FFA FISHERIES TRADE NEWS Volume 4: Issue 1 & 2 January-February 2011



Volume 4: Issue 1& 2  January-February 2011

By Amanda Hamilton, Elizabeth Havice and Liam Campling[1]


Fisheries Subsidies and Trade

Update on fisheries subsidies discussions at the WTO

EU deems IUU regulation a success

Fisheries Development

ISSF announces 2011 conservation goals and opposition to New Zealand albacore MSC certification

Marine Stewardship Council updating strategic plan and assessment process


Tuna Markets

UK market moves toward pole and line and against FAD-caught canned tuna

Soltai Expands Production Capacity

Starkist’s American Samoa Plant Granted Tax Exemption

‘Tuna the Wonderfish’: US ‘Big Three’ and Thai firms team up to boost category


Fisheries Subsidies and Trade

Update on fisheries subsidies discussions at the World Trade Organisation

Negotiations on proposed fisheries subsidies disciplines at the WTO were held for the entire week beginning 7 February.[2] Six new proposals sponsored by Members were discussed as well as the specific themes of fuel subsidies and of fisheries management.[3] The first proposal discussed was from the Small and Vulnerable Economies (SVEs) group, which includes Fiji, PNG, the Solomon Islands and Tonga.[4] The proposal was originally released in early 2010, but, on Japan’s suggestion in December 2010, the Chair tabled it for additional discussion. The SVE position starts from the premise that these countries are often dependent upon fisheries resources, but operate small fleets, have limited capacity to subsidise, and represent a very small share of global marine wild capture.  The SVE submission attempts to reflect this by proposing additional flexibilities for capacity enhancing and operating cost subsidies where a developing Member contributes both less than 0.1% of the world trade in industrial goods and a maximum of 1% of global marine fisheries capture. All SVEs fall within this proposed criteria.

Responses to the proposal suggested that the parameters should be dynamic, thus if a benefitting country goes above the threshold it would no longer benefit, and that the threshold should be based solely on percentage of marine fisheries capture. Members also suggested that the threshold based on share of marine capture fisheries should be lower than 1% as no SVE currently catches more than 0.5%. The long-running worry that the proposal would create an additional category of developing country Members was also raised. Finally, the SVEs were asked how their proposal would deal with fishing activities in the high seas and those using flags of convenience. 

The cluster then moved to discuss a submission by Japan.[5] This ambitious proposal covers several aspects of the proposed disciplines. On the prohibited list of subsidies (Article I of the 2007 Chair draft text[6]), Japan suggested deletion of reference to port infrastructure and income support, as well as a more narrow definition of direct operating cost subsidies. While many – but not all – members welcomed the suggestions on port infrastructure and income support, demandeur Members placed particular emphasis on their opposition to the proposed exclusion of indirect operating cost subsidies. Japan also proposed the replacement of a so-called ‘catch-all’ clause (Article I.2) that is designed to prohibit subsides where a target stock is clearly overfished with a clause against subsidising illegal, unreported or unregulated (IUU) fishing. This was widely opposed by demandeurs. 

Among Japan’s proposals for additional general exemptions, perhaps the most interesting was a clause to allow capacity enhancing and operating cost subsidies to the ‘small scale’ boats of all Members. The working definition of small scale included an unspecified maximum gross tonnage, the domestic flagging, registration and offloading of catch, the absence of installed refrigeration to store fish, and operational limits to the EEZ. Many developing and developed delegations saw this request as too broad. However, there was a positive response to the application of objective and more easily monitored measures in Japan’s definition of small-scale (e.g. no installed fish refrigeration, domestic offloading of catch).

A joint proposal from Argentina, Chile, Egypt and Uruguay focussed on special and differential treatment (S&DT).[7] For them, S&DT should be based upon the existence of under-exploited or unexploited fisheries resources within a Member’s EEZ and the lack of enough fishing capacity to exploit the resource in a sustainable way. They also called for strict environmental and transparency conditionalities as a fundamental feature of S&DT. Developed demandeurs (the ‘friends of fish’) offered strong support to the proposal. But defensive developing Members raised questions around the proposed exclusion of S&DT for the construction of new port infrastructure, and the limitation on subsidised fishing activities to a country’s EEZ. It was also felt that the proposal’s definition of subsistence was too narrow.

The final proposal addressed here was that submitted by Ecuador and Peru on enhancing S&DT for ‘artisanal’ fisheries.[8] Its primary objective was to broaden the definition of ‘subsistence’ fisheries in the Chair’s 2007 text (Article III.2(a)) – which are provided with maximum S&DT – to include ‘artisanal’ boats.  The key components of Ecuador and Peru’s definition were: (1) boats can only fish under the national jurisdiction (i.e. in-EEZ); (2) fishworkers act on their own behalf (i.e. not employed) or are organised in associations or other forms of small producer organisations; (3) the fishery product does not go beyond a small-scale trade and is mainly destined for direct human consumption; (4) the vessels are not greater than 15 metres in length; (5) the operations are carried out using simple fishing gear, tools and techniques and involve predominantly manual labour; and (6) no destructive fishing practices are used (as per Article 8.4.2 of the Code of Conduct for Responsible Fisheries). The proposal was broadly welcomed, although there were many questions about its details, including that some concepts were difficult to define or monitor in practice. The greatest concern was raised around the use of vessel length as a capacity measure.

The cluster then moved to two focussed sessions, one highly technical discussion around fuel subsidies and another on fisheries management. The latter was facilitated by two ‘friends of the chair’ (individuals from Norway and South African delegations) who were briefed to consult Members on what they considered to be the core elements of a fisheries management system (FMS). This exercise is of importance to the debate because any eventual S&DT will be conditional upon sustainability criteria which will be based on effective FMS. The friends of the chair presented a very useful six-part typology of FMS, delineating which elements would be mandatory and which would be indicative, non-compulsory tools. The presentation was very well received and is likely to form the basis for future discussions on FMS; as such the thrust of their outline is reproduced in the following table.

Table 1: Friends of the Chair consultation with Members on fisheries management systems

Core/Mandatory Elements

1) Institutions and legislative 

(someone to ‘manage’ the FMS – a FM authority)

2) Stock assessment 

 Key: data collection to allow with a degree of certainty what one’s resource-base is and what is the level of outtake (i.e. an ‘output’ element)

3) Fishing capacity

Count boats and measure composition of fleet (e.g. size), maybe also gear (i.e. an ‘input’ element)

4) Fishing effort/capacity management

Utilisation of data on stocks and fishing capacity based on: a) input controls; b) output controls   

5) MCS – based on different levels of national/supra-national authority Key: some form of catch control is necessary to identify etc.

6) Enforcement


Tools (i.e. indicative, not compulsory)

2) Trend series to assess resource base 

 Level of sophistication depends on context

3) Vessel registry (not necessarily for smallest boats though)

Licences/permits (depending upon fishery)

4) Depending on fishery:

a) input controls (e.g. closed seasons, limits of gear or vessel size/numbers, etc) b) output controls (e.g. total allowable catch, vessel-specific quotas, etc)

5) Sampling, controls at port, fishing cooperative level, customary level, VMS and/or GPS onboard especially when operations in different zones,

6) Administrative penalties Criminalisation Indigenous methods (e.g. moral pressure)


Finally, the Chair announced his proposed next steps for the negotiations. He recognised the need ‘to break the impasse that we face on some of the most critical issues in respect of fisheries subsidies’. To this end, he established a series of ‘contact groups’ where individuals from prominent demandeur and defensive developed and developing Members would come together to discuss, in turn, high seas fisheries, artisanal/small-scale fisheries, and income support, with a fourth group on fuel subsidies yet to be configured. The introduction of this mechanism reflects the wider political push to move the Doha Round forward. Two more clusters on fisheries subsidies are scheduled for the beginning and end of March with a view to soliciting any final proposals before the Chair moves to potentially producing a new draft text.


EU deems IUU regulation a success

As reported in FFA Fisheries Trade News, in January 2010, the European Community’s regulation to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing went into force. The regulation requires that the fish suppliers provide notification to their competent authorities that they are in compliance with the IUU regulation in order to supply product to the EU market, a process that has been criticised for being administratively burdensome.[9]

One year on, the EU Fisheries Commissioner suggests that the scheme has yielded concrete results. Ninety of the EC’s trading partners have implemented the catch certification scheme. In 2010, 14 imports were refused entry in the EU and some 240 infringements were detected. The rules have also encouraged firms to shift their sourcing to companies that they are certain will strictly comply with rules. According to EU Fisheries Commissioner Maria Damanki, the regulation ‘ensures[s] the traceability of every [seafood] product with a catch certificate’.[10] According to Damanki, the next step in fisheries conservation is a worldwide catch certification system; an indication that fishers in the WCPO and worldwide should continue to be prepared to comply with new catch documentation requirements aimed at sustainability.


Fisheries Development & Sustainability

ISSF announces 2011 conservation goals and opposition to New Zealand albacore MSC certification

Industry organisation ISSF has started 2011 off with several new developments. First, the organisation’s membership, which in 2010 represented more than 60 percent of global tuna processing capacity along with eNGO WWF and scientists, expanded further as Thai food manufacturer Chotiwat joined the organisation’s ranks. ISSF also unveiled its 2011 conservation goals for vulnerable tuna stocks, emphasising efforts to protect bigeye in the Pacific and yellowfin in the Indian Ocean. To protect the former in the Western and Central Pacific, ISSF has urged a full seasonal closure of the entire purse seine fishery, arguing that the current 90 day closure on FAD fishing has proven ineffective, in part because of its numerous loopholes. In the Eastern Pacific, ISSF is urging members of the Inter-American Tropical Tuna Commission to publically pledge that they will fish in line with scientific advice. In the Indian Ocean, ISSF is advocating for a total allowable catch of yellowfin of no more than 300,000 tonnes per year, a figure in line with the scientific guidance provided by the Indian Ocean Tuna Commission.[11]

Building off of its critique of the MSC certification for the PNA free-school skipjack certification,[12] ISSF – which is classified as a stakeholder in the MSC process – has posted a formal objection to the in-progress MSC assessment of the New Zealand albacore troll fishery. The ISSF objection is premised on the argument that the MSC assessment was too lenient on the strength and transparency of RFMO management and that harvest control mechanisms are not clearly defined in the fishery. In both the free-set skipjack purse seine and now the albacore troll fisheries, ISSF is objecting to certifying individual tuna fisheries that are operating under RFMOs with weak functionalities.[13] According to ISSF, ‘We are convinced that all tuna RFMOs have weak functionalities at different levels, and these will not be remedied by granting MSC certifications with a set of conditions.’[14]

ISSF’s objection to MSC certification on account of broader RFMO failures holds significance for other tuna fisheries seeking to carry the eco-label, including the longline caught albacore fishery in Fiji’s EEZ, which is currently under pre-assessment. Industry seeking MSC certification should closely follow outcomes in the skipjack purse seine and albacore troll fisheries to determine if RFMO failings prove a roadblock for earning the ecolabel. RFMO failures proved a fatal blow for the St. Helena pole and line tuna fishery which was barred from certification in part because of fisheries management problems within the International Convention for the Conservation of Atlantic Tuna (ICCAT).


Marine Stewardship Council updating strategic plan and assessment process

The Marine Stewardship Council, which offers a sustainable certification process and accompanying eco-label for qualifying products, has announced that it is to formulate a new strategic plan and a series of programme improvements. Such changes are relevant in the tuna industry as in late 2010, there were five MSC certified tuna fisheries; four albacore (pole and line, troll and jig) and one skipjack (pole and line) fishery. In addition, there were six tuna fisheries of multiple gear types undergoing full assessment for MSC certification, and at least two others in the pre-assessment phase.[15]

MSC’s new policy development work focuses on the quality and consistency of the MSC fisheries and chain of custody certification programmes. The board of trustees and technical advisory board agreed to act on ten priority issues to guide the organisation’s certification approach between 2012-2017.[16] On strategic direction, MSC will undertake the following activities:

* Updating the MSC’s strategic plan

* Commissioning an external governance review

* Extending the MSC’s chain of custody and logo-license programme services to more partners in the seafood supply chain

* Reviewing MSC’s principles and criteria for sustainable fishing.


On programme improvements, MSC will undertake the following activities:

* Approving a standardised framework for pre-assessments

* Identifying new requirements for key data on fisheries performance and environmental impacts for fisheries in the MSC programme

* Rebuilding timeframes for depleted fisheries, including a requirement that all conditions of a certification are set with annual milestones

* Developing a new pilot assessment protocol for non-native, introduced species.


The announcement follows recent criticisms over the consistency and effectiveness of the MSC certification process and its outcomes in the tuna industry and beyond, particularly as demand for certified seafood increases.[17] Such changes stand to affect how MSC will be applied, particularly as the organisation broadens its reach to include larger-scale fisheries, such as the PNA skipjack fishery.


Tuna Markets

UK market moves toward pole and line and against FAD-caught canned tuna

There has been a flurry of NGO activity in the UK recently, intended to raise consumer awareness about fisheries sustainability issues and to pressure major brands to adopt more sustainable sourcing policies. 

In mid-January, Greenpeace released preliminary results of its 2011 tinned tuna league table which ranks the UK market’s major canned tuna brands according to their sustainability, in terms of factors such as fishing methods, species used, labelling and public support shown for sustainability initiatives such as the establishment of marine reserves.  Sainsbury’s, Marks & Spencer and Waitrose were ranked in the top three positions because they already supply pole and line caught canned tuna.  Princes and Tesco, on the other hand, were ranked in the bottom two positions, given the majority of their canned tuna is caught by purse seine vessels using fish aggregation devices (FADs), which is considered the least sustainable tuna fishing method.  

Several major UK tuna brands have since made the following commitments towards improving their sustainable sourcing policies:

* John West, the UK’s second largest tuna supplier, committed to sourcing 20 per cent of UK tuna products from pole and line fisheries.[18] 

* In response to its bottom ranking in the tinned tuna league table, along with pressure from over 80,000 Greenpeace supporters emailing the company, Princes, the UK’s largest tuna supplier, has committed to sourcing 100 per cent of its supply from either pole and line fishing or purse seine fishing on free swimming schools (i.e. non-FAD caught tuna) by 2014.  Princes as also agreed to include species information on labels.[19]  

* ASDA, like Princes, has committed to sourcing 100 per cent of its supply from either pole and line or non-FAD caught purse seine fisheries by 2014.[20] 

* Tesco will source 100 per cent pole and line caught tuna by the end of 2012 (which follows from previous indications from the company to source 25 per cent, on a trial basis).[21] 

* Sainsbury’s committed to sourcing 100 per cent pole and line caught skipjack tuna for all tuna products (i.e. canned tuna, fresh/frozen, sandwiches, ready-made meals etc.) by the end of January 2011.[22] 

* Sainsbury’s, Marks & Spencer, Princes and ASDA have committed to supporting Greenpeace’s call for the establishment of the ‘Pacific Commons’ marine reserves and have undertaken not source tuna caught from within these waters.[23] 


The availability of supply of pole and line caught tuna will continue to be an issue of concern, given pole and line vessels represent only a small proportion of total global supply of raw materials for canning.  Given this constraint, it is likely that the demand for non-FAD caught tuna from purse seine vessels will escalate.   

UK celebrity chef, Hugh Fearnley-Whittingstall also launched a new ‘Fish Fight’ television campaign on Channel 4, aiming to end fish discards and encourage consumers to try less well known lower-value species of fish (as an alternative to cod).  This campaign has seen sales rocket in the sale of alternative fish species, and has also contributed to the pressure placed on Princes and other major tuna brands to improve sustainability.  In addition, Fearnley-Whittingstall has appealed to UK consumers to join the Fish Fight campaign and sign a letter to be sent to the European Fisheries Commission, Maria Damanaki, calling for the banning of discards to be given top priority in the upcoming review of the European Common Fisheries Policy.[24]


Soltai expands production capacity

In mid-January 2011, the Solomon Islands’ based tuna processing facility, Soltai expanded its production capacity, with the introduction of a fourth processing line, reportedly valued at over $ 1 million.  

This expansion, made possible by a working capital injection of USD $13.7 million by the company’s major shareholders, Tri Marine International (51 per cent) and the Solomon Islands National Provident Fund (29%), contributes to a planned increase in production capacity from 60 mt/day to 80 mt/day in the short term, to eventually reach 150 mt/day.  An additional 150 jobs have also been generated through the expansion.[25]  


Starkist’s American Samoa plant granted tax exemption

The American Samoa Government signed a certificate in mid-January 2011, which grants Starkist Samoa a tax exemption for the next two years under the ‘30A tax benefit’.  Starkist’s previous tax break expired in 2010 and the plant has operated for over six months without such an exemption in place.   With the tax exemption re-instated, Starkist plans to temporarily increase production volumes in the next quarter and will hire additional workers to facilitate this.[26]  US Congress granted approval for the two-year extension of the 30A tax benefit, as well as a one year postponement of the minimum wage increase which was mandated to come into effect in September 2010, to assist American Samoa’s canned tuna processing industry try to regain its global competiveness. 

Currently, the 30A tax credit only applies to companies that were previously eligible for tax breaks under the IRS 936 benefit (i.e. Starkist and Chicken of the Seas).  Congressmen Faleomavaega Eni has expressed a commitment to work with the US Congress to revise 30A so that federal tax benefits can be extended to any new companies establishing processing facilities in American Samoa, including Tri Marine International, who recently purchased Chicken of the Sea’s processing plant.    


‘Tuna the Wonderfish’: US Big Three and Thai firms team up to boost category

For the first time, the three largest American tuna companies – Bumble Bee, Chicken of the Sea and StarKist – have joined forces (along with Thai tuna processing partners) to fund and launch a category-wide marketing campaign. Totalling US$60 million over the next three years and facilitated by the National Fisheries Institute’s Tuna Council, the campaign, which commenced in January, brands tuna as the ‘wonderfish’ through television and print ads, billboards in health clubs, and a new website. 

The ultimate goal is to revitalise interest in tuna in the US market by encouraging consumers to be creative about their use of tuna products and to remind them that canned tuna is nutritious, versatile, convenient and affordable. Spots highlight that tuna is part of healthy diet that is low in calories and is a quick and easy meal, and thus compatible with an active lifestyle.[27] Sales in the category declined after 2004 following US Food and Drug Administration and Environmental Protection Agency warnings over mercury levels in albacore. Since then, sales have rebounded in part because consumers have turned to value-oriented products in the economic downturn.[28]


Coming in the next issue (March 2011, Vol. 4: Issue 3)

* Update on EU-EPA negotiations

* Impact of Japan Tsunami on tuna industry

* Update on Pacific Commons


1 Prepared for the FFA Fisheries Development Division by Liam Campling, Consultant Fisheries Trade Analyst, FFA, Elizabeth Havice, University of North Carolina at Chapel Hill, and Amanda Hamilton, independent consultant. Desktop publishing by Antony Price. The authors would like to thank Hugh Walton for his input on an earlier draft of this briefing. The contents of this briefing (including all analysis and opinions) are the responsibility of the authors and do not necessarily reflect the positions or thinking of the FFA Secretariat or its Members.

2 The following text draws heavily on the excellent Transparency Session document written by Chair Ambassador Dennis Francis, ‘Negotiating Group On Rules: Fisheries Subsidies –Transparency Session’, Monday, 14 February 2011

3 For additional reporting, see ICTSD, ‘Fisheries Negotiations Surge Ahead as Easter Deadline Looms’, Bridges Trade BioRes, 11(3), 21 February 2011. Available at: http://www.ictsd.org

4 TN/RL/GEN/162, 8 January 2010, Communication from the Small and Vulnerable Economies, ‘Textual Proposal For Additional Flexibilities For Small And Vulnerable Economies Under Article III Of The Proposed Draft Chair's Text On Fisheries Subsidies’. Available at: www.wtocenter.org.tw/SmartKMS/fileviewer?id=106859

5 TN/RL/GEN/171, 17 January 2011, Communication from Japan,  ‘Fisheries Subsidies: New Proposals Regarding The Discipline’. Available at: http://ictsd.org/downloads/2011/02/tnrlGEN171-Japan.pdf

6 The full Chair 2007 Draft Text is available at the following link (including Annex VIII on Fisheries Subsidies, which is located at the end of the document): http://tinyurl.com/2lnp75

7 TN/RL/GEN/173/Rev.1, 26 January 2011. Communication from Argentina, Chile, Egypt and Uruguay, ‘Fisheries Subsidies: Special and Differential Treatment’. Available at: http://ictsd.org/downloads/2011/02/tnrlGEN173R1-Argentina_Chile_Egypt_Ur...

8 TN/RL/GEN/172, 19 January 2011. Communication from Ecuador and Peru, ‘Proposal on Fisheries Subsidies Special and Differential Treatment Artisanal Fisheries – Article III.2(a)’.  Available at: http://ictsd.org/downloads/2011/02/tnrlGEN172-Ecuador_Peru.pdf

9 ‘Update on EU-IUU fishing regulation’, FFA Fisheries Trade News, 3 (2&3), February and March 2010. Available at: http://www.ffa.int 

10 ‘Damanaki: New IUU fishing law paying off’, Seafood Source, 17 January 2010. Available at: http://www.seafoodsource.com 

11 Mike Crispino, ‘Tuna coalition backs seasonal Pacific fishery closure, calls for catch limit in Indian Ocean, Board announces agenda for 2011 RFMO season’, ISSF Press Release, 22 February 2011. Available at: http://www.iss-foundation.org  

12 ‘MSC assesses skipjack and yellowfin, advocacy groups ISSF and Pew object’, FFA Fisheries Trade News, 3 (10&11) 2010. Available at: http://www.ffa.int

13 Susan Jackson, ‘MSC notice of objection—New Zealand albacore troll’, 2 March 2011. Available at: http://iss-foundation.org 

14 Susan Jackson, ‘Re: ISSF stakeholder comments on MSC assessment report for New Zealand albacore troll fishery (public comment draft report v3)’. 13 December 2010.

15 For more details on tuna fisheries under certification through MSC, see: www.msc.org 

16 ‘MSC advances policy development’, Seafood Source, 20 January 20100. Available at: http://www.seafoodsource.com 

17 ‘Fisheries eco-labels are assessed against each other’, FFA Fisheries Trade News, 3 (5&6) 2010. Available at: http://www.ffa.int; ‘MSC assesses skipjack and yellowfin, advocacy groups ISSF and Pew object’, FFA Fisheries Trade News, 3 (10&11) 2010. Available at: http://www.ffa.int 

18 Atuna (2011) ‘John West makes pole and line tuna commitment’.  18 January 2011.  Atuna.  Available at: http://www.atuna.com. 

19 Greenpeace (2011) ‘VICTORY! You pushed Princes to start protecting our oceans’.  9 March 2011.  Greenpeace.  Available at:  http://www.greenpeace.org

20 Greenpeace (2011) Also Princes and ASDA commit to Fully Pole and Line by 2014. 9 March 2011.  Greenpeace Press Release.  Available at: http://www.greenpeace.org

21 Greenpeace (2011) TESCO Last Minute Commits to Source Only Pole & Line Tuna. 10 January, 2011.  Atuna.  Available at:  http://www.atuna.com.

22 Seafood Source (2011) Sainsbury to Commit to Sell 100% Pole & Line Tuna.  7 January 2011.  Available at: http://www.seafoodsource.com

23 Intrafish (2011) Supermarket giants commit to tuna marine reserves.  12 January 2011.  Intrafish.  Available at: http://www.intrafish.no

24 The Guardian (2011) ‘Fish Fight Campaign Leads to 17% Increase Pole & Line Tuna’.  19 January 2011.  Atuna.  Available at:  http://www.atuna.com. 

25 ‘Soltai Expanding its Canning Capacity’. Solomon Star, 25 January 2011.  Available at: http://www.atuna.com

26 ‘Samoa Set on Keeping Tuna Industry Operational’, Atuna, 15 February, 2011.  Available at:  http://www.atuna.com

27 ‘Tuna giants launch $60 million advertising push’, IntraFish Media, 17 January 2011. Available at: http://www.intrafish.no 

28 ‘US Brands and Thai Canners Start Joint Promotion in the USA’, Seafood Source, 18 January 2011. Available at: http://www.atuna.com