PALAU

GENERAL ECONOMIC DATA¹

FISHERIES DATA

Commodity balance (1999):

STRUCTURE AND CHARACTERISTICS OF THE INDUSTRY

General

The 343 islands of the Republic of Palau are diverse in geological origin and include volcanic, low platform, high platform, and atoll types. The Republic includes the islands of Koror (the administrative center and capital), Babelthuap (the largest island in terms of land mass, making up 78% of Palau’s land area and the second largest island in Micronesia after Guam), Angaur, Peleliu and several coral outer islands including Sonsorol, Tobi, Pulu Anna, Helen’s Reef and Merir to the southwest, and Kayangel to the north. The westernmost islands of Palau are closer to Indonesia than they are to Koror, which comprises only 4% of the land area but is home to more than 70% of the population. Politically, the country consists of 16 states vested with inshore fishery management responsibilities and a national government with offshore responsibilities. 

The major marine habits of Palau and their approximate sizes are:

•         Mangroves – 45 sq km

•         Inner reef – 187 sq km

•         Outer reef – 265 sq km

•         Lagoon – 1,034 sq km 

Marine fisheries 

Exploitation of Palau’s living marine resources is diverse. Most fishing is done within the lagoons and on the outer reef slopes and is commonly conducted on a subsistence or semi-subsistence level, with a portion of catches finding their way to markets in the capital, Koror. Techniques used for subsistence and small-scale commercial fishing range from simple hand-collection to hook-and-line fishing, underwater spear-fishing, net fishing and trolling, most of which are conducted almost exclusively by men. 

Boat-based fishing activities involve the use of small fishing craft, typically from 4.8-7.6 m in length and powered by outboard motors. At least 25% of households own fishing boats and through the extended family system, most fishers have access to a powered craft of this type. 

The most important resources are reef finfish, pelagic fish, mangrove crab, lobster, trochus (for both shells and meat), giant clam, beche-de-mer, and other invertebrates.

In the ten-year period 1989 to 1998 an annual average of 2115 t of fish and invertebrates was produced by Palau’s coastal and inshore fisheries. By weight, about 60% of the landings were from the subsistence fisheries. The value¹¹ of the subsistence and commercial fisheries was about US$5 million. In a typical year of the last decade, about 1,300 fishers (1,100 subsistence, 200 commercial) using 800 boats participated in the Palau’s inshore fisheries.

Although subsistence fishing remains a major activity, the economic growth of Koror, tourism development, the increasing availability of non-fisheries related employment and a large foreign labour force have together resulted in the establishment of a cash market for fresh fish and other seafoods. Improvements in shipping and air communications in the past decade have allowed development of profitable fish export activities. In the mid-1990s as a conservation measure, export restrictions were placed on a number of marine species. 

Fishing for the shellfish trochus is periodically a significant source of revenue for many fishers. In the 1990s regulation of the trochus industry increased and harvests occurred in only five years: 1992, 1993, 1995, 1996, and 1999 when between 26 t and 389 t was exported annually.

Private-sector interests commenced the collection and export of ornamental species for the aquarium trade in 1991. Marine dive tourism is very important in Palau and sport fishing is growing in importance.

The offshore fishery for pelagic species, particularly tuna, is conducted primarily by locally-based foreign vessels. From 1964 to 1983 Van Camp Seafood Company operated a shore base and freezing facilities at Malakal near Koror, supplied by a locally-based pole-and-line fleet which produced from 3,000 to 8,000 t of tuna per year. The base, made redundant by the successful introduction of purse-seining into the region, was sold in 1986.

The next wave of tuna-related fishing activity was purse seining. Some experimental purse seining was carried out in the 1970s in the Palau zone, first by the Japanese and then by the Americans. Commercial tuna seining became important in the early 1980s. Catches increased in the Palau zone, reaching nearly 30,000 t in 1991. Catches have since declined, mainly because increasing familiarity with the region indicated higher catch purse seine catch rates to the east of the Palau zone. Tuna catches by purse seine gear in the 1998 were almost zero, while that of 1999 were only a few hundred tonnes. 

From the mid-1980s to the early 1990s the locally-based longline fishery expanded rapidly. Nearly 4,000 t of tuna was landed in 1992, after which catches tapered off. During subsequent years about 2,500 t of longline tuna was caught and exported annually. The three major longline companies used predominantly vessels from China, with the fleet size fluctuating from 100 to 300 longliners in the latter part of the decade. Much smaller amounts of tuna were caught in the Palau zone by Japan-base longliners. 

Tuna catches in 1999 were made by vessels from mainland China (995 t), Japan (46 t), Kiribati (65 t), Papua New Guinea (13 t), and Taipei China (1,229 t), for a total of 2,368 t. Access fees and other government charges for foreign fishing averaged about $2,290,000 in the period 1993 to 1997. 

Inland fisheries 

There are no significant inland or freshwater fisheries in Palau. Lake Ngardok in Melekeok State, the largest natural body of freshwater in Micronesia, was made a nature reserve in 1997.  

Aquaculture 

The Micronesian Mariculture Demonstration Center was established in 1973 to serve Palau and other US-affiliated Pacific islands by developing, demonstrating and promoting mariculture technology. Later renamed the Palau Mariculture Demonstration Center (PMDC) the facility also serves as a regional mariculture training centre and a marine science research laboratory. PMDC’s primary activities have focused on: giant clam hatchery operation, re-seeding, export, training and research; hawksbill turtle head-starting, research and conservation; trochus resource assessment and management; research into soft coral culture; and a visiting scientist programme. 

PMDC has carried out culture of giant clams, soft corals and other organisms as a means of financing it’s own research activities. It has also supported a handful of giant clam grow-out sites around Palau. 

Species which have been trialed in Palau include seaweed, corals, giant clams, crocodiles, milkfish, mollies, mullet, oysters, shrimp, rabbitfish, sponge, trochus, and turtles.

There are presently few, if any, commercial aquaculture operations in Palau. In the past much of the private sector aquaculture activity was associated with various aid projects or government promotion schemes.   

Utilization of the catch

Studies sponsored by the Palau Conservation Society indicate that, of the 2115 t produced annually by the inshore fisheries, 715 t goes to the seven retailers, 2 t goes to the 26 local restaurants, and 1,378 t goes directly to residents. 

The fishers, retailers, and residents together export about 400 t, or 19% of the inshore catch. Government records show that about 32% of the exports were by air cargo, with the remainder as baggage by travelers. Guam and Saipan to the northeast of Palau together received about 86% of the inshore fishery exports.

The distribution channel for trochus is quite different, with the meat being consumed locally and the shell going to button factories in Asia and Europe. Most of the aquarium fish exports are for the market in the United States. 

The Palau Division of Marine Resources indicates that during the past few years about 12% of the tuna exports were for canning, while 88% was for the sashimi market, primarily in Japan. Much of the tuna is exported in aircraft dedicated to the fish trade.  

Demand 

Fish and other marine organisms play an important part in the diet of most Palauans, including those living in urban areas. The market for fresh fish and other seafood in Koror is strong, supported by local consumption, a large tourist industry, and by demand from exporters shipping fish to Guam and Saipan.  

In the past two decades numerous estimates of fish consumption in Palau have been made. Most of the estimates have been in the range of 84 to 135 kg per capita per year¹². A recent study by the Palau Conservation Society estimated (a) local coastal fisheries production of 2115 t, (b) fishery product imports of 610 t, (c) fishery product export of 400 t, (d) a mean resident population in Palau in the 1990s of 16,600, (e) visitors to Palau (full-time resident equivalents) of 500. This equates to annual per capita fishery product consumption of 135 kg in the 1990s.   

Economic role of the fishing industry 

In 1998 fishing contributed about 8% to the GDP of Palau. Although this is substantial, it has declined dramatically in the past decade, partly due to a decline in the locally-based longline fishery and to strong growth in other sectors of Palau’s economy, especially tourism. It also should be noted that the methods used to calculate Palau’s GDP have changed since the early 1990s when the nominal contribution of fishing to GDP was reported as 25%. 

The value of the 2,500 t of tuna shipped out of Palau annually by locally-based companies in the 1990s is estimated to be about US$ 12.5 million. This together with the inshore fishery exports account for the vast majority of Palau’s commodity exports. 

Other economic benefits of fisheries include:

• Food to 1,100 subsistence fishers and employment to 200 commercial fishers;

• Access fees and other government charges for foreign fishing of about $2,290,000 annually in the 1990s;

• A substantial portion of the protein supply for local residents;

• Recreation for both Palau residents and visitors.
  

DEVELOPMENT PROSPECTS

Given the resource limitations that apply to tropical reef and lagoon fisheries, Palau’s main development prospect is the offshore fishery for tuna and allied species. The EEZ is estimated to have a throughput of skipjack tuna amounting to 14,000 t/month. No recent estimates have been made of the local abundance of yellowfin and bigeye tuna, but industrial fishing activity and catches indicate that these fish also form a substantial resource. Palau’s geographic position makes it easier, and cheaper, for offshore fishing companies to access markets in Japan and elsewhere in Asia, a particularly important factor in the fresh tuna fishery targeting sashimi markets. Palau is thus well placed to benefit from further development in the offshore fishery.  

INSTITUTIONAL ARRANGEMENTS 

Several national government agencies and one local NGO are concerned with marine resource exploitation, development and management in Palau.

• The Ministry of Resources and Development includes the Bureau of Natural Resources and Development, which directs the activities of the Marine Resources Division (MRD). The functions of MRD include marine research and development, resource management, technology transfer, technical advisory and extension services, statistical monitoring and recommending legislation. In addition, MRD is responsible for the operation of the PMDC which is charged with developing and promoting the commercialisation of certain species through mariculture;

• Within the Bureau of Natural Resources and Development the Palau Maritime Agency has responsibilities in the management of tuna fisheries, including maintaining the data collection system for recording catches and exports of fish by locally-based foreign fishing;

• Within the Ministry of State the Bureau of Foreign Affairs handles trade negotiations, and the Division of Foreign Relations oversees matters relating to international boundaries;

• Surveillance and enforcement are the responsibility of the Ministry of Justice, where both Attorney General’s Office and the Division of Marine Law Enforcement have important functions;

• The Environmental Quality Protection Board monitors and enforces legislation dealing with the environment;

• The Palau Federation of Fishing Associations is a cooperative established in 1975 to provide shoreside facilities and services to local fishers. PFFA suffered financial losses and was declared insolvent in 1982. In 1983 it was taken over by the national government and is currently managed as a quasi-government agency by PFA;
  
  

• The Palau Conservation Society¹³ (PCS) is an NGO with major involvement in marine resources. Past initiatives have included a study of the costs and benefits of tuna fishing to Palau, an inshore fisheries resource profile, promotion of marine reserves, conducting reef surveys, promotion of sport fishing as a management tool, and assessing the effects of tourism on reef ecosystems.

Article I, Section 2 of Palau’s Constitution confers on the country’s 16 states the ownership of all marine resources found within 12 nautical miles of the state boundaries. Article IX, Section 5 (12) states that marine resource conservation in the national interest falls within the purview of the national government. State governments thus have primary responsibility for management of inshore fisheries, while national government takes the lead role with respect to offshore fisheries. 

Palau’s main fisheries law is Title 27 of the Palau National Code, under which there are regulations for both foreign and domestic fishing. Other relevant legislation is contained in Title 24, which relates to environmental protection. The Marine Protection Act (1994, amended 1995) which imposes a variety of restrictions on the harvest and trade of some food fishes, on aquarium fish and on aquacultured organisms, has been incorporated into Title 27.   

INTERNATIONAL ISSUES

The MRD maintains direct contact with regional and international organisations on technical issues dealing in fisheries. Policy and other matters are managed in the first instance through designated contact points, most often the Bureau of Foreign Affairs. Palau is a member of the Secretariat of the Pacific Community (SPC), the South Pacific Forum Fisheries Agency (FFA) and the South Pacific Regional Environmental Programme (SPREP). 

Palau is also party to a number of treaties and agreements relating to the management of regional fisheries, including:

• The Treaty on Fisheries Between the Governments of Certain Pacific Island States and the Government of the United States of America;
  
  

• The Convention for the Prohibition of Fishing with Long Driftnets in the South Pacific;

• The Niue Treaty on Cooperation in Fisheries Surveillance and Law Enforcement in the South Pacific Region;

• The Nauru Agreement Concerning Cooperation in the Management of Fisheries of Common Concern;

• The Palau Arrangement for the Management of the Western Pacific Purse Seine Fishery;

• The FSM Arrangement for Regional Fisheries Access. 

Palau is a signatory to the following international agreements:

• The United Nations Convention on the Law of the Sea (UNCLOS);
  
  

• The Agreement for the Implementation of the Provisions of the United Nations Convention of the Law of the Sea of 10 December 1982 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks;
  
  

• The Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean.  

RESEARCH AND TRAINING

Fisheries and aquaculture research in Palau is the responsibility of MRD, whose primary responsibilities and activities include:

• Resource assessment and evaluation of the commercial potentials of reef, pelagic deep water and bait fish, mollusks, turtles and crustaceans from catch records, censuses and field surveys;

• Development and recommendation of regulations for the scientific management of these resources on a sustainable yield basis;
  
  

• Recommendation of regulatory measures such as size limits, fishing seasons and sanctuary areas, where appropriate ;
  
  

• Advising and informing the public of any measures and other important matters concerning marine conservation;
  
  

•   Maintenance of the PMDC as a site for research on Palau’s marine resources;
  
  

• Hatchery rearing and mass production of commercially important marine organisms, including giant clams and trochus;

• Turtle research for conservation and management.
  

MRD is also undertaking data gathering in support of management, including aerial mapping of habitats to assist in determining optimum yields, a programme of rapid ecological assessment for areas of key concern, a marine and terrestrial survey of resources in the Southwest islands, a household survey of subsistence fishing activities and production, a comprehensive monitoring and re-seeding programme for trochus, and the collection of data on commercial landings in market centres. 

The PMDC serves as an education and training centre for Palauan students in principles of marine biology, conservation and mariculture. The centre provides intensive summer education programmes for local students as well as educational tours for schools at all grade levels.  

MRD staff and others seeking more advanced training mostly rely on overseas opportunities provided by bi-lateral and multi-lateral donors as well as by regional and international fisheries organisations. 

The MRD maintains direct contact on technical issues with regional and international organisations dealing in fisheries. Policy and other matters are managed in the first instance through designated contact points, most often the Bureau of Foreign Affairs. Palau is a member of the South Pacific Commission (SPC), the South Pacific Forum Fisheries Agency (FFA) and the South Pacific Regional Environmental Programme (SPREP). 

Other training and research agencies relevant to Palau are:

• Palau Conservation Society has carried out numerous studies relevant to the fisheries of Palau (see Institutions section above);

• Center for Tropical and Subtropical Agriculture operates in Palau and other US-affiliated Pacific Islands. CTSA’s activities involve providing technical assistance, management; support and training in aquaculture;

• Marine Resources Pacific Consortium (MAREPAC) attempts to adapt traditional management principles and practices to modern resource management challenges. MAREPAC membership comprises Palau and other US-affiliated Pacific Islands;

• Palau International Coral Reef Center (PICRC), opened in January 2001. The PICRC is a research centre directed by a board of eminent regional scientists that undertakes research on coral reefs and participates in regional coral reef monitoring activities;

• Palau Community College has a Cooperative Research and Extension Program involved in aquaculture research and monitoring of marine protected areas;

• The Nature Conservancy has provided substantial support for fisheries-related research.  

AID 

Palau has enjoyed fisheries sector assistance from a range of multi-lateral and bi-lateral donors. Support has included the funding of expatriate staff positions within MRD, construction of aquaculture facilities, fisheries infrastructure (docks, refrigeration facilities), equipment costs, the provision of vessels, collaborative research, sector planning studies, and travel costs for training and attendance at meetings.  

Important donors have included the US Department of the Interior (through Sea Grant), the US Department of Commerce (Saltonstall-Kennedy allocations) the Japanese Government (through the Japan International Cooperation Agency and Overseas Fishery Cooperation Foundation) and the Pacific Aquaculture Association. Other donors have included UNDP, NZODA, AusAID, ACIAR, FFA, SPC, ICOD, and CIDA. 

Much of the fisheries sector assistance in the past has been channeled through the Marine Resources Division. Recently the Palau Conservation Society has obtained an increasing amount of marine-related overseas aid. 

Private foundations are making significant contributions to marine conservation projects in Palau. These include the MacArthur Foundation, Packard Foundation, and Wallis Foundations that are based in the United States, and the Keidanren Foundation in Japan.

INTERNET LINKS 

The site http://www.spc.int/coastfish/countries/palau/palau has information on Palau fisheries and links to other sites dealing with Palau.