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

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
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
Linpico s.a.r.l. Page 79