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Summary of the International Fisheries Trade Activities |
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SUMMARY OF THE INTERNATIONAL FISHERIES TRADE ACTIVITIES 1. At the multilateral level, the Food and Agriculture Organization Committee for Fisheries is considering the development of a new binding international instrument on port state measures. It was agreed to launch this process, but it is not an immediate help since it will be a two year process to develop and take up at the next COFI meeting in March 2009). In the meantime, the prospect of a binding instrument with both rights and duties for port states like Japan and its implications for Russian IUU can be noted in future bilaterals with both countries, but especially Japan. 2. At the regional level, there is an APEC project Canada is launching (with US and Mexico co-sponsoring) and it will include sea urchin as a case study on IUU fishing. It is planned to be completed within a year from now and it will provide a good profile of this particular issue and the report will make some recommendations that Russia and Japan can respond to. Lori Ridgeway, Director General, International Fisheries Policy, DFO emphasized the importance Canada attaches to this forthcoming case study at the annual APEC Fisheries Working Group meeting two weeks ago (the same group that will examine the case study when it is completed a year from now), and the Japanese and Russian officials who were there took careful note. 3. At the bilateral level, Gor Ruseski, raised this issue with Japan on the margins of a UN meeting in May particularly the catch documentation/certification scheme between Russia and Japan. In response, the officials explained that the scheme has been in place for a few years now, but the documentation is showing up on the entire product being brought in (both legitimate and IUU) and so it wasn't working, there has not been any review or assessment done to date. Mr. Hashimoto has reported that a greater official inspector presence from Russia has the potential to impact the illegal product importation. Since the UN meeting, the Japanese government is preparing more specific information on the catch documentation/certification scheme. There are plans to address the issue with the Russians at the North Atlantic Fisheries Ministers Conference coming up in late June. The meeting will be dedicated to discussion of progress on combating IUU in the region. Russia is a member of NAFMC the DFO is preparing our delegation to talk to them on the margins about the IUU sea urchin, especially the enforcement aspect. When a Russian enforcement presence is in the area (e.g., during the Putin visit to Japan in late February), fishing drops off, market demand increases and prices rise. 4. Next steps: (aside from bilateral opportunities as they come up at all levels) Prepare letters to Russia and Japan at the Fisheries Ministers level expressing Canada's concerns with the situation and hopefully suggesting some concrete areas where progress could be made, catch documentation/certification scheme improvements and/or examples of periods when enforcement presence (either Russian fisheries or Japanese inspectors) was up and IUU was down. There is also the option of a similar formal correspondence going through our respective embassies (my Foreign Affairs colleagues have been briefed on this issue as has the Ambassador for Fisheries Conservation Loyola Sullivan). With the letters, these would be more effective if the US was making similar interventions and there were concrete examples or suggestions to offer.
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SUMMARY OF THE PROCEEDINGS OF THE SEA URCHIN SUMMIT
BACKGROUND
The red urchins are harvested for the gonads or Uni. Uni is a valuable delicacy sold primarily in Japan. The Red Sea Urchin fishery is a successful small scale fishery in BC. It is well managed, environmentally sustainable and generates wealth for participants and coastal communities. THE RED SEA URCHIN FISHERY and THE PACIFIC URCHIN HARVESTERS ASSOCIATION The Pacific Urchin Harvesters Association (PUHA) is a leader in co-management and research with a focus on sustainability, maximizing economic returns from the allowable harvest and cooperating with community groups. The urchin fishery had its first significant landings in the late 1970’s and the fishery grew slowly until the late 1980’s when effort and landings increased exponentially. The landings peaked in 1992 when DFO implemented coast wide TAC’s. During this period of rapid growth the typical “derby style” openings resulted in supply gluts, low prices and poor safety practices. In 1994, the PUHA facilitated a Voluntary Individual Quota system and in 1996 the Department of Fisheries and Oceans sanctioned a government Individual Quota Program. The implementation of the VIQ and the subsequent IQ program stabilized landings, improved fisheries management, increased prices and improved safety. The PUHA funds science and management from a budget of just over $600,000 annually. The budget is approved at the annual general meeting of the Association and a work plan is developed with the DFO. The annual Association fee is $5,500/licence which is paid to the PUHA for a validation log book which is required before commencing fishing. Due to the devastating market impacts of the Russian IUU fishery many fishermen cannot sell or market their product and therefore have not required a validation log book. This season only 70 licences out of 110 requested a validation log book and paid the $5,500 Association fee, leaving a $220,000 budget shortfall. The market limitations and subsequent decline in fishing activity have made it impossible for PUHA to fully fund all of the current science, management and operational commitments.
Summary of Benchmark Study Findings The Japanese urchin market has an annual consumption of about 6,000 MT of uni, Japan remains the main market for these products even as Japanese cuisine is the fastest growing food service category in many other parts of the world. Canada in aggregate has the 4th largest legal urchin fishing industry in the world trailing Chile, Japan and the US. Japan and California are the primary markers used for comparison in this study. The Russian IUU fishery would jump Russia up to #3 if it were included. It is interesting to note that while Chilean fishery is by far and away the largest in terms of volume, Japan’s is the highest valued. The landed prices obtained by each of these producers is generally categorised into 3 tiers: Japan at the highest level, the US and Canada in the middle and less developed countries including Chile, Russia and Mexico at a lower level. It is especially hard to beat Japan on the quality side because they may be more accurately characterized as cultivating their product, as opposed to simply harvesting it. The BC fishery is sustainable, our management regime is effective but it is more costly to industry in comparison to other producers because intensive regulatory measures, including on-grounds monitoring and comprehensive validation, and research are fully funded by industry. These activities are either not required or are partially funded by government in other countries. Harvesting and transport operations are efficient in good part because of high daily harvest levels that allow certain economies of scale with harvesting, packing and transport. The distances from the main fishing grounds allow the accumulation of more handling impacts and higher costs in comparison to Japan and California, considered the two premiere producers for the purposes of this study. The post-harvest transit times to the plants in their fisheries are measured in hours while product off BC’s North Coast can take days. This requires extra care to get the same results. The greater distances also mean we face higher costs, especially from the North Coast. Developing countries have advantages in some respects because the pay rates are lower. The rise of a Russian Illegal, Unregulated and Unreported (IUU) fishery confounds matters. This fishery produces a product comparable to domestic Japanese sea urchin at prices legitimate producers simply cannot match because normal regulatory limits and costs simply do not apply. It is identified in the study as the biggest problem facing legitimate suppliers simply because of the market impacts from the volumes and low prices involved. 200 - 600 tons a week (approx 10,000 tons annually) are landed at the Japanese port of Hanosaki where it is picked up by Japanese processors, flooding the system and depressing prices and causing severe disruptions throughout the whole Japanese urchin market. The impact of the Russian IUU urchin fishery on legitimate producers is a conspicuous example of how critical economic factors are to the sustainability equation. IUU fisheries are a large and growing problem around the world and effective solutions require internationally recognized and applied principles, tools and regulatory policies which are coherent across all fisheries. In this case, the location and direct delivery ports of this IUU fishery and the limited number of interests involved may provide an opportunity to find and test workable solutions for wider application.
Industry Panel on the Current State of Sea Urchin Industry in BC The industry panel consisted of processors and fishermen who explained how the Russian IUU fishing had affected their current business Kiku Fisheries, William Choi For over 25 years, Kiku Fisheries Corporation has been a leading supplier of sea urchin products to the world. The company focused almost entirely on sea urchin and has suffered the most drastic reductions. Over the past three years the company has been reduced from biggest BC urchin processor to one of smallest. As recently as 2002 the company employed over 125 employees for 8-10 months/year. This year the company has cut staff by over 70% and revenue is less than 20% of previous years. Even Revenue Canada has contacted the Company to enquire to the drastic drop in earnings. Grand Hale Marine Products, Francis Chueng In 1989, Grand Hale Marine Products Company Limited was established in Vancouver, B.C., Canada. Starting as a 5,000 square foot processing plant, Grand Hale processed fresh Sea Urchin Roe for the Japanese market. The company has grown and diversified and now has a 50,000 square foot facility in Richmond and a 18,000 square foot facility in Port Edward. The company normally employees 150 people year round but revenues from the sea urchin have declined severely and there were forced layoffs during the sea urchin season from November to March this year. Hi-To Fisheries Hi-To Fisheries has processed sea urchin for over 28 years and employees over 100 full time workers during the normal sea urchin season. This year the company only employeed 30 workers on a part time basis. The company sea urchins sales have declined drastically over the past 5 years and they are very concerned about future. There needs to be more value adding and new markets. They used to ship 50 tons of green sea urchins per year this year they shipped 1 ton.
Territory Seafoods Employed over 75 employees in the past but this year only 20 employees. It is very difficult to survive the current situation. The biggest factor is Russia IUU. Drastic change needed as this industry is on life support. West Coast Green Sea Urchin Association The green sea urchin fishery is in a total collapse with only 12% of the TAC harvested this year. It is questionable if there will be a fishery by next year. Problem is directly related to the Russian IUU fishery. Red Sea Urchin fisherman The current situation has had a dramatic effect on the fishermen. There are fewer divers, tenders and crewmen who want to work in the industry now. Costs are up and prices are down. No young divers recruiting to fishery. Safety is compromised (smaller crew sizes). California Sea Urchin Commission California can compete with legitimate players. BC and California should take joint approach… interests are shared.
Monitoring Programs Don provided a history of fishery from the pre-IQ times to today and outlined the many elements and objectives (not just enforcement) and roles of the Dockside Monitoring Program (DMP), funded 100% by industry. The current problems are urgent and significant. There are only 61 red urchin licences active currently (out of 110); and only 41% of RSU TAC has been caught this year to date, vs 85% at this time normally. The situation is worse with the Green urchins as less than 7% caught and the season virtually over. The DMP costs have risen per pound of harvest, while prices have dropped. D&D knows that industry cannot afford current cost burden and is looking at ways to re-structure costs.
Science and Management Juanita provided an explanation of the “cycle” of fishery review, stock assessment, and fishery management. The relationship between DFO and urchin harvesters is key to its effectiveness. BC is a far-flung area, five regions are assessed; estimating biomass to set quotas. The fishery management toolkit comprises minimum size limits, limited entry, IQ, area licensing and area quotas with all the activities are funded by industry through a Joint Project Agreement. We’re here for the long haul and need to explore alternative ways of gaining information needed to manage the fishery at lower cost. We also need to work urgently to assess where we’re going.
Current Update on the Japanese Market and Russian IUU Situation Hashimoto-san is based in Sapporo and has worked with Russians for 20 years, providing him with a unique and comprehensive understanding of the problems. IUU fisheries in this area are big problems, not just in urchins, but in other fisheries like salmon and crab. Basically the impacts relate to oversupply into Japanese market. Over the last three years, imports of urchins to Japan from Russia have exploded. He is aware of discussions between Canadian, Japanese, and Russian governments and realizes it is an international problem with much of the responsibility on the Japan side. His ideas involve continued discussions with Russian and Japanese officials in an effort to reach a compromise situation to stabilize the market. The current situation is not good for Japanese processors and marketers.
Canada’s Federal Response to Russian IUU Situation IUU fisheries worldwide are problematic and represent an estimated value US$ 4-9 billion/yr.
“The Collapse of Order in the Russian Far East” Since the fall of communism, massive events in Russia have been largely ignored. In the far east “everyone’s a poacher” out of simple necessity. Russia now like the “wild west” with commerce dominated by small-scale (poachers) and organized crime. A huge percentage of the Russian economy is controlled by criminals and there is a distinct lack of control over harvest of natural resources which is threatening numerous species. Harvests are clearly not sustainable. This situation is persisting, and growing in spite of the best intentions of ordinary Russians
Brand Canada
Urchin Summit Working Group Sessions Given the economic crisis described today, we must develop and implement strategies to effect positive change, both short term and long term. Participants organized into working groups to tackle four broad topics: Government policy – Russian IUU Fishery; Government policy – Fishery Management/Science; Operational Efficiencies; Marketing. 1. Operational Efficiencies This is an area of direct industry control and the focus was on steps needed to improve the bottom line, for example: Quality, Yields, Costs, Transportation and/or Handling methods. Quality and yield – areas, times; pay based on recovery and yields with a standardized grading system, educate fishermen (color charts, tray size)
2. Marketing & Value Adding Given the realities of the current Japanese market and recognizing current budget constraints, what can we do to improve the marketability and values for our product? Specific initiatives might include Market research, Product development and/or Customer service. PUHA continue CAFI program, trade shows in Asia, particularly China to diversify markets, use website to educate US and domestic markets, for Japan – get feedback from end consumer
3. Government Policy: Fishery Management/Science Given the spirit of co-management in the BC urchin fisheries, list short term cost relief strategies not compromising sustainability OGM monitoring at plant vs. dock level – water loss
4. Government Policy: Russian IUU Situation List specific strategies to influence positive change in the Russian urchin fishery and the Japanese market Work with Ottawa to apply pressure to Japan first, Russia second, follow up of international forums (get and distribute daily intel on Russian landings); Pursue anti-dumping; Follow up on port validation req’ts; coordinated approach – w/in govt, externally (AKA)
SUMMARY AND RECOMMENDATIONS The Pacific Urchin Harvesters Association is a leader in co-management and research with a focus on sustainability, maximizing economic returns from the allowable harvest and cooperating with community groups. The industry has been devastated by the Russian IUU fishery with only 50% of the total allowable catch harvested this season due to the market collapse. This has resulted in the loss of approximately 300 full time shore workers jobs, millions of dollars in lost export revenues and the industry cannot fully fund all of the current science, management and operational commitments.
In response to these challenges the following actions are recommended:
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SEA URCHIN SUMMIT FOLLOW UP PROGRESS AND UPDATE BACKGROUND The Sea Urchin Summit was held in Vancouver, B.C. on March 6, 2007. The Summit focused on the challenges and recommendations of the Benchmarked Competitiveness Study of British Columbia Sea Urchins which was commissioned by the British Columbia Seafood Alliance (BCSA) in co-operation with Agriculture and Agri-Food Canada (AAFC) for the Seafood Value Chain Roundtable. The purposes of the benchmark study are: securing an enduring competitive advantage for Canada in international markets and gaining a better understanding of the red sea urchin fishery on the Pacific coast of Canada.The Summit was hosted and organized by the Pacific Urchin Harvesters Association (PUHA). There was particular emphasis on the impacts of the Russian illegal, unregulated and unreported (IUU) sea urchin fishery which was identified as the greatest threat to the economic sustainability of Canada’s Pacific sea urchin fisheries. There were 48 participants who included:
SUMMARY OF RECOMMENDATIONS AND FOLLOW UP
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