Interview: Ritche Rivera, Vice-Chairman, RD Corporation
What role do you see for fisheries in the government’s attempts to diversify the economy?
RITCHIE RIVERA: Papua New Guinea’s fishing industry has huge potential to help diversify and stimulate the country’s economy. However, PNG will have difficulties competing with other markets if it does not have the right infrastructure, facilities and management in place. The last 20 years have been difficult for maintaining a sustainable business environment due to various obstacles. In particular, inefficient power and water supply, high power generation and freight costs, low availability of packaging materials, and problems with law and order have proved to be significant challenges.
The government has undertaken some measures and passed new laws and regulations to make the business environment more competitive. Nevertheless, the cost of doing business is still substantial and not very inviting to potential investors. The key to attracting genuine investors to PNG is to give them a more attractive business environment in terms of supporting facilities and infrastructure. The realisation of the Pacific Marine Industrial Zone in Madang, if managed properly, would be a step in the right direction.
How can the long-term sustainability of the country’s fishing stocks be guaranteed?
RIVERA: The tuna stocks caught in the waters of PNG have consistently topped at an average of 250,000 tonnes per year. This is a sizeable figure that is able to generate a lot of revenue. However, to ensure the country benefits for many years to come, a sustainable way to manage fish stocks needs to be found. The implementation of a tuna management plan would guarantee that programmes are investor-friendly and implemented on a level playing field.
The regional Vessel Day Scheme (VDS) regulates the number of fish caught per day and also the fees paid to the signatories of the Nauru Agreement, which includes PNG. The scheme was implemented to protect regional fishing stocks and allows vessel owners to purchase and trade on allocated fishing days at sea.
However, despite the good intentions behind the scheme, the VDS needs reform, as it speeds up stock depletion. In my opinion, the scheme has been counterproductive, and the recent increase in fees has led boats to stay out longer and set nets twice or more a day, which has reduced the average size of catches.
In what ways could the authorities boost investments in onshore processing facilities?
RIVERA: The government should provide incentives to fishing companies and onshore processors if it wants a significant part of the tuna catch to be processed domestically. Measures that could suit a market like PNG include long-term tax incentives or tax holidays for investing in onshore processing facilities; duty-free importation of raw and packaging materials for production use; an export subsidy in the form of fish rebates for value-added products processed domestically; reduction of power generation charges for electricity; and special rates for water, harbour and berthing charges. The government recently introduced a rebate to foreign fleets that process their fish in factories in PNG. This is a welcome move, and will ensure the financial viability of local factories to operate profitably.
Another important incentive would be to better integrate the country’s industrial fishing companies into the local and regional supply chain. Certain basic infrastructure is needed in order for PNG to meet this objective and become both a processing and export centre. Cold storage facilities, for example, are needed to maintain the volume of fish during good seasons and to keep factories operational during leaner seasons. Furthermore, to encourage fishing boats to unload their catch onshore, wharves must have automated unloading systems for fast turnaround times, as well as connections to road networks to transport the raw materials to processing facilities and export centres.
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