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Joint venture plant to acquire two more purse seiners

By Giff Johnson MAJURO, Marshall Islands (Marianas Business Journal, Oct. 24, 2011) – In repeated attempts to jumpstart a domestic commercial fishing industry in the late 1980s and early 1990s, the Marshall Islands bought a purse seine fishing vessel and a group of longliners. But all these attempts failed financially.

In 2005, the Marshall Islands Marine Resources Authority (MIMRA) went into a joint venture with a Taiwan fishing company that had a major presence in the Marshall Islands. The partnership had experienced some hiccups. In 2006, for example, the purse seiner Marshalls 201 was seized by the U.S. Coast Guard for alleged illegal fishing near Baker Island. The purse seiner and its crew were taken to Guam for prosecution. The case was ultimately settled out of court.

Five years on, the joint venture Marshall Islands Fishing Co. is expected to net the Marshall Islands US$1 million this year. The success of this joint venture with Koo's Fishing Co. is spurring the Marshall Islands to consider adding two additional purse seiners to the business.

In 2010, the joint venture partnership managed by Marshall Islands Fishing Co. generated nearly US$800,000 for the Marshall Islands Marine Resources Authority, and is expected to increase to nearly US$1 million for 2011, MIMRA Director Glen Joseph said on Oct. 14.

"One joint venture vessel is worth license fees of about 25 vessels," Joseph said, emphasizing the benefit of the joint venture with Koo's. "It proves we don't need a lot of vessels to generate a lot of revenue. Revenue from the Koo's joint venture, license fees and fishing days traded are all revenue streams that support MIMRA operations and go to the [Marshall Islands government's] general fund," he said.

Fisheries revenue is projected to contribute US$2.5 million to the fiscal 2012 national budget.

MIMRA initially invested US$2.9 million in the joint venture in 2005, giving it a 49 percent share in the Republic of the Marshall Islands (RMI) 201 vessel. By agreement, MIMRA did not actually put up the money, but the investment was supported as a loan at 3 percent interest from Koo's that was paid off through revenues generated from fishing. It took four years to pay off the loan and the Marshalls began earning.

MIMRA is now looking to expand the joint venture to include more than the Marshall Islands, Joseph said.

"Nauru and Kiribati have expressed interest in the joint venture arrangement," he said. It's something we'd like to see happen - to engage broader cooperation [among islands] in developing domestic fisheries."

The Forum Fisheries Agency has been enlisted to provide advice on how a three- or four-party joint venture would work, and Joseph is hopeful that by the end of the year, progress on getting additional partners into the joint venture operation will be made.

Joseph said the benefit to Koo's of expanding its joint venture operation is that it gives the Taiwan-based company security and access to the fishery through its domestic links. All of Koo's fishing vessels and its mother ships that collect tuna for transport to canneries are flagged in the Marshall Islands, which operates the world's third largest ship registry.

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