APPENDIX H. - PROVISIONAL SCHEME AND SCALE OF CONTRIBUTION TO AN AUTONOMOUS BUDGET OF APFIC

INTRODUCTION

1. The financial constraint, impeding the implementation of planned or approved activities by the Commission, remains the major difficulty of APFIC. At the Twenty-fifth Session in 1996, the Commission recognized that FAO might not be able to fund all of APFIC’s activities in future and underlined the need for possible contributions by Members, namely, (1) annual contributions based on an agreed scale, (2) voluntary contribution by participating countries for specific activities, and (3) travel expenses of their delegates attending the sessions of APFIC Committees and Working Parties. The Commission requested Members to discuss these options with their competent authorities for further consideration at its next session.

2. At the Twenty-sixth Session of the Commission in 1998, several delegations were not ready to support the first option, i.e., mandatory annual contribution, while many expressed their support in principle to the second and third options. To facilitate further consideration of this important matter, the Commission agreed to establish an Ad hoc Legal and Financial Working Group to develop a self-sustaining financial mechanism under which APFIC would operate and manage its affairs more effectively.

3. In this connection, the Commission was reminded by FAO that APFIC belonged to the Members and that FAO’s role was that of a facilitator and coordinator. It is hoped that the Members would increase their efforts to support the work of APFIC and thus demonstrate their confidence in the Commission.

4. The recent survey on the future direction of APFIC (Document APFIC/LFWG/99/5) showed that 68 percent of the Members agreed that Members should provide contributions to support the activities of the Commission as specified in Article VIII of the Agreement. However, most Members preferred voluntary contributions by participating countries for specific activities than annual contributions.

5. This document outlines, as an example, the provisional scheme and scale of contributions to an autonomous budget that could be established as a means to develop a self-sustaining financial mechanism as directed by the Commission. It was patterned on the agreed principle for similar financial systems adopted by the General Fisheries Commission for the Mediterranean (GFCM) and the Indian Ocean Tuna Commission (IOTC).

CONTRIBUTIONS BY MEMBER STATES TO APFIC

6. At its Twenty-fifth Session, the Commission noted with appreciation that core funding of the APFIC Secretariat would continue to be provided by FAO pursuant to Article VIII.2 of the Agreement, in spite of the financial difficulties being faced by FAO just as in other public international institutions. However, a specific amount for such contribution could not be committed by FAO as its budget is decided by its governing bodies. Although the Committee on Fisheries, at its recent Twenty-third Session in February 1999, strongly recommended that the Council and the Conference should grant a substantially increased share of FAO’s Regular Programme to Major Programme 2.3 on Fisheries, the supplementary fund for APFIC’s activities is not likely to increase much more than the current level.

7. It is therefore essential that extra-funds for APFIC must be sought to ensure effective implementation of the Commission’s directives and decisions. Specifically, contributions by Members are required, both in cash and in kind, to support technical activities such as expert consultations on emerging issues, assistance as requested by Member States, collection and dissemination of fishery information and data, analysis of fishery production and trends as well as the state of fishery resources in cooperation with fishery institutions and researchers in the region. The contribution in kind by Members shall cover the costs of their participation at APFIC Sessions. For specific projects, attempt shall be made to collaborate with other regional bodies or donor agencies in their implementation.

8. In order to request for contributions from the Member States, however, amendments to the APFIC Agreement and Rules of Procedure and the setting up of an autonomous budget are required. These imply new obligations for the Members of the Commission and shall enter into force only after acceptance by a two-thirds majority of its membership and for each of them after their own acceptance (Articles II.7 and IX of the APFIC Agreement). The following possible schemes and scales of contributions by APFIC Members are therefore preliminary proposals to facilitate consideration of the Ad hoc Legal and Financial Working Group.

BASIC ASSUMPTIONS OF THE AUTONOMOUS BUDGET

9. The proposal on the Members’ contributions assumes that each APFIC member shall contribute annually its share to the autonomous budget in accordance with a scale of contributions to be adopted by the Commission, and that the amount that each member contributes shall be determined in accordance with a scheme to be adopted by the Commission.

10. Two basic assumptions for the proposed contributions are:

(1) The autonomous budget is adopted at each regular session of the Commission on the basis of an annual work programme of APFIC; and

(2) All current members accept the amendments to the APFIC Agreement relating to the provisions for the autonomous budget, and the amended Agreement enters into force for them.

11. It is suggested that each member’s contribution to the autonomous budget should consist of:

(a) a basic fee that is unrelated to either national wealth, fish production and/or export value; and

(b) a charge that reflects the member’s national wealth, fish production and/or export value.

The Basic Fee

12. The basic fee should be limited so that its payment does not cause too heavy burden on any member, but it should be substantial to secure a minimum basic stable income to the Commission to cover its administrative costs. It is suggested that 10 percent of the total budget will be covered by the payment of the basic fees. The amount shall be divided equally among ALL Members. Thus, in mid-1999, the total number of shares is 20.

The Charge Reflecting National Wealth and Fish Production

13. In order to determine the charge that reflects national wealth and fish production of each member, it is necessary to agree on standard measurement criteria, as proposed in the following paragraphs.

Measuring national wealth

	a) Low-income countries	per caput GNP < US$ 785 (Index = 1);
	b) Lower middle-income countries	US$ 3,115 > GNP > US$ 786 (Index = 2);
	c) Upper middle-income countries	US$ 9,636 > GNP > US$ 3,116 (Index = 3);
	d) High-income countries	per caput GNP > US$ 9,637 (Index = 4).

The sample of this measurement, as expressed as the Capacity-to-pay index, with a total of 45 shares, is given in Table 1.

Measuring fish production

16. The difference in price between major groups of species can be substantial. Such differences in value of fish produced should be taken into account in determining members’ fish production. However, due to the present weakness in collecting and disseminating value data from most Member States, the price index has to be included in the calculations of share allocations at the later stage.

17. The three-year average of fish production, excluding aquaculture, in Asia and the Pacific shall form the basis in estimating the production index of the Members. The volume of production, expressed in percentages of total fishery production in the APFIC region shall be weighed by the following criteria:

	a) Less than 0.50%	Index = 0
	b) 0.51-5.00%	Index = 1
	c) 5.01-10.00%	Index = 2
	d) 10.01-20.00%	Index = 3
	e) More than 20%	Index = 4

The sample of this measurement, with a total of 25 shares, is given in Table 2.

THE SCALE OF CONTRIBUTION

18. There are various ways of combining the measurement of national wealth and the measurement of fish production. In order to facilitate the consideration on the options, an autonomous budget with an hypothetical amount of US$ 800,000 per annum is presented in Table 3. It is expected that an autonomous APFIC budget of this size would be needed for the Commission to fulfil its mandate in a year.

19. The basic fee, 10% of the total budget, is US$ 80,000. Each member will equally share the annual contribution of US$ 4,000 regardless of national wealth and fish production.

20. For the balance of 90%, two options are proposed:

a) a combined charged based on national wealth or the capacity-to-pay index and the fish production index (Table 3); and

b) a split charge based on each index. In this case, it is suggested that the charge for the national wealth covers 40% and the fish produced charge covers the remaining 50% (Table 4).

Table 1. Members’ share relating to national wealth

APFIC Member	GNP per capita (US$)				Capacity-to-pay Index
	1994	1995	1996	Average 1994-96
Australia	17 980	18 720	20 090	18 930	4
Bangladesh	230	240	260	243	1
Cambodia	c1/	270	300	2852/	1
China	530	620	750	633	1
France	23 470	24 990	26 270	24 910	4
India	310	340	380	343	1
Indonesia	880	980	1 080	980	2
Japan	34 630	39 640	40 940	38 403	4
Korea, Rep.	8 220	9 700	10 610	9 510	3
Malaysia	3 520	3 890	4 370	3 927	3
Myanmar	c	c	c	c	1
Nepal	200	200	210	203	1
New Zealand	13 190	14 340	15 720	14 417	4
Pakistan	440	460	480	460	1
Philippines	960	1 050	1 160	1 057	2
Sri Lanka	640	700	740	693	1
Thailand	2 210	2 740	2 960	2 637	2
United Kingdom	18 410	18 700	19 600	18 903	4
Unite States	25 860	26 980	28 020	26 953	4
Vietnam	190	240	290	240	1
					45

Source: The World Bank Atlas 1996, 1997, 1998.
Notes:	1/	c. Estimated to be low-income ($ 725 or less).
	2/	Figure corresponding to the average of the two years for which data are available.

Table 2. Fish Production Index for the APFIC Member States, based on nominal catches from capture fisheries in the Asia-Pacific region, 1994-1996^1/

APFIC Member	Fish production (x 1 000 mt)					Production Index
	1994	1995	1996	Average 1994-96	%
Australia	201	205	192	199	0.52	1
Bangladesh	821	851	874	849	2.21	1
Cambodia	95	103	95	98	0.25	0
China	10 867	12 563	14 222	12 551	32.62	4
France2/	94	96	84	91	0.24	0
India	3 210	3 220	3 492	3 307	8.60	2
Indonesia	3 320	3 509	3 730	3 520	9.13	2
Japan	6 617	5 967	5 964	6 183	16.07	3
Korea, Rep.	2 358	2 320	2 414	2 364	6.14	2
Malaysia	1 068	1 112	1 131	1 104	2.87	1
Myanmar	751	758	805	771	2.00	1
Nepal	7	11	11	10	0.03	0
New Zealand	442	544	421	469	1.22	1
Pakistan	537	527	537	534	1.39	1
Philippines	1 852	1 862	1 790	1 835	4.77	1
Sri Lanka	221	229	225	225	0.58	1
Thailand	3 013	3 202	3 138	3118	8.10	2
United Kingdom	-	-	-	-	-	-
Unite States3/	369	389	367	375	0.97	1
Vietnam	915	889	811	872	2.27	1
Total	36 758	38 357	40 303	38 475	100.00	25

Notes:	1/	FAO (1998). FAO Fishery Statistics Yearbook 1996. Vol. 82, Capture Production. Table A-2.
	2/	Only nominal catches from Fishing Area 51.
	3/	Only nominal catches from Fishing Areas 71, 77 and 87.

Table 3. Scale of contributions to hypothetical APFIC autonomous budget of US$ 800,000 - Option a (combined charge)

APFIC Member	Capacity-to-pay Index1/	Production Index2/	Total Index	Share of 90% budget		Total contribution in US$ (plus 10%, basic fee)
				in %	in US$
Australia	4	1	5	7.14	51 408	55 408
Bangladesh	1	1	2	2.86	20 592	24 592
Cambodia	1	0	1	1.43	10 296	14 296
China	1	4	5	7.14	51 408	55 408
France	4	0	4	5.71	41 112	45 112
India	1	2	3	4.29	30 888	34 888
Indonesia	2	2	4	5.71	41 112	45 112
Japan	4	3	7	10.00	72 000	76 000
Korea, Rep.	3	2	5	7.14	51 408	55 408
Malaysia	3	1	4	5.71	41 112	45 112
Myanmar	1	1	2	2.86	20 592	24 592
Nepal	1	0	1	1.43	10 296	14 296
New Zealand	4	1	5	7.14	51 408	55 408
Pakistan	1	1	2	2.86	20 592	24 592
Philippines	2	1	3	4.29	30 888	34 888
Sri Lanka	1	1	2	2.86	20 592	24 592
Thailand	2	2	4	5.71	41 112	45 112
United Kingdom	4	-	4	5.71	41 112	45 112
Unite States	4	1	5	7.14	51 408	55 408
Vietnam	1	1	2	2.86	20 592	24 592
Total	45	25	70	100.00	720 000	800 000

Notes:	1/	From Table 1.
	2/	From Table 2.

Table 4. Scale of contributions to hypothetical APFIC autonomous budget of US$ 800,000 - Option b (split charge)

APFIC Member	Capacity-to-pay Index	Share of 40% budget		Production Index	Share of 50% budget		Total contribution1/ (in US$)
		in %	in US$		in %	in US$
Australia	4	8.89	28 448	1	4.0	16 000	48 448
Bangladesh	1	2.22	7 104	1	4.0	16 000	27 104
Cambodia	1	2.22	7 104	0	0	0	11 104
China	1	2.22	7 104	4	16.0	64 000	75 104
France	4	8.89	28 448	0	0	0	32 448
India	1	2.22	7 104	2	8.0	32 000	43 104
Indonesia	2	4.44	14 208	2	8.0	32 000	50 208
Japan	4	8.89	28 448	3	12.0	48 000	80 448
Korea, Rep.	3	6.67	21 344	2	8.0	32 000	57 344
Malaysia	3	6.67	21 344	1	4.0	16 000	41 344
Myanmar	1	2.22	7 104	1	4.0	16 000	27 104
Nepal	1	2.22	7 104	0	0	0	11 104
New Zealand	4	8.89	28 448	1	4.0	16 000	48 448
Pakistan	1	2.22	7 104	1	4.0	16 000	27 104
Philippines	2	4.44	14 208	1	4.0	16 000	34 208
Sri Lanka	1	2.22	7 104	1	4.0	16 000	27 104
Thailand	2	4.44	14 208	2	8.0	32 000	50 208
United Kingdom	4	8.89	28 448	-	0	0	32 448
Unite States	4	8.89	28 448	1	4.0	16 000	48 448
Vietnam	1	2.22	7 104	1	4.0	16 000	27 104
Total	45	100.0	320 000	25	100.00	400 000	800 000

Notes:

1/

Including a basic fee allocated equally among the Member at US$ 4 000.

Table 5. Scale of contributions (Option a) taking into account of the export earnings

APFIC Member	Total value of exports (in US$ million)1/					Export Index2/	Capacity Index3/	Production Index4/	Total Index	Share of contribution5/ (90%)
	1994	1995	1996	Average 1994-96	%
Australia	758	855	798	804	3.86	1	4	1	6	6.25
Bangladesh	287	287	255	276	1.32	1	1	1	3	3.12
Cambodia	18	14	23	18	0.09	0	1	0	1	1.04
China	2 320	2 835	2 857	2 671	12.82	3	1	4	8	8.33
France	910	993	1 003	969	4.65	1	4	0	5	5.21
India	1 125	1 105	978	1 069	5.13	2	1	2	5	5.21
Indonesia	1 583	1 667	1 678	1 643	7.88	2	2	2	6	6.25
Japan	743	713	709	722	3.47	1	4	3	8	8.33
Korea, Rep.	1 411	1 565	1 513	1 496	7.18	2	3	2	7	7.29
Malaysia	325	335	327	329	1.58	1	3	1	5	5.21
Myanmar	62	57	98	72	0.35	0	1	1	2	2.08
Nepal	...	71	...	71	0.34	0	1	0	1	1.04
New Zealand	692	811	816	773	3.71	1	4	1	6	6.25
Pakistan	153	144	141	146	0.70	1	1	1	3	3.12
Philippines	533	502	437	491	2.36	1	2	1	4	4.17
Sri Lanka	32	56	67	52	0.25	0	1	1	2	2.08
Thailand	4 190	4 449	4 118	4 252	20.41	3	2	2	7	7.29
United Kingdom	1 180	1 195	1 308	1 228	5.89	2	4	-	6	6.25
United States	3 230	3 384	3 148	3 254	15.62	3	4	1	8	8.33
Total	20 036	21 551	20 778	20 836	100.00	26	45	25	96	100.00

Notes:	1/	FAO (1998). FAO Fishery Statistics Yearbook 1996. Vol. 83, Commodities. Table A-5.
	2/	Based on the percentage of total export value (1994-96): 0 for 0.01-0.50%; 1 for 0.51-5.00%; 2 for 5.01-10.00%; and 3 for 10% or more.
	3/	From Table 1.
	4/	From Table 2
	5/	Excluding basic fee of US$ 4 000 each.