Papua New Guinea's seafood gets MOU lift

FDI from China can help the country realize its underdeveloped fishing industry potential

After the Papua New Guinea government signed a memorandum of understanding with a Chinese fishery company late last year to build a seafood processing plant on an island in the Torres Strait, it attracted criticism in Australia about regional security risks and depletion of fishery resources.

However, analysts largely dismissed the fears as unwarranted, saying the claims have no basis and that critics ignored the economic benefits that the project will bring to PNG, including jobs for local people.

Leon Perera, CEO of international research and consulting firm Spire, said the project could create the foundation for PNG's seafood export industry.

In November, a memorandum of understanding was signed by Fujian Zhonghong Fishery Company, PNG's fisheries minister Lino Tom, and the governor of the island nation's Western province, Taboi Yoto, to build a comprehensive multifunctional fishery industrial park on Daru Island.

The project, which is worth some $150 million, is part of the Belt and Road Initiative that aims to boost international links and economic development through infrastructure related investments. The fishery park signaled a major boost to PNG's ambition to establish itself as a significant exporter of seafood.

As is the case with many poor countries, the island nation could not work toward realizing its goal without financial help from outside. Fortunately, China stepped in, aiming to assist a developing country with which it had built friendly relations in recent years.

PNG is the second Pacific nation to join China's ambitious BRI program in 2018 to help build the necessary infrastructure for a developing economy.

Abundant resources

The plant, which will be located in an impoverished region, will serve as a hub for processing fish taken from the Torres Strait which divides PNG and Australia. The region is known to be abundant in marine resources, including fish, prawns and lobsters.

According to a recent report from the Australian Broadcasting Corporation, a delegation from Australia's foreign affairs department and the Australian High Commission in PNG traveled to Daru in early January to meet with local officials to discuss the Chinese project.

After the meeting, Yoto wrote on a Facebook post that the Australian government had proposed nothing to counter the Chinese proposal, adding that he does not want his people to remain living in poverty.

"As usual, they came with no alternative plans to counter and deter any foreign direct investment, especially to alleviate poverty and improve social services," wrote Yoto in an article entitled "We will not sway".

"It's regrettable that all they want is for us to be subsistence farmers and fishermen, and maintain our current status quo."

He also wrote that those who were with him in that meeting can confirm that Australia lost the plot and minced their words.

Yoto said he was "aware that Australians are working behind my back to have my people not to support any foreign direct investment".

Sovereign right

Still, Australia's Foreign Affairs Minister Marise Payne told the Senate－the upper house of Australia's parliament－last month that the Australian Border Force would be patrolling the Torres Strait to ensure that the traditional-only fishing rules in the region, agreed to between PNG and Australia, are enforced.

"Commercial-scale fisheries would not be considered a traditional activity under the Torres Strait Treaty and would not be permitted," she said.

Minister Tom acknowledged the "growing interests and concerns "in a statement and said "existing bilateral agreements will be respected".

But Tom added that PNG is "within its sovereign rights" to be considering the project, which he said can "boost economic activity in the area".

PNG's fishing industry is underdeveloped and has huge potential to become a major exporter of seafood given the bountiful fish, prawn, and lobster stocks.

"The challenge is for PNG to create an effective made-in-PNG brand for the seafood industry," Perera said. "And such things as hygiene, production best practices, sufficient quality control and a pool of skilled manpower will be vital."

China has recognized PNG's potential as a seafood exporter. A June agreement allowed PNG seafood exports directly into the Chinese mainland. In time, it is expected that more PNG companies will be added and registered by China's General Administration of Customs when the health certificate for live seafood is submitted and the administrative requirements are satisfied.

Xue Bing, China's ambassador to PNG, noted that with 2 million square kilometers of ocean, PNG is well placed to supply China's rapidly expanding middle class with quality seafood.

Fuzhou-based Fujian Zhonghong Fishery has had long involvement with PNG, mainly in fishing and seafood processing. The company's investment is expected to enhance PNG's ability to comprehensively develop and utilize its own fishery resources.

karlwilson@chinadailyapac.com