Pacific Studies Series About Oceanic Voyages: Shipping in the Pacific International shipping services are crucial to trade, growth, and development in the Pacific region. The vast majority of trade is carried by international shipping with countries outside of the region. Some cargo is bound for Australia and New Zealand, and significant proportions are destined for Asia, Europe, and North America, while very little is between Pacific island countries themselves. Outbound access to international markets for agricultural and marine products opens up opportunities for rural producers to expand their businesses and provide local jobs. Although some features of the Pacific region make provision of international services a challenge, there have also been some notable successes that offer key lessons for future development. Case studies of national shipping sector experience show the value of operating on commercial principles, attracting international and private-sector capital investment, assigning risk where it can best be managed, and liberalizing market access. Integration of the regional market for transport services, combined with harmonized OCEANIC V but less restrictive regulations, would facilitate a greater range of services at more competitive prices. Pacific island country governments have the ability to create effective operating environments. When they do so, experience shows that operators will respond with efficient service provision. O YAGES: YAGES: About the Asian Development Bank S HI ADB aims to improve the welfare of the people in the Asia and Pacific region, PP particularly the nearly 1.9 billion who live on less than $2 a day. Despite many ING IN THE PACIFIC success stories, the region remains home to two thirds of the world’s poor. ADB is a multilateral development finance institution owned by 67 members, 48 from the region and 19 from other parts of the globe. ADB’s vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve their quality of life. ADB’s main instruments for helping its developing member countries are policy OCEANIC VOYAGES dialogue, loans, equity investments, guarantees, grants, and technical assistance. ADB’s annual lending volume is typically about $6 billion, with technical assistance usually totaling about $180 million a year. Shipping in the Pacific ADB’s headquarters is in Manila. It has 26 offices around the world and more than 2,000 employees from over 50 countries. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Publication Stock No. 090707 Printed in the Philippines Oceanic Voyages-Shipping in the 1 1 12/09/2007 3:33:33 PM ADB Pacific Studies Series OCEANIC VOYAGES Shipping in the Pacific Asian Development Bank © 2007 Asian Development Bank All rights reserved. Published 2007. Printed in the Philippines. Cataloging-In-Publication Data Publication Stock No. Asian Development Bank. A study on the shipping sector of Pacific developing member countries 1. Pacific developing member countries 2. Shipping sector 3. Case studies The views expressed in this material are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. Use of the term “country” does not imply any judgment by the authors or ADB as to the legal or other status of any territorial entity. Contents ACRONYMS AND ABBREVIATIONS ............................................. v PREFACE............................................................................................... vii FOREWORD ......................................................................................... viii EXECUTIVE SUMMARY ................................................................... ix INTRODUCTION ............................................................................... 1 THE PACIFIC REGION AND ITS MARITIME SERVICES ....... 2 Challenges in the Shipping Sector ................................................ 5 Maritime Institutions in the Pacific Region ................................. 5 Shipping Services in the Pacific Region ....................................... 11 Ports in the Pacific Region ............................................................. 25 Maritime Security ........................................................................... 35 Maritime Training .......................................................................... 36 ASSESSMENT AND RECOMMENDATIONS .............................. 40 International Shipping Services ................................................... 40 National Transport Plans ............................................................... 43 Maritime Sector Subsidies ............................................................. 45 Structuring the Maritime Sector ................................................... 46 Port Administration ........................................................................ 49 Domestic Shipping Services .......................................................... 56 Human Resources .......................................................................... 59 Information Issues .......................................................................... 61 Regional Cooperation ..................................................................... 63 iv Oceanic Voyages: Aviation in the Pacific Region APPENDIXES ....................................................................................... 66 1. Fiji Islands Case Study............................................................ 66 2. Federated States of Micronesia Case Study .......................... 75 3. Solomon Islands Case Study ................................................... 83 4. Profile of Pacific Island Countries .......................................... 92 5. Pacific Island Forum Principles on Regional Transport Services ..................................................................................... 95 6. Pacific Forum Line .................................................................. 97 7. Shipping Routes and Port Calls of Asian and Around-the- World Trades ............................................................................ 103 8. Shipping Routes and Port Calls of the North American Trade ......................................................................................... 109 9. Shipping Route and Port Calls of the European Trade ........ 110 10. Shipping Routes and Port Calls of the Australia and New Zealand Trade ................................................................. 111 Acronyms And Abbreviations ADB Asian Development Bank APIMTIMA — Association of Pacific Island Maritime Training Institutions and Maritime Administrations APP — Association of Pacific Ports ASEAN — Association of Southeast Asian Nations ANZ — Australia and New Zealand BAF — bunker adjustment factor break bulk — cargo generally referred to as the opposite of containerized cargo CABAF — currency and bunker adjustment factor CAF — currency adjustment factor DMC — developing member country EEZ — Exclusive Economic Zone FIC — Forum Island Country FIMSA — Fiji Islands Maritime Safety Administration FPCL — Fiji Ports Corporation Limited FSM — Federated States of Micronesia GDP — gross domestic product GPDLR — general purpose discharge, land, restow: a shift from one bay to another GPMT — general purpose empty container GPSOB — general purpose shift on board: a shift within the same bay GRT — gross registered tonnage GSS — Government Shipping Services (Fiji Islands) GST — goods and services tax GT — gross tonnage vi Oceanic Voyages: Aviation in the Pacific Region ICCC — Independent Consumer and Competition Commission (Papua New Guinea IMO — International Maritime Organization ISPS — International Ship and Port Facility Security Code LCL — less than container load LOA — length overall MOU — Memorandum of Understanding MSC — Micronesian Shipping Commission PacMA — Pacific Islands Maritime Association PacWIMA — Pacific Women in Maritime Association PDL — Pacific Direct Line PFL — Pacific Forum Line PIC — Pacific island country PIMLA — Pacific International Maritime Law Association PNG — Papua New Guinea PSC — port service charges PTL — Ports Terminals Limited (Fiji Islands) RMP — Regional Maritime Programme (of the Secretariat of the Pacific Community) ro-ro — roll on-roll off (vessel type) SIPA — Solomon Islands Ports Authority SPC — Secretariat of the Pacific Community STCW — International Conventions on Standards of Training, Certification and Watchkeeping for Seafarers (1978) and (1995) TEU — twenty-foot equivalent unit (container) THC — terminal handling charges NOTE In this report, “$” refers to US dollars. Preface his report was prepared as part of the output of the Asian Development Bank (ADB) regional technical assistance project (TA 6166 REG): TPacific Regional Transport Analysis. The goal of the project is to enhance economic development in Pacific developing member countries (DMCs) of ADB by improving the efficiency and effectiveness of Pacific transport services. In order to achieve this, the report is expected to contribute to reform of public sector operations and policies in the transport sector, and to increased private sector participation in transport service provision. Such reform and participation will reduce