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FFA Report 05/13 Tuna Longlining by China in the Pacific Islands

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FFA Report 05/13 Tuna Longlining by China in the Pacific Islands Tuna Longlining by China in the Pacific Islands: A Description and Considerations for Increasing Benefits to FFA Member Countries March, 2005 M. A. McCoy and R. D. Gillett GILLETT, PRESTON AND A SSOCIA FFA Report 05/13 PACIFIC ISLANDS FORUM FISHERIES AGENCY P.O.BOX 629 HONIARA SOLOMON ISLANDS TELEPHONE (677) 21124 FAX (677) 23995 WEB http://www.ffa.int Ver. Apr 25 Tuna Longlining by China in the Pacific Islands: A Description and Considerations for Increasing Benefits to FFA Member Countries March, 2005 M. A. McCoy and R. D. Gillett GILLETT, PRESTON AND ASSOCIATES INC. TABLE OF CONTENTS KEY FINDINGS........................................................................................................................................... 4 ACRONYMS AND ABBREVIATIONS..................................................................................................... 7 INTRODUCTION ........................................................................................................................................ 8 1 BACKGROUND..................................................................................................................................... 11 1.1 GOVERNMENT POLICY AND MACROECONOMIC BACKGROUND .......................................................... 12 1.1.1 Adjustments to the Public Sector ............................................................................................... 13 1.1.2 Food Security............................................................................................................................. 14 1.1.3 Finance ..................................................................................................................................... 15 1.2 DOMESTIC FISHERIES ACTIVITIES ...................................................................................................... 17 2 TUNA FISHING BY CHINA IN THE WCPO .................................................................................... 18 2.1 DEVELOPMENT OF CHINESE LONGLINE TUNA FISHING ...................................................................... 18 2.2 OTHER TUNA FISHING AND RELATED ACTIVITIES.............................................................................. 20 3 RELEVANT ASPECTS OF CHINA’S GOVERNMENT FISHERIES ADMINISTRATION ....... 22 3.1 LEGAL REGIME FOR FISHERIES........................................................................................................... 23 3.2 POLICIES AFFECTING TUNA FISHING IN THE PACIFIC ISLANDS ........................................................... 24 3.3 DATA COLLECTION AND ANALYSIS .................................................................................................... 25 4 ORGANIZATION OF THE COMMERCIAL TUNA FISHERIES SECTOR................................. 26 4.1 STATE OWNED ENTERPRISES OVERVIEW ........................................................................................... 27 4.1.1 China National Fishery Corporation......................................................................................... 27 4.1.2 Shanghai Fisheries General Corporation.................................................................................. 28 4.1.3 Guangdong Guangyuan Fishery Group Co. Ltd........................................................................ 28 4.2 PRIVATE OWNERSHIP......................................................................................................................... 28 5 CHINESE LONGLINE FLEETS BASED IN THE FFA REGION................................................... 31 5.1 GENERAL FLEET DESCRIPTIONS ......................................................................................................... 33 5.1.1 Vessel Specifications and Configuration .................................................................................... 33 5.1.2 Operating Patterns...................................................................................................................... 37 5.1.3 Aspects of Operating Cost Structures ........................................................................................ 39 5.1.4 Trends in Fishing Technology.................................................................................................... 43 5.2 GENERAL BUSINESS STRUCTURE DESCRIPTION .................................................................. 45 5.2.1 Vessel Ownership and Control ................................................................................................ 45 5.2.2 The Role of Local Agents ........................................................................................................... 46 5.2.3 Marketing Relationships ............................................................................................................ 51 5.2.4 Indications of Subsidies to Chinese Vessels............................................................................... 54 5.3 FACTORS IN CHINA CONTRIBUTING TO THE ATTRACTIVENESS OF THE FFA REGION TO LONGLINE FISHING ............................................................................................................................. 57 6 POTENTIAL FOR INCREASING BENEFITS FROM FISHING ACTIVITIES TO PACIFIC ISLAND COUNTRIES .............................................................................................................................. 59 6.1 FACTORS CONTRIBUTING TO THE ATTRACTIVENESS OF THE REGION ................................................. 59 6.2 FACTORS DETRACTING FROM THE ATTRACTIVENESS OF THE REGION................................................ 61 6.3 LOCAL EXPENDITURE CASE STUDY.................................................................................................... 62 6.3.1 Direct Government Revenue in the Case Study ......................................................................... 62 6.3.2 Payments to the Private Sector in the Case Study ..................................................................... 63 6.4 ALTERNATIVE SOURCES OF DIRECT REVENUE ................................................................................... 64 6.5 OTHER CONSIDERATIONS ................................................................................................................... 66 7 POSSIBLE FUTURE DEVELOPMENTS........................................................................................... 67 7.1 CHANGING ECONOMIC CIRCUMSTANCES IN CHINA AND ELSEWHERE ................................................ 67 7.2 FUTURE DEVELOPMENTS IN THE CHINESE TUNA INDUSTRY............................................................... 67 7.3 FUTURE EXPANSION OF CHINESE LONGLINING IN THE FFA REGION .................................................. 68 2 CONCLUSIONS......................................................................................................................................... 69 REFERENCES ........................................................................................................................................... 71 APPENDIX 1 .............................................................................................................................................. 75 APPENDIX 2 .............................................................................................................................................. 77 3 KEY FINDINGS TOPIC KEY FINDINGS Nature of operations of the Chinese It is estimated that during 2004 there were a total of about longline fleets in the FFA region 110 Chinese tuna longline vessels locally licensed and based in five Pacific Island countries: Fiji, Marshall Islands, FSM, Tonga, and Palau. Those in the Micronesian area target bigeye and to a lesser degree yellowfin for the fresh sashimi market. Vessels based in Fiji and Tonga catch primarily albacore for the cannery market. There are probably 20 to 30 large-scale Chinese longline vessels that use Fiji as a base but do not have access to the Fiji EEZ. There has been a steady increase in the number of Chinese vessels based in the Pacific Islands since 1999. There has also been an increase in the variety of arrangements under which those vessels operate. Flag state regulations (China) In June, 2003 new regulations came into force governing Chinese fishing activity on the high seas and in the EEZs of other countries. Chinese enterprises must obtain government approval and various operational certificates before their vessels can be based overseas. Once overseas, there are no restrictions on movement of vessels from one base to another in the Pacific Islands. Trends in level of technology The most noticeable technological trends in the Chinese employed by the Chinese fleet longline fleet based in the PICs are (1) increased use of hydraulic longline reels and line setters, with a corresponding reduction in the use of the more traditional basket gear; (2) less use of wooden and ferro-concrete hulled vessels towards more steel vessels as well as the introduction of FRP as a hull material. Without a long history in tuna longlining, China has adapted utilitarian designs used in other fisheries in coastal China as tuna longliners. A few new vessels are now being built specifically as longliners for basing in the Pacific Islands. Relationships and Arrangements Most vessels have charter or other arrangements with for Vessel Operation locally-based domestic or foreign agents who have contractual or other arrangements to handle transshipment of fish to foreign markets and the handling of payments received from sales. Such agents can also buy fish, and/or
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