PNG tuna firms forge ahead with break from Pacifical, gain gov’t backing for MSC drive

By Matilde Meregetti in Under Current News

Papua New Guinea (PNG)’s tuna fishing and processing firms have met in Manila, Philippines, on Sept. 18 (see photo above), to discuss the country’s plan to obtain an independent Marine Stewardship Council (MSC) certification, breaking away from Dutch marketing firm Pacifical.

They have also been backed by the PNG government, in the form of a memorandum of agreement (MoA) between the national fisheries agency (NFA) and the country’s Fishing Industry Association (FIA).

Some of the country’s FIA members intend to obtain their own MSC certification and terminate a collaboration with EU-based sales company Pacifical, which sells tuna from PNG and the other Parties to the Nauru Agreement (PNA) countries, Undercurrent News reported on Aug. 10.

Representatives of the NFA and FIA attended the meeting in Manila. MSC’s Bill Holden and consultant Marcelo Hidalgo (formerly a “product integrity manager” with Pacifical) also attended the meeting. Also at the meeting were representatives from Philippines fishing and processing firms RD Corp and Frabelle Corp, as well as executives from two joint ventures involving Fong Chun Formosa Fishery Company (FCF), the Taiwanese tuna trading giant, Nambawan Seafood and South Seas Tuna Corporation (SSTC).

FCF is partnered with Philippines-based investors in Nambawan and the Netherlands’ Jaczon, part of Cornelis Vroljik, and PNG interests, in SSTC. Also in attendance were representatives of Majestic Seafoods — a joint venture between Frabelle, Thai Union Group, Century Pacific Food, the largest canner in the Philippines, and local partners — as well as TSP Mariner Industries, and the Philippines’ Trans-Pacific Journey Fishing Corp, according to a FIA’s press release summarizing the meeting’s outcome.

Aside from FIA member International Food Corporation, part of Malaysian group Kumpulan Fima Berhad, which has a plant in PNG, “basically the whole PNG tuna industry” was at the meeting, Francisco Tiu Laurel Jr, of Frabelle, told Undercurrent.

At the Sept. 18 meeting the PNG firms reportedly set out their aims for MSC certification, establishing they need two areas certified: the fishery and the chain of custody. They are around 80% of the way to completing documents for MSC certifier SCS Global Services, and the point was made that there are “more than enough” NFA-certified observers to cover both domestic and locally-based foreign fishing vessels.

“Bilateral boats fishing in PNG’s [exclusive economic zone] may also be included in FIA MSC subject to audit and accreditation,” the meeting’s minutes showed.

“The attendance today demonstrates the commitment of all PNG stakeholders to have a
100% owned PNG MSC certification,” FIA’s press release said.

“The meeting agreed that attaining the PNG FIA MSC certification for the tuna fishery is
the first step towards eventually pursuing MSC certification for other national fisheries
such as the prawn [shrimp] fishery, crab fishery, lobster fishery, and beche-de-mer,” it said.

“The immediate benefits to PNG include improving the robustness of PNG’s national
governance framework, [and] opening new markets for PNG made products, which will result in the expansion of the domestic tuna industry production base, thereby increasing employment and foreign exchange receipts. It will also promote a global image for PNG as clean green sustainable, while adding value to PNG as a country that promotes a well-managed fishery resource,” FIA said.

PNG government’s support for the plan

The event in Manila followed the signing of the MoA between PNG’s government and the FIA on Aug. 30 to formalize the former’s endorsement of FIA’s MSC bid.

John Kasu and Sylvester Pokajam signing the agreement on Aug. 30, 2018. Photo credit: FIA

Managing director of PNG’s NFA, John Kasu, and FIA president Sylvester Pokajam signed the MoA to endorse the plan, the latter told Undercurrent. FIA produced the memorandum as proof.

Kasu did not respond to a request for further comment from Undercurrent, however.

Pokajam was recently re-elected as president of the PNG FIA, which represents the country’s tuna industry.

“FIA has already signed a contract with SCS to carry out the assessment and the respective work plan shall be discussed,” Pokajam told Undercurrent.

In the first audit, PNG will seek to get its licensed purse seine fleet — fishing skipjack and yellowfin tuna on anchored fishing aggregating devices (FADs), drifting FADs and free schools (unassociated sets) in both its exclusive economic zone and archipelagic waters — certified to the MSC standard, according to a statement from the FIA sent to Undercurrent.

This assessment’s scope would “exceed the units of assessments and scrutiny under the Pacifical MSC certificate”, according to the press release.

“In the later phase, global sourcing will be considered for assessment. Also, in the later phases, plans are in place to eventually have MSC certification for the prawn [shrimp] fishery after PNG has successfully attained the MSC certification for tuna fishery,” the release also reads.

“PNG FIA has finalized the scope of the assessment with the selected conformity assessment body (CAB) and signed the service contract with SCS Global Services.
PNG FIA is in collaboration with NFA technical divisions to prepare the required documentation required by SCS to undertake the assessment. The tentative plan is to have the CAB visit PNG in early 2019, to undertake their site visit and reviews,” FIA said.

Pacifical’s view

Asked about the reasons for obtaining a separate MSC certification, FIA’s president has claimed Pacifical is “not transparent with its accounts and financial operations and reporting”, as Undercurrent reported on Sept. 14. Pacifical and the PNA — whom the Netherlands-based sales company represents in the market — have rejected the claims of a lack of transparency, referring to it as “clearly mischievous and commercially motivated”, Undercurrent also reported in the same article, for which it requested comment from all involved parties.

Following the publication of Undercurrent’s story on Sept. 14, Pacifical sent a press release to its stakeholders referring to the story as “fully filled from top to middle of the article with incorrect and false information, which has deliberately been spread and edited by UCN in such a way to purposely damage Pacifical and sensationalize lies and fake news”.

Pacifical also suggested Undercurrent should have realized Pokajam’s accusations of a lack of transparency were “fake news, fully commercially motivated”, and that Pokajam’s claims mainly represented Filipino company Frabelle, rather than a majority of PNG’s tuna players; something Tiu Laurel rejected, adding Pokajam did not represent Frabelle directly in any sense.

Pacifical said Pokajam did “not speak on behalf of the PNG government or its [NFA], although he is continuously purposely trying to make it sound that way”. The participation of most of the PNG’s tuna players in the Manila workshop on Sept. 18, and the MoA signed on Aug. 30, however, seem to suggest that the bid for independent MSC certification is supported by the majority of the PNG tuna industry and also the country’s government.

Asked about the PNG’s MSC certification progress, Pokajam said: “Irrespective of what Pacifical may say, we are steaming ahead. Time will only tell”.

Pacifical’s press statement was also republished by Dutch media outlet Atuna, which is owned by Henk Brus, Pacifical’s indirect owner, and his wife.

Atuna republished Pacifical’s statement on its website on Sept. 14 and Sept. 17, in two slightly different versions, accusing Undercurrent of publishing “false claims” and lacking “journalistic integrity”.

Pacifical also said the certification would not benefit PNG, but the big Philippine companies.

“The largest part of the PNG tuna industry is owned by Philippine companies, so in fact if their PNG based companies would get their own MSC certification it would then mostly be eventually indirectly ‘Philippine owned’,” Pacifical said.

The statement defended Pacifical’s accounting, stating its financial statements are fully audited and approved by certified accountants in the Netherlands every year; though Undercurrent was not able to locate them, and the firm declined to share them.

As previously reported, Pokajam has claimed Pacifical promised “windfall revenue to PNA members, starting initially with 5% revenue sharing on a 50/50 basis”.

This would mean Sustunable took 2.5% and the eight PNA nations, and Tokelau, one-ninth each of 2.5%, Pokajam said. However, revenue has been less than promised, he claimed; today, it has declined to a “mere 2%”, so 1% for Sustunable, and one-ninth of 1% for the other nine countries.

Tiu Laurel had backed this, stating, “many of us in the [PNG tuna] industry [have] lost faith in Pacifical. PNG has funded most of Pacifical and it is getting almost nothing, there is no transparency in Pacifical.” Again, Pacifical rejected all claims of a lack of transparency.

It did admit that “after a lot of pressure from the market (and also FIA members) on Pacifical to lower its service fee, the Pacifical board decided to lower the
service fee from 5% to 2%”, but that this was done in order to make its products more competitive and accessible to consumers worldwide. This drop from 5% to 2% was previously reported by Undercurrent.

In the Netherlands, BV companies need to submit their financial statement to the Dutch chamber of commerce 13 months after the end of a financial year, while CV companies are exempted from doing so.

According to the Dutch chamber of commerce, Pacifical CV is owned and managed by Sustunable BV (and a silent partner that invested €30,000 in the company). Sustunable BV is owned by Brus Holding Europe BV. Brus Holding Europe is owned by Henk Brus, who is also the firm’s managing director.

Undercurrent mentioned in its Sept. 14 article that Pacifical’s financial statement was not available at the Dutch chamber of commerce, but also pointed out that Pacifical and Sustunable did not reply to a request by Undercurrent to share their 2017 financial statements.

Henk Brus and Maurice Brownjohn did not reply to a request for comment regarding the MoA between PNG’s FIA and the government, or on the Manila workshop.

Accusations to UCN
Undercurrent’s story titled “Trouble in MSC tuna ‘paradise’ as PNG seeks to break from Pacifical”, was driven by a desire to understand the reasons behind PNG’s intention to obtain its own MSC certification. Undercurrent requested comment from all the parties mentioned in the story, and included Pacifical and PNA’s official reply in its initial article.

Undercurrent is an independent media outlet and none of its partners nor employees have any direct or indirect financial interest in the seafood industry, nor in “damaging” Pacifical’s reputation, as claimed by the organization.

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