Report on the Implementation of the derogation to ... - Trade Websites

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
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.
Linpico s.a.r.l. Page 39