Palau Passes New Fishing License Revenue Distribution Law

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55 percent of profits to be equally divided between state governments

By Aurea Gerundio-Dizon

KOROR, Palau (Island Times, July 31, 2012) – The proposal to equitably divide all revenue derived from licensing foreign vessels to fish in Palau was signed into law yesterday.

But President Toribiong, even if he approved the new formula, said it would have been more equitable if the states with greater population will be provided more money.

The new formula for the division of fishing revenues is as follows: 15 percent goes to the national government; 55 percent will be equally divided among states; and 30 percent will be divided among states according to population of each state as stated in the most recent national government census.

The Governors’ Association, since Fiscal Year 2011, has been asking for the national government to release fishing revenues to the state governments.

The last time state governments received its share from the fishing revenues was in FY 2010, when the money was used to restore the 10 percent that was earlier slashed from each state’s block grant.

The bill with the new formula, when it was first submitted to the president for his signature, was referred back to the Olbiil Era Kelulau (OEK). Toribiong recommended that the OEK consider utilizing a different basis for determining the population in a state instead of following the recent national government census, which was done in 2005.

He said that population in Airai, for instance, has increased over the years since the last census by the national government.

"As the populations of the states of Airai and Koror continue to increase in proportion to the populations of the rest of the states of Palau, it will be even more important in the future for the Olbiil Era Kelulau to allot resources to where they are needed the most," Toribiong said.

However, the OEK still passed the same formula they approved earlier.

"Having it referred back to the OEK to consider Koror and Airai States’ concerns, under Article IX, Section 15, I cannot refer it back a second time so I have to approve it today in its present form," the president said in signing the bill into law.

After the national government gets its 15 percent share, the remaining amount to be distributed to the states is $1.393 million.

According to Vice President and Finance Min. Kerai Mariur, the shares of each state will be appropriated as soon as the new formula will be installed in the computer. Installation of the new formula is anticipated to be completed next week.

The new law requires the minister of Finance to submit quarterly reports to the Office of the President and the OEK stating any and all revenue derived from the licensing of foreign fishing vessels to fish in Palau’s jurisdictional waters. The report shall include the following information: to whom the license was granted, the amount of revenue derived from the licensing thus far; and the amount of revenue projected to be derived from the license.

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