The President & Chairman of Papua New Guinea’s Fishing Industry Association (FIA), Sylvester Barth Pokajam, congratulates Honourable James Marape MP, elected unopposed as the Prime Minister of the Independent State of Papua New Guinea, and Honourable Job Pomat MP, elected unopposed as the Speaker of the 11th Parliament. Our best wishes to all the members of Parliament both in Government and Opposition who have been re-elected or elected for the first time as members of Parliament.
The FIA strongly supports the Marape Government in taking back PNG as our Government strives to fully involve and support the participation and inclusion of PNG in the fishing and processing business. The policy on building basic and appropriate infrastructure such as fishing ports, having affordable and readily accessible utilities such as water, electricity and communication are vital for the growth of the industry and to foster interest amongst many individual groupings and businesses both within and outside to look at fisheries investment opportunities in PNG.
Attracting Foreign Direct Investment (FDI) has stalled since 2013 due to inconsistent and sudden shift in Government policy after Grand Chief Sir Michael Somare’s regime. In fact, between 1998 and 2013, six new tuna-processing plants were built in PNG, but investment has been stalled since then. WHY?
The FIA also refutes the claim by so called ex ternal advisors and experts that attracting investors is not the main problem. It is not just investment but finding the right investment. Investors must be enticed or attracted to invest where there is a win-win situation for both parties:
Fishing operators invest in processing to gain license concession. This is a conventional global practice that rewards frontrunners for investing substantially in developing the local industry and the sector.
Processor to invest not fishing operators to invest. This is a situation where a processor is able to put in place additional shifts in its processing operation as a result of the expansionary government policy where the negative impacts are reduced.
At this juncture, the FIA is happy that the Prime Minister continues to support the PNG aspiration to make PNG the tuna capital of the world, a feat that is not impossible under your leadership. This is a quest we planned for after we were able to negotiate a Tariff free access to the EU. As the former Managing Director for NFA from 2004 to 2014, we have seen the rush of serious proposals for on-shore investments. Frabelle PNG Ltd, International Food Corporation Ltd, Nambawan Seafood Corporation Ltd, Majestic Seafood Ltd were established in Lae, in addition to RD in Madang and South Seas Tuna Corporation Ltd/FCF in Wewak.
Unfortunately, two other investors who had already acquired land in Lae, signed project agreement with the State in 2013, but did not continue due to sudden change in Government Policy. Majestic being partly owned by the two world players in the tuna processing industry, Thai Union Group of Thailand and Century Pacific Food Inc of Philippines, the former being the biggest tuna processor in the world and the latter biggest in the Philippines. Our current tuna industry players and Majestic helped boast our export to EU markets.
Cost to operate a processing facility in PNG that competes in the world continues to be a big challenge. Ideal set up should be an entity doing fishing and processing at the same time ensuring supply of tuna for processing and the flexibility to market its products so that it can reduce the impact of high cost.
FIA was also able to secure a reputable Marine Steward Council (MSC certification scheme) ECO label for PNG. There is a lot more work to do. We shall work closely with the Prime Minister and his Government by providing accurate industry market information to guide the Government to enable us to achieve our aspiration.
Another issue with the current Government policy is the higher prices it charges for the country’s vessel-day scheme (VDS), which governs its tuna-fishing sector. From hard facts, other Pacific nations are charging USD 6,000 to USD 7,000 (PGK21,700 – PGK25,300) for daily access for their domestic fleets, but in PNG, the cost is USD 10,500 (PGK38,000) daily. Investors that would like to invest in PNG look for competitive cost of license and the VDS is a scheme PNG can use to attract both local investor and FDIs.
In late February 2022, the number of tuna purse-seiners flagged to Papua New Guinea had dropped significantly as a result of the higher prices. More PNG flagged vessels are reflagging to other Pacific countries, especially Nauru and FSM (Federated States of Micronesia). Since 2019, a total of 28 vessels have moved to reflag to FSM and 9 reflagged to Nauru. These two countries offered discounted vessel day scheme fees and facilitated access for vessels to fish in the Eastern high seas pocket. Only a dozen purse-seiners remain flagged to PNG. The National Fisheries Authority (NFA) is very much aware of this dilemma and have stated that the country needed “conducive policies in place to attract vessels to carry the PNG flag and fish in the country’s fishing zones.”
In addition, the FIA also shares the same sentiments as expressed by “The Farmers and Settlers Association Inc.,” that the Government should not get involved directly in the industries whether it be fisheries, forestry and downstream processing of precious metals which is something that should be discouraged at the outset. Past experiences have shown the many failed ventures that the Government had been involved in and therefore the Government should concentrate more in supporting domestic PNG private sector entities and FDIs through an expansionary fiscal policy.
Having said that, may I wish the Honourable Prime Minister, James Marape MP and his Government, the Honourable Speaker, Job Pomat MP and the rest of all the members of Parliament the best in serving our country and our people. May God bless Papua New Guinea.
Sylvester Barth Pokajam
President & Chairman
Fishing Industry Association (PNG) Inc.