Reshaping International Fisheries Development: Assimilating the Treaty on Fisheries between the Governments of Certain Pacific Island States and the United States under the PNA Vessel

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The International Journal of Marine and Coastal Law �9 (�0�4) 5�–76

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Reshaping International Fisheries Development: Assimilating the Treaty on Fisheries between the Governments of Certain Pacific Island States and the United States under the PNA Vessel Day Scheme (VDS)

Transform AqorauChief Executive Officer, PNA Office, Marshall Islands; Senior Visiting Fellow, Australian National Center for Oceans, Resources and Security University of Wollongong, Wollongong, NSW, Australia

Abstract

Since June 1988, Pacific Island States and the United States have co-operated in fisher-ies management, conservation and development through the Treaty on Fisheries between the Governments of Certain Pacific Island States and the Government of the United States. The renegotiation of the Treaty has presented challenges. The Treaty worked perfectly under an open and unrestricted access regime. However, changes instituted by Pacific Island States and the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific have tested the utility of the Treaty. This article discusses these changes, and these chal-lenges, including the implications of the Vessel Day Scheme. The article concludes that having unimpeded multiple-zone access is inimical to a rights-based system such as the purse-seine Vessel Day Scheme.

Keywords

fisheries – South Pacific Islands – Vessel Day Scheme – Pacific Islands/US Fisheries Access Treaty ̶ Western and Central Pacific Convention for the Conservation and Management of Highly Migratory Fish Stocks

53reshaping international fisheries development

The International Journal of Marine and Coastal Law 29 (2014) 52–76

Introduction

The Treaty on Fisheries between the Governments of Certain Pacific Island States and the Government of the United States of America (hereinafter referred to as “The Treaty”)1 was signed on 2 April 1987 and entered into force on 14 June 1988. Since then, it has been the focal point in the relationship between the Pacific Island States2 and the United States (US). Changes in the fisheries management paradigm in the Western and Central Pacific Ocean (WCPO) have created tensions between the Parties and tested the utility of the Treaty as an instrument of fisheries development. This article traces the geo-political underpinnings of the Treaty and looks at the evolution of fisheries management regimes in the WPCO, and, in particular, moves towards limits that align with rights-based fisheries management arrangements. The article discusses how these limits affect tuna management in the WCPO, and how the Treaty, which was modelled around unlimited access, has become an impedi-ment to, rather than an instrument for effective fisheries management for the Pacific Island States. The article concludes by arguing that having a multilat-eral access arrangement is inimical to a rights-based system such as the PNA Purse-Seine Vessel Day Scheme,3 which is centred on creating a seller’s market by limiting effort.

1 FFA, Treaty on Fisheries between the Governments of Certain Pacific Island States and the Government of the United States, (Honiara: Forum Fisheries Agency, 1988). The Parties to the Treaty are: Australia, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, United States, and Vanuatu.

2 The Pacific Island States referred to in this Paper are all those who are Parties to the Treaty, including the New Zealand Territory of Tokelau, who, although not independent, is a partici-pant in the Palau Arrangement for the Management of the Purse-Seine Fishery of the Western Pacific 1995.

3 PNA, The Vessel Day Scheme (Majuro: PNA Office, 2010). See also T. Aqorau and A. Bergin., “Ocean Governance in the Western Pacific Purse Seine Fishery: The Palau Arrangement” (1997) 21(2) Marine Policy 173–186. For further reading on the VDS see T. Aqorau, “Recent Developments in Pacific Tuna Fisheries: the Palau Arrangement and the Vessel Day Scheme” (2009) 24(3) International Journal of Marine and Coastal Law 557–581. See also, E. Havice, “Rights-based Management in the Western and Central Pacific Ocean tuna fishery: Economic and environmental change under the Vessel Day Scheme” (2013) (32) Marine Policy 259–267.

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The Political and Economic Underpinnings of the Treaty

The Treaty is often hailed as a classic example of a successful co-operative fish-eries management arrangement between the small island States of the Pacific Islands, who are largely dependent on the development of their tuna resources for their economic growth, and the US tuna industry and government.4 For the US tuna industry, the Treaty has provided stable, multiple-zone access to the tuna-rich waters of sixteen Pacific Island States without the constraints of having to negotiate with individual countries. A single application is submit-ted for their vessels to apply to fish in June each year to the Administrator of the Treaty, who is the Director-General of the Pacific Island Forum Fisheries Agency (FFA), and US vessels are given 12 months of unimpeded access in return for an industry payment of USD $3 million. At current levels of 40 ves-sels, that equates to USD $75,000 each for the privilege of fishing in 16 exclusive economic zones (EEZs). This translates to just slightly more than the value of a day’s fishing at an average price of $2,000/day at an average Catch Per Unit Effort (CPUE) of 30 metric tonnes/day. The balance of the Treaty payments of USD $18 million is paid for by the US government through an Economic Assistance Agreement with the FFA. The US vessels have only known how to fish in the Pacific Islands region under a subsidized arrangement. For the US government, the arrangement serves multiple strategic and geopolitical moti-vations. The Treaty gives the US justification to maintain a presence in the region, and therefore a reason to deploy their naval and military platforms to support monitoring, control and surveillance (MCS) of the fishery.5

Illegal, unregulated and unreported (IUU) fishing by vessels that fish with impunity has become a threat to the sustainability of fish stocks worldwide. Although non-conventional means of dealing with them are also available, such as port State and market-based measures, one of the most effective means of addressing IUU fishing is to have a physical enforcement presence in the area. The Treaty therefore provides the US with justification to deploy their

4 See generally, W. Sutherland and M.B. Tsamenyi, Law and Politics in Regional Co-operation: A Case Study of Fisheries Co-operation in the South Pacific (Pacific Law Press, Tasmania, 1992).

5 See Testimony of Russell Smith, Deputy Assistant Secretary for International Fisheries National Oceanic and Atmospheric Administration U.S. Department of Commerce on Renegotiating the South Pacific Tuna Treaty: Closing Loopholes and Protecting U.S. Interests before the House Foreign Affairs Subcommittee On Asia, the Pacific and the Global Environment U.S. House of Representatives, 22 September 2010 (http://www.legislative.noaa.gov/Testimony/ Smith092210.pdf) In his Testimony Russell Smith said at p. 5: “Without significant U.S. participation in this fishery, NOAA’s ability to influence decision-making in the Western and Central Pacific Fisheries Commission would be diminished.”



military and surveillance assets in the region. This also gives the US an oppor-tunity to pursue their multiple strategic geopolitical interests, which in recent years has been to counter the growing influence and presence of China in the islands’ region. The US’s multiple strategic interests in the Treaty are evident from President Reagan’s referral note to the US Senate for Advice on the Treaty when he said:

For the last several years, the United States has been involved in a fisher-ies dispute with several Pacific Island states as a result of conflicting laws regarding jurisdiction over highly migratory tuna. The Pacific Island nations claim jurisdiction over tuna within their 200-nautical-mile exclu-sive economic zones. The United States neither recognizes nor claims jurisdiction over tuna beyond 12 nautical miles. As mandated by the Magnuson Fishery Conservation and Management Act, the United States Government has prohibited imports of tuna from several countries as a result of seizures of U.S. tuna boats by nations exercising jurisdictional claims. This dispute has resulted in a cycle of tuna vessel seizures and con-sequential U.S.-imposed trade embargoes that has resulted in serious ero-sion of our good relations with the countries of the region and has provided the Soviet Union with an opportunity to exploit these differences through fisheries agreements.

United States policy under the Magnuson Act has been to negotiate international agreements to ensure the effective conservation and man-agement of tuna and to secure access for U.S. fishermen to the stocks wherever they migrate beyond a narrow belt of coastal waters. The Treaty provides for the issuance of regional licenses for tuna fishing in some ten million square miles of the South Pacific Ocean. Data collected on tuna catch may provide a basis for future management and conservation efforts. It thus furthers U.S. fisheries policy goals while eliminating the pri-mary source of bilateral friction between the United States and the Pacific Island states.6

For the Pacific Island States, their interest in the Treaty is also multi-dimen-sional. The US was the only country that did not recognize coastal State sov-ereign rights over highly migratory fish stocks in the EEZ. In the 1980s, this led to open conflict between the US and certain Pacific Island States, namely

6 See Message to the Senate Transmitting the Pacific Island States-United States Fisheries Treaty 18 June 1987, Ronald Reagan, The White House, 18 June 1987 (emphasis added); http://www .reagan.utexas.edu/archives/speeches/1987/061887a.htm.

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Solomon Islands and Papua New Guinea, when they arrested US vessels for fishing without authorization in their EEZs.7 The US response was to impose an embargo on Solomon Islands. Papua New Guinea had released the vessel to US authorities before an embargo was imposed on its exports. The Treaty alleviated these legal obfuscations over the different interpretations of coastal State sovereign rights over highly migratory fish stocks by parking it to one side, while allowing for access by US vessels through a multilateral framework. It is instructive to note that the Treaty did not resolve these legal differences over the interpretation of coastal State rights over highly migratory fish stocks. They simply agreed to provide a co-operative framework to achieve their political and economic objectives without prejudice to their respective legal positions.

The Treaty was also far-reaching in that it provided comprehensive provi-sions on flag State responsibility. This was well before the current principles of flag State responsibility became the vogue in international legal instru-ments. The Treaty also provided for the application of national laws of the Pacific Island States to US vessels. There is, however, one qualification to this: Pacific Islands States cannot legislate for matters that are encompassed under the Treaty. The Treaty provides for access to US vessels to three geo-graphic areas that are defined under the Treaty. These are: the Treaty Area, the Licensing Area and the Limited Area. The Treaty Area includes areas of high seas adjacent to the EEZs of the Pacific Island States and the US, as well as the EEZs of the US Territories of American Samoa, Guam and the Commonwealth of the Northern Marianas. The Licensing Area includes areas of the EEZ of the Pacific Island States, save for those areas that were designated as “closed”. These include the internal waters, archipelagic waters and territorial seas. The Limited Area confined US vessels to fish for 500 days, after which they are required to leave. Only Solomon Islands applied a Limited Area in its EEZ to protect its domestic industry. However, this was subsequently amended in 2002, and hence there is no Limited Area under the current arrangements.

The structure and form of the Treaty served both sides well for the first 15 years after its entry into force on 15 June 1988. It was a straight-out access agreement which facilitated both sides’ strategic, geopolitical and development interests. The Treaty also set benchmarks against which various other access agreements and arrangements could be measured. Its flag State responsibility rules were far-reaching and unprecedented in their scope and breadth under international law. It provided a comprehensive framework for compliance

7 See B.M. Tsamenyi, “The Treaty on Fisheries between the Governments of Certain Pacific Island States and the Government of the United States of America. The Final Chapter in the United States Tuna Policy” (1989) 15 Brooklyn Journal of International Law 183–221.



under which the US would rigorously investigate every allegation of breaches of the Treaty. The Treaty was also regionally administered, hence it provided a cost-effective means of managing fisheries arrangements. The initial successes of the Treaty prompted regional political leaders to push for multilateral fish-ing arrangements with other fleets. As a result there were attempts to develop similar multilateral arrangements for the southern albacore tuna fishery. There were also discussions with Japan over a multilateral arrangement, although this did not progress any further beyond four rounds of negotiations.

The major attraction of the Treaty for some of the less well tuna-endowed Pacific Island States was the fee distribution formula. The Treaty payments were structured in such a way that after deducting the administrative costs from the USD $21 million, USD $2.5 million were distributed equally amongst the Pacific Island States. This was known as the Project Development Fund (PDF). Each Party was entitled to a share of the PDF, irrespective of whether US vessels fished in their waters. Fifteen per cent of the balance was distrib-uted equally amongst the Pacific Island States. Unlike the PDF, which was administered by the FFA as discretionary funds to be accessed by the respec-tive Parties, the 15% equal share was paid directly to the Treasury Departments of the Pacific Island Parties. Thus, each Party received a share of the PDF and 15% equal share, regardless of whether US vessels fished in their waters. This served a political purpose. It ensured that all Pacific Island Parties were able to receive a share of Treaty Funds whether or not fishing occurred in their waters. It is also served US purposes, because it allowed Pacific Island States who would otherwise not be eligible to receive US Grant-Aid, to indirectly ben-efit from the US Grants.

The Treaty also contained provisions for broader cooperation. This was intended to provide a framework for the development of the Pacific Island States tuna fisheries. The broader co-operation provisions stipulate that the US Government shall “as appropriate”, promote the maximization of benefits for the Pacific Island States from the operations of US fishing vessels, including the use of canning, transhipment, slipping and repair facilities in the Pacific Island States, the purchase of equipment and supplies, including fuel from suppli-ers in the Pacific Island States and the employment of Pacific Island nationals on US vessels. These provisions were motivated by the desire of Pacific Island States to broaden their participation in the fishery. The early disputes with the US over sovereign rights over highly migratory fish stocks stemmed from two diametrically opposed development philosophies. The US on the one hand viewed tuna stocks as a common property, and with the tuna being highly migratory, the US did not believe that a single country or grouping of coastal States could effectively manage and conserve the tuna stocks without the

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co-operation of fishing States. The Pacific Island States on the other hand were newly emerging States and Territories, and therefore viewed the tuna stocks as the means through which they could economically support their treasuries. The Treaty therefore was intended to provide a fusion between these two per-ceptibly diametrically opposed principles.

It is instructive to note that the Treaty was concluded before the negotia-tion of the UN Fish Stocks Agreement (UNFSA),8 and the establishment of the Western and Central Pacific Fisheries Commission.9 Thus, although the US agreed to set aside their position that coastal States could not exercise sov-ereign rights over tuna in the EEZs, they did not change their view that inter-national law required tuna to be managed and conserved by an international conservation body constituted by all States with a real interest in the fishery. The conclusion of the Convention for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean10 in 2000 triggered the establishment of such an organization and paved the way for the creation of clearer rights to the resources and the introduction of limits.

The Evolution of Limits in the Tuna Fisheries of the WCPO: Transition towards Rights-based Fisheries Management

Attempts at introducing limits in the WCPO were initiated by a subset of Pacific Island States known as the Nauru Group.11 This Group was established in 1982, stemming from frustration at Distant Water Fishing Nations (DWFNs) playing

8 The United Nations Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks, 2167 UNTS 88.

9 The Western and Central Pacific Fisheries Commission (WCPFC) was established on 19 June 2004 upon entry into force of the Convention for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific. The Headquarters of the WCPFC is in Pohnpei, Federated States of Micronesia.

10 See FFA, Convention for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific (Honiara: Forum Fisheries Agency, 2000) (hereinafter referred to as the “WCPF Convention”). Also available at http://www.wcpfc.int/doc/convention-conservation-and-management-highly-migratory-fish-stocks-western-and-central-pacific.

11 The Nauru Group is made up of Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu. See D. Doulman, “Fisheries Co-operation: The Case of the Nauru Group” in D. Doulman (ed.), Tuna Issues



Pacific Island States off against each other in their bilateral access agreements to keep access fees low. Fundamentally, the Group felt that the FFA, established three years earlier, was not representative enough of Island interests and there-fore agreed that it would be in the interests of island nations in whose EEZs the tuna were being harvested to have a separate organization that could control and establish their own tuna-related industries. Therefore it was important to establish an island organization to deal with various problems common to the various island nations, as the tuna fishery in the WCPO was the largest and most valuable in the world. Although international law of the sea granted Pacific Island States the right to exploit and manage this valuable fishery, they had been unable to capture their perceived economic development potential from the ongoing fisheries operations as they wanted.

The PNA initiated a number of arrangements beginning with the First Implementing Arrangements Setting Forth Terms and Conditions for Access by Foreign Fishing in 198312 and then the Second Implementing Arrangements Setting Forth Additional Terms and Conditions of Access for Foreign Fishing Vessels in 1990.13 These initiatives were aimed largely at the operations of fish-ing vessels, and, in particular, the need to establish a framework for collec-tion of accurate data. Thus, the First and Second Implementing Arrangements stipulated the terms of licensing, the need for vessels to be licensed, the form of the licence, and the data to be provided by these vessels. When communica-tions technology improved, additional terms and conditions were stipulated that required vessels to have vessel monitoring systems, report their catch for the entire trip, rather than just for the EEZ, and for vessels to meet the costs of observers’ salaries and fees. It is instructive to note that the fishery was still open access, and no catch or effort limits were required. Vessels paid a fee that was calculated as a fixed percentage of the rate of return of the catch, hence the requirement for the provision of accurate catch and effort data. All these data were provided by the vessel operators through their respective fisheries associations. There was no means by which the licensing State could verify the accuracy of the data, and often the catch reports were provided 45 days after the end of a trip. The fishery was relatively simple, and there were no concerns at the time for the biological health of the tuna stocks. The rate of return on

and Perspectives in the Pacific Islands Region, (Honolulu: East-West Center, 1988) pp. 257–278. For purposes of this article the Nauru Group is referred to as the “PNA”.

12 See FFA, First Implementing Arrangements setting Forth Terms and Conditions of Access of Foreign Fishing Vessels (Honiara: Forum Fisheries Agency, 1983).

13 FFA, Second Implementing Arrangement Setting Forth Additional Terms and Conditions of Access of Foreign Fishing Vessels (Honiara: Forum Fisheries Agency, 1990).

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access fees was valued at approximately 3–4% of the landed value of the catch, and the primary motivation for the Island States then, as it still is now, was to extract maximum return for access. This was difficult to extract in a fishery that was unconstrained, with no capacity or effort limits.

The evolution of limits in the WCPO underwent a metamorphosis in the early 1990s, when signs of small-sized yellowfin tuna (Thunnus albacores) became apparent in purse-seine landings. Whether it was coincidental or not, these were also accompanied by the rapid increase in the number of purse-seine vessels entering the fishery. These concerns led to the negotiation of the Palau Arrangement for the Management of the Purse-Seine Fishery in the Western Pacific.14 The Palau Arrangement established a management frame-work for Parties to prioritize the licensing of fishing vessels. A cap was estab-lished, initially at 167 vessels, and finally culminating in 206 vessels. The Palau Arrangement restricted the number of purse-seine vessels to the total listed in Annex 1 of the Arrangement. Amongst other things, at their management meetings, the Parties can consider management measures including:

(i) the regulation of fishing effort by purse-seine vessels which have good standing on the Regional Register;

(ii) the implementation and operation of Management Schemes, and the review and amendment of those Management Schemes as appropriate;

(iii) the establishment of closed areas and closed seasons; and(iv) any other management measure deemed necessary from time to time.15

The Palau Arrangement established criteria for giving priority to the alloca-tion of licenses. Thus, domestic vessels were given high priority, reflecting the significance attached to onshore processing and other benefits closely linked with the domestic economies of the Parties. Second priority was to be given to the domestic vessels of other Parties; locally based foreign fishing vessels were to be given third priority. Foreign fishing vessels with a good record of compli-ance with the national laws and terms and conditions of the Parties were to be given fourth priority, and new entrants were to be given last priority.

14 FFA, Palau Arrangement for the Management of the Purse Seine Fishery of the Western Pacific (Honiara: Forum Fisheries Agency, 1995) (hereinafter referred to as the “Palau Arrangement”). The Parties are: Federated States of Micronesia, Kiribati, Marshall Islands, Palau, Papua New Guinea and Solomon Islands. Tuvalu has not acceded to the Palau Arrangement.

15 Art. 3.2(b) of the Palau Arrangement.



The system worked well initially, but tensions started to arise when the Parties increased the size of their domestic fleets and capacity from new entrants expanded. Ironically, although the text of the Palau Arrangement gave priority to domestic vessels, the allocations which were fixed by flag did not allow for that. This was one of the inherent weaknesses of the initial alloca-tion of rights under the Palau Arrangement, in that although it suited the flag States, it was inimical to the domestic development aspirations of the Parties. Table 1 below shows the allocation by flag.

Part of the problem was the allocation model which was to give the slots to flag States. A simple solution would have been to substitute the Parties for the flag States, allowing each Party to sponsor a certain number of vessels under the Arrangement with all the allocation of the capacity going to the Parties. Thus, the initial foray of Parties into rights-based fisheries management was telling for them. Parties learnt that capacity limits allocated by flag States were inflexible. It also had several other economic consequences. It did not result in the increase in access fees that had been anticipated by imposing ves-sel limits. The theoretical underpinning of the capacity limits was that capping

Table 1 Allocation of capacity limits under the Palau Arrangement

Category Single purse seiner

Group purse seiner

Total Reduction Increase Target April 1997

Multilateral Access

US Treaty 55 55 55

2 Bilateral Foreign Access

Japan 32 7 39 35

Taiwan 44 44 40

South Korea 32 32 29

Philippines 11 11 10

Sub-total (1–2) 174 7 181 169

All Parties 23 1 24 + 12 36

Total (1+2) +3 197 8 205 205

Source: Forum Fisheries Agency, 1994.

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vessels at a certain number would result in an increase in access fees as ves-sels would compete for the limited capacity available. However, the problem was that Parties did not apply the licensing criteria as stipulated in the Palau Arrangement, and did not reduce the number of foreign fishing vessels by 10% as they had agreed in April 1994. There was simply no competition because all vessels that wanted to be in the fishery were already in receipt of an alloca-tion, and so they operated as if they were a cartel. The reduction in the US fleet from 40 vessels to 12 vessels in the early to mid-2000s meant that effectively the actual number of vessels operating in the fishery was kept below the cap of 205 until the US amended its laws and allowed Taiwanese-owned vessels to operate under the US flag. Thus, there was no competition for slots, and therefore the Parties were unable to increase access fees as they had initially aimed to do.

These weaknesses put pressure on the Parties and threatened the ability of the Parties to maintain cohesion. These weaknesses were also exacerbated by internal and external factors, including the willingness of some Parties to license bilaterally flag-of-convenience vessels, DWFN flag vessels in excess of the number agreed under the Arrangement, and vessels from new entrant DWFNs outside of the Arrangement. External pressures included growing demand for access to the highly productive and healthy skipjack (Katsuwonus pelamis) and yellowfin resources in EEZs of the Parties; a trend that contin-ues today. As a result of the confluence of all these issues, the Parties decided in 2000 to review the Palau Arrangement with a view to developing a long-term management system based on national limits on the number of purse-seine days fished. In doing so, Parties acknowledged the growing external and internal pressures on the Palau Arrangement and the likelihood that the Arrangement needed to create a more effective management framework for the future. As noted by Geen, notwithstanding these flaws in the current vessel cap, it has attained central importance as an indicator to the interna-tional community of the management responsibility of the PNA, even if the limits on vessel numbers under the Palau Arrangement have, at best, been a partial and temporary restraint on the ambitions of potential new entrants to the fishery.16

16 See G. Geen, Review of the Palau Arrangement for the Management of the Western Pacific Purse Seine Fishery (Canberra: Fisheries Economics and Management Ltd, 2000) p. 13.



The Purse-Seine Vessel Day Scheme

Reforms of the Palau Arrangement led to the development of the Vessel Day Scheme (VDS).17 References to capacity limits in the Palau Arrangement were removed and supplanted by reference to effort limits, namely the VDS. The VDS is a management measure adopted by Parties to the Palau Arrangement. The objectives of the VDS are found in Article 2. These include, inter alia, enhanc-ing the management of purse-seine fishing vessel effort in the waters of the Parties by encouraging collaboration between all Parties; promoting optimal utilization and conservation of tuna resources; maximizing economic returns, employment generation and export earnings from sustainable harvesting of tuna resources; supporting the development of domestic locally based purse-seine fishing industries; and promoting effective and efficient administration, management and compliance. The underlying obligation of the Parties is explicitly stipulated in Art 2.2, namely to limit the level of fishing by purse-seine vessels in their EEZs to the agreed total allowable effort levels.

The VDS is essentially a tool that limits the total amount of effort by purse-seine vessels in the waters of the PNA and Tokelau. Effort is measured by the number of days that a vessel actually spends fishing. The only days that are not counted is when the vessel is in the territorial sea, in archipelagic waters or in port. A day is discounted as non-fishing if a vessel is unable to make a set in a 24-hour period because the vessel’s engine breaks down, the weather is bad, the vessel is full and is steaming for port to unload, the vessel has pre-advised that it will transit through an EEZ and undertakes to do so with its boom down, it is retrieving a fish aggregation device (FAD), and when it is in port.

Parties set a total allowable effort (TAE) and then divide it up amongst themselves. Their share of the TAE is known as the party allowable effort (PAE). Articles 12.3, 12.6 and 12.7 of the VDS text provide for the TAE to be adjusted before allocation of PAEs by making deductions for the effort under the Treaty and the Federated States of Micronesia (FSM) Arrangement.18 Thus, 3,907 days are taken off the top for the FSM Arrangement. The consideration of days

17 PNA Office, Palau Arrangement for the Management of the Western Pacific Fishery as Amended—Management Scheme (Purse Seine Vessel Day Scheme) (Amended 27 April 2012), (Majuro: Parties to the Nauru Agreement Office, 2012). Also available online at http://www.pnatuna.com/system/files/Palau%20Arrangement_Purse%20Seine%20Vessel%20Day%20Scheme%20Management.pdf.

18 FFA, The Federated States of Micronesia Arrangement for Regional Access (hereinafter referred to as “FSM Arrangement”) (Honiara: Forum Fisheries Agency, 1995). The Parties to the FSM Arrangement are: Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu.

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for the Treaty has been complex because the renegotiations. Up until 14 June 2013, US vessels were allowed to fish unlimited days to reflect the obligation of Parties to provide access to up to 40 licenses for US vessels without an effort limit. However, this requirement has become redundant since 15 June 2013 when the Treaty came under the VDS.

Article 12.2 of the VDS text provides that the TAE is to be set with reference to scientific advice and information, economic advice, WCPFC considerations, and the Marine Stewardship Council (MSC) Certification for free school skip-jack fishery. The WPFC scientific advice was as follows:

The stock is currently only moderately exploited (FCUR/FMSY = 0.37) and fishing mortality levels are sustainable. However, there is concern that high catches in the equatorial region could result in range contrac-tions of the stock.

If recent fishing patterns continue, catch rate levels are likely to decline and catch should decrease as stock levels are fished down to MSY levels. Due to the rapid change of the fishing mortality and biomass indi-cators relative to MSY in recent years, increases of fishing effort should be monitored. The Commission should consider developing limits on fish-ing for skipjack to limit the declines in catch rate associated with further declines in biomass.19

Currently, there are no agreed target reference points for skipjack, although the PNA have been working on this since February 2013. Various interim tar-gets have been suggested, including maintaining effort at 2010 levels, as well as maintaining catches at recent levels as proposed by the WCPFC.20

In 2012, the Parties agreed to adopt the 2010 effort level in PNA EEZs to estab-lish a precautionary TAE for 2013, although fishing mortality is still estimated to be at moderate levels. Given the advice of the WCPFC Scientific Committee on skipjack status, it was important for the PNA to strengthen the management of fishing for skipjack in the light of the failure by the WCPFC to do so. This stock is critically important for the economic development of the Parties and other developing states in the region. On the basis of these considerations, the Parties applied a TAE for 2013 based on the 2010 effort level. Thus, the TAE and adjusted PAE for 2013 are as set out in Table 2 below.

19 WCPFC, Report of the 7th Session of the WCPFC Scientific Committee Meeting, Busan, Korea, August 2012 (Pohnpei: Western and Central Pacific Fisheries Commission, 2012) paras. 224 and 225.

20 See WCPFC Secretariat (WCPFC-Technical Compliance Committee 7-2011/01), and main-taining catches at recent levels (WCPFC8-2011-46).



The PAE is apportioned to Parties on the basis of the formulae set out in Article 12.5 of the VDS text which states as follows:

The PAE for each Party shall be expressed as a percentage. The formula for calculating the PAE shall be selected by each Party from either of the two options set out hereunder. i) (a) 40 percent of the PAE is based on the distribution of the assessed

relative biomass of skipjack and yellowfin within the waters of the Parties, excluding archipelagic waters—for this purpose the aver-age shall be taken over a ten (10) year period using the most recent available data; and (b) 60 per cent on the average of the annual dis-tribution of the number of vessel days fished in the waters of the Parties, for this purpose the average shall be taken over a seven (7) year period using the most recent available data; or

ii) 100 per cent on the average of the annual distribution of the num-ber of vessel days dished in the EEZs of the Parties, for this purpose the average shall be taken over a seven (7) year period using the most recent available data.

The VDS is both a sustainability tool and an economic instrument. It supports sustainability of the WCPO skipjack purse-seine fishery by setting a limit on TAE expressed as Vessel Days, which is then subdivided into PAEs. It is the responsibility of each Party to ensure that their PAE is not over-fished, thereby ensuring the integrity of the TAE as a fisheries management measure. The VDS has been the single most transformative instrument in the tuna fishery in the WCPO in recent years. This is because it has transferred the power in the fishery back to the coastal States. Whereas in the past the DWFNs would set the price which they would pay for the right to fish, the VDS has created a seller’s market and incentive for vessel operators to compete amongst themselves for

Table 2 TAE and PAEs in 2013

MY6: 2013(days)

TAE 44,703

FSMA 3,907

UST 8,256

PAEs (Adjusted TAE) 32,540

Source: PNA Office, 2013

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the opportunity to fish in the Parties’ waters. The role of the VDS in the value chain for the purse-seine skipjack fishery is highlighted in the Parties to the Nauru Agreement (PNA) Office Business Plan as follows:

What is not widely recognized is that the VDS is a mechanism that poten-tially delivers benefits to the Parties from throughout the entire supply chain without the Parties necessarily having to invest in harvesting, pro-cessing and marketing of tuna. Indeed, if the VDS is used properly by PNA, investors in the supply chain are likely to achieve no more than nor-mal risk-adjusted returns on investment. Of course, normal returns are still sound business, and those businesses may be of interest to particular Parties. However, the overall economic purpose of the VDS is to make those businesses tougher and more competitive than they are today.

Traditionally, the key factor of production in the skipjack tuna supply chain has not been priced fairly. That factor is the right to catch skipjack tuna. This is because skipjack tuna migrate through many Exclusive Economic Zones (EEZs) and high-seas pockets. As a result, control over this crucial factor of production has been dissipated and weak. In these circumstances, harvesters have only had to consider the costs of vessel operations rather than the full value of the opportunity to fish. This opportunity has been obtained by the payment of license fees estab-lished by negotiation. The information available to the parties is highly asymmetrical. The coastal state can estimate the value of catch taken in its zone (tonnes of fish x port price) but only the buyer of the license knows the cost incurred to catch the fish and deliver it to market and the profit made by this activity. Furthermore, the buyer has every incentive to withhold this information from the coastal state. Used correctly, the VDS is a potent means of eliciting accurate profit data.

At present, licensing negotiations take the form of a double bluff where harvesters seek to play coastal states off against each other and coastal states do the opposite. History suggests that harvesters (predomi-nantly distant water fishing nations (DWFNs) and vertically integrated multinational companies) have played this game more successfully than coastal states. This is not surprising because of the information asymmetry between the parties. Coastal states in this situation often try to improve the odds through co-operation with licensing ‘competitors’ (i.e. other coastal states) but to the extent that coastal states wish to ensure that catching or landing occurs in their own EEZ, there are incen-tives to cheat on fellow coastal states in the same market. Double bluff



therefore becomes a more complex but little more rewarding game of triple bluff.

Attempts by coastal states to ‘guestimate’ the margins achieved by the vertically integrated businesses prominent in the tuna business encoun-ter problems created by the presence of transfer pricing between related harvesting, logistics, processing and marketing businesses. The owners of vertically integrated businesses have influence over where profits are taken and how they are presented. Generally, these incentives are to minimize declared profits and to crystallize profits in jurisdictions where corporate taxes are most favourable. A VDS that allocates a sufficient number of multi-zone vessel days by tender or auction cuts through the fog obscuring margin data at present.21

Since the application of hard limits under the VDS was imposed, the returns to the PNA have doubled. In 2010, the selling price per tonne was US$900/metric tonne, and the value of a fishing day in the PNA waters was $1,500/day. The total revenue collected from foreign fishing access by the PNA was USD $60 million. The total value of the catch in 2010 was USD $1.95 billion. In 2011, the PNA applied hard limits to the VDS and adopted a minimum benchmark price of USD $5,000/day. Although the minimum benchmark fee came into effect from 1 January 2012, the application of hard limits had an impact on revenue levels. PNA revenue increased to USD $104 million while the value of the catch increased to USD $2.359 billion. In 2012, PNA revenues increased to USD $229 while the value of the catch increased to USD $3.028 billion. PNA revenues are expected to increase to USD $249 million in 2013, and the value of the catch is expected to be USD $3.888 billion. With the increase of the minimum bench-mark to USD $6,000/day in 2014, the PNA revenue is expected to increase.

A central feature of the VDS is the ability for PNA to trade days with each other. While the development of pooling arrangements and auctioning of days will eventually become a means by which days are to be sold by Parties, the PNA are already seeing the transformative power of a rights-based instrument which creates competition amongst the vessel operators, and makes the PNA price setters, rather than price takers, which latter they have been since they declared their respective EEZs and Fisheries Zones.22

21 T. McClurg, PNAO Business Plan (Majuro: Parties to the Nauru Agreement (PNA) Office, 2012) p. 14.

22 For some critical comments see Havice, cited (n 3).

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Impact of the Treaty on Conservation and Management Measures

The implementation of the Treaty in the first fifteen years after its entry into force was relatively smooth. Tuna stocks were generally healthy, and the growth of the domestic fleet of the Pacific Island States was comparatively slow. This changed largely as a result of four factors. The first was the rapid increase in the purse-seine fishery and the concomitant overexploitation of some tuna stocks, namely, bigeye tuna (Thunnus obesus) and yellowfin tuna (Thunnus albacares). The second was the wide-spread use of FADs, which resulted in relatively high juvenile bigeye mortality compared to free school sets. The third was the rapid expansion of the domestic fleets of the Pacific Island States, which was spawned by the growth in investments in onshore processing facilities in some of the Pacific Island States, and the flexibility given to domestic ves-sels to fish multiple EEZs under the FSM Arrangement for Regional Access.23 The fourth was the conclusion of the WCPF Convention. Although the WCPF Convention, in and of itself, did not have any significant implications for the Treaty, it was the development of conservation measures, and the exemptions to the application of those measures to US vessels because of the Treaty that created problems, because although other fleets, including the domestic fleets of Pacific Island States, were constrained, US vessels continued to fish outside these limits.

Pacific Island States wanted a greater role in fisheries development. They wanted to see jobs on fishing vessels and in domestic processing plants. They wanted to integrate the single largest economic activity, namely, the exploitation of their tuna resources by foreign fishing vessels, into their domestic economies. It was not an unreasonable demand. In the same way that developed countries have control over what takes place in their EEZ and on their land, the Pacific Island States expected nothing less.

The tuna fishery in the WCPO continued to expand. New vessels were brought into the fishery. Not only were these vessels new, they were also larger and more efficient. The uncontrolled growth in the purse-seine fishery led to the establishment of limits by Pacific Island States who were Parties to the Nauru Group. They established the VDS and instituted several conservation measures, which included the introduction of a three-month (from July to September) ban on fishing on any FADs each year, a requirement to ensure that all tuna was retained and not discarded, a rule that all vessels must carry an independent fisheries observer, and a prohibition on fishing by vessels that

23 Supra note 18.



they license to fish in the two high seas pockets in the WCPO.24 The VDS was not intended to address bigeye mortality, but was an integral part of a package of measures to contribute to reducing bigeye overfishing.

Problems arose because, under the Treaty, these measures could not be applied to US vessels. The limits under the VDS could not be applied to US vessels because it would have been a breach of the Treaty to limit US effort when they were entitled to 40 licenses. Thus, the instrument under which the Pacific Island States sought to maximize their economic benefits excluded US vessels. While all other fleets’ effort in the EEZs of the Pacific Island States was limited, US vessels were not constrained. The PNA were the strongest agitators for change to the Treaty. Indeed, at a Meeting of the Pacific Island Parties to the Treaty in 2009, the PNA issued a statement expressing concern about US vessels not applying effort limits under the WCPFC’s Conservation and Management Measure 2008-01.25 The key factors that prompted calls to reshape the Treaty were:

a) The Treaty undermines the VDS: The VDS is intended to limit effort in order to conserve stocks and make access to PNA waters scarce and valu-able and limit the supply of tuna to world markets to increase global tuna prices. The US purse-seine fleet is the only fleet whose effort is not lim-ited by the VDS, and US effort and catches have increased dramatically since 2007, as shown in Fig. 1. The large increase of around 200,000 tonnes annually in catches from the US fleet increased catches and supplies to the world market overall, creating the impression that the VDS is not working, and that the PNA are failing to apply it effectively.

b) Undermines the conservation efforts of the Parties and other Commission members, especially the FAD closure: The increase in the level of effort by the US fleet has been identified by the Secretariat of the Pacific Commu-nity as a major reason why WCPFC Conservation and Management Mea-sure 2008-01 cannot achieve the objective of removing overfishing of bigeye, and why additional measures for bigeye conservation are needed. What this means is that the additional bigeye mortality from the increase in FAD sets by the US fleets is likely to remove the benefits of the annual 3-month FAD closure and cause the need for additional FAD closures. In addition, the Asian States are not prepared to apply any additional cuts to

24 See FFA, Third Implementing Arrangement setting Forth Additional Terms and Condition for Fishing Vessels (Honiara: Forum Fisheries Agency, 2008).

25 FFA, Statement of the PNA to Meeting of the Pacific Island Parties to the Treaty, Honiara, Solomon Islands, 28 October 2009 (Honiara: Forum Fisheries Agency, 2009).

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their fleets as long as the Treaty is exempt, because of the unfairness of the US purse-seine fleet being able to expand while they can see that they are being cut back under the VDS.

c) Undermines the domestic development aspirations of the Parties: The Treaty allows large volumes of fish to be caught by US vessels paying less even than the PNA’s own vessels operating under the FSM Arrangement. Furthermore, their catch is taken freely outside the region for processing wherever the buyers choose, often to ports such as Ecuador with duty free access to the US, or to Thailand, where there are large economies of scale. The Treaty thus allows most US interests in the fishery to avoid making the contribution to domestic development that is now expected by the PNA from other fishing partners.

d) Undermines the efforts of the Parties to increase access fees: Major Asian canners are able to push the price they pay for tuna down by at least 25% because of the large flow of cheap fish available from Treaty vessels. This results in lower access fees, because most access agreements are based on Bangkok tuna prices. In addition, US vessels were paying less than half the amount of access fees paid by other foreign partners, even though the quality of the Treaty arrangements are more favourable than the condi-tions faced by other fleets, in that they provide access to all EEZs of the Pacific Island Parties, are for 10 years duration, and provide a high level of continuity with respect to access. This is “inequitable”, and increases resistance from other fleets to pay more.

e) Is a constraint on the exercise of sovereign rights: The Treaty does not allow Parties to do what they want in their EEZs if it is a matter that is covered by the Treaty. The PNA could not apply the VDS to US purse-seine vessels in their EEZs even if they wanted to. This is because the Treaty allows for up to 40 licenses to be issued to the US. In 2009, the PNA agreed to limit US vessels to 2,773 days to be consistent with effort levels stipulated in

Figure 1 Annual catch (mt) in PNA EEZs.

1,200

met

ric to

nes (

x 100

0) 1,000

800

600

400

200

02004 2005 2006 2007 2008 2009

USMLTFSMAForeignPacific Is



WCPFC Measure 2008-1. This would effectively remove at least 15 vessels from the US fleet. However, under the terms of the Treaty, the PNA cannot collectively or individually impose such limits, because the US are enti-tled to up to 40 licenses. US effort continued to increase against the back-drop of the need to reduce further effort. Although the PNA have had to reduce the effort of other fleets, including its own, it is unable to control US effort, and cannot bring it down to 2,773 days because of the con-straints on the exercise of sovereign rights.

f) Sustains US opposition to PNA in the WCPFC and other regional fora: The US has a very different view of the WCPFC than the PNA, believing that the Commission should have jurisdiction over national waters, overriding the sovereign rights of the PNA and other Pacific Island States. The Treaty sustains a large US fleet and a significant US influence in the WCPFC. As a senior US official put it, “without significant U.S. partici-pation in this fishery, NOAA’s ability to influence decision-making in the Western and Central Pacific Fisheries Commission would be diminished”.26

Efforts to reshape the Treaty to ensure it meets the contemporary needs of Pacific Island States have been ongoing since 2009. There have been some posi-tive developments, but also at the same time it has not been easy to reshape a Treaty that has entrenched certain habits of fishing. Some of the more positive aspects of current renegotiation efforts include bringing the Treaty under the VDS, thus ensuring that all purse-seine efforts fall within the purview of skip-jack limits which the WCPF Commission has set at 2010 effort levels. However, there are still differences with regard to the application of national laws. These differences pertain to the extra-territorial application of national laws. The Pacific Island States want the Treaty to provide for the extra-territorial applica-tion of national laws. Some of these include such things as US vessels having their automatic locations communicator (ALC) switched on even when they are outside the EEZ. The US on the other hand agrees to apply national laws only when they are in the EEZ of a Pacific Island Party’s EEZ. The removal of the constraints on the application of national laws is one of the key objectives of the Pacific Island States in reshaping the Treaty.

The dilemma facing the Treaty reflects a conflict between approaches that have arisen because of changes in international fisheries law. The 1995 UNFSA gave coastal States a greater role to play in ensuring that fishing vessels that

26 Supra note 5.

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fish on the high seas are accountable for their actions. The UNFSA transformed international fisheries law by further qualifying the freedom of high seas fishing. The freedom to fish on the high seas is not absolute and unlimited. Vessels that wish to fish on the high seas must agree to comply with the con-servation and management measures adopted by relevant Regional Fisheries Management Organizations (RFMOs) or Arrangements.27 The subsequent WCPFC Convention also gives more clarity to the idea of sovereign rights, espe-cially in an economic sense. The limits that have arisen from measures under-taken by the WCPF Commission have transformed the fishery. There is greater economic clarity to these rights. The single most significant factor has been the development of rights-based fisheries, primarily through the VDS. The VDS has created a seller’s market, and firmly put the PNA countries, in particular, in the driver’s seat. The evolution of a private-property rights-based fisheries management regime has transformed the fishery, and the concomitant result is that it has driven the reforms being demanded of the Treaty.

The renegotiation of the Treaty is still ongoing. Since the current arrange-ment lapsed on 14 June 2013, a transitional arrangement has been agreed for a period of 18 months from 15 June 2013 pending the finalization of the Treaty re-negotiations. Some elements of the reshaped Treaty have been agreed, but because it is being negotiated as a package, the Treaty renegotiations will not be finalized until all the elements are adopted by the Pacific Island Parties and the United States. Some of the elements of a reshaped Treaty that have been provisionally agreed are:

a) Ensuring US vessels pay commercial rates: The US vessels are now required to pay a commercial rate for the days that they will be taking from the VDS. This is significantly higher than the USD $3 million which they have been paying since 2003. The total financial package under the Treaty once all the elements of the re-negotiations are accepted is USD $63 mil-lion for 8,000 PNA days and 300 non-PNA days. This includes a US govern-ment contribution of USD $21 million. The total US industry payment is USD $42 million. Although the figure of USD $63 million looks high, it is instructive to note that the US vessels will catch around 240,000 metric

27 See Article 8(4) of the UNFSA. “Only those States which are members of such an organization or participants in such an arrangement, or which agree to apply the conservation and management measures established by such organization or arrangement, shall have access to the fishery resources to which those measures apply”.



tonnes of fish. This is based on an average CPUE of 30 metric tonnes of tuna a day for 8,000 days. If the fish is sold at USD $2,100/metric tonne, US vessels will make USD $500 million from the Treaty.

b) Compliance by US vessels with National Laws: This has been one of the key issues for the Pacific Island States, who have agitated for greater flexibility in the application of their national laws. The current provisions on the application of national laws prohibit Pacific Island States from enacting legislation if it is already provided for in the Treaty. Hence, the Pacific Island States could not just enact any laws for their fishery if they conflict with the Treaty. As alluded to above, this issue has not been addressed to the satisfaction of the Pacific Island States and is one of those that is sub-ject to ongoing negotiations. The only agreement that has been reached on this is a 60-day notification of changes to national laws by the Pacific Island States.

c) US Vessels to Fish under the VDS: This has been accepted. US vessels will be given 8,000 days from the PNA and 30 days from non-PNA countries in return for USD $63 million. There is a process of biennial review to take into account changes in the fishery, changes to fishing power and price of tuna.

d) Broader Co-operation and Domestic Development: the reshaped Treaty provides for the development of a Memorandum of Understanding (MoU) in which the more specific aspects of US assistance towards broader co-operation in domestic development will be facilitated. How-ever, these commitments are not binding, but nonetheless provide a framework for the Pacific Island States and the US to discuss issues per-taining to domestic development.

Achieving a multilateral access arrangement in which days are allocated for a fixed amount of money against the backdrop of an instrument that creates a seller’s market has not been easy. Days have become more valuable as hard limits are applied to the PAE. The complexity with the Treaty has been how to contribute days to the 8,000-day pool without undermining the value of the VDS. The value of the days contributed to the Treaty is exacerbated by the fact that 15% of the value of the 8,000 days being paid for by the US tuna industry has to be shared equally, including with non-PNA States who do not contribute to the value of the Treaty. This reduces the proportion of funds available to pay the PNA for the days they contribute to the pool at above the minimum bench-mark. The PNA agreed that in order to be able to contribute to the Treaty pool, the days contributed would have to be sold at USD $5,500/day. While this is

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only 10% above the minimum benchmark price for a day, it was a compromise reached on the basis that the 15% equal share which is paid to all Parties will be reduced.

The PNA have struggled to agree amongst themselves on whether days to be contributed to the Treaty are to be taken “off the top” or “contributed” from their PAEs, reflecting in large measure the value they now attach to the VDS because of its impact on revenue. The implication of taking days off the top, or have it contributed from their respective PAEs, lies in the ownership of those days. Taking the days off the top implies that the PNA do not own those days, whereas contributing days from their PAEs suggests that they own those days. The latter is consistent with the approach of a rights-based regime. However, the level of revenue can be the same whether days come off the top or are contrib-uted by Parties. If Parties contribute days equivalent to the effort in their EEZs, they would get same amount as when it is taken off the top. By allocating days back to Parties, which effectively means taking “zero days off the top” allows Parties to choose what to do with their days. However, taking days out of PAEs by allocating all days off the top for the Treaty would result in Parties losing control over those days.

Conclusion

The Treaty has gone through three stages in terms of the relationship between the Parties and the US and despite the limitations articulated in this article, it has been a central feature of regional co-operative fisheries management in the WCPO. Initially, the Treaty was imperative for both the Pacific Island States and the United States, because US legislation at the time did not recog-nize national jurisdiction over tuna and provided for sanctions to be imposed on States that took action against US vessels for breaching national law. This severely damaged relations between the US and Pacific Island States and the threat of sanctions deterred investment in region. In the initial stages, the core of the Treaty was the responsibility of the US government to ensure that its vessels complied with the national laws of the Pacific Island States and to not apply sanctions or trade restrictions to the Pacific Island States for enforc-ing their national laws. These responsibilities also included ensuring that US vessels comply with a standard set of conditions for fishing by US vessels, and payment by the US government and the US tuna industry. The nature of the Treaty at this point required all Pacific Island States to be Parties for it to be effective. The imperative of dealing with the US tuna policy was removed in 1992 when the US asserted management authority over tuna in its own waters



and at the same time recognized the assertion of jurisdiction over tuna by other States.28

Once US tuna policy changed, the Treaty essentially became an instrument of economic cooperation, albeit a valuable one, providing attractive condi-tions for the operation of US vessels which could fish in multiple EEZs under a single license and a standard set of key conditions, and relatively high returns for the Pacific Island Parties, as well as establishing important MCS precedents. A key feature of the second stage was that providing guaranteed access to the US fleet was essentially costless in financial and economic terms as there were no overall limits in the fishery; and the application of pre-agreed conditions to US vessels did not significantly constrain the exercise of sovereign rights by the Pacific Island States.29

In the third, and current, stage, the implementation of the WCPF Convention and the need for the application of a new set of conservation and management measures have complicated the relationship between the Pacific Island States and the US. Among other implications, the Treaty has resulted in fishing effort by US purse-seine vessels in the WCPO not being subject to the limits applied to other foreign fleets, creating an incentive for expansion of the US fleet, to some degree at least at the cost of development of domestic Pacific Island fleets and reducing the relative returns to the Pacific Island States. Furthermore, the US fleet has been reshaped because it has attracted to the US flag a number of vessels apparently controlled by non-US interests with a different pattern of operation that may be less beneficial to the Pacific Island States than the historical US fleet. The structure of the Treaty has effectively placed some constraints on the exercise of their sovereign rights by Pacific Island Parties to apply conservation and management measures to US vessels. As a result, although the Treaty has remained a valuable economic instrument, it has also become, in some respects, a significant obstacle to rational management of the region’s tuna resources.30

The challenge for the Pacific Island Parties and the US is to build on the economic value of the Treaty and the robustness that has made it relevant for over 20 years, but reshape it to fit the complexities that arise from the need for measures to conserve and manage the region’s tuna resources.

28 FFA, Pacific Island Parties’ Strategy for Negotiation of the Extension/Renewal of the Multilateral Fisheries Treaty with the United States, Paper prepared for the Friends of the Chair Meeting, June 2009, Honiara, Solomon Islands (Honiara: Forum Fisheries Agency, 2009) p. 2.

29 Ibid.30 Ibid.

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The reshaping of the Treaty to meet the new international fisheries para-digm in the region has not been without its difficulties. The tensions arising from the Treaty renegotiation reflect the difficulties in shaping an arrangement that fulfils the aspirations of the different sides, especially against the backdrop of a new international legal framework that affirms the property rights of the Pacific Island States. The VDS has given the Pacific Island States and, in particu-lar, the PNA, more options to develop their fisheries, and maximize the value of their fishery. The VDS and Treaty are not mutually inclusive instruments. The VDS on the one hand is an instrument that creates a market environment, and spawns competition amongst fishing vessels that wish to fish in the EEZs of the Pacific Island States. It creates scarcity and flexibility in responding to changes in prices and demand for days. The Treaty on the other hand removes that flexibility, and does not respond to changes in fish prices and demand for days. Therein lie the philosophical issues surrounding the renegotiation of the Treaty. The challenge for the two sides will be to reconcile these differences while maintaining their economic and geopolitical interests at the same time.

Documents

Reshaping International Fisheries Development: Assimilating the Treaty on Fisheries between the Governments of Certain Pacific Island States and the United States under the PNA Vessel