Table 5.3 

Changes in vessel numbers in the WCPO industrial purse seine fleet between 2007 and 

2011 (October) ................................................................................................................. 87 


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Table 5.4 

Table 5.5 

Table 5.6 

Table 5.7 

Table 6.1 

Table 6.2 

Table 6.3 

Summary of current management activity at regional, sub-regional and national levels, 

according to criteria established for RFMOs, 2011 ....................................................... 103 

Summary of MSC activity at regional, sub-regional and national (PNG) level in the 

WCPO ........................................................................................................................... 110 

Number of RASSF alerts for fish and fish products from selected EU exporting countries, 

2006 – September 2011................................................................................................. 116 

Comparison between numbers of active purse seine vessels and the number of those 

vessels on the SANCO lists, 2010-2011 .......................................................................... 119 

Corporate concentration and private label penetration in principal EU canned tuna 

markets .......................................................................................................................... 124 

Extra-EU27 tuna ‘loin’ imports by major supplier and selected GSP+ and ACP countries 

(all in tonnes unless otherwise specified) ...................................................................... 128 

EU market volume – domestic production vs. extra-EU imports (in tonnes unless 

otherwise specified) ...................................................................................................... 129 

Table 6.4 Intra-EU export of canned tuna in value and volume, bi-annual 2002-2010 ................ 131 

Table 6.5 

Table 6.6 

Extra-EU export of canned tuna by top-3 destination market, bi-annual 2002-2010 (in 

million Euro unless otherwise stated) ........................................................................... 131 

Extra-EU27 canned tuna imports by major supplier and selected GSP+ and ACP 

countries (all in tonnes unless otherwise specified), 2001-10 ...................................... 133 

Table 6.7 The EU distant water tuna purse seine fleet in 2011 .................................................... 141 

Table 6.8 Estimated EU-based Tuna Processors, Capacity and Production in 2008 ..................... 142 

Table 6.9 Major EU canned tuna processing firms ........................................................................ 144 

Table 6.10 

Canned Tuna and Loin Production in Selected Countries by EU Preference Regime in 

2008/10 .......................................................................................................................... 148 

Table 6.11 Projected PNG exports to EU in 2016 ............................................................................ 151 

Table 6.12 

Table 6.13 

Average value per tonne of EU imported canned tuna by supplying country, 2006-10 (all 

in Euro) ........................................................................................................................... 155 

Identifying market interaction and potential trade diversion – Top 5 markets for EUbased 

processors plus PNG (in million Euro), annual average for 2006-10 .................. 156 

Table 6.14 Share of EU Import Market by Selected Third Country Suppliers of Canned Tuna, 2001- 

10 (all in %) .................................................................................................................... 159 

Table 6.15 Share of EU Import Market by Selected Third Country Suppliers of Tuna Loins, 2001-10 

(all in %) ......................................................................................................................... 160 

Table 6.16 

Identifying potential raw material trade diversion for Third Countries – WCPO purse 

seine catch by fleet or flag and estimated processing country receipts in 2010 for major 

processing countries (all figures to nearest ‘000mt) ..................................................... 164 

Table 6.17 Identifying market interaction and potential trade diversion for Third Countries – 

Volume of Supplier's Canned Tuna Exports to EU27 Markets, annual average for 2006- 

10 (all in % unless otherwise specified) ......................................................................... 168 


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LIST OF FIGURES 

Figure 3.1 Comparative Direct Raw Material Processing Costs – Thailand and PNG, 2011 

(US$/mt) ....................................................................................................................... 39 

Figure 5.1 WCPO catch by gear in the WCP Convention Area, 1960-2010 ................................... 83 

Figure 5.2 

Number of purse seine vessels by flag on the FFA Regional Vessel Register, October 

2011. ............................................................................................................................. 84 

Figure 5.3 WCPO purse seine catch by fleet (mt), 2010 ............................................................... 85 

Figure 6.1 Schematic value chain in canned tuna ....................................................................... 125 

Figure 6.2 EU import of pre-cooked tuna loins in value and volume, 2001-2010 ...................... 126 

Figure 6.3 EU import of pre-cooked tuna loins by major destination market, 2001-10 (in tonnes) . 

.................................................................................................................................... 126 

Figure 6.4 EU27 production of prepared or preserved tuna, 1976-2008 ................................... 130 

Figure 6.5 

Figure 6.6 

Figure 6.7 

EU27 vs. World skipjack and yellowfin tuna catch. All regions, gears, all fishing areas 

(in tonnes), 1950-2009 ............................................................................................... 134 

EU Canning-grade Tropical Tuna Catch: all regions, gears, all fishing areas (in tonnes), 

1950-2009 ................................................................................................................... 135 

France (a) vs. Spain (b) total catch by fishing area (skipjack and yellowfin combined), 

1950-2009 ................................................................................................................... 138 

Figure 6.8 Network of EU marine territories and Fisheries Partnership Agreements in 2011 ... 139 


Page viii



ACRONYMS 

3IA 

ACP 

ACU 

ANABAC 

ANFACO 

ASEAN 

AW 

BE 

BFAR 

BOD 

BSCI 

CA 

CC 

CCMs 

CCS 

CCSBT 

CDS 

CEACR 

CEPESCA 

CER 

CFTO 

CH 

CMM 

CMS 

CoC 

CRO 

CSYIC 

CTC 

DCI 

DEC 

DG MARE 

DG SANCO 

DG Trade 

DLIR 

DWFN 

EC 

EC 

EEAS 

Third Implementing Arrangement of the Nauru Agreement 

African, Caribbean and Pacific Group of States 

NFA – Audit and Certification Unit 

Asociación Nacional de Buques Atuneros Congeladores y la Organización 

de Productores de Túnidos Congelados 

Asociación Nacional de Fabricants de Conservas de Pescados y Mariscos 

Association of Southeast Asian Nations 

archipelagic waters 

Bigeye 

Bureau of Fisheries and Aquatic Resources (Philippines) 

Biochemical Oxygen Demand 

Business Social Compliance Initiative 

competent authority 

catch certificate 

WCPFC members, cooperating non-members and participating territories 

catch certification scheme 

Commission for the Conservation of Southern Bluefin Tuna 

catch documentation scheme 

ILO Committee of Experts on the Application of Conventions and 

Recommendations 

Confederación Española de Pesca 

country evaluation report 

Compagnie Francaise du Thon Oceanique 

China 

conservation and management measure 

Compliance Monitoring System 

Chain of Custody 

Community Relations Officer 

China Shenyang International Economic and Technical Cooperation 

Corporation 

Change in Tariff Classification method 

Department of Commerce & Industry 

Department of Environment & Conservation 

EC - Directorate General for Maritime Affairs and Fisheries 

EC - Director General for Health & Consumers 

EC - Directorate General for Trade 

Department of Labour & Industrial Relations 

distant water fishing nation 

Environment Council 

European Commission 

European External Action Service 


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EEZ 

EIA 

EMP 

eNGO 

ENSO 

EP 

EPA 

EPO 

EU 

Eurothon 

FAC 

FAD 

FCF 

FFA 

FPA 

FSM 

FSMA 

FTA 

FVFODF 

FVO 

GDP 

GoPNG 

GRT 

GSP 

GSP+ 

GT 

HACCP 

HCR 

HR 

HSP 

IA 

IATTC 

ICCAT 

IEPA 

IFC 

ILG 

ILO 

IOTC 

IPA 

ITUC 

IUU 

Exclusive Economic Zone 

environmental impact assessment 

Environmental Management Plan 

environmental non-government organisation 

El Niño/La Niña-Southern Oscillation 

Environmental Permit 

Economic Partnership Agreement 

Eastern Pacific Ocean 


European Tropical Tuna Trade and Industry Committee 

WCPFC Finance and Administration Committee 

fish aggregation device 

Fong Cherng Fishery Company Ltd. 

Pacific Islands Forum Fisheries Agency 

Fisheries Partnership Agreement 

Federated States of Micronesia 

Federated States of Micronesia Arrangement 

Free Trade Agreement 

Freezer Vessel Fish Origin Declaration Form 

EU Food and Veterinary Office 

gross domestic product 

Government of Papua New Guinea 

gross registered tonnage 

Generalized System of Preferences 

EU Generalised System of Preferences Plus 

gross tonnage 

Hazard Analysis and Critical Control Point Analysis 

harvest control rule 

Human Resources 

high seas pocket 

Implementing Arrangement 

Inter-American Tropical Tuna Commission 

International Commission for the Conservation of Atlantic Tunas 

Interim Economic Partnership Agreement 

International Fisheries Corporation 

Incorporated Landowner Group 

International Labour Organisation 

Indian Ocean Tuna Commission 

Investment Promotion Authority 

International Trade Union Confederation 

Illegal, unreported, unregulated fishing 


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JP 

K 

kg 

KR 

LNG 

LRP 

MCS 

MFN 

MOU 

MSC 

MSY 

mt 

NAMA 

NC 

NEC 

NFA 

NGO 

NMSA 

NPOA 

NTAD 

NTMP 

NZ 

OFP 

OPAGAC 

ORTHONGEL 

PACER 

PACPs 

PAE 

PAFCO 

PH 

PICs 

PMIZ 

PMSA 

PMV 

PNA 

PNG 

PNGDF 

PNGFIA 

PNGSFFP 

PS 

RASSF 

Japan 

PNG kina 

Kilogram 

Korea 

liquid natural gas 

limit reference point 

Monitoring, control and surveillance 

Most-Favoured Nation 

Memorandum of Understanding 

Marine Stewardship Council Certification 

maximum sustainable yield 

metric tone 

Non-Agricultural Market Access 

WCPFC Northern Committee 

National Economic Council 

National Fisheries Authority 

Non-Government organisation 

PNG National Maritime Safety Authority 

National Plan of Action 

non-target, associated and dependent species 

National Tuna Management Plan 

New Zealand 

SPC – Oceanic Fisheries Programme 

Organización de ProductoresAsociados de GrandesAtunerosCongeladores 

Organisation des Producteurs de Thon Congelé 

Pacific Agreement on Closer Economic Relations 

Pacific ACP States 

party allowable effort 

Pacific Fishing Company 

Philippines 

Pacific Island countries 

Pacific Marine Industrial Zone 

FAO Port State Measures Agreement 

passenger motor vehicle 

Parties to the Nauru Agreement 

Papua New Guinea 

PNG Defence Force 

PNG Fishing Industry Association 

PNG Standards for Fisheries Products 

purse seine 

Rapid Alert System for Food and Feed 


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RDTC 

RFMO 

RFV 

RoO 

ROP 

RPOA 

RTMADS 

RVR 

SA 8000 

SAAS 

SC 

SEZ 

SKJ 

SPARTECA 

SPC 

SPS 

SSTC 

STDs 

TAC 

TAE 

TOG 

TOR 

TPJ 

TRP 

TSP 

TTC 

TW 

UK 

UN 

UNCLOS 

UNCTAD 

US 

USMLT 

UVI 

VDS 

VMS 

VTAF 

VU 

WCPFC 

WCPO 

WMA 

RD Tuna Canners 

Regional Fisheries Management Organisation 

Register of Fishing Vessels 

Rules of Origin 

Regional Observer Program 

Regional Plan of Action 

FFA Regional Tuna Management and Development Strategy 

FFA Regional Vessel Register 

Social Accountability International 

Social Accountability Accreditation Service 

WCPFC Scientific Committee 

Special Economic Zone 

skipjack 

South Pacific Regional Trade and Economic Cooperation Agreement 

Secretariat of the Pacific Community 

sanitary and phytosanitary standards 

South Seas Tuna Corporation 

Sexually transmitted diseases 

total allowable catch 

total allowable effort 

Thunnus Overseas Group 

terms of reference 

Trans Pacific Journey Fishing Corporation 

target reference point 

TSP Marine Industries 

WCPFC Technical Compliance Committee 

Taiwan 

United Kingdom 

United Nations 

United Nations Convention on the Law of the Sea 

United Nations Conference on Trade and Development 

United States of America 

US Multilateral Tuna Treaty 

Universal Vessel Indicator 

Vessel Day Scheme 

vessel monitoring system 

vessel tracking agreement form 

Vanuatu 

Western and Central Pacific Fisheries Commission 

Western and Central Pacific Ocean 

wildlife management area 


Page xii



WMP 

WQM 

WTO 

WWF 

YF 

Waste Management Plan 

water quality monitoring 

World Trade Organisation 

World Wildlife Fund 

yellowfin 


Page xiii



EXECUTIVE SUMMARY 

Background 

After several years of negotiations to establish a WTO-compliant reciprocal Economic Partnership 

Agreement (EPA) between the European Union (EU) and the Pacific-ACP states (PACPs), the EU and 

PACPs agreed to the terms of an Interim EPA, which was initialled in November 2007 by Papua New 

Guinea and Fiji, and later signed in July and September 2009, respectively. 

As part of this agreement, a special derogation to the standard Rules of Origin (RoO) for processed 

fish was negotiated. This derogation, often referred to as ‘global sourcing’, permits PACPs to source 

raw material from any vessel regardless of flag or where it was caught, provided it has been 

‘substantially transformed’ by a PACP-based processing facility into canned tuna or frozen cooked 

loins. This was a one-off and specific exception offered exclusively to PACPs because of their 

historical lack of RoO compliant fish under the prior RoO due to limited fishing capacity of PACP 

fishing fleets, reduced processing capability due to physical and economic factors, geographical 

isolation and distance from the EU market, as well as a low identified risk of destabilising the EU 

market. 

On 13 March 2008, PNG submitted a notification to the EU for use of the derogation for processed 

fishery products. In meeting the review requirements specified in the PACP IEPA text (Protocol II, 

Art. 6), this report on the implementation of the RoO derogation was commissioned for completion 

no later than three years after PNG’s notification had been lodged to consider the following: 

• Development effects on PNG economy – long-term income and employment generation; 

• Effective conservation and sustainable management of fishing resources (including 

compliance with sanitary and phytosanitary (SPS) regulations and support for combating 

illegal, unregulated and unreported (IUU) fishing in the Western and Central Pacific Ocean 

(WCPO)). 

In addition, the review also considers the impacts of the RoO derogation on the EU canned tuna 

market and EU fishing and canned tuna processing industries. 

Impact of RoO derogation on PNG development 

The impact of PNG’s global sourcing RoO derogation on development effects on the PNG economy 

has been negligible since 2008, given that existing canners have made very little use of the 

derogation to date. 

In the medium term future (2011-2016), with the potential development of an additional five 

processing plants, the derogation is expected to have a partial impact on development effects on the 

PNG economy, given global sourcing is only one contributing factor of several in attracting new 

onshore investment to PNG. 

Onshore tuna processing facilities 

Currently, PNG has three tuna processing facilities handling canned tuna and cooked loin production, 

with a combined maximum processing capacity of 520 mt/day (130,000 mt annual raw material 

throughput). In September 2011, actual production was around 280 mt/day (70,000 mt/year). From 

2008-2011, global sourcing has had little influence on growth of PNG’s existing tuna processing 

Linpico s.a.r.l. Page 1



facilities, given production levels have generally remained constant and well below capacity. To 

date, existing plants have generally been able to meet raw material needs with EU-compliant 

catches from their own fleets, or if sourcing from non-company vessels, are yet to branch out and 

utilise the RoO derogation to its full capacity to source fish from vessels who have not traditionally 

supplied them in the past. 

There are currently five new planned tuna processing investments for PNG, each at different stages 

of development; four at Malahang Industrial Estate, Lae and one at the Pacific Marine Industrial 

Zone at Vidar, Madang. By 2016, estimated total daily production could potentially reach around 

730 mt/day (~182,500 mt raw material), should all five new and proposed operations proceed. At 

present, there are few other confirmed additional projects in the pipeline for tuna processing in 

PNG, and the publicity given to the possibility of rapid large scale expansion seems not be based on 

the reality of existing development plans. 

Expansion is currently driven largely by PNG’s National Fisheries Authority (NFA) policy of linking 

fisheries access to onshore processing, rather than duty free access to the EU market and global 

sourcing per se. However, while not the primary driver for attracting onshore investment, the 

derogation will play a critical role in industry expansion in the future and its survival. One of the 

primary intentions of negotiating global sourcing was to reduce the impediment to industry 

expansion of inadequate supplies of wholly originating fish for export to the EU market. Global 

sourcing, amongst other factors, will assist in efforts to achieve greater economies of scale, such that 

PNG tuna processing facilities can improve their competitiveness in the short-medium term. In 

doing so, if and when PNG’s margin of preference (24%) to the EU gradually erodes in light of more 

favourable trade preferences garnered by PNG’s major competitors (e.g. Thailand, Philippines), 

global sourcing will be a contributing factor in sustaining PNG’s processing sector in the future. 

Income generation 

For 2007-2010, total direct income generated to the PNG economy by the existing three tuna 

processing facilities was in the order of around K 35 million – K 48 million annually (US $16 - 22 

million). The most significant contributions to the economy were employee earnings (average K 25 

million/year; 45% of net income) and net purchases in local businesses (average K 13.5 million/year; 

32% of net income). 

Since 2007, the total net direct income generated from canned tuna and tuna loin processing has 

generally increased, however, this cannot be directly linked with global sourcing. This trend relates 

largely to increased contributions from one of the three existing canneries, whose production has 

expanded annually since establishment in 2006. Also, employee earnings have increased 

consistently in line with increases in the minimum wage rate. 

In the medium term, as new onshore investments come on stream, additional income will be 

generated in the economy - the largest direct contributions being employment earnings and 

spending by canneries (and their employees) in local businesses. 

Employment 

New tuna processing facilities will generate a significant increase in employment opportunities for 

PNG nationals, particularly young women (potentially in the order of 50,000 direct and indirect jobs 

by 2016). 




The derogation also has the potential to contribute, in part, to improvements in working conditions 

for cannery employees. If profitability of the canneries increase due to lower production costs 

realised through gains in economies of scale, then the capacity of companies to afford higher than 

minimum wages and other benefits will increase. Existing processing companies have already 

indicated that while there is believed to be a readily available source of local labour, competition for 

attracting labour will arise between various plants. In trying to attract and retain labour, this may 

result in canneries offering more favourable pay conditions, as well as additional benefits (e.g. 

transport, housing). Already, with growing international attention on PNG’s tuna cannery sector, 

including working conditions within processing facilities, companies are voluntarily taking steps to 

demonstrate their compliance with international labour standards and continue to make 

improvements in this respect through third-party accreditation under private social standards 

systems. 

Other development issues 

With increased investments, the opportunity for expansion in spin-off businesses (and other 

ancillary benefits) for local communities exist, if these businesses are adequately planned and 

executed, with the necessary capacity building provided in all facets of small business operations, in 

addition to any working capital provided. 

If not properly managed, negative social and environmental impacts associated with tuna processing 

activities could magnify. However, it should be noted that the management of broader social, as 

well as environmental issues is not the sole responsibility of tuna processing companies. A 

coordinated effort is required between canneries, national and provincial governments, local 

community leaders, as well as concerned NGOs. In addition, it should be noted that social and 

environmental issues associated with tuna processing developments in PNG have been in existence 

prior to global sourcing. 

Impact of RoO Derogation on Tuna Resource Management 

Stock sustainability 

The current status of tuna stocks in the WCPO is generally positive and remains essentially 

unchanged since the advent of the RoO derogation. Two of the three main stocks harvested - 

skipjack and yellowfin - which supply over 95% of purse seine-caught raw material for processing, 

continue within sustainable limits, now and most likely into the future. This is despite primary 

management measures failing to limit effort, associated with the growth of the purse seine fleet 

during much of the previous decade. However, most of this growth occurred prior to the derogation 

and the total WCPO catch has been relatively stable since 2007. The third stock, bigeye, was subject 

to overfishing at the introduction of derogation and will continue to be, unless purse seine effort can 

be reduced. However, bigeye is not yet deemed to be in an overfished state. 

Current management measures in place will be strengthened under an enhanced Conservation and 

Management Measure (CMM) through the Western and Central Pacific Fisheries Commission 

(WCFPC), which will be extended to include skipjack (in addition to yellowfin and bigeye currently) 

and revised on the basis of current scientific advice. An important recent development has been the 

approval of the Marine Stewardship Council PNA skipjack certification in December 2011. As a result 

of the certification, reference points and harvest control rules will be introduced as key management 

measures in the near future, which will further strengthen management in the WCPO, including 

PNG’s waters. 




Provided compliance with existing and new management measures is good, and current effort levels 

in both the purse seine and longline fisheries can be reduced, the impact of derogation on stock 

sustainability in the future is likely to continue to be minimal. 

IUU fishing 

Monitoring, control and surveillance (MSC) capability at the regional, sub-regional and, in the case of 

PNG, national level is well developed and continues to strengthen. There is little evidence of IUU 

fishing in the WCPO purse seine fishery, with most issues relating to in-zone infractions. 

As tighter MCS controls are introduced and enhanced management measures adopted, pressure to 

infringe, particularly with respect to closed high seas areas, time period closures and fishing method 

restrictions may increase. This additional pressure on MCS schemes will be exacerbated by increased 

pressure on relatively static raw material supplies, given WCPO catch levels are expected to remain 

stable. Provided MSC activities continue to be well resourced and well coordinated across the 

region according to agreed strategies, both within EEZs and on the high seas, any impacts of 

derogation on IUU fishing should be limited. 

A recent review indicated that PNG has effectively implemented the EU-IUU Fishing Regulation. This 

additional requirement for EU market access has not limited the supply of compliant raw material 

for processing in PNG plants, other than in the case of Vanuatu-flagged vessels. 

SPS compliance 

To date, global sourcing has had little or no direct impact on PNG processors, with adequate supplies 

of originating fish to meet prior and current needs. Catches within archipelagic waters have been 

close to 100,000 mt in recent years, while PNG’s canneries have required around 60,000-70,000 mt. 

Also, the requirement for compliance of this supply with the EU’s Sanitary and Phytosanitary (SPS) 

Regulation has not been a constraint thus far, with an adequate number of SPS-compliant vessels to 

meet the necessary raw material supply. 

In the short to medium term, as additional processing plants come on stream, global sourcing will 

need to be exercised to a much greater degree for new plants to acquire sufficient SPS-compliant 

raw material for processing and export to the EU. However, the issue may not be that the number 

of vessels with SPS certification is inadequate, given that in 2010, over 750,000 mt of WCPO fish was 

likely caught by vessels with SPS certificates. Rather, the issue may be the availability of SPS 

compliant fish to PNG processors. Global sourcing notwithstanding, there is currently little to no 

incentive for fleets to offload to PNG plants (existing or potential plants) if those vessels/fleets have 

no links to PNG onshore investments. Even where vessels do have links to onshore plants, 

significant quantities of fish are often transhipped and exported, rather than offloaded to processing 

facilities. PNG will need to consider arrangements to guarantee supply to proposed future plants 

(e.g. compulsory offloading a portion of catch by licensed vessels, in combination with preference 

given to licensing SPS-compliant vessels to fish in PNG waters). The present requirements for vessels 

fishing under existing arrangements to supply fish to onshore plants may need to be tightened up or 

enforced. 

A second SPS-related issue for PNG relates to the status of its Competent Authority (CA). Issues with 

the CA itself and the certification of vessels and plants were identified by DG SANCO’s Food and 

Veterinary Office in 2007 and 2008, and the CA was further examined in 2009. While best efforts 

have made to rectify the deficiencies identified, it is still not certain if full compliance has been 




achieved. There has been a recent increase in rapid alerts for EU tuna imports from PNG, which will 

raise renewed questions about the compliance of vessels/plants and the CA itself. PNG cannot 

afford to be de-listed, with the EU the primary market for PNG canned tuna and increasingly, cooked 

loin exports. In future, the work load and expectations of the CA associated with increasing number 

of plants and unloading vessels can increase substantially. The CA has anticipated this to some 

extent, with plans to double the number of auditors by next year. Furthermore, additional 

equipment, enhanced training and capacity building, upgrading systems/processes etc. will all be 

required. 

Impacts on the EU Market and EU-Centred Fishing and Processing Industries 

The EU is PNG’s most significant market overall in terms of total tuna exports, and is the largest 

market for canned tuna. In 2010, total canned tuna exports to the EU were 15,867 mt and valued at 

around € 37 million. The highest volume of canned tuna exports on record was 18,217 mt in 2005, 

with annual export volumes fluctuating throughout the past ten years (2001-2010). The major EU 

markets for canned tuna from PNG are presently Germany, UK, Denmark and the Netherlands. 

PNG processors have also been exporting cooked loins to the EU since 2005 and volumes have 

fluctuated during this time. In 2010, cooked loin exports were the highest volume to date, totalling 

2,485 mt and valued at € 8.8 million. The major markets for PNG loins are Italy and Spain. 

Impacts on the EU Distant Water Fleet 

The purse seine fleet that is flagged by EU member states operates almost exclusively in the Eastern 

Tropical Atlantic and the Western Indian Ocean. Today, and historically, there is very limited 

interaction of the EU Distant Water (tuna purse seine) Fleet (EU DWF) with the WCPO. Currently 

only four Spanish-flagged boats operate under Fisheries Partnership Agreements in the WCPO (with 

FSM, Kiribati and Solomon Islands), and an additional 10 Spanish-owned, non-EU flagged boats are 

registered to fish in the WCPO. Non EU-flagged Spanish-owned vessels in the Pacific operate 

primarily in the Eastern Pacific Ocean, but also engage in operations in the WCPO. These purse 

seiners primarily supply catches to parent tuna processing facilities in Latin America. As a result, 

these vessels generally do not supply originating fish to PNG or other tuna processing facilities based 

in the Pacific islands. 

PNG-based processors have utilised only very minor quantities of tuna under the derogation in 2011, 

so de facto no direct impacts on the EU DWF are discernable. The Spanish DWF active in the WCPO is 

not currently supplying PNG, so processing investment in PNG is not directly influencing EU DWF 

tuna sales through competition on the PNG market with non-EU purse seining firms. 

Given zero direct interaction between the Spanish fleet and PNG, there is little likelihood of the 

derogation impacting on the current operations of the EU DWF in the medium term. However, in the 

case where European fishing firms wanted to expand their operations to the PNG EEZ, they may 

encounter enhanced competition for fisheries access and the PNG market for tuna raw material may 

already be sufficiently supplied by fishing firms that have onshore investments. 

EU-based processors and their canned tuna markets 

Since PNG processors have only sourced very minor volumes of raw material under the derogation in 

2011, the derogation has not had a discernable impact on EU markets. In any case, PNG canned tuna 

exports have not penetrated the most important markets of EU-based producers (i.e. Spain and 




Italy), largely since the types of canned tuna products currently processed in PNG (i.e. basic skipjack 

in vegetable oil or brine in 180 g packs) do not interact substantially with the types produced within 

Italy and Spain for their major markets of Italy and Spain (i.e. high quality yellowfin in olive oil in 

small packs). Given that Philippines-based processors are the principal source of investment in PNG, 

and that these companies have not penetrated the Italian or Spanish markets in their three decades 

of operations in the Philippines either, it is highly unlikely that this will change in the far more 

challenging business environment of PNG. 

It seems that the most important immediate strategic concern of EU-based processors is that global 

sourcing will be treated as a precedent rather than as an exemption and be offered to other trading 

partners, such as in free trade agreement negotiations with major canned tuna processors in ASEAN. 

In the medium-term, without the purchase of a major brand, PNG’s lack of direct penetration of 

Italian and Spanish markets is very unlikely to change. If there are plans for intra-EU growth by 

Spanish non-branded exporters, they may deepen interactions with PNG exports, possibly in the 

French market. However, Italy- and Spain-based processors may develop a symbiosis with PNG 

through the increased import of loins. 

Third countries and their EU canned tuna markets 

Thailand, Philippines, Ecuador, Mauritius and Seychelles have consistently been leading third country 

suppliers of canned tuna and cooked loins to the EU market throughout the last decade. To date, 

PNG’s RoO derogation has not had any direct impact on third country exports to the extra-EU 

market, given the derogation has barely been utilised. Similarly, the derogation cannot explain shifts 

in PNG’s share of EU markets for canned tuna and tuna loins. Neither the data for relative PNG 

share of the EU canned tuna market, nor that for the loin market show any discernable trends in the 

‘post-derogation’ period (March 2008-2011). 

For extra-EU imports of canned tuna, the top-5 third countries have dominated the market for the 7 

year period running up to the derogation (2001-06) and afterwards. PNG has remained a relatively 

insignificant player throughout. In fact, PNG’s largest recorded volume share of the extra-EU canned 

tuna import market was before the derogation (i.e. 4.5%. in 2005). The market share of the leading 

third country supplier in that year (Ecuador) was 3.4 times higher than PNG’s. For PNG volume share 

of the extra-EU import market for tuna loins there was a minor increase in the post-derogation 

period when it hit a new height of 2.4% in 2010, but there is no discernable trend in the data. This 

share is, however, insignificant compared to that of the top-3 leading third country suppliers in 2010 

(i.e. Ecuador with 35.6%, Mauritius with 12.0%, and Thailand with 11.6%). 

Raw material diversion of tuna catch in the WCPO from third country processors relying on this 

supply to PNG-based processors is one potential impact on third country suppliers identified for the 

medium term. By 2016, PNG processors may require an additional 120,000 mt of raw material. The 

main third countries that will likely be impacted will be processors in Thailand, Philippines, Vietnam 

and China. There are no likely raw material diversion impacts on EU-based processors, or other IEPA 

(i.e. Indian Ocean based processors) and GSP+ (i.e. Latin American) third countries. 

Trade diversion of finished product, where increased PNG exports of duty free canned tuna and tuna 

loins to the EU market will displace market share of existing exporters, has been identified as 

another potential impact on third country tuna processors. 

If the EU market remains relatively stagnant, by 2016 PNG could capture up to 14.0% share of the 

extra-EU import market for canned tuna (from 4.3% in 2010), potentially exporting around 56,700 




mt by 2016. Alternatively, if the extra-EU canned tuna import market returns to growth, PNG could 

capture up to 12.6% share of a mildly expanding extra-EU import market for canned tuna. Under 

both of these scenarios, potential PNG share of the extra-EU canned tuna import market is 

significantly less than that of Thailand and Ecuador, the two largest third country suppliers in recent 

years. The trade diversionary effect would be minor, and would not serve to destabilise the EU 

market. Two sets of companies in third companies could be potentially impacted: i) non-branded 

Asian-Pacific processors targeting similar markets as PNG (e.g. Germany, the UK and the 

Netherlands) that are also reliant on the WCPO for raw material (i.e. Philippines, Vietnam, China and 

smaller players in Thailand); and ii) Others: specialised non-branded processors in a weak tuna 

supply position (e.g. poor location, without vertically-integrated fleets,) and without ownership by 

EU firms (i.e. that are not tied-in to EU markets through EU firms who have an interest in the 

commercial survival of their overseas cannery investments). 

In the case of tuna loins, should the EU market experience continued growth, based upon projected 

PNG exports to the EU in 2016 of 29,200mt, PNG could capture up to 15.4% share of the extra-EU 

import market for tuna loins. Under this scenario, Ecuador’s 2010 market share is more than double 

that of Papua New Guinea’s projected share in 2016. In short, expansion of PNG’s exports to the EU 

(and the contributing role that the derogation plays in this) will not have a market destabilising 

effect. Moreover, given that the EU market for loins could increase by an estimated 54,600 mt 

between 2010 and 2016 (from 104,400 mt in 2010 to 159,000 mt in 2016) and that PNG’s projected 

exports in 2016 are 29,200 mt, existing third country suppliers will also still have room to grow. 




1 INTRODUCTION 

1.1 Background 

Since the mid 1970’s, former European Union (EU) colonies in the African, Caribbean and Pacific 

regions (ACP) have enjoyed preferential market access for exports to the EU under the Lomé 

Convention, and more recently, the Cotonou Agreement. The EU’s primary stated rationale for 

offering preferential market access to ACP countries has been to boost ACP industry competitiveness 

and promote development. Under the Lomé/Cotonou preference, Pacific Island Countries (PICs) 

benefit from duty free access for processed tuna products (cans/loins), while competing exports are 

subject to an EU 24% most-favoured nation (MFN) tariff. 

To comply with WTO requirements, former non-reciprocal trade agreements between the EU and 

ACP are being reformulated under a series of reciprocal Economic Partnership Agreements (EPAs). 

Regional negotiations between the EC and the 14 Pacific ACP States (PACPs) commenced in 2004 

and fisheries issues have been a critical component. From the outset, the principle fisheries-related 

demands of PACPs in negotiations have been ongoing preferential market access for fisheries 

products (particularly tuna), and relaxed rules of origin (RoO) that deems fish to be originating 

regardless of where the fish is caught or vessel ownership, if substantially transformed (processed) 

in a PACP-based processing facility prior to export. 

In 2007, PACPs were successful in negotiating a special derogation to the standard RoO (referred to 

as ‘global sourcing’) for processed fish (HS Chapters 1604 and 1605, covering canned tuna and 

cooked loins) which permits PACPs to source fish from any vessel regardless of flag or where it was 

caught, provided it has been ‘substantially transformed’ by a PACP-based processing facility. This 

derogation means that PACPs are able to source qualifying fish from a much wider range of vessels 

for onshore processing than under previous Cotonou Agreement rules of origin. The objective of the 

RoO derogation for processed fishery products is to support the development of onshore processing 

capacity for fish (notably tuna) products in the Pacific States, in order to create local employment (in 

particular for women) and income. For the EC this was a one-off and specific exception offered 

exclusively to PACPs because of their historical lack of ‘compliant’ fish under the prior RoO due to 

limited fishing capacity of PACP fishing fleets, reduced processing capability due to physical and 

economic factors, geographical isolation and distance from the EU market, as well as a low identified 

risk of destabilising the EU market. 

EC-PACP negotiations have been complex and drawn out, resulting in an inability to conclude a 

comprehensive EPA by the end-2007 deadline. Papua New Guinea (PNG) and Fiji signed an interim 

EPA in November 2007 to ensure uninterrupted preferential market access into the EU from 1 

January 2008. 

On 13 March 2008, PNG submitted a notification to the EU for use of the derogation for processed 

fishery products. According to Protocol II (Article 6) of the PACP Interim Economic Partnership 

Agreement text, a report on the implementation of the RoO derogation must be drawn up no later 

than three years after notification has been lodged by a PACP to utilise the derogation. 

In meeting the review requirements under Protocol II, this report on the ‘implementation of the 

derogation to the standard rules of origin granted to the Pacific ACP States in the framework of the 

Interim Economic Partnership Agreement’ was commissioned by the European Commission’s 

Directorate-General for Trade (DG TRADE) for completion by December 2011. 




In accordance with Protocol ll, Article 6.6 (c), (d), (e) of the PACP-Interim EPA and the project Terms 

of Reference (Appendix 1), the report considers: 

• Development effects on PNG economy – long-term income and employment generation; 

• Effective conservation and sustainable management of fishing resources (including 

compliance with sanitary and phytosanitary (SPS) regulations and support for combating 

illegal, unregulated and unreported (IUU) fishing in the Western and Central Pacific Ocean 

(WCPO)); and 

• Impacts on the EU canned tuna market and EU fishing and canned tuna processing industry. 

On the basis of this report, the EU and PNG will hold consultations in 2012 on the utilisation of the 

derogation, taking into account in particular its development effects and the effective conservation 

and sustainable management of the resources. 

1.2 Methodology 

This review has been undertaken in accordance with the methodology specified in the Terms of 

Reference (TOR) and has involved a review of existing literature, desktop research, stakeholder 

consultations and evidence-based analysis. 

The review was conducted from July – December 2011 and consisted of three phases: 

i) Phase l (18 – 29 July): 

• Brussels - 1 week; client inception meeting; multi-stakeholder consultation, bilateral 

consultations. 

• Spain - 4 days; bilateral consultations - industry, government. 

ii) Phase ll (8 Aug – 4 Nov): 

• FSM consultation - 1 week; Western and Central Pacific Fisheries Commission (WCPFC). 

• PNG consultation - 3 weeks; National Fisheries Authority (NFA), other government 

departments, industry representatives, non-government organisations (NGOs), international 

organisations. 

• Evidence-based analysis and report preparation. 

• PNG De-briefing - i) NFA/EC; ii) wider stakeholders. 

iii) Phase lll (7 Nov – 31 Dec): 

• De-briefing Brussels - EC (DG Trade, DG Mare, DG Sanco, European External Action Service 

(EEAS)). 

• Finalise draft report – submit to EC and NFA for review. 

• Client review of draft report – 21 days. 

• <strong>Report</strong> finalisation – 14 days; submission end December. 

An extensive review of literature was conducted to complement the consultants’ existing knowledge 

and establish a strong foundation for the study, since considerable information and data already 

exists in the public domain. This enabled the consultants to maximize the time available in face-to- 




face meetings with relevant stakeholders to focus on issues that are not sufficiently addressed in the 

public domain, are not easily understood or are of a sensitive nature. 

Desk top research included a review of reports/documents (e.g. public sector, private sector, grey 

literature, academic literature), media releases, company profiles, data and official statistics (e.g. 

vessel catch and effort data, vessel registries, trade statistics, market information), internet sites and 

other sources in the public domain. 

The study involved face-to-face consultation with key stakeholders in the EU (Belgium and Spain), 

PNG and Federated States of Micronesia (FSM). Written submissions were also received from three 

EU stakeholders (see Section 1.3). 

Using relevant literature sources, data, information gathered from key stakeholders and the 

consultants’ own knowledge and industry contacts, an evidence-based analysis was conducted. 

In assessing the impacts of the RoO derogation, three timeframe scenarios were considered: 

• Pre-derogation: 2006-2007 

• Post-derogation (first three years following notification): March 2008-2011 

• Post-derogation (future five-year projection): 2012-2016 

In terms of future projections of potential development of PNG’s tuna processing industry, a 

maximum period of five years was considered, as both the client and the consultants’ were of the 

view that projections any further than five years out could not be made with any certainty. 

While the objective of the review was to specifically analyse the impacts of the global sourcing 

derogation, in each section of this report discussion goes well beyond this, where issues which were 

either in existence prior to the derogation and/or have little relation to global sourcing have been 

included for the purpose of providing context. 

1.3 Stakeholder consultation 

The study involved extensive consultation with key stakeholders in the EU (Belgium and Spain), PNG 

and FSM. Table 1.1 presents a list of organisations that were consulted including relevant 

government agencies, tuna fishing and processing operators, international and regional 

organisations, non-government organisations and civil society representatives. Follow-up was 

conducted via email/telephone with selected stakeholders (particularly industry representatives) 

with additional information and data requests to support evidence-based analysis (see Appendix 2 

for the list of persons consulted). 

Discussions held with EU stakeholders centred largely around their respective positions on PNG’s 

global sourcing derogation. The positions raised were general in nature (with little empirical 

supporting information) and centred on issues including the potential impact of the derogation on 

the EU market, and EU fishing and processing industries, as well as industries in other ACP and GSP+ 

countries; the impact on the WCPO tuna resource, including the potential for IUU fishing and SPS 

infractions; and social issues relating to PNG’s processing facilities. Positions were presented during 

the multi-stakeholder consultation and bilateral meetings held in Brussels and Spain (18-29 July), as 

well as via written positions submitted to the consultants by three EU-based organisations. 




In contrast, consultation held with PNG stakeholders (12-30 September) was for the specific purpose 

of collecting detailed information and data to underpin evidence-based analysis of the impact of the 

derogation in PNG, rather than more general positions concerning the strengths/risks of global 

sourcing. 


Table 1.1 List of stakeholder organisations consulted 

Country Location Stakeholder Group/Company Details 

Belgium Brussels EC / EEAS European Commission - Client 

DG Trade 

European Commission - Client & Task Manager 

EU Parliament - Committee on Fisheries 

DG Mare 


DG Sanco 


EU fishing/canning industry 

OPAGAC, ANFACO, ANABAC, Eurothon, Pole Mer, Frucom 

Diplomatic Missions 

PNG, Fiji, Thailand, Philippines 

NGO's 

WWF, CFFA-CAPE, EBCD 

Spain Vigo ANFACO Industry association - Spanish Canned Tuna Processors 

Vigo Eurothon Industry association - European Tuna Fishers/Processors 

Madrid OPAGAC + CEPESCA Producer organisation - Purse seine vessel owners 

Madrid ANABAC Producer organisation - Purse seine vessel owners 

Madrid Ministry of Fisheries Government Agency – Fisheries 

Madrid Ministry of Industry, Tourism & Trade Government Agency – Trade 

FSM Pohnpei Western and Central Pacific Fisheries Commission Regional Fisheries Management Organisation 


WCPFC Science Provider 

PNG Port Moresby EC Delegation to PNG 


Government Fisheries Agency 


Government Agency - Foreign Investment 


Government Agency - PMIZ Project Coordination 


Government Agency – Environment 


Government Agency – Labour 

World Bank/International Finance Corporation 

Support for PMIZ/Special Economic Zone development 

Halisheng Corporation 

Tuna fishing/processing company - new development 

Fairwell Investment 

Tuna fishing company - partner in Niugini Tuna development 

World Wildlife Fund 

Environmental NGO 

Lae Frabelle Fishing Corporation Tuna fishing and processing company - established (2006) 

Majestic Seafood Corporation 


International Fisheries Corporation 

Mackerel processors - existing, expanding into canned tuna 

Madang RD Tuna Canners Tuna fishing and processing company - established (1997) 

Niugini Tuna 


PNG Fisheries Industry Association 

PNG tuna fishing/processing industry association 

Bismarck Ramu Group 

NGO 

Nancy Sullivan 

Social Anthropologist 

Wewak South Seas Tuna Corporation Tuna fishing and processing company - established (2003) 




2 RULES OF ORIGIN DEFINED 

2.1 What are preferential rules of origin 

Rules of origin (RoO) are contained within all preferential and free trade arrangements and govern 

whether or not a product is eligible for tariff preferences that are provided in a given trade 

arrangement. RoO in preferential trade arrangements are designed to serve two purposes. The first is 

to ensure that the economic activity associated with goods exported under the terms of the trade 

preference is undertaken in the preference receiving country. By specifying the origin of inputs or the 

amount of transformation required these rules reduce trade deflection (i.e. commercial interests in a 

third country transhipping product through the preference receiving country). The result is that the 

benefits of preferential trade are not conferred on non-signatories. 

In practice, rules of origin (RoO) also serve an important second purpose. They protect and/or promote 

economic interests based in the preference giving country by targeting the input composition of imports 

or acting as a non-tariff barrier to trade. 1 According to a RoO specialist at UNCTAD, ‘today’s rules of 

origin are used as, or simply are, instruments of commercial policy’. 2 This second purpose can have the 

effect of limiting the potential developmental benefits of a commercially significant trade preference. 3 

2.1 EU rules of origin for fish and fish products 

EU rules of origin for fish are based upon ‘wholly obtained’ criteria. Under (Interim) EPAs and under the 

EU’s current Generalized System of Preferences (GSP) regime, 4 the wholly obtained criteria for fish and 

fish products are that: 

• All fish is automatically wholly obtained and therefore considered as originating based upon the 

5 

location of catch for fisheries based inland and within territorial seas (12 miles from the coast). 

This can also include fish caught in a country’s archipelagic waters where the proper 

international legal procedures have been followed through the United Nations. 6 

• Origination is determined by the ‘nationality’ of the boat for fish caught at any point outside the 

territorial seas of signatories (i.e. in exclusive economic zones and the in high seas). The 

nationality of the boat is determined by: a) the boat being flagged and registered by one of the 

1 Falvey and Reed 2002; Gibbon 2008; Hoekman 1993; Krueger 1997. 

2 Inama 1995: 109. 

3 Alavi et al. 2007; Brenton 2003; Brenton and Manchin 2003; Brenton et al. 2008: 7-8; Mattoo et al. 2003. 

4 The three pillars of the EU’s GSP regime are: a) the standard GSP (available to almost all developing countries); b) 

the GSP+ (available to countries categorised as ‘vulnerable’ and having ratified and implemented 27 conventions 

on the environment, good governance and human rights); and, c) ‘Everything But Arms’ (available only to least 

developed countries, as recognised and categorised by the United Nations) (Council Regulation (EC) No 980/2005; 

Council Regulation (EC) No 732/2008; Commission Regulation (EU) No 1063/2010). 

5 Territorial seas as defined under UNCLOS (1982), Part II, Section II, Article 3. 

6 For example, Papua New Guinea obtained a redefinition of its ‘territorial sea’ to incorporate the sea surrounding 

its entire archipelago. To receive this status under UNCLOS (1982) Part IV, Articles 47-50, a country declares the 

waters sovereign and submits the claim to the Division of Oceans and Law of the Sea at the UN (a collection house 

for declarations). If there is no dispute, the declaration becomes law. Before PNG’s application, no other state had 

made use of archipelagic waters in relation to EU RoO. 




parties to the agreement; and, b) being at least 50% owned either by nationals of parties to the 

agreement or by a company based in one of the parties to the agreement. 7 

Due to the specific nature of fish, the 'wholly obtained' approach is the basis of all EU preferential rules 

of origin for fishery products in international preferential trade arrangements, including in the Cotonou 

Partnership Agreement (and the Lomé Conventions before it) . 

The main change in defining ‘wholly obtained’ fish in the (Interim) EPAs and the current GSP compared 

to Lomé/ Cotonou and prior GSP RoO is the full deletion of a requirement for a vessel’s crew to consist 

of 50% nationals of the parties to the agreement (75% for the prior GSP RoO). 8 EU industry had pushed 

for this deletion as it would give ‘the EU fleet greater flexibility without compromising any of the other 

benefits of the current RoO’. 9 

The EU tuna fishing industry maintains that the RoO contributes to off-setting its higher cost structure 

compared to less heavily regulated competitors, especially in the realm of ‘social and environmental 

conditions’. 10 From the perspective of preference-receiving trading partners, such as the ACP group, EU 

fisheries rules of origin have long been perceived as a source of contention due to their restrictiveness. 11 

2.2 The ‘global sourcing’ rule of origin under the PACP-EU Interim EPA 

The ‘global sourcing’ rule of origin permits PACP signatories to the Interim EPA to source fish from any 

vessel regardless of flag or where it was caught, provided it has been ‘substantially transformed’ by a 

PACP-based processing facility. 12 This provision means that PACPs are able to source qualifying fish from 

a much wider range of vessels for onshore processing than under previous Cotonou Agreement rules of 

origin. 

After several years of negotiations, the EU and the Pacific ACP agreed to the terms of an Interim EPA in 

November 2007, which deals solely with the trade in goods. Only Papua New Guinea and Fiji initialled 

the Agreement and both have since signed it (in July and December 2009 respectively). Fiji has not yet 

applied the Interim EPA or notified its intention to utilise global sourcing. For PNG, the continuation of 

uninterrupted preferential access to the EU market for palm oil and canned tuna were major 

motivations behind its initialling of the IEPA. 

From the perspective of the Pacific parties, achieving a relaxation of the rules of origin for fish was a 

primary objective in the negotiations. The rationales for this objective were recorded in the text of the 

PACP-EU IEPA (2010): 

7 This is a simplification of complex legal text. More detailed comparative accounts of fisheries RoO under Cotonou 

and under (Interim) EPAs can be found in Campling (2008) and Naumann (2010). 

8 Compare (Interim) EPA RoO protocols with CPA, Annexes 5 and 17; and Commission Regulation (EEC) No 2454/93 

with Commission Regulation (EU) No 1063/2010. 

9 Oceanic Développement-Megapesca 2007: 52. 

10 FITAG-Anfaco 2011: 2; Murias 2011a; Estudios Biologicos 2006. 

11 Commission for Africa 2005: 55-56; Cosgrove Twitchett 1981: 111; Davenport et al. 1995: 33, 61; Ravenhill 1985: 

167-171; Stevens and Weston 1984: 55. 

12 See Box 1 for full reproduction of the relevant article in the PACP-EU IEPA. 




The Parties recognise that since the Lomé Convention was signed in 1976, Pacific States 

have not been able to develop an adequate national fleet respecting the vessel 

conditions of Article 5.2 of the present Protocol II [i.e. on ‘wholly obtained’ fish]. The 

Parties also recognise the special circumstances of the Pacific States encompassing the 

insufficient wholly-obtained fish to meet on-land demand, the very limited fishing 

capacity of the Pacific States’ fishing fleet, the reduced processing capability due to 

physical and economic factors, the low risk of destabilising the EU market due to large 

inflows of fishery products from the Pacific States, the geographical isolation of the 

Pacific States as well as the distance to the EU market. The Parties also share the final 

goal of promoting further development in the Pacific States while promoting 

sustainable fisheries and good fisheries governance. (Protocol II, Article 6.6(a).) 

In other words, the negotiated text of the PACP-EU IEPA explicitly recognised that prior EU RoO had 

limited the developmental potential of commercially significant trade preferences for processed fish 

products due to ‘insufficient wholly-obtained fish’. 

For the EU this was a one-off exception offered exclusively to PACPs because of their historical lack of 

originating fish under Cotonou RoO. Global sourcing is ‘a specific relaxation’ for the PACP and ‘cannot be 

taken as a precedent in other negotiations’ (DG Trade 2007a: 3; see also DG Trade, 2007b: 15). A letter 

by Trade Commissioner Peter Mandelson to Cook Islands Minister of Foreign Affairs Wilkie Rasmussen 

reiterates this position. In the letter, Mandelson noted that, in offering global sourcing fisheries RoO, 

‘we did so specifically and only for the Pacific, in response to what you [the PACP] said was a decisive 

issue’ (Mandelson 2008; see also, EUROTHON 2011a: 2-3). 

Popularly referred to as ‘global sourcing’ this negotiated outcome of the PACP-EU Interim EPA is more 

technically understood as an application of the Change in Tariff Classification (CTC) method. That is, 

goods are deemed to be originating if they are transformed in a signatory PACP country from one 

heading of the Harmonised System (HS) of tariff classification (in this case fresh and frozen fish under 

Chapter 3, especially tuna) to another heading (in this case processed fish products, especially canned 

tuna and tuna ‘loins’ for reprocessing as canned tuna under Chapter 16). 13 The text establishing the 

‘global sourcing’ derogation is reproduced in full as follows: 

6. (b) The Parties recognise the enormous importance of fisheries to the people of the 

Pacific States and that the fish, for example tuna in the Western and Central Pacific 

Ocean is the most important shared natural resource for long-term income and 

employment generation for the Pacific States. This shared fisheries resource in the 

waters of the Pacific States is subject to various management regimes at regional, subregional 

and national levels, including the Vessel Day Scheme aiming at regional 

sustainable tuna purse seine fisheries. These activities are subject to monitoring within 

13 It is important to specify the type of tuna ‘loins’ under consideration here. Pre-cooked, vacuum-packed frozen 

skipjack and yellowfin tuna loins are filed under Chapter 16 of the World Customs Organisation Harmonised 

System and transposed to the EU Combined Nomenclature (Commission Regulation (EU) No 861/2010). This type 

of loin is used by canning operations, including by EU processors, for defrosting and inserting into the canned tuna 

production process (HS codes 1604 1416 and 1604 1931). This product is distinct from fresh-chilled vacuum packed 

tuna loins which are filed as ‘fillets’ under Chapter 3 (0304). This product type is imported to be cut into fillets or 

steaks for sale on supermarket fish counters, retailed as pre-packed portions of fresh-chilled or frozen product, or 

are used in restaurants. 




the framework of the Western and Central Pacific Fisheries Commission, including the 

Vessel Monitoring System and Observer Programmes. In this context, the Parties agree 

that notwithstanding paragraph 1, when circumstances are such that wholly obtained 

products as defined in Article 5 paragraphs 1(f) and 1(g) cannot be sufficiently utilised 

to satisfy the on-land demand and following the prior notification to the European 

Commission by a Pacific State, processed fishery products of headings 1604 and 1605 

manufactured in on-land premises in that State from non-originating materials of 

Chapter 03 that have been landed in a port of that State shall be considered as 

sufficiently worked or processed for the purposes of Article 2. The notification to the 

European Commission shall indicate the reasons why the application of this paragraph 

will stimulate the development of the fisheries sector in that State, and shall include 

the necessary information about the species concerned, the products to be 

manufactured as well as an indication of the respective quantities to be involved. 

(Protocol II, Article 6.6(b). Emphases added.) 

Two points from this text are worth re-emphasising here. First, the rule was worded as a one-off 

exemption applied to the Pacific islands (as already emphasised in the wording of the text of Article 

6.6(a)). Second, this text and the ‘review clause’ (see below) details the principal objective of the 

derogation – ‘long-term income and employment generation for Pacific States’ (see also, Commission 

Staff Working Document 2007: 15). 

The term ‘global sourcing’ can be misleading. While in terms of preferential origin the derogation is 

global if compared to standard EU origin rules, this does not permit PACP signatories unmitigated 

sourcing of tuna or other fish species on a global scale. The supply of fish is subject to strict EU sanitary 

and phytosanitary (SPS) measures and the EU regulation on the import of IUU fish and fish products. 

Both conditions are specified in Article 6.6(e) of Protocol II. 

Another conditionality in the derogation is that ‘[a] report on the implementation of Article 6.6(b) shall 

be drawn up no later than three years after the notification’ to the European Commission (Article 6.6(c) 

and (f)). PNG sent a notification to the European Commission on 13 March 2008. This report was 

commissioned to fulfil the requirement of Article 6.6(c). 14 In so doing, it provides the first step in the 

process of the derogation’s ‘review clause’. The review clause specifies that: 

On the basis of this report, the European Community and the requesting Pacific State 

shall hold consultations on the utilisation of subparagraph (b), taking into account in 

particular its development effects and the effective conservation and sustainable 

management of the resources and, if appropriate, amend it. (Protocol II, Article 6.6(d). 

Emphasis added) 

The review clause thus specifies the two central elements to be considered in this report: the 

derogation’s overarching objective of generating ‘development effects’ (defined as ‘long-term income 

and employment generation’ as per Article 6.6(b) above) and the principal conditionality of ‘the 

effective conservation and sustainable management of the resources’ (Article 6.6(d)). A third 

component of this report takes seriously the en passant mention in Article 6.6(a) on ‘the low risk of 

destabilising the EU market due to large inflows of fishery products from the Pacific States’ (see above). 

14 See Appendix 1 for the full terms of reference for this study. 




Box 1: Text of the PACP-EU Interim EPA on ‘global sourcing’, Protocol II, Article 6 (6) 

6. (a) The Parties recognise that since the Lomé Convention was signed in 1976, Pacific States have 

not been able to develop an adequate national fleet respecting the vessel conditions of Article 5.2 

of the present Protocol II. The Parties also recognise the special circumstances of the Pacific States 

encompassing the insufficient wholly-obtained fish to meet on-land demand, the very limited 

fishing capacity of the Pacific States’ fishing fleet, the reduced processing capability due to 

physical and economic factors, the low risk of destabilising the EU market due to large inflows of 

fishery products from the Pacific States, the geographical isolation of the Pacific States as well as 

the distance to the EU market. The Parties also share the final goal of promoting further 

development in the Pacific States while promoting sustainable fisheries and good fisheries 

governance. 

6. (b) The Parties recognise the enormous importance of fisheries to the people of the Pacific 

States and that the fish, for example tuna in the Western and Central Pacific Ocean is the most 

important shared natural resource for long-term income and employment generation for the 

Pacific States. This shared fisheries resource in the waters of the Pacific States is subject to various 

management regimes at regional, sub-regional and national levels, including the Vessel Day 

Scheme aiming at regional sustainable tuna purse seine fisheries. These activities are subject to 

monitoring within the framework of the Western and Central Pacific Fisheries Commission, 

including the Vessel Monitoring System and Observer Programmes. In this context, the Parties 

agree that notwithstanding paragraph 1, when circumstances are such that wholly obtained 

products as defined in Article 5 paragraphs 1(f) and 1(g) cannot be sufficiently utilised to satisfy 

the on-land demand and following the prior notification to the European Commission by a Pacific 

State, processed fishery products of headings 1604 and 1605 manufactured in on-land premises in 

that State from non-originating materials of Chapter 03 that have been landed in a port of that 

State shall be considered as sufficiently worked or processed for the purposes of Article 2. The 

notification to the European Commission shall indicate the reasons why the application of this 

paragraph will stimulate the development of the fisheries sector in that State, and shall include 

the necessary information about the species concerned, the products to be manufactured as well 

as an indication of the respective quantities to be involved. 

(c) A report on the implementation of subparagraph (b) shall be drawn up no later than three 

years after the notification. 

(d) On the basis of this report, the European Community and the requesting Pacific State shall 

hold consultations on the utilisation of subparagraph (b), taking into account in particular its 

development effects and the effective conservation and sustainable management of the resources 

and, if appropriate, amend it. 

(e) Subparagraph (b) shall apply without prejudice to sanitary and phytosanitary measures in 

force in the EU, effective conservation and sustainable management of fishing resources and 

support to combat illegal, unreported and unregulated fishing activities in the region. 

(f) The provisions of this paragraph shall be applicable to imports from a Pacific State from the 

first day after the publication in the Official Journal of the European Union of a notice informing 

that the State concerned has made a notification to the European Commission in accordance with 

subparagraph (b). 




3 PNG CANNED TUNA INDUSTRY 

3.1 PNG Tuna Fishing Fleet 

With a large exclusive economic zone (EEZ) 2,437,480 km 2 in extent, and centrally located in the most 

productive part of the western Pacific Ocean, PNG has become a tuna producer of global significance. 

The annual catch in the PNG EEZ by the purse seine fleets which account for the majority of the tuna 

catch (> 99%) 15 has been around 500,000 mt in most recent years, representing ~ 11% of the global 

catch and 20% of the catch within the Western and Central Pacific Ocean (WCPO) in 2009. 16 PNG also 

has extensive archipelagic waters (640,000 km 2 – 26% of the total EEZ area) which it declared as 

sovereign territory, along with territorial seas, under UNCLOS procedures, and has been law since 2004. 

PNG was the first country to make use of this provision in relation to EU Rules of Origin (RoO). 17 

The total purse seine fleet is a mix of PNG-flagged vessels, locally-based foreign (or chartered) vessels 

which are linked to onshore development/processing through concessional access, and foreign fishing 

vessels operating in PNG waters (but outside archipelagic waters) under bilateral access agreements. 18 

The first two categories are considered to be under the competency of PNG, and hence, are generally 

labelled the ‘PNG fleet’. Table 3.1 lists the number of vessels licensed in 2008 (pre-derogation) and 

currently (2011). Certain foreign vessels have been permitted to fish within archipelagic waters on the 

condition that fish is unloaded to onshore processing facilities (see later). 

Table 3.1 Vessels licensed to fish in PNG by flag and permitted operating area - 2008, 2011 

Category 

Flag 

Vessel numbers 

2008 2011 

Fishing area permitted as condition of licence 

Domestic a PNG 9 12 All waters outside 12nm of land, island, reef 

(archipelagic and EEZ) 

Locally- based 

foreign 

(chartered) a Philippines (20), China (2), 

Taiwan (4), Vanuatu (13) 

33 39 Small-medium vessels 1,000 GT) 19 - EEZ waters only (i.e. 

outside 12nm and archipelagic waters ) 

Foreign 

a 

China, FSMA + , Japan, 

Korea, Philippines, Taiwan, 

USMLT + , Vanuatu, other 

128 (176) b EEZ waters (outside 12nm and outside 

archipelagic waters) 

Classified as ‘PNG fleet’ 

b 

2010 figures - 2011 figures not available; other 2011 figures from NFA Licensing Database 

+ 

FSMA = Federated States of Micronesia (FSM) Arrangement, USMLT = US Multilateral Tuna Treaty 

15 There is a domestic longline catch of 2,000-4,000 mt in most years, plus small catches by handline vessels 

(pumpboats); there has been no domestic pole-and-line fleet operating in PNG since 1985, and the Japanese 

distant water pole and line fleet does not have access to PNG waters. 

16 Usu 2011 (Table 2). 

17 Campling 2008. 

18 Exceptions to this are vessels fishing under the US Multilateral Treaty and the FSM Arrangement (FSMA) 

amongst PNA members, which are licensed to fish both within PNG’s EEZ and beyond, in the EEZs of the seven 

other PNA members (i.e. Solomon Islands, Nauru, Federated States of Micronesia, Marshall Islands, Kiribati, 

Tuvalu, Palau). 

19 Super seiners of two companies – size not defined but > 1,000 GT in most cases; small-medium vessels with well 

capacity < 600 GT are permitted to tranship at sea, usually in archipelagic waters. 




Foreign vessels fishing under access agreements account for around 70% of the total tuna purse seine 

catch in the PNG EEZ in most years, with Japan, Korea, Taiwan, Philippines and US Multilateral Tuna 

Treaty (USMLT) accounting for the majority of the foreign vessel catch (> 80%), with the balance taken 

by China, Vanuatu and FSM Arrangement (non-PNG home party) vessels. 

Tables 3.2 presents catch within PNG’s waters (i.e. archipelagic waters (AW) and the EEZ) for all vessel 

access categories from 2006-2010. From 2006-2009, total catch ranged from between around 390,000 - 

470,000 mt. However, in 2010, catch increased significantly to over 700,000 mt (discussed later). 

Table 3.2 Catch in PNG waters a by vessel access category (mt), 2006-2010 

Catch by Location 2006 2007 2008 2009 2010 

Ave. 

2006 - 

2010 

PNG flag vessels (domestic) 18,659 20,826 31,106 34,688 27,972 26,650 

Locally-based foreign (chartered) 126,495 124,572 112,286 95,310 114,468 114,626 

Foreign access vessels 273,926 317,839 329,160 262,450 560,530 348,781 

Total EEZ catch 419,080 463,237 472,552 392,448 702,970 490,057 

a Includes catches within archipelagic waters and the EEZ. 

Source: NFA database, 2011. 

Note: NFA logsheet data are used here - SPC EEZ total catch estimates raised to account for gaps in logsheet coverage are 

generally higher by 20,000-30,00 mt each year. 

Table 3.3 presents catch by the PNG fleet within PNG’s waters and beyond (i.e. high seas and other PNA 

members’ EEZs). From 2006-2010, the total PNG fleet caught over 140,000 mt per year on average 

within PNG’s waters, with PNG-flag (domestic) vessels accounting for around 20% of catch. The total 

catch by the PNG fleet, including catches beyond the EEZ, averaged almost 214,000 mt annually from 

2006-2010. Around one-third of this catch is taken outside PNG waters by the larger chartered vessels. 

Table 3.3 PNG fleet catch in PNG waters a and beyond (mt), 2006-2010 

Catch by Location 2006 2007 2008 2009 2010 

Catch inside EEZ 

Ave. 

2006 - 

2010 

PNG-flag vessels (domestic) 18,659 20,826 31,106 34,688 27,972 26,650 


Total EEZ catch 145,154 145,398 143,392 129,998 142,440 141,276 

Catch outside EEZ 


Total PNG fleet catch 224,375 224,914 210,493 202,610 205,837 213,645 

a Includes catches within archipelagic waters and the EEZ. 

Source: NFA database, 2011. 




Catch by area 

The majority of the catch in PNG waters is taken within the EEZ (i.e. outside territorial seas and 

archipelagic waters), by all vessel categories. Fishing in archipelagic waters is generally restricted to 

PNG-flag vessels and smaller chartered vessels, although some exemptions conditional upon unloading 

fish to PNG processing facilities have been granted to foreign vessels (Philippines flag) since 2007, 

allowing them to fish periodically in archipelagic waters. 

Whilst exact figures on catch by individual vessels in archipelagic waters are difficult to obtain, Table 3.4 

below indicates that on average, around 16% of the total PNG catch was taken from 2006-2010. PNG 

flag vessels, which fish almost exclusively in archipelagic waters, account for around one-third of this 

catch. The small-medium chartered vessels (Philippines flag) account for most of the remainder, with 

small amounts taken by foreign vessels (Philippines flag) under the concessional arrangements as 

outlined earlier. No detailed breakdown of the archipelagic waters catch for these vessels is available 

from the analysis of logsheet data, 20 although positional data are available from the PNG VMS database. 

With the large increase in the total catch in PNG waters in 2010 (and 2011), archipelagic waters are 

becoming proportionally less important as a fishing area, and with the advent of the global sourcing 

derogation, enjoy no distinctive advantage in terms of EU market access. However, exemptions offered 

under the Vessel Day Scheme (VDS) continue to apply to purse seine vessels when fishing within 

archipelagic waters (see Section 5.4.2). There are no fisheries management arrangements applying 

specifically to archipelagic waters in PNG, other than restrictions on access relating to vessel licensing 

classes. 

Table 3.4 Catch in PNG archipelagic waters (mt), 2006-2010 

Fishing Fleet 2006 2007 2008 2009 2010 

Ave. 

2006- 

2010 

PNG-flag (domestic) in AW 18,659 20,826 31,106 34,688 27,972 26,650 

Locally-based foreign (chartered) catch in AW 32,125 49,204 53,711 64,947 53,549 51,644 

Total archipelagic waters catch (mt) 50,784 70,030 84,817 99,635 81,521 77,357 

PNG domestic fleet catch as % AW catch 37% 30% 37% 35% 34% 34% 

AW catch as % of total catch in PNG waters 11% 15% 17% 23% 12% 16% 

Source: NFA and SPC databases, 2011 

Trends in catch and vessel numbers 

The numbers of vessels licensed to fish in PNG waters have been increasing steadily since 2008 in each 

of the three access categories (Table 3.1). 

20 Data from one company (RD Tuna) indicate that 7% of their catch by chartered vessels was taken outside AW in 

the period 2007-2010 inclusive; the % catch outside AW waters is assumed to be similar for the second smaller 

fleet of chartered small-medium vessels (Frabelle - 3 vessels). 




PNG flag vessels have increased by three (25%) since 2008, with the accession of three small vessels to 

the fleet. Two vessels in this category were also replaced by other vessels of comparable size. 

Nonetheless catches by this category have not significantly increased in that time and average catch per 

vessel remains small (< 3,000 mt/year) 

The number of locally based-foreign vessels has also increased, from 33 in 2008 to 39 in 2011, as a result 

of additional vessels introduced by two of the three companies currently processing tuna. 21 Despite this, 

the total catch by chartered vessels has remained stable since 2008, although this may trend slightly 

upwards during 2011 with all additional vessels fully operational. These additions to the chartered fleet 

are generally larger and more modern vessels, with the declared intention of fishing predominantly 

outside AW, and with greater targeting of free swimming schools. Annual catches by chartered vessels 

are quite divergent between the small-medium vessels (2,500 mt -3,000 mt/year, mostly taken in AW) 

and the large vessels (6,000-8,000 mt/year), which fish both within PNG’s EEZ and beyond. 

The number of foreign vessels that fished in the PNG EEZ during 2010 showed a sharp increase from 

2008 (126 vessels) to 2009 (155 vessels), largely as result of the direct relocation of effort following the 

closure of the adjacent high seas pockets (HSP) in January 2010 under the Parties to Nauru’s Third 

Implementing Arrangement (discussed later). Not all foreign vessels fishing in the WCPO choose to fish 

in PNG’s EEZ in a given year, and the number varies in response to factors such as ENSO-induced shifts in 

the distributions of tuna biomass. However, considerably more vessels than usual fished in PNG’s EEZ in 

2010 due to the HSP closures and this has continued to be the case in 2011. This relocation of effort 

resulted in a huge increase in catches within PNG waters in 2010, jumping to over 700,000 mt from 

22 

under 400,000 mt in 2009. 

It is unlikely that this increase in vessel numbers or catch volumes in PNG waters in 2010 and 2011 is 

related to the RoO derogation, since there has only been a minimal increase in the volume of fish 

processed in PNG since the derogation first came into effect in March 2008. 

The overall catch in the WCPO has also not increased significantly since 2008 (see Section 5.2), although 

as mentioned, the distribution of effort has been much impacted by the HSP closures, with greater 

effort in adjacent PNG waters where fish were readily available during most of 2010. Indications are 

that the distribution of effort and catch during 2011 by EEZ in the WCPO will be similar, with the catch in 

23 

PNG waters once again exceeding 700,000 mt, with probably higher effort and CPUE than 2010. 

Catch by species and size 

Catch species composition in PNG waters varies slightly amongst years and by area (e.g. EEZ vs. AW, 

with higher yellowfin and bigeye % in AW), but has been in the range 74-83% skipjack, 15-25% yellowfin 

24 

and 2-3% bigeye. 

21 RD has added four vessels – Dolores 839 and 849 (purchased from Solomon Islands), Dolly 14 and Discovery 101, 

a joint-venture vessel operated by RD and FairWell; Frabelle has added two vessels, one initially as a Japanese 

joint-venture (Wakaba 8) and Gardenia. 

22 Usu 2011. 

23 SPC data to September 2011. 

24 SPC data – logsheet data for skipjack, yellowfin and bigeye breakdown estimated from observer grab samples. 




Size composition of the catch, by species, along with many other details for the PNG fishery, is 

summarized in a recent comprehensive SPC review. 25 In addition, NFA has been conducting an intensive 

port sampling programme at the main unloading points to document the size and species composition 

of the catch for management purposes since 2009. 

Market destinations 

Table 3.5 summarizes the market destination of tuna by product type taken by the various categories of 

vessels fishing in PNG waters. This serves to demonstrate that almost all fish currently being processed 

and exported by PNG’s three existing processing facilities originates from PNG-flag and small-medium 

charter vessels which have access to PNG’s AW. Hence, catches would automatically be considered 

‘wholly obtained’ on the basis of EU standard RoO. 

It should be noted that exports of frozen whole round fish by large chartered vessels (which are 

considered to be part of the PNG fleet) transhipped in PNG ports are not currently regarded as exports 

of PNG. 

26 Similarly, fish caught by foreign access vessels which take much of their catch in PNG waters 

and transhipped in PNG ports for export is not regarded as exports of PNG. 27 

Table 3.5 Market/processing destination of fish caught by vessels in PNG waters, 2011 

Domestic 

PNG Exports 

consumption 

Source 

Frozen 

Valueadded 

Canned (incl. by- 

Fresh 

Frozen 

Fish 

Canned cooked 

whole 

meal/oil 

loins 

frozen 

catch) 

PNG flag √ √ √ √ √ √ √ 

Chartered (small) √ √ √ √ √ √ √ 

Chartered (large) minor minor √ x X minor 

Foreign (Phils) √ √ √ X x 

Foreign (all other) X x √ x X x 

Source: Interviews, various PNG tuna processing company representatives, September 2011. 

= definitive information not available on these categories at the time of writing. 

25 Nicol et al. 2009. 

26 Around 60,000 mt caught in PNG waters in 2010. 

27 Around 80,000 mt caught in PNG waters by Philippine flag foreign vessels in 2010. 




Originating/EU compliant fish available for processing and subsequent export to EU markets prederogation 

Following PNG’s declaration of its archipelagic waters as sovereign territory (2004), the following catch 

could be processed and exported to the EU as originating product under Protocol 1 to Annex V of the 

Cotonou Agreement, provided that vessels and processing plants were compliant with SPS 

requirements: 

• catch by PNG flag vessels in PNG waters; 

• catch by PNG flag vessels in any waters (subject to fulfilment of vessel ownership criteria); 

• catch by EU vessels in any waters; and 

• catch by vessels of any flag in PNG archipelagic waters. 

In terms of EU SPS requirements, PNG’s National Fisheries Authority became PNG’s EU-accredited 

Competent Authority (CA) in 2002. Since that time, it has been able to certify and audit PNG-flag vessels 

and processing establishments. In addition, through a Memorandum of Understanding with the 

Philippines CA (the Bureau of Fisheries and Aquatic Resources(BFAR)) recognised by DG SANCO under 

Article 15 of EC Regulation 854/2004, 28 NFA can also certify and audit Philippine-flag chartered vessels 

for SPS compliance. 

During the period 2004-2007, approximately 20 vessels were SPS-compliant, as well as three processing 

29 

facilities. For the years 2006 and 2007, 50,000 mt and 70,000 mt of tuna respectively were caught in 

AW by SPS certified vessels (Table 3.x). Hence, these catches were EU RoO compliant for processing and 

subsequent duty free export to the EU. 

In 2007, PNG’s processing plants required around 65,000 mt/year of raw material. 

30 Hence, the volume 

of available compliant originating fish adequately met demand, even in the instance that 100% of 

production was intended for EU markets, which was not the case. 31 No EU vessels were licensed to fish 

in PNG waters in 2007, 32 so all RoO compliant fish originated from PNG-flag or Philippines-flag vessels 

operating within AW. There was an increase in the AW catch during 2008 and 2009 (to 85,000 mt and 

100,000 mt respectively) (Table 3.4), but the amount of wholly originating fish available has never 

exceeded more than 100,000 mt. 

Post-March 2008, with the notification of PNG’s intent to utilize the derogation from RoO under the 

IEPA, fish from a wider range of vessels was potentially available to processors for export to the EU, 

provided the vessels were SPS-compliant. This issue is considered in more detail in Section 5.6. 

28 da Silva 2009. 

29 NFA/ACU data provided to consultants, September 2011. 

30 Consultants’ analysis (see Section 3.2.1). 

31 In practice, in 2007, 16,299 mt of canned tuna and 763 mt of loins were exported to the EU, equivalent to about 

24,500 mt and 1,800 mt of whole fish respectively (26,300 mt total.) 

32 This continues to be the case, with no EU-flag or beneficially owned vessels fishing in PNG waters under either a 

fisheries partnership agreement (FPA) or bilateral agreements. 




EU IUU-Fishing Regulation requirements 

In an effort to combat the flow of IUU fish into the EU market, in September 2008 the EU adopted a 

Regulation (EC Regulation No. 1005/2008) establishing a system to prevent, deter and eliminate illegal, 

unreported and unregulated (IUU) fishing (referred to as the ‘IUU Regulation’), which entered into force 

on 1 January 2010. As of this date, only flag states that have their notification accepted by the European 

Commission are authorized to export fisheries products to the EU, either directly or indirectly after 

processing in another country. 33 

PNG’s notification was accepted on 4 February 2010, with NFA nominated as the Competent Authority 

for the purposes of the IUU-Regulation. Since that time, procedures have been put into place for catch 

certification of PNG flag vessels. In the case of Philippines chartered and foreign vessels, Philippines 

Bureau of Fisheries and Aquatic Resources (BFAR) has been notified as the principal institution 

responsible inter alia for the issuing of catch certificates, in line with flag state reporting responsibilities. 

Hence, catch certificates for Philippines vessels fishing in PNG waters are issued by BFAR. Similarly, in 

accordance with flag state reporting principles, Taiwan, Japan, China and Korea, amongst others, have 

CA status and are in a position to validate catch certificates for their flag vessels fishing in PNG. In 

addition, their vessels require SPS certification to be able to export to EU (see Section 5.5.3). However, 

Vanuatu-flag chartered vessels are unable to supply IUU Regulation (or SPS) compliant fish as Vanuatu 

does not have a CA in place for both the IUU and SPS Regulations. With respect to the IUU Regulation 

this implies that as the country has no flag state notification status, it cannot issue catch certificates. 

Hence, exports to the EU of fish and fish products caught by Vanuatu-flagged vessels (fishing in PNG 

waters or elsewhere) are not permitted, irrespective of PNG’s RoO derogation. Similarly, Pacific-Island 

flagged vessels with licences under the FSM Arrangement that may fish in PNG waters under the flags of 

Kiribati, Marshall Islands and Federated States of Micronesia are also unable to export to the EU, as they 

do not have a CA established for the purposes of the IUU (or SPS) Regulation. 

A recent review of PNG’s implementation of the IUU regulation suggests that it has performed very well, 

and that this additional requirement for EU certification has not limited the supply of compliant raw 

material for processing in PNG plants, other than in the case of Vanuatu-flagged vessels (discussed 

34 

further in Section 5.5.3). 

Potential future changes in fleet size and profile 

With management measures in place to restrict purse seine fishing effort to 2004 levels, indications 

are that the rapid growth in vessel numbers fishing in the WCPO experienced during the 2000s has 

slowed, and that hard limits to the existing purse seine effort capping scheme (VDS) are starting to be 

enforced for the first time in 2011 (see Section 5.3). It is not expected that overall fleet size within the 

WCPO will expand significantly in the future, provided the measures in place are respected. The recent 

MSC certification of the PNA skipjack fishery stipulates conditions that reference points and harvest 

control rules be applied, which will further restrict fleet growth at the regional level (WCPO). 

However, the composition of fleets operating within the WCPO may change as replacement and 

restructuring by fleet takes place, particularly as a number of fleets are comprised of ageing vessels. 

35 

33 IUU Regulation (EC) No. 1005/2008 of 29 September 2008. 

34 Banks 2011. 

35 WCPFC Conservation and Management Measure 2008-01. 




In the case of PNG, should PNG respect hard limits to purse seine effort under VDS, this may result in 

reduced access for foreign vessels not associated with or committed to onshore processing, to make 

way for vessels associated with new processing facilities. PNG’s current policy concerning the issue of 

fishing licences associated with new processing investments is that they must be filled by existing 

vessels operating within WCPO. In the event that new vessels are constructed to utilise licences, 

equivalent fishing capacity within the WCPO must be withdrawn through the scrapping of existing 

vessels. 36 

At this point in time, it seems that global sourcing will have little impact on the future total fleet size, 

either at the regional or national level. The main constraint to supply for new and existing processing 

plants in PNG at projected full production levels in medium term may well be the number of fully 

compliant vessels (in terms of both IUU and SPS regulations). Further, supply of compliant fish will also 

be dictated by the volume of such fish that is not only potentially available to PNG plants for processing 

and export, but can actually be delivered to PNG plants for processing, in light of existing supply 

contracts and supply arrangements in place. 

3.2 PNG Processing Sector 

3.2.1 Existing Operations 

Currently, PNG has three tuna processing facilities handling canned tuna and cooked loin production. 

PNG’s first canned tuna processing facility was established by Philippines’ owned RD Tuna Canners in 

Siar, Madang in 1997. Seven years later (2004), a loining plant was established in Wewak by Taiwanese 

interests called South Seas Tuna Corporation. Frabelle (Philippines) is the most recent investment and 

was established in Lae in 2006, although Frabelle’s fishing fleet became active in PNG a number of years 

prior. In the case of all three plants, this investment was driven by a desire to obtain discounted licences 

to fish in PNG’s highly productive waters. To date, for RDTC and Frabelle, production is focussed 

primarily on canned tuna for the EU and domestic markets, with small volumes of cooked loins also 

processed (also for export to the EU). SSTC specialises in cooked loin production on a contractual basis 

and until 2011, has focussed almost exclusively on the US market. SSTC plans to increase exports to the 

EU to account for up to 50% of their total production. 

Table 3.6 presents a profile of PNG’s existing tuna processing operations (as at October 2011) in terms of 

production capacity, products and markets and current constraints, recent developments and future 

prospects. Note that production capacity of plants expressed in mt/day (both below and throughout the 

report), reflects the raw material input into the production process (e.g. 120 mt/day, means that 120 

mt of whole round fish are processed per day into canned tuna or cooked loins). 

36 NFA Managing Director, S. Pokajam, pers. comm., September 2011. 




Table 3.6 Profile of PNG’s Existing Tuna Processing Operations, 2011 

Key Parameters RD Tuna Canners Frabelle (PNG) Ltd. 

PRODUCTION 

Location/Year established 

Ownership 

‘Project’ definition (as per 

original Project 

Agreement) 

Siar, Madang – cannery 

Vidar, Madang – private 

wharf, cold storage, valueadded 

processing 

Est. 1997 

RD Group of Companies 

(Philippines) 

Not available 

Maximum production 

capacity (mt/day) 

Current production 

capacity (mt/day) 

Current annual raw 

material throughput (mt) 

Raw material sources RD Fishing Ventures (90% 

supply): 

17 chartered vessels – 

Philippines flagged 

(operating mostly in AW, 

also EEZ; 3 with FSMA 

licences). 

Lae City, Morobe 

Est. 2006 

Frabelle Fishing 


(Philippines) 

Integrated tuna 

processing facility; initial 

capacity 70mt/day, 

potentially up to 

140mt/day; 20 fishing 

licences. 

South Seas Tuna 

Corporation Ltd. 

Wewak, East Sepik 

Est. 2003 

200 mt/day 100 – 120 mt/day 200 mt/day 

FCF (Taiwan) (95.5%); Bank 

South Pacific (PNG) (3%); 

East Sepik Provincial Govt. 

(PNG) (~1.5%) 

Integrated tuna processing 

facility; up to 200mt/day; 

14 fishing licences. 

120 mt/day 70-80 mt/day 70-80 mt/day 

~ 25,000-30,000 mt ~20,000 mt ~20,000 mt 

Other vessels supply 

around 10% (e.g. TPJ, 

Frabelle, Fairwell). 

Frabelle fleet: 

9 x PNG-flagged (AW) 

3 x locally-based foreign 

(PH flagged under charter) 

(AW) 

10 x foreign access (PH 

flagged) (PNG EEZ) 

Also purchase small 

volumes from other EUcompliant 

PH vessels (i.e. 

TPJ) since 2011. 

Vessel management and 

raw material sourcing 

handled by FCF – SSTC 

contract processes (for a 

fee) on behalf of FCF. 

SSTC-affiliated vessels: 

4 x TW-flagged 

8 x VU- flagged 

2 CH-flagged 

(All FSMA licensed – PNG 

EEZ + other PNA waters) 

No. of employees (direct) 3,280 (~ 2,800 operational 

staff + 15% buffer for 

absenteeism) 

Sources of labour PNG ~ 3,200 

Philippines ~ 80 

Other vessels (e.g. TPJ, TSP, 

Fairwell, Frabelle, Pacific 

Blue Seas). 

2,061 1,370 

PNG ~ 2008 


PNG ~ 1,340 


Others ~ 2 





PRODUCTS & MARKETS 

Products 

Markets - export 

Canned tuna – SKJ, YF 

Cooked loins – mostly YF, 

some SK 

Fish meal 

Export s (70% production): 

Canned tuna – SKJ, YF 

Cooked loins – mostly YF, 

some SK 

Fish meal 

Export s (80% production): 



Cooked loins – SKJ, YF 

Fish meal 

Exports : (98% production) 

Canned tuna: 

EU (Germany, UK, 

Netherlands, Denmark, 

others); private label; 

200g/2kg; 

Chunks/solid/flakes in 

oil/brine. 

Cooked loins: 

EU (Spain, Italy); mostly 

YF. 

Canned tuna: 

EU (Germany, France, 

Italy, Netherlands, 

others); private label; 

200g/2kg; 

Chunks/solid/flakes in 

oil/brine. 

Cooked loins: 

EU (Spain, Italy), mostly 

YF. 

Cooked loins: 

US, EU (Spain), Thailand; 

YF, SKJ. 

Markets – local/regional Local/regional (30% 

production): 

PNG, Vanuatu, Solomon 

Islands 

Own-labelled canned 

tuna: 200g/300g; white 

meat in oil, fancy packs 

(Dolly) and red meat 

(Diana). 

Local (20% production): 

PNG 

Own-labelled canned tuna 

(Isabella) – red meat, 

white meal in oil, fancy 

packs. 

CURRENT CONSTRAINTS, RECENT DEVELOPMENTS, FUTURE PROSPECTS 

Local/regional (2% 

production): 

PNG, Vanuatu, Solomon 

Islands 

(Contract packing for local 

company - Hugo Canning; 

has ceased October 2011) 

Current constraints • Raw material supplies - 

RD Fishing Ventures 

operating small, 

uncompetitive vessels in 

AW (which is becoming 

overcrowded). 

• Labour (i.e. high 

turnover/ absenteeism, 

low efficiency) 

• Limited availability of 

reefer containers 

• Congestion at Lae wharf 

(i.e. up to 1 week waiting 

time for vessels to 

offload); plan to build 

own wharf 

• Port siltation (unloading 

issues for larger vessels) 

• Wharf congestion 

• Unreliable water & 

electricity supply – 

resulting in plant shutdowns 

• Labour (i.e. high 

turnover/ absenteeism, 

low efficiency) 

• High fuel cost 







Recent developments- 

(past 12 months) 

None stated 

• Introducing raw pack 

line – extra 20mt/day for 

large YF; export mostly 

to France. Trial run late 

October 2011; full 

operations January 

2012; plant at Malahang 

• Started purchasing from 

non-Frabelle vessels in 

2011 (i.e. other PH 

vessels (TPJ). 

• Regained EU market 

access April 2010 

• 2010 – 25mt trial 

shipment of loins to EU, 

now >40% of loin 

production to EU 

• Reduced from 2 shifts to 

1 shift in March 2010. 

• Cessation of canned 

tuna production October 

2011 – will sell red meat 

to other canners (RD, 

Frabelle). 

• Aiming for 50% 

production for EU, 50% 

for US from 2011. 

• Likely only to increase 

production if 

infrastructure issues are 

resolved (i.e. wharf, 

power, water). 

Future prospects + plans 

(next 1-3 years) 

• Considering upgrading 

fishing fleet. 

• Increase frozen loin 

processing capacity. 

• Increase canning for 

local markets (increase 

20%) 

• No firm overall 

production targets set – 

but could increase to 

180 mt by 2015). 

• Expand to other EU 

markets – higher quality 

markets, so will need to 

focus more on product 

development. 

• Expand into Australia & 

NZ markets – sending 

small volumes now. 

• Build new 120 m wharf 

(PGK $20 million) – for 

use by Frabelle and 

other Lae-based 

processors 

• Move can-making, fish 

meal, label-making to 

Malahang due to 

overcrowding at current 

site + 2 extra lines and 

fish oil plant. 

• Increase share of local 

market. 

Source: Interviews, company representatives - various, 2011. 

Currently, PNG’s tuna processing plants have a maximum processing capacity of 520 mt/day (130,000 

mt annual raw material throughput). However, the plants consistently operate at around half of their 

processing potential, due to a various production constraints (as per Section 3.2.4). At the time of 

conducting this review (September 2011), actual production was around 280 mt/day (70,000 mt/year) 

(i.e. 54% of total maximum capacity). 

From 2006-2010, daily production volumes have ranged from 220-260 mt/day, with no discernible 

trends. In 2008, production declined to 220 mt/day, largely due to RDTC temporarily losing EU market 

access due to SPS-compliance issues. In 2011, production has increased by 30mt/day to 280 mt/day. 




However, this increase is not attributable to the RoO derogation, given the plants have consistently 

operated well below capacity, despite having ample supplies of wholly originating raw materials in past 

years and, in theory, continue to be able to meet raw material demands with existing sources. This 

increase relates to Frabelle gradually building up its processing capacity over time, given it is PNG’s 

newest processing plant established in 2006. In addition, RDTC’s processing volumes have returned to 

former levels prior to its temporary loss of EU market access in 2008. Conversely, SSTC’s production 

volumes have declined. 

Table 3.7 presents annual production data for PNG’s tuna processing facilities from prior to the RoO 

derogation (2006-2008) and after the derogation came into effect (2009-2011). It also includes export 

volumes to the EU market. 




Table 3.7 Production Capacity of PNG’s Tuna Processing Plants (2006-2011) 

a 

Facility 

PRODUCTION 

Max. Capacity 

(mt/day) 

Pre-Derogation 

Actual Production Input (mt/day) 

Post-Derogation 

2006 2007 2008 2009 2010 2011 

RD Tuna Canners 200 120 120 60 100 100 120 

Frabelle (PNG) Ltd. 100 30 40 60 60 70 80 

South Seas Tuna Corp. 200 100 100 100 70 80 80 

TOTAL PRODUCTION 500 250 260 220 230 250 280 

RAW MATERIAL THROUGHPUT 

Canned tuna (mt) 78,750 37,200 39,700 30,000 38,300 41,075 46,500 

Cooked loins (mt) 46,250 25,300 25,300 25,000 19,200 21,425 23,500 

TOTAL RAW MATERIALS a 125,000 62,500 65,000 55,000 57,500 62,500 70,000 

FINISHED PRODUCT b 

Canned tuna (mt) 52,500 24,800 26,467 20,000 25,533 27,383 31,000 

Cooked loins (mt) 19,425 10,626 10,626 10,500 8,064 8,999 9,870 

TOTAL FINISHED PRODUCT 71,925 35,426 37,093 30,500 33,597 36,382 40,870 

EU EXPORTS – FINISHED PRODUCT c 

Canned tuna (mt) 28,875 12,719 16,299 8,739 14,626 15,867 19,247 

Cooked loins (mt) 10,684 1,413 763 511 1,766 2,485 5,425 

TOTAL EU EXPORTS 39,559 14,132 17,062 9,250 16,392 18,352 24,671 

Based on plant operations for 250 days/year. 

b Finished product is calculated on the following basis: 1.5kg of raw material = 1 kg finished canned tuna (including weight of the fish, can, oil etc.); 1 kg raw material = 0.42 kg of 

finished frozen cooked loins. 

c 2006-2010 EU exports derived from actual trade data (Eurostat). 2011 figures are estimates based on data provided by PNG canners. Max capacity (mt/day) estimates for loin 

production, based on 2011 export volumes. 

Note: Source: Interviews, PNG canning representatives 2011; consultants' analysis. 




3.2.2 New planned investments 

There are currently five new planned tuna processing investments for PNG, each at different stages 

of development; four at Malahang Industrial Estate, Lae and one at the Pacific Marine Industrial 

Zone at Vidar, Madang. 

The rationale for onshore investment in these facilities is driven primarily by the desire to maintain 

or gain fishing access to PNG’s rich tuna resources, in response to PNG’s policy that vessels wishing 

to gain licences to fish are required to make onshore investments. However, duty free market 

access to the EU under the IEPA, as well as global sourcing RoO, makes onshore investment a more 

attractive prospect and new investments will be geared primarily towards supplying canned tuna 

and/or cooked loins to the EU market. 

Under the NFA’s current vessel licensing policy, each plant has been approved ten fishing licences 

(ideally PNG-flagged), which can be utilised after plant construction is 75% completed. NFA 

maintains that the issuance of new or additional licences granted in association with new processing 

investments are subject to national laws and are in compliance with WCFPC’s Resolution on the 

Reduction of Overcapacity (Resolution 2005-02). 

In September 2011, NFA’s policy position concerning issuance of fishing licences was that licences 

must be filled with vessels with existing fishing history in the WCPO. In the event that new vessels 

are constructed, companies will be required to provide proof that an existing vessel(s) of equivalent 

or greater capacity than the new vessels operating within WCPO waters have been scrapped. 

Vessels that are PNG-flagged (including domestically based foreign vessels, on a case by case basis) 

will be allowed to fish in both archipelagic waters and the PNG EEZ. Foreign-access vessels will be 

restricted to fishing in the EEZ only. NFA has indicated an intention to reduce the number of licences 

issued to bilateral foreign access vessels with no onshore investments in PNG, to make way for 

vessels licensed in association with new onshore developments, in keeping with effort limits under 

the VDS. However, to date, this intention has yet to be exercised in practice. Until such time as it is, 

the number of vessels operating within PNG waters will increase, as will competition for fishing days 

under the VDS. However, provided the policies of utilising vessels with existing history in WCPO and 

scrapping existing vessels to make way for newly constructed vessels are respected, the number of 

vessels operating within the total WCPO region should not increase. To date, a total of eight licences 

have been issued in association with new onshore developments - four for Majestic Seafoods (one 

vessel under construction, remaining three licences to be filled as yet); four for International Food 

Corporation (one licence filled by Philippine fishing company Rel & Ren; remaining three yet to be 

filled). 

Details concerning the five planned tuna processing investments are as follows: 37 

Majestic Seafoods Ltd – Malahang, Lae 

Majestic Seafoods Ltd. is a joint venture partnership between Thai Union (Thailand), Century 

Canning (Philippines) and Frabelle (Philippines, PNG). The development is planned to proceed in two 

phases: 

• Phase 1: Maximum processing capacity 120 mt/day (~30,000 mt raw material); capital 

investment US$ 25 million; 1,500 employees; first year production at 60 mt/day, building up 

to 200 mt/day over several years. 

37 Details concerning new investments are based on interviews with various company representatives and NFA and, in 

several cases, information contained within State Project Agreements. 




• Phase 2: Expand maximum processing capacity from 120 mt/day to 350 mt/day (~87,500 

mt raw material); no firm commitment to extend to Phase 2 – will depend on profitability of 

operations at Phase 1 production volumes; 4,500 employees. 

A 15 ha site was purchased at Malahang in Lae and in September 2011, the facility’s buildings were 

70% constructed. Operations are planned to commence in the second quarter of 2012 and the 

company will utilise Frabelle’s wharf. Raw material will be sourced from vessels utilising fishing 

licences issued in association with the plant (up to ten licences). In December 2011, NFA Board 

approved the issue of four licences to supply the plants Phase 1 raw material needs (up to 120 

mt/day), as the plant has reached 75% completion. According to NFA, the issue of the additional six 

licences will be staged and will be contingent on the plant proceeding to Phase 2 (i.e. 350 mt/day). 

The company will likely need to source additional raw material from other vessels (including utilising 

global sourcing), unless additional fishing licences are issued. Currently, Frabelle is constructing a 

new vessel to supply Majestic and NFA have indicated that a vessel of equivalent capacity will be 

scrapped. According to NFA, Majestic licences will be PNG-flagged and have access to EEZ waters 

only, although this conflicts with earlier information provided that PNG-flagged vessels will likely 

have access to PNG’s AW and EEZ. 38 

At this stage, it is planned that Majestic will process 100% canned tuna; 80-90% of which will be 

exported to the EU market (Germany, Italy, UK); with 10-20% to other markets including the US, 

Japan and others. Given plant construction is nearing completion, the likelihood of this operation 

proceeding is definite. 

International Food Corporation (IFC) – Malahang, Lae 

International Food Corporation is an existing facility which has processed canned mackerel since 

1997 at Malahang in Lae. The plant is owned by a Malaysian state-owned enterprise, FIMA 

Company. Plans are well underway to expand operations to include canned tuna and cooked loin 

production (target production 120 mt/day; 3,000 employees). Up to ten fishing licences will be 

granted in association with the expansion. As IFC does not own an existing purse seine fleet, it 

intends to try to partner with a Filipino fishing company to secure raw materials (up to 30,000 

mt/year) and operate up to four PNG-flagged vessels, in the first instance. IFC would also look to 

source from other vessels, most likely Philippines-owned, through global sourcing, if need be. 

Production is anticipated to be 70% canned tuna and 30% cooked loins; 95% of which is planned to 

be exported to the EU market (canned tuna to Germany, loins to Spain). As at September 2011, new 

tuna processing equipment had been installed and trial production of 4-5 mt/day was taking place. 

However, the plant was experiencing difficulties sourcing raw material. IFC tuna processing facility 

has passed an EU-SPS inspection and is waiting for the SPS certificate to be issued. It is anticipated 

that initial production will commence at 40 mt/day, and ideally build up to 120 mt over five years. 

While equipment has been installed, sourcing ongoing adequate volumes of raw material presents a 

risk to the operation (to date, only one licence has been taken up by a small purse seiner operated 

by Philippine fishing company Rel & Ren). Also, this is now IFC’s third attempt to expand into canned 

tuna production. 

Nambawan Seafoods – Malahang, Lae 

Nambawan Seafoods is a proposed joint venture between two Philippines fishing companies - Trans 

Pacific Journey Fishing Corporation (TPJ) and TSP Marine Industries to establish a 150 mt/day plant 

to process canned tuna and cooked loins. Morobe Provincial Government has also been offered 10% 

38 NFA Managing Director, S. Pokajam, pers. comm., December 2011. 




in preferred shares in the company. TSP and TPJ have been fishing in PNG under bilateral access 

arrangements for some time now, and often supply raw materials to Frabelle and SSTC. 

Total capital investment is expected to be in the order of US $11 million, with plans to stage 

construction over three phases - Phase 1: 40-60 mt/day; Phase 2: 80 mt/day; Phase 3: 150 

mt/day. According to NFA, raw materials will be sourced from eleven existing company-owned 

vessels currently operating under bilateral access arrangements in PNG. Hence, additional fishing 

effort will not be introduced into PNG’s fishery as a result of this development at this point. 39 The 

purpose of TSP and TPJ committing to the establishment of Nambawan is reportedly to retain 

guaranteed access for their existing vessels, given NFA’s intention to reduce licences issued to 

bilateral foreign access vessels with no onshore investments in PNG. These vessels have access to 

AW and the EEZ, as they currently supply some raw material to PNG’s existing processing facilities. 

The plant will produce canned tuna and cooked loins, primarily destined for the EU, as well as the US 

and emerging markets in China and the Middle East. 

A five hectare site has been secured at Malahang and a contract for a 99 year lease has been signed 

with BUP Incorporated Landowners Group. A Project Agreement was presented to the National 

Economic Council (NEC) for approval, however, with the new Government coming into power in 

August 2011, the Agreement was returned to NFA for appraisal by the new Minister for Fisheries. 

Halisheng Corporation – Malahang, Lae. 

Halisheng Corporation (formerly known as Zhousan Zhenyang) is a proposed development at 

Malahang, Lae by Halisheng Group; a Chinese company with diversified interests in industries such 

as tuna processing, pharmaceuticals and real estate, but no previous experience or investment in 

purse seine fishing. The company proposes to establish a plant with up to 200 mt/day processing 

capacity, commencing with 30-50 mt/day in the first phase. The company intends to process canned 

tuna and loins for export to the EU, as well as China and the US. A state agreement has been 

drafted, which is now waiting for Ministerial signing and NEC approval. A deposit for land has been 

paid and the company is now negotiating the terms and conditions with the landowners (BUP 

Incorporated Landowners Group). The NFA Board has approved up to ten fishing licences in 

association with the plant. The company originally intended to construct new vessels, given it does 

not currently own any existing vessels or have any prior links with the purse seine fishing industry. 

However, NFA’s recent policy directive that new licences need to be filled with vessels with existing 

fishing history in the WCPO, has created some uncertainly for the company about how best to fill the 

fishing licences and source raw materials. In addition to utilising PNG’s preferential market access to 

the EU, the plant also intends to gear itself to supplying the growing Chinese market for canned 

tuna, as well as cooked loins for final processing. The likelihood of this operation proceeding is 

tenuous at this point, due to the issue of how to secure raw materials. The company is reportedly 

liaising with existing vessel owners within the WCPO purse seine fishery to explore opportunities for 

partnerships, including possible vessel chartering arrangements. If the company does not have an 

integrated fishing and processing operation, it is difficult to see the motivation for the investment 

otherwise, or how it might be sustainable in the future. 

Niugini Tuna Ltd. – PMIZ, Madang 

Niugini Tuna Ltd. (NTL) is a joint venture between RD Tuna Canners (Philippines), FairWell Fishing 

(Taiwan) and one of the major three tuna trading companies, Tri Marine. Capital investment in the 

plant will be an estimated US $30 million and targeted production will be up to 100 mt/day. Pending 

profitability, production could potentially increase to up to a maximum of 200 mt/day. The plant will 

39 NFA Managing Director, S. Pokajam, pers.comm., December 2011. 




process cooked tuna loins, destined mostly for Italy. The Project Agreement still awaits NEC 

approval, after it was returned to NFA for review and signing by the new Fisheries Minister. It is 

anticipated that construction will commence as soon as the Project Agreement is signed off. Raw 

material will be sourced from 10 fishing licences associated with the plant, which the company 

expects will have FSMA status. While progress to date with development of the PMIZ site has been 

slow (see Section 3.2.3), this is unlikely to hinder NTL’s development plans, as the plant will utilise 

RD Fishing’s existing facilities at Vidar. It is anticipated that the construction process will take up to 

two years to complete. 

Table 3.8 presents further details of the status of these five processing investments. 




Table 3.8 Status of New PNG Tuna Processing Investments, October 2011. 

Status 

Majestic 

Seafoods 

IFC 

Niugini Tuna 

Ltd. 

Halisheng 

Group 

Nambawan 

Site visit N/A 

Proposal to NFA N/A 

Company registration (IPA) N/A 

Foreign Certification (IPA) N/A 

Land acquisition negotiations N/A 

NFA Board approval of proposal 

(includes in principle granting of 

fishing licences) 

N/A 

Drafting of Project (State) 

Agreement N/A 

October 

2011 - In 

progress 

Whole-of-Government 

consultation re: State Agreement 

N/A 

Submission of State Agreement to 

NEC 

N/A 

NEC Approval of State Agreement 

 

N/A 

Environmental Permit Issued 

(DEC) 

N/A 

Site ground-breaking 

N/A 

Site preparation – fencing, 

clearing, utilities 

N/A 

Construction – buildings 

Plant installation 

Trial production 

Commence operations 

Obtain EU-SPS certificate 

December 

2011 - 75% 

completed 

Majority of 

equipment 

in PNG 

N/A 

 

 

 

Passed 

inspection; 

certificate to 

be issued 


2011 - State 

Agreement 

returned to 

NFA for 

signing by 

new 

Fisheries 

Minister 

Source: Interviews, PNG Government and tuna processing company representatives, September 2011. 

 


2011 - State 

Agreement 

returned to 

NFA for 

signing by 

new 

Fisheries 

Minister 




3.2.3 Potential future investments 

In addition to the confirmed investments or investments likely to go ahead with some degree of 

certainty described in Section 3.2.2, there are other possible investments that have been informally 

proposed, have been the subject of enquiries, or may have prompted site visits to PNG to explore 

possibilities. It is necessary to evaluate these as part of estimating demand for globally-sourced fish 

in PNG in the future. 

Most uncertainty for future investment relates to the proposed Pacific Marine Industrial Zone (PMIZ) 

development at Vidar, Madang Province. It is useful to recount the history of this initiative and its 

current status. 

Establishment of the Pacific Marine Industrial Zone was mooted in the late 1990s/early 2000s to 

increase onshore processing activity (including, but not exclusive to the processing of fish products) 

in a central location to fishing grounds, to build economies of scale through the development of an 

‘economic cluster’/critical mass and, as a result, lower key operating costs (e.g. utilities, freight). An 

area of 215 ha of freehold land adjacent to the present RD Fishing port was made available by the 

freehold owner (RD) and was acquired by PNG Government. The concept was approved for 

development in 2005, with the offer of a concessional soft loan from the China Exim Bank 40 to 

underwrite the development. The project was to proceed in two phases: 41 

• Phase 1 - involving land acquisition, construction of major infrastructure (e.g. wharves, 

roads, utilities etc.), at a value of US$ 95 million, with US$ 74 million to be funded by Exim 

Bank and the balance by the Government of PNG. 

• Phase 2 - involving development of public and commercial amenities (US$ 65 million). 

A National Management Committee was established to serve as the project’s governing board, 

comprised of DCI and NFA (who have been the major driving government players), as well as 

representation by other GoPNG agencies and the private sector. It was also intended that PMIZ 

would be incorporated as a Special Economic Zone (SEZ), established under an SEZ Bill, which was 

prepared with the assistance of IFC and to be approved before the end of 2011. 42 A feasibility study 

was commissioned and an Environmental Impact Assessment submitted in late 2009/early 2010. 43 

In March 2011, approval in principle for the project was granted by the Minister for Environment 

and Conservation, at the time. However, with the change in Government in mid-2011, an immediate 

review of the PMIZ project was directed for completion by December 2011. Indications have been 

given of support in principle for the project by the new Government, with an expectation that the 

implementation schedule of the PMIZ should not be affected. 

Project construction is yet to commence, in part because the GoPNG contribution to Phase 1 has yet 

to be provided and is unlikely to happen until early 2012, at the earliest. Until such time as GoPNG’s 

contribution is made, Chinese load funds cannot be released. Phase 1 construction time (involving a 

44 

contracted Chinese firm as a condition of the Chinese Exim Bank loan), is estimated at three years. 

40 CSYIC, undated. 

41 DCI PMIZ Coordinator, pers. comm., September 2011. 

42 International Finance Corporation 2011; refer for a summary of IFC’s recommendations regarding SEZs in 

PNG. 


44 DCI PMIZ Coordinator, pers. comm., September 2011. 




Some opposition to the PMIZ project has been expressed by local communities on environmental 

and social grounds, and an injunction to halt the project has been lodged. Apart from environmental 

issues, the allocation of ancillary benefits (‘spin-offs’) to approved communities within the project 

impact area has been an important issue, along with the process for doing so. NFA has allocated K 1 

million to initiate this process. It is generally recognized that there has been insufficient consultation 

with affected communities so far. The area has recently been fenced off, with squatters still 

occupying land inside the PMIZ perimeter. Eviction of these squatters, which will be contentious, has 

commenced. 45 These issues are discussed further in Section 4.5. 

According to the PMIZ site plan, ten sites are available for processing facility developments. At 

present, firm plans have only been lodged for the development of one of these ten sites (Niugini 

Tuna Ltd.), at the site closest to the present RD Fishing area. Construction of this facility may begin 

next year (2012) on signing of the Project Agreement and DEC approving an application for an 

Environment Permit (EP) application (see Section 3.2.2). 

The original intent of the PMIZ was to be a site that hosted a range of agro-processing industries (i.e. 

fish, agriculture, forestry), not just fish processing, but interest beyond fishing has yet to materialize 

and the concept has become associated with fisheries per se. With the proposed construction of the 

Mt. Hagen-Madang Highway, there are hopes that this might present additional opportunities for 

other agro-processing activities, but this will be a medium-long term prospect, at best. 

There has been interest shown by several fishery investors in PMIZ (e.g. DongWon, the large Korean 

fishing and processing company, 

46 and Sapmer, an Indian Ocean-based French company with 

interests in fishing (tuna, toothfish, rock lobster) and value-added processing. 47 However, at the time 

of writing, firm expressions of interest have yet to be received from either party or full project 

concepts tabled. The review team is unaware of any other firm expressions of interest in PMIZ at this 

time, although a Philippines/Japan joint venture for processing katsuobushi for export has been 

mentioned. No proposal has been received and in the opinion of the review team, is unlikely to 

ahead on the grounds of economic feasibility. 48 

In summary, despite ten years preparation, the PMIZ development is yet to commence, in terms of 

construction of major infrastructure, although many necessary arrangements are now in place. 

There may well be further delays associated with commencement, given the current review of the 

project, the delay in release of GoPNG funds, current legal action against NFA and DCI as proponents 

of the project, and stakeholder concerns in the area. 

A reasonable prediction, based on available information, is that there is unlikely to be more than one 

tuna processing plant on the site for the next five years in PMIZ, and limited prospects for additional 

plants up to ten years into the future. As noted, construction of the Niugini Tuna Ltd. is geared to 

commence with the signing of the Project Agreement, and will be able to use the existing RD 

facilities for unloading fish, freight etc. without waiting for the Phase 1 PMIZ infrastructure which 

may not be in place for another four years. It is reasonable to expect that potential new investors 

would hold off making firm commitments until the infrastructure is completed, socio-economic 

issues have been resolved, and the SEZ is demonstrably functional. 

45 PACNEWS 2011. 

46 The same company has also expressed interest in Lae (Malahang) and may eventually opt for that site to 

base a facility. The Korean fleet is one the main foreign fleets fishing in PNG waters, but at present, none of 

this fish is processed in PNG plants. 

47 See http://www.sapmer.com. 

48 Hamilton et al. 2011. 




The Lae (Malahang Industrial Estate) situation presents a different perspective. There are currently 

no plans to make this an SEZ, and development is proceeding mostly with the support of the Morobe 

Provincial Government and local landowners who are making the necessary land available under 

long-term lease. As the site is adjacent to the Lae urban area, basic infrastructure is in place and 

utilities available. As mentioned in Section 3.2.2, plans for the construction of three plants are well 

advanced (one with construction over 75% complete), the plans for the expansion of two existing 

plants (Frabelle and Frescomar), plus construction of ancillary developments (i.e. can making plant, 

new wharf in Lae). 

Whilst there are no additional project proposals tabled at this point, interest has been shown by 

DongWon of Korea in the construction of a processing facility, but no details are currently available. 

According to recent information, this is likely to go ahead at the expense of the PMIZ proposal. It 

should be noted that DongWon also has a proposal in place to establish a processing facility in the 

Solomon Islands. 

No other projects at any stage of development are known to the review team, but scope for 

additional development certainly is available at Malahang Industrial Estate, and as current projects 

come on line, it is possible that this could catalyse additional development. There has, for example, 

been reported interest from two of the large tuna trading companies (e.g. Itochu (Japan), FCF 

(Taiwan). 

In summary, at present there are few additional projects in the pipeline for tuna processing in PNG, 

and the publicity given to the possibility of rapid large scale expansion seems not be based on the 

reality of existing development plans. 

3.2.4 Competitiveness of PNG processors 

Advantages 

The most significant competitive advantages associated with establishing canned tuna processing 

operations in PNG relate to access to tuna resources, in some cases at discounted access rates. 

• PNG has highly productive waters with abundant canning-grade tuna resources; accounting for 

50 % of total PNA catch, 20 % of total WCPO catch, and 11 % of global catch in 2009. 49 

• As processing facilities are located in close proximity to fishing grounds, savings in freight costs 

are enjoyed for raw material delivery (i.e. the cost of transhipping raw material from vessels 

operating in WCPO waters to Thailand-based processors is around US $150-200/mt). 

• Fishing licences issued in association with onshore processing facilities are discounted. 

Potential exists for vessels to qualify for licences under the FSM Arrangement, which provides 

access to all eight PNA members’ EEZs; some vessels (i.e. PNG-flag, some locally-based foreign 

chartered vessels) are also permitted to fish in PNG’s archipelagic waters. 

PNG is well known for being a high-cost tuna processing location due to a range of disadvantages 

relative to other more competitive sites of production such as Thailand, Philippines and Ecuador 

(discussed below). Hence, the primary impetus for investment in onshore processing facilities in 

PNG has stemmed from the availability of discounted fishing licences granted in association with the 

investment. New and future potential investments in tuna processing facilities will continue to be 

driven by the desire to maintain or gain access to the resource, given PNG is actively seeking to link 

49 Usu 2011. 




fisheries access to onshore investments as a means of deriving greater economic benefits from the 

tuna fishery. 

Disadvantages 

PNG suffers from a number of disadvantages, resulting in a high-cost and difficult environment for 

conducting business, relative to other major competing canned tuna processing sites. 

Overall, the cost of production of a case of tuna in PNG is currently estimated to be US $3.00/case 

higher than a case of identical specifications in the Philippines. 50 In 2011, the raw material 

processing cost in PNG is estimated to be around US $255/mt compared with US $124/mt in 

Thailand (Figure 3.1). 51 

Figure 3.1 Comparative Direct Raw Material Processing Costs – Thailand and PNG, 2011 (US$/mt) 

300 

250 

200 

150 

100 

50 

0 

Thailand 

PNG 

Cleaners/Skinners Other Labour Electricity Fuel Water 

Source: Hamby 2010, updated 2011. 

The following constraints are major contributors to PNG’s global uncompetitiveness: 52 

• Labour - Given the high unemployment rate, PNG processors have access to a readily 

available labour force. However, labour, while still marginally cheaper than Thailand (~US 

$10/day) and Ecuador (~ US $12.70/day), remains costly due to a relatively high minimum 

wage rate (K 2.29/hr (i.e. currently ~ US $8.25/day). 53 Labour costs are exacerbated by low 

50 Tiu-Laurel 2011. 

51 Hamby 2010, updated in December 2011 for the purpose of this report by J. Hamby. 

52 Comparative cost data collected from various global tuna industry representatives – PNG, Ecuador, Philippines, Thailand, 

2010-2011. A data request was submitted to several industry representatives in Mauritius, but no response was received. 

Oceanic Développement 2010. 

53 Since 21 January 2010, PNG’s minimum wage rate for unskilled labour has been PGK 2.29/hour. Upon coming into 

power in August 2011, PNG’s new government called for a 100-day review to investigate potentially increasing the 

minimum wage to PGK 3.50/hour. Interview – DLIR representative, September 2011. 




efficiency levels (2-3 times less efficient than Thai, Filipino and Ecuadorian labour), high 

absenteeism (20-30%) and high labour turnover (50-60%). 

• Freight - PNG processors are subject to very expensive sea freight costs due to relatively low 

freight volumes and a limited number of freight service providers in PNG. 

− 

− 

− 

− 

PNG - EU: US $2,800/20ft. container (dry) 

Philippines - EU: US $1,200/20ft. container (dry) 

Thailand - EU: US $ 1,300/20ft. container (dry) 

Ecuador - EU: US $1,700-2,000/20 ft. container (dry) 

Domestic freight rate between Wewak’s provincial port and Lae’s international port are 

reportedly almost as expensive as the freight rate between Lae and Europe. There is also a 

reported shortage of empty containers due to heavy competition from other export sectors. 

• Utilities - Water and electricity are high cost and supply is unreliable. Processing plants are 

forced to install back-up generators and fuel costs are high due to a monopolistic supply 

arrangement between Inter-Oil and the PNG Government. In Wewak, unreliable power and 

water supplies are the biggest constraints to production. PNG’s estimated utilities cost is 

currently around US $0.80/case, which is markedly higher than the Philippines (US 

$0.54/case). 

• Infrastructure - The quality of key infrastructure is poor, particularly wharves and roads. 

Wharf-related issues are one of the most serious disadvantages for Wewak and Lae-based 

processing facilities. 

• Oil, cans and other packaging materials - Steel plate for can-making, cartons, labels and 

oil/condiments all need to be imported, whereas other major competing sites (e.g. Thailand, 

Philippines) have established domestic supporting industries. 

• General business environment – Processing operations (as well as other large-scale exportorientated 

businesses) are hampered by PNG’s difficult business environment stemming 

from factors including high levels of corruption, unstable legal frameworks, security issues, 

customary land ownership issues, limited administrative capacity of government at both the 

provincial and national levels, high inflation and strong currency. 

PNG’s existing tuna processing operations have struggled since establishment to become profitable. 

It is understood that losses incurred by the processing operations are generally offset by profits 

made by the companies’ fishing operations (which is the case for most-PIC processing operations). 

According to a senior-level PNG processing industry representative, “We’d be happy to breakeven.....a 

plant processing 100 mt/day in PNG will not make money; processing needs to be at least 

120mt/day to be remotely profitable and 150 mt/day if the plant is to turn a decent profit”. 

Duty-free access to EU markets helps to relieve PNG’s competitive pressures, but is not a 

competitive advantage per se – the 20.5-24% duty preference enjoyed by PNG in comparison to 

Thailand and Philippines respectively, simply enables PNG processors to be able to supply this 

market. PNG processing industry representatives indicated that profit margins for supplying the EU 

are negligible – at best, maybe 2-3%. Unless economies of scale can be achieved and several other 

constraints addressed, as PNG’s margin of preference erodes compared to Thailand and the 

Philippines in the coming years (see Section 7.2), then PNG will no longer be able to supply the EU 

market. 




The primary motivation behind PNG Government trying to establish an ‘economic cluster’ or special 

economic zone in Madang (PMIA) is to achieve greater economies of scale. Similarly, as new 

processing developments are constructed and commence operations in Malahang, Lae, they will also 

benefit from the same. The tuna processing industry may derive positive externalities from 

improvements in areas such as freight, telecommunications etc. through developments realised in 

other export-orientated industries in PNG (e.g. new liquid natural gas (LNG) project). 

However, the chances of PNG becoming a ‘tuna processing hub’ of comparable magnitude to 

Thailand remains very unlikely in the short-medium term. Currently, Thailand processes over 

700,000 mt/year and has a daily maximum processing capacity of 3,000 mt/day (current production 

~ 2,500 mt/day). 54 In comparison, PNG currently processes around 70,000 mt (280 mt/day). If PNG 

were to realise its goal of processing over 1,000 mt/day, the canned tuna processing industry would 

grow to be comparable in size with the Philippines’ industry. 55 

A number of factors (some of which PNG lacks) underpinned Thailand’s development as the world’s 

leading producer of canned tuna – a large export orientated-economy; an already well-established 

food processing industry with supporting industries (e.g. can making, packaging) to help build 

economies of scale; excellent shipping logistics; a highly productive labour force; strategically 

located to source raw materials from the Pacific and Indian Oceans to ensure continuing of supply; 

financing available for raw material purchases/processing activities; strategic ‘co-packing’ 

relationships with key US and EU firms; a ‘pro-business’ Government; and diversified production 

bases (i.e. other seafood processing lines in addition to tuna). 56 

3.3 PNG Tuna Trade 

3.3.1 Exports 57 

Total Exports 

Total PNG tuna exports (for all gear types) fluctuated between 65,000-74,000 mt annually from 

2006-2010 (Table 3.9). Exports of frozen tuna, the majority of which is whole round frozen tuna, is 

the largest export category, and accounted for around 50% of total exports in 2010 (~32,000 mt). 58 

This fish is destined for processing in plants elsewhere, notably Thailand and the Philippines. 

Canned tuna and cooked loins (HS 1604 products) have collectively accounted for around 30-43% of 

total exports. Over the past five years, cooked loin exports have consistently ranged between 

10,000-12,000 mt. Canned tuna exports have ranged between 12,000-17,000 mt, with no firm 

trends. 

The EU and the US are PNG’s largest export markets for canned tuna and cooked loins (HS 1604), 

together accounting for 80% of total exports. 


55 Pokajam 2011. 


57 Market sales volumes reflect finished product weights. 

58 This does not include fish transhipped in PNG ports by large chartered and foreign vessels, with the former amounting to 

around 50,000 mt in most recent years. 




Table 3.9 Total PNG Tuna Exports (mt), 2006-2010 

Year 

Canned 

Tuna 

Cooked 

Loins 

Frozen 

Tuna a 

Chilled 

Tuna b Fish Meal Total 

1604 as % 

total 

2006 16,380 11,986 33,159 1,667 6,142 69,334 41% 

2007 14,654 11,525 40,364 1,395 5,484 73,422 36% 

2008 12,177 10,031 44,145 1,302 4,752 72,407 31% 

2009 15,742 11,249 38,233 666 5,552 71,442 38% 

2010 c 16,980 10,955 32,335 345 4,538 65,153 43% 

a 

Includes whole round, gilled/gutted and headed/gutted frozen tuna 

b 

Includes whole round, gilled/gutted, headed/gutted and filleted fresh tuna 

c Provisional data 

Note: Inconsistencies exist between export volumes recorded in NFA, EU (Eurostat) and US (NFMS) databases. Hence, 

these figures should be treated as indicative only. 

Source: NFA Database 2011 

EU Exports 

The European Union is the most significant in terms of total PNG exports, and is also the largest 

market for canned tuna. In 2010, total canned tuna exports to the EU was 15,867 mt and valued at 

around € 37 million (Table 3.10). The highest volume of canned tuna exports on record was 18,217 

mt in 2005, with annual export volumes fluctuating throughout the past ten years (2001-2010). In 

2008, there was a considerable drop in canned tuna exports to 8,739 mt, as a result of RDTC’s 

temporary loss of EU market access. The major EU markets for canned tuna are presently Germany, 

UK, Denmark and the Netherlands. 

PNG processors have been exporting cooked loins to the EU since 2005 and volumes have fluctuated 

during this time. In 2010, cooked loin exports were the highest volume to date, totalling 2,485 mt 

and valued at € 8.8 million. The major markets for PNG loins are Italy and Spain. 

The EU markets for canned tuna and cooked loins are further discussed in Section 6. 




Table 3.10 PNG Exports of Canned Tuna and Cooked Loins (HS 1604) to EU, 2000-2010 

Year 

Canned tuna a Cooked Loins b Total 

Volume 

(mt) 

Value 

(€'000) 

Volume 

(mt) 

Value 

(€'000) 

Volume 

(mt) 

Value 

(€'000) 

2001 2,787 6,296 0 0 2,787 6,296 

2002 5,912 13,444 0 0 5,912 13,444 

2003 12,588 23,933 0 0 12,588 23,933 

2004 13,904 25,840 0 0 13,904 25,840 

2005 18,217 37,521 338 1,091 18,555 38,613 

2006 12,719 26,350 1,413 4,549 14,132 30,899 

2007 16,299 34,961 763 2,858 17,062 37,819 

2008 8,739 27,672 511 2,171 9,250 29,843 

2009 14,626 35,242 1,766 6,653 16,392 41,895 

2010 15,867 37,280 2,485 8,810 18,352 46,090 

a Includes HS 1604 1411, 1604 1418, 1604 1939, 1604 2070. 

b Includes HS 1604 1418; excludes HS 1604 1931 as export volumes are negligible. 

Source: Eurostat 2011. 

US Exports 

The US is PNG’s second largest export market overall and to date, the primary market for cooked 

loins (37% in 2010). Export volumes of cooked loins have fluctuated over the past ten years, 

reaching a high of 5,110 mt in 2009. In 2010, cooked loin exports was 4,097 mt, valued at US $12.7 

million (Table 3.11). 

Over the past ten years, volumes of canned tuna exports have also fluctuated. The US has been an 

important market in the past and particularly during 2008 as an alternative market to the EU, 

however, in the most recent years (2009-2010), export volumes have been negligible. 




Table 3.11 PNG Exports of Canned Tuna and Cooked Loins (HS 1604) to US, 2000-2010 

a 

b 

Year 

Canned tuna a Cooked Loins b Total 

Volume 

(mt) 

Value 

(US$'000) 

Volume 

(mt) 

Value 

(US$'000) 

Volume 

(mt) 

Value 

(US$'000) 

2001 5,208 7,976 0 0 5,208 7,976 

2002 5,358 8,168 0 0 5,358 8,168 

2003 1,145 2,012 0 0 1,145 2,012 

2004 83 165 707 2,002 790 2,167 

2005 0 0 1,379 3,985 1,379 3,985 

2006 67 148 2,306 6,639 2,373 6,786 

2007 551 1,239 4,390 14,438 4,941 15,678 

2008 3,641 9,195 2,949 13,247 6,590 22,442 

2009 97 213 5,110 17,279 5,207 17,493 

2010 0 0 4,097 12,717 4,097 12,717 

Classified as tuna in airtight containers in oil/not in oil (brine) 

Classified as tuna not in airtight containers, not in oil >6.8kg 

Source: NFMS 2011. 

Other Export Markets 

As mentioned, the EU and US are PNG’s most significant markets for canned tuna and cooked loins, 

accounting for at least 80% of total exports. Canned tuna exports to other markets are very minor – 

the highest recorded volume between 2002-2010 was around 500 mt (Table 3.12). In 2010, exports 

to non-EU and US markets was 241 mt. 

Table 3.12 PNG Exports of Canned Tuna to other markets (non-EU, US) (mt), 2000-2010 

Country 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Vanuatu 99 66 16 16 132 129 69 131 180 

Solomon Islands 82 0 0 0 0 17 40 0 31 

Fiji 0 98 0 16 79 32 0 0 0 

Australia 0 18 0 0 40 0 0 0 16 

New Zealand 15 0 0 0 113 46 16 0 0 

Japan 0 0 0 0 122 0 0 0 0 

United Arab 

Emirates 16 17 33 30 0 0 0 0 0 

Others 104 0 16 47 16 2 154 16 15 

Total 316 199 65 109 503 225 280 147 241 

Source: NFA 2011. 

One PNG canner is looking at alternative markets to EU due to low profit margins and has indicated 

an interest in expanding canned tuna exports to Australian market. However, even with duty free 




access into the Australian market for PNG under the South Pacific Regional Trade and Economic 

Cooperation Agreement (SPARTECA), it will be very difficult to compete with duty free imports from 

Thailand (due to a free trade agreement established between Thailand and Australia). Also, 

Australia is reportedly a difficult and costly market to break into. The Australian canned tuna market 

is estimated to be valued at around $200-$250 million per annum. 59 

While the Middle East is a significant market for canned tuna, it is dominated by Thailand imports 

and PNG processors are unable to compete. 

3.3.2 Domestic Market 

The domestic market is significant for PNG processors, accounting for 20-30% of total production. 

Two out of the three existing processors indicate that this market is their ‘saving grace’, accounting 

for 20-50% of their sales, as profit margins generated on domestic sales are higher than those 

derived in other export markets. 

The local market is reportedly growing in both size and value. Rough estimates indicate that the 

market is currently around 15,000 mt and has increased from around 10,300 mt in 2006 (Table 3.13). 

Originally PNG processors supplied mainly low value red meat products, but local demand for higher 

quality/higher value products (i.e. white meat in oil, brine and flavoured (fancy) packs) is growing. 

According to RDTC, PNG’s pioneer tuna processing facility, 13 years ago the company supplied one 

container per month to the domestic market. Now, the company’s sales volumes have increased 

dramatically to 65 containers per month. It is estimated in the near future, the domestic market 

could grow to as high as 80-90 containers/month (i.e. equivalent of ~17,000 mt/year). 60 

In order to meet the growing demand, PNG also imports finished canned product, mostly from 

Thailand. According to Thai Customs data, annual imports from Thailand have ranged from around 

3,600 – 5,500 mt/year. There is no discernible trend in import volumes of canned tuna from 

Thailand from 2006-2010 to support concerns raised by several EU stakeholders that Thai canners 

are laundering finished product through PNG for re-export to the EU to take advantage of global 

sourcing. 

Table 3.13 PNG Domestic Market for Canned Tuna (Estimate) – 2006-2010 (mt) 

Year Domestic Production Imports Total 

2006 6,600 3,738 10,338 

2007 7,800 5,056 12,856 

2008 6,000 4,597 10,597 

2009 7,500 3,609 11,109 

2010 9,500 5,566 15,066 

Source: Interviews, PNG cannery representatives 2001; Thai Customs data (provided by Infofish 2011); consultants’ 

analysis. 

59 Interview, PNG processing company representative, September 2011. 

60 Interviews, PNG processing company representatives, September 2011. 




3.4 Projected Production - 2012-2016 

Medium-term projections of future production capacity of PNG’s tuna processing plants have been 

made by the consultants for 2012-2016 (Table 3.14). The following information and assumptions 

underpinned these projections in an attempt to make them as realistic as possible: 

• Planned production volumes, anticipated timeframes for construction and scaling up 

production, as well as expected products and markets, as communicated by various 

company representatives, formed the starting basis for projections. 

• These were then revised accordingly to reflect the realities of establishing and operating a 

tuna processing facility in PNG. For example, based on the experience to date of PNG’s 

existing processors, it is assumed that there is little likelihood of most plants reaching 

maximum processing capacity; actual processing capacity could be in the order 40-50% 

lower than maximum levels in some instances. 

• It is considered unlikely that any of the plants with staged production plans over several 

phases will move beyond Phase 1 production within the next five years. 

• Following ground-breaking, plant construction could realistically take up to two years. 

• Estimates of the annual production volume split between canned tuna and cooked loins (in 

both raw material and finished product equivalents), as well as the estimated volume of 

exports to the EU was based on information provided by company representatives (see 

Appendix 3 for detailed data). 

On this basis, by 2016, estimated total daily production could potentially reach around 730 mt/day 

(~182,500 mt raw material), should all five new and proposed operations proceed. 




Table 3.14 

Medium-term projection of the production capacity of PNG’s tuna processing plants, 

2011-2016 

Existing Operations 

New Operations 

Proposed New 

Operations 

a 

Operational Status Facility 

TOTAL PRODUCTION (MT/DAY) 

RAW MATERIAL REQUIREMENTS 

2012 2013 2014 2015 2016 

RD Tuna Canners 200 120 120 120 120 120 

Frabelle (PNG) Ltd. 100 80 80 80 80 80 

South Seas Tuna Corp. 200 80 80 80 80 80 

TOTAL EXISTING PRODUCTION 500 280 280 280 280 280 

Majestic Seafoods Ltd. 350 30 60 120 120 120 

International Food Corp. 120 40 60 60 70 70 

Niugini Tuna Ltd. 200 - - 40 80 100 

Nambawan Seafoods 150 - - 40 40 80 

Halisheng Group 200 - - 30 50 80 

TOTAL NEW PRODUCTION 1,020 70 120 290 360 450 

TOTAL RAW MATERIAL REQUIREMENTS (MT) b 

1,520 350 400 570 640 730 

380,000 87,500 100,000 142,500 160,000 182,500 

Raw material - canned tuna (mt) 247,000 60,900 71,900 97,150 103,400 113,150 

Raw material - cooked loins (mt) 133,000 26,600 28,100 45,350 56,600 69,350 

FINISHED PRODUCT 

Max. Capacity 

(mt/day) 

Projected Production Input (mt/day) 

Post- Derogation 

Finished product - canned tuna (mt) 164,667 40,600 47,933 64,767 68,933 75,433 

Finished product - cooked loins (mt) 55,860 11,172 11,802 19,047 23,772 29,127 

EU EXPORTS - FINISHED PRODUCT 

EU Exports - canned tuna (mt) 

EU Exports - cooked loins (mt) 

123,500 27,780 33,997 51,238 51,238 56,705 

41,895 6,972 7,602 14,658 19,257 24,423 

Based on plant operations for 250 days/year. 

b Finished product is calculated on the following basis: 1.5kg of raw material = 1 kg finished canned tuna (including weight 

of the fish, can, oil etc.); 1 kg raw material = 0.42 kg of finished frozen cooked loins. 

Source: Interviews, PNG canning representatives 2011; consultants' analysis. 

3.4.1 Implications of global sourcing on PNG processing sector expansion 

From 2008-2011, global sourcing has had little influence on growth of PNG’s existing tuna processing 

facilities, given production levels have generally remained constant and well below capacity. Also, to 

date, existing plants have generally been able to meet raw material needs with EU-compliant 

catches from their own fleets, or if sourcing from non-company vessels, are yet to branch out and 

utilise the RoO derogation to its full capacity to source fish from vessels who have not traditionally 

supplied them in the past. 

Onshore investment in PNG in the short-medium term will continue contrary to market forces, since 

PNG is a high-cost operating environment and tuna processing industries globally already suffer due 

to overcapacity. Expansion is currently driven largely by NFA’s policy of linking fisheries access to 

onshore processing, rather than duty free access to the EU market and global sourcing per se. 




However, while not the primary driver for attracting onshore investment, the derogation will play a 

critical role in industry expansion in the future and its survival. The primary intention of negotiating 

global sourcing was to reduce the impediment to industry expansion of inadequate supplies of 

wholly originating fish for export to the EU market. Global sourcing, amongst other factors, will 

assist in efforts to achieve greater economies of scale, such that PNG tuna processing facilities can 

improve their competitiveness in the short-medium term. In doing so, if and when PNG’s margin of 

preference (24%) to the EU gradually erodes in light of more favourable trade preferences garnered 

by PNG’s major competitors (e.g. Thailand, Philippines), global sourcing will be a contributing factor 

in sustaining PNG’s processing sector in the future. 

4 DEVELOPMENT EFFECTS ON THE PNG ECONOMY 

4.1 Definition of ‘Development Effects’ 

For the purposes of this review, ‘development effects’ is interpreted as ‘long-term income and 

employment generation for the Pacific States’ (Protocol II, Article 6(b)). 

Income generation pertains to direct contributions to the PNG economy from tuna processing 

activities in the form of: 

• Government revenue – contributions to Government revenue streams including taxes, 

customs duties and charges, port charges, inspection and clearance fees and permits and 

licences. 

• Net local purchases – the total value of goods and services purchases from local PNG-based 

businesses, reduced by an amount representing the imported context of the 

products/services purchased to reflect the portion of expenditure fully retained in the PNG 

economy. 

• Employee earnings – the level of employment earnings of cannery employees, including 

salaries/wages, bonuses, provident fund contributions and paid leave. Estimates include 

earnings for locally employed staff, as well as a proportion of earnings of expatriate staff 

resident in PNG, who are assumed to spend at least some of their salary within PNG. 

• Other economic contributions - includes other contributions such as sponsorship/donations 

in local communities, interest paid on loans made through PNG banking institutions and 

community-based projects. 

Income generation also encompasses other macroeconomic benefits: 

• Contribution to balance of payments - net foreign exchange earned through exports of 

canned tuna and cooked loins; includes the value of local sales of canned tuna, as this is 

deemed to generate savings in foreign exchange due to import substitution. 61 

• Contribution to gross domestic product – net contribution to economic growth (also 

commonly referred to as ‘value-added to GDP’). 62 

61 Calculated as gross revenue from export sales, reduced by the imported content of local purchases, direct 

imports and payments for off-shore services. Local sales of canned tuna are treated as an addition to balance 

of payments, on the basis that this will result in import substitution. 

62 Calculated as gross sales minus the cost of intermediate goods and services purchased from other firms. 

Alternatively, contribution to GDP may be estimated as the sum of employee earnings plus taxes, plus gross 

operating surplus (net profit before depreciation, financial costs, investment income and bad debts). For the 




Employment generation refers to the jobs directly generated by tuna processing operations, as well 

as indirect (flow-on) employment generated in support industries, as well as induced employment 

generated as a result of expenditure of salaries earned by cannery workers and employees in 

support industries in local businesses. 

‘Long-term’ is interpreted to mean the generation of income and employment benefits which are 

both permanent and sustainable. 

While not explicitly mentioned in the text of Protocol ll (6b), the ‘development effects’ review also 

considers internationally recognised labour rights, labour/working conditions, other social impacts 

and environmental impacts. It should be noted that much broader discussion of these issues is 

presented than relates to global sourcing, however, additional supporting information is included to 

provide context. 

4.2 Income Generation 63 

For 2007-2010, total direct income generated to the PNG economy by the existing three tuna 

processing facilities was in the order of around K 35 million – K 48 million annually (US$ 16 – 22 

million) (Table 4.1). On average for the four years, this amounted to around K 180,000 (US $ 83,000) 

per metric tonne of raw material processed. The most significant contributions to the economy 

were employee earnings (average K 20 million/year (US $11.5 m); 45% of net income) and net 

purchases in local businesses (average K13.5 million/year (US $6.2 m); 32% of net income). 

Sufficient financial data was not available to accurately estimate the contribution made by PNG’s 

processing facilities to balance of payments and gross domestic product. However, based on the 

data available, these may have roughly been in the order of: 

• Contribution to balance of payments - K 170-215 million (US $ 78-100 million) annually 

• Contribution to GDP - K 20-30 million/year (US $ 8-14 million), which was largely constrained 

by the low profitability of tuna processing operations. 

purposes of this analysis, the latter was used as it required less detailed financial data to be collected from 

canneries. 

63 Given the commercially sensitive nature of the financial data provided by canneries for use in the income 

generation analysis, the data has been aggregated for the sake of anonymity. While other analyses conducted 

in the course of the review commence from 2006 where possible, given the inability of one cannery to supply 

data for 2006, this analysis commences from 2007. Currency conversions from PNG kina to USD were 

conducted using http: www.oanda.com/currency/converter. 




Table 4.1 Income Generation by Existing Tuna Processing Plants to PNG Economy, 2007-2010 

Economic Benefit 2007 2008 2009 2010 

DIRECT INCOME TO PNG ECONOMY 

Government revenue 4,000,520 10,265,282 8,494,986 4,619,125 

Employee's earnings 15,788,793 16,533,057 20,501,967 25,689,304 

Net local purchases 13,180,595 12,822,304 15,013,651 13,280,028 

Other economic contributions 2,412,453 4,017,384 4,409,139 3,214,926 

TOTAL NET DIRECT INCOME 35,382,361 43,638,027 48,419,743 46,803,382 

Production (mt/day) 260 220 230 250 

Net direct income/mt 136,086 198,355 210,521 187,214 

2007-2010 average/mt 183,044 

Source: Consultants’ own analysis based on financial data provided by canneries, 2011. 

Since 2007, the total net direct income generated from canned tuna and tuna loin processing has 

generally increased, however this cannot be directly linked with global sourcing. This trend relates 

largely to increased contributions from Frabelle, as its operations expanded annually since 

establishment in 2006 to reach current processing levels of 70-80 mt/day. Also, employee earnings 

have increased consistently in line with increases in the minimum wage rate. Contributions to 

balance of payments and gross domestic product have also increased annually. 

Table 4.2 presents estimates of projected income generation in the medium term (2011-2016). It 

uses the four-year average (2007-2010) income generation per metric tonne of raw material 

processed as a basis for estimates, together with projected increases in production, as new 

processing investments come on-stream over the next five years. 

Table 4.2 Projected Income Generation by Tuna Processing Plants to PNG Economy, 2011-2016 

2011 2012 2013 2014 2015 2016 

Production (mt/day) 280 350 400 570 640 730 

Total net direct income 51,252,237 64,065,297 73,217,482 104,334,912 117,147,971 133,621,905 

Source: Consultants’ own analysis based on production and financial data provided by canneries, 2011. 

By 2016, the total net direct income generated by tuna processing operations into the PNG economy 

could be in excess of K 130 million per year. 

In addition, based on rough calculations using the available financial data, contributions to balance 

of payment and gross domestic product could be in the order of K 650 million annually. 

4.3 Employment Generation 

Over the past five years, PNG’s tuna processing sector has generated between 6,400-7,400 direct 

jobs annually (Table 4.3). In 2010, total direct employment was estimated at around 6,500 jobs. 

Taking into account multiplier effects, additional employment is generated in businesses that 




support tuna processing activities, as well as in businesses where cannery and support workers 

spend their earnings. In 2010, over 16,000 indirect jobs were estimated to be generated by the tuna 

processing sector. 64 In total, the sector accounted for around 22,800 jobs in PNG in 2010. For every 

one metric tonne of raw material processed by PNG’s tuna canneries in 2010, a total of 91 jobs were 

generated (i.e. 26 direct jobs and 65 indirect jobs). 

From 2006-2009, the number of direct (and as a result, indirect) jobs increased steadily. However, in 

2010, employment numbers declined by almost 1,000 workers, due largely to SSTC reducing from 

two shifts per day to one shift per day, plus reductions in other plants due to production constraints. 

Table 4.3 Estimated Employment Generation in PNG from Tuna Processing, 2006-2010 

Number of Jobs 2006 2007 2008 2009 2010 

TOTAL JOBS 

Direct Jobs 6,419 7,279 7,322 7,456 6,534 

Indirect Jobs 16,048 18,198 18,305 18,640 16,335 

Total Jobs 22,467 25,477 25,627 26,096 22,869 

TOTAL JOBS/MT 

Production input (mt/day) 250 260 220 230 250 

Direct Jobs/mt 26 28 33 32 26 

Indirect Jobs/mt 64 70 83 81 65 

Total Jobs/mt 90 98 116 113 91 

Source: Consultants’ own analysis based on labour data provided by canneries, 2011 

By 2016, as additional processing plants are established and commence operations, PNG’s tuna 

processing sector could potentially provide 15,000 direct jobs and 38,000 indirect jobs (over 53,000 

total) (Table 4.4). 

64 The multiplier used for estimating indirect and induced employment is 2.5 and is consistent with the 

multiplier used by NFA (which according to NFA personnel reflects the standard employment multiplier 

adopted in PNG for analyzing employment impacts, taking into account local labour market dynamics). The 

consultants have been unsuccessful in several attempts to independently verify the validity of this multiplier. 




Table 4.4 Projected Employment Generation in PNG from Tuna Processing, 2011-2016 

Number of Jobs 2011 2012 2013 2014 2015 2016 

Direct Jobs 6,603 9,215 10,338 12,810 14,048 15,231 

Indirect Jobs 16,508 23,038 25,845 32,025 35,120 38,078 

Total Jobs 23,111 32,253 36,183 44,835 49,168 53,309 

Source: Consultants’ own analysis based on labour data provided by PNG canning industry representatives, 

2011. 

The tuna processing sector has the potential to become a major provider of formal employment in 

PNG, particularly for young women, given that around 70% of employees are female (further 

discussed in Section 4.4.1). Cannery workers in existing plants indicated that limited alternative 

formal employment opportunities exist currently for unskilled labour. 

Gillett (2009) estimated that in 2008 around 774,000 people were employed in monetary jobs in 

PNG. 65 In the absence of a more recent or precise estimation of the size of the formal job market in 

PNG, total employment (direct and indirect) generated by tuna processing activities in PNG in 2016 

could account for at least seven % of total formal employment (anecdotal reports indicate around 

10%), since monetary jobs could also extend to informal cash-earning employment opportunities. 

4.4 Labour/Working Conditions 

4.4.1 Cannery Labour Profiles 66 

Presently, around 6,700 workers are directly employed by PNG’s three canned tuna processing 

operations. 

Of the total workforce, around 98% of positions are filled by PNG nationals. In the case of SSTC, the 

majority of workers are sourced from within the East Sepik province, while RDTC and Frabelle attract 

staff from both within their own provinces (Madang and Morobe, respectively), as well as from 

other regions (e.g. Highlands, Sepik). 

One-hundred per cent of unskilled cannery jobs are filled by PNG nationals. As a rule, under PNG’s 

Employment of Non-citizens Act 2007, jobs requiring unskilled or low-skilled labour are reserved 

exclusively for PNG nationals. Each cannery also employs a small percentage of foreigners (1-3%), 

who fill management-level positions. Currently, expatriate employees are almost exclusively sourced 

from the Philippines. PNG’s foreign employment laws open managerial, professional and highlyskilled 

jobs to non-citizen employees, as well as PNG citizens, in acknowledgement that suitablyqualified/skilled 

employees for such positions cannot always be sourced from within PNG. 67 To date, 

65 Gillett 2009. 

66 Based on analysis of labour data provided directly to the consultants by canneries, as well as data gathered 

during interviews, PNG in-country consultation, September 2011. 

67 Employment of Non-citizens Act 2007; Employment of Non-citizens Regulation 2008. Department of Labour 

and Industrial Relations 2009. 




very few PNG nationals have been employed or promoted into management-level positions within 

the canneries. 68 However, the majority of supervisory level positions are filled by PNG nationals. 

Worldwide, tuna canneries are large-scale employers of female workers in unskilled, productionlevel 

positions, particularly skinning and loining. At least 70% of workers in PNG canneries are 

female; 80-90% of whom are unskilled and employed in production lines. 

Given the labour-intensive nature of work within tuna processing facilities, coupled with difficult 

working conditions (i.e. standing for long periods each day, working in hot/damp conditions), 

canneries actively seek young, fit workers, aged 18 years and over. At a minimum, around 50% of 

workers are within 18-35 years of age. In the case of SSTC and RDTC, at least 80% of workers are 

between 18-35 years of age. Generally, the maximum age for production-line workers is around 45 

years old. 

High levels of absenteeism and staff turnover are serious issues for PNG canneries (discussed further 

in Section 4.4.2). Currently, absenteeism levels range from around 20-30%. To manage this, PNG 

canneries employ up to 30% more workers than the actual level of production warrants. Staff 

turnover is as high as 50-60% and is evidenced by the large proportion of the workforce employed 

for less than 12 months (40-85%). Canneries report that staff turnover levels are heavily influenced 

by interruptions to production. When interruptions are low, staff turnover levels may be around 

10%; with interruptions to production due to issues like power and water outages, turnover is much 

higher. 

Table 4.5 presents a comparative labour profile for PNG’s three tuna processing operations, as at 

September 2011. 

68 A similar case exists for crews onboard fishing vessels. 




Table 4.5 Labour profile of existing tuna processing operations - 2011 

Labour Profile RD Tuna Canners SSTC Frabelle 

Total number of employees 3,283 1,359 2,061 

PNG National vs. Expatriate Workers 

Total number of PNG national employees 

Total number of expatriate workers 

Catchment area for PNG employees 

Female vs. Male Workers 

Total number of female employees 

Total number of male employees 

% of total female employees in 

production-level jobs 

% of total male employees in productionlevel 

jobs 

Skilled a vs. Unskilled Workers 

% PNG nationals in management-level 

positions 

% PNG nationals in supervisory positions 

3,203 

(98%) 

80 

(All PH) 

(2%) 

Madang, Highlands, 

Sepik 

2,397 

(73%) 

886 

(27%) 

1,339 

(99%) 

18 

(16 PH, 2 Other) 

(1%) 

East Sepik 

920 

(68%) 

439 

(32%) 

2,008 

(97%) 

53 

(All PH) 

(3%) 

Lae (Morobe) - 60% 

Outside Morobe- 

40% 

1,594 

(77%) 

467 

(23%) 

81% 93% 86% 

35% 71% 64% 

4% 

(1/27) 

73% 

(113/154) 

29% 

(8/28) 

100% 

(55/55) 

22% 

(4/18) 

38% 

(24/63) 

% PNG nationals in unskilled positions 100% 100% 100% 

Age Structure 

% of employees between 18-35 years old 89% 47% ~83% 

Length of Employment 

% employees working for 12 months or 

less 

62% 85% 40% 

Absenteeism (%) 20% 32% 25-30% 

Labour turnover (%) 19% 56% 30% 

a Includes management, supervisor, superintendant/officer and skilled-technical positions. 

n.a. = Not available; PH = Philippines nationals. 

Source: Human Resources Departments – RDTC, SSTC, Frabelle 2011. 

4.4.2 Cannery Labour Conditions 

i) ‘Internationally Recognised’ Labour Rights 

The International Labour Organisation (ILO) has identified eight conventions covering issues which 

are considered as ‘fundamental principles and rights at work’: 




• freedom of association and the effective recognition of the right to collective bargaining; 

• the elimination of all forms of forced or compulsory labour; 

• the effective abolition of child labour; and 

• the elimination of discrimination in respect of employment and occupation. 

Since 1995, the ILO has been actively pursuing universal ratification of these eight conventions. By 

2000, PNG had ratified all eight conventions (Table 4.6). 

Table 4.6 

PNG ratification of eight ‘fundamental’ ILO conventions 

ILO Convention 

Date of Ratification 

Freedom of Association and Protection of the Right to Organise 1948 (No. 87) 2 June, 2000 

Right to Organise and Collective Bargaining Convention 1949 (No. 98) 1 May, 1976 

Forced Labour Convention 1930 (No. 29) 1 May, 1976 

Abolition of Forced Labour Convention 1957 (No. 105) 1 May, 1976 

Minimum Age Convention 1973 (No. 138) 2 June, 2000 

Worst Forms of Child Labour Convention 1999 (No. 182) 2 June, 2000 

Discrimination (Employment and Occupation) Convention 1958 (No. 111) 2 June, 2000 

In November 2010, the International Trade Union Confederation (ITUC) delivered a report to the 

WTO General Council concerning PNG’s implementation of internationally recognised core labour 

standards. 69 The ITUC report indicated that while PNG has ratified all eight core ILO conventions, 

improvements need to be made in the implementation of four of the conventions (i.e. Freedom of 

Association and the Right to Collective Bargaining; Discrimination and Equal Remuneration; Child 

Labour; Forced Labour). 70 The ITUC report cites sector-specific examples for the forestry, agriculture 

and mining industries. However, no specific examples relating to the tuna processing industry were 

included. Short-comings in legislative frameworks, implementation and monitoring may also extend 

to this sector though. Table 4.7 presents a summary of the key implementation issues raised by 

ITUC, as well as tuna processing industry-specific issues of relevance. 71 

69 The ITUC report contributed to a broader WTO Trade Policy Review conducted for PNG (WT/TPR/5/239). 

Available at: http://www.wto.org/english/tratop_e/tpr_e/tp339_e.htm 

70 ITUC 2010. 

71 Tuna processing-specific implementation issues are the consultants’ own opinions, based on prior 

knowledge and information gathered during in-country consultation. 




Table 4.7 

Convention 

Freedom of 

Association and the 

Right to Collective 

Bargaining 

Discrimination and 

Equal Remuneration 

Child Labour 

Forced Labour 

Issues with PNG implementation of ‘fundamental’ ILO conventions 

Implementation Status 

• Recognised by PNG law – right to form and join 

unions, collectively bargain and strike; but 

numerous legal provisions do not conform with ILO 

Conventions. 

• DLIR drafting new Industrial Relations Bill to 

repeal/amend a number of provisions re: trade 

unions, in response to CEACR recommendations. 

• Law not effectively enforced re: discrimination 

against workers who seek to join/join in activities of 

unions. 

• <strong>Report</strong>s that DLIR actively seeks to prevent strikes, 

even if legal. 

• <strong>Report</strong>s that law has not been enforced when 

employers have taken retaliatory measures against 

striking workers. 

• PNG Government has discretionary power to cancel 

arbitration awards and void wages agreements. 

• Constitution prohibits discrimination on grounds of 

race, origin, colour, gender, disability; no specific 

employment law re: anti-discrimination. 

• Limited law re: prohibition of sexual harassment in 

the workplace. 

• Homosexuality is deemed illegal. 

• No law prohibiting discrimination against persons 

with HIV/AIDs 

• <strong>Report</strong>s of racial discrimination/violence against 

Asian business owners and workers. 

• Child labour is prohibited by law – minimum age of 

employment is 16 years. 

• New legal reforms to deal with issues re: child 

sexual assault, child involvement in drug production 

and trafficking. 

• DLIR engaged in 4-year programme to strengthen 

enforcement of child labour laws; also 

implementation of NAP against Commercial Sexual 

Exploitation of Children (2006-2011). 

• Primary education not free, compulsory or universal 

– new PNG Government (as at August 2011) is 

pushing for free education. 

• Constitution prohibits forced labour and slavery, but 

not all forms of trafficking; no specific antitrafficking 

law. 

• Inadequate penalties for crimes relating to forced 

labour and forced prostitution. 

Tuna Processing Sector 

Implementation Issues 

• RDTC & SSTC have 

independent workers 

unions established. 

Frabelle – no union as yet, 

but the company states 

that it is supportive of the 

establishment of one. 

• July 2010 – strike by RDTC 

workers (deemed illegal); 

489 workers suspended 

due to strike; workers reinstated. 

Company 

ordered by GoPNG to 

increase and back-pay 

minimum wage effective 

21 January 2010. 

• No evidence of 

discrimination against 

female workers in 

recruitment/salary. 

• Anecdotal reports of 

instances of sexual 

harassment by male coworkers 

of female staff; 

zero tolerance with 

offending staff terminated 

instantly. 

• Minimum age of 

recruitment is 18 years. 

• Anecdotal reports of 

prostitution – largely 

associated with tuna 

fishing/carrier vessels 

(refer Section 4.5.4). 

DLIR = PNG Department of Labour and Industrial Relations; CEACR = ILO Committee of Experts on the Application of 

Conventions and Recommendations. 

Sources: ITUC 2010; multiple interviews – PNG in-country consultation, September 2011. 




The International Labour Affairs Section, within PNG’s Department of Labour and Industrial Relations 

(DLIR) reportedly has ongoing communication with the ILO Committee of Experts on the Application 

of Conventions and Recommendations (CEACR) concerning PNG’s implementation of core ILO 

conventions. In attempting to address recommendations put forward by CEACR, DLIR is presently 

reviewing key legislation, including the Employment Act and Industrial Relations Act, as well as 

relevant regulations, to ensure PNG’s labour-related legal instruments are consistent with ILO 

conventions. 72 

ii) 

National Labour Conditions 

The Employment Act 1978, together with associated regulations and amendments, establishes the 

legislative framework for minimum labour/working conditions in PNG. The DLIR is responsible for 

ensuring the effective implementation of the Employment Act 1978 in workplaces, together with 

other key labour-related legislation pertaining to issues including workers compensation, 

occupational health and safety, employment of non-citizens and industrial relations. PNG’s tuna 

canneries are subject to regular scheduled inspections, as well as random spot checks by DLIR 

inspectors. 

To establish an understanding of current working conditions within the canneries and in turn, to 

make an informed assessment as to whether or not they operate in accordance with relevant 

national labour conditions, the Consultants undertook the following: 

• conducted detailed discussions with senior-level human resources personnel in each 

cannery concerning company policies and procedures relating to employment. 

• reviewed key documentation including wage and salary structures, employee contracts, 

employee payslips, company rules and regulations, codes of conduct and performance 

appraisal systems. 

• conducted informal interviews with 15 randomly selected workers per cannery 73 (45 in total) 

from along the production line (i.e. receiving/cold storage, thawing, skinning/cleaning, 

loining, can packing, retort, labelling, packaging). 74 

• reviewed relevant national legislation (i.e. Employment Act 1978). 

On the basis of the consultants’ analysis, current working conditions of all three canneries appear to 

be in accordance with the Employment Act 1978. 75 

Table 4.8 presents a summary of key relevant labour conditions as set out in national legislation, 

together with details concerning the canneries’ compliance with these conditions. 

72 Interview, DLIR representative, September 2011. 

73 The random selection and interviewing of workers was conducted by the Consultants independently; 

management representatives of the canneries were specifically not involved in this process to avoid any 

selection bias. Interviews were conducted in tok pisin (pidgin), except in cases where the workers were 

comfortable speaking English. The Consultants were assisted during interviews by NFA fisheries officials based 

in provincial offices. 

74 A comprehensive survey of cannery workers using formal interview techniques and sampling methods was 

outside the scope of this review. However, the consultants endeavoured in their selection of workers to 

obtain a representative cross-section of workers within the production section of each cannery. 

75 The assessment of labour conditions has been conducted to the best of the consultants’ abilities. However, 

it should be noted that the consultants are not qualified labour specialists. Interview questions related directly 

to working conditions in the canneries, not broader social issues. 




Table 4.8 Overview of Working Conditions in PNG Tuna Processing Facilities – September, 2011 

Labour Conditions National Legislation Canneries’ Implementation 

Contractual age Minimum age - 16 years or over Minimum age - 18 years or over 

Minimum Wage 

Statement of wages 

Maximum daily 

hours 

Rest periods 

Overtime 

Minimum wage offered to employees must 

not be less than the registered award. 

Employer will provide a written statement 

with particulars for a wage period including 

gross ordinary wages earned; overtime pay; 

any extra payments; amount and reason for 

deductions; net wages due; date of pay 

period. 

• Work no more than 12 hours in any one 

day. 

• Provisions for exceeding maximum hours 

in certain circumstances – includes inter 

alia to avoid the deterioration/loss of 

materials which, by reason of their nature 

or of exceptional circumstances, it has not 

been possible to complete within the 

maximum hours; work required to coordinate 

the work of two successive shifts. 

• One meal break or rest periods totalling no 

less than 50 minutes per 8 hour shift. 

• Non shift-work: rest period of not less than 

24 consecutive hours in a week (Mon-Sun); 

shift work - not less than 24 consecutive 

hours and total not less than 96 hours in 

every 28 day period. 

Overtime defined as: 

all time worked in excess of 8 hours 

(Monday to Friday); ii) all time worked 

after 12 noon on Saturdays; iii) all time 

worked on a Sunday or public holiday; iv) 

all time worked in excess of 44 hours in 

any seven day period. 

Overtime pay rates: 

1.5 x hourly rate – Mon-Fri; Saturdays 

before 12 noon; ii) 2 x hourly rate – 

Sundays; public holidays; iii) 1.5 x hourly 

rate – any other times. 

• Minimum wage set at K 2.29/hr, 

effective 21 January, 2010. Entry-level 

for unskilled workers at K2.29/hr 

• Salary scales in place according to job 

classification and job grade levels. 

• Employees provided with fortnightly 

payslip (electronically generated), 

containing the required information. 

• Some workers interviewed encounter 

difficulties understanding information 

included in payslips. 

• Cannery shifts are 8 hours (plus 1 

hour lunch break); see below re: 

overtime. 

• Given the nature of processing, 

canneries may evoke provisions for 

exceeding maximum hours (i.e. 

processing highly deteriorative raw 

materials which must be processed 

on the day of thawing; 2 out of 3 

canneries operate 2 shifts per day 

over 24 hours – coordination 

required between shift changes). 

• Lunch break – 1 hour. 

• Toilet breaks during shift - 10 

minutes. To avoid abuse of toilet 

breaks, if worker returns to shift after 

15 minutes without good reason, 

time is deducted from the workers’ 

pay. 

• Rest periods in accordance with 

Employment Act 1978. 

• Overtime worked (up to 4 hours max; 

but typically 1 – 3 hours). 

• Overtime pay rates in accordance 

with Employment Act 1978. 

• Contrary to some workers indicating 

that overtime is not paid, inspection 

of payslips and company records 

confirmed this is not the case (refer 

to former point re: misunderstanding 

of wage calculation on payslips). 





Sick leave 

Recreation leave 

Long service leave 

Pregnancy and 

maternity leave 

Compassionate 

leave 

Absence from duty 

where employee 

nursing child 

• 6 days per year on presentation of a 

medical certificate; payment at rate of 

ordinary pay. 

• Eligible after 6 months continuous 

service. 

• Applies to illness or injury other than 

those arising out of or during the course 

of employment. 

• Can accrue up to max. 18 days sick leave 

credits. 

• 14 consecutive days paid leave for each 

year of continuous service; paid at 

ordinary rate of pay. 

• Not applicable to casual workers (i.e. 

workers on probation); pro-rata leave 

balance payable on termination or 

resignation if employee has worked for 

not less than 6 months continuous 

service. 

• Recreation leave credits accruable for a 

maximum of four years. 

• 3.5 days for each year of service – not in 

the award covering tuna processing 

facilities. 

• Maternity leave covers the period 

necessary for hospitalization prior to 

confinement and up to six weeks 

following confinement. Granted an 

additional four weeks in addition to 

maternity leave due to sickness following 

confinement. 

• Pregnancy/maternity leave taken without 

wages. 

• Medical certificate confirming medical 

fitness must be presented prior to 

resuming work. 

• Eligible if employed for not less than 108 

days within a 12 month period; not less 

than 90 days within a 6 month period. 

Not included in Employment Act 1978. 

Employee nursing a child is allowed periods 

of absence from duty, not less than one half 

hour twice daily during normal working 

hours; counted as working hours. 

• Paid sick leave in accordance with 

Employment Act 1978. 2 canneries – 

6 days; 1 cannery 9 days. 

• Granted with presentation of medical 

certificate + prior notification of 

absence + filing sick leave notification 

on return to work with HR. 

• Option to go onto leave without pay 

for general medical illnesses (i.e. non 

work-place related injury), if used up 

paid sick leave provision in a calendar 

year. 

• Paid recreation leave in accordance 

with Employment Act 1978; 2 

canneries – 14 days, 1 cannery – 21 

days. 

• Most workers interviewed did not 

fully understand leave entitlements. 

• Long service leave paid by all 

canneries, despite no legal 

requirement to do so. 

• 3.5 days for each complete year of 

service after 3 years, awarded after 

15 years service. 

• Maternity leave granted in 

accordance with Employment Act 

1978. 

• 2 canneries – 10 weeks total; 1 

cannery – 12 weeks total. 

• No legal requirement for paid 

maternity leave, but one cannery 

provides a one-off payment per 

pregnancy of K 150; exempted from 

working night shift on return to work; 

also gives paternity leave (leave 

without pay). 

• While no legal mandate exists for the 

provision of compassionate leave, 

one cannery grants this (7 days paid, 

7 days leave without pay/year). 

• Allowance 1 hour twice a day for 

breastfeeding, if baby bought to 

cannery. 

• 1 cannery plans to establish a 

designated area for breast feeding, 

currently use doctor’s office/sick bay. 





Public holidays 

Food rations 

Deductions from 

wages 

Discrimination 

prohibited 

Housing 

Transport 

• Paid public holiday at usual wages, if 

employee attended work on the day 

immediately preceding a public holiday. 

• If working on a public holiday will be paid 

usual wages for that day, plus paid in 

accordance with the actual time worked. 

• Food rations provided at the agreement 

between employer and employees. 

• Food rations shall be edible and of good 

quality. 

• Consist of one unit selected from each of 

the items specified in a ration scale 

(Schedule 1 of Act). 

• Deductions can be made upon receipt of 

written consent of an employee for inter 

alia - contributions to provident fund (i.e. 

superannuation), food rations, clothing 

and housing rental. 

• Deductions cannot exceed 50% of wages 

due to be paid in any pay period. 

• An employer who discriminates against a 

female person on account of her sex or 

fails to pay a female employee the same 

wages as a male employee employed at 

the same level in the same work is guilty of 

an offence. 

• A female shall not be employed in heavy 

labour. 

• An employer is not required to provide 

housing for an employee who owns a 

house or who has written permission from 

the owner of a house to occupy a house, 

within close proximity and reasonably 

accessible to the place of employment. 

Only required to provide transport on 

repatriation. 

Medical supervision • An employee with more than 800 

employees and accompanying dependents 

must provide a medical practitioner and 

medical aid, whose full time duty is the 

medical care of employees and 

dependents. 

• Does not apply to a place that is within 

reasonable distance from a hospital. 

• Public holidays paid in accordance 


• 2 canneries - free lunch; 1 cannery - 

subsidized food (K1) + free tea/coffee 

for night shift. 

• Food typically includes staple (rice), 

protein (tinned/fresh fish, sausage), 

green leafy vegetables. 

• Some workers complain about lack of 

variety of meals and small portion 

size. 

• Fortnightly deductions for provident 

fund (i.e. Nasfund – 6% employee 

contribution); rental for those staff in 

company-arranged housing; union 

fees (for union members). 

• Deduction for uniform deposit in 

first/second pay fortnights after 

commencement of employment. 

• Ad hoc deductions for repayment of 

salary advances; voluntary 

contributions to bereavement 

collection when death in the family of 

work colleagues. 

• Same salary scale for males/females. 

• No evidence of females employed in 

heavy labour during site visit. 

• Not legally mandated to provide 

housing or housing allowances. 

• 1 cannery provides limited dormitory 

accommodation + boarding for nontechnical 

(unskilled) workers; housing 

allowance for supervisors and key 

technical positions. 

No transport currently provided by any 

cannery. Previously provided prior to 

K2.29 minimum wage rate increase. 

• 1 cannery - clinic equipped to handle 

first aid, medical and 

accident/emergency cases; also has 

laboratory testing facilities; full- time 

doctor + 4 nurses on-site. 

• 2 canneries – first-aid clinic on-site 

with nursing staff; private doctor for 

more serious illness/injury. 




Hospital and sick 

wards 

Medical and 

hospital treatment 

Termination 

Where 400 or more employees and 

accompanying dependents, employer must 

provide an approved building for use as a 

hospital, except when within a responsible 

distance from a hospital. 

• Employer shall make all necessary 

arrangements for the treatment or 

hospitalization of an employee or 

accompanying dependent who resides at 

or adjacent to the place of employment, at 

the request of the employee. 

• Medical and other treatment provided by 

the employer at the place of employment 

shall be free of charge. 

Salary paid up to date of termination, 

together with any leave credits (annual, long 

service). 

See comments above re: medical 

supervision. 

• Workers taken to hospital in case of 

serious workplace injuries that 

cannot be handled by on-site clinics. 

• Consultation, medicines, medical 

consumables (bandages etc.) all free 

of charge at on-site clinics. 

• Companies maintain that all hospitalrelated 

expenses covered by 

company; several workers indicated 

instances when they paid their own 

expenses. 

Final pay on termination in accordance 


In addition to the key working conditions-related issues covered above, during the course of the 

review further issues of interest were raised. 

• Salary/wages – Production workers (both those on probation and regularised workers) 

consistently indicated that canneries are meeting the minimum wage rate of K 2.29/hour. 

On average, fortnightly pay per worker ranges from K 200-280, if all shifts within the 

fortnight have been worked (i.e. 80-88 hours). Workers’ pay contributes to meeting basic 

needs (i.e. food, clothing, transport, rent/board, kerosene, school fees etc.). Most workers 

interviewed indicated that given the high cost of living in Papua New Guinea, there is little 

ability to save money from their pay, 76 although there are instances where staff have 

voluntarily instructed the companies to deduct funds from their pay for additional Nasfund 

contributions (up to 10%). Across the board, workers indicated that the first priority in 

improving working conditions would be to increase salary levels above the minimum wage. 77 

Local economies, particularly in rural areas, are still largely subsistence and semisubsistence. 

Hence, many cannery workers’ pays are supplemented by subsistence 

activities. For workers that do not have access to land for establishing gardens, 

opportunities for subsistence activities are limited, which causes additional financial strain 

as a higher proportion of cannery pay must be used for the purchase of food. 

• Job advancement – For production level workers, the primary motivation for seeking 

employment at canneries is generally motivated by the need to acquire a cash income to 

meet basic needs, rather than developing a career per se, which is commonplace worldwide 

for manufacturing industries requiring large volumes of unskilled workers. However, there 

are instances where some workers are engaging in extension studies to complete secondary 

school and move onto university entry level; for these workers cannery salaries assist in 

76 The ability to save is also influenced by PNG’s cultural and social setting, whereby financial contributions are 

generally given to extended family members in meeting cultural responsibilities such as funerals, weddings 

etc., as well as assisting other family members in meeting basic needs (e.g. food, school fees etc.). Spending on 

extended family may be considered ‘savings’ or an investment, on the premise that financial support given to 

other family members could be reciprocated in future. 

77 In August 2011, PNG’s new government ordered a 100-day review of the minimum wage rate to investigate 

the potential to increase this from K2.29/hour to K3.50/hour. Recommendations from the review will be 

presented to the National Economic Council (NEC). Interview, DLIR representative, September 2011. 




meeting their school fees. Also, a number of workers interviewed indicated that in addition 

to receiving a wage, that another positive aspect of employment has been the opportunity 

provided to learn new skills. To date, there are very few PNG nationals in management-level 

positions within canneries. Companies cite difficulties attracting suitably qualified nationals 

to fill these positions, as well as competition for highly skilled-labour with other sectors with 

the capacity to offer higher salaries (i.e. the mineral resources sector). Companies also 

indicate that there have been numerous instances when PNG nationals have been recruited 

or groomed to fill skilled/management level positions, but have been head-hunted by other 

companies. Some opportunities exist for high performing PNG national workers to be 

promoted through the ranks to supervisory levels and/or to move into other departments. 

• Absenteeism/turnover – As mentioned, canneries are plagued by high levels of absenteeism 

and staff turnover. This is largely a product of the maintenance of strong subsistence and 

semi-subsistence livelihoods, which means the drive for cash incomes is often intermittent, 

particularly in rural areas (i.e. Madang, to a lesser extent Wewak). To reduce absenteeism, 

canneries have strict policies in place whereby workers are terminated if they do not show 

up for work for more than three days without good reason. Common reasons cited by 

workers for absenteeism include bad weather, no transportation, illness (either themselves 

or family members), family/domestic issues, community commitments and refusal of entry 

into the work compound (i.e. no ID, non-compliance with QA standards (e.g. men unshaven, 

no footwear)). According to cannery management, some common reasons for resignation 

include problems encountered with arranging baby-sitters, lack of transport and domestic 

issues. In addition, some workers entering formal employment for the first time have 

difficulties adjusting to a controlled working environment where they are closely supervised 

and must keep to time. 

• Probation – RDTC and Frabelle have a six-month probationary period for new production 

workers, while SSTC has a three-month period. Re-hired workers who previously resigned or 

were terminated are subject to probation again. During this time production staff receive 

the minimum wage (K 2.29/hour), but are not eligible for employer provident fund (Nasfund) 

contributions (8%) or leave entitlements. Following a performance appraisal at the 

completion of probation, staff are regularised and commence receiving Nasfund 

contributions (and making their compulsory contributions of 6%), as well as receiving prorata 

leave balances since the time of employment. Upon recruitment, staff are covered 

under worker’s compensation insurance and receive medical entitlements. 

• Recruitment policy - The minimum age of recruitment in the three canneries is 18 years old, 

which is two years above the legal minimum age being 16. Implementation of this policy is 

difficult however, due to a large proportion of workers not having birth certificates as proof 

of age. Canneries often need to use other subjective forms of identification to estimate age 

(e.g. medical records and examinations, statutory declarations). SSTC and Frabelle actively 

seek to recruit workers with education qualifications for Grade 8-10 (early-mid secondary 

school-levels) for entry level skinners and loiners. 

• Worker’s compensation - Under PNG law, canneries are required to have workers’ 

compensation insurance coverage for workplace-related injuries of employees. Following a 

workplace-related injury, an incident report is prepared by the Human Resources 

Department (together with a doctor’s medical report assessing the degree of injury) and is 

filed with the Office Workers Compensation (within DLIR). Six months later a second 

assessment is conducted by the doctor to assess recovery and determine the permanent 

level of damage caused by the injury. Each case is assessed by the Workers Compensation 

Tribunal who makes a final decision on whether or not to award compensation and the level 

of compensation to be paid. The process for filing claims is reportedly lengthy, taking up to 

one year. Responses from some workers concerning coverage for workplace-related 




injuries, coupled with union responses, indicate instances where employees do not feel their 

injuries have been appropriately dealt with under the Workers Compensation Act 1987, as 

claims have either not been filed or are yet to be processed. 

• Performance incentives - Each cannery has systems in place for annual performance 

appraisals. In addition, the salary structures include provisions for annual pay increases by 

increment, based on favourable performance appraisals and affordability of the company 

(i.e. if net profits are high enough). Presently, all three canneries are not implementing 

performance incentive systems citing profitability issues. Hence, workers who have been 

with the company in excess of one year and/or who are high performers may still remain on 

the minimum wage. When discussing the potential for performance incentive schemes to 

increase productivity levels, cannery representatives indicated that such systems work very 

effectively in South-east Asian canneries, but in Papua New Guinean culture jealousies result 

amongst workers when staff are singled out and given remuneratory bonuses for 

exceptional performance. Bonus systems exist for attendance including gifts (e.g. umbrellas, 

raincoats, cash) and recognition at the annual staff Christmas party. 

• Workers Unions – SSTC and RDTC have independent workers’ unions established which are 

officially registered with the Office of the Industrial Registrar (within DLIR) under the 

Industrial Relations Act. However, the majority of workers interviewed indicated 

widespread lack of interest or frustration with the ineffectiveness of these unions. In some 

cases, workers also expressed concerns that being a union member might be viewed 

unfavourably by management. As a consequence, membership numbers are currently 

relatively low (reportedly around 300 members for each union), and as a result unions are 

financially under-resourced (union membership dues range from K1.50-K 

4.00/fortnight/worker). RD National Workers Union has a Memorandum of Agreement in 

place with the company which is currently under re-negotiation and covers issues including 

payment of transport and housing allowances, reduced night shift times, improved 

maternity leave provisions and severance/finishing pay entitlements. South Seas Tuna 

Workers Union does not currently have an MOA or collective bargaining agreement in place 

with SSTC, however, it has engaged in ongoing negotiations with the company concerning 

increasing pay levels above the minimum wage and the provision of housing and transport 

benefits. Frabelle workers are yet to establish a legally registered workers union, but have 

made several attempts in the past and have expressed interest in joining the Maritime 

Workers’ Union. All three canneries have experienced strike action on several occasions 

over the past few years. In the case of RDTC and Frabelle, strike action has largely related to 

implementation of the minimum wage, while SSTC security staff forced a plant shut-down in 

protest of a company decision to outsource its security services. In all cases, the strike 

action was deemed illegal by the DLIR. 

• Uniform deductions – Uniforms were formerly provided free of charge to workers. 

However, all three canneries now have policies in place where workers pay a ‘security 

deposit’ which covers a portion of the cost of their uniforms and is deducted from their first 

pay. Cannery Management indicated that by attaching a monetary value to uniforms, it 

deters staff from ‘losing’ uniforms. When uniforms were provided free of charge the 

frequency (and associated costs) of uniform replacement was high due to workers not taking 

responsibility for uniforms and giving them away to other people. Uniform deductions are 

made for: shirts (K 8.00-10.00), pants (K 12.00); caps (K 5.00); gumboots (free – K 25.00); 

cloth masks (K1.50) and hairnets (K0.90). 78 

78 Workers are required to pay a ‘security deposit’ for the following items of uniform: RDTC - shirts, pants, 

cloth mask, hair net; SSTC - gumboots, cap; Frabelle - cap, shirt, gumboots. 




• Transport – Prior to the minimum wage rate increase to K 2.29 in January 2010, all three 

canneries provided company-sponsored transport to and from work for employees, as an 

additional benefit. Following implementation of the increase in minimum wage, canneries 

retracted this benefit on affordability grounds (from the perspective that with increased 

wages, workers could afford to cover their own transport costs; and, from a cannery 

perspective that the increase wage costs reduced the affordability of providing transport to 

workers). Further, in the case of two canneries, spin-off businesses established with local 

transport providers to provide workers’ transport were reportedly abused by the PMV 

operators. 

Workers, particularly those living considerable distances from canneries (i.e. over one hour 

drive away), report issues with the lack of reliability and the high cost of transport. Female 

staff also raised concerns about security issues associated with catching transport before 

sunrise/after sunset. In light of these issues (and their related influence on absenteeism 

levels), all three canneries reported to be re-considering the provision pick-up/drop-off 

transport services for workers. In response to security issues, canneries have tailored shift 

hours to ensure workers on day shift have adequate time to return home prior to dark. For 

night shift workers, they are permitted early entry to the cannery compound before sunset 

and may stay onsite after finishing their shift until sunrise. 

• Housing – To cater for workers who live long distances from the cannery compound, RDTC 

has constructed free dormitory accommodation on cannery-owned land in Maiawara (about 

15 minutes from the cannery) for 100 workers. In partnership with local communities, RDTC 

is also financing the materials for the construction of dormitories for rent to RDTC staff for K 

30.00/fortnight. To date, five dorms/houses have been constructed which accommodate up 

to 50 staff (5 rooms per house, 2 x workers per room). Frabelle and SSTC are also reportedly 

considering options for providing housing assistance to workers. 

• Expatriate workers – Despite aspersions cast by European industry and parliamentary 

interests that PNG canneries are hiring large volumes of cheap foreign labour sourced from 

Asia, 79 this is not the case. All unskilled/production level jobs are reserved for PNG nationals 

under the Employment of Non-Citizens Act 2007. During cannery visits there was no 

evidence of foreign labour employed in production-level jobs. As mentioned earlier, 

expatriate workers are employed into management and high-level supervisory positions and 

are generally of Filipino origin. In prior studies, there have been anecdotal reports of 

mistreatment of local staff by foreigners, particularly verbal abuse/use of coarse language. 80 

Cannery management representatives confirmed isolated incidences of conflict between 

expatriate and local staff and indicated a zero tolerance policy for mistreatment of staff, 

whereby in such instances, the expatriate staff member has been terminated, had their 

foreign work permit cancelled and been repatriated from PNG. It is a requirement under 

PNG law that non-citizen workers are proficient in English, Tok Pisin or Hiri Motu. 81 While 

Filipino staff are generally proficient in English, frustrations have been raised by nationals 

workers concerning the use of their native tongue (Tagalog, Visayan) in the workplace at 

times. 

• Grievance handling - Each cannery has policies in place for dealing with staff grievances. 

Interviewed workers were well aware of the respective processes in place in instances when 

issues arise (e.g. fighting, theft, complaints against other workers etc.). Generally, workers 

first report to their immediate supervisor and then, if the issue cannot be resolved as this 

level, the matter is taken to either the HR Department, Security Department or Community 

79 For example, Fraga 2010. 

80 Sullivan et al. 2003; Sullivan et al. 2005. 

81 Employment of the Non-Citizens Act 2007. 




Relations Officer. Workers responses to the effectiveness of grievance handling procedures 

were mixed. 

• Code of Conduct - Each cannery has policies and procedures in place concerning staff 

conduct and subsequent disciplinary action if Codes of Conduct are breached. Companies 

adopt a zero tolerance policy for issues such as sexual harassment, fighting and stealing, 

with staff potentially dismissed instantly. 

• Training - Under PNG taxation law, canneries are entitled to a tax rebate of 2% of the annual 

salary budget which is to be used specifically for staff training. Upon recruitment, all staff 

attend an induction course (usually one day). Training is also provided in areas such as postharvest 

handling, quality assurance/HAACP, machine operations for production staff and 

team building/leadership for supervisory/management level staff. Cannery management 

state that annual training budgets consistently exceed the 2 % training levy. 

• Hygiene/sanitation - There have been past anecdotal reports of unsanitary working 

conditions, particularly with respect to staff toilets and showers. 82 Sanitation crews are 

specifically allocated to the cleaning of staff toilets and showers regularly during shifts and 

maintenance staff are on hand to attend to any plumbing issues that may arise. 

iii) Private Social Standards – BSCI and SA 8000 

Under a PNA-driven initiative, all fish processing facilities within PNA member countries are 

preparing to obtain accreditation under one of two voluntary internationally-recognised social 

accountability 83 standards – the Business Social Compliance Initiative (BSCI) or Social Accountability 

International (SA 8000). 84 The rationale for doing so is to improve working conditions within PNA 

processing facilities to ensure that international labour standards are met, since both the BSCI and 

SA 8000 standards are underpinned by national law, international human rights norms and the 

conventions of the ILO. For both BSCI and SA 8000, the audit is undertaken by third-party 

companies who are accredited by Social Accountability Accreditation Services (SAAS). 85 

Under the BSCI, suppliers form an agreement with specific clients to implement the BSCI Code of 

Conduct, which is based on a series of ten general mandatory social requirements concerning 

freedom of association and the right to collective bargaining; discrimination; child labour; minimum 

wages; working hours; forced labour and disciplinary measures; workplace health and safety; 

environment; social accountability policy; and, anti-bribery/anti-corruption. 86 

The SA 8000 standard is considered to establish global ‘best practice’ social standards. Hence, 

suppliers who have successfully acquired BSCI accreditation are encouraged to obtain SA 8000. 

Under SA 8000, suppliers must meet a series of nine broad social accountability requirements 

concerning the following – child labour; forced and compulsory labour; health and safety; freedom 

of association and right to collective bargaining; discrimination; disciplinary practices; working hours; 

remuneration; and, management systems. 87 The accreditation is more rigorous than BSCI, in that for 

each of the nine requirements, a number of specific criteria must be met. However, unlike BSCI, SA 

82 Sullivan et al. 2003, 2005. 

83 Social accountability is a component of Corporate Social Responsibility (CSR), whereby social issues such as 

human and labour rights and community relations are incorporated into an organization’s business practices. 

Courville 2003. 

84 Pacifical 2011. 

85 BSCI 2011. 

86 BSCI 2011. 

87 Social Accountability International 2008. 




8000 does not include broader governance requirements relating to the environment or antibribery/anti-corruption. 

In March 2011, an internal pre-audit was facilitated by the PNA Office for seven PNA fish processing 

facilities, including RDTC, SSTC, Frabelle and IFC in PNG. The purpose of the pre-audit was to 

‘diagnose’ how each processing facility’s working conditions and management systems fare against 

the BCSI and SA 8000 standards to determine whether or not they are in a position to enter into an 

audit. Under the pre-audit, all four PNG plants scored between 70-90% for eight out of the nine SA 

8000 requirements. However, the compliance scores for social accountability management systems 

(i.e. social accountability-related policies, procedures and manuals) were low at around 25%. This is 

because PNA plants are new to implementing social accountability systems and are yet to establish 

associated management systems. 88 

In the past several months, PNA processors have been working on addressing gaps identified in the 

pre-audit. The intention is then for processors to commence the audit proper with a BSCI selfassessment, 

prior to the initial audit conducted by a third-party SAAS-accredited auditor. It is 

anticipated that the PNG plants will likely comply with the BSCI standard and opt to progress to 

acquiring SA 8000 accreditation, given that it represents a higher standard than BSCI. 89 

It should be noted that the value of the SA 8000 accreditation process has been debated over time. 

On the positive side, SA 8000 has the potential to improve conditions for workers, as well as 

promoting socially responsible company reputations and brand images. However, SA 8000 has also 

been criticised for only measuring a select group of social factors (i.e. labour force issues), while 

excluding broader social issues that are more difficult to quantify such as environmental impacts, 

effects on neighbouring communities, chain of custody social standards and ethical investment 

practices. In addition, the certification process can be quite costly. 90 

4.5 Other Social Issues 

In addition to labour-related issues of direct importance to workers employed by canneries, there 

are broader social issues, both positive and negative, associated with tuna processing operations in 

PNG. 

To date, considerable attention has been given to broader social issues in Madang through past and 

recent studies, media reports, anecdotal recounts and, in the course of this review, stakeholder 

interviews. However, there has been comparatively little coverage of broader social issues 

associated with tuna processing activities in Wewak and Lae. 

4.5.1 Corporate social responsibilities of tuna processing companies 

As part of their investment agreements with the PNG Government, tuna processing companies are 

required to exercise a degree of corporate social responsibility, by committing to generating 

additional benefits to local communities, over and above employment offered within the canneries. 

88 PNA Office, pers. comm. August-October 2011. 

89 PNA Office, pers. comm. August-October 2011. 

90 Campling et al. 2007: 218. 




Project Agreements established between the Independent State of Papua New Guinea, the relevant 

provincial Government and tuna processing companies include a specific provision relating to 

broader socio-economic benefits, entitled ‘Provincial and Local Benefits’ (Clause 11). 91 

Under the ‘Provincial and Local Benefits’ provision of Project Agreements, existing and 

new/proposed Lae-based tuna processing developments are subject to the following 

requirements: 92 

• Annual meeting with Morobe Provincial Government – meetings must be held annually (and 

as required) to discuss provincial and local benefits from the project in terms of utilising, 

purchasing and encouraging food production and marketing, service industries and coastal 

fishing in the Province. The meeting shall attempt to address immediate issues of concern 

including direct and indirect benefits, fair and equitable opportunities to facilitate real 

participation by local people etc. 

• Priority to local business - the Company will identify business opportunities for participation 

and give priority to the local landowners in the sourcing of any supplies or services related to 

secondary business activity. Wherever possible supplies and services will be sourced from 

local businesses in Morobe Province. 

• Assistance to locally based artisanal fishers - the Company will give priority to local artisanal 

fishers to participate in the supply of fish at fair value/price to the company’s processing 

plant. The Company may also provide credit facilities for the purposes of assisting such 

fishers to acquire small boats, eskies, ice and fishing gear. 

For Madang-based tuna processing facilities, the requirements stipulated under ‘Provincial and Local 

Benefits’ in Project Agreements are more extensive. This may relate to the fact that social issues 

with Madang communities are long-standing and complex, whereas fewer issues have been raised in 

Lae and Wewak. 

In addition to holding an annual meeting with the Madang Provincial Government, giving priority to 

local businesses and providing assistance to local artisanal fishers (as per the requirements for Laebased 

operations), Madang-based companies are also required to undertake the following: 

• Priority to local business participation – give first priority to citizens or registered business 

entities living in the project impact areas whose eligibility is determined by land geneaology 

studies and incorporated land groups. 

• Local business spin off – in consultation with Madang Provincial Commerce Office, formulate 

and develop viable business plans to be supported through the Local Business Development 

Programme of the company. The company will identify and provide a list of business spinoff 

activities and opportunities for participation. Priority for the listed business spin-off 

activities and opportunities shall be given to the project impact area communities in the 

sourcing of any supplies or services related to secondary business activities. 

• Local business content – the company shall reserve certain business spin-off activities for the 

local people/citizens. The parties will consider the immediate and long term opportunities 

91 During the course of the review, the consultants’ had the opportunity to review Project Agreements for a 

number of PNG’s tuna processing operations, including existing, approved and proposed projects. The text of 

the Project Agreements is fairly standard across various processing operations for general provisions, with 

project-specific variations concerning targeted plant production capacity and the number of associated fishing 

licences. 

92 The text largely reflects verbatim the requirements specified in the Project Agreements; minor textural 

adjustments have been made by the consultants’ to enhance readability. 




for business from the project that may be open for local participation. The following general 

criterion will apply – local contractors/groups/entities will have capacity to utilise their 

potential, craftsmanship or trade in all categories of business. Preference will be given to 

immediate and indigenous people of Madang. Where there is no capacity within the 

province, the next level of preference should go to local businesses outside of Madang 

Province. Unless all national capacities are exhausted, there shall be no consideration of any 

international contracting interest. 

A provision has also been incorporated into Project Agreements for Madang-based operations 

regarding dispute settlement: 

• Local community dispute settlement – The State and the Madang Provincial Government 

and the company will form a committee to consult with the Project Impact Area 

Communities to address any dispute that may arise relating to provincial and local 

participation in the project (Clause 11). 

In addition to provincial and local benefits requirements as specified in the Project Agreement, RD 

Group of Companies established a Memorandum of Understanding (MOU) with government and 

Incorporated Landowner Group (ILG) leaders in 1997, which specified the benefits for coastal 

residents. RD agreed to a extend a number of benefits to Madang residents including: 1) a 

concession to manage and operate a canteen in the cannery area; 2) permission to sell fresh 

vegetables to the cannery canteen and the company’s fishing fleet; 3) employment for six to eight 

men as security personnel at the cannery site; 4) positions for ‘one and later on at least two local 

landowners for cleaning and maintenance of the cannery yard’; 5) construction of one health clinic 

‘with maximum area of 30 square metres’; 6) contract transport services to customary landowners 

‘who own a suitable vehicle’; 7) an option to purchase up to 25 tonnes/day of raw tuna from locals 

for cannery operations; and, 8) priority status for RD sponsorship of ‘qualified’ local students to 

tertiary institutions and technical colleges in Papua New Guinea ‘if and when the company initiates 

the said scholarship program’. 93 

In short, in meeting their corporate social responsibilities, tuna processing companies are required 

to ensure that broader social-economic benefits stem to local communities in the form of spin-off 

businesses (e.g. catering, transport, security, worker’s accommodation etc.) and other associated 

benefits (e.g. local purchases, sponsorship/donations, traineeships, Christian outreach etc.). 

Existing companies have established dedicated positions within the company (generally titled 

‘Community Relations Officer’ (CRO)), which are filled by PNG nationals, to specifically handle liaison 

among the company, local communities and Government concerning spin-off benefits and other 

social issues. RD Group of Companies (covering RD Tuna Canners and RD Fishing) has established a 

dedicated subsidiary company, RD Foundation, to carry out its corporate social responsibility-related 

activities. 

4.5.2 Spin-off businesses 

Table 4.9 summarises spin-off businesses and other socio-economic benefits generated to date by 

PNG’s tuna processing companies. 94 The socio-economic contribution made by PNG’s tuna 

processing operations to local communities is highly significant. 

93 MOU as cited by Havice and Reed 2011. 

94 This list is compiled on the basis of information gathered during interviews with cannery representatives 

(September 2011) and may not be exhaustive. 




Table 4.9 Socio-Economic Benefits Generated by PNG Tuna Processors, 2011 

Company/Project Spin-off Businesses Other Benefits 

RD Tuna Canners a 

(Total annual estimated 

benefits ~ K 3-4 million 

annually) 

Frabelle 

South Seas Tuna Corp. 

Cannery canteen concession 

Compound security 

Ground maintenance 

Stream cleaning 

Workers’ transport (discontinued) 

Fishing net mending 

Unloading/stevedoring (Vidar 

wharf) 

Fish sales (by-catch) 

Construction of worker’s 

accommodation (at Maiwara) 

Cannery canteen concession 

Workers’ transport (discontinued) 

Artisanal fishing - pump boats 

(discontinued) 

Stevedoring (K 1 million/year) 

Sludge discharge 

Worker’s transport (discontinued) 

Established nursery schools & 

kindergartens (8 villages to date) 

Establishing a technical school for outof 

school youths (open in 2012) 

Training for community teachers 

School scholarships – 3 students per 

year; throughout entire education 

Targeted employment programme – 

‘Paddling Mamas’ 

Women’s livelihood development 

program 

Traineeship/work experience program 

Establishing churches 

Christian outreach/education 

Donations to local hospital 

Ad hoc sponsorships/donations – 

local sporting teams, charities, 

hospital 

Purchasing fresh tuna from local 

fishers for processing at Frescomar 

(value-added processing plant) 

Preferential hiring of workers from 

landowning group (Kreer clan) 

Purchase fresh produce for staff 

meals from local suppliers. 

Donations to local hospital – fish, 

linen, seats, freight for new beds 

Other ad hoc sponsorships/donations 

Pacific Marine Industrial Zone Perimeter Fencing 

Establishment of two umbrellas 

Tentative plan to establish schools, a 

health clinic and product market. 

companies for spin-off businesses 

(seed capital K 1 million) – Kananam 

and Rempi villages: K 100,000 each 

disbursed to date to establish 

security companies. 

Tentative plans to establish an 

additional three umbrella 

companies for other affected 

communities. 

a Also incorporates RD Fishing. 

Sources: Multiple interviews, industry and government representatives, September 2011. 




However, several issues have risen concerning the distribution of spin-off benefits, which either 

apply currently, or potentially, to canneries in Madang, Lae and Wewak. 

The first relates to inequitable distribution of spin-off benefits. For a number of years now, selected 

members of traditional landholder groups in Madang (from Kananam and Rempi villages) have 

raised concerns that the distribution of spin-off benefits associated with RD is inequitable. They 

believe that benefits are not being accrued by the true ancestral landowners, but rather just a select 

few. This issue has resulted in internal conflict within ancestral landowner groups, given spin-off 

benefits have been allocated by RD based on submissions received from the groups themselves 

identifying who the beneficiaries should be. 

The sustainability of spin-off businesses is also a major issue. For example, each company 

established spin-off businesses with passenger motor vehicle (PMV) operators for transporting 

cannery workers to and from work. When then canneries withdrew the provision of transport in 

association with the mandated increase in minimum wage in 2010, these businesses folded. In 

Madang, complaints were also raised by transport operators about the unfavourable terms of the 

spin-off businesses, as contractors were provided with second hand vehicles and the associated 

bank loans were considered onerous to service. On the other hand, companies raise issues 

concerning PMV operators taking advantage of the contracts by also transporting non-cannery 

workers. 

As mentioned earlier, it should be noted that all three companies are contemplating reinstating 

transport services to alleviate worker’s concerns regarding the availability of alternative reliable 

transport and security issues. Also, there is acknowledgement that the current public transport 

system in Lae will not be sufficient to cater for large increases in cannery workers associated with 

new processing investments which will potentially commence operations in the next 3-5 years. This 

provides opportunities to potentially re-establish former transport spin-off businesses, as well as 

establishing new ones. 

The sustainability of spin-off businesses is also influenced by the level of business acumen of 

beneficiaries. Awarding a contract and/or providing the necessary assets or working capital to 

establish businesses is not always adequate in establishing successful spin-off businesses. Training is 

also generally required in important facets of running small-business operations (e.g. management, 

book-keeping, technical skills, equipment maintenance). 

4.5.3 PMIZ development 

The establishment of the Pacific Marine Industrial Zone in Vidar, Madang has generated a number of 

concerns, on both social and environmental grounds. Some of these are extensions of existing 

concerns, whereby people are worried that with the potential addition of new processing plants 

these issues, if not adequately addressed, could potentially magnify up to ten-fold if all ten sites are 

taken up within the PMIZ. 

Longstanding issues with ancestral landowners concerning RD also now extend to PMIZ. The 216 ha 

site, now owned by GoPNG, is part of an 880 ha parcel purchased by RD in 1997 from Zuanich ZZZ 

Company (and prior to this was former Catholic Church land). However, these groups (Kananam and 

Rempi) are demanding to be recognised as the rightful ancestral owners in efforts to facilitate more 

equitable distribution of spin-off benefits, on the basis that their people have occupied the land for 

three-five generations. Internal issues also exist within the clans between clan leaders and younger 




members, who believe clan leaders are not equitably distributing benefits from spin-off businesses 

within the clan. 

The eviction by DCI of two squatter settlements established in the Nukuru and Mos Damon areas 

within the PMIZ compound has commenced. In June 2010, squatters were compensated by DCI for 

the loss of economic crops (K 275,000). However, controversy has surrounded this process, with 

claims that payouts received were less than those agreed to. 95 RD workers and their families living 

in these settlements are being repatriated to land purchased by RD at Maiwara (about 15 minutes 

from the cannery compound), while issues still arise concerning where to relocate families from the 

settlements who are not RD workers. 

Concerns have been raised that the people of Madang province have not been adequately consulted 

concerning the PMIZ development. This has given rise to a group of concerned members of the local 

community (Idawad Group, sub-set of Kananam tribe) mounting a legal case against DCI, NFA and 

the Justice of the Attorney, for breaching the Free Trade Zone Act and Fisheries Management Act. 

The plaintiffs are seeking to be recognised as the true ancestral landowners to ensure that are able 

to fully participate in spin-off economic activities. They are also challenging the legality of 

establishing a special economic zone (SEZ) in Madang and raising concerns about potential 

environmental impacts and the lack of community consultation. While the plaintiffs are calling for 

an injunction to stop the development on the site, there are indications that they are seeking to 

have the issues raised adequately addressed, rather than actually stopping the development from 

proceeding. It should be noted that the views of the Idawad group, do not necessarily reflect those 

96 

of some other Kananam members who publically support the PMIZ development. 

Further concerns have been raised that the drive for the project is largely coming from National 

Government (DCI and NFA), with Madang Provincial Government being a lesser player. 

One of the conditions of the Chinese Exim Loan for the construction of infrastructure under Phase 1 

of the PMIZ project is that the contract is awarded to a Chinese company, who will employ 60% 

Chinese workers. Fears exist that there will be cultural tensions between Chinese construction 

workers and local residents, as has been the case for other resource development projects involving 

foreign workers (i.e. Ramu Nickel). 

In an attempt to specifically address PMIZ-related issues such as these, a Technical Committee has 

been established by NFA and DCI. A geneaology and business-spin off study was commissioned by 

DCI to assist in identifying target groups for spin-off businesses. As mentioned, in the first instance, 

NFA has contribution K 1 million for distribution to two landholder groups (i.e. Kananam and Rempi) 

for the establishment of spin-off businesses. A socio-economic impact study has also been 

commissioned by DCI, which is currently in the process of being finalised. Details concerning major 

findings of these studies were not made available to the consultants at the time of preparing this 

report. 

4.5.4 Other concerns 

Concerns have been raised regarding the negative impacts associated with large influxes of workers 

from other regions to gain employment at canneries. This has the potential to give rise to cultural 

clashes between different groups. In addition, the large influx of settlers places additional pressure 

on already scarcely available land for establishing housing and gardens. The influx of workers could 

95 PACNEWS 2011. 

96 Interviews – Bismarck Ramu representatives; Nancy Sullivan; PMIZ Office (DCI) representatives, September 

2011. 




also place pressure on existing public infrastructure (i.e. utilities), as well as public transport. 

Security issues (particularly in Lae) could also be exacerbated and will require additional resources 

for policing/law enforcement. Companies will need to work closely with provincial Governments to 

adequately plan and address these issues. 

A Pacific-wide negative social issue associated with the tuna industry is the involvement of local 

women in sex work with crew members, when vessels come into port. Engagement in sex work 

exposes women to increased risks of contracting HIV/AIDs and other sexually transmitted infections 

(STIs), as well as other social risks (i.e. unplanned pregnancy, physical abuse and alcoholism). In a 

Pacific cultural context it is viewed as an immoral activity, which erodes traditional social values. 

In the Madang area, anecdotal reports exist of young women exchanging sex for fish with crew 

members onboard industrial fishing vessels and carriers. 97 Originally this activity commenced with 

women paddling out in canoes to vessels to swap garden vegetables for fish, but eventually 

extended further to illicit activities. In acknowledging and attempting to address this issue, RD 

implemented a targeted employment program in 2008, whereby young women (‘paddling mamas’) 

engaged in such activities are offered employment as fish classifiers within RD’s cold storage facility 

at Vidar. The Company reports that the program has had a very positive impact in reducing 

prostitution activity in the area. 

The availability of fish for local consumption from industrial vessels in Madang has reportedly 

altered the level of artisanal fishing activity, and as a result, the species mix sold in local markets, as 

well as home consumption patterns. Local fishers and fish market stall operators report changed 

patterns of access to fishing grounds near Vidar Port, as well as declines in fish size and availability. 

Increased sales of tuna and other by-catch (called ‘salt fish’) from tuna fishing vessels in local market 

stalls has replaced, in part, sales of reef fish. ‘Salt fish’ are apparently sold at cheaper prices than 

reef fish caught by artisanal fishers and is often of questionable quality, raising food safety 

98 

concerns. 

4.6 Environmental Issues 

4.6.1 Management of environmental risks 

PNG’s Department of Environment and Conservation (DEC) is “vested with the powers to protect the 

environmental values of air, water, soil and biodiversity, and the sustainable use of natural 

resources, as mandated by the fourth goal of the National Constitution”. 99 The relevant legislation 

establishing the regulatory framework of the Department is the Environment Act 2000 with 

associated Regulations (i.e. Water Quality Criteria, Procedures, Prescribed Activities, Fees and 

Charges). PNG is also signatory to a number of international environment conventions which are 

implemented by DEC. 

DEC consists of seven operational divisions covering three activity areas – Environment Protection, 

Sustainable Environment and Policy Coordination and Evaluation. DEC’s head office is based in Port 

Moresby, with minimal staff outposted in provincial centres. 

DEC has a central role to play in approving development projects, as it is responsible for assessing 

the potential environmental impacts associated with such projects and issuing the necessary 

97 Sullivan et al. 2003; Sullivan et al. 2011. 

98 Havice and Reed 2011. 

99 See DEC website http://www.dec.gov.pg. 




Environment Permit. Most projects involving large fish processing plants would qualify as Level 3 

activity – projects of national significance - as defined in the Regulations. 

The following process is prescribed to obtain the necessary Environmental Permit to accompany 

project approval. 100 

1) submission of an Environmental Permit application in standard format. Detailed information 

is required in the application, including details of processes and activities involved, 

identification of risks, description of potential contaminants etc. An environmental impact 

assessment (EIA) or an environmental improvement plan (EIP) may be required to accompany 

the application. 

2) if the application is accepted, a notification of the decision is published in the GoPNG gazette, 

followed by an invitation for public comment, and referral to interested parties etc. 

3) the application is then evaluated by the Environmental Council, which involves rigorous 

review using transparent guidelines by the panel of independent experts who comprise the 

Council. 

4) following approval by the Environmental Council, an Environmental Permit may then be 

issued on the approval of the Minister and the project can proceed, subject to other 

necessary requirements being met. 

Once the permit has been issued, the company/entity concerned has three months to respond with 

a Waste Management Plan (WMP) covering all forms of possible waste emanating from the 

development (i.e. solid waste, air emissions and water discharge). The WMP should be monitored by 

DEC (quarterly inspection), on a user-pays basis. 101 

Although voluntary codes of practice apply to industrial/mining developments, nothing has yet been 

formulated for fish processing developments. 

Changes to the Environment Act 2000 have been proposed in recent years, with amendments passed 

in June 2010. The most contentious of these amendments was the addition of new sections (69A and 

B, 87 A,B,C and D) which reduced the scope of landowners and concerned parties to object to 

102 

proposed developments, using the Environment Act 2000 as the basis. While likely implemented 

to assist in promoting mining sector developments, these amendments may have potentially set an 

undesirable precedent for proposed major tuna processing developments. 

With the recent change in Government in August 2011 and, in response to major protests against 

the amendments to the Act, the new Government announced in early October 2011, that these 

103 

were to be repealed with the amendments described as “unnecessary and undesirable”. 

On 26 August 2011, the newly appointed Minister for Commerce and Industry directed an 

immediate review of the PMIZ involving all stakeholders, noting that “the Government recognizes 

this project as important to the country, wants it to go ahead and supports it in principle” but that 

“certain shortcomings must be acknowledged, and addressed”. 104 He further directed that an 

independent international engineering firm be engaged to vet the design process and provide 

project management services on the contract to ensure value for money. The previous government 

100 Interview, DEC officials, September 2011. 

101 Interview, DEC officials, September 2011 

102 ActNow 2011. 

103 ActNow, undated. 

104 The National, 26 August 2011. 




had earlier issued an approval in principle for the PMIZ project (11 March 2011), noting that it had 

met all legislative requirements under the Environment Act 2000. 105 

The PNG National Maritime Safety Authority (NMSA), established by an Act of Parliament in 2003, is 

legally responsible for maritime safety, marine pollution control and corporate governance in PNG 

waters. There are four related draft Acts concerning marine pollution in PNG waters, three of which 

are technical, but these seem not to have entered into force since drafted in 2008. The exact role of 

NMSA in marine pollution prevention and control activities is not known. In conjunction with the 

PNG Ports Corporation, it is reported to be undertaking the first national marine pollution risk 

assessment for PNG, starting with the Port Moresby area. 106 There is little evidence that NMSA has 

been actively involved thus far in issues involving potential pollution from PNG processing plants and 

associated facilities. Although there is some possible involvement with at-sea oil spills and/or vessel 

groundings, but no incidences of this nature are known. 

4.6.2 Existing environmental risks 

A range of potential environmental risks relate to fish processing plants and associated activities, 

including (but not limited to) those presented in Table 4.10. 

Table 4.10 Potential environmental risks associated with fish processing plants 

Type of Operation 

Fishing vessels 

Onshore processing 

facilities 

Environmental Risks 

Oil spills and bilge/ballast water 

Dumping of solid organic waste including reject fish 

Dumping of inorganic waste (netting, rope, drums etc) 

Shipwrecks (reef damage, oil spills and scattering debris) 

Introduction of invasive species (marine/terrestrial plant or animal pests) 

Foul odour emissions 

Disposal of solid organic waste (rejected fish, fish scraps) and sludge 

Disposal of inorganic solid waste (reject cans, lids, oil drums, glass, plastic, packing 

material, tyres) 

Disposal of waste water (washing, thawing, spraying, cleaning, sauce spillage, ice 

plant, cooling tower) 

Dredging/land fill when establishing/extending sites 

According to DEC representatives, to date, no PNG tuna processing facility has been prosecuted and 

fined for breaches of the Environment Act. However, it should be noted that instructions to rectify 

deficiencies have been issued by DEC following complaints. For example, RDTC was instructed to 

install a new waste water management plant in Siar following concerns regarding waste water 

discharge into a nearby stream. The widespread perception that monitoring activity (by DEC) has 

fallen short of the required level should also be noted. 

105 The National, 14 March 2011. 

106 The National, 31 October 2011. 




Table 4.11 <strong>Report</strong>ed environmental issues associated with tuna processing plants in PNG 

Plant Operational details Nature of complaints Company response 

RD Tuna Canners 

Siar, Madang 

RD Fishing, 

Vidar fish port, 

Madang 

Frabelle Cannery 

Lae 

South Sea Tuna 


Wewak 

Malahang 

Industrial Estate 

Lae 

Canning, loining and 

fishmeal; 

western side of Madang 

Lagoon, several kms from 

the water/shoreline) 

Fish port for the Siar 

cannery, cold storage and 

small value-added 

processing plant 

Canning, loining and 

fishmeal; 

Located in Lae town on 

foreshore 

Loining, previously canning 

Located on Wewak 

foreshore, adjacent to main 

wharf 

Existing value-added plant 

(Frescomar) and location of 

additional canneries in 

future; 

several km inland 

<strong>Report</strong>s of repeated 

odours from plant, and 

pollution of local stream 

which flows through Siar 

village. 

Various reports from 

local communities of oil 

spills, bilge pumping, 

waste disposal, fish 

discards, dead fish 

floating, odours, 

inorganic waste disposal. 

Also claims of depletion 

of local fish resources 

and other environmental 

impacts (e.g. ship 

grounding). 

Few reports of 

environmental issues 

No issues 

known/reported 

No issues 

known/reported 

Sources: interviews, eNGOs, canning company representatives 2011. 

Company has a WMP 

(current being updated) and 

a state of the art waste 

water treatment plant with 

very low BOD outflow 

Inorganic solid waste 

recycled or disposed of in 

designated areas (e.g. 

landfill) 

Company has a WMP and 

company policy which 

forbids discharging of oil, 

waste and pollution in the 

Vidar port area. 

Organic waste disposed of 

at sea 

Company has a WMP. 




landfill) 

Company has WMP and air 

pollution controls; 

contracted sludge disposal 

at sea 




landfill) 

Environmental permit 

approved for Majestic 

Seafoods, and WMP. 

It is generally difficult to assess these concerns in the absence of detailed information or quantitative 

data. 

It is also clear that DEC does not take an active role in monitoring environmental risks, a situation 

exacerbated by the absence of staff at provincial level, with travel from Port Moresby usually 

involved with any monitoring activity or investigation of alleged breaches. It seems probable that 

DEC is under-resourced to discharge the range of obligations in environmental monitoring 

associated with the fish processing plants and ports. 




In general, most complaints of an environmental nature have been directed at food processing 

activities either on, or near, the Madang Lagoon. These activities involve Vidar fishing port, the Siar 

cannery, and a meat packing plant adjacent to the airport, just north of Madang town. Other sites in 

PNG (i.e. Lae city, Malahang, Wewak) have thus far attracted little attention, possibly because of 

their location in, or adjacent, to heavily developed urban areas. However, this does not dismiss the 

possibility of environmental issues existing at these locations. 

The Madang Lagoon is a 20km-long body of water, 50 km 2 in extent, that stretches between Madang 

town and Sek harbor in the north, is dotted with islands and reefs, and has an outer barrier of reef 

and islands. The area has long been designated a priority area for its outstanding conservation 

values. Environmental monitoring activity has been carried out for around ten years, mostly under 

the direction of WWF. Five wildlife management areas (WMAs) have been established, under the 

Flora and Fauna Protection Act, and are regularly monitored. Water quality monitoring (WQM) was 

conducted extensively over a five year period (2003-2008). 107 

The lagoon is threatened not just by food processing activity, but also “coastal population growth, 

intensive agriculture, urban development and intense logging activities, aggravated by minimal 

planning for waste disposal and the lack of water purification systems”. 108 There have been plans to 

develop an Environment Management Plan (EMP) or Integrated Coastal Zone Management Plan for 

the lagoon but this has yet to eventuate. WWF is in the process of preparing a State of the Lagoon 

<strong>Report</strong> due to be completed by the end of 2011, which will draw together and synthesize all 

monitoring and investigative work carried out over the last ten years. It is hoped this will produce a 

series of recommendations which may catalyse the development of an EMP for the Madang Lagoon, 

backed by the Madang Provincial Government. 

The only quantitative published information currently available reports on WMQ sampling 

109 

conducted over a one year period during 2002-2003. At that time, the lagoon was reported to be 

in generally pristine condition, despite repeated reports of oils spills from the northern end of the 

lagoon. Signs of pollution were identified near the Siar cannery and the meat packing plant, but not 

at Vidar/Sek Harbour. Further information is expected to be available in the SLR, but it is likely that 

the Siar situation has improved with the installation of the RDTC’s state of the art waste water 

treatment plant since that time. 

There seems little doubt that some environmental issues have arisen in association with the 

operation of the tuna processing facilities in PNG, especially in the early days of operation of plants. 

In few cases have breaches or concerns been carefully documented, and it difficult to quantify the 

extent of any problems and environmental damage caused, either temporary or permanent. 

There has been some criticism of the role of DEC in the monitoring process, and the perceived lack 

110 

or response to verbal complaints. There is, however, also recognition that DEC is under-resourced 

and with limited presence on the ground at provincial level. As result, requirements to minimize 

environmental impacts associated with the plants and unloading points have been largely selfpolicing, 

through the application of comprehensive WMPs, in particular. 

Although environmental impacts in the Madang area have been relatively well documented in 

qualitative terms at least, information is generally lacking for other sites and monitoring or 

107 Bualia, WWF, pers.comm., September 2011. 

108 Benet-Monico et al. 2006. 

109 Benet-Monico et al., 2006. 

110 Various verbal opinions communicated throughout PNG stakeholder consultation, September 2011. 




information gathering needs to occur, especially in the case of Lae prior to the implementation of 

expanded processing capacity in Malahang. 

4.6.3 Potential environmental impacts 

The environmental impacts associated with existing plants have been discussed in the previous 

section. In general, it must be concluded that there are few if any documented cases of permanent 

negative environmental impacts associated with the processing plants in the four locations, but the 

need for enhanced monitoring, possibly formalized, with associated requirements for remedial 

action, is clear. 

The potential environmental impacts that might be associated with future investments are discussed 

here, and mainly concern the Pacific Marine Industrial Zone (PMIZ) established in Vidar (Madang) 

adjacent to the current RD Fishing facilities, and the developments at the Malahang Industrial Estate 

near Lae. The current status of these developments with regard to environmental requirements, 

permits and EIAs is presented in Table 4.12. 

Table 4.12 Status of environmental approvals for planned PNG processing facilities, 2011 

Location Components Current status Environmental 

approval process 

PMIZ, Vidar Overall project Under review (to be 

completed by Dec 2011) 

Feasibility study, 

including EIA submitted 

(year unknown - possibly 

Infrastructure development 

(wharf, roads etc) – Phase 1 

Niugini Tuna 

Other projects 

Awarded to Chinese company; 

(unknown if environmental 

best practice has been 

negotiated in contract) 

State agreement awaited, 

following change of Govt 

No other formal expressions 

of interest 

2009) 

No EIA submitted 

(could be within the 

feasibility study) 

EP application not yet 

submitted until SA 

approved 

n/a 

Malahang IFC Expansion planned Will need to update WMP 

Area 1 70% completion 

24/6/2010; WMP 

Industrial Majestic 

Construction underway, with EP application submitted 

Namabawan Tuna 

State agreement awaited, No EP application yet 

following change of Govt 

Halisheng 

State Agreement in 

No EP application yet 

Frabelle (PNG) Ltd wharf 

construction 

preparation 

Planning stage 

EP granted 




PMIZ, Madang Province 

A feasibility study was commissioned in late 2009/early 2010 111 and an EIS was submitted to DEC for 

the PMIZ development. As noted earlier, approval in principle for the project was given by the then 

Minister for Environment and Conservation in March 2011. With the change in Government, an 

immediate review of aspects of the project was directed, for completion by December 2011. 

Some opposition to the project has been expressed by local community members, on environmental 

and other grounds and, as mentioned previously, an injunction to halt the project has been lodged. 

Environmental concerns include pollution (i.e. air, noise, waste water) as well as impacts on 

threatened species in the lagoon area. 

The draft SEZ includes provisions for environmental legislation. Under the draft SEZ legislation 

(Special Economic Zones Act, 2011), Sect 57, the Authority (DCI in this case) and “the relevant 

competent Agency responsible for environment matters for the protection and maintenance of the 

environment, water supply, natural resources and biological diversity (DEC) in each SEZ” .. “shall 

execute a MoU to establish , consistent with this Act and any other law with regard to – 

(a) environmental impact assessments 

(b) environmental permits, approvals and certificates 

(c) air and water quality, emission and effluent limits 

(d) enforcement and monitoring, including inspection and auditing procedures 

(e) contingency and emergency planning, and 

(f) penalties, fines, sanctions and remedial actions” 

These requirements will clearly apply to PMIZ though it is unlikely that an MoU will be prepared until 

the legislation is passed. Some preliminary community consultation has been held on environmental 

112 

aspects of the development. It is also assumed that an Environmental Management Plan may be 

needed for the new port area/wharves which may eventually come under the control of the PNG 

Ports Authority. There is some concern that negotiation for Phase 1 construction activity may not 

have fully incorporated best practice environmental management technologies in the construction 

plans. 

According to the PMIZ site plan, ten sites are available for processing facility development with the 

PMIZ. Currently firm plans are in place for only plant within PMIZ (i.e. Niugini Tuna Ltd.). 

All environmental quality requirements for this facility and any others which arise in the future will 

be covered under the PMIZ MoU with DEC and associated requirements. 

Malahang Industrial Area, Lae 

Currently, plans are in place for an additional three new tuna processing investments in Lae (see 

Section 3.2.3). These developments will all require appropriate environmental approvals and 

conditions. With the site located inland, the main environmental requirement will be the 

implementation of an approved Waste Management Plan (air, water and solid waste) with 

associated monitoring and inspection requirements. In the case of IFC, the existing mackerel cannery 

which is introducing a tuna processing line, an upgraded WMP associated with increased production 


112 Seminar held at Divine Word University, Madang, 2011; details and record of discussion not available. 




will be required. In the case of wharf construction at the existing Frabelle (PNG) site, an EIA and 

necessary approvals will be required. 

It is to be hoped that environmental impacts associated with these new developments at both PMIZ 

and Lae can be minimized, through good compliance with existing statutory requirements and 

confirmation that Amendments to the Environment Act (2000) will not apply. Experience with 

existing plants has shown that the key element in this process is inspection/audit and monitoring, 

the responsibility of DEC which has not been fully applied to date. Effective policing of requirements, 

whilst desirable to the maximum extent possible, cannot be assumed and comprehensive exercise of 

regulatory functions will be required. 

4.7 Impact of RoO derogation on PNG development 

The impact of PNG’s global sourcing RoO derogation on development effects on the PNG economy 

has been negligible since 2008, given that existing canners have made very little use of the 

derogation to date. 

In the medium term future (2011-2016), the derogation is expected to have a partial impact on 

development effects on the PNG economy, given an additional four tuna processing plants could 

potentially come on-stream (noting that global sourcing is only one contributing factor of several in 

attracting new onshore investment to PNG). 

New tuna processing facilities will generate a significant increase in employment opportunities for 

PNG nationals, particularly young women (potentially in the order of 50,000 direct and indirect jobs 

by 2016). Additional income will also be generated in the economy – the largest direct 

contributions being employment earnings and spending by canneries (and their employees) in local 

businesses. 

The derogation also has the potential to contribute to improvements in working conditions for 

cannery employees. If profitability of the canneries increase due to lower production costs realised 

through gains in economies of scale, then the capacity of companies to afford higher than minimum 

wages and other benefits will increase. Existing processing companies have already indicated that 

while there is believed to be a readily available source of local labour, that competition for attracting 

labour will arise between various plants, particularly in Lae (and potentially the PMIZ, if any 

additional investments come to fruition). In trying to attract and retain labour, this may result in 

canneries offering more favourable pay conditions, as well as additional benefits (e.g. transport, 

housing). Already, with growing international attention on PNG’s tuna cannery sector, including 

working conditions within processing facilities, companies are voluntarily taking steps to 

demonstrate their compliance with international labour standards and continue to make 

improvements in this respect through third-party accreditation under private social standards 

systems (i.e. SA 8000, BSCI). 

With increased investments, the opportunity for expansion in spin-off businesses (and other 

ancillary benefits) for local communities exist, if these businesses are adequately planned and 

executed, with the necessary capacity building provided in all facets of small business operations, in 

addition to any working capital provided. 

If not properly managed, negative social and environmental impacts associated with tuna processing 

activities could magnify. However, it should be noted that the management of broader social, as 

well as environmental issues is not the sole responsibility of tuna processing companies. A 




coordinated effort is required between canneries, national and provincial governments, local 

community leaders, as well as concerned NGOs. 

5 MANAGEMENT OF TUNA RESOURCES IN THE WCPO 

5.1 Tuna Stock Status 

Despite providing over 50% of the global tuna catch of primary market species, stocks of WCPO 

tunas are generally in good condition relative to other ocean areas, with none of the main stocks of 

interest in an overfished state and only one currently subject to overfishing (bigeye). The Western 

and Central Pacific Fisheries Commission (WCPFC) is charged with the responsibility for the 

conservation and management of the stocks in the WCPO. 113 Comprehensive assessments of the 

status of the main tuna stocks in the WCPO (skipjack, yellowfin, bigeye and albacore) are provided 

by the Secretariat of the Pacific Community (SCP) as the contracted science provider and database 

manager to the Commission. The highly regarded assessments 114 are undertaken with the 

collaboration of WCPFC members, cooperating non-members and participating territories (CCMs) 115 

on a regular basis, but generally every few years for most species of interest, and more often in the 

case of species where particular concerns may apply (e.g. bigeye tuna). The assessments are subject 

to peer review, with the first such review undertaken this year for yellowfin, producing a positive 

conclusion. 116 Assessments of other species in the fishery (e.g. billfish) may be undertaken as 

availability of required catch/effort and biological data permit. 

In 2011, assessments of all four tuna species of primary interest (skipjack, yellowfin, bigeye, 

albacore) were undertaken in a single year for the first time. The outcomes for the three main 

species of interest here, 

117 with implications for the future condition of the stock, are summarized in 

Table 5.1 below. Measures in place to address sustainable management of these stocks, with 

evaluation of their effectiveness are considered in Section 5.4. 

113 WCPFC Convention, Art 3 (3). 

114 Allen 2010. 

115 WCPFC Members, Cooperating non-members and participating territories (CCMs). 

116 SPC-OFP (2011b). 

117 Albacore assessment outcomes, involving two stocks, north and south Pacific, are not included here, as 

albacore are caught primarily by longline and are not currently canned/loined in PNG. South Pacific albacore 

stocks are under-exploited and in healthy condition. 




Table 5.1 Current stock status of skipjack, yellowfin and bigeye in WCPO, 2011 118 

Species 2010 catch 

(mt) 1 

Skipjack 1,556,600 

(1,610,578) 

Yellowfin 507,100 

(558,761) 

Bigeye 116,900 

(125,757) 

Catch 

trend 

Stable in recent 

few years, rapid 

expansion 

during 2000s 

Stable/ 

Increasing 

slightly 

Decrease 

Overfishing 

occurring 2 

No 

(F curr /F MSY = 0.37) 

No 

(F curr /F MSY =0.77) 

Yes 

(F curr /F MSY = 1.46) 

Overfished 

state 

No 

(SB curr /SB MSY = 

2.94) 

No 


1.47) 

No 


1.19) 

Comment 

Stock robust but impacts 

increasing and greatest in 

western equatorial areas 

Approaching MSY levels; 

impact greatest in western 

equatorial areas; future 

projections favourable 

under most scenarios 

Continuing overfishing; 

almost overfished (biomass 

close to MSY levels) but 

situation may be improving; 

Impacts greatest in 

equatorial areas 

1 

WCPO catches have been adjusted for species composition following catch sampling and as used in the 2011 assessments; 

unadjusted catch figures as reported to SC7 are listed below (bracketed) in each case. 

2 

Overfishing is judged to be occurring when the level of fishing mortality (F), in this case F curr , the fishing morality applying 

to recent years (2006-2009), exceeds that associated with Maximum Sustainable Yield (MSY); when the ratio of F curr to F MSY 

exceeds 1.0, overfishing is occurring. The stock is judged to be in an overfished state when current spawning biomass 

levels (SB curr ) have fallen below the biomass level associated with the spawning biomass at MSY (i.e. SB curr < SB MSY ). 

Source: SPC database, 2011 assessments and Harley et al. 2011. 

The skipjack stock remains only moderately exploited and current fishing levels are sustainable, as 

has been the case since assessments commenced. 119 Current fishing mortality rates are about one 

third of the level associated with Maximum Sustainable Yield (MSY), and biomass levels are over 

twice those associated with those at MSY level. Catches are at near record highs and at current 

fishing mortality levels, the equilibrium yield is exceeded. 120 The WCPFC Scientific Committee noted 

that, if recent patterns continue, catch levels will decline in future and catch should decrease as 

stock levels are fished down and MSY levels are approached. 121 There is a risk that skipjack 

availability to seasonal temperate water fisheries (e.g. Japan, New Zealand) may be reduced. Recent 

recruitment levels are estimated to have been high and it is unclear if these will be maintained. 

Fishing pressure and recruitment variability, influenced by environmental conditions, will continue 

to be the primary influences on skipjack stock size and fishery performance. 112 No management 

action on skipjack has been necessary to date, although precautionary limits to catch and effort are 

now under consideration. There is a commitment to develop and adopt at the Eighth Annual Session 

of WCPFC (WCPFC 8) an enhanced version of CMM 2008-01 for tropical tunas which will include 

skipjack for the first time, and which will follow an agreed process for its formulation. 122 This is 

necessary as the current CMM will theoretically expire at the end of 2011. 123 

118 Information from Harley et al. (2011) and SC7 assessments. 

119 Hoyle et al. 2011. 

120 The equilibrium yield is a theoretical concept and is the yield or catch that could be taken every year by a 

fixed amount of fishing effort, maintaining the stock at a constant level, assuming a steady-state situation. 

The concept neglects inter-annual environmentally driven stock fluctuations and so is not useful for short term 

predictions. It is, however, useful for guidance on long term strategy formulation. 

121 Harley et al. 2011: 2. 

122 WCPFC 2010b. 

123 The Eighth Regular Session of the WCPFC (WCPFC8), to be held in early December in Palau, was postponed 

due to logistical difficulties, and has been rescheduled for late March 2012 in Guam. It is agreed that current 

CMMs will remain in force until March 2012. 




The yellowfin stock is neither overfished nor is overfishing occurring, and there has been little 

change in recent assessments. 124 Both biomass and fishing mortality are approaching MSY levels and 

in the western equatorial regions (including PNG waters) where most of the catch is taken, high 

exploitation rates and strong reductions in biomass are occurring. Continuing restrictions on effort 

are recommended but the projections for the future condition of the stock are generally positive. 125 

The status of the bigeye stock has attracted the most concern for some time, as it has been judged 

subject to overfishing for more than a decade. This overfishing continues and a 32% reduction in 

fishing morality was recommended in the current assessment, 126 continuing previous such 

recommendations. Reduction of bigeye overfishing has been the main thrust of CMM 2008-01 (see 

Section 5.4.1). There is some indication that management actions would reduce bigeye fishing 

mortality if current patterns of fishing continue (i.e. those for 2010, with increased unassociated 

school fishing, reduced longline catch etc.) (see Section 5.4.1). However, this is unlikely, with a 

return to more normal fishing patterns observed during 2011 (i.e. less unassociated school fishing, 

typical levels of fishing on fish-aggregating devices (FADs) etc.); overfishing will continue under these 

fishing patterns. The bigeye catch in 2010 was 16% lower than the average for the recent period 

(2006-2009), 127 as a result of reduced catches by all gears. Although the stock is not yet in an 

overfished state, concern over the bigeye stock remains. 

Changes in stock status since RoO derogation 

The status of the three major stocks of interest to the purse seine fishery has shown little change 

post-derogation, with one stock (bigeye) continuing to be subject to overfishing, as it has been for a 

decade, despite the intent of the primary management measure (CMM 2008-01). Total catches in 

the WCPO have declined slightly since the record high of 2009, and in 2010 were similar to those of 

2008, but effort levels remain considerably above those for 2004. It is expected, on the basis of 

current stock projections that management measures currently in place will continue to maintain 

the stocks of skipjack and yellowfin at sustainable levels, provided there is good compliance with 

existing and future management measures. Revision of the current key conservation and 

management measure (CMM 2008-01) at the upcoming WCPFC 8 (re-scheduled from December 

2011 to March 2012) to take account of most recent management advice and to include skipjack for 

the first time, on a precautionary basis, should further strengthen sustainable management of these 

stocks. The issue of bigeye overfishing remains to be satisfactorily addressed, despite some apparent 

recent reduction in catch by the main gears. 

5.2 Catch and effort trends 

The provisional estimate of the 2010 catch of the four main tuna species in the WCPFC Convention 

Area was 2,421,113 mt, the second highest on record after the record high of the previous year 

(2,494,112 mt). 128 The total catch increased sharply during the early 2000s with the addition of 

vessels to the purse seine fleet, but this growth has slowed and stabilised since 2007 at around 2.4 

million mt (Figure 5.1). The WCPFC-Convention Area (WCPFC-CA) accounted for 83% of the total 

Pacific Ocean catch and 60% of the provisional global catch estimate for 2010. 

124 Langley et al. 2011. 

125 SPC-OFP 2011a. 

126 Davies et al. 2011. 

127 Harley et al. 2011. 

128 Williams & Terawasi 2011, updated in Harley et al., 2011. 




Figure 5.1 WCPO catch by gear in the WCP Convention Area, 1960-2010 

Catch (mt) 

2,800,000 

2,400,000 

2,000,000 

1,600,000 

1,200,000 

800,000 

400,000 

0 

PURSE SEINE 

OTHER 

POLE-AND-LINE 

LONGLINE 

1960 

1962 

1964 

1966 

1968 

1970 

1972 

1974 

1976 

1978 

1980 

1982 

1984 

1986 

1988 

1990 

1992 

1994 

1996 

1998 

2000 

2002 

2004 

2006 

2008 

2010 

Source: SPC database 2011 

The majority of the WCPO catch continues to be taken by the purse seine fishery (75%, 1,818,255 

mt), with the balance contributed by longline (10%, 248,589 mt), pole-and-line (7%, 171,597 mt) and 

other fisheries (7%), most notably the small scale commercial/artisanal fisheries of Indonesia and 

Philippines. Catches by gear types other than purse seine have generally been stable or decreasing in 

recent years, although it is noted that there has been considerable transfer of longline effort to 

more southern areas (e.g. Vanuatu, Solomon Islands, Cook Islands). From this point of the report 

onwards, discussion will mostly focus on the purse seine fishery, which is the primary fishery of 

concern for PNG’s canned tuna industry. 

The species composition of the logsheet-reported purse seine catch was estimated as 81% skipjack, 

16% yellowfin and 3% bigeye, consistent with previous years. However, the logsheet data are known 

to under-report yellowfin and bigeye, and in future reports, species composition estimates will be 

corrected, based on observer data spill samples. 129 The overall impact of this will be a reduced 

skipjack percentage, possibly down to 67%, and slightly higher percentage estimates for yellowfin 

(23%) and bigeye (5%), with albacore also 5%. 

Skipjack and yellowfin are the target species for the purse seine fleet, with incidental catches of 

bigeye. Associated purse seine sets (i.e. anchored FADs, drifting FADs, log sets) take higher 

proportions of bigeye and larger amounts of juvenile tunas, especially yellowfin and bigeye, and 

have thus been the focus of conservation and management measures aimed at reducing bigeye 

catches overall, and juvenile catch of both species. 

Both total purse seine catch and effort have not increased significantly since 2008, despite a higher 

130 

total catch (all gears) in 2009. However, the effort and catch for the four main purse seine fleets 

combined (Korea, Taiwan, Japan, US) was the highest ever for 2010, and just over 50% of the total 

WCPO purse seine catch. 

129 P.Williams, SPC, pers.comm., September 2011. 

130 Williams & Terawasi, 2011; Figure 5. 




5.3 Profile of WCPO purse seine fishing fleets 

The industrial purse seine fleet of the WCPO is the largest operating in the four ocean areas within 

the competence of RFMOs. 131 As of mid-October 2011, there were 263 vessels on the FFA Regional 

Vessel Register (RVR), 132 compared to around 190 in 2007. 133 These numbers do not include a large 

number of small-medium size domestic vessels fishing in Japan, Indonesia and Philippines, and a few 

smaller vessels in PNG and Korea. The number of purse seine vessels on the WCPFC Register of 

Fishing Vessels (RFV) is listed as 728. 134 France and Spain also have 16 and 33 vessels respectively on 

the RFV but of these, only four of the Spanish vessels are currently active in the region, fishing under 

Fisheries Partnership Agreements (FPAs). There also 10 beneficially-owned EU vessels fishing in the 

region under bilateral access agreements, mostly in the eastern part of the region (Kiribati, Tuvalu, 

Tokelau). In addition, another ~40 vessels are beneficially owned by Taiwan interests (Vanuatu flag, 

USA, Tuvalu etc). 

Otherwise, the two vessel lists are in good agreement, with the total number of medium-large purse 

135 

seine vessels active fishing in the WCPO estimated to be around 280. 

Figure 5.2 Number of purse seine vessels by flag on the FFA Regional Vessel Register, October 

2011. 

No. of vessels 

50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

45 

36 35 34 

27 

16 

12 

10 10 

7 7 6 5 4 

2 

Source: FFA Regional Vessel Register; R. Chand, FFA, pers.comm. 2011. 

The WCPO purse seine catch has traditionally been dominated by the fleets of four countries (Korea, 

Japan, USA, Taiwan), which account for over 60% of the catch (Figure 5.3). The PNG fleet (comprised 

of domestic and locally-based foreign chartered vessels) was the fourth ranked fleet in terms of 

catch, with the Philippines catch (from distant water and domestic vessels) also significant. The catch 

131 Generally vessels > 200 GT. 

132 Since 1991, vessels fishing within the EEZs of FFA members have been required to be in good standing on 

the FFA Regional Fishing Vessel Register (RVR). Registration by domestic vessels is voluntary, and chartered 

vessels fishing in PNG are only registered if PNG requires them to be so. R.Chand, FFA, pers. comm.., October 

2011. 

133 Numbers are not directly comparable as some domestic or chartered vessels were not listed on the FFA 

RVR at that time (since registration for these vessel classes is voluntary). 

134 A total of 5,934 vessels are listed on the WCFPC RFV (see WCPFC-TCC7-11 Annex 1) and 1,327 on the FFA 

RVR. 

135 Williams & Terawasi, 2011; Figure 4. 




by non-PNG PIC fleets (i.e. Kiribati, Marshall Islands, Solomon Islands, Tuvalu) is steadily increasing 

and accounted for 7% of the total WCPO purse seine catch in 2010. 

Figure 5.3 WCPO purse seine catch by fleet (mt), 2010 

300000 

250000 

200000 

Catch (mt) 

150000 

100000 

50000 

0 

Source: WCPFC Yearbook 2010 (provisional); fleets correspond to flag except in the case of the PNG fleet 

where vessels of four flags are involved (i.e. Vanuatu, Taiwan, China and Philippines). 

More recently, vessels fishing under the FSM Agreement (41 vessels currently, with 22 having PNG 

as their home party, 10 linked to Marshall Islands, 6 to FSM and 3 to Kiribati) 136 have been making a 

comparable contribution to the WCPO purse seine catch. The estimated catch by FSMA vessels in 

2010 was 250,000 mt. 137 

Table 5.2 No. of vessels and catch for major fleets operating in the WCPO, 2010-2011 

Japan Korea Taiwan USA FSMA 

No. of vessels (2010/Oct 2011) 36/36 26/27 34/34 36/36 36/41 

Provisional catch (2010) (mt) 241,549 277,312 198,851 245,524 ~250,000 1 

1 FSMA catch is indicative only and may include some double counting. 

Source: FFA Regional Vessel Register; Williams and Terawasi 2011; WCPFC Yearbook 2010 (provisional). 

Most foreign vessels fish under bilateral access agreements with at least several PICs, as stocks are 

migratory and most of the catch (> 80%) is taken in the EEZs of coastal states. Purse seine catch 

within the waters of the eight Parties to the Nauru Agreement (PNA), a sub-regional grouping of FFA 

136 By flag, 41 vessels comprise 13 Vanuatu flag, 10 RMI, 6 FSM, 4 Taiwan, 3 Philippines, 3 Kiribati and 2 China. 

137 Williams & Terawasi 2011; Figure 6. 




members whose EEZs encompass some of the most productive purse seine fishing grounds in the 

WCPO, now accounts for around 60% of the regional purse seine catch. 138 

Since 1995, vessel numbers were constrained by the Palau Arrangement to 205 vessels, with an 

additional 12 or more vessels fishing in the eastern part of the region by special arrangement. 139 

Although the vessel cap had been moderately effective in constraining vessel numbers, it was not 

felt to be the best approach for promoting conservation and management objectives and optimizing 

economic returns, and was replaced by the Vessel Day Scheme (VDS) in December 2007. At the time, 

the number of vessels on the FFA RVR was around 190 (see above). With vessel numbers no longer 

constrained by the cap, the fleet expanded rapidly thereafter. In parallel, significant restructuring 

and revitalisation of the US fleet occurred in 2008/09, with the number of vessels fishing increasing 

from 13 to 38, almost restoring the fleet size to historical levels provided for under the Treaty (40 

licences). 

Table 5.3 demonstrates that, excluding the additional US vessels, an estimated 34 vessels have been 

added to the WCPO purse seine fleet since that time. Less than a quarter of these are newlyconstructed 

vessels; some vessels from distant water nations have been transferred to Pacific Island 

flag in joint-venture operations (known as ‘islandization’), thus allowing new vessels to be built by 

DWFNs without exceeding their respective self-imposed national vessel limits. The majority of new 

entrants are relocations and/or renaming vessels from within the region, most notably from 

Philippines to PNG. Nonetheless, some vessels were also brought in from outside the region. 

After the initial large increase in 2008 - early 2010, vessel numbers have grown more slowly since 

that time, with no significant change in purse seine vessel numbers between 2010 and the present. 

140 

A paper presented by Japan at WCPFC 7 draws similar conclusions regarding the purse seine 

vessel increase, identifying a rapid build-up in the number of PIC flag vessels (17 in 2000 to 40 in 

2010), the construction of 59 new vessels since 2000 (beneficial operation mostly by Taiwan and 

China – 40 vessels, replacement of old vessels by Korea and Japan – 13 vessels), and the associated 

benefits accruing to trading companies who handle the fish from the new vessels and presumably 

have contractual supply arrangements with those vessels. 

138 MSC 2011: 29; higher PNA % in 2010, following high seas closures. 

139 The Palau Arrangement is a PNA instrument to limit purse seine effort in the PNA EEZs, formerly through a 

cap on vessel numbers (205 in various categories, plus a small number of special arrangement vessels), and 

since December 2007, a limit on purse seine fishing days under the Vessel Day Scheme (VDS). 

140 Japan Delegation to WCPFC 2011. 




Table 5.3 Changes in vessel numbers in the WCPO industrial purse seine fleet between 2007 and 

2011 (October) 

Flag 2007 2011 Change Comment 

China 6 12 +6 Re-flagged/renamed vessels, some outside the region 

FSM 4 7 +3 3 existing vessels in region re-flagged/renamed 

Japan 35 36 +1 

3 new vessels; 2 older vessels islandized in region (PNG, 

Kiribati) 

Kiribati 1 6 +5 3 Ecuador vessels re-flagged, 2 DWFN vessels islandized 

RMI 5 10 +5 Four new vessels, one re-flagged from outside region 

PNG (7) 10 +3 Small vessel re-flagged, two larger vessels in 2011. 

Philippines vessels 

in PNG 

(25) 1 43 

Solomon Is 4 7 2 +1 

+15 

(approx) 

Tuvalu 0 1 +1 J/V vessel (new) 

Additional chartered/foreign vessels (7) from existing 

companies (relocate/renamed);additional vessels from 

expanded bilateral access (7); 1 new vessel built 

Two sold and re-flagged, 3 re-flagged to Solomon Islands 

from outside the region 

Vanuatu 22 16 -6 Six VU vessels changed flag to US during 2008; 

Total +34 

USA 3 13 36 +23 

Restructuring of fleet with numerous new entrants in 

2008/09; 38 vessels in 2009, 2 since sank 

Source: FFA Regional Vessel Register; WCPFC-SC CCM Annual <strong>Report</strong>s - Part 1. 

1 

Philippine vessels not consistently registered on the FFA RVR at that time. 

2 

Includes two Philippines-flag vessels which began fishing in 2011. 

3 

US vessels are maintained in a separate category since the comparison between 2007 and 2011 vessels 

numbers is not valid; 2007 vessel numbers were at lower than historical levels provided for under the US 

Treaty due to economic attrition (up to 40 licences), but were rebuilt to close to previous levels during 

2008/2009; 12 new vessels constructed. 

Changes in fleet profile since derogation 

There has been a considerable increase in fleet numbers on the FFA RVR since 2007 (i.e. the year 

prior to PNG’s RoO derogation coming into effect in March 2008), continuing a build-up in numbers 

since the early 2000s. The largest increases are seen for the fleets of China, Kiribati and Marshall 

Islands, and for Philippines vessels fishing exclusively in the PNG EEZ under foreign access. There has 

been little or no change in fleet numbers on the FFA RVR in the past 9 months. 141 

This increase in fleet size, some of which predates derogation, seems unrelated to taking advantage 

of global sourcing. The increase in Philippine vessels, formerly domestic vessels based in Philippines, 

now fishing in PNG, is the largest single contributor to this increase. This shift in operational location 

of Philippines vessels has resulted from reduced fishing opportunities stemming from the loss of 

141 Comparison of active purse seine vessel numbers on the FFA RVR, 29 December 2010 and 1-10 October 

2011. 




access to Indonesian waters, the closure of the HSPs (an important fishing area for these vessels), 

and continuing low availability of fish in Philippines waters. These vessels, which were already 

fishing in the WCPO but not within PNA waters (and hence, were not on the FFA RVR), currently 

supply little raw material to PNG’s existing canneries, with most fish landed in Philippines. However, 

they may do so in the future utilising global sourcing if PNG’s processing capacity increases, as 

planned. Relatively few of the new or re-flagged/relocated vessels are EU compliant in SPS terms 

(see Section 5.6.1). 

As noted, some of the increase in vessel numbers involves migration onto the FFA RVR, not new 

fishing effort into the region; these vessels were already fishing within the WCPFC Convention Area 

outside of FFA members’ waters (e.g. the Philippines vessels formerly fishing as domestic vessels and 

not on the register until licensed under bilateral access in PNG since 2007). There is also effort 

expansion related to building domestic capacity/domestication (e.g. growing RMI fleet) or 

commercial expansion of comparatively new entrants to the fishery (e.g. China), which is unrelated 

to derogation. 

Current raw material flows 

Raw material caught by purse seiners operating in the WCPO is shipped to many countries for 

processing, as well as directed in some cases to processing facilities based in PICs (i.e. PNG, Solomon 

Islands, Fiji, Marshall Islands) (see Section 6.7.4). Current raw material flows for WCPO processing 

involve the following destinations: 

• Thailand for canning/loining 142 (750,000 mt in 2010, or 41% of the total purse seine catch), 

with Taiwan, the US and Korea the major suppliers; also Japan, Vanuatu, Marshalls, El 

Salvador, China, Indonesia, Solomon Islands, PNG and others. 

• Philippines for canning (220,000 mt, comprising, in approximately equal amounts, fish from 

domestic vessel catch (though this is decreasing), catch by Philippines vessels fishing in PNG 

(both chartered and bilateral access), and other fleets, including Japan, Korea and Taiwan. 

• Korea for canning (120,000 mt), supplied by own fleet. 

• Pago Pago for canning (100,000 mt estimated), supplied by US and Korean fleets. 

• Japan for canning, katsuobushi, fresh consumption (150,000 mt, mostly supplied by own 

fleet). 

• Indonesia – large domestic consumption (>100,000 mt), canning (90,000 mt). 

• Eastern Pacific Ocean, for canning (100,000 mt, mostly Ecuador), mostly supplied by Kiribati, 

Spain, Ecuador, El Salvador . 

• PNG for processing (~70,000 mt), most fish from domestic vessels, chartered vessels, some 

from bilateral access vessels, mostly from within PNG EEZ; large volumes exported as frozen 

whole round for canning elsewhere (e.g. Philippines, Thailand). 

Potential future changes in fleet profile 

With the shift to the Vessel Day Scheme in 2007, there are no longer explicit capacity limits in the 

WCPO purse seine fishery, other than the non-binding 2005 Resolution on Reduction of 

Overcapacity. 143 With the advent of VDS, the number of vessels has grown considerably since 2007, 

though not all are new vessels (Table 5.3). Nonetheless, no further increases in overall WCPO purse 

142 Thai imports are listed by flag rather than by beneficial ownership. 

143 WCPFC Resolution 2005-02. 




seine vessel numbers are anticipated in the short term, under management measures incorporating 

effort limits (CMM 2008-01 and the PNA VDS), and even though these have not been fully effective, 

the recent growth phase in the fishery has certainly slowed. As noted, there has been no increase in 

vessel numbers on the FFA RVR during the past nine months. Some fleets are ageing and vessels will 

need to be replaced – this is already occurring to some extent, and generally involves scrapping of 

vessels equivalent to the new capacity, though some islandization has occurred. 144 Several distant 

water fishing nations (e.g. Japan, Korea) have also voluntarily imposed a moratorium on the 

construction of new vessels. 

In the specific case of PNG, licences are to be allocated in association with new PNG processing 

plants (see Section 3.2.2) which will result in additional vessels and capacity joining PNG’s purse 

seine fishery. Under NFA’s current vessel licensing policy, each plant has been approved fishing 

licences (generally ten licences). Under the NFA policy, “only those vessels with fishing history in the 

WCPO will be considered for licences; for any new vessel to be considered for licensing, proof of 

145 

scrapping an old vessel (or vessels) of equivalent capacity in the WCPFC-CA must be provided”. 

However, it is expected that some of these associated vessels will come from beyond the PNA/FFA 

area (e.g. Philippines domestic vessels), and whilst currently fishing within the WCPO, they will add 

to FFA RVR numbers, as has already been the case with Philippines foreign access vessels fishing in 

PNG. If such vessels re-flag as PNG, they will also likely gain access to archipelagic waters, as well as 

EEZ waters and hence, fishing days within AW would be exempted under the VDS. Hence, there will 

inevitably be some increase in fishing effort in PNG waters, but overall WCPO catch and effort should 

remain stable or will not increase significantly. 

Future issues are more likely to involve increased competition amongst processors and traders for a 

relatively constant or only marginally increasing supply of raw material, assuming little additional 

growth in supply can be expected in the WCPO. Global sourcing may have had little or no impact 

until now, since the supply of fish for processors and traders has not generally been limiting. 

Any impact in the medium term (e.g. in five years time) is difficult to gauge, but if existing effort 

limitations remain in place, and other more stringent management measures are put in place (e.g. 

limit and target reference points and especially harvest control rules required of PNA/WCPFC as 

conditions of the recent MSC certification), then irrespective of fleet size, effort (fishing days) will be 

limited, leading to some economic rationalization of an essentially ageing fleet. 

5.4 Fisheries Management Frameworks and Institutions 

5.4.1 Regional level institutions 

i) Western and Central Pacific Fisheries Commission 

The Western and Central Pacific Fisheries Commission (WCPFC) was established with the entry into 

force of the WCPFC Convention in July 2004. 146 It was the first RFMO 147 established since the 

144 Islandization involves the re-flagging of an existing vessel, usually belonging to a DWFN company, to Pacific 

Island control, normally involving joint venture ownership to promote domestic development. In the case of 

Japanese islandization vessels transferred to PICs (two as at October 2011), equivalent fishing capacity must be 

removed by scrapping an existing vessel(s) operating within the WCPFC Convention Area. 

145 Interviews, various NFA officials, September 2011; written advice from NFA Managing Director, S. Pokajam, 

December 2011. 

146 Much of the history of regional and sub-regional arrangements is sourced from Hanich 2010. 




ratification of the UN Fish Stocks Agreement, with the western and central Pacific Ocean as its area 

of competence. This large area 148 overlaps with the Inter-American Tropical Tuna Commission 

(IATTC) in the east, and extends to the coastline of East Asia in the west, although it is understood 

that the Convention Area does not generally include the South China Sea. 

The Commission, as the governing body of the Convention, currently has 25 cooperating members, 

with another 7 territories participating in the work of the Commission, and nine cooperating nonmembers 

(CNMs), all these entities collectively known as 

149 

CCMs. 

It has four subsidiary bodies, as below, which report and provide advice to the annual session of the 

WCPFC (usually held in December): 

• Scientific Committee (SC) - meets in August; provides scientific information and advice on 

conservation and management matters. 

• Technical and Compliance Committee (TCC) - meets in October; serves as the enforcement 

committee; coordinates with Scientific Committee. 

• Northern Committee (NC) - meets in September; provides advice on stocks mostly occurring 

north of 20 0 N. 

• Finance and Administration Committee (FAC) - meets alongside the annual session; reviews 

and advises on the Commission’s budget. 

The objective of the Convention is “to ensure, through effective management, the long term 

conservation and sustainable use of highly migratory fish stocks in the western and central Pacific” in 

accordance with UNCLOS. In addressing conservation and management issues identified by its 

committees, notably the SC and TCC, the Commission adopts Conservation and Management 

Measures (CMMs), which are legally binding on CCMs. 150 There are 25 CMMs currently adopted, 

nine relating to species or species groups taken in the fishery (tunas, billfish, sharks and turtles), 

eight relating to fishing practices or mitigating the impact of fishing, seven relating to compliance 

issues) and one relating to CNMs. Compliance with these CMMs is monitored in the TCC each year, 

and the Commission has adopted a Compliance Monitoring Scheme (CMM 2010-03) for use in 2011, 

which is subject to review for future operation. 

Apart from supporting the activities of these subsidiary bodies, and monitoring the implementation 

of CMMs, the Commission Secretariat also operates its own compliance activities, involving the 

Register of Fishing Vessels (RFV), a regional Monitoring, Control and Surveillance (MCS) programme 

with Regional Observer Programme (ROP) and Vessel Monitoring System (VMS) components, 

supervision of boarding and inspection of fishing vessels on the high seas, and maintenance of an 

IUU list (see later under 5.5.2). 

Article 8 of the Convention (Compatibility of conservation and management measures) establishes 

the need for compatibility of measures adopted for areas under national jurisdiction with those 

adopted for the high seas by the Commission; requires the Commission inter alia to take account of 

distribution and biological characteristics of stocks, including the extent to which they are fished in 

national waters, to ensure measures adopted for the Convention area do not undermine measures 

147 Tuna RFMOs, which include IATTC (Eastern Pacific), ICCAT (Atlantic), IOTC (Indian), CCBST (southern oceans) 

and CCAMLR (Antarctic). 

148 20% of the earth’s surface. 

149 General information on the WCPFC from WCPFC website (http://wcpfc.int/frequently-asked-questions-andbrochures). 

150 WCPFC may also adopt Resolutions which are non-binding statements and recommendations. 




adopted for national waters (and vice versa for national measures); to take account of measures 

applied by sub-regional and RFMOs; and, to pay special attention to wholly enclosed seas areas. In 

practice, the Commission is largely concerned with high seas issues and measures pertaining 

throughout the range of the stocks, and ensuring compatibility of measures. 

The most important conservation issue facing the Commission since its inception has been the 

concern regarding the status of bigeye tuna stocks, and to a lesser extent, yellowfin tuna stocks, with 

the SC drawing attention since the early 2000s to the persistent overfishing occurring on bigeye 

stocks. Fishing mortality on yellowfin stocks, as well as biomass levels are also close to MSY levels 

(i.e. fully exploited). A CMM introduced in 2005, and modified in 2006 and 2008, 151 with the 

objective of maintaining bigeye and yellowfin stocks at levels capable of producing MSY, prescribed 

a series of compatible measures on the high seas and in EEZs designed to reduce fishing mortality on 

bigeye by at least 30% from the average of 2001-2004 levels or the 2004 level, and to ensure fishing 

mortality on yellowfin did not increase beyond 2001-2004 average levels or 2004 levels. 

The suite of measures included: 

• 2-3 month prohibition on purse seine sets on fish aggregation devices (FADs). 

• Closure of two high seas pockets (HSP) to purse seine fishing. 

• Restricting purse seine effort to 2001-2004 levels. 

• Reduction of longline bigeye catch by 30% by the end of 2011. 

• Some restrictions on other bigeye catches to 2001-2004 levels. 

Assurances were also sought that various exemptions claimed by some CCMs (e.g. exemptions from 

purse seine measures in archipelagic waters) 152 should not undermine the CMM. The catch in PNG 

AW is declining as a percentage of the total catch in PNG waters (12% in 2010, or 81,500 mt – see 

Table 3.3) and remains relatively low in Solomon Islands AW (< 20,000 mt). Little information is 

available on the situation in Indonesia, which has very extensive archipelagic waters. 

The CMM was progressively implemented in 2009 (i.e. two month FAD closure with compulsory 

observer coverage, two month closure of high seas areas between 20 0 N and 20 0 S), then in 2010 (i.e. 

three month FAD closure, full catch retention, three month high seas closure with observer 

coverage, and closure of two HSPs until further notice from 1/1/2010). Development of high seas 

FAD Management Plans, research on mitigating juvenile bigeye and yellowfin catch, and 100% 

observer coverage for all purse seine activity, other than that exclusively undertaken in the EEZ of 

153 

one CCM, from 1/1 2010, were also required, as were measures for longline fisheries taking 

bigeye. The requirement for an annual review of the effectiveness of these measures was also 

specified. This review, prepared by SPC/OFP, is presented to each Regular Session of the WCPFC. 

An initial technical review of the effectiveness of the measures, presented in 2009, concluded on 

the basis of ten year stock projections (2009-2018) that the CMM was unlikely to achieve its 

objectives for bigeye (i.e. 30% reduction in fishing mortality, maintain stocks at levels capable of 

154 

151 CMM 2008-01. Conservation and management measure for bigeye and yellowfin tuna in the WCPO. 

152 AW exemptions currently apply in practice only to PNG, Solomon Islands and Fiji, as archipelagic states, 

although no purse seining occurs in Fiji AW. Indonesia also has extensive AW, while the Philippines has no 

declared or recognized AW. 

153 100% observer coverage for the majority of the purse seine fleet was achieved for 2010, and the period July 

2010-July 2011 (WCPFC 2011c). For vessels fishing exclusively in EEZs and not covered by the ROP, coverage by 

national programmes was high (e.g. PNG over 80% in 2010). 

154 Hampton & Harley 2009; based on projections from stock assessments. 




producing MSY), but was more optimistic for yellowfin. The likely failure of the measure for bigeye 

was attributed to a combination of factors, including doubtful effectiveness of the FAD and high seas 

closures at that time, purse seine effort increases allowed under various exemptions (30% increase 

over 2001-04 levels), insufficient reductions in longline catch, and exemptions for fishing in 

archipelagic waters. However, the annual session of the Commission in December 2009, in noting 

these failings, was unable to come to agreement on measures to strengthen the CMM. 

The first review of the FAD closure in August 2010, based on the analysis of available observer data, 

concluded that the 2009 closure had little impact in reducing total effort, and that there was some 

evidence of non-compliance, but bigeye catches were much reduced during the closure. 155 

A review of the effectiveness of CMM 2008-01, presented several months later to the Seventh 

Regular Session of the Commission (WCPFC 7) in 2010, advised that the measure had not been 

effective in constraining growth of purse seine effort, that compliance with the FAD closure had 

been generally good, that the HSP closure had resulted in transfer rather than removal of effort from 

the fishery, that the 2009 longline catch of bigeye had been reduced by 21% relative to 2004 levels, 

and that bigeye overfishing under the CMM might be reduced by 14%, but that this would increase 

to 50% if the various exemptions and exclusions built into the CMM were removed. 156 

WCPFC 7, in response, determined to adopt a process for 2011 to “develop an enhanced 

conservation and management measure for tropical tunas (bigeye, skipjack and yellowfin) in the 

WCPO”. 157 

The second review of the FAD closures for 2009 and 2010, in August 2011, 158 reported strong 

reduction in bigeye catch during the closure periods, good compliance, reduced use of drifting FADs 

in 2010, and overall reduction in FAD use (and increased unassociated sets) during 2010. This review 

was based on analysis of just over 30% of observer trips, due to a large data processing backlog of 

the 100% coverage, but it is believed this was representative of fishery behaviour and will be verified 

by later analyses with more complete coverage of the available observer data representing close to 

100% coverage. Some of the projections based on the 2011 stock assessments have indicated more 

positive outcomes with respect to bigeye under the fishing patterns which prevailed in 2010 

(reduced bigeye longline catch, higher than usual effort on unassociated schools). 159 Fishing 

mortality on bigeye, under some scenarios, was projected to return to MSY levels or below in 2015. 

However, under the more normal fishing patterns which are prevailing in 2011, overfishing will 

continue and WCPFC 7 recommended a reduction of at least 32% in fishing mortality from the 

average levels for 2006-09. 

Although these recent projections have generated some optimism, 

160 this may be premature as 

there remain many outstanding data issues, especially with bigeye longline catches for 2010, and 

estimates of fishing mortality for the most recent year are highly uncertain. 151 The projections 

confirmed the relatively healthy condition of the yellowfin and skipjack stocks into the future. 

Attention will now turn to the updating of the projections as more data become available, and the 

development of the enhanced and broader CMM to be adopted at the Regular Session in December 

2011. 161 

155 Harley et al. 2010. 

156 SPC-OFP 2010. 

157 WCPFC 2011i. 

158 Hampton & Williams 2011. 

159 SPC-OFP 2011a. 

160 PNAO 2011b. 

161 Now delayed until late March 2012 with the postponement of WCPFC8. 




Other management issues for WCPFC 

In managing the stocks under its care, the Commission has yet to establish formal reference 

points 162 - target (TRP) or limit (LRP) - to guide the management of these stocks, and to develop 

associated harvest control rules (HCRs). Whilst it has this gap in the management framework in 

common with most other RFMOs, and although de facto MSY-based indicators are already used in 

assessing the condition of the stocks, the absence of formal RPs and HCRs is still seen as a major 

weakness, and was identified such in the recent MSC assessment of the PNA skipjack fishery. 163 In 

particular, work has commenced in identifying and evaluating possible limit reference points, with 

the conclusion that adoption of limit reference points is important immediately for bigeye and 

yellowfin, whereas setting target reference points to maximize fishery importance is the priority for 

skipjack. 164 With the recent approval of MSC certification for the PNA unassociated skipjack fishery, 

WCPFC, through PNA, will be required to implement RPs and HCRs as firm conditions of the 

certification. 

Another issue for the Commission has been with its decision-making process (Art. 22), which 

normally occurs by consensus on substantive matters such as the adoption of CMMs. However, it 

has proved difficult to achieve consensus on several contentious management issues. With a twochamber 

voting system (FFA and non-FFA members) and a two or more vote majority required in 

each chamber, the Commission has thus far been unwilling to go to a formal vote. The decision 

making process is perceived as a potential weakness in achieving endorsement for required 

management decisions, such as the planned revisions to CMM 2008-01. 

EU involvement in WCPFC 

The EU has been a member of WCPFC since soon after its inception, and is part of the diverse non- 

FFA voting chamber. Despite its relatively minor involvement in fishing (and processing) activity in 

165 

the WCPO, the EU is an active and regular participant in the work of the Commission. It has 

presented ten delegation papers and proposals to Regular Sessions of the Commission on topics 

such as IUU fishing, a CMM on port state measures, catch documentation scheme (CDS), support for 

developing states under Article 30, and observer cross-endorsement. It also participates fully in the 

work of the Commission’s subsidiary bodies – the Scientific Committee and the Technical and 

Compliance Committee. 

ii) 


The Secretariat of the Pacific Community (SPC), formed in 1947 as the South Pacific Commission and 

with a broad membership currently including PICs, PI territories and Australia, France, NZ and the 

USA, provides technical services across various sectors to its PICs and PI territories. SPC’s Oceanic 

Fisheries Programme (OFP) provides scientific services not only to its members, but also serves as 

science provider and data manager to the WCPFC, undertaking stock assessments and maintaining a 

range of databases for the Commission. 

162 

Reference points are indicators of the status of a stock. Target reference points (TRP) indicate the desirable 

position for the stock to be in with respect to fishing mortality and recruitment, are often based on Maximum 

Sustainable Yield (MSY) levels and may incorporate socio-economic goals. Limit reference points (LRPs) are the 

minimum biologically acceptable limits to sustainable harvest. 

163 MSC 2011. 

164 For example, Preece et al. 2011; Harley & Davies 2011; earlier papers at SC6. 

165 Four Spanish vessels fishing under FPAs, 10 beneficially-owned vessels fishing under bilateral access 

agreements; total catch 2010 ~ 50,000 mt or < 3% of the WCPO catch; some longline fishing targeting 

swordfish. 




The SPC/OFP also undertakes targeted biological research in the region, including tuna, billfish and 

by-catch species, delivers regional tuna tagging programmes, is involved with regional observer 

training, deployment, quality control and data entry, and supports data collection/port sampling 

programmes in Indonesia, Philippines and Indonesia, through the WCPFC Secretariat, as well as 

throughout the FFA sub-region. 

Delivery of advice to member countries mainly occurs via National Tuna Fishery Status <strong>Report</strong>s 

(NTFSRs) which provide scientific inputs to national tuna management plans, inform national 

understanding of national fisheries dynamics and issues, serve as a valuable reference source and 

inform subregional (FFA) and regional analyses and assessments. 166 

iii) Pacific Islands Forum Fisheries Agency (FFA) 

The Pacific Islands Forum Fisheries Agency, formed in 1979 and including the independent PICs, as 

well as Australia and New Zealand, promotes cooperation and harmonization of fisheries 

management policies and in the past, has largely driven management initiatives in the wide region 

occupied by its members. 

FFA also negotiated and administers the US Multilateral Tuna Treaty, the Niue Treaty (cooperation in 

fisheries surveillance and law enforcement), and was instrumental in the adoption of the Wellington 

Convention (prohibition of fishing with long driftnets in the South Pacific). 

FFA established the Regional Vessel Register and the Vessel Monitoring System (VMS) as key 

regional compliance tools, and continues to support regional MCS activity, guided by the Regional 

MCS Strategy adopted in 2010. 167 It organizes, for example, joint MCS deployment exercises in the 

region involving FFA PIC member states, and navies of Australia, NZ and France, and coordinates 

aerial surveillance activity. 

In resource management and development terms, FFA is guided by a Regional Tuna Management 

168 

and Development Strategy. Through the collective actions of its members, it remains an influential 

advisory, rather than regulatory force within the management framework for the region, regularly 

providing coordinated key inputs to the development of CMMs within the Commission, for both 

compliance and stock management issues. FFA members’ position is also recognized in the 

Convention decision-making process where they constitute one of the two voting chambers. 

5.4.2 Sub-regional level institutions 

Only the PNA is discussed here, although other sub-regional bodies exist with the WCPO framework 

(e.g. the Northern Committee, established under Art. 11(7) of the Convention, to make 

recommendations on the conservation and management of stocks in the Convention Area north of 

20 0 N; stocks covered by this body are largely outside the concern of this review). 

166 National Tuna Fishery Status <strong>Report</strong>s (NTFSR) available at: 

http://www.spc.int/oceanfish/en/ofpsection/sam/national-reports-a-advice 

167 FFA 2011; available at http://www.ffa.int/mcs-strategy#attachments 

168 FFA 2009; available at http://www.ffa.int/node/302#attachments 




Parties to the Nauru Agreement (PNA) 

In 1982, a subset of the FFA membership whose equatorial waters contained much of the tuna taken 

in the region – the Parties to the Nauru Agreement (PNA) 169 – developed an agreement to initially 

coordinate and harmonize their fisheries management and access conditions. PNA was housed 

within FFA until 2010, when following a ministerial decision on its future activity (see Bikenibeu 

Declaration below), a separate PNA Office was established in Majuro, Marshall Islands. 

PNA has since applied a series of Implementing Arrangements (IAs), as well as other arrangements 

incorporating increasingly comprehensive management measures to fisheries within its area of 

influence, and has become the driving force in effecting changes in fisheries management in the 

region. These IAs, and other agreements/declarations of the PNA, are summarized as follows: 

• First Implementing Arrangement (1983) - established harmonized minimum terms and 

conditions for foreign fishing vessels, which were extended to all FFA states; Regional Vessel 

Register (RVR) of fishing vessels established by FFA. 

• Second Implementing Arrangement (1991) – incorporated observer requirements, 

prohibited transhipments at sea (designated ports listed), expanded MCS activity and 

introduced annual registration for the FFA Regional Vessel Register. 

• FSM Arrangement (1995) – concessional fishery access to the waters of all PNA states for 

domestic and locally-based purse seine vessels to promote domestic fishery development. 

• Palau Arrangement (1995) – to limit purse seine effort in the PNA EEZs, through a cap on 

vessel numbers (205 in various categories, plus additional special case vessels). 

• Vessel Day Scheme (2007) – a replacement for the vessel licence cap (205 vessels) under the 

Palau Arrangement; based on a limit on total purse seine fishing days in PNA waters, with 

fishing days allocated to individual PNA parties; commenced 1 December 2007; intended to 

constrain catches to 2004 levels, and enhance economic returns. 

• Third Implementing Arrangement (2008) – closure of high seas pockets, 3-month FAD 

closure, catch retention, 100% observer coverage; incorporated into CCM 2008-01; 

amended in 2010 to prohibit sets on whale sharks, and closure of additional high seas areas. 

• The Bikenibeu Declaration (2009) - provided for the establishment of a separate PNA Office 

in Majuro, Marshall Islands (PNA functions were previously carried out within FFA), 

foreshadowed the additional high seas closures, anticipated additional initiatives to 

generate increase economic benefits (e.g. crewing, unloading in PNA ports, refuelling in 

port), and supported the implementation of the proposed PNA Longline Vessel Day Scheme 

(VDS). 

• Koror Declaration (2010) – confirmed support for the Vessel Day Scheme, closure of 

additional high seas between 10 0 N and 20 0 S, and 170 0 E to 140 0 W, and endorsement to 

proceed with a full MSC assessment for the PNA skipjack fishery. 170 

Most of these PNA management initiatives, which applied to PNA EEZs and some cases adjacent high 

seas areas, have since been incorporated into WCPFC measures applying throughout the Convention 

Area, notably CMM 2008-01. 

169 Initial PNG members were PNG, FSM, Kiribati, RMI, Nauru, Palau, Solomon Islands, with Tuvalu joining in 

1991. 

170 Marine Stewardship Council (MSC) has developed standards for sustainable fishing and seafood traceability; 

fisheries can be assessed for certification against these standards and if successful, can apply sustainable ecolabelling; 

see http://www.msc.org/ for further details. 




The MSC certification process for the PNA skipjack fishery was approved on 15 December 2011, 

following independent adjudication of various objections from interested stakeholders. The 

certification will apply to unassociated/free-school skipjack taken in the defined PNA fishery, with a 

significant list of conditions and recommendations pertaining to the certification, as well as Chain of 

Custody (CoC) requirements. 171 This decision now represents a significant endorsement of the PNA 

(and WCPFC) management processes currently in place and their overall effectiveness in sustainably 

managing a significant part of WCPO skipjack tuna stocks (close to 60%, and higher in 2010). 

Two potential areas of difficulty for the MSC process included: 

1) the PNA Vessel Day Scheme (VDS) , the primary management tool of the PNA since the shift 

from capacity management under the Palau Arrangement in late 2007 (see below). Concerns 

related to the perceived lack of transparency surrounding its operation and reporting, and 

apparent lack of success in constraining effort by some parties 

2) the lack of formal reference points (target and limit) and harvest control rules (HCRs) in the 

responsible RFMO (WCPFC) and by extension, PNA, to guide management of the tuna stocks 

under consideration. 

The PNA Vessel Days Scheme 

172 

The Vessel Day Scheme (VDS) was adopted by PNA in October 2005 to replace the 205 vessel licence 

cap under the Palau Arrangement. A trial operation period was held from 1 December 2006 to 30 

November 2007, with the VDS officially coming into effect on 1 December 2007. A schedule of total 

allowable effort (TAE) in PNA waters was established, based on agreed 2004 effort levels, and then 

partly allowable effort (PAE) in each of the eight individual parties’ EEZ was allocated, based on the 

application of 50% biomass distribution and 50% historical effort within EEZs. The agreed TAE (sum 

of PAEs) at the time was 28,468 days. An additional allocation was made for FSMA vessel fishing 

days (3,907). The first management year ran from 1 December 2007 to 31 December 2008 (13 

months), and thereafter for calendar years. 

Management of the VDS during the first three management years (2008-2010) was flexible, with 

parties able to transfer days between years and between three-year management periods, and to 

seek temporary increases with the approval of other parties. An allocation of fishing days was taken 

from the total allowable effort (TAE) to cater for FSMA and USMLT vessels. However, a limit on 

fishing days was not actually placed on these vessels, except when fishing in their home-party 

waters. By a critical decision of the parties in May 2007, fishing days in archipelagic waters were 

exempted from the TAE/PAEs. Beginning in the second management year, some parties began to 

173 

deduct self-determined ‘non-fishing days’ from PAE days used. Some adjustments were also 

made to the method of calculating PAEs (e.g. changes to the time series for calculation of biomass 

and effort, as well as optional deviation by parties from the 50/50 weighting of biomass and 

historical fishing ratios for the calculation of PAEs). However, from the outset, fishing days were to 

be standardized by the administrator (PNA) based on vessel length to take in account different sized 

171 MSC 2011. 

172 Summary drawn from PNA internal report (confidential) – January 2011. 

173 Fishing days as defined under the Harmonized Minimum Terms and Conditions include all activity 

associated with fishing, and exclude only steaming in transit or to port with gear stowed, or emergencies. The 

definition used in the VDS seems to have broadened and is subject to claims by parties for exclusion from 

PAEs. 




vessels within the fleet, on the premise that one fishing day for a large-sized vessel was not 

equivalent to one fishing day for small and medium sized vessels. 174 

In the third management year (2010), the parties agreed to eliminate roll-over of days between 

years and management periods, and to cap FSMA days outside home party waters at 3,907 days. 

However, the agreed TAE limit was exceeded by 4,978 days, even after the deduction of 3,484 nonfishing 

days. The FSMA cap was also exceeded by 1,685 days. Limited trading of days began between 

PNA parties, initiated by those who had exceeded their annual PAE limit. 

Recognizing the inadequacies and efficiencies of the system in the first three years of 

implementation, for the fourth management year (2011), PNA parties agreed to apply hard limits for 

the first time, with standardized hybrid PAEs and the agreed total limit (TAE) of 28,469 days was 

retained. Protocols for the regular trading of days between PNA parties were also established. The 

setting and use of a regional benchmark minimum price for a fishing day was also achieved (US 

$5,000/day). 

175 The limits have been observed by some PNA parties, with Solomon Islands closing its 

waters on 16 June 2011 once its PAE was reached, and subsequently Nauru and Tuvalu. 176 The FSMA 

limit of 3,907 days was exceed on 21 August, but with credit of 25% of days as ‘non-fishing days’, in 

anticipation of eventual reconciliation, fishing was provisionally scheduled to continue until around 4 

November. 2,580 days had been traded by 30 September, including 1,500 days purchased by PNG. It 

is not known how PNG, which exceeded its TAE in 2010 by 7,615 days before non-fishing days (3,071 

as at 30/11/2010) were deducted, has fared in 2011, but a large amount of effort has reportedly 

occurred in its waters during the first half of the year. 177 More recent information indicates that the 

record 2010 catch (and effort) in PNG waters will be exceeded in 2011, with the continuation of La 

Nina conditions and continuing displacement of effort to the PNG area. The 2011 VDS TAE and the 

PNG PAE exceeded will once again be exceeded 178 although it is expected that the overall WCPO 

catch will be similar to that of 2010. 

In summary, to date, the VDS has not been an effective tool for limiting PNA effort to the agreed 

TAE, based on 2004 effort, and effort has continued to increase. Parties have taken steps to improve 

the application of the VDS, and indications for the future are more positive. Currently, the USMLT 

fishing days remain outside the VDS, since they are bound by international treaty, and are now 

around 8,900 days, compared to 2,773 logsheet days in 2004 before the restructuring and 

revitalisation of that fleet. With the Treaty due to lapse in 2012, with some indications that renewal, 

which has occurred three times previously, may not occur this time around. PNG has already 

indicated its intention to withdraw. In any case, if a new US Treaty is negotiated, PNA members are 

adamant that the US fleet will need to operate within the realm of the VDS and be subject to a hard 

limit on fishing days. 

For 2012, PNA Ministers adopted, in principle, an increased TAE of 30,932 days in May 2011, based 

on recent catch levels and MSY considerations. They were due to meet in September 2011 to 

consider formal adoption of this revised TAE, but it may not be sufficient to prevent future over-runs 

of the increased TAE unless hard limits are strictly enforced by all parties. A Special PNA Meeting in 

174 Fishing days are calculated on the following basis – one fishing day is based on vessels 50-80 metres in 

length; for less than 50 metres, one fishing day = 0.5 fishing days; for over 80 metres, one fishing day = 1.5 

fishing days. 

175 Unpublished report to WCPFC 8 on the VDS by PNA – progress in 2011 and report on fishing activity in 2010. 

176 Nauru closed its waters in late October 2011, and Tuvalu in mid-November 2011 (refer 

http://www.pnatuna.com/). 

177 PNA Office representative, pers. comm., October 2011. 

178 Regional tuna database as at mid-December 2011. 




October 2011 considered further options for the VDS, but information is not yet been made publicly 

available on these outcomes. 

Criticism has arisen from a number of non-FFA CCMs concerning an overall perceived lack of 

transparency of the VDS system. Particular concerns include inter alia the discretional approach that 

has been applied in the first few years of implementation in terms of changing TAE/PAE calculation 

settings, the definition of what constitutes a ‘non fishing day, how days have been traded between 

parties and exemptions applied for fishing in archipelagic waters for PNG and Solomon Islands. In the 

case of PNG, concerns have been raised about additional effort in archipelagic waters from vessels 

associated with new onshore processing investments not being adequately managed, as any days 

fished within AW currently fall outside of the VDS. It is likely that PNG-flag vessels associated with 

new investments will have access to PNG’s already overcrowded AW. 

While there is progress in terms of improvements to the effectiveness of the VDS and PNA members 

have expressed a commitment to the effective implementation of the management system, there is 

still considerable room for improvement. The final report on the 2011 VDS performance to be 

delivered to WCPFC 8 will be keenly awaited. 

Reference points and harvest control rules 

As mentioned, PNA, as with WCPFC, does not currently have a system of reference points and 

harvest control rules in place. The PNA Office has recently indicated that it will be working towards 

the development of target reference points and management objectives for PNA fisheries, and that 

it plans to have a Harvest Control Strategy in place within five years. This will now be mandatory, 

within an even shorter timeframe as a condition of the recently approved MSC certification, and will 

also spill over to the WCPFC. 

Other PNA initiatives 

The PNA office has also indicated that it will be undertaking a series of new management-related 

initiatives, including: 179 

• Establishing a separate PNA VMS associated with the VDS. This will be based in Madang, 

and will be fully operational in early 2012, following delivery of the vessel register and 

other data from FFA, and completion of the Madang database centre. 

• PNA observer agency - a scoping study is being undertaken; likely to commence with 

deployment of observers on FSMA vessels, and likely to have an important role in MSC 

Chain of Custody (CoC) certification, now that the MSC skipjack fishery certification has 

been approved. 

• Additional FAD closures - possibly extend to 6 months from the current 3 months closure 

in 2012. 

• Mesh size limits for purse seine nets (mesh not smaller than 90mm) to be phased in over 

two years). 

• PNA fisheries information management system - PNA to take control of its fisheries data 

and integrate into an online fisheries information management system. 

• PNA crewing agency - possibly commencing in early 2012 with a target of 10% PNA 

national crewing. 

179 PNAO 2011a. 




• Implementation of the PNA Longline VDS – undergoing trials in 2011, with possible carryover 

of the trials to 2012. 

5.4.3 National level (Papua New Guinea) 

PNG has had in place for some time a legislative framework for the management of its tuna and 

associated resources which is provided by the Fisheries Management Act (1998) and the Fisheries 

Management Regulations (2000). The Act establishes the statutory National Fisheries Authority and 

provides for management of the NFA by a ten member Board, reporting to the Minister for Fisheries, 

and with a chairman appointed by the National Executive Council. 

The Act, which is currently under review, provides for management by formal fishery management 

plans for the main commercial fisheries. These plans have the same status as fisheries regulations. 

PNG developed the first comprehensive National Tuna Management Plan (NTMP) in the PNA region 

(gazetted 1999) which served to guide the sustainable development of the fishery in the early 2000s, 

and demonstrated the intention to conserve and manage tuna resources within PNG waters. With 

rapid changes to both the fishery and regional/sub-regional management arrangements (e.g. WCPFC 

CMMs, PNA Implementing Arrangements, VDS etc.), it became clear that the NTMP was in need of 

considerable revision to harmonize it with other applicable instruments at the regional level. Steps 

to undertake this revision have been underway since 2003, but only piece-meal changes have been 

made. For example, the original TAC established for the surface tuna fishery (338,00 mt) has been 

exceeded every year since 2005. An upward revision of this TAC to 500,000 mt has taken place, with 

the approval of the NFA Board, 180 but in 2010, the PNG EEZ catch jumped to over 700,000 mt (see 

Section 3.1), and the TAC has been revised further, to 700,000 mt 181 with limit and target reference 

points still yet to be established and adopted. 182 A separate plan for the management of FADs in 

PNG waters has also been gazetted, and will be incorporated within the revised NTMP. NFA has 

recently committed to a formal revision of the NTMP, starting in early 2012. 183 PNG already receives 

periodic scientific advice from SPC to inform the Plan, through the National Fisheries Status 

<strong>Report</strong>s 184 and is well placed to revise the Plan quickly and efficiently. In December 2011, NFA Board 

also approved the development of a management plan for PNG’s archipelagic waters, which is 

scheduled to be drafted in 2012. 185 

With the largest EEZ catch in the region in its productive waters, PNG faces considerable challenges 

in constraining purse seine effort under the VDS and the requirements of CMM 2008-01. PNG 

exceeded its 2010 VDS PAE by over 4,500 days, and despite some vigorous trading during the second 

half of 2011, it appears certain that this will be exceeded again. A proposed increase in the present 

TAE by 2,500 days 186 (see Section 5.4.2) might only partly alleviate this situation. In the final analysis, 

180 L. Kumoru, NFA, pers.comm., September 2011. 

181 Decision of the NFA Board, December 2011, but not yet gazetted. 

182 Establishing national TACs for migratory species is not considered desirable by many scientists, but is 

nonetheless widely used as guidelines. National TACs, which should be regarded a provisional guidelines, may 

be permitted to change within overall limits set through the management framework (HCRs, CMMs etc.) to 

reflect shifts in biomass distribution (i.e. ENSO effects, stock assessment shifts), shifts in spatial distribution of 

effort (such as following closure of high seas areas) and long term stock changes, as well as changes in levels of 

local exploitation. 

183 NFA Board Member, pers. comm., December 2011. 

184 See http://www.spc.int/oceanfish/en/ofpsection/sam/national-reports-a-advice; individual plans are 

confidential to member countries; available now as hard copies, they will be accessed in future via secure web 

pages and subject to semi-regular updates, on demand. 

185 NFA Managing Director, S. Pokajam, pers. comm., December 2011. 

186 PNA Ministerial paper in preparation at PNA Ministerial direction; not sighted by consultants. 




as long as PNG catch and effort are harmonized within overall regional limits and can be 

accommodated within existing mechanisms and rules, then some flexibility in the distribution of 

catch and effort is permitted for migratory/mobile species. However, there are concerns that such 

harmonization is not occurring. 

PNG has no specific management measures such as effort or catch limits in place for archipelagic 

waters (AW), which make up 26% of PNG waters by area, but have contributed proportionally less of 

the total catch (10-15% in most recent years). However, this is of potential concern since AW are 

exempt from VDS allocations and thus, outside existing PNA effort regulation. In addition, licences 

associated with new processing plants are likely to be linked to AW access, at least in case of smaller 

vessels. In practice, and especially with the considerable increase in effort and catch during 2010 and 

2011 in the PNG EEZ waters which largely surround the AW, fish availability in AW has been reduced, 

with resulting lower catch rates than in EEZ waters. 187 It is likely that effort in the already heavily 

fished AW will become self regulating, as vessels regularly leave AW in search of better catch rates in 

the more extensive EEZ waters. Local depletion as result of increased effort in AW is not seen as an 

issue for migratory tunas, with replenishment likely to be rapid once effort is reduced, and no 

permanent damage sustained to stocks in AW waters. In the long term, it would be desirable to 

remove the AW exemptions from the VDS, although this in itself would not prevent temporary local 

depletion. 

PNG has long had high logsheet coverage of its purse seine and longline fleets (> 80% coverage), 

backed up by an efficient licensing system for foreign and domestic/locally based vessels, with 

associated licensing conditions which reflect domestication policy. PNG/NFA has long carried out its 

own data entry, and compiles authoritative catch and export summaries for the WCPFC Annual 

<strong>Report</strong> Part 1. 189 

There is a large PNG national observer programme covering all fisheries, including tuna, with over 

200 trained observers currently on the roster, and plans to expand this to more than 400. Average 

tuna vessel observer coverage, over the past 6 years to 2009, even prior to 100% coverage 

requirements, has been 86% for PNG domestic vessels, 61% for chartered vessels and 29% for 

foreign vessels. In 2010, under the requirements of CM 2008-01, close to 100% coverage of foreign 

vessels was achieved, as was the case for the region, and over 80% for other vessels. 190 The PNG 

observer programme is the largest in the region and probably the most effective at national level. It 

sets the standards for other programmes in the region and expects to expand in the near future, and 

supplies large numbers of observers for regional coverage Training for national and regional 

observers is also provided on a significant scale by PNG. Observer data entry is currently carried out 

by SPC in PNG, and there remains a significant backlog, but it is hoped this might be possible in the 

future. 

The PNG national VMS system has been in operation for some years, and similar to the observer 

programme, has been a regional benchmark. It will serve as the model for the new PNA VDS system 

currently being established. It is planned to move to a web-based system in the near future, with an 

electronic data reporting system using and various data sources (e.g. VDS, catch and effort, licensing, 

SPS, IUU and observer data linked in a single online system). 

On its own initiative, PNG/NFA also supports a large port sampling programme (to characterize size 

and species composition of the catch) and recently, a PNG tuna tagging programme aimed to 

188 

187 Interviews, PNG fishing industry representatives, September 2011. 

188 Usu 2011; summary data to 2009; data for 2010 verbally supplied. 

189 L. Kumoru, NFA, pers.comm., September 2011. 

190 NFA official, pers. comm., September 2010 re: 2010 data. 




contribute to regional assessments, as well as generating assessment data specific to the in-zone 

dynamics and management of PNG stocks. This commenced in 2010 and will continue for another 

two years. 

PNG is at the forefront of developing a regional catch documentations scheme (CDS) acceptable to 

all parties, 191 as strongly pushed for by the EU, and as the EU-accredited Competent Authority for 

both the EU SPS and IUU Fishing Regulations, has well developed capacity in this area (see Sections 

5.5 and 5.6). 

Stakeholder involvement in the management of PNG fisheries is provided by the PNG Fishing 

Industry Association (PNGFIA), which has input to fisheries management policies and development 

strategies, through its representation on the NFA Board and participation in consensus decisions. 

5.4.4 Current effectiveness of management institutions 

Within the Kobe process, performance reviews of RFMOs, using common criteria and methodology, 

have been agreed to in the Kobe Action Plan. 192 Reviews have already been undertaken or are 

ongoing for CCSBT, ICCAT and IOTC, but have yet to be initiated for WCPFC and IATTC. There has also 

been an EU-sponsored review of the effectiveness of RFMOs, but the outcomes of this are not yet 

available. 193 The agreed criteria for these reviews provide a good framework for assessing the 

current effectiveness of institutions with respect to conservation and management at various levels 

within the WCPO. This has been attempted in Table 5.4 below, based on information presented in 

the preceding sections (5.4.1 Regional, 5.4.2 Sub-regional and 5.4.3 National (PNG)). 

At regional level, the Commission seems to meet most criteria, based on this subjective analysis, and 

has made good progress in the conservation and management in the seven years since its inception. 

The quality and timely provision of the science is a strength of the regional structure, combined with 

data collection and data sharing arrangements, which have been in place for some time through the 

efforts of the existing regional organizations (SPC, FFA). A wide range of CMMs covering most issues 

has been adopted, and a Compliance Monitoring Scheme (CMS) for these CMMs is now in place. 

Compatibility issues may not be completely resolved, but there is good awareness of the need to do 

so and active efforts are being made to address these issues 

Sub-regional activities, at least in the PNA/FFA area, are based on a solid platform in place for over a 

decade, as summarized in Table 5.4. These activities are well-resourced, have seen considerable 

growth in technical capability, and have enjoyed strong political support. Vindication of the 

management framework put in place at sub-regional (PNA) level, exerting sustainable management 

over a significant proportion of regional stocks (e.g. 60% of skipjack catch), has been provided by the 

recent MSC certification. 

In the western-most sub-region of the WCPO (i.e. Indonesia, Philippines), higher exploitation rates 

and biomass depletion are the case for some species, and serious data gaps exist, but are being 

addressed through initiatives of the Commission and the CCMs themselves. The GEF-funded 

Western Pacific East Asia Oceanic Fisheries Management Project (WPEA OFMP) is building 

management capacity, ensuring compliance with WCPFP requirements, and implementing data 

collection and monitoring programmes with some success. This follows on from the earlier 

Indonesia-Philippines Data Collection Project, funded by the WCPFC and extra-budgetary 

191 PNG Delegation 2011. 

192 WCPFC 2011a. 

193 Aranda et al. 2010. 




contributions, which laid the foundations for the current project. This activity will need to be 

supported into the foreseeable future. 

Management of stocks in the northern sub-region of the WCPO, north of 20 0 N, is handled by the 

Northern Committee, established under the Convention. However, a review of its operation and 

effectiveness is beyond the purview of this study. 

PNG has built strong data collection and sharing capability, in association with MCS activity, and 

growing research capacity contributing to regional efforts. However, as a matter of urgency, 

improvements need to be made in updating its legislative and management framework, constraining 

effort (and catch) in its waters and harmonizing management activity on national scale with those at 

RFMO and regional level. As noted, the PNG National Tuna Management Plan is scheduled for 

revision in 2012 to bring in-zone management in line with regional measures. There are encouraging 

signs that the operation of the PNA VDS is tightening up (although PNG remains the main offender in 

exceeding its PAE). Most importantly, the recent MSC certification of the PNA skipjack fishery will 

impose strict conditions to limit catch and effort in PNA waters, including PNG waters, under harvest 

control rules, to be adopted in the next few years. 




Table 5.4 

Summary of current management activity at regional, sub-regional and national levels, 

according to criteria established for RFMOs, 2011 

General criteria Regional Sub-regional 2 National (PNG) 

Status of living 

marine resources 

Data collection and 

sharing 

Quality and 

provision of 

scientific advice 

Most tuna stocks in good 

condition, with status being 

maintained through 

management action; RPs and 

HCRs to be developed; less 

information on NTAD 1 

species, but CMMs 

developed. 

Fishery (catch/effort) and 

vessel operational data 

collected in agreed standard 

formats, with high level of 

coverage and compliance; 

comprehensive databases 

maintained by data manager; 

RFV maintained by 

Commission; WCPFC 

coordination of activity in 

Indo/Phils/Vietnam. 

Regular high quality 

assessments of key tuna 

species – SPC/OFP as science 

provider; other species as 

requested. 

As for regional (same 

stocks), but depletion 

more severe in western 

parts of the WCPO (YF and 

SKJ); application of 

ecosystem-based 

approach to fisheries 

management by FFA 

members. 

FFA/SPC regional 

database; FFA regional 

register; port sampling, 

transhipment, observer 

data collection and 

analysis. 

PNA plans for integrated 

information system. 

Regional assessments 

available to FFA and PNA; 

FFA also has Regional 

Tuna Management and 

Development Strategy 

(RTMADS). 

Exploitation rates high in 

PNG and areas to west, 

but overall sustainable 

(National Tuna Fishery 

Status <strong>Report</strong>); research 

into NTAD species 

undertaken. 

Well established 

licensing and data 

collection systems, with 

high logsheet coverage; 

collection of various data 

used in regional/national 

assessments, including 

port sampling. 

National monitoring and 

assessment; recent 

tagging project to 

contribute to regional 

and national 

assessments. 

Adoption of CMMs 

Capacity 

management 

Compatibility of 

measures 

Fishing allocation 

and opportunities 

17 CMMs adopted for species 

and fishery management, 

others for MCS; Compliance 

Monitoring Scheme (CMS) for 

CMMs in place; flow-on from 

PNA MSC certification 

conditions in future. 

CMM 2008-01 and 2005-02 

Resolution. 

Generally compatible, but still 

evolving. 

CMMs applied subregionally. 

PNA Implementing 

Agreements (3) 

incorporated into CMMs. 

MSC certification, with 

stringent conditions to be 

implemented. 

Palau Arrangement - VDS 

currently, vessel cap limit 

(205) in past. 

PNA measures generally 

compatible with WCPFC. 

CMMs applied nationally 

through Tuna 

Management Plan and 

associated plans but 

revision needed. 

Variable application at 

present but, as PNA 

member, will be 

tightened following MSC 


None in place. 

National measures 

compatible with PNA 

measures, but not fully 

observed/applied. 

Not applicable Not applicable Not applicable 

Note: This does not include compliance or enforcement activity, decision making/dispute settlement, and 

international cooperation. 

1 

Non-target, associated and dependent species. 

2 Not including most the western (i.e. Philippines/Indonesia) and northern sub-regions of the WCPO. 




5.5 IUU Fishing 

5.5.1 Incidence of IUU fishing in WCPO 

The work of Agnew et al. (2009), in estimating the worldwide extent of illegal fishing, is widely 

quoted in efforts to estimate the incidence of IUU fishing in the WCPO. 194 For the years 1980-2003, 

they estimated the average IUU catch in the WCPO at between 786,000 mt and 1,730,000 mt, 

valued between US $707 million and US $1,557 million. However, this was for all fisheries, including 

tunas, and included much data from South-East Asian coastal states, with more limited data from 

the wider WCPO. The study in fact concluded that, since the advent of RFMOs, IUU fishing for tunas 

now largely involves not illegal, but rather unreported (i.e. non-reporting of catches by flag states) or 

unregulated (i.e. flag state not party to the relevant RFMO) fishing, and that globally, the proportion 

of illegal catch of tunas, bonitos and billfishes is generally very low (< 5% globally). They further 

opine that in the WCPO, “the bulk of IUU (tuna) fishing (albeit at low levels) probably occurs within 

EEZs and, in particular, within the waters of FFA member countries”. It thus comes under the direct 

control of FFA MCS activities which have strengthened considerably since that time (2003). 

Other claims of widespread IUU fishing in the region, often referring to or implicating tuna fishing, 

have been made since that time, 

195 but are rarely accompanied by any solid evidence, and it is hard 

to judge their accuracy or credibility. It is also likely that the incidence of IUU fishing has declined 

further since the time of the global study - the last year covered by the study (2003) precedes the 

establishment of the WCPFC, which has since instituted a range of MCS measures to combat IUU 

fishing (e.g. Register of Fishing Vessels (RFV), IUU vessel lists for vessels not in good standing, 

extensive VMS coverage of high seas (and EEZs by FFA), very high recent observer coverage, recent 

high seas closures etc., as well as MCS activities at the national and sub-regional level). There are 

also ongoing international efforts within the Kobe process and amongst RFMOs to harmonize IUU 

vessel listing procedures and to cross-list IUU vessels. 196 The range of measures currently continues 

to evolve and is complex, as to be expected for multi-gear/multi-species fishery operating over a 

vast area, and accounting for half of the global catch of primary market species of tuna. This 

complexity will continue to be refined but solid progress has been made in the brief operational 

period of this the newest RFMO, relative to other RFMOs (e.g. IOTC, ICCAT) which have been 

established for a much longer period of time. 

IUU fishing by purse seine vessels in the region is, on the basis of available evidence, not believed to 

be significant, with a high level of compliance by vessels operating in the region, and with most of 

the catch taken in the EEZs of coastal states, notably since the closure of large areas of high seas 

pockets in 2010. Longline tuna vessels, on the other hand, are seen as representing a problem in the 

197 

WCPO, as they take most of their catch on the high seas and may not be licensed under access 

agreements or be on the WCPFC RFV, as required. The extent of IUU fishing by longline vessels is not 

known, but attempts are underway to regulate that fishery in the same way as the purse seine 

fishery is regulated (i.e. though a longline vessel days scheme (LVDS) currently under trial). 

The WCPFC IUU vessel list for 2011 (Dec 2010) includes only five vessels, two of which were listed 

during 2010; none of the listed vessels are purse seine vessels. There has been no trend in the 

number of vessels on this list, which has been uniformly low (6 in Dec 2007, 3 in Dec 2008). One view 

194 See FFA Regional Monitoring, Control and Surveillance Strategy, 2010-2015, p.1 (http://www.ffa.int/mcsstrategy). 

195 At the opening of the 2011 Forum Investment Summit (7 September 2011), NZ Foreign Minister, Murray 

McCully claimed that USD 400 million is being lost “in the Pacific” to illegal fishing activities every year. 

196 WCFPC 2011f. 

197 Banks 2011. 




is that this low number of listed vessels does not allow any conclusions to be drawn about the 

presence of IUU-listed vessels in the WCPO, and that WCPFC and its members should adopt the FAO 

Port State Measures Agreement (PSMA) 198 to more effectively combat IUU fishing. 199 This is under 

consideration by WCPFC. 

IUU issues for WCPO purse seine vessels now involve regulating and reporting associated with 

management measures (e.g. FAD closures, high seas closures, misreporting of position, incomplete 

200 

catch reporting, under-reporting of landings and possibly selling catch though IUU channels). 

These issues are believed to occur mostly within EEZs, with the exception of high seas closures, and 

are likely to have reduced with the introduction of 100% observer coverage. 

In the case of PNG, there are felt to be only minor incidences of IUU tuna fishing – NFA has strong 

MCS systems in place, there is high compliance in most cases, and NFA is confident it effectively 

polices its fisheries. The PNG Defence Force (PNGDF) operates a fleet of four patrol vessels, and 

under an MoU with NFA, undertakes 600 sea patrol days each year. NFA also has plans to contract 

aerial elements of the PNGDF to patrol the extremities of the EEZ for around 140 days per year. 

The major IUU risks to PNG are similar to those at regional scale and include FAD fishing during 

closed seasons, misreporting of vessel position relative to archipelagic waters/12 nm territorial seas 

limit, EEZ and high seas, under-reporting of catch if landing outside PNG, and selling catch through 

201 

IUU channels by foreign vessels without a CA (see Section 5.6). There have been some instances 

of fishing inside 12 nm (territorial seas) and use of prohibited fishing methods (shark fishing for fins). 

There may be with minor issues with incursions of foreign pump boat (tuna handline) vessels on the 

north-western border, and issues in the so-called ‘Dogleg’ (PNG EEZ extension into the Arafura Sea) 

where foreign squid, gillnet and trawl fisheries may be operating illegally. 

PNG currently has no National Plan of Action (NPOA) for IUU fishing, and it is not seen as priority for 

development at present, since NFA deems “the MCS measures and tools introduced to combat, 

202 

deter and eliminate IUU fishing .. form the basis of an NPOA by default”. Similarly, there is no 

regional plan (RPOA IUU) for the WCPO. 

In summary, the incidence of IUU fishing in the WCPO purse seine fishery is believed, on the basis of 

available evidence, to be low, and has likely decreased post-derogation (March 2008) as a result of 

more active management controls, a range of MCS strengthening activities and more effective 

harmonization at regional and national level. 

5.5.2 Evaluation of monitoring, control and surveillance (MCS) capabilities for combating IUU 

fishing 

Increasing MCS capacity at the regional, sub-regional and national levels has been developing over 

many years. The current MCS capability is well developed, and briefly evaluated here at regional, 

sub-regional and national level, in the case of PNG. 

198 FAO Agreement on Port State Measures to prevent, deter and eliminate illegal, unreported and unregulated 

fishing (PSMA). Adopted November 2009 by FAO. 

199 MRAG 2010. 

200 Banks 2011. 

201 Banks 2011. 

202 NFA Managing Director, S. Pokajam, pers. comm., September 2011. 




i) Regional MCS capabilities 

It is appropriate here to consider WCPFC and FFA capability together, as FFA activity has been 

ongoing for some years, covers much of the WCPO and has recently been guided by the adoption of 

a joint MCS strategy in March 2010, much of which is applicable beyond the FFA area of 

competence. WCPFC activity, on the other hand, has been more recent, with the Commission only 

established in 2004. Both organizations work together in the delivery of services to members, and 

FFA acts as an MCS service provider to WCPC in some cases (e.g. regional VMS). 

Fishing vessel registers 

Vessel register lists are used by both organizations as a key verification tool. The WCPFC Convention 

establishes a requirement 203 for each member to maintain a record of fishing vessels that are 

authorized to fish in the Convention area beyond that member’s area of national jurisdiction and, in 

turn, for the WCPFC to maintain its own central database of these national submissions. 204 Subject 

to additions, deletions, updates and any withdrawal of authorization, this WCPFC Register of Fishing 

Vessels (RFV) acts as a verification tool to ensure that fishing vessels are legally operating in the 

Convention Area. Information on authorized vessels, in accordance with Annex 4 of the Convention, 

is provided by members (CCMs) annually and includes all vessel types involved in the fishery (e.g. 

fishing vessels, carriers, bunker vessels). There are currently 5,948 vessels on the RFV, including 723 

purse seine vessels. WCPFC is now implementing a direct entry scheme for CCMs to enter their own 

data on the RFV. Although good progress has been made with the RFV in its short history, WCPFC 8 

is set to adopt a US-proposed set of standards, specifications and procedures (SSPs) for the RFV “to 

ensure that information in the RFV is complete, up-to-date, accurate, unambiguous and comparable 

across flag states, and to make the maintenance of the RFV cost-effective for CCMs and the 

Secretariat”. 205 

Vessels wishing to fish in the EEZs of FFA members must be in good standing on the Regional Vessel 

Register maintained by FFA, and must also register on the WCPFC RFV. The RVR applies for one year, 

and registration can now be sought at any time during the year. Vessel data are supplied by fishing 

companies rather than CCMs. This registration is in addition to any national registration and 

licensing requirements. As of 1-10 October 2011, there were 1,327 vessels in good standing on the 

FFA RVR, with 260 of those purse seine vessels. 206 

There is some duplication between the two systems, and some issues with vessel names. There are 

some pending changes in international standards for registration, with the Lloyd’s Fair Play Universal 

Vessel Indicator (UVI) soon to be adopted by FFA (and IATTC), with some changes then becoming 

necessary to the existing WCPFC Convention Annex 4 requirements. In VMS terms there is also a 

need for matching vessel tracking agreement forms (VTAF), and as catch documentation schemes 

are developed, an urgent need to harmonize information requirements, especially if universal catch 

documentation schemes (CDS) are to be adopted. 

Vessel monitoring systems 

The Commission’s VMS, which became operational in April 2009, monitors vessels which fish 

exclusively on the high seas, in two or more EEZs, or in one EEZ and on the high seas. At the end of 

2009, over 2,000 vessels were on the system and that number is currently 2,381 with VTAF received, 

203 WCFPC 2000; Convention Art. 22, paras 4, 5 and 6. 

204 WCPFC 2000; Convention Art 22, para 7; CMM 2004-01 and subsequent revisions. 

205 WCPFC 2011h. 

206 




1,516 activated by WCPFC at the time of TCC7, and 1,633 listed by FFA VMS. 207 The Commission VMS 

currently does not officially receive data from waters under national jurisdiction, but negotiations 

are in the final stages for these data to be accessible to WCPFC, so that WCPFC can more effectively 

manage its VMS system. Currently less than half of vessels reporting directly are ‘visible’ on the 

Commission VMS, although all data in-zone and outside the Convention Area are collected by the 

system and are potentially available now. Application of the VMS to national waters of CCMs is in 

the final stage of approval (WCPFC7-2010-DP/27 Rev.1) which will then allow CCMs to exercise this 

option. It is expected that most CCMs will do so, thus enhancing the effectiveness of the Commission 

VMS, and greater transparency between systems . 

The FFA VMS monitors fishing activity in the EEZs of member countries, including archipelagic 

waters, and has been operational for many years. FFA currently serves as the service provider for the 

Commission VMS. 

Full compatibility between the two systems and their SSPs (Standards, Specifications and 

Procedures) have yet to be achieved, with the following issues outstanding: 

• Spatial coverage issues – overlap in areas covered by the two schemes. Whilst there is no 

formal agreement on joint management of these overlap areas, measures for crossendorsement 

were recently agreed. There are also ongoing issues with unresolved maritime 

boundaries in some cases 

• Accessibility (data quarantine) – it is currently not possible for WCPFC to view all the data, 

particularly within EEZs, for a large number of vessels which are on both systems. This issue 

is being addressed, as noted above. 

Coverage by both systems is believed to be high and compliance generally good. The two VMS 

systems, working in tandem at regional level, have become an effective MSC compliance tool. It is 

also important to note that the PNA VMS will be operational early in 2012, and will largely subsume 

national VMS activity for PNA members, including monitoring of archipelagic and territorial waters 

of members. Establishment of this system will involve migration of the existing PNG system to an 

operations centre in Madang, PNG. 

WCPFC IUU list 

Vessels found to have been involved in IUU fishing, where such violations can be proven, are placed 

on an IUU list maintained by WCPFC. Members are prohibited from engaging in fishing activity or 

transactions with such vessels, which serves as a strong disincentive to engage in IUU activity. As 

noted in Section 5.5.1, there are currently only five vessels on that list. 

The FFA RVR also incorporates a list of vessels in good standing - the issue of licences to fish in EEZs 

or authorization to fish beyond the EEZ cannot occur unless a vessel is on that list. 

Regional observer programme 

Observers deployed onboard fishing vessels primarily have a data collection role relating to fishing 

operations and catch composition, but also can provide compliance information in terms of verifying 

fishing information relative to the requirements of management measures in place (e.g. FAD 

closures). 

207 




The role of the WCPC Regional Observer Programme (ROP), 208 under the hybrid model adopted for 

observer coverage, is mainly coordination of the national level implementation, with observers 

recruited at national level, trained through the joint efforts of FFA, SPC and WCPFC using regionallybased 

trainers and facilities and deployed at national level. As of the beginning of 2010, 100% 

observer coverage of purse seine fishing and 5% of longline fishing was required, following a twomonth 

rehearsal during the first FAD closure (August-September 2009). This level of coverage was 

largely achieved to give a level of coverage unique in RFMOs, with an estimated 1,751 observer trips 

carried out in 2010. For the area of RFMO overlap (IATTC/WCPFC) in the east, cross-endorsement of 

observers was achieved. 

Implementation of a programme on this scale – over 400 observers were involved – has not been 

without some issues. Apart from relatively isolated issues of coercion and bribery, the main issues 

have arisen post-deployment, namely debriefing of the observers (as an integral part of data quality 

control) and entering the very large amount of data collected by the observer cadre for subsequent 

compilation and analysis. There are currently only 4-5 debriefers, whereas possibly 90 of these might 

ideally be required. Approximately 2.5 data entry technician days are required for each observer 

trip, and initially, there was neither manpower resources or associated funding to support the level 

of activity needed. This has improved, with additional data entry staff recruited at SPC and funding 

provided, but large backlogs still exist for some countries (e.g. PNG). An audit of the authorized 

observer programmes in the region has commenced (14/23 programmes audited) 

209 and ROP data 

management reviewed. 210 Just over 32% of the 2010 observer data had been processed as at 4 July 

2011, but this level will have increased considerably since that time. 

High seas boarding and inspection 

As part of a process to deter fishing violations on the high seas, registered CCM patrol vessels can 

board and inspect flag state vessels of other CCMs. In 2010, 34 inspections of vessels were 

undertaken on the high seas of the CA by vessels of USA, French Polynesia and Chinese Taipei, with 

twelve alleged infractions. By August 2011, 103 inspections of vessels had been undertaken in 2011, 

211 

with eight alleged infractions. 

A low level of aerial surveillance is also undertaken in the region but no details are available of this 

activity and numbers of infractions detected. 

Compliance monitoring scheme 

Adopted in 2010 as CMM 2010-03, the Compliance Monitoring Scheme (CMS) allows a detailed 

analysis of individual CCM’s compliance with Commission CMMs, largely based in information 

provided in the Part 2 Annual <strong>Report</strong>s provided to TCC. The process will be further refined, but 

provides information on compliance with 23 CMMs during 2010. 

ii) 

Sub-regional MCS capabilities 

PNA is committed to starting a PNA VMS system, which will be based on the PNG national VMS and 

with the control office in Madang. It is expected to be operational in early 2012, and may commence 

initially with monitoring of the FSMA vessels. This system, as noted, will cover all waters of PNA 

members, including archipelagic waters. 

208 WCPFC 2011c. 

209 WCPFC 2011c; Attachment 1. 

210 Williams 2011. 

211 WCPFC 2011d. 




PNA also has plans to run an observer agency, possibly commencing with FSMA vessels and likely to 

have an important role in Chain of Custody certification for the MSC PNA skipjack fishery 


iii) National MCS capabilities (PNG) 

As noted, PNG has very strong systems in place, primarily through activities of the NFA MCS group, 

but also in cooperation with the PNGDF (sea patrols, at-sea boarding) and certain Provincial 

Governments, to which some MCS functions are delegated (i.e. port monitoring, local compliance). 

PNG’s MCS system includes: 

• Observers (over 200 well trained observers, achieving 100% purse seine coverage, lower for 

other fisheries (e.g. longline)). 

• VMS (sophisticated system with full coverage of licensed vessels; system to become webbased; 

also used to validate fishing days under the VDS). 

• Logsheets and licensing (high compliance by licensed fishing vessels). 

• Port state controls (FVODF, landing verification of domestic vessels). 

• Port inspection/sampling (tuna vessels sampled in main ports for size, species composition). 

MSC capabilities to combat IUU fishing at all levels are believed to be well developed, and are 

summarized in Table 5.5 below. Improvements are planned at each level, with the major 

weaknesses to be addressed including greater compatibility of WCPFC and FFA VMS systems, 

refinement to CMS, introduction of CDS, and building capacity at national level (PNG is an 

exception). 




Table 5.5 

Summary of MSC activity at regional, sub-regional and national (PNG) level in the WCPO 

Activity Regional Sub-regional National (PNG) 

Vessel lists 

RFV/authorization to fish 

FFA Regional Register 

(high coverage, long history) 

IUU lists Established in 2007 Verify good standing on RR 

VMS 

Observer 

programmes 

Regulation of 

transhipment 

Compliance 

monitoring 

Boarding and 

inspection 

EU-IUU 

Traceability 

scheme 

Port state 

measures 

Regional VMS for high seas 

(since 2008) 

Regional Observer Program 

Transhipment observer 

coverage 100%; t/s reports 

CMS since 2010; to be 

further refined 

High seas scheme in place 

Not applicable - CDS not yet 

developed 

CDS not yet developed 

PSMA not in force, but parts 

in Convention 

1 Findings of recent review conducted by Banks 2011. 

FFA Regional VMS; PNA VMS 

in development 

USMLT, FSMA, support 

national and WCPFC 

Transhipment in designated 

ports, observed. 

No formal process, but 

regional MCS strategy 

National naval vessels/patrol 

boats 

Not applicable at the regional 

level 

National level; 

CoC under PNA skipjack MSC 

certification 

Implemented at member 

level 

Licensing database; 

Support RFV/ FFA RR 

National list and regional 

lists 

PNG VMS in place; soon to 

merge with PNA VMS 

Large national observer 

programme; training for 

other programmes; high 

coverage 

At-sea transhipment for 

small vessels in archipelagic 

waters; observed 

Voluntary checks 

PNGDF patrol vessels 

Good EU-IUU system in 

place 1 

Good system in place 1 

Good system in place 1 

5.5.3 Implementation of the EU- IUU Regulation 1005/2008 

The IUU Regulation (EC) N o 1005/2008 of September 2008 and subsequent related legislation, 212 for 

third countries exporting marine products to the EU and EU exporting to third countries, was 

implemented to provide assurance that such products are compliant with existing international, 

regional and national conservation and management measures and do not stem from IUU fishing 

activities. The Regulation requires that countries ensure that conservation and management 

measures are correctly implemented, and MCS arrangements put in place to combat IUU fishing. 

The Regulation came in to force at the beginning of 2010. Various national authorities notified their 

Competent Authorities (CA) to the EC, in accordance with Art 20(1) and (2) of the IUU Regulation. 

The National Fisheries Authority (NFA) of PNG was notified to the Commission as the PNG CA and 

this was accepted on 4 February 2010. 

The CAs are competent for: 

1) registration of vessels under the flag of the flag state; 

2) granting, suspending and withdrawing licences to the fishing vessels of the flag state; 

3) attesting the veracity of the information providde in the catch certificates referred to in Art. 12 

and for validating such certificates; 

212 See 

http://ec.europa.eu/fisheries/cfp/illegal_fishing/index_en.htm 




4) the control and enforcement of laws, regulation and conservation and management measures 

which must be complied with by fishing vessels; 

5) the verification of catch certificates to assist the Competent Authorities of Member States 

through the administration cooperation referred to in Article 20(4); 

6) the communication of a sample form of the catch certificate in accordance with the specimen 

in Annex II; and 

7) updating the notifications. 

Other countries with established EU-IUU CAs with tuna vessels fishing in the WCPO include Australia, 

China, Ecuador, El Salvador, Fiji, Indonesia, Japan, Korea (Republic of), New Zealand, Philippines, 

Solomon Islands, Taiwan, Thailand, USA, Vietnam and the French Pacific territories. Most PICs have 

yet notified CA status (e.g. Vanuatu, Marshall Islands). 

PNG Catch Certification Scheme (PNG CCS) 

The main element of the Regulation for PNG is the European Union (EU) IUU Catch Certification 

Scheme (CCS), procedures for the implementation of which are prescribed in the Regulation. 

The implementation and functioning of the PNG CCS and related mechanisms ensuring compliance 

with conservation and management measures was recently reviewed in March 2011 as part of a 

Country Evaluation <strong>Report</strong> (CER), to assist third countries with the implementation of the regulation, 

and largely informs this section of the report, along with first-hand examination of NFA/ACU 

systems. 213 

The CCS is implemented within the Audit Certification Unit of NFA, with catch documentation 

officers in two ports (Lae, Madang), with a small amount of CCS work done in Port Moresby for 

longliners, and an additional port office planned for Wewak. Completing the CC is aided by a very 

detailed verification checklist and appears to work efficiently. There is currently no cost recovery for 

this service. 

IUU-certified tuna exports to the EU from PNG generally occur in the following ways: 

• For PNG flag (domestic) vessels, mostly based in Lae, exports are accompanied by a 

validated Catch Certificate (CC) from the PNG CA. 

• For locally-based foreign (chartered) vessels landing into PNG plants for processing, exports 

are accompanied by a validated CC from the flag state CA (in most cases, BFAR, Philippines) 

and a processed statement (Annex 4). 

• Foreign-owned, foreign-based vessels (e.g. bilateral access agreement vessels) landing catch 

into PNG plants for processing exports are accompanied by a CC from the flag state (mostly 

Philippines) and a processed statement. 

• Less frequently, imports from carriers associated with chartered vessels, landed into the 

Philippines and brought back to PNG for processing, and subsequently exported are 

accompanied by a CC form the flag state and a processed statement (Annex 4). 

NFA has further supported the process by requiring the submission of Freezer Vessel Fish Origin 

Declaration Forms (FVODF), with detailed procedures explained on the reverse of the form. 

213 Banks 2011. 




For domestic vessels, the CCs, FVFODF, logbooks and transhipment documents are submitted 

electronically to NFA, cross-checked against VMS records, and then sent back to the processors after 

stamping and authorization. 179 CCs for domestic vessels were processed in 2010. The CER PNG 

concluded for domestic vessels that “the functionality of the CC validation and verification system 

was thorough, with no opportunity for manipulation” but that the system could be improved by 

shared access to the electronic system amongst NFA Head Quarters, NFA port offices and industry, 

which is now occurring. 

For chartered (locally-based foreign) vessels, the CCs are provided by the relevant CA, usually BFAR 

Philippines, but could also include Taiwanese and Chinese CAs. 214 The PNG FVFODF, vessel logbooks 

and the EU CC are sent to the appropriate BFAR office (usually General Santos). After processing and 

dispatch to PNG, the Annex 4 form and validated CCs are submitted to the NFA port office for 

endorsement. 

Delays are often encountered in the Philippines (up to 40 days) due to lack of, or unavailability of 

BFAR staff. Any delegation of powers to NFA for catch certification of chartered vessels would be 

rejected by the EC, which has explained to the two parties that in the spirit of UNCLOS and the FAO 

IPOA-IUU and in line with the IUU Regulation, it is the responsibility of the flag state to validate the 

CC. 

Foreign vessels with a national CA landing into PNG could include, inter alia, Korea, Japan, USA, but 

mostly involve Philippines bilateral access vessels which fish almost exclusively in the PNG EEZ and 

unload a portion of catch to PNG plants for processing and subsequent export. For such vessels, the 

procedures are the same as for chartered vessels. Similar delays may also occur whilst awaiting the 

validated CC from the flag state (Philippines). 

Some questions have been raised over landings from Vanuatu flag vessels which have no flag state 

notification under the IUU Regulation. However, such fish is reportedly processed as frozen cooked 

loins and exported to the US and Thailand. The PNG CA will need to ensure that adequate audit 

processes are in place to ensure that the increasing number of locally-based processing plants follow 

traceability of their products and ensure that non-qualifying EU IUU Regulation fish is not exported 

to the EU. 

A potential concern for the EU is that product may be laundered through SE Asia, using umbrella or 

dummy CCs, and find its way to the EU market, but this has yet to be demonstrated in the case of 

PNG-origin fish. There also concerns with carrier imports and exports, where, though minor in scale, 

there is an opportunity for additional fish to be added as transfers may not be fully monitored by 

215 

BFAR. 

With the PNG CCS now nearing its second year of operation, the review considers that the 

introduction of the PNG CCS has not adversely affected the volume of exports. 216 Industry feels that 

whilst some adjustment was needed, the CCS has not been too onerous, and that the verification 

and validation processes have complemented existing MCS activities. Whilst arriving at a positive 

assessment of the functionality of the PNG CCS, the PNG Country Evaluation <strong>Report</strong> (CER) made a 

series of recommendations for future action, including: 

214 There is also one locally-based foreign/chartered Japan vessel (Wakabu 8), but it is not confirmed if fish 

from this vessel is certified for EU export. 

215 Banks 2011. 

216 Banks 2011. 




• Development of a web-based system providing access to all documentation by all parties 

(Note: NFA is committed to the development of such a system). 

• Greater role for NFA port offices in processing CCs, and investigation of a cost recovery 

system for the CCS, possibly linked to SPS certification duties. 

• PNG to require PNG-registered vessels to land only in to designated PNG ports and prohibit 

direct landings into third countries; also consider transfer to PNG flag. 

• Assure full traceability through the use of original CCs only, with detailed records kept of all 

CC components in mother CCs, and FVFODFs to accompany mother CCs. 

• Establish a dialogue box in the web-based system to report and share experiences when 

exporting to EU member states. 

An EU-IUU inspection of the PNG system was scheduled by DG MARE for mid-November 2011, but 

the results of this were not available as of mid-December 2011. 

5.6 SPS Regulations 

5.6.1 Background 

For countries to be eligible to export fisheries products to the European Union, rigorous Sanitary and 

Phytosanitary (SPS), or food safety measures must be in place to ensure a level of hygiene and safety 

associated with market access. 217 Countries need to be placed on a list of countries deemed eligible 

to export to the EU, with the principal eligibility criterion as follows: 

• A Competent Authority (CA) must exist which is responsible for official controls throughout 

the food production chain. The CA must be in the public sector and must generally have 

218 

regulatory authority for fish and fisheries inspection. It must be empowered, structured 

and resourced to implement effective inspection and guarantee credible certification of the 

relevant hygiene conditions. The country itself must have EU-standard food safety legislation 

in place. 

• National authorities must guarantee that relevant hygiene and public health requirements 

are met. These relate to fishing vessels, landing sites, processing plants and operational 

processes (e.g. freezing, storage). 

The EU Directorate General for Health and Consumer Protection (DG SANCO) is responsible for food 

safety in the EU, and through its Food and Veterinary Office (FVO), requires the adoption of agreed 

inspection, examination and certification procedures. Exporting companies in qualifying countries 

need to apply to their CA for permission to export. 

DG SANCO carries out periodic inspections of national CAs, and also maintains a regularly updated 

list of approved processing plants (onshore processing plants and freezer vessels, including industrial 

fishing vessels and carrier vessels). 219 

Only three PICs are on the DG SANCO list for fishery products (PNG, Fiji and Solomon Islands). Most 

of the distant water fishing nations (e.g. China, EU, Japan, Korea, Philippines, Taiwan, USA) and 

neighbouring metropolitan countries (e.g. Australia, NZ, Indonesia) are also listed. Most of the 

217 Doherty 2008:6-8. 

218 Doherty 2008:11. 

219 See https://webgate.ec.europa.eu/sanco/traces/output/listsPerCountry_en.htm# 




WCPFC CNMs have CAs (e.g. Belize, El Salvador, Ecuador, Indonesia, Mexico, Panama, Senegal, 

Vietnam). In contrast, most PICs with a purse seine fleet have not established a CA (e.g. FSM, 

Kiribati, RMI, Tuvalu, and Vanuatu). Most of the Vanuatu fleet fishes in PNG under the FSMA, and is 

discussed further in Section 5.6.2). 

5.6.2 PNG Competent Authority 

The National Fisheries Authority (NFA) has been PNG’s Competent Authority since 2002, and has 

been implementing the EU SPS regulation since that time. A large Audit and Certification Unit (ACU) 

within the MCS Group carries out this work, with 11 qualified staff, including port coordinators in 

three locations (Lae, Madang and Port Moresby) with another position soon to be established in 

Wewak. 

The ACU has developed formal PNG Standards for Fisheries Products (PNGSFFP 2009), a Procedures 

Manual (2011), Quality Systems Manual and a Monitoring Plan which is reviewed annually, and is 

well advanced in implementing EU Export Protocols. 220 Fifty-three vessels and four processing plants 

(including PNG’s existing three canned tuna processing operations – RD Tuna Canners, Frabelle and 

South Seas Tuna Corporation) 221 are currently on the DG SANCO list for PNG. 

Freezer carrier vessels are inspected annually, but are not required to implement Hazard Analysis 

and Critical Control Point Analysis (HACCP) systems, in contrast to fishing vessels, which as primary 

producers, are required to do so. 

As at 16 February 2011, of the 53 vessels listed for PNG on DG SANCO’s list for SPS compliance, 30 

were fishing vessels, covering 8 domestic flag (PNG) vessels, 16 Philippines flag (chartered) vessels, 4 

Vanuatu and 2 China flag (chartered) vessels. In addition, 23 freezer carrier vessels (all Philippines 

flag) were also on the list. 

PNG has a Memorandum of Understanding (MoU) with the Philippines, applicable under Regulation 

(EC) 854/2004 (Art 15), such that the CA of the Philippines delegates authority to NFA for inspection 

and certification of Philippine vessels for compliance with EU SPS requirements. 

222 Hence, the large 

number of Philippine chartered vessels are inspected and audited by PNG’s ACU each year. There 

are three chartered vessels from Taiwan on Taiwan’s SANCO list which could presumably supply SPScompliant 

fish to PNG processors under the global sourcing derogation. However, the four Vanuatu 

flag vessels operating under charter arrangements technically cannot supply SPS-compliant fish, 

despite anomalously being on PNG’s SANCO list. In Vanuatu’s case, there is currently no CA 

established, nor an MOU in place with PNG authorizing PNG to inspect vessels on Vanuatu’s 

behalf. 223 There is also a Japan-flag chartered vessel (and also on Japan’s DG SANCO list) unloading 

part of its catch to one PNG plant. Catch certificates are received from Japan, and the Annex 4 

document is processed by the relevant port office for any product destined for export to EU markets. 

220 A. Kango, NFA, pers. comm., September-December 2011; documents available at NFA. 

221 The forth is Frescomar in Lae, a value-adding plant associated with Frabelle, which processes mostly 

raw/frozen fish and is not covered by this review. 

222 da Silva 2009. 

223 When queried about this issue, NFA’s ACU officials were unsure why the Vanuatu and Chinese were 

included in PNG’s DG SANCO list, but confirmed that fish from these vessels would not qualify for EU market 

access. 




In the case of processing plants, Regulations (EC) 853/2004 and 854/2004 need to be followed with 

respect to microbial criteria, temperature control, cold chain compliance, sampling and analysis, and 

hygiene controls, in addition to the application of HACCP measures. 

A traceability system from capture to packing, in accordance with Regulation (EC) 178/2002 also 

needs to be in place. In PNG, this is provided for in the PNG SFFP 2009. SPS traceability looks at the 

hygiene and temperature controls from vessels to plant, and includes special product coding of fish 

from landing to final destination. This allows tracing to product origin if there is a complaint (e.g. DG 

SANCO Rapid Alert System for Food and Feed (RASFF) notifications). Traceability along the chain of 

custody can be evaluated by logbooks, the Freezer Vessel Fish Origin Declaration Form (FVFODF), 

transhipment forms, observer data, port sampling forms, export documentation and VMS reports. 

Validated catch certificates (CCs) and Processed Statements (Annex 4) for year 2010 are filed 

electronically in NFA headquarters in Port Moresby, but from 2011 are filed in respective port 

offices. 

Landing sites and cold storage are also subject to EU SPS regulations. 

In March 2007, the EU Food and Veterinary Office (FVO) carried out an inspection/audit of the PNG 

CA (i.e. NFA) system. 224 At that time, 6 plants and 41 freezer vessels (including some Vanuatu flag 

vessels) were on the list of establishments authorized to export to the EU. The FVO reported 

numerous deficiencies in CA activities and authorized establishments. A follow-up FVO mission in 

February 2008 assessed what corrective action had been taken by the CA, according to PNG’s 

remedial action plan lodged following the 2007 FVO inspection and audit. 225 With some problems 

persisting, the CA was then required to de-list two of the three tuna processors (RD Tuna Canners 

and SSTC). Some fishing vessels were also removed from the list, as EU indicated Vanuatu vessels do 

not meet the EU rules because of the flagging arrangements and should not be DG SANCO listed by 

PNG, but rather the flag state, which in this case does not have CA status. 

Following the de-listing of RD Tuna Canners, exports of canned tuna to the EU almost halved during 

2008, and had not fully recovered by the end of 2009. After adequately addressing various SPS 

compliance issues, RD Tuna Canners was re-listed in mid-2009, and SSTC in April 2010. By 2010, 

export volumes to the EU returned to levels prior to the de-listing of the plant. 

Assistance was provided to the CA in January-February 2009 under the FFA Export, Inspection and 

226 

Certification Project. The consultant reported that, with implementation of a new regulatory 

verification system, the ACU was well placed to strengthen official controls over the industry and to 

comply with EU export requirements, but there was a need to strengthen HACCP application and 

verification, and to improve the current MoU with the Philippines CA. 

There is no FVO inspection for PNG scheduled for 2011, nor is one confirmed for 2012 at this 

point. 

227 There appear to have been no potential triggers for scheduling an FVO inspection, such as a 

marked increase in the number of rapid alerts but this is worth closer examination. Table 5.6 lists, 

for the period 2006 to 30/9/2011, the number of fish and fish product (FP) rapid alerts listed DG 

SANCO’s Rapid Alert System for Food and Feed (RASSF) portal for a range of countries with tuna 

processing plants, focusing on canned and frozen cooked loins (HS 1604 products). 228 Several 

countries have had no alerts posted during this time, despite considerable quantities of canned tuna 

224 DG SANCO 2007. 

225 DG SANCO 2008. 

226 da Silva 2009. 

227 Interview, DG SANCO representative, Brussels, July 2011. 

228 RASSF 2011; https://webgate.ec.europa.eu/rasff-window/portal 




and cooked loins being exported to the EU (e.g. Ghana, Mauritius). Overall, alerts for canned tuna 

and cooked loins are relatively rare for most countries, with most alerts relating to raw tuna product 

rather than processed product (canned, cooked loins). 

PNG had experienced only one alert until January 2008 (histamine in canned tuna) but has seen a 

moderate number of relevant alerts in recent times. During 2011, two cooked loin alerts (histamine, 

rupture of cold chain), and one canned tuna alert (histamine) have been registered, which gives 

some cause for concern, although most alerts occurred beyond PNG, due to rupture of the cold 

chain on transit vessels. 

The CA is assuming that an FVO inspection is likely in 2012 and is preparing accordingly, with 

continuing efforts to address issues raised during the 2007 and 2008 FVO visits, as well as the FFA 

Project Assistance visit in 2009. 

Table 5.6 

Number of RASSF alerts for fish and fish products from selected EU exporting countries, 

2006 – September 2011 

Country 

All Fish and 

Fish Products 

Number of Rapid Alerts Total Exports to EU - 2006-2010 

(approx. mt) 

Canned tuna Cooked loins 

Canned tuna Cooked loins 

Ecuador 24 1 1 (histamine) 360,000 174,000 

Ghana 0 0 0 136,000 14,000 

Indonesia 70 3 (histamine) 0 50,000 300 

Mauritius 0 0 0 197,000 49,000 

Papua 

New 

7 2 (histamine) 2 68,249 7,000 

Guinea 

Philippines 16 5 (3 histamine) 0 252,000 2,200 

Seychelles 5 2 ( 1 histamine) 0 235,000 640 

Solomon 

Islands 

0 0 0 85 10,300 

Spain 310 5 0 n/a n/a 

Thailand 72 22 (16 histamine) 0 344,000 50,000 

Sources: RASFF 2011, Eurostat 2011 

Availability of ‘originating’ fish and SPS/IUU compliant global sourcing fish to PNG 

Prior to March 2008, fish caught by PNG-flag vessels (in PNG waters or beyond), and fish caught in 

archipelagic waters by vessels of any flag, qualified as wholly originating fish eligible for processing in 

certified plants for subsequent export to the EU, provided the vessels were also SPS-compliant. With 

most fish caught by domestic vessels in archipelagic waters anyway, the amount of originating fish 

available in 2007 was approximately 70,000 mt (see Section 3.1). This was higher than the amount of 

fish being processed at the time (60,000 mt) and thus adequate, in theory, to meet existing raw 

material needs at the time, subject to seasonal variations in supply and existing supply 

contracts/arrangements of fishing firms. However, raw material supply volumes at this level (i.e. 




60,000 mt) were insufficient to meet demand to support marked expansion in processing capacity. 

There has been an increase in AW catch since 2008, to almost 100,000 mt in 2009, but with the 

advent of the global sourcing derogation and with PNG’s total processing volume remaining stable, it 

has not been necessary to fully utilize this increase in PNG processing plants. The AW catch 

decreased in 2010, despite the record catch in PNG waters. 

Following derogation from the RoO (post March 2008), fish could potentially be obtained from a 

wider range of vessels (i.e. any vessels irrespective of vessel flag/ownership or fishing area). 

However, in practice, since vessels are also required to be SPS-compliant to access EU markets, this 

requirement may have initially served as a constraint, as many purse seine vessels operating in 

WCPO waters did not have SPS certificates. A comparison undertaken in March 2010 between the 

number of purse seiners on the FFA Regional Vessel Register and the number of vessels on both the 

vessel register and the DG SANCO list, found that only 39% of vessels were SPS compliant. Only 

three fleets were in a position to supply significant quantities of EU-compliant fish for processing and 

export to the EU market – Philippines (15/18 vessels), Korea (26/27) and Taiwan (17/33). Smaller 

volumes were also potentially available from China (3/12), Ecuador (7/7), El Salvador (2/2), Spain 

(4/4) and New Zealand (2/4). 229 Japan (1/36), USA (5/37) and Vanuatu (0/19, with no SPS or IUU CA) 

were not in a position to supply significant amounts of raw materials for the EU market. Central to 

estimating how much fish would actually be available to supply EU markets would be an 

understanding of vessels’ existing supply contracts/arrangements with trading firms and processing 

firms, including own plants for those vessels belonging to vertically integrated companies with tuna 

processing interests (refer to Section 6 for further discussion). 

An update of this analysis (October 2011) is presented in Table 5.7, as well as 2010 catch data and 

volumes/destinations of fish for processing. It is clear that there has been a marked increase in the 

number of vessels on DG SANCO lists (i.e. an additional 48 vessels) and, in turn, the volume of SPScompliant 

fish potentially available for processing (Table 5.7). Over 50% of the 263 purse seine 

vessels listed in the FFA Regional Vessel Register are now on DG SANCO lists compared to 39% in 

2010. Apart from the more complete listing of Philippine vessels on the FFA register, the biggest 

change is seen in Japanese vessels, with 26/36 vessels now listed, compared to only one vessel in 

2010. 

As noted above, it is unknown what volume of fish caught by these vessels might be available to PNG 

processors in light of existing supply contracts and arrangements, but a rough proportional estimate 

from Table 5.7 suggests that as much as 760,000 mt of compliant fish was potentially available from 

the 2010 purse seine production. Countries with the largest quantities of SPS-compliant fish at this 

time include Japan, Korea, Taiwan and PNG/Philippines. The Japanese catch is largely committed to 

domestic use (canning, katsuobushi), with small (but increasing) increasing volumes sent to Thailand 

230 

(~20,000 mt). Much of the Korean catch (277,000 mt in 2010) is currently supplied to its own 

domestic canneries (120,000 mt), and to Thailand (90,000 mt), while Taiwan is the largest supplier to 

Thailand of all fleets operating in the WCPO (198,000 mt, accounting for nearly all of its production). 

The catch of Philippines domestic vessels mostly goes to its own canneries. PNG-based Philippines 

and Philippines distant water vessels fishing in PNG supply processing operations in both Philippines 

and PNG. 

Indonesian catch is not included in the table, since Indonesian vessels are not required to be on the 

FFA RVR. However, it should be noted that Indonesia is a major WCPO producer and existing 

229 Oceanic Développement 2010. 





exporter of processed product to the EU. Any increase in the supply of compliant Indonesian fish is 

likely to be taken up by its own processing capacity, which is currently expanding once again. 231 

Thailand and Philippines are currently major suppliers of processed tuna to the EU and would need 

to secure their SPS-compliant raw material supplies from the WCPO. 232 The issue of the destination 

of WCPO SPS-compliant fish now and in the future, and diversion of raw material from existing 

markets, is discussed further in Section 6. 

From early 2010 onwards, with the advent of the EU-IUU Fishing Regulation, vessels supplying fish to 

the EU needed to be compliant with this regulation, as well as SPS requirements. Most countries 

who are potential suppliers of raw material are on the list of states with EU-IUU Competent 

Authorities (see previous section). However Vanuatu remains outside and unable to supply 

compliant fish in EU-IUU terms, until such time that it establishes CAs for both EU-SPS and IUU 

Fishing Regulations. It remains a major supplier of fish to Thailand. Most of the VU vessels in the 

fleet (13 FSMA vessels, 3 of the 6 foreign bilateral) are relatively modern and as such, likely 

technically compliant. Vanuatu are in the process of establishing the SPS CA within the Fisheries 

Department, with designated officers and systems in place, with an audit and training scheduled for 

October, but have encountered delays with enabling legislation. 

233 Similarly, Vanuatu expressed in 

the early stages of the entry into force of the EU IUU Regulation its desire to meet the requirements 

of the EU IUU Regulation, but there still appear to be issues with Vanuatu’s open shipping registry. 234 

RMI, also with an open registry, has similar issues in trying to establish an EU-IUU CA and may be 

able to establish an additional Government-run fishing vessel registry operating separately from the 

shipping registry. 

Based on the favourable experience of PNG and other countries with implementing the EU-IUU 

Regulation, this may not be an issue for most countries, but certainly will bring no more fish to the 

table, underlining the fact that SPS compliance is a more significant issue than the IUU Fishing 

Regulation for potential suppliers (and processors) to address. 

231 Hamilton et al., 2011. 

232 Estimated 200,000 mt in 2009. 

233 H. Walton, FFA, pers. comm., September 2011 

234 L. Rodwell, FFA, pers. comm., September 2011 




Table 5.7 Comparison between numbers of active purse seine vessels and the number of those 

vessels on the SANCO lists, 2010-2011 

Flag state 

No. of PS Vessels 2010 

FFA RR FFA RR + DG SANCO WCPO PS 

Catch a 

3/2010 11/2011 3/2010 11/2011 (mt) 

SPS- 

Compliant 

Catch b 

(mt) 

China 12 12 3 3 c 58,000 14,500 

Product 

destination/ 

approx. volume – 

(mt) 

Thailand (17,000) 

China 

Ecuador 7 7 7 7 10,000 10,000 EPO 

El Salvador 2 2 2 2 11,000 11,000 Thailand, EPO 

FSM 7 7 0 0 22,000 0 Thailand (18,000) 

Japan 36 36 1 26 250,000 180,500 

Japan (180,000) 


Korea 27 27 26 27 277,000 277,000 

Korea (120,000) 


Marshalls 6 10 0 0 57,000 0 


Marshalls (8,000) 

NZ 4 4 2 1 24,000 6,000 

American Samoa 

Thailand 

PNG flag 4 d 10 3 7 30,000 21,000 PNG 

PNG (30,000) 

Philippines 

18 d 45 f 15 40 g 135,000 130,000 Philippines (70,000) 

(DW) 


Kiribati 4 6 0 0 26,000 0 EPO, Thailand 

Vanuatu 19 d 16 0 0 c 130,000 0 Thailand (90,000) 

Solomon Is. 6 5 3 5 13,000 13,000 Thailand (13,000) 

Spain 4 4 4 4 29,000 29,000 Spain/EPO 

Taiwan 33 34 17 11 210,000 64,000 Thailand (198,000) 

Tuvalu 1 1 0 0 11,000 0 

USA 37 35 5 0 269,000 0 

TOTAL 227 261 88 130 e 1,562,000 759,000 

a 

b 

c 

d 

Bracket figure where 2010 data not available; 2009 data used instead. 

Indicative estimates only, based on % of fleet on DG SANCO list. 

Anomalous listing of 2 Chinese and 4 Vanuatu flag vessels on PNG SANCO; assumed non-SPS compliant. 

Inconsistent listing protocol on FFA RVR between 3/2010 and 11/2011 for these categories. 

e 

Excludes 2 Chinese, 4 Vanuatu flag vessels on PNG SANCO list. 

f 

Includes 2 vessels fishing in Solomon Islands and one duplicate on RVR. 

g 

Includes 15 vessels certified in PNG under MoU with Philippines. 

Sources: RASFF 2011, WCPFC SC7 2011, Hamilton et al. 2011 (updated). 

ADDITIONAL NOTES: 

Philippines domestic and Indonesian purse seine vessels are not included. 

More detailed analysis of raw material flows is provided in Section 6. 

EPO = Eastern Pacific Ocean processing facilities. 



American Samoa 




5.7 Impact of RoO Derogation on Tuna Resource Management 

5.7.1 Stock sustainability 

The current situation with tuna stocks in the WCPO is generally positive and remains essentially 

unchanged since the advent of the RoO derogation. Two of the three main stocks harvested (skipjack 

and yellowfin), which supply over 95% of raw material for processing, continue within sustainable 

limits, now and most likely into the future. This is despite primary management measures failing to 

limit effort, associated with the growth of the purse seine fleet during much of the previous decade. 

However, most of this growth happened prior to derogation and the total WCPO catch has been 

relatively stable since 2007. The third stock, bigeye, was subject to overfishing at the introduction of 

derogation. This has not changed, and the stock is not yet demonstrated to be in an overfished state, 

despite being very close to that state, due to recent high levels of recruitment. The reduction of 

fishing mortality to MSY levels is possible under certain scenarios, albeit probably unlikely, and 

longline catch has been substantially reduced. However, overfishing will continue unless purse seine 

effort can be reduced in accordance with CMM 2008-01, supported by recent calls to reduce fishing 

mortality by 32% from 2006-2009 average levels. It would also assist if VDS purse seine limits are 

adequately enforced. 

The current measures will be strengthened under an enhanced WCPFC CMM, extended to include 

skipjack and revised on the basis of current scientific advice, but this will now not occur until 2012. 

An important recent development has been the approval of the MSC PNA skipjack certification in 

December 2011. Reference points and harvest controls will be introduced as key management 

measures in the near future which further strengthen management in the PNA area and beyond. 

Provided compliance with these existing and new management measures is good, and current effort 

levels in the fisheries (purse seine and longline) can be reduced, the impact of derogation on stock 

sustainability in the future is likely to continue to be minimal. Holding the line on effort controls will 

be crucial. With little increase in total catch since 2008, and some indications that effort restrictions 

will maintain the two most important stocks at sustainable level, the likelihood of success appears 

good. If so, and with raw material supply becoming limiting, attention will turn to the heightened 

competition for available fish, leading into discussion of the succeeding areas of potential impact. 

5.7.2 IUU fishing 

MCS capability at the regional, sub-regional and national levels (in the case of PNG) is well developed 

and continues to strengthen. There is little evidence of IUU fishing in the purse seine fishery, with 

most issues relating to in-zone infractions. The situation with longline IUU fishing is less clear, but it 

is anticipated to occur at a higher, but as yet unquantified, level. The RoO Derogation would be 

expected to have little impact on longline IUU fishing, as little or no raw material from this fishery is 

processed for EU export. 

As tighter MCS controls are introduced and enhanced management measures adopted, pressure to 

infringe, particularly with respect to closed areas (high seas closures, which may be extended 

beyond the existing HSPs), time period closures and fishing method restrictions (FAD closures, which 

may also be lengthened), may increase. This additional pressure on MCS schemes will be 

exacerbated by increased pressure on relatively static raw material supplies, as noted in Section 

5.7.1. The existing MCS framework might be strengthened by commitment to the FAO PSMA and 

other initiatives (e.g. development of an RPOA-IUU), although others believe that measures already 

in place ensure similar outcomes. 




Provided MSC activities continue to be well resourced, and well coordinated across the region, both 

within EEZs and on the high seas, according to agreed strategies, any impacts of derogation on IUU 

fishing should be limited. 

5.7.3 SPS compliance 

The advent of derogation from RoO has so far had little or no direct impact on PNG processors, with 

adequate supplies of originating fish to meet prior and current needs (i.e. catches in archipelagic 

waters have been close to 100,000 mt in recent years). To date, the requirement for SPS compliance 

of this supply has not been a constraint, with PNG as CA for PNG-flag vessels, and with an MoU 

existing with Philippines to certify chartered Philippine vessels which catch originating fish 

(archipelagic waters). Despite this, processors have chosen to source a very limited amount of fish 

under global sourcing since the derogation came into effect for reasons of convenience and 

company sourcing policy. In the short to medium term (next five years), as additional processing 

plants come on stream as expected (see Section 3.2.2), global sourcing will need to be exercised to a 

much greater degree, for new plants to acquire sufficient SPS-compliant raw material for processing 

and export to the EU. 

In terms of sourcing SPS-compliant raw material, the issue may not be that the number of vessels 

with SPS certification is inadequate, given that in 2010, over 750,000 mt of WCPO fish was likely 

caught by vessels with SPS certificates (Table 5.7). Rather, the issue may be the availability of SPS 

compliant fish to PNG processors. Global sourcing notwithstanding, there is no incentive for fleets 

to offload to PNG plants (existing or potential plants) if those vessels/fleets have no links to PNG 

onshore investments (e.g. most vessels fishing under bilateral access agreement or unless better 

prices are offered for raw material). Even where vessels do have links to onshore plants, significant 

quantities of fish are transhipped and exported, rather than offloaded, which is consistent with the 

conditions of existing agreements. 235 

PNG plants are unlikely to offer higher prices than BKK, even with proximity-related reduced freight 

costs, given the tight margins pertaining to PNG-based processing, as a result of high operational 

costs. It is also likely that most vessels have long standing supply arrangements with traders, 

processors and domestic plants (e.g. Japan, Korea, Philippines, Taiwan) and it seems certain that 

PNG will need to consider arrangements to guarantee supply to proposed future plants (e.g. 

compulsory offloading a portion of catch by licensed vessels, in combination with preference given 

to licensing SPS-compliant vessels to fish in PNG waters). The present requirements for vessels 

fishing under existing arrangements to supply fish to onshore plants may need to be tightened up or 

enforced. These options are further discussed in Section 6.3.2. 

A second SPS-related issue for PNG relates to the status of its own Competent Authority. Issues with 

the CA itself, as well as certification of vessels and the plants, were identified by the FVO in 2007 and 

2008, which was further examined in 2009. While best efforts have been made to rectify the 

deficiencies identified, it is still not certain if full compliance has been achieved. There has been a 

recent increase in rapid alerts for EU tuna imports from PNG which will raise renewed questions 

about the compliance of vessels/plants and the CA itself. PNG cannot afford to be de-listed, with the 

EU the primary market for PNG canned tuna, and increasingly cooked loin exports. 

In future, the work load and expectations of the CA associated with increasing number of plants and 

unloading vessels could increase substantially, as these new investments will primarily focus on the 

235 The majority in the case of one plant. 




EU market, as a result of PNG’s preferential market access to the EU and global sourcing. If there is a 

risk of processing plants or the CA being de-listed, investor confidence for new investments will be 

shaken, with a severe impact on existing processors, as noted. The CA has anticipated this to some 

extent, with plans to double the number of auditors by next year. Furthermore, additional 

equipment, enhanced training and capacity building, upgrading systems/processes etc. will all be 

required. At present, there is no cost recovery associated with ACU activity - this may need to be 

considered with some urgency. 

In balance, if PNG is to take full advantage of global sourcing for the proposed expansion of onshore 

processing capacity, the main challenge may be to maintain CA status and to expand current 

capability to deal with increased demands for services. 

6 IMPACTS ON THE EU MARKET AND EU-CENTRED INDUSTRY 

6.1 EU Retail Market for Canned Tuna 

Canned tuna is a mass commodity and the EU is the largest market in the world. 236 It is one of the 

main forms of seafood consumed by residents of the EU27. Principal EU markets for canned tuna are 

Spain (with 21% share of the EU market), Italy (20%), the UK (19%), France (19%) and Germany 

(9%). 237 Together these five markets account for almost 90 % of EU27 consumption. 

The southern European market can be typified by consumption of canned yellowfin tuna in olive oil 

(especially Italy and Spain), where domestic production has historically supplied domestic 

consumption. 

238 Import-dependent northern Europe can be typified by consumption of skipjack 

canned in brine or vegetable oil (e.g. the UK and Germany). France straddles this differentiation as 

an ‘intermediate’ canned tuna market in terms of product quality. France produces so-called ‘valueadded’ 

items domestically (e.g. canned tuna salads) but imports ‘standard’ and ‘raw pack’ canned 

tuna, 239 historically from West Africa since the 1950s. The species difference in these cultures of 

consumption is commercially important. Larger, slower growing and less abundant yellowfin tuna 

fetch a higher ex-vessel price than skipjack. 240 This is because canned yellowfin is considered a 

premium product in the EU compared to canned skipjack and also because larger fish are prized by 

processors as they result in higher recovery rates of useable meat when butchered (see below). 

Across the world, the vast majority of canned tuna sales take place in the retail market. The 

‘supermarket revolution’ of the 1980s is conceived as constituting a shift in market power from 

branded-manufacturing firms to large retailers in the UK and USA, followed by a similar tendency in 

Western Europe, Japan and elsewhere in the 1990s. Today, retail channels for canned tuna in all 

241 

principal EU markets are dominated by supermarkets. The top-five supermarkets in six principal 

236 McGowan and McClain 2010: 5. 

237 Valsecchi 2007: 143. 

238 The Italian market has become increasingly penetrated by imports from Spain (see Section 6.3). 

239 The French canned tuna market is split between standard product where the fish is cooked both before 

canning and in the can (for the purposes of sterilisation) and ‘raw pack’ or thon au naturel which is only cooked 

once, in the can. 

240 For example, on the Bangkok market, imported frozen whole yellowfin was 25% more expensive than 

frozen skipjack between January 2000 and July 2011 (FFA database). 

241 ‘Supermarkets’ as defined here captures several categories of grocery retailer. There are many categories of 

grocery retailer in the EU (e.g. hypermarkets, superstores, hard discounters, etc) and the US (e.g. dollar stores, 

warehouse clubs, supercentres, etc), but the generic term ‘supermarkets’ is used to refer to all of these in this 

report. 




EU markets control an average of around 69% of grocery sales (Table 6.1). 242 While there is a general 

tendency to concentration in grocery retail markets across the EU, there are significant differences 

in degree. There is especially high concentration of grocery sales (including canned tuna) in the 

Netherlands, the UK, France and Germany. In Italy and Spain grocery market sales are rather more 

dispersed, albeit also intensifying in concentration over time. This has important implications for 

branded canned tuna firms as they have lost their prior position of market leadership to 

supermarkets. 243 This dynamic is probably the most important source of competitive market 

pressure on canned tuna firms. 

The market share of canned tuna brands is also concentrated, but it does not necessarily mirror 

levels of supermarket concentration. In the Netherlands, the UK and France one ‘category leader’ 

244 

brand and one ‘follower’ brand dominate the market (Table 6.1). The limitation to two major 

brands is partly a result of supermarkets wanting to ensure that shelf space is available to sell their 

‘private label’ (or own-brand) product. 245 Germany is very different and the market there can be 

typified as being highly competitive on price and dominated by private label canned tuna. Combined 

with the focus on lower priced, basic quality skipjack tuna, this makes Germany a less attractive 

market for high cost producers (i.e. Spain and Itlay). This explains why the market has historically 

been supplied by non-branded contract processors who are highly competitive on price. In this 

context, it is important to re-iterate that Germany is the world’s main importer of PNG canned 

tuna. 246 

The situation is different in Italy and Spain where a number of brands are chasing the lead brand. 

But there are also important differences between Italy and Spain. Private label canned tuna has a 

very high market penetration in the Spanish retail market (around 65% market share). This places 

considerable competitive pressure on Spanish branded-firms as they compete with each other and 

the supermarkets for an increased market share. All indications are that private label will deepen its 

hold in this market. But more fragmented grocery retail markets and several competing canned tuna 

brands does not result in a universal tendency of highly competitive pricing. In Italy, canned tuna in 

oil is the 7 th most important category in retail sales value across all shelf-stable food. 247 One brand – 

Rio Mare – leads this market with around 36%. Other branded players price their product at points 

around Rio Mare rather than pushing the general price down. This, and the fact that the main 

product sold is higher priced canned yellowfin tuna, makes Italy perhaps the most attractive canned 

tuna market in the EU. Notably, PNG barely exports any canned tuna to Italy or Spain, although it 

does supply Spain with tuna loins (see Section 6.2). 

242 The data in Table 6.1 are purely indicative. The market is in constant flux and relative market share regularly 

shifts between players. Nonetheless, the main trends depicted here are broadly indicative. 

243 Krampe 2000; Lischewsky 1998, 2000, 2004; Schapira 2009; Spruyt 2000. 

244 See Section 6.5 for an overview of the main firms engaged in principal EU markets. 

245 Anzer 1998; Spruyt 2000; Trovamala 2004; Valsecchi 2006. ‘Private label’ is a term used mainly in US 

industry. A predominant term in Europe is ‘supermarket own-brand’ or ‘own-label’. We use the US term 

because of its parsimony. 

246 See market share trends in Table 6.17 below. 

247 Schapira 2009: 306. 




Table 6.1 Corporate concentration and private label penetration in principal EU canned tuna 

markets 

Country 

Top 2 canned tuna brands 

share of market 

(2010 or nearest year) 

Top 5 supermarkets share of 

total grocery market 


Private label as % 

canned tuna sales 


Netherlands 66% 90% 16% 

UK 60% 81% 38% 

France 41% 80% 47% 

Germany 4% 79% 95% 

Spain 20% 45% 65% 

Italy 46% 40% 18% 

Belgium 30% No data 55% 

Average level of 

concentration 

38% 69% 48% 

Sources: Camping (forthcoming); Hamilton et al. (2011); Schapiro 2009; FRUCOM, pers. comm., 2011. 

In most principal markets, big supermarkets compete horizontally for market share by attempting to 

attract consumers with lower prices for ‘core category’ products such as canned tuna. The resulting 

competitive pricing of private label canned tuna is eating into the profit margins achieved by 

supermarkets for this product. 248 This, and competition between brands, translates into downward 

price pressure on contract processors of canned tuna as well as on boat owners, including the 

European Distant Water (tuna purse seine) Fleet (EU DWF). 

Combined, this set of dynamics functions as a high barrier to entry for new firms looking to launch 

competing brands of canned tuna on EU markets. The main way that new firms enter the EU market 

is by buying (and hoping to expand) existing brands. Given the high costs involved – such as Thai 

Union’s recent purchase of three European canned tuna brands (with two factories and a handful of 

249 

fishing vessels) at € 680 million – this broadly excludes smaller players from entering the EU 

branded-market, except as contract suppliers of finished product. 

Eastern Europe, especially Poland, has the most probable growth potential in terms of volume sales, 

albeit from a very low baseline: The average per capita consumption of the most recent 12 acceding 

countries to the EU (i.e. the EU27 compared to the EU15) was only 0.22kg in 2008, but it is 

250 

growing. 

248 Schapira 2009; Valsecchi 2010. 

249 CIMB 2010. 

250 Commere 2009. 




6.2 EU Market for Pre-cooked Frozen Tuna Loins 

Tuna ‘loins’ are the butchered and cleaned meat of the fish. Loining is the most labour intensive 

process in the processing node of the value chain in canned tuna, constituting around 80% of the 

labour process in a canned tuna factory. ‘Loining plants’ are based in relatively low-cost locations of 

production in the international division of labour and export pre-cooked, frozen vacuum packed 

loins to factories in higher-cost locations, such as Spain, where they are defrosted and inserted into 

the canned tuna production process. Figure 6.1 sketches a generic value chain in canned tuna. EU 

trade preferences are critical to the logic of loining (i.e. they enter duty free under (Interim) EPAs 

with the ACP and under the GSP+ scheme). The EU loin market will continue as long as EU-based 

canneries are protected by a 24% MFN duty. In addition, in the face of competition from imported 

canned tuna, EU-based processors may need to rely more heavily on imported loins in order to limit 

costs and remain competitive. 

Figure 6.1 Schematic value chain in canned tuna 

In contrast to the EU market for imported canned tuna, the volume of loin imports continued to 

grow in 2009 with a slight 7% drop-off in 2010 (Figure 6.2). In the ten-year period 2001-10, the 

volume of the EU imported loin market doubled, while in value terms it grew by two and a half 

times. The proportionally higher growth in value over volume reflects the very low prices of raw 

material in 1999 and through the early 2000s. (See Section 6.7.4 below for a discussion of the impact 

of the derogation on PNG’s share of the EU import market for tuna loins.) 

Spain is the largest importer of loins, followed by Italy. France is in decline and Portugal has only 

ever been a relatively minor market. This is because Spain is the largest producer of canned tuna in 

the EU by a very large margin (see discussion and data in Section 6.3.1 on intra-EU production and 

trade). However, unlike France and Italy which rely predominantly on imported loins, Spain still uses 

whole round tuna as its main source of tuna raw material supply. 251 

251 Campling et al. 2007: 317-18. 




Figure 6.2 EU import of pre-cooked tuna loins in value and volume, 2001-2010 

450 

400 

350 

300 

250 

Value (in € million) 

200 

150 

100 

Volume (in 1,000mt) 

50 

- 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Source: Eurostat 2011 

Figure 6.3 EU import of pre-cooked tuna loins by major destination market, 2001-10 (in tonnes) 

70,000 

60,000 

Tonnes 

50,000 

40,000 

30,000 

Spain 

Italy 

France 

Portugal 

20,000 

10,000 

- 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 





EU loin imports were based on a more geographically dispersed supply base in 2010 compared to 

2001. In 2001, the top-five 252 provided 92% in volume of supply, whereas in 2010 the top-five 253 

provided only 75%. This is due to growing absolute EU demand and an increased number of 

countries exporting this product. Despite this fluctuation, Ecuador’s relative share declined by only 

1% – from 37% in 2001 to 36% in 2010 – but gained a 45% increase in absolute supply. Ecuador is the 

clearly the leading supplier of tuna loins to the EU by a large margin. However, processors based 

there suffered from a declining availability of raw material in 2010. 254 

It is also important to note the growth in EU loin supply from Thailand, from 2% in 2001 to 12% in 

2010 (Table 6.2). This is despite its exports normally only being eligible for the standard GSP at a 

tariff rate of 20.5%. Thailand’s increase in relative and absolute market share can be explained by an 

EU tariff quota on loins where 15,000 mt can be imported annually at only 6% duty as long as they 

are destined for canning by EU-based processors. 255 The ‘loin quota’ is provided to ensure that EUbased 

processors receive an adequate supply of raw material, but without jeopardising the 

competitiveness of these processors through full exposure to low-cost imports. 256 

Combined, the four Latin American GSP+ countries listed in Table 6.2 had a 53% share of the extra- 

EU loins market in 2010, and the six African IEPA countries had a 24% market share. This indicates 

that these two types of preferential trading arrangements are working (i.e. promoting exports to the 

EU in this product category). 

Excluding PNG and the Solomon Islands, the five Asia-Pacific countries exported a total volume of 

17,600 mt of loins in 2010, a total 17% share of the EU market. This indicates two important issues. 

First, the GSP+ and IEPA countries are unable to supply the full volume requirement of EU-based 

processors. Second, that the ‘loin quota’ is functioning to mainly benefit Thailand and China (Table 

6.2). 

252 Ecuador, Colombia, Kenya, Côte d’Ivoire and Seychelles. 

253 Ecuador, Mauritius, Thailand, Guatemala and El Salvador. 


255 The most recent autonomous quota dealing with tuna loins applies from 1 January 2010 to 31 December 

2012 and is only available to one HS Code for loins (1604 1416) (Council Regulation 1062/2009). These quotas 

have been necessary for EU-based processors due to insufficient supply of loins from third country suppliers 

that benefit from duty-free preferences, i.e. ACP, EBA and GSP+ countries; Campling 2008b. 

256 Damanaki 2011. 




Table 6.2 Extra-EU27 tuna ‘loin’ imports by major supplier and selected GSP+ and ACP countries (all in tonnes unless otherwise specified) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

LATIN AMERICA 

Ecuador 17,418 25,323 37,506 22,825 23,388 32,737 28,109 35,953 43,916 37,109 

Guatemala 0 139 174 4,108 6,587 2,353 0 1,468 5,736 8,659 

El Salvador - - 527 8,654 13,206 10,945 14,753 12,362 13,106 7,587 

Colombia 13,270 12,769 14,914 12,942 14,469 9,992 7,431 6,041 2,744 1,938 

AFRICA 

Mauritius 15 107 30 - 1,527 8,161 8,315 10,805 11,738 12,503 

Kenya 6,937 2,508 3,042 7,510 9,233 6,963 7,923 4,825 3,152 3,686 

Côte d’Ivoire 2,611 2,408 1,603 246 130 257 202 555 403 3,428 

Madagascar - - - - - - 24 - - 3,138 

Ghana 120 504 847 1,413 1,919 2,027 2,869 2,946 3,376 2,700 

Seychelles 2,526 3,094 1,536 470 567 0 481 124 0 34 

ASIA-PACIFIC 

Thailand 827 2,753 6,507 3,428 5,032 4,705 8,644 7,298 16,919 12,064 

China - - - - 26 - 731 2,064 4,452 5,341 

PNG - - - - 338 1,413 1,051 658 1,766 2,485 

Solomon Islands - - - 1,057 2,128 1,851 2,100 2,227 2,176 1,925 

Vietnam 48 75 24 27 98 77 490 206 351 83 

Indonesia 229 55 513 257 203 158 - - 120 61 

Philippines 98 23 113 55 641 1,649 244 120 70 55 

Others 2,389 8,858 12,896 5543 1,700 1,704 1,690 1,226 2,107 1,589 

Total Extra-EU 46,486 58,616 80,232 68,534 81,189 84,993 85,054 88,880 112,132 104,384 

PNG as % of extra-EU 0.00% 0.00% 0.00% 0.00% 0.42% 1.66% 1.01% 0.63% 1.58% 2.38% 

Note: Data based on official imports under two HS codes for tuna ‘loins’ (1604 1416; 1604 1931). 

Source: DG Trade extraction from Eurostat (5 August 2011). 




6.3 Major Suppliers of the EU Canned Tuna Market 

There are two sets of suppliers of canned tuna to EU markets: EU-based producers (including intra- 

EU trade) and third countries (i.e. extra-EU imports). Table 6.3 details the split between these two 

sources over the period 2000-08. Domestic EU production data are only available via the FAO to 

2008, 257 but note that in 2009 and 2010 the extra-EU import market declined in volume (see below). 

Table 6.3 

EU market volume – domestic production vs. extra-EU imports (in tonnes unless 

otherwise specified) 

2000 2002 2004 2006 2008 

Extra-EU import 289,421 350,691 376,998 422,590 424,148 

EU production 345,974 394,756 360,689 324,500 370,471 

Total EU market volume 635,395 745,447 737,687 747,090 794,619 

Extra-EU import as % total 46% 47% 51% 57% 53% 

EU production as % total 54% 53% 49% 43% 47% 

Sources: Fish StatJ for EU production and EuroStat for Extra-EU imports 2011. 

6.4 Intra-EU 

The production of canned tuna and related ‘ambient’ 258 (or ‘shelf-stable’) tuna products within the 

EU is dependent upon tariff protection against relatively low cost imports. The EU MFN tariff of 24% 

on canned tuna has been very successful in supporting processors, especially in Spain, which 

overtook Italy in 1993 onwards to be the leading EU-based producer of canned tuna (see Figure 6.4). 

Over the last ten-year period for which data are available (1999-2008), Spain accounted for 65.1% of 

total EU production, rising from a 60% share in 1999 to 72% in 2008. Italy declined from 22% to 15% 

over the same period, as did France, from 13% to 10%. Portugal’s share remained relatively stable at 

5% and 4%. 

Spain hit a record high of canned tuna production in 2008 at 267,280 mt and has been the second 

largest producer of canned tuna in the world since 2004 when it overtook the United States. 

259 As 

we have seen, the import of tuna loins is a major component in the production strategies of EUbased 

firms due to relatively high labour costs. It would, however, be too simplistic to assume that 

Spanish processors will necessarily follow the tendency in France and Italy where loins are the 

dominant input into the production process. This is because, in Spain at least, the labour process is 

competitive (albeit behind tariff and non-tariff barriers) when butchering large sized whole round 

fish (e.g. yellowfin over 10kg). Labour productivity – as measured by high recovery rates – is higher 

when butchering larger sized fish (the average recovery rate for a large yellowfin is 48.5%, but it can 

reportedly go up to 51%, whereas for skipjack it ranges from 37-40%). 260 In short, for some Spanish 

processors, an optimum production strategy (i.e. the balance between labour time/cost and fish 

yield) is to fully process big yellowfin and import skipjack loins. This supply is supported by the 

Spanish distant water tuna fleet being the main supplier of raw tuna to the Spanish canning industry. 

257 ANFACO estimates that its members produce around 350,000 mt of canned seafood per annum. Around 

70% (or 245,000 mt) of ANFACO members’ production is canned tuna. FIS 2011. 

258 Such as tuna packed in glass jars or plastic pots. 

259 Globefish 2010: 72-3. Thailand first emerged as the world’s largest producer in 1991 and has consistently 

been the leader since 2001. On the Thailand and US industries, see Campling et al. 2007; Hamilton et al. 2011. 





Several Spanish firms own subsidiary loin processing facilities in Latin American GSP+ countries and 

rely on this arrangement for their import of loins (i.e. Calvo, Jealsa, Garavilla, Salica; see Table 6.9 

below). Some even also use these processing facilities to produce canned tuna for the EU market 

(i.e. Garavilla, Salica). However, in 2010, Spain-based processors faced a decline in locally-landed 

whole round tuna, with a reported 40% drop in supply at the main ports of Galicia. 261 If this trend 

continues the import of loins will become all the more important in future, at least for skipjack. This 

may mean that, unless an alternative steady source of duty-free supply can be secured from IEPA 

and/ or GSP+ countries, the ‘loin quota’ will require expansion when renegotiated in 2012. 

Figure 6.4 EU27 production of prepared or preserved tuna, 1976-2008 

300,000 

250,000 

200,000 


150,000 

Spain 

100,000 

Italy 

50,000 

France 

0 

Portugal 

Source: FAO Fish StatJ (accessed 19 October 2011) 

Aside from supplying domestic markets, EU-based processors export to other EU markets. 262 As is 

clear from Table 6.4, Spain is again the most important player here. Its intra-EU trade in canned tuna 

was worth € 355 million in 2010. France’s intra-EU exports have declined rapidly over the last 

decade, while Italy’s and Portugal’s have stagnated (Table 6.4). In fact, Spain’s principal intra-EU 

export markets are also the main EU-based processors: Italy, France and Portugal (see Table 6.11 

below). In other words, increased Spanish production appears to have displaced production in other 

EU member states. 

261 Murias 2011b. 

262 See Section 6.7.3 for exports by destination and a discussion on possible trade diversion generated by 

PNG’s derogation. 




Table 6.4 Intra-EU export of canned tuna in value and volume, bi-annual 2002-2010 

2002 2004 2006 2008 2010 

Spain Volume (mt) 60,072 63,426 70,336 75,895 101,989 

Value (mn €) 218.6 213.9 268.7 334.4 355.0 

Italy Volume (mt) 27,833 16,443 16,475 13,030 13,434 

Value (mn €) 60.6 48.4 63.4 67.7 67.4 

France Volume (mt) 26,323 22,056 13,858 14,780 6,398 

Value (mn €) 75.5 63.4 45.9 59.2 27.0 

Portugal Volume (mt) 3,951 3,567 3,910 2,556 2,516 

Value (mn €) 18.5 17.8 20.6 17.5 15.0 

Source: Eurostat (author extraction, 31 October 2011) using HS codes 1604 1411; 1604 1418; 1604 1939; 1604 2070. Note 

that 1604 1411 is the code for canned tuna in oil (which could be yellowfin in olive oil in Italy or skipjack in vegetable oil in 

France) and 1604 1418 is the code for canned tuna not in vegetable oil (e.g. brine). 1604 1939 is the code for non-skipjack 

canned bonito which is included here as the data indicate that some exporters and/or customs authorities sometimes mix 

this up with canned tuna, but it does not have any real effect on trends in the data as the volumes traded under this code 

are low. The specific intended utilisation of the final code (1604 2070) is to classify tuna salads and similar products, but, 

again, this is not applied universally. 

Export markets outside of the EU are relatively small (Table 6.5). For Spain, at € 35.4 million in 2010, 

extra-EU exports were only 10% in value of intra-EU exports. The majority of Spain’s extra-EU 

exports are to two autonomous communities outside of the Spanish mainland – the Canary Islands 

and Melilla (59% in value in 2010). Extra-EU export markets are proportionately more important to 

the export profile of Italy-based firms, totalling 31% in value (or € 21.1 million) of intra-EU exports in 

2010. Extra-EU trade by France and Portugal is insignificant. 

Table 6.5 

Extra-EU export of canned tuna by top-3 destination market, bi-annual 2002-2010 (in 

million Euro unless otherwise stated) 

Exporter Destination 2002 2004 2006 2008 2010 

Spain Canary Is. 2.7 2.8 4.0 5.6 10.5 

Melilla 8.2 5.1 6.4 8.6 10.4 

Algeria 3.4 4.0 4.5 4.0 4.2 

Top 3 as % total 36% 23% 51% 49% 71% 

Extra-EU total 40.2 30.0 29.4 36.8 35.4 

Italy Saudi Arabia 5.1 4.4 6.0 5.3 6.2 

Switzerland 1.3 1.6 2.4 2.7 3.5 

Croatia 1.6 1.8 2.4 2.8 2.2 



Portugal Angola 0.9 0.9 2.3 3.0 2.3 

Mozambique 0.2 0.3 0.6 1.2 1.1 

USA 1.2 0.4 0.8 1.1 0.9 



France N. Caledonia 0.4 0.4 0.3 0.2 0.3 

Algeria 0.2 0.3 0.6 0.9 0.2 

Fr. Polynesia 0.6 0.4 0.3 0.3 0.3 



Source: Eurostat (author extraction, 31 October 2011) using HS codes 1604 1411; 1604 1418; 1604 1939; 1604 2070. 




6.4.1 Extra-EU 

Table 6.6 details extra-EU canned tuna import data for the last ten years (2001-10). 263 The extra-EU 

canned tuna import market must be understood in the context of a combination of low-cost sites of 

production and tariff preferences. Duty free access to the EU under Cotonou (and subsequent IEPAs) 

or the GSP+ scheme is not by itself enough to: 

1. boost exports – other factors such as availability of (EU compliant) raw material supply and 

domestic political and/ or economic dynamics and crises are also important considerations, 

as the declines of Guatemala, Cote d’Ivoire, Madagascar and Senegal illustrate (Table 6.6); or 

2. block low-cost, high-volume operations – as the continued importance of Thailand and the 

Philippines shows. 

The extra-EU canned tuna import market has become slightly more concentrated among the top-five 

supplying countries over the last decade. In 2001, the Top-five 264 provided 65% in volume; in 2010 

the Top-five 265 share had increased to 70%. Combined, the six African IEPA countries had a 53% 

market share in 2001 which had dropped to 39% in 2010 – a 14% relative decline (albeit of a growing 

absolute market) despite continued duty-free access. This relative decline can largely be accounted 

for by a 15% increase in share over the same period by only three countries: Ecuador (from 8% to 

17%), Thailand (from 15% to 18%), and the Philippines (from 9% to 12%). 

Excluding PNG and the Solomon Islands, the five Asia-Pacific countries in Table 6.6 exported a total 

volume of 127,933 mt of canned tuna in 2010, accounting for a 34% share of the EU market. This 

indicates that these countries are competitive despite the standard GSP import tariff of 20.5% on 

canned tuna. Thailand has consistently been a lead supplier since the 1980s and over the last ten 

year period has emerged as the extra-EU import market leader. In a similar upward trend, the 

Philippines has gone from 5 th to 3 rd position. The main emerging player in Southeast Asia is Vietnam, 

which has grown without a substantial domestic supply of tuna. However, raw material supply 

appears to be an increasingly important dynamic in limiting production in some Asian countries. The 

drop off in Philippines exports in 2010 from a high point in 2008/9 was due primarily to insufficient 

supply of tuna. 

The decline in Ecuador’s exports in 2009 and 2010 after its rapid rise since 2001 is also explained by 

266 

factories cutting production due to reduced supply of fish at a commercially competitive price. 

The origin of this issue is low catches/supply (i.e. processors based in Ecuador are producing below 

maximum capacity because of low supply and its associated upward impact on price). 

263 For more detail on extra-EU suppliers see Section 6.6. 

264 Seychelles, Thailand, Côte d’Ivoire, Ghana and Philippines. 

265 Thailand, Ecuador, Philippines, Mauritius and Seychelles. 





Table 6.6 Extra-EU27 canned tuna imports by major supplier and selected GSP+ and ACP countries (all in tonnes unless otherwise specified), 2001-10 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

LATIN AMERICA 

Ecuador 24,486 29,279 37,306 46,138 62,489 63,259 75,860 93,843 64,028 62,128 

Colombia 6,191 7,011 7,811 10,454 11,559 8,839 11,964 17,859 12,746 11,260 

AFRICA 

Mauritius 26,754 27,097 28,513 35,066 31,004 37,896 40,599 38,121 35,527 44,300 

Seychelles 46,098 57,627 52,342 54,297 57,298 60,599 47,670 43,157 42,318 40,984 

Ghana 28,858 25,238 30,948 28,987 29,298 25,735 26,660 29,501 26,471 27,387 

Ivory Coast 41,252 53,509 42,721 49,537 30,848 32,298 37,157 37,745 31,752 26,363 

Madagascar 11,201 15,390 22,955 21,410 19,790 17,648 13,072 7,218 7,336 6,806 

ASIA-PACIFIC 

Thailand 45,371 57,272 63,255 52,008 65,353 84,431 67,592 63,000 62,258 66,200 

Philippines 27,816 41,555 42,183 34,048 40,073 46,138 51,852 54,467 54,044 45,360 

PNG 2,787 5,912 12,588 13,904 18,217 12,719 16,299 8,739 14,626 15,867 

Indonesia 9,522 11,740 9,762 8,466 12,401 8,378 10,893 9,804 11,056 9,019 

Vietnam 1,479 2,443 2,419 1,690 3,229 6,557 7,862 8,298 7,631 6,898 

China 56 83 90 154 38 235 347 718 601 455 

Solomon Islands - - - - 19 - - 67 18 - 

Others 21,460 16,536 19,767 20,838 21,671 17,858 18,397 11,610 7,929 7,821 

Total Extra-EU 27 293,330 350,691 372,661 376,998 403,286 422,590 426,222 424,148 378,339 370,847 

PNG as % of Total Extra-EU 

Imports 

0.95% 1.69% 3.38% 3.69% 4.52% 3.01% 3.82% 2.06% 3.87% 4.28% 

Note: data based on official imports under four HS codes for canned tuna (1604 1411; 1604 1418; 1604 1939; 1604 2070). 

Source: DG Trade extraction from Eurostat (05 August 2011). 




6.5 EU Distant Water Fleet (EU DWF) 

The EU Distant Water (tuna purse seine) Fleet (EU DWF) is one of the largest of this gear-type in the 

world. 267 In 2007, EU-based firms controlled an estimated 84 boats of a global purse seine fleet of 

c.450 vessels at >500GT; of these, 57 vessels were actually flagged by EU Member states. 268 In 2011, 

the fleet consisted of an estimated 89 boats, of which 56 were flagged by EU states (see Table 6.7 

below). The EU flagging states are Spain, France and Italy. 269 With an estimated cost of around US 

$20 million per vessel, total capitalisation of this fleet is roughly US $1.76 billion. 270 The high cost of 

establishing a viable purse seine fleet is a major barrier to entry to domestic interests based in 

poorer developing countries, such as in the ACP. 

Recorded catch of the main two canning-grade tropical tuna species (skipjack and yellowfin) by all 

EU27 members totalled 333,868 mt in 1989, 358,212 mt in 1999 and 285,854 mt in 2009 (Figure 

6.5). Proportionately, EU members catch more yellowfin than skipjack. Averaged over the 10-year 

period 2000-09, EU members caught 15% of the world total for yellowfin and only 10% for skipjack. 

It is important to note that around 37% of the EU DWF is flagged by third parties and the catch is 

thus not recorded as ‘European’ (see Table 6.7 below). 

Figure 6.5 

EU27 vs. World skipjack and yellowfin tuna catch. All regions, gears, all fishing areas (in 

tonnes), 1950-2009 

3,500,000 

3,000,000 

2,500,000 

2,000,000 

1,500,000 

1,000,000 

500,000 

World 

SKJ+YFT 

EU27 

SKJ+YFT 

0 

Notes: SKJ = skipjack; YFT =- yellowfin 

Source: FAO Fish StatJ (accessed 14 October 2011) 

267 Competing for position as the largest distant water purse seine fleet is boats owned by Taiwanese interests, 

most of which operate in the WCPO (Hamilton et al. 2011). 

268 In 2007, the average EU purse seiner was 2,099GT and 3,191kW power (Oceanic Développement 2008). 

269 There was only one Italian-flagged purse seiner by the 2000s and because of commercial connections with 

MW Brands/ Thai Union, it is considered here under the French fleet. Even when Italy was the world’s third 

largest producer of canned tuna in the late 1980s and early 1990s, it still relied almost exclusively on imported 

raw material (Josupeit 1993: 2, 32-4; ADB/INFOFISH 1991: 28). 





As detailed in Section 6.1, species-based product differentiation is an important dynamic in principal 

EU markets. It is also a major element in the business strategies of the EU DWF. Depending upon 

fishing season by oceanic sub-region, some fishing firms focus primarily on targeting higher priced 

yellowfin and others on catching larger quantities of less valuable skipjack. For example, in very 

general terms, the larger boats in the Spanish-owned fleet in the Western Indian Ocean target 

predominantly skipjack through their operational focus on using man-made fish aggregating devices 

(FADs), while the French fleet catches proportionality more yellowfin by setting their nets on freely 

swimming schools. 271 It can be safely assumed that yellowfin caught by the EU DWF is inserted 

predominantly into EU markets because of the price premium that canned yellowfin receives there. 

Figure 6.6 EU Canning-grade Tropical Tuna Catch: all regions, gears, all fishing areas (in tonnes), 

1950-2009 

350,000 

300,000 

250,000 

Spain France* Portugal 


200,000 

150,000 

100,000 

50,000 

0 

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 

* Combines catch for Italy (1 Italian-flagged purse seine vessel from 1997 onwards) 

Notes: Catch data are for bigeye, skipjack and yellowfin. Bigeye tuna are included because juveniles of this species are 

regularly caught during fishing on FADs. Due to minimal catch volumes, the following EU27 Member states are not 

depicted in the figure - Bulgaria, Germany, Greece, Ireland, Latvia, Netherlands, Poland, Romania, and the UK. 

Source: FAO Fish StatJ (accessed 14 October 2011). 

As illustrated in Figure 6.6, the main two players in the EU DWF are Spain and France. 272 The rapid 

drop-off in catches from 2007 is mainly due to declining catch rates in the Western Indian Ocean 

where two main factors have affected resource extraction: 

1. The activities of Somali pirates is a major problem for the EU DWF operating there, including 

273 

attacks on and the capture of EU purse seiners. 

271 Campling forthcoming; Guillotreau et al. 2011. 

272 Portugal is only a very minor player and is not assessed in this report. 

273 See various issues of FFA Fisheries Trade News for an overview: http://www.ffa.int/trade_news 




2. Catches of high value yellowfin tuna have tailed off since 2007, most likely due to the 

increased intensity of tuna catch since the mid-1990s (e.g. FAD use, other forms of effort 

creep, and rising vessel capacity) and record high catches in 2003-06; 274 with negative 

implications for the EU DWF business model/profitability. 

This has resulted in up to 15 purse seiners leaving the Western Indian Ocean for other oceanic 

regions, mainly the Eastern Central Atlantic. Some EU boat owners fear that the resulting increase in 

pressure on the purse seine fishery in the Eastern Atlantic Ocean will result in its collapse. 275 

The two areas of operation of the French fleet are: 

• The Eastern Central Atlantic since the 1950s (Figure 6.7(b)), with Abidjan, Ivory Coast as the 

main base of the fleet since the 1970s. Twenty years after the industrialization of this 

fishery, purse seine catch had reached a peak of 70,000-80,000 mt in the early 1970s. The 

deployment of FADs from the early 1990s saw this fishery reach a second peak of 140,000 

276 

mt before stabilizing again. 

• The Western Indian Ocean since the 1980s, with Port Victoria, Seychelles as the main base. 

The EU DWF is the main player in this fishery. For the period 1984-2007, European-owned 

boats took over 90% of the catch of the entire Western Indian Ocean purse seine fishery. 277 

The Spanish fleet mirrored the French equivalent in the Atlantic and Indian oceans, including its 

bases. But it is also active in: 

• The Eastern Central Pacific, where it has had minor operations since the 1970s, but 

expanded significantly with increased investment in onshore processing in the early 2000s. 

This includes the local registration and flagging of Spanish owned boats in several Latin 

American countries (see Sections 6.5 and 6.6), whose catch is not recorded in Figure 6.7(b). 

• The Western and Central Pacific, where it first started operations in 1999 (Figure 6.7(b)). In 

2010/11, Spanish interests owned a total of 14 purse seiners that are registered with the 

WCPFC to fish in the WCPO. 278 This does not necessarily mean that all boats undertake the 

majority of their activities in the WCPO. Currently, only four EU-flagged purse seiners 

operate under Fisheries Partnership Agreements (FPAs) with Federated States of Micronesia, 

Kiribati and Solomon Island. Two of the boats are owned by Albacora and the other 2 by 

Garavilla (see Table 6.7 below). 279 Another 10 Spanish-owned purse seiners use non-EU 

flags: 2 flagged by El Salvador owned by Calvo that fish in the WCPO under a bilateral access 

arrangement with Kiribati; 3 flagged by Ecuador and 1 that has recently switched flag and 

area of operation from Seychelles to Kiribati, all owned by Albacora; 2 Garavilla owned boats 

flagged by El Salvador; and 2 flagged by Ecuador and owned by Pesquera Ugavi, S.A. (also 

based in Ecuador) but which is affiliated to the OPAGAC/AGAC producer organisation. 280 

Tuna fisheries access by the EU-flagged DWF is negotiated by and partly paid for by the EU. In 2010, 

FPAs were in place across three of the world’s four major tropical tuna fisheries, as illustrated in 

Figure 6.8. The EU DWF that is flagged by third parties access fisheries using different local 

274 IOTC 2009: 92-94; Allen 2010: 24. 

275 Interviews, EU industry representatives, 2010. 

276 Miyake et al. 2004: 25. 


278 WCPFC record of authorised vessels. 

279 The limitation to 4 vessels under EU FPAs in the WCPO is reportedly due to a negotiated agreement by the 

EU during its successful bid to gain membership of the WCPFC (Interview, OPAGAC representative, July 2011). 

280 Table 6.7; Interview, OPAGAC representative, 27 July 2011; written communication, OPAGAC 

representative, 4 and 7 November 2011. 




arrangements - normally company-to-government access agreements or through the simple 

purchase of licences. 

Aside from vessel flag and area of operation, the EU DWF can also be differentiated according to 

whether or a not a firm is vertically integrated into processing. The leading player in the French fleet 

is a specialised fishing firm (CFTO), while the largest player in the Spanish fleet was historicallly a 

specialised fishing firm but is now vertically integrated into processing (Albacora). 

The Spanish fleet is all owned by family firms, albeit with a recent injection of private equity into 

Garavilla (see Section 6.5). The fleet can broadly be divided into: 

• specialised fishing firms who are members of the ANABAC producer organisation. The main 

players here are Inpesca, Atunsa, Echebastar and Pevasa (Table 6.7). 

• vertically-integrated fishing-processing firms who are members of the OPAGAC producer 

association. The main players here are Albacora, Calvo and Garavilla. 

The Spanish fleet has remained broadly stable along these lines in recent years. 

The French fleet has undergone very significant changes since the late 2000s. Three changes are 

highlighted here. The first is the merger of Cobrecaf (which had owned 10 purse seiners) with a 

consortium of Kühn-Ballery, France-Afrique and CMB (which had 7 boats). 281 A new operating firm 

was created in January 2011 called Compagnie Francaise du Thon Oceanique (CFTO). The firm sold 4 

of its boats, leaving it with a modern fleet of 13 purse seiners with an average construction year of 

1997. CFTO is now one of the largest tuna purse seining operators in the world and is notable for 

being a specialised fishing firm through its avoidance of vertical integration into processing. The 

emergence of CFTO indicates both an interest in consolidating operations through more modern 

boats (the pre-merger average year of construction was 1993) and a positive outlook for continued 

profitability in the EU DWF. 

The second change in vessels controlled by France-based interests is to do with MW Brands. 

Between 1994 and 2006 Cobrecaf was effectively controlled by Heinz European Seafood. 283 When 

Heinz sold its European Seafood Business to an investment fund managed by Lehman Brothers in 

2006, the new management company – MW Brands – held onto Cobrecaf for another two years. It 

eventually sold its share of Cobrecaf when it no longer had effective control and could not drive 

price on a ‘cost plus formula’. 284 MW Brands’ sale of its share in Cobrecaf to the (then) Kühn-Ballery, 

France-Afrique and CMB consortium reduced its fleet to 5 Ghana-based vessels (under the ‘TTV Ltd’ 

subsidiary). Since the purchase of MW Brands by Thai Union in 2010 it has bought 3 more purse 

seiners (in January 2011) which are also managed under the TTV subsidiary. 285 

282 

281 Hamilton et al. 2011. The merger occurred when the Kühn-Ballery et al. consortium bought a controlling 

share (88%) of Cobrecaf from MW Brands in late 2008. CREFMPM 2008; pers. comm., EU industry 

representative, 2010. 

282 MW Brands is headquartered in Paris, but has been a management subsidiary of Bangkok-based Thai Union. 

283 Even though Heinz only owned only a 36% share, it had effectively cooperated with another minority 

shareholder to exercise this control. Le Roy 2008: 137, 139; Guillotreau and Le Roy 2001: 3-4. 

284 Pers. comm., EU industry representative, 2009; Campling forthcoming. 

285 MW Brands 2011. 




Figure 6.7 France (a) vs. Spain (b) total catch by fishing area (skipjack and yellowfin combined), 1950-2009 

(a) 

(b) 

200,000 

200,000 

180,000 

180,000 

160,000 

160,000 

140,000 

140,000 

120,000 

120,000 

100,000 

100,000 

Spain - Western Indian Ocean 

80,000 

80,000 

Spain - Eastern Central Atlantic 

60,000 

France - Western Indian Ocean 

60,000 

40,000 

40,000 

Spain - Western Central Pacific 

20,000 

France - Eastern Central Atlantic 

20,000 

Spain - Eastern Central Pacific 

0 

0 

Notes: Catch data are for skipjack and yellowfin only. France extraction of tuna from Eastern Central Pacific is almost zero (bar a very small volume between 1971-75). France skipjack and 

yellowfin catch in the Western Central Pacific is zero. 

Source: Fish StatJ (accessed 14 October 2011) 




Figure 6.8 Network of EU marine territories and Fisheries Partnership Agreements in 2011 

= FPA = EU marine territories (incl. Overseas Countries or Territories (OCTs), Departments, etc) 

Source: Update of Campling 2011 based upon Flanders Marine Institute for line map, DG MARE 2011 for FPAs and Walmsley et al. 2007 for marine territories. 




The third development in the French fleet is the emergence of Sapmer as a new player in tuna purse 

seining. Previously, Réunion-based Sapmer specialised in tuna longlining. It commissioned the 

construction of three new purse seiners from 2007 onwards. 286 As a very recent investment in purse 

seining this represents another positive outlook for future profitability. However, the major 

difference from the rest of the EU DWF is that at least part of this catch will not be processed into 

canned tuna. Sapmer’s business plan is based on catching and processing for diversified markets, 

including processing vacuum packed portions of tuna and other pelagic species at its Mer des 

Mascareignes factory in Mauritius, which was built in 2009. 287 This is major innovation in the 

standard business model of the EU DWF and is based on higher value market segments and higher 

product quality than canned tuna. 288 Sapmer faces two challenges. The ongoing economic slump in 

the EU and elsewhere may generate a reluctance among some EU residents to pay more for freshchilled 

or frozen tuna portions. In addition, the incidence of piracy in the Western Indian Ocean may 

affect raw material supply as all Sapmer vessels are currently based there. Perhaps in an effort to 

counter the latter dynamic, Sapmer has expressed interest in establishing a high value frozen 

yellowfin loin processing facility for export to Asian markets in PNG (see Section 3.2.3). 

286 Constructed in Concarneau, France by Piriou Group, and in Vietnam by a subsidiary of Piriou Group. 

287 Sapmer 2011. 

288 See Hamilton et al. 2011: Chapter 8 for an overview of this non-canned market segment. 




Table 6.7 The EU distant water tuna purse seine fleet in 2011 

Controlling firm Basic characteristics Vessel flag 

Albacora Group 

Fishing firm forward integrated into brandedprocessing 

Spain (6); Seychelles (2); Ecuador (3); 

Panama (3); Kiribati (1); Netherlands 

Antilles (1) 

Boats by area of operation 

Atlantic Indian Pacific Not Total 

Ocean 

known fleet 

3 5 7 1 16 

CFTO** Specialised fishing firm France (13) 5 8 0 0 13 

Inpesca Specialised fishing firm Spain (7); Seychelles (1) 1 6 0 1 8 

Thai Union (MW Branded-processor backward integrated into fishing Ghana (8) 8 0 0 0 8 

Brands) 

Atunsa Specialised fishing firm Spain (5); Seychelles (1) 2 4 0 0 6 

Echebastar Specialised fishing firm with minor processing 

investment 

Spain (3); Seychelles (3) 0 6 0 0 6 

Calvo Group Branded-processor backward integrated into fishing El Salvador (4); Cap Verde (2) 2 0 4 0 6 

Pevasa Specialised fishing firm Spain (5) 0 5 0 0 5 

Bolton Group Consumer goods marketer with some backward France (4) 2 2 0 0 4 

(Saupiquet) integration into processing and fishing 

Garavilla Group Branded-processor backward integrated into Spain (2); Ecuador (2) 0 0 4 0 4 

fishing 

Sapmer 

Specialised fishing firm and high-value (non-canned) France (1); Mayotte (2) 0 3 0 0 3 

processor 

Others** Specialised fishing firms Spain (7); Ecuador (2); France (1) 5 2 1 0 10 

Total EU flag (56); Other (33) 28 41 18 2 89 

* The Eastern and Western and Central Pacific are merged because a number of Spanish boats operate in both areas. ** Compagnie Francaise du Thon Oceanique (CFTO) is 

an operating company owned by several Breton fishing interests; *** ‘Others’ includes the following firms and their number of purse seiners: Pesquera Ugavi , S.A. (2); 

Nicra-7 (2 boats); Petusa (2); Jealsa-Rainxeria (1) Compania Europea de Tunidos (1); Pebertu (1); Sofilab et CIE SCS (1). Sources: Campling (forthcoming); Hamilton et al. 

(2011); Sapmer (2011); Saupiquet (2011); MW Brands (2011); pers. comm., various EU industry representatives 2009, 2010 and 2011; Le Télégramme (2011); IOTC record 

of authorized vessels; www.bateaux-fecamp.fr. 




6.6 EU-based Processors 

The European lobby organisation for both tuna fishing and processing interests – EUROTHON – 

states that its members directly employ over 25,000 people in the EU and subsequent indirect EU 

employment totals around 54,000. 289 No independent assessment of these estimates is available. In 

terms of Spain-specific estimates, ANFACO states that its membership includes 175 processors of a 

wide range of seafood, based mainly in Galicia, and total direct employment is 15,375 people. 290 Of 

these it is not known precisely how many work in the tuna processing industry (see Appendix 4). 

Table 6.8 details independent estimates by US industry experts of EU-based tuna processing 

capacity. Unsurprisingly, Spain is the major player with 54% of daily processing capacity in the EU. 

Table 6.8 Estimated EU-based Tuna Processors, Capacity and Production in 2008 

Tuna Processing 

factories 

Capacity 

(mt/day) 

Annual Production 

(mt) 

Spain 25 1,000 220,000 

Italy 6 450 108,000 

France 2 200 36,000 

Portugal 2 200 18,000 

EU27 TOTAL 35 1,850 382,000 

Source: McGowan and McClain 2010. 

A more detailed overview of the major EU-based and formerly EU-based firms and their processing 

interests is presented in Table 6.9. This is not an exhaustive list of current firms engaged in the EU 

market for canned tuna, but it does detail the most important players, as well as provide the full 

range of types of companies engaged in the market. Three main types are categorised here (albeit 

with variants between them): highly diversified firms focussed on the marketing of a wide range of 

consumer goods (Bolton and Princes), specialised branded-processors of canned fish and especially 

tuna (Calvo, Garavilla, Jealsa and MW Brands), and non-branded contract processors who supply 

product to branded-firms and to supermarket private labels (Frinsa, Thunnus Overseas Group). Most 

branded-processors also pack private label product, but this widely varies in proportion of total 

production (i.e. Calvo produces none, and the majority of Jealsa’s production is for other labels). 

All of the top five Spanish firms have at least two domestic processing facilities in Spain (see Table 

6.9). In general terms, the basic business model for each is to have one plant specialised in the 

production of canned tuna, and the other in various seafood products; although some firms have 

shifted production of the latter overseas in recent years (e.g. Jealsa and Garavilla). It is important to 

note that, while the ANFACO industry association attempts to represent the external relations of 

Spanish processors as being unified, they have diverse interests reflecting their different commercial 

positions in the value chain. 

For Bolton and Princes, vertical integration into canned tuna production is not a key component of 

their (highly diversified) businesses. The commercial emphasis of these companies is on the 

marketing of a wide range of consumer brands based on a highly diversified supply base sourcing 

from across the planet. In other words, unlike Thai Union for example, each could probably function 

289 EUROTHON 2011b. 

290 Data provided to consultants by ANFACO on request, 19 October 2011. 




as profitable canned tuna businesses without ownership of processing facilities simply by contracting 

processors to produce finished product for their brands. Conversely, MW Brands and Thunnus 

Overseas Group (TOG) both own substantial processing capacity and rely on these facilities for a 

large proportion of their total supply. In other words, processing is a significant part of their business 

operations. 

On a global scale, there is a widely recognised and growing overcapacity in tuna processing facilities. 

This contributes to deeper price volatility as canneries compete for raw material and a greater 

politicisation of access to tuna resources as firms compete to ensure future supply. In these 

conditions, it is highly likely that some processors will eventually be squeezed out and that the 

industry will become more concentrated. 291 Given that a large number of Spanish branded firms are 

competing for a market dominated by private label, a future of mergers and acquisitions may well be 

facing this segment. In this competitive context, investments in new processing facilities, such as in 

PNG, are more to do with securing access to fish rather than meeting increased demand for product. 

A strategy pursued by some Spanish firms to grow the sales volumes is to focus on new markets, 

especially in Latin America. 

292 In mature markets – in recognition of most canning-grade tuna stocks 

having reached, or approaching, their maximum sustainable yield – a strategy deployed to enhance 

profit margins pursued by some firms in principal EU markets is to try to shift consumer focus to 

quality and a range of differentiated, ‘value added’ products. 293 However, while there has been 

growth in principal EU market for value added products, it is yet to be seen how far this desired 

transformation will translate into mass consumption by EU consumers. As a reflection of the limits of 

this strategy, it is worth noting that only some firms are focussing their energies on their portfolio of 

value-added products. Instead standard canned tuna will likely remain the main product type for the 

foreseeable future. 

291 Hamby 2009: Hamilton et al. 2011. 


293 McGowan and McClain 2010; Hamilton et al. 2011. ‘Value added’ products normally contain less tuna raw 

material and more less-costly other inputs (e.g. salad, potato, etc), making them more profitable, not least as 

they are also often sold at a higher price point that standard canned tuna. 




Table 6.9 

Major EU canned tuna processing firms 

Firm Basic characteristics Ownership Processing locations and capacity* Markets 

Bolton Group 

MW Brands 

Calvo Group 

Jealsa 

Rianxeira 

Group 

Consumer goods 

marketer backward 

integrated into canned 

tuna processing and 

fishing 

Branded-processor 

backward integrated 

into fishing 




Specialised nonbranded 

processor 

Mr Nissim 

(100% 

owner) 

Thai Union 

(since 2010) 

78% Calvo 

Pumpido 

family 

100% Alonso 

family 

2 factories: France (Quimper plant: canned tuna and misc 

seafood); Italy (Cermenate-Milan plant: canned tuna) 

4 MW Brands factories – 3 process tuna: France (330,000 cans of 

various seafood per day); Ghana (800,000 cans of tuna and 20mt 

loins per day); Seychelles (1.5mn cans of tuna per day) 

4 factories: Spain (Carballo plant: 80% canned tuna; 20% misc. 

others); Spain (Esteiro plant: c.20% tuna products; 80% mussels, 

salads, bean-based products); El Salvador (80% loins for Spain; 

20% canned tuna for US and Latin America); Brazil (75% canned 

sardines; 25% canned tuna) 

Est. total canned fish production: 149,000mt (2009) 

10 factories – 5 process tuna: Spain (Jealsa plant: 100% canned 

tuna); Spain (Éscuris plant: 80% canned tuna; 20% mussels, etc); 

Spain (Tunaliment plant: pet food using tuna and others); 

Guatemala (100% tuna loins for Spain); Brazil (canned sardines 

and tuna). 


Owns Saupiquet the number two canned 

tuna brand in France, number one in 

Germany and number three in Belgium, as 

well as the number one in Italy (Rio Mare) 

Owns the number one canned tuna brands in 

the UK and France (John West and Petit 

Naivre) and the number 3 or 4 in Italy 

(Mareblu). 

Calvo brand has around 10% of the Spanish 

market and owns Nostromo, the third largest 

Italian brand. 

Produces exclusively in Spanish market for 

one major supermarket; penetrates the 

Italian market through the major Mare 

Aperto brand in a 50:50 joint venture in the 

Star firm; sells in Spain and Portugal through 

its Rianxeria brand; and packs for French 

supermarkets and for a UK brand. 




Table 6.9 

Major EU canned tuna manufacturing firms [continued] 

Firm Basic characteristics Ownership Processing locations and capacity* Markets 

Frinsa del 

Noroeste 


processor 

85% Carregal 

Varela family 

4 factories 


Specialised supplier of private label to 

Spanish supermarkets 

Garavilla 

Group 




Garavilla family 

and MCH Private 

Equity 

4 factories – 3 process tuna: Spain (El Grove plant: canned tuna); 

Spain (Mundaka plant: canned tuna and various seafood); 

Ecuador (canned tuna and loins) 

Isabel brand has around 5% of the 

Spanish market. 

Salica 

Fishing firm forward 

integrated into 

branded-processing 

83% Albafrigo 

(logistics firm); 27% 

Albacora 

3 factories: Spain (canned tuna): Spain (added value tuna, various 

seafood): Ecuador (20% canned tuna; 80% loins) 

Sells product in Spain under the 

Conservas Campos, Bachi and Salica 

brands 

Thunnus 

Overseas 

Group (TOG) 


processor 

Mr Mohamed 

Khachab (majority); 

Emerging Capital 

Partners and 

Kingdom Zephyr 

(private equity) 

3 factories: 2 in Côte d'Ivoire and 1 in Madagascar 

Est. annual canned tuna production: 50,000 to 62,000mt 

Produces private label product for 

major French-owned supermarket 

chains, for food service/catering (40% 

share of the French market in 2005), 

and under its own brand Pompon 

Rouge. 

Princes 

Consumer goods 

marketer backward 

integrated into canned 

tuna processing 

Mitsubishi 

(Princes Group is 

headquartered in 

UK) 

1 factory: Mauritius: canned tuna 

Annually processes around 60,000mt of whole round tuna. 

Princes is the number two canned 

tuna brand in the UK and the 

Netherlands. Its Vier Diamanten 

brand is number one in Austria. 

* ‘loins’: pre-cooked vacuum packed frozen tuna loins 

Sources: Campling (forthcoming), Hamilton et al. (2011); Liewes (2010). 




6.7 Third Country Processors 

Exporters of processed tuna to the EU are competing in a multi-billion euro market. French 

investment in overseas processing concentrated in West Africa from the 1950s onwards until being 

taken over by other players in the 1980s and 1990s. 294 Spanish investment focussed on Latin 

America from the mid-1970s onwards. Table 6.10 details the canned tuna and tuna loin production 

capacity of the major countries supplying the EU with these products. 295 As already noted, all of 

these countries except for the four Southeast Asian countries plus China have duty free access to EU 

markets (subject to regulations on RoO, SPS and IUU). On the one hand, for all of these countries, 

tuna processing capacity is also deployed to supply non-EU markets. Market diversification is a 

central strategy for some Asian producers. 296 For example, Thailand, Indonesia, the Philippines and 

China are major suppliers of canned tuna to the US market, 297 and the EU market was only 13% in 

volume of total Thailand exports in 2010. 298 On the other hand, all of the Africa IEPA countries and 

PNG are highly dependent upon the EU market. The GSP+ countries sit somewhere between the 

two, with significant sales to the US and in regional markets. 

It is beyond the scope of this report to offer full accounts of all third country processors. The 

following provides short accounts of some key elements of selected locations of production as they 

relate to EU markets and/or investments by European firms. 

• All processors based in Thailand specialise in non-branded processing except for Thai Union, 

which owns major canned tuna brands in the EU (Table 6.9) and Chicken of the Sea in the 

US. Nonetheless, Thai Union also continues to undertake non-branded processing for EU 

clients. Thailand provides an almost full range of tuna products – from standard canned tuna 

in vegetable oil or brine to a wide selection range of ‘value added’ items. In short, it is a 

‘one-stop shop’ for buyers needs. The only market segment where Thailand remains a minor 

player is canned yellowfin in olive oil in 80gm cans, the principal product on Italian and 

Spanish markets. Importantly, Thailand relies very heavily on tuna raw material imported 

from the WCPO (see Table 3.16). 

• PNG, Philippines, Madagascar, Indonesia and Côte d’Ivoire all specialise in the non-branded 

processing of basic canned tuna in vegetable oil and brine. PNG produces primarily for 

private label and hard discount stores. As already noted, processors in the Philippines have 

experienced increasingly severe raw material supply constraints since 2009. 

• Ghana and Seychelles produce standard canned tuna, mainly for Thai Union-owned brands, 

but also some private label. The Seychelles has only one cannery and is orientated primarily 

to supply the EU market. Production in the Seychelles declined with the drop in tuna catch in 

the Western Indian Ocean in 2007 onwards. Its export volumes to the EU declined by 31% 

299 

294 Senegal was the first major site of European investment in canned tuna processing capacity (by French 

firms in the 1950s). Processing based there has been in relative decline since the 1970s when the EU DWF 

shifted southeast in the Gulf of Guinea to establish its new main base in Abidjan, which processing investment 

soon followed. With the opening of the purse seine fishery in the Western Indian Ocean in the 1980s, French 

firms also invested in processing capacity in Madagascar and Seychelles . Campling 2012. 

295 This includes the countries listed in Table’s 6.2 and 6.6 above on extra-EU27 tuna loin and canned tuna 

imports respectively. 

296 Ferdouse 2011. 

297 Globefish 2010: 50. 

298 Chalisarapong 2011. Thailand’s record volume of canned tuna exports to the EU occurred in 2006 

(84,431mt), it has declined since then (see Table 6.6) but total canned tuna production in Thailand has 

increased. This also indicates a strategy of market diversification. 

299 For more detailed country-specific analysis of several of the locations of production detailed in Table 6.10 

see Campling et al. 2007, Campling and Doherty 2007, Barnes and Campling 2008 and Hamilton et al. 2011. 




between 2006 (a record high) and 2010. MW Brands/Thai Union partly countered this supply 

constraint by shifting production to its cannery in Ghana, which increased its exports to the 

EU by 25% between 2006 and 2010. 300 The other processors based in Ghana are locallyowned 

but are minor players in comparison. 

• Mauritius has steadily increased its share of the EU market through production increases by 

Princes Tuna Mauritius and Thon des Mascareignes. In the last five years (2006-10) Mauritius 

has increased its canned tuna exports to the EU by 17%. Princes Tuna Mauritius is the largest 

processor there and produces canned tuna in vegetable oil and in brine for Mitsubishi’s 

Princes subsidiary, but it also supplies private label to EU clients. Thon de Mascareignes has 

transformed from being primarily a producer of loins to a significant cannery. Mauritius also 

emerged in 2010 as the second largest supplier of loins to the EU with 12% volume share 

(Table 6.3). To ensure supply, these processing facilities often pay slightly higher raw 

material prices than the cannery in Seychelles and were thereby able to increase production 

rather than follow Seychelles’ recent decline. 

• Ecuador is responsible for over half of tuna processing across the eastern Pacific and is the 

major player in canned tuna processing in the Americas. There are approximately 18 

processing plants located in Guayaquil, Posorja and Manta with a daily processing capacity 

ranging from only 20 mt/day up to 300 mt/day. 301 Production in Ecuador can be split by a 

minority of subsidiaries of Spanish branded-firms and a majority of domestically-owned, 

specialised non-branded processors. The first major Spanish investment in Ecuador was by 

Garavilla in 1976. The next Spanish firm to invest there – Albacora – came over two decades 

later in 2000. With Thailand, Ecuador dominates the US market for tuna pouches. For 

Ecuador this was the outcome of a US trade preference for this particular product type. 302 

Ecuador is also the leader in the EU import market for loins (Table 6.3). 303 Processors in 

Ecuador can also be further typified by those that are backward integrated into fishing 

(which includes the Albacora and Garavilla) and those that are not. Given that Ecuador 

needs to import around 100,000 mt of its raw material needs each year, vertical-integration 

is a major strategy for ensuring supply of tuna. Between January and early August 2010, over 

80,000 mt of tuna were imported into Eastern Pacific production sites. Of this, around 

72,000 mt was delivered to Ecuador. In 2010, over 89% of raw material imports to the 

Eastern Pacific region originated in the WCPO. 304 

• Between 2005 and 2007, Thunnus Overseas Group (TOG) consolidated its operations across 

two factories in Côte d'Ivoire and a single factory in Madagascar to increase production and 

reduce costs (see Table 6.9). However, these two production locations each saw their share 

of the EU market decline by around 50% between 2000 and 2009. Political crises in the 

2000s in both countries may have contributed to production declines. All of these factories 

specialise in the non-branded processing of basic canned tuna and thus compete in a similar 

market segment to PNG (see Section 6.7.4). 

300 This was a result of shifting exports to the EU away from this factory’s other market, the United States. 


302 For relevant details on the Andean Trade Preference Act and related US preferential arrangements, see 

Campling et al. 2007. 

303 It was also a major supplier of loins to the US in the early 2000s, but this had declined to insignificant 

volumes by 2007. 

304 Hamilton et al. 2011. See also Table 6.16 below. 




Table 6.10 Canned Tuna and Loin Production in Selected Countries by EU Preference Regime in 

2008/10 

EU preference regime 

Tuna 

Processors 

Capacity 

(mt/day) 

Annual Production 

(mt) 

SOUTHEAST ASIA AND CHINA 

Thailand GSP 15 2,770 736,000 

Philippines GSP 7 850 225,000 

Indonesia GSP 13 500 96,000 

Vietnam GSP 3 250 50,000 

China GSP 2 150 40,000 

TOTAL SOUTHEAST ASIA PLUS CHINA 40 4,520 1,147,000 

LATIN AMERICAN GSP+ COUNTRIES 

Ecuador GSP+ 14 1,865 447,600 

Colombia GSP+ 3 415 99,600 

Venezuela GSP+ 4 240 57,600 

Costa Rica GSP+ 1 75 18,000 

El Salvador GSP+ 1 170 40,800 

Guatemala GSP+ 1 80 19,200 

TOTAL LATIN AMERICAN GSP+ 36 3,575 682,000 

AFRICA IEPA COUNTRIES* 

Mauritius IEPA (ESA) 2 400 90,000 

Seychelles IEPA (ESA) 1 350 75,000 

Côte D’ Ivoire IEA (ECOWAS) 3 300 60,000 

Ghana IEA (ECOWAS) 3 250 25,000 

Madagascar IEPA (ESA) 1 150 20,000 

Kenya IEPA (EAC) 1 100 12,000 

TOTAL AFRICAN IEPA 11 1,550 282,000 

PACP COUNTRIES 

Fiji IEPA (PACP)* 1 120 18,400 

PNG IEPA (PACP) 3 410 59,800 

Solomon Islands EBA 1 50 5,000 

Marshall Islands GSP 1 90 4,000 

TOTAL PACP 6 670 87,200 

*In practice, these countries utilise the Market Access Regulation (No. 1528/2007) for EU access, as they do not yet apply 

their IEPAs. 

Sources: McGowan and McClain (2010) for baseline data and Hamilton et al. (2011) for updates where available. Also: 

Liewes (2010); UN-OHRLLS (2011); Commission Decision 2008/938/EC on GSP+ beneficiaries from 1 January 2009 to 31 

December 2011; Council Regulation (EC) No 732/2008 on GSP beneficiaries; DG Trade (2011) on IEPA signatories. 

6.8 Impacts of the Derogation on the EU and Third Countries 

Two other recent reports have looked at the possible impacts of the ‘global sourcing’ derogation on 

EU markets. A preliminary assessment by Oceanic Développement (2010) found that, because the 

EU tuna industry has few strategic links in the WCPO in terms of fishing and none in terms of 

processing, ‘[t]he impacts of ... global sourcing on the EU tuna industry are expected to be 

minimal’. 305 In addition, due to the weak competitive situation in PNG (see Section 3.2.4 above), the 

notion that the EU market would be ‘flooded by imports from PNG does not appear to be realistic’; 

305 Oceanic Développement 2010: 122. 




not least because it does not yet have commercial ties with the major EU brands, which as shown in 

Section 6.1 play a central role in the EU market. 306 The Oceanic Développement assessment 

identified the most likely impact of the derogation as being a diversion of raw material supply from 

processors reliant on catch from the WCPO, especially Thailand and the Philippines. The consultants’ 

research findings from this review concur with this general assessment. 

The second, more recent, study was commissioned by EUROTHON. Sullivan et al. (2011), found that: 

‘it is not possible to identify global sourcing as the immediate cause of processing declines in the EU’; 

‘global sourcing in PNG is not a more immediate threat to the EU processing sector than the 

numerous constraints that it already faces from global competitors’; ‘PNG processors might be more 

competitive in loining, than in canning, though in the long term’ canning might become more viable 

307 

‘if PNG production costs improve’. The ‘long term’ was not defined. The only major medium-term 

threat indentified by Sullivan et al. (2011) is if the derogation is seen as a precedent rather than as 

an exception (see discussion in Section 2). 

The following attempts to deepen these analyses. It draws heavily on projections of potential PNG 

exports using the production plans for 2016 of all known current and future processors investing in 

PNG (as defined in Table 3.13). It combines this with contextual analyses of market and industry 

dynamics to assess the current and medium term impacts of the derogation. 

Caveats 

It is important to emphasize a series of caveats that limit the reliability of any projections of the 

impact of the derogation on EU markets, the EU DWF, EU-based processors and third countries 

exporting canned tuna to the EU (and the relations among them all). The following are considered to 

be of particular importance: 

• The situation of global tuna catch is open to considerable uncertainty. This includes: 

o 

o 

o 

o 

Direct anthropogenic effects on stocks such as potential overfishing, especially 

yellowfin, and the widely acknowledged limitations on all tuna RFMOs of adequately 

managing these stocks. 

Indirect anthropogenic effects on stocks such as ocean acidification and global 

warming. 

Cyclical El Niño and La Niña events affecting tuna, including their habits and prey. 

Intensified global competition for all natural resources, including tuna, and its 

potential manifestations in the strategies of firms and of governments, which may 

result in changing priorities in the production and direction of consumption of tuna. 

o The incidence of piracy in the Western Indian Ocean continues to disrupt EU DWF 

operations there. 

• Rapid and unpredicted downward shifts in extra-EU imports in 2009 and 2010 (see Section 

6.1). 

• A rapidly changing world economy, typified by a global slump in the OECD countries and 

elsewhere, which makes tuna industry dynamics very difficult to predict. 

• Changing domestic dynamics in major locations of production, including civil unrest, wider 

political change and natural disasters. 


307 Sullivan et al. 2011: 18-19 (emphasis added). 




• The ongoing (and potential increase) of government subsidies to support domestic fishing 

industries and national consumption, especially with the likely collapse of proposed fisheries 

subsidies disciplines under the Doha Round at the WTO. 

• The growing importance of environmental sustainability policies and awareness, especially 

among retailers and consumers of fish in Northern Europe, which may result in continued 

shifts in emphasis on fishing methods. The largest potential development here is the recent 

MSC certification of the PNA purse seine skipjack fishery. 

Note that trade volumes and values do not capture species composition of product because EU 

trade data do not effectively capture this. 308 As such, as per Section 6.1, markets are characterised as 

being predominantly either canned yellowfin or canned skipjack. 

6.8.1 Projecting PNG exports: data and assumptions 

The following discusses current and potential future impacts on the EU Distant Water Fleet and, 

respectively, EU-based and third country processors and their markets within the EU. Each of these 

three sets of players is assessed according to two time-frames of impacts: 

1. From March 2008 to present (i.e. from when PNG first notified the EU under the PACP-EU 

IEPA Protocol II, Article 6.6(b), triggering the three-year review clause in the derogation, of 

which this study is a part (see Section 2)). 

2. In the medium term (to 2016), selected as a period of time where some reasonable 

assumptions around potential PNG exports could be developed (see Table 6.11 which is 

based upon Table 3.13). 

The medium-term scenario is based upon a realistic interpretation of planned increases in 

production and export strategies by existing and planned processing facilities in PNG for 2016. It 

forms the basis for the quantitative components of the following analysis of medium-term market 

and industry impacts of the derogation. 

The total estimated raw material throughput requirements for the PNG export scenario in Table 6.11 

are 182,500 mt (or ~113,150 mt for canned tuna and 69,350 mt for tuna loins). This estimate of raw 

material needs is for all markets, including domestic sales and other export markets (e.g. the US), 

and does not equate to total raw material used in processed exports to the EU. 

308 HS codes do formally differentiate between types and species of products, but it is believed that they are 

not universally applied by customs authorities to differentiate between species. (See note to Table 6.4.) 




Table 6.11 Projected PNG exports to EU in 2016 

Company Canned Tuna (mt) Cooked Loins (mt) 

RD Tuna Canners 9,000 1,260 

Frabelle (PNG) Ltd. 10,347 252 

South Seas Tuna Corp. - 4,200 

Majestic Seafoods 16,000 - 

International Food Corp. 7,758 2,205 

Niugini Tuna Ltd. 1,333 9,450 

Nambawan Seafoods 4,800 5,040 

Halisheng Corp. 7,467 2,016 

Total 56,705 24,423 

Sources: Industry interviews in PNG, September 2011; other industry sources, pers. comm. 2011; State Project Agreements 

– various. 

6.8.2 Impacts on the EU Distant Water Fleet 

The overview of the EU DWF in Section 6.4 revealed five important trends: 

1. The purse seine fleet that is flagged by EU member states operates almost exclusively in the 

Eastern Tropical Atlantic and the Western Indian Ocean. 

2. Today, and historically, there is very limited interaction of the EU DWF with the WCPO 

(Figure 6.7(b)). Currently only 4 Spanish-flagged boats operate under FPAs in the WCPO, and 

10 Spanish-owned, non-EU flagged boats are registered to fish in the WCPO. All of which are 

members of the OPAGAC/AGAC producer organisation. 

3. There is no real opportunity to expand operations by EU-flagged purse seiners in the WCPO 

due to an EU limit on FPAs in the region to only 4 boats. 309 

4. Total EU commercial interests in the WCPO consist of 14 purse seiners that are represented 

by 4 companies: Albacora, Calvo, Garavilla and Pesquera Ugavi (a minor player). 

5. Spanish-owned vessels in the Pacific (Table 6.7) operate primarily in the Eastern Pacific 

Ocean, but also engage in operations in the WCPO. 310 All of these purse seiners are known to 

be deployed primarily to supply parent tuna processing facilities in Latin America, except for 

Pesquera Ugavi for which ultimate beneficial ownership or connections to processing 

facilities are not known. As a result, these vessels generally do not supply originating fish to 

PNG or other tuna processing facilities based in the Pacific islands. 

Impacts on the EU Distant Water Fleet from March 2008 to present 

Despite submitting a notification to the EU March 2008, PNG-based processors have utilised only 

very minor quantities of tuna under the derogation in 2011, so de facto no direct impacts to date on 

the EU DWF are discernable. The Spanish DWF active in the WCPO is not currently supplying PNG, 

so, in the said period, the derogation is not directly influencing EU DWF tuna sales through 

competition on the PNG market with non-EU purse seining firms. 

309 Interview, OPAGAC representative, July 2011. 

310 For example, the two Garavilla boats flagged by Ecuador that are based in the EPO are active in the WCPO 

for around 20% of the year. 




The EU continues to maintain FPAs with Kiribati, Solomon Islands and the Federated States of 

Micronesia. There have been no reports of any actual or potential impacts of the derogation on the 

terms or day-to-day operations of these agreements. The time-frame of the FPAs are scheduled as 

follows: 

• Federated States of Micronesia: 26.2.2007 – 25.2.2016 

• Kiribati: 16.9.2006 – 15.9.2012 

• Solomon Islands: 09.03.2011 – 08.03.2014 

Due to the stability of and strong record of compliance within FPAs, the consultants are not aware of 

any reasons why the three PACP parties to these FPAs will not be willing to renegotiate them in the 

future. 311 Moreover, there is no clear relationship between the derogation provided to PNG and 

decisions made by these three sovereign Pacific island nations. 

Impacts on the EU Distant Water Fleet in the medium term (to 2016) 

In formal communications and press releases and during consultations, EU industry alleges that in 

the medium term: 

• some fleets with lower cost operations will gain an additional commercial advantage over 

the EU DWF in the WCPO. This is a possible outcome, but fish caught by non-EU fleets is 

already entering EU markets via other processors in the Asia-Pacific, albeit normally with the 

payment of MFN or GSP import duties (see Section 6.7.4); 

• the derogation will result in IUU-caught fish entering EU markets via PNG processors (for 

analysis of this allegation, see Section 5.5) 

• it will result in unsanitary fish entering EU markets via PNG processors (for analysis of this 

allegation, see Section 5.6) 

Separating the EU DWF out from connections with EU processors, 312 we have identified two 

additional possible concerns with the derogation: 

1. That it will heighten an ongoing scramble for strategic long-term access to WCPO fisheries as 

companies make commitments to onshore investments, as per the types of arrangements 

currently deployed in PNG. This scenario may result in greater competition for tuna fisheries 

access in the WCPO and, in some cases, may exclude fishing interests that are unwilling or 

unable to commit to onshore investment. However, at present, PNG appears to be the only 

PACP state that is likely to utilise global sourcing in the medium term (see Section 7) and it 

does not have an FPA with the EU or access arrangements with any of the 10 Spanishowned, 

foreign-flagged vessels registered with the WCPFC. As such, any future licensing 

requirements imposed by PNG – such as requiring a set amount of tuna catch to be landed 

domestically – will not affect the current operations of the Spanish fleet in the WCPO. 

Moreover, one EU tuna fishing-processing firm – Sapmer – has expressed interest in 

investing in PNG (see Section 3.2.3). 

2. That the derogation will be treated as a precedent rather than an exception in the European 

Union’s other trade negotiations with third countries, such as the proposed multilateral or 

bilateral FTA with ASEAN members (see Section 7). If the EU were to accept the derogation 

311 Any future agreements would be in a new form subsequent to the reform of the external dimension of the 

EU’s Common Fisheries Policy in 2012. 

312 This is simply done for most of the French fleet and for the Spanish fleet that are members of ANABAC, but 

it is a false separation for the vertically-integrated members of the OPAGAC producer organization (see 

Sections 6.4 and 6.5). 




as a precedent then it may result in the unravelling of the current EU system of preferential 

rules of origin for fish and fish products. However, this possibility is considered by the 

consultants to be highly unlikely as there are strong reasons for arguing that the derogation 

was explicitly designed as an exception (see Section 2). 

In summary, given zero direct interaction between the Spanish fleet and PNG, the consultants have 

not been able to identify any medium-term impacts of the derogation on the current operations of 

the fleet. However, in the case where European fishing firms wanted to expand their operations to 

the PNG EEZ, they may encounter enhanced competition for fisheries access and the PNG market for 

tuna raw material may already be sufficiently supplied by fishing firms that have onshore 

investments. 

6.8.3 Impacts on EU-based Processors and their Canned Tuna Markets 

Impacts on EU-based Processors and their Canned Tuna Markets from March 2008 to present 

As already noted, PNG has only used very minor quantities under the derogation in 2011, so it could 

not have had a discernable impact on EU markets. Even so, to date, PNG canned tuna exports have 

not penetrated the most important markets of EU-based producers. This is for three main reasons: 

1. No other major Asia-Pacific exporter (i.e. Philippines, Thailand) has ever played a significant 

role in the Italian and Spanish markets for canned tuna. Part of the explanation for this is 

the specificity of the Italian and Spanish markets: yellowfin tuna in olive oil packed in small 

can sizes. This requires: 

a. a regular supply of yellowfin tuna (the EU DWF is the lead player in the two oceans 

with a historically high proportion of yellowfin tuna catch – the Eastern Central 

Atlantic and Western Indian oceans); 

b. cheap supply of olive oil (an agricultural sector that is heavily subsidised in the EU); 

c. specialised production lines dedicated to processing 80g cans, which, given the 

higher ratio of canning material to fish, also requires the availability of competitively 

priced canning inputs (e.g. tinplate) normally facilitated by industrial canning 

clusters such as in Bangkok and Galicia. 

d. control of a major national brand in Italy and/or Spain, and/or stable contracts to 

supply brands or private label. 

All of these factors could be individually achieved in other locations of production, but in 

combination they act as a significant barrier to entry, certainly for PNG-based exporters in 

the medium to long term (i.e. 5-10 years). In addition, the country of manufacture may play 

a role in consumer decisions in these two countries, with a preference for domestically 

made food items in Italy, for example. 313 

2. In France, where Thailand has a very significant market share, domestic production has long 

given way to extra-EU imports of standard canned product. France-based processors 

specialise in ‘value added’ tuna products which is a highly specialised, technicallysophisticated 

manufacturing process that PNG-based exporters have no plans to enter into. 

3. The vast majority of PNG’s exports to the EU (84.5%) over the period 2006-2010 went to 

Germany, the Netherlands and the UK and consisted of basic quality ~180g canned skipjack 

in vegetable oil or brine. 

313 Catarchi 2004. 




In other words, the types of canned tuna products currently processed in PNG do not interact 

substantially with the types produced within Italy and Spain for their major markets of Italy and 

Spain. 314 Given that Philippines-based processors are the principal source of investment in PNG, and 

that these companies have not penetrated the Italian or Spanish markets in their three decades of 

operations in the Philippines, it is highly unlikely that this will change in the far more challenging 

business environment of PNG. 

Another concern raised by EU industry (EUROTHON) is that PNG exporters are involved in dumping 

canned tuna on the EU market. 

315 Technically, ‘dumping’ is not about selling price per se, but when 

export sales prices are below the cost of production or below the price sold in the domestic market 

or third-country markets. Nonetheless, EUROTHON’s allegation is based on the import price of PNG 

product being consistently below the average EU27 import price. 316 As can be seen in Table 6.12, this 

is the case for the 5-year period 2006-2010 except for in 2008, where PNG experienced a slow-down 

in exports due to temporary compliance problems associated with EU SPS measures which resulted 

in the de-listing of two of PNG’s processing plants during that year. The PNG price is also generally 

(but not always) below that from Africa-based exporters and always below that of Latin American 

exporters. Moreover, based on a five-year average, PNG is priced lower than both of these regions. 

However, on an annual basis, PNG price it is always higher than all of its Asia-Pacific competitors, 

excluding Thailand (but Thailand also exports value added tuna products which, despite falling under 

standard 'canned' HS codes, are priced considerably higher). Moreover, on a five-year average, EU 

imports from PNG are priced higher than all of its Asia-Pacific competitors, except for the Solomon 

Islands, which also suffers from a high cost environment. 

This data can be explained partly by the product type and destination markets for Asia-Pacific 

exporters. For example, averaged over the period 2006-2010, 72% in volume of Indonesia’s, 49% of 

Vietnam’s, 40% of the Philippines’ and 26% of China’s exports to the EU went to Germany. As is 

widely known, the German market, while the fifth largest in the EU, is based mainly on very low 

priced, standard quality canned skipjack in brine and vegetable oil. Moreover, around 80% of canned 

tuna is sold at discount. 

317 Discounts on products sold in EU (and US) supermarkets are not absorbed 

by grocery retailers, but instead by suppliers. Therefore, a lower average cost of exports for basic 

quality and discounted canned tuna from countries that focus on the German market is to be 

expected. 

A full investigation on alleged dumping is beyond the scope of this report. However, this data on 

import price gives a sufficient indication that PNG is comparable to other exporters in the Asia- 

Pacific supplying similar markets in the EU. Instead of demonstrating that PNG is involved in 

dumping, this finding supports the need for trade preferences for PNG (and other IEPA and GSP+ 

countries) to be able to compete on price with Asia-Pacific exports. 

314 Between 2006 and 2010, PNG only exported 0.8% in volume of its total EU canned tuna exports to Italy (the 

most important market for Italian production and Spain’s main export market), and only 0.3% to Spain (the 

main market for Spanish production). 

315 Formal presentation, EUROTHON representative at stakeholders meeting, Brussels, 19 July 2011. 

316 Excel spreadsheet file provided to the consultants on 19 July 2011 by Pierre Commere, EUROTHON, 

‘Analyse concurrence conserves de thon PNG 01-2009 à 01-2011’. 

317 Pers. comm., FRUCOM representative, Brussels, 19 July 2011. 




Table 6.12 Average value per tonne of EU imported canned tuna by supplying country, 2006-10 (all 

in Euro) 

Pre-derogation 

2006 2007 

Post-derogation 

2008 2009 2010 

5 year 

average 

LATIN AMERICA 

El Salvador 4,802 5,135 4,166 3,739 4,088 4,386 

Guatemala 3,015 3,502 3,885 2,369 3,585 3,271 

Colombia 2,898 2,837 3,177 3,230 3,340 3,096 

Ecuador 2,427 2,581 3,098 2,767 2,804 2,735 

AFRICA - 

Seychelles 2,661 2,910 3,485 3,728 3,662 3,289 

Ghana 2,341 2,622 2,952 3,071 3,103 2,818 

Ivory Coast 2,741 3,038 3,202 3,368 3,073 3,084 

Mauritius 2,465 2,580 3,363 2,935 2,946 2,858 

Madagascar 2,116 2,409 2,993 3,162 2,371 2,610 

ASIA-PACIFIC - 

Thailand 2,026 2,241 2,646 2,455 2,539 2,381 

PNG 2,072 2,145 3,166 2,410 2,350 2,428 

China 1,471 1,619 1,588 2,213 2,125 1,803 

Philippines 1,771 1,841 2,336 2,190 2,081 2,044 

Indonesia 1,510 1,591 1,870 2,207 1,953 1,826 

Vietnam 1,607 1,644 2,049 2,020 1,929 1,850 

Solomon Islands - - 2,534 3,103 - 2,818 

Extra-EU 27 average 2,305 2,486 2,960 2,825 2,795 2,674 

Source: DG Trade extractions from Eurostat (05 August 2011) using four HS codes for canned tuna (1604 1411; 1418; 1939; 

2070). 

In fact, derogation or not, PNG may even be seen as playing a positive role for EU industry. Italy and 

Spain-based canneries have been importing tuna loins from PNG since 2005. Over the last five years 

PNG has increased its volume share of the extra-EU import market for loins from 1.66% in 2006 to 

2.38% in 2010 (around 75% to Italy and 25% to Spain). This has provided a new source of duty-free 

supply given that the annual ‘loin quota’ is fully utilised each year. It also indicates that, by importing 

PNG product, at least some EU-based processors accept that the quality and other standards 

associated with PNG loin production is sufficiently high. 

In terms of the effects of the derogation from March 2008 to present, it again seems that the most 

important immediate strategic concern of EU-based processors is that global sourcing will be treated 

as a precedent rather than as an exemption and be offered to other trading partners in, such as in 

FTA negotiations with major canned tuna processors in ASEAN. 

Impacts on EU-based Processors and their Canned Tuna Markets in the medium term (to 2016) 

The exercise presented in Table 6.13 identifies the Top-5 intra-EU canned tuna markets for EU-based 

processors and compares these with the Top-5 markets for PNG. These values are averaged over the 

last five years in order to avoid anomalies such as peaks or troughs in exports to a particular market 

in a particular year. This recent trade data is used as a basis to identify potential future interactions 

between PNG exports and EU processors (i.e. potential trade diversion caused by the derogation). 

Given the large number of players and the complex range and instability of variables affecting the 

global canned tuna trade (see ‘caveats’ in the introduction to Section 6.7), we do not believe that 

more sophisticated projections based on econometric modelling would generate reliable results. 




There has been no significant interaction to-date between PNG and Spain on the latter’s main three 

intra-EU export markets: Italy, France and Portugal. 

Italy is Spain’s main export market by a large margin, constituting 58% of its total intra-EU sales 

between 2006 and 2010 (Table 6.13). The sheer size of this market penetration can be explained 

partly by the fact that Spanish production for domestic and Italian markets is of a very similar 

product type. In addition, in order to better access the highly profitable Italian market, Spanish firms 

acquired major Italian brands (i.e. Calvo’s full ownership of the Nostromo brand and Jealsa’s part 

ownership of the Mare Aperto brand – see Table 6.9). 

Table 6.13 Identifying market interaction and potential trade diversion – Top 5 markets for EUbased 

processors plus PNG (in million Euro), annual average for 2006-10 318 

Market Spain Italy France Portugal PNG 

Belgium and Luxembourg 6.1 11.2 0.3 0.8 

Germany 4.3 9.3 3.2 14.8 

Denmark 1.1 

Spain 0.7 0.2 

France 72.8 7.0 1.0 

United Kingdom 9.2 11.8 1.6 5.8 

Greece 17.9 

Italy 182.8 21.7 14.8 

Netherlands 6.7 

Portugal 29.4 

Slovenia 7.4 

Total export value (Million €) 315.3 66.3 52.7 18.2 32.3 

Top 5 as % total intra-EU exports 95% 72% 92% 98% 90% 


Spain’s second largest EU market is France, constituting 23% of its intra-EU exports in the period 

2006-10. PNG only sold canned tuna to this market in 2009, with exports worth € 2.7 million, but 

averaged across 2006-2010 this came to only € 0.5 million. However, Frabelle (PNG) Ltd. intends to 

increase its future sales to France. It will soon be trialling ‘raw pack’ 319 production of up to 20 mt of 

large yellowfin per day by January 2012, which would equates to around 3,300 mt of finished 

product per annum. This export strategy may result in some minor competition between PNG and 

Spain on the French market. But given that this market has long been dominated by extra-EU 

imports (see above and Section 6.7.4), Spain is simultaneously competing with several other third 

countries. In addition, Frabelle is yet to establish clients and has not started producing commercially 

Spain’s third largest market is Portugal (9% in value of its intra-EU sales in 2006-10) and where 

Spanish firms also own major brands (such as Jealsa’s Rianxeria which has around 8% share of the 

Portuguese canned tuna market). PNG exports only tiny volumes to Portugal (worth an average of € 

0.04 million in 2006-10). Trade diversion from Spain to PNG in the Portuguese market is not 

expected. 

318 Re-exports are important for the Netherlands and several other EU member states. The commercial role 

and statistical significance of re-exports does not fundamentally alter the dynamics focussed on in this report, 

and so are excluded. 

319 ‘Raw pack’ or thon au naturel is canned tuna in brine that is only cooked once, in the can. 




As identified in Table 6.13, on the surface, the other main market interactions between PNG and EUbased 

processors over the last five years have been in: 

1. The UK market, mainly with processors in France and Spain 

2. The German market, with processors in Italy, Spain and France 

We can discount direct competition between production in PNG and France in terms of their exports 

to the UK and Germany because France-based processors focus predominantly on value-added 

products; a range of products that PNG does not produce and is unlikely to produce into the longterm 

future, at least without investment by a major EU branded-firm willing to upgrade PNG into 

value-added processing. 

We can also discount Italy’s exports to Germany. Despite Germany being Italy’s most important 

intra-EU export market (valued at an annual average of € 9.3mn over 2006-2010), the interaction 

with PNG is not considered to be direct, or of commercial importance. This is because it is assumed 

that Italy is exporting a different type of product to Germany, as the average cost per tonne is € 

4,736 between 2006 and 2010 compared to an average cost for PNG product of € 2,515 on the 

German market over the same period. 

The average cost per tonne of Spanish exports to the UK between 2006 and 2010 was € 3,788. The 

average cost of PNG exports to the UK over the same period was considerably lower at € 2,095. The 

large average difference in price between Spain and PNG exports to the UK may reflect the fact that 

the former is also selling higher-priced canned yellowfin and premium products such as tuna in glass 

jars as part of its export portfolio. However, it is known that non-branded processors in Spain 

produce standard canned tuna for UK clients (such as Jealsa for the Princes brand). 320 

Given that Spanish firms need to increase their export sales in order to grow in the context of a 

highly competitive domestic market, we assume that they will attempt to increase targeting of midrange 

priced EU markets where their penetration is currently minimal, such as the UK. If Spanish 

producers were to look to the UK ‘standard’ canned tuna market as a potential source of export 

growth, 321 the derogation may generate some potential trade diversion in the medium-term. 

However, the far more important dynamic contributing to any increase in PNG share of the UK 

canned tuna market is the accreditation of the PNA free-school purse seine fishery as MSC certified. 

Moreover, the Spanish industry has not targeted the UK market so far, so it is difficult to see how it 

would suddenly become competitive there in the medium-term future. 

On the surface, the Netherlands may offer another mid-range canned tuna market for increased 

Spanish exports. However, given that over 80% of this market is dominated by only three brands, 

Spanish firms would probably need to purchase one of these brands to gain a sufficient foot-hold in 

this market. 

Finally, Spanish sales to Germany are minimal, totalling only 1.4% in value of its intra-EU exports. It 

is, however, worth considering potential trade diversion here given that PNG is likely to continue to 

focus on the German market as an area of growth (see Section 6.7.4). A surprising finding in the data 

is that the average price per tonne of Spanish exports to Germany over 2006-2010 was € 6,368, 

322 

which seems extraordinarily high. This may be a result of inaccuracies in the recording of data or 

of Spain primarily exporting high-value product to this market. In the latter case, PNG and Spain will 

320 Industry interviews and consultant’s direct observation, September 2010. 

321 i.e. through non-branded processing for one of the top-5 supermarkets or for Princes (it is highly unlikely 

that Thai Union would contract Spanish firms to process significant volumes of standard canned tuna for the 

John West brand given that it already has two factories in Africa and three in Thailand). 

322 The price per tonne of PNG canned tuna in Germany averaged over the same period was €2,515. 




have no interaction on the German market in the medium-term. Moreover, the volume of Spanish 

canned tuna exports to Germany declined by 7.4 times between 2001 and 2010 (from 4,979 mt to 

676 mt), indicating that Spanish firms could not compete on this market regardless of PNG’s 

derogation. 

Moving away from the discussion of potential trade diversion, one remote possibility, but which has 

nothing to do with PNG’s derogation, is that the economic crisis will compel lower-income Italian 

and Spanish consumers to switch to lower priced canned skipjack. However, lower cost importers 

have not had any real influence in these markets in the past, including during prior recessionary 

periods (e.g. in the 1970s), so it is deemed unlikely that PNG will gain access to these markets in the 

medium term even if they do see a shift in major product type. 

The more realistic possibility of PNG gaining access to Italian and Spanish markets is if EU-based 

processors choose to divest from the industry or go bankrupt. In this scenario, PNG would be one of 

several third countries hoping to be able to gear up to produce yellowfin packed in olive oil in 80g 

cans. However, with the likely collapse of the Doha Round, EU-based industry is unlikely to be 

subject to increased competition through multilaterally liberalised tariffs, and given the high 

sensitivity of the sector, especially for Spain, it is unlikely that the EU would negotiate new FTAs that 

would open it up to bilateral liberalisation. 

Finally, it is reasonable to assume that for tuna loins, PNG’s derogation potentially offers a positive 

symbiosis with EU-based processing industry because it will be able to offer the latter an additional 

supply of duty-free imported loins. 323 

To summarise: this discussion of the medium-term impacts of the derogation on EU-based 

processors and their markets has identified three key points: 

1. Without the purchase of a major brand, PNG’s lack of direct penetration of Italian and 

Spanish markets is very unlikely to change. 

2. If there are plans for intra-EU growth by Spanish non-branded exporters, they may deepen 

interactions with PNG exports, possibly in the French market. 

3. However, Italy- and Spain-based processors may develop a symbiosis with PNG through the 

increased import of loins. 

6.8.4 Impacts on Third Countries and their EU Canned Tuna Markets 

The major third country suppliers to the EU of tuna loins and canned tuna have already been 

detailed (see Sections 6.2, 6.3.2 and 6.6). While some countries have dropped in and out of being 

among the major suppliers, Thailand, Philippines, Ecuador, Mauritius and Seychelles have all 

consistently been leading suppliers throughout the last decade. This section looks at potential 

impacts on these suppliers of the derogation provided to PNG. 

323 This new source of supply may reduce internal negotiations and commercial tensions between EU-based 

processors and the EU DWF over the provision of future volume-based import quotas for reduced duty on loins 

which is to be renegotiated in 2012 for re-commencement in 2013. 




Impacts on third countries and their EU canned tuna markets from March 2008 to present 

As already noted, while the derogation was applied for in March 2008, it had only been used in 2011 

and even then only minor quantities. Therefore, there cannot have been any direct impact on third 

country exports to the extra-EU market to date and the derogation cannot explain shifts in PNG 

share of EU markets for canned tuna and tuna loins (detailed in Tables 6.14 and 6.15 respectively). 

While the derogation does partly contribute to explaining recent investment plans in PNG, these 

investments are primarily motivated by the strategic aim of gaining access to the tuna resource in 

PNG waters. None of these investments have commenced production so the derogation cannot 

explain the pattern of PNG exports to the EU from March 2008 to the present. 

Regardless, neither the data for relative PNG share of the EU canned tuna market (Table 6.14) nor 

that for the loin market (6.15) show any discernable trends in the ‘post-derogation’ period. For 

extra-EU imports of canned tuna, the Top-5 third countries 324 have dominated the market for the 

seven-year period running up to the derogation (2001-2006) and afterwards. PNG has remained a 

relatively insignificant player throughout. In fact, PNG’s largest recorded volume share of the extra- 

EU canned tuna import market was before the derogation (i.e. 4.5%. in 2005). The market share of 

the leading third country supplier in that year (Ecuador) was 3.4 times higher than PNG’s. 

For PNG volume share of the extra-EU import market for tuna loins there was a minor increase in the 

post-derogation period when it hit a new height of 2.4% in 2010, but there is no discernable trend in 

the data. This share is, however, insignificant compared to that of the Top-3 leading third country 

suppliers in 2010 (i.e. Ecuador with 35.6%, Mauritius with 12.0%, and Thailand with 11.6%). 

In sum, the evidence shows that the derogation has not had any significant impact to-date on the 

extra-EU import market for canned tuna or tuna loins. 

Table 6.14 Share of EU Import Market by Selected Third Country Suppliers of Canned Tuna, 2001-10 

(all in %) 



2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Thailand Volume 15.5 16.3 17.0 13.8 16.2 20.0 15.9 14.9 16.5 17.9 

Value 13.2 13.7 13.4 12.2 14.8 17.6 14.3 13.3 14.3 16.2 

Ecuador Volume 8.3 8.3 10.0 12.2 15.5 15.0 17.8 22.1 16.9 16.8 

Value 8.4 8.5 9.7 11.8 15.7 15.8 18.5 23.2 16.6 16.8 

Philippines Volume 9.5 11.8 11.3 9.0 9.9 10.9 12.2 12.8 14.3 12.2 

Value 7.2 9.2 7.9 6.7 7.7 8.4 9.0 10.1 11.1 9.1 

Mauritius Volume 9.1 7.7 7.7 9.3 7.7 9.0 9.5 9.0 9.4 11.9 

Value 9.6 8.1 7.3 8.6 8.0 9.6 9.9 10.2 9.8 12.6 

Seychelles Volume 15.7 16.4 14.0 14.4 14.2 14.3 11.2 10.2 11.2 11.1 

Value 20.6 20.3 19.9 18.0 16.5 16.6 13.1 12.0 14.8 14.5 

Top 5 volume share 58.1 60.7 60.0 58.8 63.5 69.2 66.5 69.0 68.2 69.8 

Top 5 value share 59.0 59.8 58.2 57.4 62.7 67.9 64.8 68.8 66.5 69.2 

PNG Volume 0.9 1.7 3.4 3.7 4.5 3.0 3.8 2.1 3.9 4.3 

Value 0.9 1.5 2.9 1.8 4.3 2.7 3.3 2.2 3.3 3.6 

Source: DG Trade from Eurostat (5 August 2011) using four HS codes for canned tuna (1604 1411; 1418; 1939; 2070). 

324 Thailand, Ecuador, Philippines, Mauritius, Seychelles. 




Table 6.15 Share of EU Import Market by Selected Third Country Suppliers of Tuna Loins, 2001-10 

(all in %) 



2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Ecuador Volume 37.5 43.2 46.7 33.3 28.8 38.5 33.0 40.5 39.2 35.6 

Value 36.1 41.4 43.0 31.1 27.0 36.2 31.1 37.6 35.9 34.3 

Mauritius Volume 0.0 0.2 0.0 0.0 1.9 9.6 9.8 12.2 10.5 12.0 

Value 0.0 0.2 0.1 0.0 2.0 9.0 10.5 14.0 10.5 12.8 

Thailand Volume 1.8 4.7 8.1 5.0 6.2 5.5 10.2 8.2 15.1 11.6 

Value 1.6 4.6 6.9 4.2 4.8 5.5 8.6 6.7 16.7 9.2 

Guatemala Volume 0.0 0.2 0.2 6.0 8.1 2.8 0.0 1.7 5.1 8.3 

Value 0.0 0.2 0.2 5.5 7.5 2.8 0.0 1.8 4.8 8.8 

El Salvador Volume 0.0 0.0 0.7 12.6 16.3 12.9 17.3 13.9 11.7 7.3 

Value 0.0 0.0 0.7 12.2 17.3 13.8 18.6 15.1 13.0 8.5 

Top 5 volume share 39.3 48.3 55.8 56.9 61.3 69.3 70.3 76.4 81.5 74.6 

Top 5 value share 37.7 46.5 50.8 52.9 58.5 67.3 68.8 75.1 80.9 73.7 

PNG Volume 0.0 0.0 0.0 0.0 0.4 1.7 1.2 0.7 1.6 2.4 

Value 0.0 0.0 0.0 0.0 0.4 1.6 1.1 0.7 1.7 2.3 

Source: DG Trade from Eurostat (5 August 2011) using two HS codes for tuna ‘loins’ (1604 1416; 1931). 

A speculative indirect impact of the derogation is that industry might be limiting new investment in 

third countries due to concerns over the possible medium-term effects of the derogation on PNG’s 

penetration of the EU market. However, this has not been recorded in industry media or reported to 

the consultants by EU industry. An extensive study on the global tuna industry by Hamilton et al. 

(2011) found that there were no future plans by Spanish industry to invest in new locations of 

production outside of attempts to penetrate the Latin American market through the purchase of 

brands and processing facilities based within the region (e.g. Calvo in Brazil). Moreover, as already 

noted in Section 6.5, it is widely recognised that there is overcapacity in canned tuna processing on a 

global scale. This situation is positive for supermarket and branded-firm procurement of canned 

tuna from contract processors as it generates sharp competition on price among the latter. It is 

however, a less profitable environment for investing in new processing capacity due to this sharp 

price competition unless the investment is connected to access to tuna resources, as in the case of 

PNG. 

Impacts on third countries and their EU canned tuna markets in the medium term (to 2016) 

Two potential impacts in the medium term on third country suppliers to the EU have been identified: 

a) Raw material diversion of tuna catch in the WCPO, especially (but not exclusively) in the PNG 

EEZ, from those third country processors that rely on this supply to PNG-based processors. 

b) Trade diversion of finished product, where increased PNG exports of duty free canned tuna 

and tuna loins to the EU market will displace market share of existing exporters. 

Despite requests, the consultants were unable to obtain any supporting quantitative data or other 

forms of hard evidence from EU industry to support their stated concerns. As such the following uses 

what data and other information was available to the consultants from alternative sources. 




a) Raw material diversion 

As already noted above, the total estimated raw material throughput requirements for the PNG 

production scenario for 2016 are 182,500 mt (or ~113,150 mt for canned tuna and 69,350 mt for 

tuna loins). (It is important to re-iterate that not all of this production will be exported to the EU.) As 

detailed in Section 3.2.1, actual raw material throughput in 2010 was around 62,500 mt (41,075 mt 

for canned tuna and 21,425 mt for loins). Therefore, to reach the projected production scenario for 

2016, PNG-based processors will need an additional 120,000 mt of whole round tuna. Although the 

current catch by the PNG fleet slightly exceeds this amount (~ 205,000 mt in 2010) and the 2010 

catch in PNG waters (>700,000 mt) vastly exceeds this amount (see Section 3.1), it is not clear where 

the additional raw material processing requirements will be sourced and with global sourcing, could 

theoretically be sourced from non-PNG fleet vessels operating outside of PNG waters. 

Two potential possibilities are identified: 

1. New or additional fishing capacity in PNG (both archipelagic and EEZ) and/or WCPO waters 

directly linked to future processing requirements 

2. Raw material diversion from current processors. 

In the first case, existing regional effort constraints are prescribed under CMM 2008-01, which limits 

purse seine effort to 2001-2004 levels, and hard limits to purse seine effort are now starting to be 

imposed under the PNA VDS (see Section 5.4). Whilst these measures have not been completely 

successful in limiting effort (vessel numbers have continued to increased until recently), the total 

WCPO catch has not increased significantly over the past three years. These measures will also be 

strengthened in the near future under the stringent conditions (and recommendations) imposed on 

the PNA purse seine fishery by the MSC certification of the PNA free school skipjack fishery , through 

adoption of reference points, harvest control rules and tightening up of the VDS. It is therefore 

reasonable to assume prima facie that raw material supplies/total catch will not significantly 

increase into the future. 

However, it does remain unclear whether the allocation of licences associated with new PNG 

processing plants will result in additional vessels joining the fishery, or merely existing vessels in the 

WCPO relocating. It is noted that, according to policy advice provided by NFA, “only those vessels 

with fishing history in the WCPO will be considered for licences and for any new vessel to be 

considered for licensing, proof of scrapping the old vessel in the WCPFC-CA must be provided”. 325 

Some increase in capacity may nonetheless occur, but it should not be significant if these policy 

guidelines are followed. 

The second case is therefore assumed to be the more relevant (i.e. raw material diversion from 

current processors). 

On top of the basic constraint of the commercial availability of tuna raw material in PNG is the issue 

of whether or not it is compliant with EU SPS measures and the EU IUU regulation. Here, the issue is 

326 

not that the number of vessels with SPS certificates is inadequate. Instead, the constraint is the 

availability of SPS compliant fish to PNG processors. Despite having global sourcing in place, 

currently, there is no incentive for vessels to offload to PNG processors (existing or potential plants) 

by those vessels that have no commercial links to onshore investments. Unless PNG-based 

325 NFA, pers. comm., September 2011, and written advice from NFA Managing Director, S. Pokajam, 

December 2011. 

326 Given that, in 2010, over 700,000 mt of fish caught in WCPO waters was likely caught by vessels with EU SPS 

certificates (see Section 5.6.2). 




processors were offering higher prices than the main canning-grade tuna market of Bangkok, then 

there would be no incentive to do so. 

Most vessels operating in the WCPO have long standing-supply arrangements (including long-term 

supply contracts and ‘gentlemen’-type arrangements) or, due to vertical integration, commitments 

to supply ‘home’ plants (i.e. Japanese, Korean, Philippine and Spanish-owned boats). The 

commercial reality of industrial organisation and/or financial and legal interconnections in the tuna 

trade in the WCPO (and elsewhere) places a significant constraint on the availability of fish to PNGbased 

processors. This reality into taken into consideration in the following estimates of possible raw 

material diversion generated by increased tuna processing in PNG in 2016. 

In short, the trade diversion of an additional 120,000 mt of whole round tuna caught in the WCPO is 

contingent upon three main factors: 

1. Purse seine vessel licensing policy strategies deployed by the PNG government (and 

potentially other PACP states) to divert raw material to onshore processors (as noted earlier 

in this section, catch currently taken by the PNG fleet and foreign vessels in PNG waters 

under bilateral access is surplus to the projected requirements for additional raw material); 

2. Vessel vertical integration or supply contracts with foreign processors and/or trading 

companies; and 

3. Vessel compliance with EU SPS measures and the EU IUU Regulation. 

If PNG and other PACP governments take the political decision to adopt new vessel licensing 

strategies designed to divert tuna catch to domestically-based processors, the following seven fleets 

have been identified as potential sources of raw material diversion 327 (see Table 6.16 for information 

on the full range of purse seine fleets and the processing destination of their catches in 2010): 

1. WCPO catch by the PNG fleet 

328 of purse seiners totalled 205,837 mt in 2010. This includes 

103,000 mt taken by Vanuatu-flag vessels in the fleet (13), 11,000 mt by Taiwan-flag vessels 

and 7,500 mt by Chinese vessels. Aside from the 60,000 mt that was processed domestically, 

around 75,000 mt was sold to the Philippines and possibly around 75,000 mt to Thailand. 329 

Each of these is a clear possibility for diversion of a large amount of raw material to PNG 

processors. 

2. South Korean catch in the WCPO totalled 277,312 mt in 2010. The 120,000 mt processed in 

South Korea is highly unlikely to be diverted because the largest fishing firms – Dongwon 

330 

Industry and Sajo/Oyang – are vertically integrated into processing in Korea. However, of 

the estimated 90,000 mt sold to processors in Thailand, a proportion could be diverted to 

PNG. 

327 Other fleets have been excluded as realistic possibilities for raw material diversion for a wide diversity of 

reasons, including: ongoing lack of vessel compliance with EU SPS measures; vertically-integrated vessels that 

are locked into supplying ‘home’ processors (e.g. Korea or Philippine catch sent ‘home’ to Korea and the 

Philippines); and specific licensing arrangements with other PACP states, such as joint-venture agreements. 

328 The PNG fleet includes PNG flag vessels and locally-based foreign/chartered vessels. 

329 Note that Thailand does not have boats operating in the WCPO and canneries based there are largely 

reliant on frozen tuna imported from non-Thailand fleets active in the WCPO and other oceans (mainly the 

Western Indian Ocean). In 2010, the Thai purse seine fleet consisted of four vessels operating in the Indian 

Ocean, but these have since been re-flagged and fish in the Atlantic Ocean to supply catch to a Ghana-based 

plant. Hamilton et al. 2011; pers. comm., industry representative, October 2011. 





3. Japan’s total purse seine catch in the WCPO in 2010 was 250,427 mt. Around 56,000 mt was 

sold to Thailand and could be diverted to PNG. Almost all Japan purse seiners are already 

compliant with EU SPS measures. 

4. Catch by purse seiners flagged by Republic of Marshall Islands (RMI) totalled 56,800 mt in 

2010. Of this, 8,000 mt supplies a loining plant in RMI and thus could not be diverted. 

However, around 31,000 mt was sold to Thailand. Part of this volume could be diverted to 

PNG if an EU-compliant competent authority is established in RMI for the purposes of SPS 

and IUU fishing certification, which the government has shown interest in achieving. In 

addition, technically, several boats in the RMI fleet could meet EU SPS measures. 

5. Philippines distant water fleet catch in PNG waters in 2010 included around 16,000 mt 

transhipped to Thailand and possibly 5,000 mt to Vietnam. Proportions of each of these two 

volumes could be diverted to PNG processors. It is highly unlikely that the remainder of the 

catch will be diverted because it supplies Philippines-based processors which experienced 

raw material shortages in 2010 and 2011. 

6. Taiwan catch in the WCPO in 2010 331 was transhipped to Thailand (198,000 mt), Philippines 

(10,000 mt) Vietnam (7,000 mt) and China (5,000 mt). Proportions of any of these volumes 

could possibly be diverted to PNG-based processors. 

7. If the renegotiation of the Multilateral Treaty on Fisheries between the Pacific island 

countries and the USA fails, any subsequent bilateral arrangements concluded by US vessels 

and PNG could incorporate a volume of fish to be landed for PNG-based processors (e.g. the 

US fleet transhipped 122,000 mt in 2010 to Thailand). 

8. Vanuatu-flag vessels, whose catch has largely been included in previous options and 

probably exceeded 120,000 mt in 2010, trade most of their catch to Thailand, as noted, and 

a bloc, are very likely sources of raw material. 

9. Vessels which are already likely to supply planned PNG processing investments, but 

currently tranship a portion of their catch to processors elsewhere, including Thailand and 

the Philippines. 

In summary, if raw material diversion is spread across these players, the main medium-term impacts 

of the derogation will be on processors in Thailand, Philippines, and on lesser scale, Vietnam and 

China. There are no likely raw material diversion impacts on EU-based processors or IEPA and GSP+ 

third countries. 

However, an important caveat must be re-emphasised. Each of the potential sources of WCPOcaught 

raw material diversion to PNG-based processors entails complex political negotiation. Unless 

there is some kind of condition for compulsory offloading to PNG processors as part of access 

arrangements (particularly for those distant water fleets that do not have onshore investments), 

then it is going to be very difficult to override existing commercial linkages/arrangements for raw 

material supply. As noted, a significant percentage of the vessels fishing in PNG are already 

compliant with EU SPS/IUU regulations. NFA may need to enforce tougher requirements on raw 

material offloading by vessels operating under licences already associated with PNG-based 

processing plants. If a plant has surplus catch, perhaps the first right of refusal should be given to 

other PNG plants who might be having difficulties sourcing SPS compliant raw materials rather than 

selling it elsewhere (e.g. to Thailand or the Philippines). 

331 Note in Table 6.16 that some Taiwanese, Vanuatu and Chinese catch is included in the PNG fleet catch. 




Table 6.16 Identifying potential raw material trade diversion for Third Countries – WCPO purse 

seine catch by fleet or flag and estimated processing country receipts in 2010 for major 

processing countries (all figures to nearest ‘000mt) 

Purse seine fleet and 

2010 catch (WCPO) 

Estimated processing facility (canning/ loining) receipts by source (purse seine 

fleet only) 

Fleet/flag Volume Thailand PH ROK AS ID JP PNG Viet China EPO 

PR China 54 17 37 

FSM 22 18 

Indonesia 207 15 75 15 

Japan 242 56 10 5 80 5 

Kiribati 26 7 19 

Korea 277 90 10 120 10 2 5 2 5 

RMI 57 31 

NZ 25 8 14 2 

PNG 205 9 75 60 

Phils DWF 73 16 19 5 

Phils PH 93 70 10 

Taiwan 199 198 10 5 

Tuvalu 11 8 3 

USA 246 122 80 24 

Vanuatu 24 90 7 

Vietnam 15 9 13 

Solomon Is 13 13 

Ecuador 8 0 8 

El Salvador 7 33 11 

Spain 30 0 30 

Total 740 224 120 118 92 85 60 49 41 95 

Notes: 

This table is included for illustrative purposes to demonstrate the approximate scale of current product flow by 

fleet source and destination, and is largely drawn from Hamilton et al. 2011 and updated. In most cases, 

detailed information on cannery receipts is not available and figures are estimates only, based on best 

available information. Processing totals by location should regarded as indicative only. 

Purse seine catch figures are listed by vessel flag, except for PNG where the fleet includes TW flag vessel catch 

(11,000 mt), VU flag catch (103,000 mt) and China flag (7,500 mt). 

The cannery receipts for Thailand (the largest processor) are by vessel flag, so may not reconcile with some 

fleet catches (e.g. Taiwan, Vanuatu); the compiled Thai data are for frozen skipjack, yellowfin and bigeye, and 

do not include albacore. They may include Indian Ocean and Eastern Pacific fish in some cases (e.g. El 

Salvador). 

Other minor processing locations and their approximate receipts not included in the table are Solomon Islands 

(8,000 mt), Marshall Islands (8,000 mt), and NZ (3,000 mt). 

Not all of the purse seine catch is destined for canning and much may be destined for fresh consumption (e.g. 

Indonesia) or other processing (e.g. Japan katsuobushi). Minor catches by other gears may also be canned (e.g. 

pole-and-line, longline). Totals processed by fleet/flag would be incomplete in most cases. 

PH = Philippines, ROK = Korea, AS = American Samoa, ID = Indonesia, JP = Japan, EPO = Eastern Pacific Ocean 

processing countries, including Ecuador, El Salvador, Guatemala. 




b) Trade diversion 

Given the dynamics of competition for the extra-EU import market, the complexity and flux of world 

economic conditions, and the range of commercial and political struggles over resource and market 

access, it is deemed unrealistic to project trade diversion scenarios for particular exporting 

countries. 332 It is possible though to combine historical trends of market share by EU market with a 

qualitative understanding of the position of third countries in the EU-centred value chain to arrive at 

some considered possibilities of which will be most likely to be effected by medium term projections 

for PNG exports. 

Two growth scenarios are assumed for total extra-EU import volumes of canned tuna, and one 

growth scenario for tuna loins. For each growth scenario PNG market share is calculated according 

to the projected export volumes to the EU detailed in Table 6.11. These projections form the basis 

for assessing the impacts of global sourcing on the three main categories of third countries identified 

earlier (i.e. African IEPA, Latin American GSP+ and Southeast Asian GSP). No attempt has been made 

to predict future tuna prices, so no account is provided of changing values or value shares of canned 

tuna or loin markets. 

Growth scenario for extra-EU import volumes of canned tuna I: relative market stagnation 

Given the unexpected decline in extra-EU27 canned tuna imports in 2009-10, a scenario of relative 

stagnation in this market has been assumed. To do so a five-year average has been taken for extra- 

EU imports (2006-2010), which includes the highest ever volume in recorded imports (i.e. 2007) and 

333 

the lowest since 2002 (i.e. 2010). Based on these assumptions the projected extra-EU import 

volume in 2016 is around 404,400 mt. Based upon projected PNG exports to the EU in 2016 of 

around 56,705 mt, PNG could capture up to 14.0% share of a relatively stagnant extra-EU import 

market for canned tuna (from 4.3% in 2010). 

Growth scenario for extra-EU import volumes of canned tuna II: mild market growth 

Alternatively, it might be assumed that the extra-EU canned tuna import market returns to growth 

(perhaps spurred on by austerity-driven consumption of cheap, healthy animal protein, by market 

promotions and/ or by newly emerging canned tuna markets such as Poland). In this scenario we 

take the growth rate for the last seven years before the 2009-2010 drop off in imports (i.e. a market 

expansion of 1.21 times between 2002 and 2008). When applied to extra-EU import volumes in 2010 

we arrive at a higher estimate for 2016 of around 448,527 mt. Based upon projected PNG exports to 

the EU in 2016 of around 56,705 mt, PNG could capture up to 12.6% share of a mildly expanding 

extra-EU import market for canned tuna. 

334 

Under both of these scenarios, potential PNG share of the extra-EU canned tuna import market is 

significantly less than that of the two largest third country suppliers in recent years (i.e. Thailand and 

Ecuador (see Table 6.14)). In light of this finding, the consultants concur with Oceanic 

Développement (2010) that the notion that the EU market would be ‘flooded by imports from PNG 

332 These variables are slightly more stable in the intra-EU market due to its domination by one location of 

production (i.e. Spain). 

333 See Table 6.6 for the data used here. 

334 Of course, the extra-EU import market may grow far more rapidly than expected. For example, production 

by Spain-based processors might contract after its recent increases and/or Spanish processors may offshore 

more production to Latin America. Alternatively, austerity-driven consumption and/ or newly emerging canned 

tuna markets may drive absolute market expansion. We are using two conservative growth scenarios because 

projecting more optimistic scenarios entails a complex interplay of variables that is beyond the scope of this 

report. 




does not appear to be realistic’. 335 In other words, these projections do not serve as evidence for 

market destabilisation. 

Growth scenario for extra-EU import volumes of tuna loins 

For tuna loins, an increase is assumed in EU imports by 2016 to 159,000 mt from 104,400 mt in 2010 

(i.e. a difference of 54,600 mt). This projection is based upon the relative increase in the seven-year 

period 2004-2010 of 1.52. 

336 We assume continued growth because EU-based producers, especially 

in Spain, will continue to operate behind effective tariff protection for the foreseeable future since 

the collapse of the Doha Round this year. 337 Whether or not Spanish canneries will continue to 

convert their canning process to increasingly rely on the utilisation of loins is an open question, not 

least as processing from large, whole round yellowfin within Spain is more profitable than processing 

from loins (see Section 6.3.1). 

Based upon projected PNG exports to the EU in 2016 of 29,200 mt, PNG could capture up to 15.4% 

share of the extra-EU import market for tuna loins. Under this scenario, Ecuador’s 2010 market 

share (Table 6.15) is more than double that of Papua New Guinea’s projected share in 2016. In short, 

the derogation will not have a market destabilising effect. Moreover, given the assumption that the 

EU market for loins will increase by 54,600 mt between 2010 and 2016 and that PNG’s projected 

exports in 2016 are 29,200 mt, existing third country suppliers will still have room to grow. In light of 

this, we do not consider further the trade diversionary effects of the derogation on third countries in 

the extra-EU import market for tuna loins. 

Potential trade diversion for third countries in the extra-EU canned tuna import market 

PNG canned tuna exports to the EU were 15,867 mt in 2010. The 2016 projection of PNG exports 

reaching 56,705mt entails an increased volume of around 40,000 mt. Given that there are very 

limited projected increases in volumes under both of the growth scenarios for the extra-EU import 

338 

market for canned tuna, PNG’s projected increase in exports may mean that the derogation 

contributes to a minor trade diversionary effect: 

• Under the relative market stagnation scenario, the additional volume of PNG exports would 

result in a decrease in the intra-EU import market available to third countries of around 

339 

7,000 mt. 

• Under the mild market growth scenario, the additional volume of PNG exports would result 

in an increase in market volume available to third countries of around 37,000 mt. 340 

In other words, under the relative market stagnation scenario, PNG’s projected 2016 exports would 

result in a minor absolute diversion of volume from third countries. Under the mild market growth 


336 Based on data in Table 6.2. 

337 However, this must of course be treated with caution. For example, Spanish industry may continue to 

transfer elements of its operations to Latin America, the global economic slump may adversely affect tuna 

consumption reducing the demand for loins, and so on. 

338 According to the first growth scenario (i.e. relative market stagnation), the EU will import around 34,000 mt 

more canned tuna in 2016 (404,400 mt) than it did in 2010 (370,847 mt). According to the second growth 

scenario (i.e. mild market growth), the EU will import around 78,000 mt more canned tuna in 2016 (448,527 

mt) than it did in 2010 (370,847 mt). 

339 Based on extra-EU import volume in 2010 of 370,847 mt and in 2016 of around 404,400 mt results in an 

estimated absolute market growth of 33,500 mt. Thus PNG increase of 40,800 mt = 7,300 mt decline in market 

volumes available to others. 

340 Same calculation as above but with a larger market in 2016 of 448,527 mt = an absolute increase from 2010 of 77,680 

mt. Minus PNG’s increase of 40,800 mt = 36,880 mt increase available to other players. 




scenario, PNG’s estimated exports would result in a relative diversion of trade volumes from third 

countries. However, under both growth scenarios, the overall medium-term impacts of increased 

PNG exports will be relatively minimal. 

Nonetheless, which players could be crowded out of extra-EU import markets for canned tuna by 

PNG in 2016 Potential trade diversion for third countries is identified by using historical trends of 

market interaction with PNG. Table 6.17 details the volume of third country canned tuna exports to 

the EU by destination market. The market share data uses annual averages for 2006-2010 so as to 

limit anomalies occurring in particular years, markets and/or by particular third countries. The 

qualitative estimate of which third countries may be impacted combines this market share data with 

the assumptions around raw material diversion detailed above. 

Two sets of types of companies in third countries have been identified as potentially being impacted: 

1. Asia-Pacific: non-branded processors targeting similar markets as PNG (e.g. Germany, the UK 

and the Netherlands) that are also reliant on the WCPO for raw material. 341 These could 

include individual processing firms in the Philippines, Vietnam, China and smaller players in 

Thailand. As detailed in Table 6.17, the German market is the main site of interaction 

between these third countries and PNG. Exports from Thailand to Germany contracted by 

6.4 times between 2006 and 2010 342 and by 27% for the Philippines. Conversely, PNG’s 

exports to Germany increased by 68% over this period, while Vietnam’s grew by only 16%. 

This indicates that PNG might capture an even greater share of this market by 2016. 

2. Others: specialised non-branded processors in a weak tuna supply position (e.g. poor 

location, without vertically-integrated fleets,) and without ownership by EU firms (i.e. that 

are not tied-in to EU markets through EU firms who have an interest in the commercial 

survival of their overseas cannery investments). If PNG-based processors increase their 

penetration of the French market for example (see above), this could impact some 

traditional suppliers of the French market (see Table 6.17). This might include a slight drop in 

market share of the single cannery in Madagascar (whose EU market share declined by 61% 

over the last five years, 2006-2010) and, possibly, one of the canneries in Côte d’Ivoire (EU 

343 

market share for this country declined by 18% between 2006 and 2010). 

With the recent MSC certification of the PNA free school purse seine skipjack fishery, there will likely 

be a shift in PNG market share of the UK market, at least for major supermarkets’ private label 

product due to commitments to source pole and line or FAD-free product. In addition, Germany will 

likely continue as a principal market, at least for non-MSC product. 

341 It is too simplistic to assume that raw material diversion alone would result in a direct reduction in Asia- 

Pacific export volumes to the EU market because companies would presumably adjust their export strategy to 

make sure they continued to supply their highest value markets such as in the EU. 

342 This sharp decline is partly because 2006 was the record high for Thailand exports to the EU. Thai exports 

have since declined as Thai processors have engaged in a strategy of market diversification (as noted earlier). 

343 Compare the trends in Tables 6.6 and 6.17. 




Table 6.17 

Identifying market interaction and potential trade diversion for Third Countries – Volume of Supplier's Canned Tuna Exports to EU27 Markets, 

annual average for 2006-10 (all in % unless otherwise specified) 

Importing country (annual 

average Extra-EU27 imports, 

2006-10, in 1,000mt) 

Source: Euro Stat (extracted by author on 30 October 2011) 

Asia-Pacific Latin Am. GSP+ Africa IEPA 

Cote 

Thailand Philippines PNG Indonesia Vietnam Ecuador Columbia Seychelles Mauritius Ghana d’Ivoire 

Madagascar 

United Kingdom (117.2) 23.2% 30.6% 21.4% 12.5% 7.4% 12.1% 11.9% 46.4% 68.1% 79.0% 2.6% 

France (72.6) 10.7% 5.1% 1.5% 11.5% 0.3% 29.1% 3.9% 13.9% 69.9% 88.9% 

Germany (58.1) 11.7% 40.7% 43.4% 72.4% 48.5% 12.9% 0.3% 2.8% 1.6% 2.8% 1.0% 2.7% 

Spain (37.8) 1.5% 0.3% 37.6% 0.1% 10.4% 0.1% 

Netherlands (33.4) 7.8% 6.9% 20.4% 6.2% 4.0% 19.6% 0.7% 7.2% 3.7% 2.1% 2.7% 

Italy (32.5) 3.2% 1.1% 0.8% 1.1% 0.7% 3.6% 63.5% 13.0% 7.2% 0.3% 28.7% 1.1% 

Finland (7.8) 8.4% 2.3% 4.0% 2.5% 0.2% 0.5% 0.4% 0.4% 

Poland (7.2) 7.3% 0.8% 1.0% 0.5% 5.3% 0.3% 2.0% 0.2% 

Denmark (6.1) 2.4% 0.9% 3.5% 0.4% 0.2% 1.0% 15.9% 0.8% 0.3% 

Sweden (5.8) 5.5% 2.3% 1.0% 3.8% 2.8% 

Belgium and Luxb’g (5.1) 0.6% 3.1% 2.3% 1.6% 0.9% 1.0% 0.1% 1.2% 0.3% 0.3% 1.7% 

Czech Republic (3.5) 2.6% 1.6% 0.1% 0.3% 4.1% 

Romania (3.5) 4.1% 0.3% 5.3% 

Austria (3.4) 2.8% 0.7% 0.3% 1.3% 6.5% 0.2% 0.8% 

Greece (2.8) 2.2% 1.2% 0.6% 3.9% 0.1% 0.2% 

Ireland (1.6) 0.7% 0.2% 0.2% 1.4% 

Malta (1.6) 1.6% 0.5% 0.3% 0.4% 0.2% 

Cyprus (1.5) 1.8% 0.1% 2.1% 

Slovakia (0.8) 0.7% 0.3% 1.7% 

Portugal (0.6) 0.2% 0.1% 0.2% 0.4% 0.2% 

Bulgaria (0.5) 0.3% 3.1% 

Lithuania (0.4) 0.3% 0.2% 0.4% 

Hungary (0.3) 0.4% 0.5% 

Slovenia (0.3) 0.2% 0.1% 

Latvia (0.3) 0.2% 0.1% 

Estonia (0.2) 0.3% 

Total exports to EU27 (Annual 

average, 2006-10 in 1,000mt) 

68.7 50.4 13.6 9.8 7.4 71.8 12.5 46.9 39.3 27.2 33.1 10.4 




In summary, in terms of potential trade diversion, it is important to re-emphasize that, at present, 

PNG is competing in the lowest value segments of the EU canned tuna market. A great number of 

firms specialize in non-branded processing and all existing and planned investments in PNG to-date 

are focused on this highly competitive activity. In this context, aside from the local development 

gains outlined in Section 4, the major beneficiaries of the derogation will be EU buyers who will have 

access to another steady source of supply of canned tuna. 

Even if PNG were able to enhance its competitiveness vis-à-vis other Asia-Pacific locations of 

production and reduce its cost structure, without major investment by European brands (as 

occurred in West Africa, the Indian Ocean and Latin America) it is unlikely that PNG will be able to 

capture substantially more market share in the long-term than that projected here. 

The principal mechanism for increased PNG share of the extra-EU canned tuna import market in the 

short- to medium-term will be MSC certification of the PNA purse seine fishery, rather than global 

sourcing. This will potentially significantly boost PNG’s exports to the UK and the Netherlands, where 

a very significant number of major players have committed to procure MSC-certified or tuna caught 

without FADs. 

7 OTHER CONSIDERATIONS 

The following provides short overviews of four additional dynamics that are important 

considerations in an understanding of the context and commercial significance of the derogation 

allocated to PNG. 

7.1 Fiji 

Fiji is the only other PACP country to sign the Interim EPA with the EU. It has not, however, yet 

submitted a notification to the EU to utilise the ‘global sourcing’ derogation. Fiji is host to a tuna loin 

processing facility (PAFCO). The reason why PAFCO appears to be commercially uninterested in 

utilising the derogation is because it is currently a contract processor of tuna loins to the Bumble Bee 

cannery in Sante Fe Springs, USA. This relationship is unlikely to change unless the Sante Fe Springs 

cannery is closed. In addition, PAFCO currently focuses on the processing of albacore loins, which are 

not in high demand in the EU. 

There are ongoing discussions between Kiribati and Fiji on establishing a cannery in Fiji. This may 

result in Fiji submitting a notification to use global sourcing. 

7.2 Direct and Indirect Preference Erosion 

Duty free market access available to PACP countries under preferential trade agreements for tuna 

exports (particularly preferences for processed tuna to the EU under the Cotonou Agreement) have 

been vital in enabling PACP-based exporters/processors to remain competitive against other 

developing country competitors with lower production costs (i.e. Southeast Asia and Latin America). 

However, several possible developments stand to erode the benefits of preferential market access 

currently enjoyed by PNG in the long-term: 

• Direct erosion of trade preferences through multilateral tariff liberalisation under Doha 

Round negotiations at the WTO. The likely collapse of these negotiations for the medium- 




term gives the PACP, other preference-receiving third countries and EU-based processors 

some breathing space in the medium term. 

• Direct preference erosion through the negotiation of new free trade agreements (FTAs) by 

the EU with third country competitors. For example, if the EU were to negotiate an FTA with 

the ASEAN group, or even bilateral agreements with individual states such as Thailand 

and/or Vietnam, then the PACP and other third countries would face intensified competition 

on the extra-EU import markets for canned tuna and tuna loins as ASEAN countries would 

certainly push for duty-free market access rather than the current GSP preference of 20.5%. 

• Indirect preference erosion due to the rising importance of FTAs between other canned tuna 

importing countries (e.g. Australia, New Zealand and Japan) and canned tuna supplying 

countries (e.g. Thailand). Although PACP countries do not export much canned tuna to 

these markets, the increased global market share achieved by tuna supplying countries (e.g. 

Thailand) indirectly erodes the competitive advantage of the PACP trade preference as the 

competitor enhances its buying power and economies of scale enabling it to sell more 

cheaply on EU markets. 

7.3 GSP+ Reforms 

As part of a review of its Generalised System of Preferences (GSP) regime, the EU is considering 

some reforms of the GSP+. As detailed elsewhere in this report, the duty-free market access that 

GSP+ status provides to several Latin American countries (especially Ecuador) is an important 

dynamic in the extra-EU import market for canned tuna and tuna loins. The reform of GSP+ includes: 

1. The exclusion of high- and middle-income developing countries; 

2. A new set of GSP+ ‘vulnerable’ countries, but the proposal does not (yet) formally list new 

GSP+ recipients. 344 

A potential outcome of the reform is the Philippines graduation to GSP+, 345 subject to ratification 

and implementation of the 27 conventions on good governance, human rights and the environment. 

This would give this country duty free access to the EU and threaten the position of several third 

country suppliers of canned tuna, including PNG. For some observers, it may also raise questions 

around Philippine investment in PNG, but it is likely that the need for tuna resource access, the lure 

of global sourcing, and MSC certification will continue to support medium-term development in 

PNG. 

It is worth noting also that the EU already institutionalised some reforms of the GSP RoO for fish and 

fish products in November 2010. These include the following: 

1. The requirement that 75% of the crew were relevant nationals was deleted; 

2. The ownership requirement was reduced from the prior 75% to 50%; and 

3. The value tolerance method was both simplified and increased from 10% to 15%. Note that 

the 15% value tolerance provision under the Cotonou Agreement was rarely used by tuna 

processors, but the GSP simplification may increase its utilization by GSP countries. 346 

These relaxations of GSP RoO could significantly benefit the Philippines should it graduate to the 

GSP+. 

344 European Commission, COM(2011) 241 final. 

345 Commission Staff Working Document 2011. 

346 Commission Regulation (EU) No 1063/2010; Bilal et al. 2011; Campling 2008a. 




7.4 PACP-EPA Negotiations 

Negotiations for a comprehensive EPA between the EU and the PACP are ongoing. One of two 

scenarios is likely: 

1. If the EPA negotiations collapse then PNG and Fiji would stick with the IEPA, the Solomon 

Islands with ‘Everything But Arms’ (EBA), and other PACP tuna processing countries with the 

standard GSP. In this scenario, it is likely that no additional PACP countries would benefit 

from global sourcing. 

2. If the EPA were concluded then global sourcing would possibly be extended (subject to 

notification) to other signatory countries. In terms of the processing of canned tuna and 

tuna loins, this might include: the Marshall Islands, although it does not currently have a 

Competent Authority established for EU SPS measures or the EU IUU regulation; and the 

Solomon Islands, which would switch from GSP to global sourcing RoO. Foreign investors 

looking to establish new tuna processing facilities in the Solomon Islands have been lobbying 

the government to negotiate a comprehensive EPA. The Solomon Islands has recently 

conducted an economic analysis and risk assessment to compare the benefits of their 

current EBA market access conditions with what could potentially be achieved under the 

IEPA or comprehensive EPA, with global sourcing RoO provisions (the results of which are 

not yet publicly available). 

Finally, it is worth noting that a number of PACPs are interested in improved market access for freshchilled 

and frozen fisheries products (falling under HS headings 0304/0305), since these are highvalue 

products in demand in the EU and are of critical developmental importance to those PACPs 

without canning or loining processing capacity. Global sourcing provisions were not offered for 

0304/0305 under the PACP IEPA, and were instead deferred for negotiation under the 

comprehensive PACP-EPA. Hence, this was one of the major contributing factors to some PACPs not 

wanting to sign an IEPA. 

8 CONCLUDING COMMENTS 

In the three year period since PNG made notification of its intention to utilise the global sourcing 

derogation (March 2008-2011) the impact has been negligible in terms of long term income and 

employment generation in the PNG economy, the effective conservation and sustainable 

management of the WCPO tuna resource, and impacts on the EU market and EU fishing and 

processing industries. This is on account of several key factors: 

• Investment in onshore processing facilities in PNG has been driven by the desire of 

companies to secure access to PNG’s highly productive waters, in response to PNG’s policy 

directive, whereby preference for fishing licences will be given to those companies with 

onshore investments in PNG. 

• To date, PNG’s three existing processing facilities have had adequate supplies of originating 

fish to meet their processing needs, so have not yet needed to source raw materials more 

widely through global sourcing. 

• While plans are in place for an additional five new processing plants, only one plant is 

currently under construction; the remaining four plants are still in the planning phase – 

hence, these facilities are yet to require raw material supplies. 

Over the medium- to longer-term, global sourcing will play an increasingly important role in the 

development and survival of PNG’s tuna processing industry. Duty free market access to the EU, 




coupled with global sourcing, makes onshore investment in PNG a more attractive prospect, given 

PNG’s competitive constraints relative to other lower cost sites of production also supplying the EU 

market (i.e. Thailand, Philippines). Attracting more investment in onshore processing facilities will 

enable PNG to achieve greater economies of scale and improve its position relative to other 

competitors, particularly in the event that PNG’s margin of preference erodes in future. In doing so, 

development benefits will be accrued in terms of additional employment and income generation. 

However, rapid large-scale expansion of PNG’s processing sector of the magnitude which has been 

widely cited in various public fora, by both PNG Government and EU industry alike, needs to be 

tempered with reality. Given PNG’s highly difficult operating environment and the overcapacity 

which already exists globally in the canned tuna processing sector, the likelihood of achieving this 

level of development (e.g. in excess of 350,000 mt throughput annually) is negligible. 

Fishing vessel and processing plant compliance with EU SPS and IUU Fishing Regulations should not 

be a major constraint to PNG’s processing facilities sourcing adequate raw material supplies. Rather, 

the fact that many vessels operating in the region have long standing supply arrangements with 

trading companies, domestic plants and other non-PNG based processors could prove to be the 

most serious impediment to sourcing raw materials, irrespective of global sourcing. To combat this 

issue, PNG will need to consider implementing arrangements which guarantee supply to proposed 

future plants, such as compulsory offloading being incorporated into vessel licencing conditions. 

Should tuna stocks in the WCPO remain in their current unexploited state through effective 

conservation and management at the regional, sub-regional and national levels, the RoO derogation 

should not negatively impact on the health of region’s tuna resources. However, at present, there is 

considerable room for improvement, particularly on the part of PNG, to ensure fishing effort level 

restrictions are fully respected under current fisheries management systems. 

The impacts of global sourcing on the EU fishing and processing industries are likely to be minimal - 

the most major threat being if PNG’s RoO derogation serves as a precedent and is afforded to other 

competing countries with tuna processing interests through EU preferential trade agreements 

(particularly ASEAN countries). Instead, assuming catches with the WCPO remain stable, the main 

impacts will be felt by processors who also rely on raw materials from WCPO waters and will 

compete with PNG for supply (i.e. Thailand, Philippines, and, to a lesser extent Vietnam and China). 

Even if export volumes from PNG to the EU increase to projected levels, PNG will remain a minor 

market player, with little likelihood of destabilising the EU canned tuna market. 

While not directly attributable to global sourcing, negative social and environmental issues 

associated with tuna processing developments need to be more accurately quantified and in turn, 

carefully managed to ensure they do not magnify as new processing plants come onstream. 

Widespread global public attention (both positive and negative) concerning global sourcing and the 

development of PNG’s tuna processing sector has already served to draw attention to associated 

social and environmental risks, which both processing companies and PNG Government will need to 

address. 




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APPENDIX 1 

TERMS OF REFERENCE (ANNOTATED) 

<strong>Report</strong> on the implementation of the derogation to the standard rules of origin granted to 

the Pacific ACP States in the framework of the Interim Economic Partnership Agreement 

FWC COMMISSION 2011 - LOT 1 : Studies and technical assistance in all sectors 

EuropeAid/129783/C/multi 

1. BACKGROUND 

Context of the <strong>Report</strong> 

The concept of Economic Partnership Agreements (EPAs) between the EU and ACP States (ACP) was 

agreed in Cotonou in the year 2000 by all parties. EPAs were conceived as an instrument to foster 

ACP integration into the global economy and to support ACP sustainable development. The 

agreements pursue an overarching development objective which includes a trade component. 

To date, only one comprehensive EPA has been concluded, with the Caribbean region. In Africa and 

the Pacific, ACP and EU have concluded interim EPAs to minimise any possible trade disruption for 

the ACP arising from the expiry of the Cotonou trade regime whilst proceeding towards the 

conclusion of comprehensive regional EPAs. On 20 December 2007 the EU Council of Ministers 

adopted a Regulation (Market Access Regulation) providing duty free and quota free access to those 

ACP countries that had initialled a WTO compatible interim agreement with the EU. Negotiations of 

the comprehensive regional EPAs with the various ACP regions advance at different rhythms. 

Progress on the signature and ratification of the interim EPAs varies from region to region and from 

country to country. 

In the Pacific region, an interim agreement has been signed with the two countries that account for 

almost all trade with the EU, namely with Papua New Guinea (PNG) on 30 July 2009 and with Fiji on 

11 December 2009, and is being provisionally applied with PNG since 20 December 2009 Fiji has not 

yet notified the EU of provisional application. The Interim Agreement is therefore not implemented 

with Fiji, and Fiji continues to benefit from market access to the EU under the Market Access 

Regulation. The Least Developed Countries (LDCs) of Kiribati, Samoa, Solomon Islands, Tuvalu and 

Vanuatu all benefit from the Everything But Arms (EBA) initiative of the EU's Generalised System of 

Preferences (GSP) which offers duty free and quota free access to the EU market. The Pacific ACP 

(PACP) non-LDCs that did not join the interim EPA (Cook Islands, Tonga, Marshall Islands, Micronesia, 

Niue, Palau and Nauru) have benefited from the EU's regular Generalised System of Preferences 

since 1 January 2008. Trade between most of the ACP Pacific States and the EU is very limited and 

erratic. The PACP share of EU trade is just 0.06 %. Their most important export products to the EU 

are palm oil, copper, sugar, coconut (copra) and fish (see fact sheet attached as annex for more 

information). 

The interim Pacific EPA includes a derogation to the standard rules of origin for processed fish 

products. The so-called "global sourcing" provisions for products of CN headings 1604 and 1605 

(prepared/processed fish, mainly tuna) allow the use of non-originating raw materials of Chapter 03 

landed in a port of a Pacific State on condition that it is then processed in on-land premises. The 

provisions on special rules of origin were already included in the Market Access Regulation 

(Regulation 1528/2007 of 20 December 2007) applicable since 2008. 

The objective of this derogation concerning the rules of origin for processed fishery products is to 

support the development of onshore processing capacity for fish (notably tuna) products in the 




Pacific States, in order to create local employment (in particular for women) and income. It takes 

into account the specific circumstances of the Pacific region, including the limited fishing capacity of 

the Pacific States' fishing fleet, the historically limited on-land processing capacity, the limited supply 

of wholly-obtained fish to meet processing demand, and the assessed low risk of destabilizing EU 

markets with large inflows of fishery products from the Pacific States. Furthermore, the derogation 

shall apply without prejudice to sanitary and phytosanitary measures in force in the EU and 

measures to combat illegal, unreported and unregulated (IUU) fishing activities in the region. The 

special origin provisions will operate within the framework of conservation and management 

measures established by the Regional Fisheries Management Organisations with the aim of ensuring 

long term sustainability of fish stocks. The sustainable management of fishery stocks is also a major 

pillar of the EU's strategy for the Pacific region. 

Currently, PNG is the only country which can benefit from this exception. Fiji, the other fish 

processing country in the region, has not yet provided the notifications foreseen by the Market 

Access Regulation. 

PNG has a fish processing industry, which is relatively important to the country's economic 

development (the contribution of the fisheries sector to PNG's GDP has been estimated at 1,4% 347 ), 

but has not developed a national fleet. It therefore relies, to a major extent, on raw material 

supplies from third countries' vessels operating in PNG waters, PNG Exclusive Economic Zone and in 

the Western and Central Pacific more in general. Indeed, there are a number of foreign fishing 

vessels that are chartered and locally based in PNG and operating in PNG archipelagic and territorial 

waters. Furthermore, a significant number of foreign fishing vessels are licensed to fish in the PNG 

Exclusive Economic Zone. According to the Western and Central Pacific Fisheries Commission's 

Record of Fishing Vessels, there are very few purse seiners declared as flying the PNG flag 348 . 

Therefore, without the said derogation, PNG catches made in the area outside the archipelagic and 

territorial waters and landed in PNG would not be able to comply with the standard EU rules of 

origin for fish and fishery products and thus could not benefit from the trade preferences granted in 

the framework of the Interim Partnership Agreement . 

In order to ensure correct implementation of the derogation, the EU and PACP have agreed on 

various provisions regarding administrative cooperation and mutual assistance. A consultation 

mechanism, following the preparation of a specific report on the use of the derogation provisions, 

will focus on the development effects of the special rules of origin, on the effective conservation and 

sustainable management of the resources, and on effective application of EU health and IUU rules in 

the region. Furthermore, a Trade Committee and its sub-committees composed of representatives 

of the European Union and the Pacific ACP Parties that are signatories of the interim EPA, will 

constitute the bilateral framework to deal with all issues relating to the iEPA. 

A report on the implementation of the interim EPA must be drawn up no later than three years after 

PNG's notification to the EU of the use of the derogation, i.e. in 2011. This derogation was included 

347 PNG Country Strategy Paper 2008-2013. Annex IV. 

348 According to PNG 2010 report to WCPFC, a total of 227 vessels were active in the PNG waters in 2009. 32 

were longline and handline vessels and 195 were purse-seine vessels. 9 of the 195 vessels were PNG flagged, 

31 were PNG chartered and 155 were foreign vessels fishing under Access arrangements. 33 vessels currently 

operate as chartered vessels or locally based foreign (LBF) vessels in PNG, under an arrangement to realise 

domestic industry development. These vessels fish for the processing plants in PNG and they are supported by 

some form of incentive by the Government of PNG. About half the number of vessels, mainly Philippine flag, 

fish principally in PNG waters while the other half, mainly Vanuatu flagged fish widely throughout the PNA 

waters under the FSM licensing arrangement. 




in the Market Access Regulation and PNG has benefited from it since March 2008 when it made its 

notification to the Commission according to the relevant procedures. 

On the basis of this report, the EU and PNG shall hold consultations on the utilisation of the 

derogation, taking into account in particular its development effects and the effective conservation 

and sustainable management of the resources and, if appropriate, amend it by common decision of 

both Parties in the Trade Committee as foreseen in the interim EPA. 

Criticism has been raised against the Interim Agreement by the EU's tuna fishing industry and by the 

Fisheries Committee of the European Parliament, primarily because of the derogation for the Rules 

of Origin for fishery products. The industry is concerned that the provisions may lead to massive 

increases in PNG exports of processed tuna products to the EU by use of raw materials originating 

from Long Distance Countries fleets, e.g. China, Taiwan, Philippines, and may have a detrimental 

impact on the EU's fishing industry. The industry has also raised the issue of how the given 

concession would impact on illegal fishing activities, possible increased pressure on the fishery 

stocks over sustainable levels and the respect of EU sanitary and phytosanitary standards. Concern 

has also been expressed about the impact of the agreement on regional integration and the actual 

development impact for PNG (notably for labour and environmental matters). 

2. DESCRIPTION OF THE ASSIGNMENT 

2.1 Global objective 

Article 6.6 (c) of Protocol II of the iEPA stipulates that a report on the implementation of the special 

rules of origin granted in the framework of the iEPA with Pacific countries is due three years after 

the notification of the use of the derogation by the Pacific country concerned, i.e. 2011, even if the 

actual use by the private sector in PNG could have started at a later stage. 

The purpose of the report is to allow the Parties to the Agreement (PNG and the EU) to assess the 

utilisation of the derogation provisions, taking into account, in particular, its development effects 

and the effective conservation and sustainable management of the resources and whether it would 

be appropriate to amend the provisions. 

2.2 Specific objectives 

Provide an evaluation of the implementation of the described derogation and to what extent it is 

achieving the intended objectives. 

i. The consultant shall assess the impact of the derogation to the rules of origin in PNG in terms of 

development of the country, including the generation of revenue, investment, governance, local 

employment and impact on local communities: 

• Make a detailed analysis of the conditions concerning income and employment (including the 

application of internationally recognised labour rights) prior to implementation of the 

derogation and following its introduction. 

• Assess whether the development effects foreseen in the agreement have materialised and to 

what extent they may occur. 

• Analyse the impact on PNG of the derogation in terms of fulfilment of the development 

objectives and assessment of objectives yet to be achieved. This would include, but not be 

limited to, improvement in working and social conditions, and whether the derogation has the 




potential to contribute to better living conditions for the local population (number of jobs 

created, including for women, impact on the development of the local economy). 

ii. The consultant shall analyse the management of fish resources in the region: 

• The relationship between the use of the derogation included in the interim agreement and 

the effective conservation and sustainable management of the fish resources in the region, 

and its possible impact. Compliance of the processing industry and local authorities with the 

requirements of the IUU Regulation, with an emphasis on the potential sourcing of IUU fish or 

fish that does not come from a country that complies with IUU Regulation. 

iii. The consultant shall also assess the impact on the EU: 

• The effect of the measure on the EU market and the EU fish processing (canning) industry. 

• The likely impact, current and future that the provisions may have on the EU's fishing 

industry. This should also take into consideration the possible presence of EU's long distance 

fleet in the region and possible investments in the local processing industry, including the 

potential of having joint ventures between EU companies and PNG-owned companies. 

• Potential impact on the other third countries to which the EU grants preferential access for 

processed fishery products (e.g. other ACP countries, GSP+ beneficiaries) including other 

countries in the same iEPA that could benefit from the derogation. 

Taking the above analysis into account, the consultant shall make proposals and recommendations 

that may be necessary for the future joint monitoring of key indicators. 

2.3 Requested services 

Areas which need to be closely analysed, assessed and reported by the contractor include: 

i. Development effects on the PNG economy: 

• The PNG fish processing industry and its actual and potential growth in the near future, with 

particular attention to tuna processing, and the status of planned investment projects in the 

tuna processing industry in PNG. 

• The competitiveness of the PNG tuna processing industry compared to other EU trade 

partners, including countries in the region. 

• Trends in fish trade between PNG and the EU as well as with other Pacific States, and in 

particular EU imports of canned tuna from PNG before and after the implementation of the 

derogation to the rules of origin and the causal link between them. 

• The development of fish exports from PNG to other parts of the world in recent years and 

possible future evolution is such trends (e.g. USA, Australia, Japan). 

• The impact of the derogation on local and international ongoing and planned investment in 

the processing industry in the region, and possibilities for EU companies to invest in the area. 

The impact of such investments on the economic development of PNG including in terms of 

governance, environment, employment, positive and negative externalities, etc. 

• Relevance of the proposed draft environmental legislation in PNG for the possible 

environmental impact of new and existing investments in the fisheries sector 

• The environmental impacts of the operations of the current processing industry, as well as 

the potential environmental impact of the planned infrastructure for canning industries in 

PNG. 




ii. Management of fish resources in the region: 

• The impact of the measure on the sustainable management of fish stocks in the region, taking 

into account the framework in place for the sustainable management of the fish resources, 

both in PNG and at international level, such as the Western Central Pacific Fisheries 

Commission (WCPFC) and the Parties to the Nauru Agreement (PNA). 

• The effectiveness of institutional arrangements to ensure sustainable management of fish 

stocks in the region. This should include the dynamics of the functioning of the WCPFC and its 

contracting parties, including the role played by the EU. 

• The fishing vessels operating in the Western Pacific region (number and type of vessels, flag, 

registration and ownership of the vessels, total catches and species targeted, destination of 

the raw material). 

• Possible diversion of raw material due to the investment relocation to PNG from other 

countries in the region and the limited supply of eligible raw material (in terms of preferential 

rules of origin, SPS and IUU requirements) for the processing industry in the region. 

• Possible links between the derogation to the Rules of Origin and the levels of IUU fishing 

occurring in the region. 

iii. Impact on the EU tuna market and the EU fishing and canning industry: 

• The current and potential impact of the derogation on the EU tuna canning industry and on 

EU trade partners such as other ACP countries or GSP+ beneficiaries which benefit from 

preferential treatment. 

• Analysis of the competitiveness of PNG in terms of the increase in its share of the EU markets. 

Evaluation of the impact of this increase on the European industry, and whether this would be 

offset by a decrease in production and exports in other countries in the region (e.g. Thailand, 

Philippines). 

• Effects on export trends to the EU market from South East Asia caused by possible increased 

exports from PNG. 




APPENDIX 2 

LIST OF PERSONS CONSULTED 


Name 

ACCONCIA, Diana 

ALVARELLOS LOPEZ, Lourdes 

AYMERICH CANO, Marta 

BODIN, Sophie 

CARABAIN, Albert 

CASTRO NEILA, Jose Carlos 

CASTRO NEILA, José Carlos 

COMMERE, Pierre 

DESPINA, Simoas 

DEVICO, Ary 

DROSS, Nicholas 

FERNÁNDEZ ALONSO, Felicidad 

FRAGA ESTEVEZ, Carmen 

GARCIA-FERRER, Miriam 

GOREZ, Beatrice 

GOUJON, Michel 

JIMÉNEZ, Angeles Bosch 

LAQUIAN, Pit 

MAGINDE, Peter, H.E. Ambassador 

MAMIAS, Sylvie 

MANIGA, Paola 

MARCHEBOUT, Bruno 

MICHALEK, Claudine 

MOLLEDO, Luis 

MONTEAGUDO, Juan Pedro 

MONTEAGUDO, Juan Pedro 

MORALES, M. Odilo Romero 

MÒRON, Julio 

MUÑOZ, Carmen Rodriguez 

NEYRINCK, Christophe 

PÉREZ, Javier Garat 

RIECKEN, Bernd 

ROLLIER, Isabelle 

RUTSAERT, Aline 

SCHWIEGER, Thomas L. 

SINGH, Nidhendra Pratap 

SORAPUKDEE, Chanunda 

SWIDERICK, Pawel 

TABERENG, Alois 

VIDAL, Irene 

VIDAL, Tiphaine 

VIEITES BAPTISTA de SOUSA, Juan 

VOCEA, Peceli Vuniwaqa, H.E. Amb. 

WUNENBURGER, Jacques 

Organisation 

DG TRADE 

DG TRADE 

ANFACO 

DG MARE 

FRUCOM 

Eurothon/ANFACO 

ANFACO 

Pole Mer 

Spanish PR, EBCD 

La Pulpe 

DG MARE 

ANFACO 

European Parliament 

DG TRADE 

Coalition for Fair Fisheries Agreements 

Orthongel 

Ministerio de Industria, Turismo Y Comercio, Spain 

Philippines Embassy 

PNG Embassy 

FRUCOM 

FRUCOM 

La Pulpe 

Acqua Terra 

DG MARE 

Eurothon/OPAGAC 

OPAGAC 

Riaxeira America S.A. 

OPAGAC 

Ministerio de Medio Ambiente y Medio Rural y 

Marino, Spain 

Hottlet International Agencies N.V. 

CEPESCA 

FRUCOM 

DG SANCO 

EUROTHON 

Hüpenden & Co. (GMBH & Co.) KG 

Fiji Embassy 

Thai Embassy 

DG MARE 

PNG Embassy 

European Parliament 

European Bureau for Conservation & Development 

Eurothon, ANFACO 

Fiji Embassy 

DG TRADE 




ZABLECKIS, Sarunas 

ZELLER, Joachim 

World Wildlife Fund (WWF) 

DG TRADE 

Federated States of Micronesia 

Name 

FLEWWELLING, Peter 

HURRY, Glen 

KWON SOH, Sung 

STAISH, Karl 


WCPFC 

WCPFC 

WCPFC 

WCPFC 

Papua New Guinea 

Name 

AME, Margaret 

ANDRADE, Cristito 

ANDRIN, Evellalita 

ANNIS, Alex 

BARNABAS, Norman 

BERNADINO, Alex 

BLACKLOCK, Caroline 

BOLA, Vakuru 

BUALIA, Leo 

BUCOL, Herson 

CASPAR, Poin 

CELSO, Pete. C. 

CHITOA, John 

CUSACK, Peter 

DAVID, Stephen 

DAWANA, Edwin 

DELA CALZADA, John 

DEMONTEVERDE, Jeffrey 

DEX, R. 

DIHM, Martin 

DOMINGO, Love 

FANAGEL, Kernie 

GARCIA, Maria Cristina 

GOLDING, Wayne 

HOOT, Clarence 

HOUJI, Francis 

ISA, Ahmad Fauzi 

JUELE, Garry 

JUELE, Noemi Dr. 

JUNEMBARY, Gerry 

KANGO, Aquina` 

KARIS, David 

KENYUTEN, Kennedy 

KIRAROCK, Rodney 



Majestic Seafood Corporation Ltd. 

RD Tuna Canners Ltd. 

PNG Ports Corporation 

DEVADS 

Frabelle (PNG) Ltd. 

International Finance Corporation/World Bank 


WWF 





Fisheries Advisor 

PNG Ports Corporation 

Bank of Papua New Guinea 



RD Fishing Ltd. 

EU Delegation to PNG 


RD Foundation PNG Inc. 


Kina Group of Companies 


Fairwell Fishing 

International Food Corporation Ltd. 



South Seas Tuna Workers’ Union 








KIRIWOZANO, Felix 

KOIAN, Rosa 

KOIMILLA ALFRED, Yaniba 

KUMORU, Ludwig 

KUO, Thomas 

LALLEY, Barry 

LAUREL, Floyd 

LENS, Philip 

MARIANO, Jun 

MARTIN, Paul 

MARTINEZ, Dexter 

McCULLEY, Mike 

MUSAS, Garny 

NACIONALES, Mary Ann 

NAMUN, Leo 

NATIVIDAD, Gus 

PAREDES, Ronel 

POKAJAM, Sylvester 

POLON, Philip 

REV. AYOP, Alexander 

ROBERTS, Phil 

ROY, Chimolen 

SAMP, Rolly 

SANCHEZ, Philip 

SANG, F.L. 

SARITA, Maireen 

SCOVELL, Chey 

SIMSON, Bob 

SORENCIO, Norren 

SULLIVAN, Nancy 

SUPRO, Luke 

TALIS GRAUT, Veronica 

TANIKREY, Luke 

TIMARIO, Renemill 

TIMUN, Stanley 

VAN DEN HUEVEL, Peter 

VINGU, Paul 

WATAI, Jack 

WAU, Michael 

YONG, Ruel 

ZULKFLI, Rosedean 





Halisheng Group PNG 


Frabelle Fishing Corp. 


Frabelle 




RD Workers’ Union 



Frabelle 





TriMarine International 

Frabelle 





Office for the Min. for Trade, Commerce & Industry 



Nancy Sullivan & Associates 






EU Delegation to PNG 





International Food Corporation 




APPENDIX 3 

DETAILED DATA FOR PNG PRODUCTION AND EXPORT PROJECTIONS 

Table A3.1 Estimated production and EU exports of canned tuna and cooked loins 

Facility 

Production 

Exports to EU 

% cans % Loins % cans % loins 

RD Tuna Canners 90% 10% 50% 100% 

Frabelle (PNG) Ltd. 97% 3% 80% 100% 

South Seas Tuna Corp. 0% 100% 0% 50% 

Majestic Seafoods Ltd. 100% 0% 80% 0% 

International Food Corp. 70% 30% 95% 100% 

Niugini Tuna Ltd. 10% 90% 80% 100% 

Nambawan Seafoods 40% 60% 90% 100% 

Halisheng Group a 70% 30% 80% 80% 

a 

Consultant’s estimate in the absence of data provided by the company representative. 

Table A3.2 Conversion factors from raw material to finished product (canned tuna and loins) 

Product Conversion Factor Notes 

1 kg raw material to cooked 

loins 

1kg raw material to canned 

tuna 

0.42 

0.666666667 

Based on recovery rate of 42% (industry 

standard) 

Based on 1.5kg raw material = 1kg 

finished can weight (including weight of 

can, oil, fish) 

(Source: Oceanic Développement 2010) 

Table A3.3 Estimated PNG Production and Exports - 2016 

Facility 

Raw Material Throughput (mt) 

Production - Finished 

Weight (mt) 

EU Exports - Finished 

Weight (mt) 

Total Cans Loins Cans Loins Cans Loins 

RD Tuna Canners 30,000 27,000 3,000 18,000 1,260 9,000 1,260 

Frabelle (PNG) Ltd. 20,000 19,400 600 12,933 252 10,347 252 


Corp. 

20,000 - 20,000 - 8,400 - 4,200 

Majestic Seafoods 

Ltd. 

30,000 30,000 - 20,000 - 16,000 - 

International Food 

Corp. 

17,500 12,250 5,250 8,167 2,205 7,758 2,205 

Niugini Tuna Ltd. 25,000 2,500 22,500 1,667 9,450 1,333 9,450 

Nambawan Seafoods 20,000 8,000 12,000 5,333 5,040 4,800 5,040 

Halisheng Group 20,000 14,000 6,000 9,333 2,520 7,467 2,016 

Total 182,500 113,150 69,350 75,433 29,127 56,705 24,423 





Facility 



Weight (mt) 


Weight (mt) 





Corp. 

20,000 - 20,000 - 8,400 - 4,200 


Ltd. 

30,000 30,000 - 20,000 - 16,000 - 


Corp. 

17,500 12,250 5,250 8,167 2,205 7,758 2,205 

Niugini Tuna Ltd. 20,000 2,000 18,000 1,333 7,560 1,067 7,560 


Halisheng Group 12,500 8,750 3,750 5,833 1,575 4,667 1,260 

Total 160,000 103,400 56,600 68,933 23,772 51,238 19,257 


Facility 



Weight (mt) 


Weight (mt) 





Corp. 

20,000 - 20,000 - 8,400 - 4,200 


Ltd. 

30,000 30,000 - 20,000 - 16,000 - 


Corp. 

15,000 10,500 4,500 7,000 1,890 6,650 1,890 

Niugini Tuna Ltd. 10,000 1,000 9,000 667 3,780 533 3,780 


Halisheng Group 7,500 5,250 2,250 3,500 945 2,800 756 

Total 142,500 97,150 45,350 64,767 19,047 47,730 14,658 





Facility 



Weight (mt) 


Weight (mt) 





Corp. 


Ltd. 


Corp. 

20,000 - 20,000 - 8,400 - 4,200 

15,000 15,000 - 10,000 - 8,000 - 

15,000 10,500 4,500 7,000 1,890 6,650 1,890 

Niugini Tuna Ltd. - - - - - - - 

Nambawan Seafoods - - - - - - - 

Halisheng Group - - - - - - - 

Total 100,000 71,900 28,100 47,933 11,802 33,997 7,602 


Facility 



Weight (mt) 


Weight (mt) 





Corp. 

20,000 - 20,000 - 8,400 - 4,200 


Ltd. 

7,500 7,500 - 5,000 - 4,000 - 


Corp. 

10,000 7,000 3,000 4,667 1,260 4,433 1,260 

Niugini Tuna Ltd. - - - - - - - 

Nambawan Seafoods - - - - - - - 

Halisheng Group - - - - - - - 

Total 87,500 60,900 26,600 40,600 11,172 27,780 6,972 




APPENDIX 4 PROFILE OF EU CANNED TUNA PROCESSORS, 2011 




Source: EUROTHON 2011; provided to the consultants’ on request for the specific purpose of this review.

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