US embassy cable - 05TAIPEI4788

UNCLAS SECTION 01 OF 02 TAIPEI 004788 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC 
STATE PASS TO AIT/W 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958: N/A 
TAGS: ECON, SENV, EFIS, TW, ESTH, Trade 
SUBJECT:  Taiwan's Tuna Association Blames Taiwan and Japan 
Governments for Reduction in Big-Eye Quota 
 
1.  Responding to reductions in Taiwan's Atlantic big-eye 
tuna quota adopted by the International Commission for the 
Conservation of Atlantic Tuna (ICCAT)on 18 November, Edward 
Huang, Secretary-General of the Taiwan Deep Sea Tuna Boat 
owners and Exporters Association (TTA), complained that the 
reduction stemmed from Taiwan's failure to recognize its 
responsibility to control Taiwan-owned vessels flying flags 
of convenience, coupled with Japan's desire to enable 
Japan's Atlantic tuna fleet to survive in an ever more 
competitive market.  He said that even though the 
restrictions would allow for fifteen ships to continue 
operating in the Atlantic next year, it was likely that his 
membership would not send any ships to the Atlantic in 2006. 
End Summary. 
 
2.  Huang complained that his membership, which he says 
complies with all existing regulations, is being punished 
for the misbehavior of the convenience-flagged vessels, 
largely because Taiwan's government has failed to develop 
any mechanism to deal with the convenience-flagged vessels. 
Despite recent announcement by Taiwan's Council of 
Agriculture (COA) that the government would take steps to 
control the convenience-flagged vessels, COA officials as 
recently as June, 2004 stated that Taiwan's government has 
no responsibility to regulate vessels flagged in other 
countries, nor does Taiwan law provide them the authority to 
do so.  The problem of convenience-flagged vessels in the 
Tuna industry has long been known to Taiwan officials. 
Huang said that the government's failure to deal with the 
problem in a timely fashion left Taiwan in an untenable 
position at the recent ICCAT meetings. 
 
3.  Local fishery officials admitted that Taiwan currently 
lacks appropriate regulations to govern the convenience- 
flagged vessels.  Premier Frank Hsieh has directed COA 
officials to determine the composition of the Taiwan-owned, 
convenience-flagged fleet and to devise a method for 
regulating it.  The DPP's LY caucus will initiate 
legislation amending the current fishery law to more 
efficiently manage convenience-flagged vessels.  The fishery 
officials emphasized in a press conference that the 
administration would proceed with plans to scrap 97 deep sea 
fishing vessels in 2006, after it has completed the 
scheduled destruction of 63 fishing vessels in 2005. 
 
4.  According to Huang, Japan targeted Taiwan at the ICCAT 
meetings primarily because Taiwan is a Cooperating Non- 
Voting Fishing Entity, and is basically defenseless at the 
meetings.  He said that the convenience-flagged vessels of 
South Korea and various EU members were not targeted because 
their governments are in a position to defend their fleets. 
The Taipei Times, generally very supportive of the Chen 
Administration, also criticized the Administration for its 
failure to deal with the flag of convenience problem in a 
timely fashion, and for failing to defend those Taiwan 
fisherman who engage in legal fishing activities.  The 
Taipei Times went on to say that Taiwan's government was 
sacrificing the interests of Taiwan's fishermen in order to 
maintain a good overall relationship with Japan. 
 
5.  Huang went on to question Japanese motives for reducing 
fishing levels in the Atlantic.  He said that their real 
motive is to reduce competitive pressure on the Japanese 
fleet, which he described as inefficient and unable to turn 
a profit at current market prices.  He said Japan would 
welcome a rise in prices resulting from a reduction in 
supply, as the price rise would enable marginal Japanese 
vessels to remain in business.  Huang said that in his 
opinion, the root cause of over fishing is unrelenting 
Japanese demand and that reduction of Taiwan's quota and 
control of Taiwan-owned, convenience-flagged vessels would 
have little lasting impact, as other countries with large 
numbers of convenience-flagged vessels, notably Spain and 
South Korea, would move quickly to fill the void as long as 
demand remains high. 
 
6.  In addition to reducing quotas, ICCAT also imposed 
observer and inspection requirements which would force 
vessels in Taiwan's Atlantic tuna fleet to return to their 
servicing ports in South Africa at least once every three 
months, thus reducing the amount of time spent fishing to 
only eight months per year.  For the fifteen vessels that 
would be allowed to fish for big-eye in the Atlantic in 
2006, this restriction would make it unlikely that the 
vessels could make a profit.  Additionally, the twenty 
vessels which ICCAT's ruling would allow to fish for yellow 
fin tuna would be hard-pressed to meet rules dealing with 
the by-catch in big eye tuna.  In light of this, TTA is 
likely to forgo fishing in the Atlantic altogether in 2006. 
 
7.  In addition to complaints about Taiwan's failure to 
regulate convenience-flagged vessels, TTA says that the 
proposed government subsidies to the Atlantic fleet are 
inadequate.  According to Huang, the subsidies, 
approximately USD 54,000 per vessel for suspending 
operations for one year or USD 540,000 for the 
decommissioning and destruction of a vessel would not come 
close to mitigating the economic impact on the fishermen. 
He said that the $54,000 would not cover the cost of sailing 
the vessels back to Taiwan from their current anchorage in 
South Africa, and the $540,000 would not cover the cost of 
the boat, let alone address the loss of income. 
 
8.  Huang also expressed fear that the Japanese would try to 
take a similar approach with regard to Pacific Fisheries. 
However, due to the fact that Taiwan is a voting member in 
the Pacific association, he said that TTA would be better 
able to defend itself in the event that Taiwan is again 
singled out for quota reductions.  He said that Japan is 
likely to again use conservation issues as a means to 
manipulate the industry to protect Japan's tuna fleet. 
 
9.  Comment.  TTA's main complaint is that Taiwan's 
government is punishing legitimate fishermen because of its 
inability or unwillingness to tackle the problem of 
convenience-flagged vessels.  The problem has been ignored 
for many years.  AIT/K first reported on the issue in fall 
of 1997. Taiwan-owned convenience-flagged vessels generally 
fly the flags of Cambodia, Mongolia, Equatorial Guinea, and 
Bolivia, none of which take any measures to regulate fishing 
vessels.  Registration can generally be accomplished on 
line, with Mongolia guaranteeing registration within one 
hour of application.  Such registration policies make it 
difficult for any government to keep track of registration 
of vessels by its citizens.  Taiwan's situation is further 
complicated by its lack of diplomatic standing, which makes 
it difficult for Taiwan to induce these countries to 
regulate "their" fleets.  It will be difficult for Taiwan's 
current administration to get legislation passed to enable 
them to deal with these nominally foreign vessels.  Given 
all of this, it is likely that Taiwan-flagged vessels will 
continue to be forced out of the market.  End Comment. 
 
Thiele 
 
Paal