01/08/2024
PRESS RELEASE
PMIZ to be Developed in Two Phases..
Port Moresby, August 1, 2024- The Minister for International Trade and Investment, Hon. Richard Maru today announced that the National Executive Council (NEC) in its recent Meeting No: 13/2024 approved, in principle, that the Pacific Marine Industrial Zone (PMIZ) in Madang Province will be developed in two phases.
“The Phase 1 of the project will be the establishment of a fishing Joint Venture (JV) between the State and RD. The Marape-Rosso Government first want to start up a PNG fishing company so we can have our own local master fishermen, our own fishing boats, and have the fish security before we can go into processing and canning. The Government has decided to enter a strategic JV fisheries business with RD which is a current established fishing company with established business, facilities, management and industry knowledge, skills and expertise, years of experience, and networking both in the region and globally and understands the global market. It makes good commercial sense for the State to approach RD with all its facilities to enter into a JV. The State for its part would inject equity to get into the fishing business and have its nationals employed and immersed into the business to learn the trade and acquire the expertise so eventually we can have our own people set up and own the fisheries industry in the country. Countries like Australia do not issue licenses to foreign fishing vessels. One day we can reach that point so we can and own our fisheries industry. For now we are only rent collectors.”
“For the State to directly establish itself in the fisheries sector, it would be faced with huge costs of initial capital investment. Establishment costs for wharf would be USD$300 million; for onshore processing facilities will be USD$100 – USD$150 million; for cold storage will be USD$30 million; and to purchase and own fishing vessels- purse seine can range from USD$7 million to USD$25 million. The cost can vary significantly based on several factors, including the vessel’s size, age, and condition, which is estimated to cost around USD$500 million. Infrastructure costs for road, water, electricity and other amenities would add on to the business. The financial costs to set up directly to enter the business would be excessive and untenable for the Government. Added to that, we do not have the management experience nor the technology and skills of commercial fishing enterprise as a country. We need to partner and learn the trade of the commercial fishing business first over a period of time until we are confident to venture on our own. We have to learn to crawl before we can walk,” said Minister Maru.
Minister Maru stated: “Currently, we do not have our own fishing boats, our own master fishermen, we have no expertise in fishing, and in the last 50 years we have never domesticated our fisheries industry and as a result we have missed out in building another ten canneries because 80% of our catch is taken overseas, we have lost 50,000 jobs, we are earning a net revenue of only K300 million a year (after discounts and rebates from our license fish) when we could be earning K5 billion in revenue, and we also lose out on many revenue streams ranging from landing fees, shipping licenses, loss of jobs, wages, income taxes, corporate taxes, GST, fuel, water, electricity, and opportunities for other local commercial businesses revolving around the commercial fishing enterprise. We have our people graduating National Fisheries College in Kavieng but where are they? They are not in the industry- we are all spectators. We have lost all these opportunities because we have never domesticated the industry.”
“We are still a ‘Coastal State’ since both before and after Independence. We are yet to change our status to be recognized as a ‘Fishing State’. Coastal states have jurisdiction over the waters adjacent to their coastlines, usually up to a certain distance known as the Exclusive Economic Zone (EEZ), where they have special rights regarding fishing, mineral exploration, and other economic activities. These states play a significant role in regulating fishing activities, conservation efforts, and resource management within their maritime boundaries. In the context of the fishing industry, a country referred to as a ‘Fishing State’ is one that heavily relies on and actively participates in fishing activities. This term is used to describe a nation whose economy, culture, and livelihood are significantly tied to fishing and the exploitation of marine resources. Fishing states often have a large fishing fleet, extensive coastal waters, and a strong presence in international fisheries management organizations. PNG has missed out big time by being a rent collector and the Marape-Rosso Government has made a very bold decision to shift us from being a rent collector to a ‘Fishing State’.
Minister Maru added: “Whilst RD has established fishing business in Madang and has all the facilities and infrastructure that the State needs to get into the fishing business, it does not have enough vessels and volume of fish caught per day to process at its processing plant which needs 200 metric tons of fish each day to make it viable for it to operate profitably. Fish security is very critical. We have to learn from the experience of Lae-based Majestic Seafood. It closed down because it never had the volume of fish it needed for its 200 metric-ton per day cannery, resulting in 3,000 Papua New Guineans losing their jobs. The plant was not able to source enough fish each day to process to its full capacity- it was only processing up to 15-20 metric tons of fish each day. Most of the fish caught by other companies at sea were taken to other countries for processing. This also underlines the importance of owning our own fishing vessels and our own crew, and introducing the domestication policy so we can land our fish onshore and process it in our cannery and enjoy the maximum benefits of our fisheries resources."
Minister Maru further stated: “If Phase 1 is successful and we are able to catch enough fish, own our own fishing boats, have our own master fishermen, have our own people trained then we can move to Phase 2 which is to build our own cannery and other associated businesses in the 250 hectares of State Land at the PMIZ to take advantage of the Special Economic Zone (SEZ) benefits and incentives that PMIZ can offer before we can invite other investors to come and invest in the PMIZ."
“PNG has a rich and large EZZ of 2.4 million square kilometers in extent, making it one of the most productive in the region. PNG accounts for approximately 18% of the world’s tuna catch and controls around 15% of the global tuna trade with an estimate value between USD$4 billion-USD$5 billion (K13.3 billion – K16.9 billion) (NFA 2022). However, the majority of this catch is re-routed at high seas to other countries, and is processed overseas, depriving PNG of significant benefits. Currently, the revenue from the fisheries sector to the Government has mainly been resources rents all these years. The overall production output of fisheries exports for PNG has remained steady above K1 billion mark since 2016. PNG needs to break this cycle and get into the fishing business and benefit from the K12 billion – K15 billion revenue that is generated from the fish harvested from its EEZ by others.”
Minister Maru commended the Marape-Rosso Government for the decision to develop the PMIZ in two phases and described this decision as ‘an important policy shift’ by the Marape-Rosso Government.
“This the biggest game changer in our fishing industry since independence,” said Minister Maru.
Meanwhile, the NEC also approved the State Negotiating Team led by Chairman, Mr. Dairi Vele to negotiate and finalize the JV company agreement with RD for a 50:50 shareholding in the next four weeks so it can go back to the Cabinet for consideration and approval.
Ends…//
Approved for Release
Hon. Richard Maru, BTech, MBA, OBE, MP
Minister for International Trade & Investment
