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Fishy Business the Social Impact of South Seas Tuna Company in Wewak, ESP

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Fishy Business the Social Impact of South Seas Tuna Company in Wewak, ESP Fishy Business The social impact of South Seas Tuna Company in Wewak, ESP By Principal Investigators: Nancy Sullivan, Maria Huaniangre, Paul Hukuku, Kia Nema, Thomas Warr and Malawa Wong. With Daniel Amarie, Jill Bosro, Jerry Hensen, Bibiana Kasuka,, Rebecca Nalawagi, Barth Nanguru, Steven Sangi, Mek Saulmack and Rex Wani. Contents a. Acknowledgements 3 b. Abbreviations 4 c. Executive Summary 4 d. Terms of Reference 16 e. Methodology 17 f. Introduction 19 g. Tuna factories in the South Pacific 26 1. RD Tuna, Madang 27 h. Wewak background 29 i. The Wewak business climate 33 1. Logging 44 a. Parom Village, Hawain 44 b. Angoram District 46 2. Interview with Managing Director of SRDC, Michael Saulep 47 3. Marienberg clan interview 50 j. Company ownership 51 k. Project planning 53 1. ESPG Feasibility study 60 2. Excerpts from the Project Agreement 62 3. SST land 63 4. Awareness programme 66 l. Spinoff businesses 68 m. Environmental Impact reports and public concerns 69 1. Press 69 2. Wewak Urban LLG letter 27 June 2005 70 3. WWF materials 72 a. Bismark Solomon Seas Ecoregion Report 72 b. Marine Ripples article 77 c. OEC submission 78 n. Factory site visits 84 o. Health and sanitation 95 p. Labour issues 97 q. Fishing vessels 102 r. Sex trade 108 s. Landowner meetings 110 t. Interviews 124 1. Public figures 124 2. Factory workers 134 3. Local fishermen 156 2 4. Townspeople and market women 158 u. Conclusions 164 v. Recommendations 170 w. Appendices 174 1. Press clippings 174 2. Research questions 186 3. Letters and press releases 189 4. Human Resources registerees, Kewhau Development Ltd. 193 5. SST promotional materials 196 6. Workplace hazards 199 7. International fish production reports 203 8. Bismark and Nusa Group court documents 206 9. Fisheries Management Act 208 10. Sir Hugo’s court materials 212 11. NAC study 216 12. Sample fishing vessel observer forms 218 13. Transcript excerpt from SBS Dateline interview 14 September, 2004, The Two Worlds of Sir Michael Somare, between Reporter Mark Davis and Sir Michael Somare 222 x. References 224 a. Acknowledgements Our team arrived late June (2005) and spent ten days in workshop sessions with roughly 40 volunteer-participants. We then sent them out on two large studies, one of vanilla, the other of SST. Ultimately about 8 dedicated volunteers joined a team of 6 Nancy Sullivan Ltd. employees (including the company Director) in a town-based study of the loining plant and its workers, its business profile, its history and general social impact on Wewak town. We wish to make special mention of these dedicated volunteers: thank to you, Daniel Amarie, Jill Bosro, Jerry Hensen, Bibiana Kasuka, Lepas Metoa, Rebecca Nalawagi, Barth Nanguru, Steven Sangi, Mek Saulmack and Rex Wani---for giving your free time and energy to this project, with no financial reward. Along with them, I must thank my heard-working team of Principal Investigators, Maria Huaniangre, Paul Hukuku, Kia Nema, Thomas Warr and Malawa Wong. Special thanks also goes to Brother Herman Boyek, Brother Bertrand Webster, Bruce Samban, Nick Artekain and John Niabau, who were critical informants to the work, and also saw no remuneration for it. Some of our contributors shall remain anonymous, for what will become obvious reasons, but almost everyone we interviewed willingly offered their names for print, which we acknowledge her with gratitude. In some cases, however, we as authors have decided to mask their identity. Our heartiest thanks go to Elisabeth Cox and the staff HELP Resources, especially Jill and Jan Bosro and Mek Saulmack, for all the assistance and generosity they have shown us in this project. Special thanks also to Michael French Smith. All errors of fact or presentation, however, are entirely our own. Some Tok Pisin spellings may vary. 3 b. Abbreviations BFC Bismark Fisheries Company BHL Bismark Holdings Ltd (?) BWTL, BWT Blue Water Tuna Limited CSR Corporate social responsibility ESDECO East Sepik Development Corporation ESFA East Sepik Fisher Association ESIA East Sepik Islanders Association ESIANROC East Sepik Islands Association National Resource Owners Committee ESIT East Sepik Investment Trust ESPG East Sepik Provincial Government FCF F.C.F. Fishery Co. Ltd. (Taiwan) FMA Fisheries Management Act KRDC Kreer Development Corporation KDC Kakra Development Corporation KADC/KDCL Karaga Development Corporation KDCL Koikau Development Corporation Ltd KDL Kwehau Development Limited NBG Nusa Business Group NFA National Fisheries Authority NPF National Provident Fund NTC Nontraditional commodity OEC Office of Environment and Conservation PAFCO Pacific American Fish Company, Inc (USA) PEC Provincial Executive Council RH Rimbunan Hijau SBA Sana Betha Arthur Corporation SDL Saure Development Limited SIL Summer Institute of Linguistics SLC Saure Landowners Corporation SMPL Sepik Marine Products Limited SOB Soin off business SPCA Sepik Producers Co-operative Association SRDC Sepik River Development Corporation SSPC Sepik Sea Products Limited SSTC South Seas Tuna Company WILLG Wwak Island Local Level Government WDNROC Wewak District Natural Resource Owners Committee WWF World Wildlife Foundation/Worldwide Fund for Nature c. Executive Summary We were tasked with conducting a social impact assessment of the South Seas Tuna loining factory in Wewak. Over a month of research we found the impact of this cannery to be manifold, effecting Wewak residents of all kinds in physical, social, economic and, not the least, political ways. Indeed, the factory is more than an economic development, it is a political development, representing an unprecedented and possibly unethical alliance of private and public investment within the province. Thus, in all the ways in which the factory has effected Wewak, significant members of the Provincial and National government are complexly 4 implicated. We believe its novelty has allowed ownership and labour practices to occur that would not happen in more transparent and sophisticated economies. The ownership of SST is as murky as the waste water from its treatment plant. In 2000. the factory was to be a joint venture between the Taiwanese tuna brokering company company FCF1 (46.9%), the American company Starkist Seafood (owned by H.J. Heinz) (3.1%), and PNG’s ANGCO Coffee (50%). At this point the East Sepik Provincial Government had only expressed interest in participating. But by the time of graoundbreaking 2002 (?), the National (not the Provincial) Government had put in K1.5 million in behalf of the ESPG. It is unclear whether this national investment has been transferred to the province, but as of our interview with Ian Boatwood, July 2005, there is supposedly no ESPG participation whatsoever. But then, we were also told there was no Starkist participation either. Needless to say, this opacity sends up red flags, and permits us to wonder whether the Prime Minister’s office has made a ‘personal’ investment instead. Based on projected earning for years two to five of the factory, the supposed 2% ESPG investment would garner K2,958,000 in gross earnings, while a 5% deal would bring KK7,396,000 and a 10% deal would bring K14,791,000. A tidy sum for a provincial or personal budget. When ANGCO went under, its investors may have reinvested directly in SST. We heard from a former member of the Department of Foreign Affairs, for example, that Gulf Province had intended to buy out ANGCO, but when this did not eventuate the money was invested in SST instead. Why the Gulf Province? The only salient connection seems to be that Sir Hugo Berghuser has fishing vessels in the Gulf, and is a major investor in the East Sepik Province now (as will be explained). The company South Seas Tuna Corporation Limited was registered with the IPA by Michael David McCulley, its US-based the Managing Director (whom Ian Boatwood refers to as ‘my boss’), with the assistance of O’Brien’s Lawyers in Port Moresby. It’s shares are divided between: FCF Fishery Company, of Taiwan, ROC, which owns 5,708,791 shares at US$1/share; the East Sepik Provincial Government, which owns 283,868 shares are US$1/share; and Erskine Nominees, Ltd., Port Moresby, which owns 2,707,341 shares at US$1/share. Erskine Nominees Ltd. is comprised of Dudley Moore Yari-Yari (PNG) and Steven Richard O’Brien (Australia) (the latter being one of the lawyers for SST, of O’Briens Lawyers, Port Moresby). But everything surrounding the opening of this factory is shrouded in opacity. Initially, it was to be constructed out of town, at Yawasoro, where the landowners had gratefully agreed to give the company a tract of land in return for the spin-off potential and promise of new roads and other services that would be directed to their area. When SST began to think again about these costs, the Provincial Government’s Harbours Board offered the current location for lease, which would mean a great savings on transport to wharf and other infrastructural requirements. Understandably this was done to secure the company’s commitment to Wewak. But the price was an inestimable loss of advantages and benefits, not to mention good will, to the Yawasoro landowners. As one government official told us, “Arthur Somare should have been with the people, but in this case it’s the company that is benefiting more than the people.” 1 FCF consists of Jacson Visserij, Maatschappij Marine, B.V., of the Netherlands, who owns 750,733 shares at K1/share;Orion Commercial Ltd., of Tortola, British Virgin Islands, who owns 2,500,005 shares at K1/share;Eiffel Trading International Co., Ltd., of Tortola, British Virgin Islands, who owns 2,258,052 shares at K1/share. 5 More to the point, the contract for factory construction was originally given Heydridge Construction, we were told. And Heydridge then subcontracted SBA, which is the Somare family business (Sana Bertha Arthur).
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