management of the south pacific tuna fishery

Pergamon Marine Policy, Vol. 21, No. 2, pp. 155-171, 1997

~ 1997 Elsevier Science Ltd All rights reserved. Printed in Great Britain

0308-597X/97 $17.00 + 0.00

PII:S0308-597X(96)00053-X

Management of the South Pacific tuna fishery

Colin Hunt

South Pacific tuna is worth some $USl .5 billion and the economic future of many Pacific islands is dependent upon the conservation of the region's tuna stocks. The entry into force of UNCLOS in 1994 and the Implementing Agreement of 1995 have focussed attention on the management of South Pacific tuna, as have regional economic trends. However, the deficiencies apparent in fisheries management systems elsewhere are likely to be exacerbated in the South Pacific. The article suggests that a practical alternative to the direct control of tuna catches, while other methods are being researched, is area closures. This system is already in place in some island countries and requires only limited financial resources to implement. © 1997 Elsevier Science Ltd.

Key words---economic importance of South Pacific tuna, exploitation, stocks status and management alternatives

Colin Hunt is at the National Centre for Development Studies, Australian National University, Canberra, ACT, Australia.

The South Pacific is the most productive of regions, in terms of tuna harvest, due mainly to its abundant skipjack resource, and contributes some 40% of the total tuna supplied for canning [1]. The region also supplies a substantial proport ion of Japan 's sashimi imports.

The region under discussion is that covered by the South Pacific Commission (SPC) Statistical Area that covers 22 Pacific Island Coun- tries (PICs) and includes much of what is commonly termed the Western and Central Pacific: see Figure 1.

The future of tuna stocks is of great socio-economic importance to the region because stocks constitute the region's major renewable resource. The ability of tuna to generate substantial and sustainable income flows has recently come into focus because of the poor economic performance of most PICs (when compared with Caribbean island states, for example), a reduction in aid flowing to the region and rapid and unsustainable exploitation of forest resources (principally of Papua New Guinea and the Solomon Islands).

One way of indicating the importance of fishing is to express the fishing revenue received by Pacific island governments as a proport ion of total government revenue. In the case of Kiribati and Tuvalu the proportion is between 30% and 50%, most from tuna; it is also high in the Federated States of Micronesia (FSM) and the Marshall Islands. These four island countries receive significant licence fees from foreign tuna vessels that fish their considerable tuna resources.

I f we measure the importance of fishing by share of GDP, we find that it is 9 10% in Solomon Islands, Kiribati and Tuvalu but only 1.5% in Fiji and somewhat less in Papua New G u i n e a ~ c o n o m i e s that are more diversified, fishing being just one of several important sectors. The formal employment associated with the export canneries of both the Solomons and Fiji is another consequence of large tuna stocks.

While the importance to PICs of the income from tuna can easily be demonstrated, they nevertheless manage to capture directly (through fishing, see Figure 2), and indirectly (through "access fees", see Figure 3) only about 10% of the total annual value of the fishery, which is some US$1.5 billion.

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Figure 2. Value of tuna catch, South Pacific Commission Statistical Area, 1994.

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v a r i o u s .

VALUE OF CATCH, TOTAL

VALUE OF TUNA CATCH, BY RCs

Management of the South Pacific tuna fishery: C Hunt

0 200 400 600 800 1000 1200 1400 $US, millions

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Figure 3. Value of tuna catch by distant water fishing nations and access fees paid, SPC Statistical Area, 1993.

Source: S o u t h P a c i f i c C o m m i s s i o n ; M a x w e l l

a n d O w e n , 1 9 9 4 [3 ] ; F o r u m F i s h e r i e s A g e n c y .

ACCESS PAID

60

0 200 400 600 800 1,000 1,200 $US. millions

Against a background of great increases in tuna catches, particularly skipjack and yellowfin (Figure 4 illustrates trends in catch), important policy issues are the maintenance of stocks and the maximisation and maintenance of the economic benefits flowing to PICs from those stocks. In this article, some scenarios for tuna stocks and incomes are painted after an examination of trends in harvesting and markets, and of some implications of the recent entry into force of the United Nations Convention on the Law of the Sea (UNCLOS).

Economic benefits of tuna to Pacific Islands

The tuna fleets of USA, Japan, Taiwan and Korea represent investments and risk-taking far beyond the capacity of most PICs. For example, the value of a new purse seine vessel is equal to a sizeable proport ion of the G D P of many island states. The distant water fleets must contend with market price changes as well as variability in catches--prices for canning tuna have oscillated f rom $US650 to $USl l00 per tonne over the last decade. Indications are that higher prices will not be sustained in the short run [2].

Economic theory suggests that royalties as a proport ion of the fishing rents of the distant water fishing fleets are the most efficient way that income can be appropriated by the PICs. However, in practice, the esti- mat ion of rents is very difficult--fishers always claim that costs are high and rents low. In any case rents vary from vessel to vessel, fleet to fleet and from season to season. Therefore, the usual method employed to

157

Management of the South Pacific tuna fishery." C Hunt

extract the resource owner 's share of the rent in the region is a fee based on the expected value of catch. While the proport ion of value of catch and licence fee methods are distortionary (compared with a royalty) and transfer risk to the fishing nation, they are easy to calculate and provide a relatively more certain level of income for the resource owners than would royalties. This greater certainty is very welcome when fishing fees form a very large proport ion of government revenue, as they do in Kiri- bati I and other Pacific countries where fishing incomes form a large part of government revenue.

1Even so, the El Nino effect has caused large variations in the amount of tuna caught in Kiribati 's EEZ in recent years and consequently in the fishing fees received by the Kiribati government. For example, in 1992 total access fees were $A14.4 million, while in 1994 they were $A17.8 million and in 1995 some $A20.0 million, but with the waning of El Nino and a shift in the locus of tuna stocks westwards, fees were expected to fall by about $A7.00 million in 1996 (personal communication with Teekabu Tiskai, Secretary of Natural Resources, Kiribati). 2The 14 island member countries of the Forum Fisheries Agency are: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Western Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

A ccess f ecs

The "access fees" are usually set by negotiation between a PIC and representatives of a distant water fleet. The fee in the purse seine fishery is normally a percentage of the expected catch for a year multiplied by its expected price. The Japanese currently pay a fee of about 5% of expected value to fish under such bilateral agreements. In other cases, there is a lump sum demanded for access. For example, while Kiribati sets fees of approximately 5% of the value of catch under bilateral access arrangements for purse seine fishing, it has been charging the longline vessels of Korea and Japan $US 181 000 per vessel.

Access fee levels as a percentage of value of catch in 1993 were estimated by Maxwell and Owen at between 3.1% for Korea and 5.1% for Japan [3]. In 1993, access fees paid to member countries of the Forum Fisheries Agency (FFA) 2 by distant water fishing nations totalled about $US60 million.

In contrast to the usual bilateral arrangements, the United States oper- ates under a regional agreement that sets an annual fee at $US18 million (for 10 years under the 1993 agreement). To enable it to meet its fee, The United States Tuna Boat Association receives a subsidy from the US government of $US14 million and itself contributes $US4 million. The fee of $US18 million implies a rate of payment of about 14% of the value of tuna caught. Under this multilateral treaty, $US1.8 is paid annually into a project development fund administered by the FFA, 15% of the balance is shared equally among the parties and remainder is divided between the parties according to the weight of catch taken from their EEZs [4].

Fee levels under bilateral agreements were often less than they could have been due to under- and non-reporting of catches to the SPC, particularly by Taiwan and the Republic of Korea. Mandatory port transhipment, begun in June 1993, has improved purse seine catch data, now virtually complete. As well as the indirect benefits of more accurate catch data in terms of setting of access fees there are direct benefits of transhipment to PICs hosting the purse seiners. (However, the significant costs of transhipment, in the form of reduced fishing time do not appear to have been documented.)

While the agreement with the US is the only multilateral agreement in force, commentators have recommended a general shift to such arrangements [5]. The argument is that the countervailing power of islands, acting as a group, would extract higher access fees. The bilateral negotiations allow the distant water fishing nations (DWFNs) to play one island state off against another [6] and to make substantial side-payments, often in the form of aid, [7] in return for favourable access arrangements.

A major constraint on the development of a united approach to nego-

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3Parties to the Palau Agreement are Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu. '~l-he group of PICs expressed dissatisfac- tion with the poor level of compliance in catch reporting and transhipment displayed by Taiwan vessel operators in the region. The resulting suspension of bilateral arrangements by some countries in the group had caused part of the Taiwa- nese fleet to relocate to the eastern Paci- fic and the Indian Ocean. A sub-regional annual access fee of $US870000 for 75 vessels, and $US650000 for 50 or less, was proposed.


tiations with the distant water fleets is, however, the unwillingness of some island states that depend heavily on fishing fees, for example Kiri- bati and the FSM, to adopt the cooperative model. The FSM fears that it could be worse off under multilateral agreements and sees present bilateral arrangements as providing more opportunities for domestic fisheries development through joint ventures. It will confine regional cooperation to the application of umbrella terms and conditions under which bilateral deals are made. While both countries have been vocal in their opposition to multilateral agreements, [8-10] neither has not ruled out united sub-regional approaches to negotiations by tuna-rich island states under the Palau Arrangement. 3

But the limitation of such sub-regional approaches is illustrated by the recent rejection by Taiwan of specific attempts by a group of PICs to negotiate a sub-regional agreement in 1995. The group-- Cook Islands, Fiji, Niue, Solomon Islands, Tokelau, Tonga, Vanuatu and Western Samoa--tried to negotiate an agreement with representatives of the Taiwanese fishing interests that operate freezer longline vessels in the Pacific. 4 However, the Taiwanese rejected the proposal out of hand on the grounds that the fee was too high when considered along with the impositions of prohibition of transhipment at sea (which was objected to) and compliance with observer programmes and reporting [11].

If all FFA countries had given weight to the negotiations, including FSM and Papua New Guinea, which host considerable Taiwanese fishing effort [12]. there probably would have been a far greater probability of the conclusion of a beneficial sub-regional longline agreement.

Domestic fishing and processing operations

In the face of difficulty in negotiating increased access fees through bilateral agreements, the policy adopted by PICs to achieve greater economic benefits from their tuna stocks is one of trying to develop local fishing and processing operations. The development of domestic industries is taking three forms.

First, the provision of incentives for foreign purse seine fleets and vessels to base locally and contribute to local economies. Second, through the establishment and growth of locally-based, short-trip longlining operations that supply sashimi export markets. Third, through the construction of tuna canneries.

It is unlikely that the incentives offered to purse seine vessels to base locally will be effective because: (1) There is no real reduction taking place in the number of purse seine licences issues under bilateral arrangements--pressure on vessels to seek local basing is therefore absent. (2) The "preferential" access fee of 5% is no less than under most bilateral agreements. (3) The need for foreign vessels to invest in the development of the domestic shore-based tuna industries would increase their fishing costs and, in all likelihood, their profits.

Longlining

The potential to capture economic benefits from domestic longline fishing and exporting of sashimi appear to be much brighter, however [13, 14]. Since 1993, in response to profitability, there has been a rapid growth of the number of short-trip longline vessels landing tuna destined for the sashimi markets of Japan, Hawaii and the US. The number of

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Management of the South Pacific tuna fishery. C Hunt

Table 1. Vesse ls and catch: South Pacific tuna a

Purse seine f ishing (canning) DWFNs b PICs c no. vessels catch OOO t no. vessels catch 000 t

1990 150 824.9 4 6,2 1991 164 788.0 9 22.2 1992 163 781.0 10 26.7 1993 158 665.3 10 28.1 1994 160 777.6 11 34.1

Pole and l ine (canning) DWFNs PICs no. vessels catch OOO t no. vessels catch OOO t

1990 62 54.8 105 26.8 1991 54 53.2 77 42.0 1992 39 45.6 84 23.4 1993 38 45.6 64 21.7 1994 41 45.6 E 112 27.5

Longl ine (fresh marke t ) DWFNs PICs no. vessels catch 000 t no. vessels catch OOO t

1990 ? 113.0 14 2.4 1991 ? 95.8 16 2.7 1992 ? 121.1 52 2.8 1993 ? 124,3 54 5.0 1994 ? 136.3 134 8.0

aNote: (i) that the quality of data on distant water fishing nations is variable, and poor in the case of Ionglining; (ii) minor fishing methods such as troll ing are excluded; (iii) vessels and catch of Australia and New Zealand is excluded. bdistant water fishing nations; Cpacific Island countries; Eestimated. DWFNs: in the purse seine: the Republic of Korea, Taiwan Province of China, the United States and Japan; in the pole and line: Japan; in the Iongline: Japan, the Republic of Korea, Taiwan Province of China, the United States and China. PICs: In the purse seine: Solomon Islands, the Federated States of Micronesia; in the pole and line: Solomon Islands, French Polynesia, Fiji, Kiribati, Palau; Tuvalu; in the Iongline: Fiji, French Polynesia, Tonga, Federated States of Micronesia, New Caledonia, the Marshall Islands. Source: South Pacific Commission, Fiji Fisheries Division.

Figure 4. Tuna catch by species, SPC Statistical Area.

Source: South Pac i f ic C o m m i s s i o n .

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domestic longliners had grown to 134 in 1994 (see Table 1), mainly based in Fiji and French Polynesia.

Figure 5 shows the rapid growth in the value of fresh fish exports, largely tuna, from Fiji. The greatest growth in short-trip longlining has occurred in Palau and FSM, where fleets are foreign-owned but nevertheless confer substantial net benefits on the economies of those island

160

Figure 5. Fiji fish exports (1995 and 1996 estimated).

Source: G o v e r n m e n t o f Fi j i .

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40 35 30 25

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• canned fish

1993 1994 1995 1996

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Source: Forum Fisheries Agency (December 1994 data unavailable).

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states [15, 16]. The increase in fresh fish supply has put some downward pressure on Japanese prices, as illustrated in Figure 6. However, Pacific exporters have been shielded from the effects of the price downturn by the simultaneous strengthening of the yen [17].

While the cost of longline vessels is much less than for purse seine vessels, there are substantial technical, processing and transport costs involved in short-trip longlining and the industry appears to exhibit substantial economies of scale. Therefore the availability of capital and managerial expertise are likely to be constraints on locally-based growth of this industry.

Processing

In 1973 Solomon Taiyo Limited (STL) was established in the Solomon Islands as a joint venture between the Japanese firm Taiyo Gyogyo Kabushykiki Kaisha and the Solomon Islands Government.

The canned product has been steadily growing in importance, now constituting 70% of STL sales, while frozen fish has declined to 15%. The annual output of the Noro cannery has increased to almost one million cases, requiring 20000 tonnes of tuna. The canning plant has been expanding and is presently approaching capacity and the possibility of installing another line has been under consideration by STL [14].

161


Despite tax relief and the waving of import duties, however, STL has had a poor profit and dividend performance over an extended period, with losses accelerating between 1991 and 1993. The accumulation of losses has meant that no company tax has been paid to SIG. The heavy burden of debt to Taiyo G K K (denominated in Yen, and hence growing, rather than falling as the $SI depreciates) together with heavy management fees and sales commissions, absorb a significant proportion of revenue. Given the inability of the company to pay tax, the main financial benefits to the Solomon Islands government from Solomon Taiyo's operation have been indirect, through employment, commodity purchases, property rents and bait fish payments [14].

The other export canning facilities in the South Pacific are Fiji's PAFCO Ltd and the Pago Pago cannery; the latter is in US territory and will not be considered here. Madang, in Papua New Guinea (PNG), is the site of new export cannery expected to commence production in January 1997. 5 The Philippine-based joint venture partner RD Tuna Ventures Inc., will relocate purse seiners to supply the cannery from PNG waters.

The PAFCO cannery is 98% Fiji government-owned but it appears to be in a somewhat precarious financial position due to increasing operat- ing losses in the last few years. This situation arises despite the tax free status enjoyed by the company. Nor does it pay access fees, import duties, corporate tax or tax on exports. Moreover, the company has been given substantial development assistance by the Fiji Government, and more recently the Australian Government provided $F17 million of aid for infrastructure development. Employment generation on Levuka island and backward linkages to the economy are the principal benefits to Fiji of the cannery [14].

While the PICs have access to plentiful supplies of canning tuna, the comparative advantage in canning lies in south east Asian economies, particularly Thailand and the Philippines which are together responsible for over 70% of the world exports of canned tuna. 6 At present, canneries in the South Pacific enjoy preferential access to European markets under the Lom6 Agreement, but this advantage is likely to disappear or at best suffer substantial reduction after the year 2000 [18]. Given the lack of profitability of Pacific canners, or the difficulty of capturing the profits, together with the uncertainty of future market access arrangements, suggests that caution on behalf of governments of PICs with respect to cannery investment would be a wise policy. The article now turns to the issue of maintenance of stocks.

5Source: Papua New Guinea National Fisheries Authority, Port Moresby. 6Source: Trade Promotion Division, Info- fish, Kuala Lumpur.

Maintenance of stocks

The ability of the PICs to continue to benefit economically from the tuna fisheries of the region, either through access fees or by direct exploitation, is dependent in the long term on the management of stocks through the control of fishing effort.

An essential ingredient of management is catch and fishing effort data by species and by vessel. The SPC already collects, publishes and inter- prets statistics on catch and effort and supplements these by undertaking research. However, catch and effort data from the distant water longliners is deficient. There is under-reporting of longline catches within the Exclusive Economic Zones (EEZs) of PICs, and in the case of the high seas areas only the Japanese longline fleets provide catch data but in

162


aggregated rather than logbook form [19]. Discard data is also important in the derivation of reliable CPUE values but, in the case of the longline fishery, target species discards are "irregular and unpredictable" [20].

Key issues

The regional nature of the tuna stocks, combined with their migratory nature, are overwhelmingly important characteristics from the point of view of management. The level of fishing effort in a particular EEZ or high seas area will affect catches in other EEZs in the region. The implications are that management should be conducted on a regional basis-- the combined fishing effort in EEZs and that on the high seas should conform to scientific estimates of total allowable catch (TAC) that will maintain stocks.

A review of the prospects for sustainability must be conducted species by species. In the case of skipjack, the main target species for the canning industry, the current level of exploitation is "low to moderate, in spite of the large increases over the last 15 years" [21].

The current assessment of the level of exploitation of yellowfin is also low to moderate but "more caution is advised given the different biological parameters of the two species" [19]. While the surface (purse seine) fishing is stable, there has been a continual decline in the catch per unit of effort (CPUE) for yellowfin in the longline fishery, which targets adults. Reasons for the decline are unknown but it may be linked to an increase in pure seine catches [22].

In the case of bigeye, highly sought-after for sashimi, there are fears that maximum sustainable yield (MSY) is being exceeded, but analysis is hampered by the lack of basic biological parameters and reliable and comprehensive catch data. The status of the albacore stock, an important and heavily-targeted longline species, especially in higher latitudes of the South Pacific, is also uncertain [22].

The need for the development of a management plan for yellowfin, bigeye and albacore should be stressed given that these are the target species of the emerging longline operations in PICs.

As Figure 4 illustrated, there has been a steep increase in tonnage of yellowfin caught by purse seine fishing--mainly by DWFNs- - in the SPC statistical area, in the last decade. The catch by longline of yellowfin, in contrast, has tended to decline, despite an increase in the longline fishing effort. This has resulted in a reduction in the CPUE. The decline is of concern because to island-based longline fishing entrepreneurs it suggests that they may face a declining CPUE.

Figure 7 shows for the SPC region, the CPUEs for yellowfin, bigeye and albacore respectively of the large Japanese longline fleet, since 1962. The CPUE in longlining is measured by the number of hooks set; CPUE thus underestimates "effective" effort which would have increased substantially due to the more effective targeting of fish and other management and technical innovations [23].

In Figure 7 the decline in albacore and yellowfin CPUE is evident while that of bigeye is shown to remain relatively constant. However, Miyabe claims that an abundance index for bigeye (for the entire Pacific) would in fact show a marked decline, in the order of 75% (from an index of 2 to one of 0.5), since the mid-1950s [22, Fig.22, p.30]. While caution should be exercised (in the interpretation of Miyabe's results), there is considerable concern that the current catch, which may be significantly

163

Management of the South Pacific tuna fishery: C

2

1.8

Figure 7. Japanese Iongline catch per unit of effort.

1.6

.~ 1.4 O

* 1.2 ¢D ¢D

1

o. 0.8

~ 0.6

0.4

0.2

Source: South Paci f ic C o m m i s s i o n .

Hun t

,,, ,,, ,o E

= ~ = yellow fin

= albacore

bigeye

7parties to the Palau Arrangement are the Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu.

underestimated, has been consistently in excess of estimated MSY in recent years [22, p. 11].

The decline in CPUE in the yellowfin fishery is difficult to interpret satisfactorily. It could be attributed to the targeting of bigeye instead of yellowfin by the longliners of Japan by setting hooks deeper in the ocean [23]. The issue is further complicated by local abundance being somewhat independent of the levels of regional stocks, CPUE being determined to some extent by the level of local fishing effort.

Yet another complication is the distortion in the reporting of catches of bigeye. Up to about 10% of the "yellowfin" purse seine catch is in fact juvenile bigeye [24], bigeye catch is thus under-reported [21]. Along with the purse seine effort increase, there has been a great intensitifica- tion in effort on the adult bigeye stock resulting from recent additions to the short-trip longline fleet in the western Pacific. In 1994 about 500 vessels from China and 300 from Taiwan were added to the Japanese fleet of 200 [23, p.1]. The issue of whether the increasing catches of mainly juvenile tuna will impact on the catches of longline vessels targeting the adults of the same species remains to be resolved.

To address the important issue of interaction between gears in the yellowfin fishery, research is being conducted by the Western Pacific Yellowfin Group. As well as "interaction", the issues of maximum yield and local depletion are being researched as is bioeconomic and market research to assess the optimal level of purse seine and longline effort. A project, funded by ACIAR, is addressing the issues [25].

By-catch

It is inevitable that in the largest tuna fishery in the world there will be a significant catch of non-target species (by-catch). And the level of by- catch in the tuna fisheries has potentially serious implications for biodi- versity.

In the longline fishery, sharks are very commonly taken but are rarely recorded because they are not part of the commercial catch. Lewis suggests that the shark catch by longliners in Papua New Guinea waters is as much as 20% of total catch by weight [26]. Billfish are also commonly taken but may form part of the commercial catch. (Since the early 1980s there have been management measures in place to release

164


live billfish in Australia and New Zealand.) Turtles are reported as being commonly caught in the Western Tropical Pacific but, again, recorded data is inadequate to give indications of overall catches [20]. However, unlike the Eastern Pacific purse seine fishery, dolphins (and other marine mammals) are rarely caught. Albatross, on the other hand, are commonly taken in the Western Temperate Pacific (but not in the warmer waters) [27]. While steps being taken to reduce albatross deaths, [28, 29] it remains to be seen whether albatross species extinctions will be avoided.

While improvements in logsheet reporting will increase the level of by- catch data forthcoming, the voluntary nature of compliance throws doubt on its adequacy for management purposes. An intensified observer programme is the focus of recommendations for the future monitoring of by-catch [20].

The article turns to cover recent international agreements that affect Pacific tuna management.

U N C L O S

The potential to control open access fishing was radically enhanced by the adoption of the United Nations Convention on the Law of the Sea of December 10 1982 (UNCLOS) [30]. From its adoption to its entry into force, on November 16 1994, the major provisions of the convention have in fact been in force, being interpreted as representing "customary ocean law".

The UNCLOS agreement expanded territorial seas to 12 nm and created 200 nm zones (exclusive economic zones, EEZs) around coastal states. The "sovereign rights" of the coastal state apply to the exploitation and conservation of living and non-living natural resources [30, Art.55]. All PICs have declared extended maritime zones. The extended rights and jurisdictions of several South Pacific coastal states were enhanced by the application of EEZs to islands no matter what their distance from the coast. In the light of TACs and management plans, coastal states that do not have the capacity to harvest the entire TAC (many PICs are in this category) shall give other states access to the surplus in their EEZs. In providing access to other states, a coastal state shall consider the significance of the resource to its economy on the one hand, and the needs of nations that have habi- tually fished in the EEZ on the other. The nationals of other nations must however comply with the conservation measures and other terms and conditions of access (such as licensing and licence fees, provision of catch and effort statistics, port landings and enforcement) established in the laws of the coastal states [30, Art.62]. The access rights of geographically disad- vantage states--coastal states whose position makes them dependent for supplies of fish from resources of the EEZs of other states--are catered for in Article 70.

Provisions that are very relevant to PICs are those governing regional fish stocks. Where the same stock is found in more than one coastal state, the states must cooperate for the conservation and development of the stocks, directly or through regional organisations [30, Art.63]. Where highly migratory species are present, their conservation and optimum utilisation is to be achieved by cooperation between the coastal state, fishing states and appro- priate organisations [30, Art.64]. And even in the case of the high seas-- areas outside EEZs--states are bound to conserve stocks through cooperation and establishment regional organisations [30, Art. 117].

165


The agreement governing straddling and highly migratory fish stocks, commonly known as the "Implementing Agreement" [31]. reinforces UNCLOS provisions. It has important implications for the Pacific because, as emphasised above, tuna stocks both straddle, and migrate through, EEZs and the high seas. The agreement charges coastal states and fishing states to agree upon measures for the conservation of stocks and, with respect to migratory species, their optimum utilisation [31, Art.7]. As at 16 September 1996, the agreement had been signed by 44 states and ratified by three of the thirty states required to bring it into force.

The implications for the regional organisations FFA and SPC are potentially profound in that the vehicle for conservation measures is envisaged by the agreement to be regional or sub-regional management organisations. The fishing states are expected either to become a member of the regional organisations or to agree to apply management measures established by such organisations and, moreover, coastal and fishing states should partici- pate in the work of such organisations [31, Art.8].

There are implications for the collection and analysis of data given that states are charged with the provision of comprehensive catch and effort data to regional authorities covering both target and non-target species for EEZs and high seas areas [31, Art.3,5].

The lack of management plans

The effect of UNCLOS and the Implementing Agreement has been to confer on PICs greater sovereignty over their tuna stocks and construct the framework for the management of tuna stocks. However, it needs to be emphasised that there is no management plan currently in force for tuna in the region. Moreover, no r6gime exists for the control of tuna fishing effort in most regions [2].

It is suggested in the foregoing that the important issues of stock conservation relate to the tuna species targeted mainly by longliners, i.e. bigeye and albacore. In the case of bigeye and albacore the concern is that the level of longlining effort may have exceeded MSY. In the case of yellowfin stocks, the concern is not with the impact of longline fishing per se but with that of purse seine fishing on the abundance of adults available to the longline fishery. That is, it is a concern over the opportunity cost of increasing purse seine catches rather than one of maintenance of yellowfin stocks [32]. In the case of skipjack, there appears little doubt about the ability of stocks to withstand substantial increases in purse seine effort.

In the absence of any regional input or output controls, the initiatives in place to control fishing effort are those of individual countries in clos- ing certain areas to fishing by foreign vessels or banning foreign vessels altogether. For example:

• The Solomon Islands disallows access to distant water purse seine vessels except by United States purse seine vessels under the multilateral agreement. Its domestic tuna industry is however quite large.

• Tonga disallows all foreign vessels or joint ventures. • Fiji excludes vessels that do not land catch in Fiji ports to be sold

to a Fiji company (which effectively rules out the catching and transhipment of tuna).

• Papua New Guinea has banned all foreign longliners and limits areas that can be fished by foreign purse seine vessels.

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The main determinant of regional fishing effort in both the purse seine and the longline fisheries is effort under the bilateral licensing arrangements concluded between PICs, for their EEZs, and the distant water fleets. To obtain total regional effort in the purse seine fishery, the effort of the US sleet (under the multilateral agreement) and the effort of the relatively small regionally-based fleets is added to bilateral effort. To obtain the total longline effort, locally-based short-trip operations must be accounted for.

It should be noted in this context that the regional agreement to cap the number of purse seine vessels in the FFA area (the Palau Arrange- ment) [7] is not designed to limit purse seine catch. Instead, its aim is an economic one. Foreign purse seine vessels will be progressively forced to relinquish their bilateral licences, under the Agreement, in favour of multilateral ones. A condition of these regional, multilateral, licences is commitment, on behalf of the foreign vessels, to local investment and employment [33].

Management options The point was made earlier that in many PICs regional oceanic resources, of which tuna is by far the most valuable, are likely to play a major role in maintaining and improving regional standards of living. However, many island states suffer from budgetary restraints or are faced with spending priorities that preclude large increases in investment in tuna management. At the same time the level of concern about the status of migratory tuna stocks has not risen to a level sufficient to preci- pitate serious regional management initiatives. There is as yet little concern that there may be an opportunity cost on the longline fishery of further increases in yellowfin catches by purse seine [32]. The muted nature of the concerns about the status of stocks of some species, tend to be overwhelmed by the bullish nature of the assessments of the regional tuna stocks targeted by purse seiners [22].

This article adopts the Payne [2] view that in the medium term there will be an increase in the price of canning tuna and of fresh tuna. This will come about because tuna demand will increase substantially while global tuna catch will increase only modestly. The result of higher rents in tuna fisheries will be greater fishing effort through investment. If management systems are not in place to restrain effort, however, rents will be dissipated through overcapitalisation and high spending [2, 34]. The PICs could, as a consequence, bear considerable opportunity costs.

Reductions in catches under a belatedly-introduced management system, in a climate of dissipating rents and disinvestment, could be extremely difficult to implement. Experience in many other fisheries shows a desirable strategy is to have management systems in place before chronic problems of overfishing emerge. Possible methods of fishing effort control that would be central to any management system for South Pacific tuna are now discussed.

Output controls

The indifferent performance of input controls i.e., vessels numbers and/ or gear configuration, in the limitation of fishing effort, has thrown the spotlight on to output controls. Quotas, a form of property right, are a preferred method of output control. TACs are set for fisheries or EEZs

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and individual quotas (IQs) are allocated to vessels or groups of vessels within the TACs. Markets for quota allow efficient vessels to acquire additional quota and inefficient ones to divest quota.

Individual transferable quotas (ITQs) are thus an attractive concept and have been implemented in several major fisheries. Needless to say, the monitoring of catches and enforcement of quotas are essential ingre- dients of successful IQ systems.

A review of the performance of output systems based on TAC/IQ suggest that they have not fulfilled their promise. In the North Sea, fisheries of the European Union have failed to achieve their principal aim of conserving fish stocks. There is only limited compliance and catches consistently overshot TACs while landings are decreasing. Moreover, the discrepancies between reported catches and actual catches are wide [35]. Concerns have been expressed that these difficulties will be encountered in the Australia's multi-species South East fishery [36]. At the heart of the difficulties with IQs are the inherent economic and regula- tory incentives that encourage the discarding of fish, both target and by-catch [37]. These can be summarised as follows

• species caught is under management by quota but no quota is held by the vessel;

• fish size is below regulation; • species caught is not under quota but is of low value (by-catch); • species is a target species but is of lower value than other target

species (high-grading); • the species is within quota, but size is sub-optimal or the fish is

damaged (high grading).

In both Australian and New Zealand ITQ systems have failed to achieve their objectives. In Australia's southern bluefin tuna fishery, TACs and IQs have been in force for 10 years and yet there is still uncertainty whether the depleted fishery will recover under present catch levels [38]. The task of adhering to TACs is made more difficult by industry. For example, in New Zealand there are a number of stressed fisheries under quotas but an attempt to implement realistic TACs by the government resulted in heavy political and judicial pressure being exerted by the fishing industry [39]. Likewise, in Australia, Japanese vessels boycotted Australian ports because they were dissatisfied with the level of southern bluefin tuna quota allocated to them [40].

The characteristics of the South Pacific tuna industry would seem to make ITQs even less likely to deliver stock conservation in the region. Given the highly migratory nature of the tuna stocks, regional TACs would need to be agreed between the many PICs. However, as was mentioned above, some islands states are implacably opposed to the loss of sovereignty over their fish stocks that the setting of regional TACs implies. The high seas areas would also need to be subject to these TACs, requiring the compliance of the powerful distant water nations, as specified in the Implementing Agreement. The difficulties of enforcement and monitoring in the region are further exacerbated by the great distances and vast EEZs that need to be policed in the face of financial constraints, the multi-species nature of the fishery and the fact that most of the catch is landed outside the region.

Nor do political realities auger well for a system of quotas. Major incentives for PICs to maintain bilateral access arrangements with the fleets of the wealthy fishing nations are the considerable level of aid

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that may directly or indirectly be attached to fishing access. For example, the amount of Japanese aid in the Pacific in support of fishing access agreements is said to have averaged $US20 million a year between 1982 and 1992 while, in comparison, Japanese fishing fees were $US14.5 million in 1992 [7, p.55].

It was suggested above that rents will increase in the South Pacific tuna industry in the medium term as a result of global rises in the value of tuna. The foreign fleets will be motivated to maximise their share of the rents and will be reluctant to reduce fishing effort. The offer of side benefits will always be available to the distant water nations to be used as a tool to discourage the implementation of restrictive regional TACs by the PICs.

Given that criteria for the allocation of quotas are always contentious it can be expected that political action will be taken by nations perceived to have been disadvantaged. While an auction system for quotas has the potential to be equitable and transparent [34, 41] central organisation of the auction and heavy policing of quotas would nevertheless still be necessary. Arrangements that provide more secure fishing rights could lessen the monitoring and enforcement costs of ITQs but these have not been developed [42].

Input controls

If, instead of ITQs, control on the number of vessels licensed to fish through a central licensing system is contemplated as a management tool in the South Pacific tuna fishery, a problem of allocation of vessels between competing nations can be envisaged. Again the distant water fleets that felt disadvantaged could be expected to at tempt to modify constraints on vessel numbers through their considerable leverage over the economic fortunes of island states. And a limit on vessels numbers would provide an incentive for larger and more efficient vessels to enter the fishery, undermining effort control by vessel numbers. In a situation where rents are rising, these difficulties in limiting vessels numbers can be expected to be exacerbated.

Scenarios in South Pacific tuna management

There will be growth in locally-based short-trip longlining and there may be some expansion in locally-based purse seining, but for the foreseeable future tuna fishing in the region will continue to be dominated by DWFNs.

In the short run, at least, bilateral access agreements between individual PICs and the foreign fleets will remain the modus operandum. However, in order to comply with the provisions of UNCLOS, PICs will begin to set TACs for their EEZs. Locally-owned or locally-based fleets would be expected to have first call on TACs, the second priority will be vessels under multilateral access agreements, the distant water fleets will be licensed to fish the remainder. A considerable amount of research and discussion will be necessary to establish TACs for EEZs and for the region.

Given the highly migratory nature of tuna, regional TACs will need to be set to cover not only EEZs but also the high seas pockets and high seas areas adjacent to EEZs, a source of a significant proport ion of the D W F N ' s longline catch. Otherwise, a continuation of open access to the high seas will tend to undermine TACs.

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An essential ingredient of any agreement that restrains collective regional fishing effort, in EEZs and on the high seas, and allocates catches between D W F N s , is coopera t ion- -grea te r cooperat ion among PICs, among DWFNs , and between the PICs and D W F N s - - t h a n there has been hitherto.

Control of fishing effort in the region, so that TACs are complied with, would need to be through output or input controls as discussed above. Output controls, through ITQs, are the preferred method elsewhere. However, it was pointed out that the difficulties encountered in implementing ITQs, both in terms of conserving targeted species and by-catch, are likely to be exacerbated in the South Pacific.

In the event of price rises for tuna in the medium term there will be greater competition for a share of increased rents. The distant water fleets could be expected to use their economic leverage to increase their catches under bilateral access arrangements. And, if no regional tuna management plans are in place, the increase in effort on the high seas would be unrest- rained. It can be anticipated that, in the event of higher tuna prices, there will be a dissipation of fishing rents over time and a consequent opportunity cost for PICs unless effective effort controls are in place.

Given the difficulties of establishing regional TACs and a system that ensures compliance, a second best solut ion--and one that would incur relatively low financial costs-- is for PICs to control fishing effort in their EEZs by area closures. This is a practice already adopted by several PICs and it would be palatable to those that rely heavily on tuna income in that it does not entail the devolution to a regional authority of control over catches. The policing of closed areas would require only a marginal increase in the surveillance already carried out for EEZs.

There is probably insufficient data available at present to determine the size of the collective closed area that would conserve stocks and that would at the same time minimise fishing income foregone. A precaution- ary approach in setting closures areas is therefore called for. Neverthe- less, an area closure policy seems to present itself as a least-cost, practical and politically acceptable management measure that could be introduced while more sophisticated quantitative (but much more difficult and expensive in the context of the South Pacific) methods of controlling effort in the fishery are deliberated.

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