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SUVA. Fiji (Fiji Times, Jan. 2) – The lack of transparency in the allocation of fishing licenses by the Fiji government is the cause of a crisis being experienced by the country’s tuna industry.

That is the finding of an Asian Development Bank assessment of Fiji's fishing industry.

The report recommends the Government put in place laws and regulations to completely restore transparency in license allocation.

"Without these actions the Fijian tuna industry will have no hope of achieving some degree of sustainability and eliminating the rent-seeking opportunities," the report said. "The tuna industry, which accounts for some three per cent of GDP is in dire straits. The industry is in serious decline, with major operators indicating that they are considering closing down. Catches have fallen by over 25 per cent over the past few years, a direct result of poor management of the industry."

The Fisheries Ministry issued more than 200 fishing licenses in 2003 despite Cabinet imposing an annual limit of 150.

The report said the criteria for obtaining licenses in Fiji were clearly defined but the allocation procedure was far from transparent.

Three senior fisheries officials are on suspension and facing charges in regards to allegations of corrupt practices involved in the granting of licenses.

In addition to the number of licenses substantially exceeding the authorised level, local fishing operators have to pay a higher charge for fuel than those who come from other countries.

This situation gives offshore operators a substantial competitive advantage over local operators who have to pay the tax while offshore operators do not.

Combined with the falling tuna catch, this situation has placed local operators in a dire position.

"Unfortunately, the FIAS foreign investment linkage study concluded these are the very firms that have the greatest positive linkages in terms of direct employment effects, export earnings, and indirect local linkages," the report said. "Thus, an absurd circumstance exists where one part of government is attempting to attract foreign investment through the provision of incentives, while another part is responsible for policies that threaten the existence of the firms that the incentives have attracted. The locally-owned fishing companies are burdened and threatened because they have to pay the highest rate of excise tax on fuel while some of their competitors pay none."

January 3, 2006

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