FFA FISHERIES TRADE NEWS Volume 5: Issue 2 March-April 2012

 

FFA FISHERIES TRADE NEWS

Volume 5: Issue 2March-April 2012

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

 

CONTENTS

Preferential Trade Agreements

Ecuador pushes to retain duty free market access to EU

 

Fisheries Management

WCPFC8 disappoints on enhanced management of bigeye and yellowfin stocks

US and Pacific Island Parties continue to negotiate US Treaty renewal

Solomon Islands introduces a new longline licencing policy

 

Tuna Markets

Earth Island Institute and PACIFICAL/ PNA battle over ‘dolphin safe’ status

New Foundation established to support pole-and-line fisheries development

Calvo sells 40 per cent shareholding to Italy’s Bolton Group

 

Preferential Trade Agreements

Ecuador pushes to retain duty free market access to EU

With the looming expiration of Ecuador’s preferential market access to the EU under the Generalised System of Preferences Plus (GSP+) scheme at the end of 2013, the Ecuadorian government is seeking a new trade agreement with the EU to ensure continued duty free access for around 7,000 products, including cooked tuna loins and canned tuna. 

Ecuador wants to rejoin the Multiparty Trade Association Agreement initialled by Colombia and Peru in March 2011, which it opted to withdraw from in July 2009 due to conflicting concerns relating directly to the Agreement, as well as a long-running dispute with the EU over banana tariffs.  The inclusion of a clause in this agreement leaves open the possibility for increased trade cooperation with other Andean countries.[2]   However, the EU is pushing for the establishment of a Free Trade Agreement.[3]  

Continued duty free market access to the EU is critical for Ecuador’s tuna processing sector, given it is the number one supplier in volume of tuna loins into the European Union (primarily to Spain and Italy) and the EU market accounts for 60 per cent of Ecuador’s tuna exports.  Ecuador is the second largest tuna processor in the world behind Thailand, with the capacity to process up to 450,000 mt annually.[4]  

 

Fisheries Management

WCPFC8 disappoints on enhanced management of bigeye and yellowfin stocks[5]

On 26-30 March 2012, the Eighth Annual Session of the Western and Central Pacific Fisheries Commission (WCPFC8) was held in Guam. 

One of the key agenda items for WCPFC8 was the development of a new conservation and management measure (CMM) for bigeye and yellowfin, intended to strengthen the existing CMM (CMM 2008-01), which has been deemed by WCPFC’s Scientific Service Provider (SPC) to have been ineffective in reducing purse seine effort levels by 30 per cent from 2001-2004 (or 2004) levels.  However, to the disappointment of FFA members and a number of observing environmental NGOs, consensus could not be reached among members on an enhanced CMM.  Instead, members agreed to a temporary extension of CMM 2008-01 (CMM 2011-01) until 28 February 2013, with several amendments which are considered to weaken the existing conservation and management measure:

* Philippines has been permitted access to the Western High Seas Pocket #1 for 36 traditional fresh/ice-chilled group purse seiners.  This temporary exception was made in response to an appeal from the Philippines that closure of the high seas pockets has resulted in effort shift into the Philippines EEZ and greater impacts on spawning stocks.  (It should also be noted that there has been heavy coverage in international media on the detrimental economic and social impact of the high seas pockets closures on the Philippine tuna industry.)    

* PNA will limit the total days fished in EEZs under the Vessel Day Scheme to no greater than the 2010 level (44,703 days), rather than the former 2004 limit (29,144 days). 

* China has been granted an increase in its bigeye catch limit for longline vessels to 11,748mt for 2012, despite overfishing already occurring on bigeye and stocks possibly being in an overfished state.

 

The WCPFC Chair committed to a process to have a new measure for bigeye and yellowfin developed prior to WCPFC9 (December 2012), based on discussions during WCPFC 8. 

Australia presented a proposal for a draft CMM protecting whale sharks and cetaceans (i.e. whales and dolphins) from purse seine fishing operations, on the grounds that these interactions are of ongoing conservation concern and are beginning to draw criticism from international markets. The proposal included a ban on intentional setting on whale sharks and cetaceans, and requirements for safe release of animals encircled unintentionally.  While members endorsed the adoption of a CMM to address the impact of purse seine fishing activity on cetaceans (CMM 2011-03), Japan opposed a measure for whale sharks without further consideration arguing that it is difficult to differentiate between an ‘intentional’ vs. ‘unintentional’ net set.  In considering the draft measure, WCPFC8 noted ongoing work through the Scientific Committee on the development of best practice guidelines for the release of encircled whale sharks.  WCFPC members agreed to finalise the measure at WCPFC9. 

The USA presented a proposal for a CMM for oceanic whitetip sharks, given scientific evidence of steep declining catch rates, and the fact that CMMs have already been adopted for this species in two other RFMOs. Oceanic whitetip sharks are classified as globally vulnerable by the International Union for Conservation of Nature (IUCN).[6]  Members agreed to the adoption of a measure which prohibits the retention, transshipment, storage and landing of whitetip sharks (CMM 2011-04); this is the first species-specific shark measure adopted at WCPFC.  

An agenda item considered of high importance to Pacific Island member countries was the revision of the conservation and management measure for South Pacific Albacore (CMM 2010-05).  To the disappointment of FFA members, there was inadequate time left in the meeting schedule to discuss and progress the issue.  FFA members presented a proposal for revisions intended to strengthen the limits on the number of vessels and catch, and to prevent any further shift in effort towards the South Pacific albacore stock from vessels formerly operating in Northern Pacific waters and other ocean areas (i.e. Indian Ocean). They highlighted the importance of the albacore stock to domestic longline fisheries and their growing concern at increasing catch and effort by some other non-Pacific Islands WCFPC members.[7]  It was recommended that appropriate measures are taken for high seas areas and that transshipment activities be examined to ensure they are in compliance with WCFPC CMMs.  WCPFC8 agreed that South Pacific albacore will be a priority issue for WCPFC9. 

Discussions were also conducted on the introduction of limit reference points for target stocks.[8] WCPFC8 tasked SPC with preparing proposed limit reference points for consideration by the Scientific Committee (at SC8 in August 2012) and adopted terms of reference for a management objectives workshop (MOW) to be held in November 2012, just prior to WCPFC 9.  The purpose of the MOW is to introduce the terms and framework for harvest control rules (of which limit reference and target reference points are a part) and begin to work towards management objectives.  The introduction of harvest control rules through WCPFC is a priority issue for PNA members, as this is a condition of the Marine Stewardship Council (MSC) certification of the PNA skipjack tuna fishery, which must be met within five years.[9] 

During the annual session, PNA members indicated that since strong measures had been taken through PNA initiatives to control the purse seine fishery, that it is time for the longline fishery to take additional responsibility for protecting bigeye stocks.   PNA also stressed that in spite of a lack of progress on CMM 2008-01, PNA measures under the Third Implementing Arrangement (including high seas area closures, a three-month FAD closure and 100 per cent observer coverage) would continue to apply to any vessels licenced to fish in PNA members’ EEZs. 

Following the conclusion of the annual session, PNA criticized WCFPC for the lack of progress on PNA proposals including measures to reduce overfishing on bigeye, protection of whale sharks and extending the ban on FAD fishing from three months to four, citing the influence of large commercial fishing interests on governments of Commission members as a major barrier to progress.[10]  Various NGO’s also expressed their concern at the lack of progress towards sustainable management.  WWF, in particular, cited short-term interests, coupled with a lack of political will from members as major stumbling blocks.[11]  This builds on widespread criticism generally of the ineffectiveness of RMFOs in achieving effective outcomes for the sustainable management of global tuna stocks.  

 

US and Pacific Island Parties continue to negotiate US Treaty renewal 

Negotiations to renew the US Multilateral Treaty, which is set to expire in 2013, have continued to progress after a rocky phase in which PNG threatened to end the Treaty by withdrawing, before later re-entering negotiations.[12] The key negotiating issue remains the details of incorporating US vessels into the Vessel Day Scheme. Under the current Treaty, the US fleet is exempt from a limit on fishing days. In November negotiations in Nadi, Pacific Island Parties (PIPs) proposed that US vessels could purchase 6,000 fishing days for US$60 million annually (a price of US$10,000/day), while the US proposed US$45 million for 9,000 fishing days (US$5,000/day).[13] 

Since November, the US and PIPs have continued to work towards middle ground. At recent negotiations in Hawaii, the US reportedly proposed paying US$65 million for 9,000 days. As a counterpoint, PIPs are offering only 7,500 days for this price. The US delegation has argued that the PIP proposal would render the US fleet economically unviable and also expressed concern over how WCPFC resolutions might impact the agreement.[14] No details have been released as to the proportion of the price industry would pay relative to the development assistance package that the US government will offer.

PIPs have also begun to put pressure on the US delegation by suggesting that fishing days will become scarce as PIPs begin allocating days for 2013. They highlight that negotiations with the US fleet are complicating decision-making in respect to allocating days to other fleets.[15] PIPs’ ability to pressure the US in this manner reflects the growing sentiment among Pacific Island countries (and PNA countries in particular) that they can use resource control to nurture competition and improve their economic returns from the tuna sector. In order for this plan to be effective, Pacific island countries will have to remain committed to limiting fishing days. There is evidence that the VDS has changed resource access dynamics. For example, in 2011, Solomon Islands temporarily closed purse seine fishing when it used all of its fishing days in the first five months of the year. Also in 2011, PNG purchased vessel days from FSM and the Marshall Islands. In 2010, Nauru purchased extra days from the Marshall Islands when it depleted its allocation.[16] In the case of US Treaty negotiations, the expiration of the Treaty combined with the implementation of the VDS has generated some leverage to increase the US fleet payment.

It is expected that the number of vessels days allocated to the US fleet and their price will dominate the next round of talks, which are scheduled to take place in New Zealand in June. However, PIPs continue to emphasise their interest in arrangements that will promote broader economic impacts by, for example, linking the US Treaty with domestic industry activities. PIPs have indicated that these issues must be discussed before the Treaty is finalised.[17] PIPs also continue to express their interest in using US Treaty negotiations to push for improved access to the US market for tuna products, however this topic has been proposed as a separate process that will be addressed with trade officials, rather than directly through the Treaty.[18] PIP member Kiribati also emphasised the need to increase catch monitoring in the name of sustainability.[19]

 

Solomon Islands introduces a new longline licencing policy

In recent years, Solomon Islands’ longline fishery has experienced significant expansion.  In early 2012, over 250 tuna longline vessels were authorised to fish in Solomon Islands EEZ, under foreign access and domestic charter arrangements.   In association with increased vessel numbers total longline catch has grown rapidly, exceeding 17,000 mt in 2010.[20]  To date there has been very limited landing or processing of longline catches domestically, with the majority landed and transhipped in Fiji.  Also, given the rapid increase in vessel numbers and catch, sustainability concerns have risen. 

As a means of enhancing management of the longline fishery and deriving higher economic returns, the Solomon Islands government has introduced an interim longline licencing policy.  Under this policy, vessel licence numbers have been reduced to 180.  As a condition of licencing, vessels are required to unload and process catches locally; vessels offloading catches outside of the Solomon Islands will be subject to payment of a penalty.  Also, in future, licencing priority will be given to those vessels landing catches in the Solomon Islands.[21]  

Under the new longline licencing arrangements, 50 licences have been granted to Solomon Islands’ domestic fishing company, National Fisheries Development (NFD).  NFD will broaden its operations to include longline fishing, in conjunction with Soltai’s plans to expand production by processing longline-caught albacore tuna for the US market.  Currently, Soltai processes around 70-80 mt/day of purse-seine caught skipjack and yellowfin into cooked loins for the EU market (Italy), but has the potential to reach 150 mt/day. With the introduction of longline fishing and processing operations by NFD and Soltai (both owned by Tri Marine International), an additional 500 jobs are likely to be generated for Solomon Islanders.[22]

A second onshore longline processing and packing facility has been established by a Taiwanese investor in Honiara to handle exports of catch from its longline vessels operating in Solomon Islands (40 vessels).  Yellowfin and bigeye will be exported for sashimi markets (Japan, US) and processed into frozen loins for the European market, while albacore will be offloaded to Soltai and elsewhere for canning.  This operation is expected to provide employment for 30 local shore-based staff and up to 200 local fishing crew.  Construction of the onshore facility in now complete, with operations expected to commence in the second quarter of 2012.[23]

 

Tuna Markets

Earth Island Institute and PNA/Pacifical battle over ‘dolphin safe’ status

Controversy over the ‘dolphin safe’ status of Pacifical and PNA tuna has boiled up following an Earth Island Institute (EII) ‘Consumer Alert’ stating that Pacifical is not a part of the Earth Island Dolphin Safe programme and that the certifying organisation cannot confirm that Pacifical – the marketing arm for the Parties to the Nauru Agreement (PNA) set up to promote the PNA and actively trade their Marine Stewardship Council (MSC) certified tuna – are purchasing, procuring and selling tuna caught without chasing, netting or killing dolphins.[24] Earth Island has publicised that Pacifical has not signed an agreement to comply with the EII dolphin safe certification scheme and, therefore, Pacifical tuna cannot be traded or processed by EII members. [25] PNA countries suggest that EII is trying to block PNA and Asian processors from working with Pacifical and their MSC certified tuna.[26]

In response to the allegations, the Parties to the Nauru Agreement have verified that neither the PNA nor Pacifical are part of the Earth Island Programme, but argue that PNA tuna is sustainability harvested, and has much higher standards of marine conservation and management than that offered by the EII scheme. They note that when dolphins are involved as bycatch – an unlikely event in the WCPO – that fishers take measures to release them alive. The PNA Office asserts that the fishery and ecosystem has been demonstrated to be sustainable by earning the MSC certification and by having 100 per cent observer coverage onboard vessels. The MSC certification report for the PNA’s skipjack tuna fishery indicates that the impacts on dolphins for the segment of the fishery undertaking MSC certification are negligible.[27] The PNA office also suggests that the Earth Island Institute’s programme, while relevant 30 years ago in the Eastern Pacific where tuna and dolphins school together, is not relevant in the Western Pacific where there are no direct interactions between tuna and dolphins and is also not reliable because it allows captains to certify themselves.[28] 

The PNA office has also announced that it is working on developing its own PNA sustainable dolphin safe label which will reflect the sustainable management of the whole ecosystem. The office has welcomed the Earth Island Institute and other interested stakeholder groups to participate in the formation of its standard. [29]

 

New Foundation established to support pole-and-line fisheries development

A new not-for-profit foundation has been established – the International Pole & Line Foundation (IPNLF) – to facilitate access to global markets for struggling small-scale pole-and-line fisheries. IPNFL acknowledges that while global market demand for pole-and-line caught tuna is soaring, small-scale fisheries operators currently lack the knowledge and infrastructure to gain access to the global market and capitalise on this opportunity.[30] 

IPNLF’s role will be to coordinate market development of sustainable pole and line tuna.  The foundation will focus on further stimulating market demand for pole-and-line caught tuna; delivering benefits and support to coastal fishers and their communities; and, conducting research to enhance pole-and-line fisheries management and development.[31]   

Given that the Maldives and Indonesia are two of the most significant countries supporting traditional small-scale pole and line fisheries, IPNLF will focus its attention in these locations to start with.  IPNLF is in the process of establishing a branch office in the Maldives, with plans to open another in Indonesia in 2013.  While IPNLF’s registered office is based in London, the Maldives branch office will serve as IPNLF’s central operational base.  The foundation plans to expand its work to a range of other countries, including small island states in the Pacific region.   By the end of 2013, IPNLF aims to have achieved a membership of 20 market operators, established three branch offices, including a fishing school in the Maldives, as well as establishing a scientific committee to guide research. 

 

Calvo sells 40 per cent shareholding to Italy’s Bolton Group

In a continuing trend of corporate consolidation, the Dutch multinational, Bolton Group has acquired a 40 per cent shareholding in Spain’s leading canned tuna company, Grupo Calvo, for €125 million.  Bolton’s shareholding is comprised of a 22.2 per cent stake purchased from three Spanish savings banks and 17.8 per cent from the Calvo Pumpido family.  The Calvo family retains majority shareholding of 60 per cent.[32]  

Bolton’s Italian brand Rio Mare and is currently the market leader and it also owns the Italian Palmera brand, which combined give Bolton just under 50 per cent share of the Italian market. Calvo’s brand, Nostoromo, is the second largest in Italy.  By acquiring a shareholding in Calvo, Bolton Group is able to strengthen its dominance of the Italian market and now has strong investments in three of Europe’s major canned tuna markets – Italy, Spain and France (Saupiquet).  Bolton Group will also be able to benefit from Calvo’s strong and expanding presence in Latin America.  Bolton Group currently has more than 50 brands of products, marketed in over 125 countries worldwide, and in 2011 generated €400 million gross revenue.[33]  Bolton’s brand Saupiquet is France’s second leading brand and Germany’s market leader.       

This sale is likely to have come as a disappointment to Korean canned tuna industry giant, Dongwon Industries.  As reported in the previous edition of FFA Fisheries Trade News (Jan-Feb 2012), Dongwon had expressed an interest in purchasing a 50 per cent shareholding in Calvo, in an attempt to penetrate the European market and strengthen its rival position to Thai Union.[34]  

 

 

1 Prepared for the FFA Fisheries Development Division by Liam Campling, Consultant Fisheries Trade Analyst, FFA and School of Business and Management, Queen Mary, University of London, Amanda Hamilton, independent consultant and Elizabeth Havice, University of North Carolina at Chapel Hill. 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 Amanda Hamilton, Elizabeth Havice & Liam Campling 2011, ‘Free Trade Agreement Signed Between the EU, Colombia & Peru’, FFA Fisheries Trade News, April 2011.  Available at: http://www.ffa.int

3 Atuna 2012. ‘Ecuador Risks Losing Duty Free Access for Canned Tuna in Europe’. Atuna. 22 March 2012.  Available at: http://www.atuna.com

4 Amanda Hamilton, Antony Lewis, Mike McCoy, Elizabeth Havice and Liam Campling . 2011.  Market and Industry Dynamics in the Global Tuna Supply Chain, Honiara: Pacific Islands Forum Fisheries Agency.  Available at: http://www.ffa.int/node/567

5 Unless otherwise specified, information presented is sourced from:  WCPFC 2012.  WCPFC8 Draft Summary Report, Eighth Regular Session, 26-30 March 2012, Guam.   Available at: http://www.wcpfc.int

6 FIS 2012. ‘Oceanic whitetip sharks get protection, whale sharks get none’, FIS, 12 April 2012.  Available at: http://www.fis.com

7 For further background information regarding this issue, refer to FFA Fisheries Trade News – December 2011; and January-February 2012.  Available at: http://www.ffa.int

8 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.  A. Lewis, pers. comm.

9 Amanda Hamilton, Elizabeth Havice & Liam Campling 2011. ‘PNA Skipjack Purse Seine fishery is awarded MSC certification’.  FFA Fisheries Trade News, December 2012. Available at: http://www.ffa.int

10 Radio NZ 2012. ‘PNA Sees None of its Proposed Tuna Conservation Measures Accepted’.  Atuna. 4 April 2012.  Available at: http://www.atuna.com

11 WWF 2012.  ‘WCPFC Members Blind to the Fate of Bigeye: Says WWF’. Atuna.  2 April 2012.  Available at: http://www.atuna.com

12 Amanda Hamilton, Liam Campling and Elizabeth Havice 2011, ‘PNG withdrawal spells the end of the US Multilateral Treaty’, FFA Fisheries Trade News, May 2011. Available at http://www.ffa.int; Amanda Hamilton, Liam Campling and Elizabeth Havice, ‘Negotiations continue for renewal of the US Treaty’, FFA Fisheries Trade News, December 2011. Available at http://www.ffa.int 

13 Amanda Hamilton, Liam Campling and Elizabeth Havice 2011, ‘Negotiations continue for renewal of the US Treaty’, FFA Fisheries Trade News, December 2011. Available at http://www.ffa.int

14 Island Business 2012, ‘Tuna Treaty: US Wants 9000 Days, Pacific 7500 for USD 65 Million’,  Atuna, 16 April 2012. Available at http://www.atuna.com

15 ibid.

16 Amanda Hamilton, Liam Campling and Elizabeth Havice 2011, ‘Solomon Islands purse seine fishery closure under VDS’, FFA Fisheries Trade News, May 2011. Available at http://www.ffa.int; ‘Recent Developments in the PIC Tuna Fishery’, FFA Fisheries Trade News, August-September 2011. Available at http://www.ffa.int 

17 US Treaty Negotiations Participant, pers. comm., April 2012.

18  US Treaty Negotiations Participant, pers.comm,, April 2012.

19 Island Business 2012, ‘Tuna Treaty: US Wants 9000 Days, Pacific 7500 for USD 65 Million’,  Atuna, 16 April 2012. Available at http://www.atuna.com

20 Edward Honiwala 2011. Annual Report to the Western and Central Pacific Fisheries Commission – Solomon Islands, WCPFC-SC7-AR/CCM-21, Scientific Committee Seventh Regular Session, Pohnpei, 9-17 August 2011.  Available from URL:  http://www.wcpfc.int/doc/ar-ccm-21/solomon-islands-1

21 Islands Business 2012. ‘Longline Tuna Licences in Solomon Now Subject to Processing Locally’, Atuna, 16 April 2012.  Available at: http://www.atuna.com

22 ibid.; NFD & Soltai representatives, pers. comm.  March 2012. 

23 Solomon Islands’ senior fisheries officials, pers.comm.  March 2012. 

24 Earth Island Institute 2012, ‘Dolphin safe tuna consumer alert: PACIFICAL is not a part of Earth Island Dolphin Safe Program’, Earth Island Institute Press Release. No date. Available at: http://www.earthisland.org 

25 Radio Australia 2012, ‘Earth Island Institute rejects PNA claims on dolphin being safe’ Pacific Beat, 24 April 2012. Available at: http://www.radioaustralia.net.au

26 Atuna 2012, ‘PACIFICAL – PNA Tuna is Dolphin Safe, Says MSC’, Atuna, 20 April 2012. Available at: http://www.atuna.com 

27 Banks, R., Clark, L., Huntington, T., Lewis, T. and Hough, A. 2011,‘MSC Assessment Report for PNA Western and Central Pacific Skipjack Tuna (Katsuwonus pelamis) unassociated and log set purse seine Fishery’, Intertek Moody Marine, Final Report Ref: 82122/v4. No date. Available at: http://www.msc.org 

28 Atuna 2012, ‘Earth Island Dolphin Safe Not Reliable, Warns PNA’, 12 April 2012. Available at http://www.atuna.com ; Radio Australia 2012, ‘PNA welcomes EII to work with them on reliable dolphin standard’, Pacific Beat, 13 April 2012. Available at http://www.atuna.com ; Natalia Real 2012, ‘PNA refutes “alerts to consumers” regarding its tuna’, FIS, 13 April 2012. Available at http://www.fis.com 

29 Natalia Real 2012, ‘PNA refutes “alerts to consumers” regarding its tuna’, FIS, 13 April 2012. Available at http://www.fis.com 

30 Fish News EU 2012. ‘New tuna foundation formed’. Fish News EU. 2 April 2012.  Available at: http://www.fishnewseu.com

31 IPNLF 2012, International Pole & Line Foundation – Company Brochure.  Available at: http://www.ipnlf.org

32 FIS 2012.  ‘Bolton Group acquires 40 pc of Calvo’.  FIS. 23 April 2012.  Available at: http://www.fis.com

33 Atuna 2012. ‘Bolton Buys 38% of Calvo for USD 132 million’. Atuna, 23 April 2012.  Available at: http://www.atuna.com ; Amanda Hamilton, Antony Lewis, Mike McCoy, Elizabeth Havice and Liam Campling . 2011.  Market and Industry Dynamics in the Global Tuna Supply Chain, Honiara: Pacific Islands Forum Fisheries Agency.  Available at: http://www.ffa.int/node/567  

34 Amanda Hamilton, Elizabeth Havice & Liam Campling 2012. ‘Dongwon bids for prominent European tuna brand, Calvo’. FFA Fisheries Trade News, Volume 5:  Issue 1.  January-February 2012.  Available at: http://www.ffa.int