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USA Now Offering USD 6,444 For A Tuna Fishing Day In PNA

As the Pacific races to seal a deal for its tuna stocks, Papua New Guinea has been able to secure a temporary payment of USD 45 million from the United States for the Pacific Islands Parties as a condition for revoking the termination of the US treaty.
Papua New Guinea Prime Minister Peter O’Neill when this edition went to press was preparing to take the matter to the National Executive Council for approval.
The move has been described as significant given the history of the treaty and the lengthy negotiations for a successor agreement.
This will give the United States and the Pacific islands Parties more time to continue negotiating for a successor treaty.
But it certainly has been a breakthrough to get this far after stakeholders have gone through some lengthy and at times intense talks.
O’Neill wrote to Pacific Islands leaders last month informing them that his government had been in contact with United States officials and he would be offering them USD 45 million for 9000 days the US fishing fleet will operate in the Pacific region as a condition for revoking its notice to withdraw from the treaty. The withdrawal would have taken effect on May 14, this year
This was before the fifth round of negotiations for the South Pacific Tuna Treaty, which took place in Nadi last month.
At that meeting, US officials agreed to the PNG conditions to pay USD 45 million for the 25th and last Licensing Period to the current ten-year financial package of the treaty which started on June 15, 2003 before it revokes its earlier termination notice.
PNG’s Minister for Commerce Charles Abel was sent to personally relay this message during the treaty negotiations in Nadi last month, a meeting is normally attended by directors of fisheries departments in the region.
Under the current treaty, the US Government gives about USD 18 million to 16 members of the Pacific Islands Forum Fisheries Agency while its industry pays USD 3 million plus indexation.
PNG had issued a notice to withdraw from the US treaty last year, which would have brought an end to the treaty in May this year, leaving the US to negotiate with individual nations until a new deal is finalised.
As an original signatory, the treaty states that should one of the four original signatories (PNG, FSM, Kiribati or the US) pulls out, the treaty ceases to exist.
O’ Neill’s letter
Prime Minister O’ Neill told Pacific Islands leaders in his letter in January that PNG welcomed the price of USD 5,000 per day and other related financial package that has been offered as acceptable for the next licensing period and that they would consider 9000 days as a reasonable offer for PIPs.
O Neill confirmed in that communication that their position would be relayed to the US who had been in contact with them directly.
Clinton letter
US Secretary of State Hillary Clinton wrote to certain members of the Pacific Islands Parties on December 14, after talks between the islands and the US broke down in Nadi in November.
She informed them that the US tuna industry could not wait until May 2012 (when the treaty should come to an end) to make decisions regarding their operations.
The US once again reiterated that should the treaty come to an end, so would the financial assistance the US provides to Pacific Islands Parties.
Whilst the US said it was trying to come to an amicable agreement, it believes the time made available under the circumstances of PNG withdrawing its support would not be sufficient for them to conclude the negotiations.
ISLANDS BUSINESS has since obtained a copy of this letter.
January negotiations
The last day of the three-day negotiations (the fifth round) in Nadi last month went on until 10 pm with no agreement forthcoming by the end of the talks.
However, if the PNG agreement with the US is a gauge, then it looks like there is a will to reach an amicable agreement.
While the US has increased its offer to USD 58 million for 9,000 days, Pacific Islands parties are asking for USD 60 million and can only make 7000 days available as opposed to the 6000 days they had earlier insisted.
In last month’s edition of Islands Business it was highlighted that talks had ended with the US offering USD 45 million for the 9000 days to fish in any zone of the Pacific.
Parties to Nauru Agreement
While it has been reported in PNG that O’Neill’s decision to reverse the earlier decision to terminate the US treaty is ‘another sellout’, PNA director Dr Transform Aqorau believes otherwise.
He said PNG’s withdrawal was premised on the US paying USD 45 million for the last licensing period of 2012.
“This is about USD 5,000 each day for 9,000 days, and it is not a 360-degree turnaround because this is a condition of revoking the withdrawal from the US treaty,” he said.
“The US now accepts that the US Treaty will need to be adjusted because they will now be fishing under the Vessel Day Scheme.
“This has been one of the key issues for any extended treaty, that it be bought under the VDS.
“There is only one VDS and that is the PNA VDS,” Dr Aqorau added.
On the US offer and whether the PIPs were pushing it a bit, Dr Aqorau said USD 58 million divided by 9,000 days would come to USD 6,444 a day.
This is still short of the USD 10,000 a day to make it attractive for the parties to contribute to a pool for the treaty
“But remember, this includes the government contribution and PNA has said this must be kept separate.
““If the US Government contribution is excluded and it is expected that they will pay USD 21 million, the US industry will be paying USD  4,111 a day, which is still much less than what foreign fishing vessels pay for bilateral access.
“PNA has always said the US industry must pay a premium, certainly more than what foreign fishing vessels pay under bilateral access.
Had PNG continued with the termination, there would be no fishing by US vessels under the treaty, instead they would have to buy days bilaterally like every other fleet.
Major Achievement
While the latest development regarding the US and PNG on behalf of the other members is a major achievement, negotiations for a successor agreement is still a long way off.
“The PNA says there are not enough days to accommodate the US tuna industry who are being subsidized by PNA because they want cheaper fees than what everyone else is paying for the opportunity to fish,” Dr Aqorau said.
The US treaty is a multilateral one, meaning they avoid other coastal fishing laws of sovereign governments that vessels would adhere to under the bilateral agreements.
It is encouraging to note that the US has increased the amount it is willing to subsidize for its fishing fleet.
But the defining moment would be PNG’s ability to flex its muscle on behalf of the PIPs and manage to get a temporary agreement that is also higher than what the existing US treaty offers.