Technical Assistance Consultant’s Report Project Number: 40595 June 2008 Republic of Palau: Facility for Economic & Infrastructure Management Prepared by: Laurence Slee PINZ Wellington. New Zealand For Government of Palau and Asian Development Bank This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. June 2008 Project Number: TA 4929-PAL Facility for Economic & Infrastructure Management Project Aquaculture and Fisheries Review Final Prepared for: Prepared by: Government of Palau & Asian Steve Lindsay, Marine Resources Specialist Development Bank CONTENTS Acronyms .....................................................................................................................................iv Executive Summary ..................................................................................................................... 1 Report Scope ........................................................................................................................... 1 Action Plans ............................................................................................................................. 1 Background Assessment.......................................................................................................... 1 Summary of Priority Actions .....................................................................................................2 I. Part One: Action Plans ......................................................................................................... 3 Action Plan Matrix .................................................................................................................... 4 II. Part Two: Background Assessments.................................................................................. 16 A. OVERVIEW .................................................................................................................. 16 III. Marine Resource Institutional And Policy Issues................................................................ 16 A. Roles, Responsibilities & Constraints........................................................................... 16 B. Actions Required .......................................................................................................... 18 C. Fisheries Policies ......................................................................................................... 18 1. Policy Issues ................................................................................................................ 18 2. Fisheries Legislation..................................................................................................... 19 3. Independent Management of the Offshore Commercial Fisheries............................... 20 4. Inshore Fishery Cooperatives ...................................................................................... 20 5. Enforcement ................................................................................................................. 20 6. Quarantine Issues........................................................................................................ 21 IV. Aquaculture ..................................................................................................................... 21 A. Priority Actions............................................................................................................. 21 B. Background .................................................................................................................. 22 C. Development Needs and Principles ............................................................................. 22 D. Policy and Strategy Issues ........................................................................................... 23 E. Awareness and Education............................................................................................ 24 F. Access to Capital.......................................................................................................... 25 G. Taxes............................................................................................................................ 25 H. Technical and Business Support Services ................................................................... 25 I. Land and Water Leasing .............................................................................................. 25 J. Industry Development and the Role of the BMR .......................................................... 25 K. Case Study - Giant Clams Industry .............................................................................. 27 V. Offshore Fisheries.............................................................................................................. 28 A. Priority Actions............................................................................................................. 28 B. Background .................................................................................................................. 29 C. Issues Raised by Stakeholders .................................................................................... 30 D. Polices, Regulations and Plans.................................................................................... 30 E. Management and Regulations ..................................................................................... 31 F. Economic Contributions............................................................................................... 32 G. Tax Reform................................................................................................................... 32 H. By-Catch Issues........................................................................................................... 34 I. Shark Finning............................................................................................................... 35 J. Enforcement ................................................................................................................. 37 K. Fisheries Management................................................................................................. 37 L. Value Added Processing Opportunities........................................................................ 37 VI. Inshore Fisheries............................................................................................................. 38 A. Priority Actions............................................................................................................. 38 B. Background .................................................................................................................. 38 C. Issues Raised by Stakeholders .................................................................................... 39 Aquaculture and Fisheries Review June 2008 D. Policies and Regulations .............................................................................................. 39 E. Actions Required .......................................................................................................... 40 F. Roles and Responsibilities ........................................................................................... 40 G. Management ................................................................................................................ 41 H. Development Issues and Future Prospects ................................................................. 42 I. Enforcement ................................................................................................................. 43 J. Access to Capital and Business Support Services....................................................... 43 Appendix 1: List of Stakeholders Consulted............................................................................... 45 Appendix 2: Priority Issues Matrix for the Marine Resources Sector ......................................... 46 Appendix 3: List of Current Aquaculture Issues and Concerns.................................................. 71 Appendix 4: Palau Aquaculture Clam Association (PACA) ....................................................... 72 Appendix 5: Cited References & Key Reports Consulted .......................................................... 74 Aquaculture and Fisheries Review June 2008 Acronyms AVA Australian Volunteer Organisation AESOP Australian Executive Service Overseas Program AusAID Australian Agency of International Development BED Bureau of Economic Development BMR Bureau of Marine Resources BOA Bureau of Agriculture CITES Convention on International Trade in Endangered Species of Wild Fauna & Flora CCRA Code of Conduct for Responsible Aquaculture EIA Environment Impact Assessment EIS Environment Institutional Strengthening EEZ Exclusive Economic Zone EQPB Environmental Quality Protection Board FAD Fish Attracting Device FAO United Nations Food and Agriculture Organisation FFA Forum Fisheries Agency FEIM Facility for Economic and Infrastructure Management FFA Forum Fishing Agency GOP Government of Palau ICES International Commission for Exploitation of the Sea JICA Japanese International Cooperation Agency JOCV Japanese Overseas Cooperation Volunteers KFC Kuniyoshi Fishing Company MMDC Micronesian Mariculture Demonstration Centre MOS Ministry of State MOJ Ministry