A Marshall Islands company has initiated talks with a Taiwan company to build a purse seine fishing vessel and is seeking local investment to fund half of the estimated $15 million cost.
If successful, it would become the first private sector-purchased and operated commercial fishing business in the Marshall Islands.
Bank of Marshall Islands President Patrick Chen is promoting the investment, saying it is high time for the private sector to get into commercial fishing by owning and operating purse seine vessels. “We need to explore this option for our economic benefit,†he said in late June.
For years, the Marshall Islands and other Pacific islands have been collecting only license fees from fishing nations that amount to a tiny fraction of the total value of the $3 billion in fish caught in the Pacific each year.
“This is in the national interest,†Chen told the Journal. “The Compact with the United States will end in 2023 and the Marshall Islands has to stop depending on U.S. and other foreign aid. We have to start making our own revenue and developing the economy.â€
Chen’s push for commercial fishing has some history to overcome. In the late 1980s, the Marshall Islands government bought two purse seiners, which were operated by American fishing companies. It also bought five longliners and gave them to local businesses to operate. All failed as fishing ventures within a few years of their start.
But Chen believes that the time is right for private sector involvement in large part because he sees a higher level of business expertise in the country and established links to successful fishing companies overseas that provide the foundation for successful joint ventures.
The fishing venture is being promoted through the Marshall Islands Service Corp., an offshoot company of the bank established several years ago. It currently provides payroll and other business management services to local firms.
Chen and MISCo officials have been discussing the building of a new purse seiner with Taiwan-based Ching Fu, a major shipbuilding and fishing company.
Another option Chen is pushing the Marshall Islands government and the Marshall Islands Marine Resources Authority to consider is letting MISCo be the private sector partner with Taiwan-based Koo’s Fishing Co., which now operates one purse seiner in a joint venture with MIMRA, the government’s fisheries department. High-level government officials acknowledge the inherent conflict of interest for MIMRA, a regulatory body, to be engaged in a joint venture with a company fishing in Marshall Islands waters. But MIMRA established the joint venture as part of the Marshall Islands’ goal of gaining more than license fees from the industry.
“Before, no one in the private sector was interested (in a joint venture), so MIMRA did the joint venture with Mr. Koo,†Chen said. “Now the private sector is interested. It’s an idea to explore.â€
With Minister of Finance Jack Ading’s announcement in late June of cabinet-endorsed reform efforts aimed at “state owned enterprises,†Chen’s proposal may gain some traction in the future.
Getting Marshall Islands private investment in commercial fishing is essential to the long-term economic development of the Marshall Islands, said Sultan Korean, the Bank of Marshall Islands compliance officer who works closely with Chen. “The total value of tuna exports from Marshall Islands is substantial,†Korean said. “If we retain some of this revenue it will help the economy.â€
Chen said a partnership with Ching Fu to build a new purse seiner will need an investment of $8 million from the Marshall Islands so the controlling interest is here, not in another country. “If we don’t put up half of the money, someone else will control the business,†Chen said. “If we put our money in, we will own it and run it.â€
“Key to this is for people in the Marshall Islands to get involved in and learn all aspects of the fishing business - not just let a company from another country to run it for the Marshall Islands as happened in the past failed ventures. We need knowledge transfer. If we do it, we learn to do it.â€
Korean said, “Marshallese people need to understand that if local investors get into this industry and significant revenue is returned to the Marshall Islands, it will help sustain and stabilize the government¹s budget after 2023 when the Compact funding expires.â€
