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Offer Highlights Tuna Plight

As unlikely as it sounds, the fate of the South Pacific’s dangerously over-fished and lucrative tuna stocks may depend on a 24-year-old woman called Li Li. She fronts a shadowy
18 Sep 2014 00:57
Offer Highlights Tuna Plight

As unlikely as it sounds, the fate of the South Pacific’s dangerously over-fished and lucrative tuna stocks may depend on a 24-year-old woman called Li Li.

She fronts a shadowy company flying the Chinese flag over a massive and sophisticated expansion of fishing in our neighbouring waters, a fishery worth around NZ$5 billion (FJ$7.7  billion) a year.

The company is even counting on the fact that when it exceeds official tuna quotas, Beijing will do nothing about it.

China Tuna also quietly celebrates that no environment groups seem to have noticed it.

Li wholly controls China Tuna Industry Group Holdings Ltd which, despite its name, is registered in the Cayman Islands.

The chairman of the board is her father Li Zhenyu, 49. It claims a fleet of 24 high technology boats flying the Chinese flag, taking big-eye tuna across the South Pacific.

With the help of Frankfurt headquartered Deutsche Bank AG, China Tuna launched a NZ$120-$240 million public share offering on the Hong Kong Stock Exchange to fund expansion.

Paperwork for that offering reveals China’s casual disregard for any attempts by Pacific nations, to control the tuna fishery.

An alphabet chowder of organisations tries to police the tuna take with the Western and Central Pacific Fisheries Commission (WCPFC) setting quotas on the annual take.

Scientific report

Last month a scientific report showed bigeye was heading toward an Atlantic cod-style collapse with stocks just 20 per cent of what they would have been if left unfished.

“If we want a train wreck instead of a sustainable fishery, we should keep going the way we are now,” WCPFC’s outgoing executive director, Glenn Hurry, says.

The Forum Fisheries Agency (FFA), which controls access to Pacific nation’s exclusive economic zones, has been alarmed by the growth in the Chinese fleet and the high level of subsidies Beijing gives its deepwater fishing boats.

China wants to have 2300 vessels in its deep water fleet by the end of next year.

China Tuna’s operations

Enter Li Li’s China Tuna which, while flying China’s flag, is undeniably capitalist company registered in a tax haven.

In 2013 profit before tax was NZ$27.2 million; Cayman registered they do not pay tax.

China Tuna’s fishing operation, based out of Dalian, operates 24 ultra-low temperature boats, catching mainly bigeye on longlines.

Able to snap freeze down to minus 55 degrees Celsius, it targets premium tuna used in high-end sashimi with 80 percent of their revenue from bigeye.

The company boasts of high technology fishing-finding equipment and claims to even be able to pick out the best bigeye schools before fishing them.

China Tuna claims to be the largest Chinese supplier to the Japanese market as well as developing new markets in China.

Tough disclosure rules on the Hong Kong exchange mean China Tuna had to confess in its five-centimetre thick documents to transgressions.

It says catch volumes in the Pacific by vessels flying the Chinese flag exceed the quotes over four years.

“China has not been, and will not, under any sanction system which may be adopted in the future, be subject to any penalties for such historical non-compliance,” the documents say.

Lobbying

Regional fishing organisations (RFMOs) had no mechanisms available to “impose any sanction against China”, they say, noting bigeye limits are set against governments, not companies.

“In the event of any breach of international conventions by a fishing company, the RFMOs would need to first notify [Chinese] authorities of any breach … and such [Chinese] authorities would in turn notify the relevant [Chinese] fishing company.”

It has never happened, China Tuna says, even though they admit to overfishing.

“Currently, we plan to continue to operate in the Pacific Ocean and Atlantic Ocean in substantially the same manner as we presently operate,” China Tuna says.

The document says that environmental groups have been lobbying for the imposition of new restrictions on tuna fishing.

It says these groups have not yet noticed companies like China Tuna but if the focus of environmental and non-government organisations came on them, it “may impact the public perception of the industry, consumer preferences or the demand for tuna products”.

In a bid to control overfishing, some attempts are being made to block the licensing of any more boats but China Tuna will use the float money to buy out old boats and their licenses and replace them with more sophisticated vessels.

China Tuna’s float is virtually unnoticed in the Hong Kong business press but an industry source drew it to Star-Times attention due to the involvement of Deutsche Bank which has proclaimed environmental, social and governance principals.

The bank’s Hong Kong communications head Michael West said the bank took its commitment to sustainability seriously.

 




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