USA: the State of Louisiana asks BP to fund a large aid package to the fishing industry

In August 2010 Louisiana Governor Bobby Jindal called BP to provide funds for a long-term testing and a marketing campaign to convince consumers seafood from his state is safe. More specifically he asked BP to fund a funding of a USD 173 million plan to ensure the safety of Louisiana seafood and restore consumer confidence.

Governor Jindal made this call after he announced on 19 August 2010 that BP had agreed to fund a three-year, USD 13 million fishery-resource monitoring plan.

In actual fact the total cost of the “Louisiana Seafood Safety Response and Certification Plan”, which could cover a 20 year implementation period, has been estimated at USD 457 million.

According to the plan USD 276,703,354 would be spent in media purchases for the public education campaign. A detailed reading of the yearly budgeted amounts reveals that during the first five years of the plan a yearly amount of USD 20-30 million would be spent in “ad buys”, i.e. media purchases.

If, for the sake of argument, BP would agree to provide this funds to the Louisiana’s budget, or to disburse them as directed by Louisiana’s authorities, would this a subsidy in the sense of the WTO’s Agreement on Subsidies and Countervailing Measures?

I referred to a similar situation where fishermen in Cape Cod where getting “subsidies” from the Pew Group (see my post of 1 November 2009 “USA: "charitable" fisheries subsidies and the WTO”)

Here are links to:

Governor’s Jindal announcement on 19 August 2010:


http://emergency.louisiana.gov/Releases/81910Fishery.html

A letter dated 15 September 2010 from Lousiana’s Department for Wildlife and Fisheries Secretary Robert Barham reiterating the call for BP to fund an Extensive Seafood Testing, Certification and Marketing Plan to Robert Dudley Chief Executive Officer of BP Global.

http://www.wlf.louisiana.gov/news/32931

Lousiana’s Department for Wildlife and Fisheries page, which includes a link to the plan


http://www.wlf.louisiana.gov/louisiana-seafood-safety-response-and-certification-plan

NORWAY: report on aid provided to the cod sector

Some readers may remember that, in late 2009, I wrote various on the aid measures that the Norwegian government took to help companies in the cod sector to withstand the crisis creted by low prices in the consumer market.

Well now NOFIMA, a state controlled, business oriented research group working in research and development for the aquaculture, fisheries and food industry in Norway, has published a report on the crisis.

In the press release by NOFIMA (31 August 2010) one can read:

“In order to help the situation, the authorities implemented a series of measures. These included offering loans and guarantees, funds for marketing and subsidies for the transportation of fish between different regions. The cod quotas were also increased.”

Here is the link to the English version of the press release:

http://www.nofima.no/marked/en/nyhet/2010/09/that-s-why-the-cod-had-trouble

And here the link to the report (in Norwegian):

http://www.nofima.no/filearchive/Rapport%2023-2010.pdf

BRAZIL: fisheries subsidies notification to the WTO

The WTO Secretariat published on 1 September 2010 the document "New and Full Notification Pursuant to Article XVI.1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures" by Brazil. The reference number of this document is G/SCM/N/186/BRA. The document is available at the WTO website.

Under the section "FISHERIES INCENTIVES" only the "PROGRAMME FOR DIESEL OIL SUPPORT" is notified.

I copy here the contents of this section.

III. FISHERIES INCENTIVES
A. PROGRAMME FOR DIESEL OIL SUPPORT
1. Title of programme

Programme for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels.

2. Period covered by the notification

From January 2007 to December 2008.

3. Policy objective and/or purpose

To equalize the price of diesel oil paid by national fishing vessels with the international market price.

4. Legislation and authority

The programme was established by Law 9445, of 14 March 1997, regulated by Decree 4969, of 30 January 2004, and by the former Secretariat for Aquaculture and Fisheries - SEAP (presently the Ministry for Aquaculture and Fisheries) Normative Instruction 18, of 28 August 2006. The Ministry for Aquaculture and Fisheries is responsible for the administration of the programme.

5. Form of subsidy

The reimbursement of the difference (if below 25 per cent) between the diesel oil price paid by the beneficiary and the international market price.

6. To whom and how the subsidy is provided

Recipients: Fishing vessel owners or charters (natural or legal persons); professional fishermen and fishing industries.

Benefits will be granted when there is a difference of up to 25 per cent between the price of the fuel paid by national vessels and the international market price.

7. Total amount

Fiscal Year 2007: R$ 25.5 million.
Fiscal Year 2008: R$ 20.5 million.

8. Duration

Not defined.

9. Trade effects

N.A.

PHILIPPINES: Subsidies for fish workers affected by tuna a fishing ban

Here is a press release by the Philippines' Department of Labor and Employment (DOLE) on the above subject:

Press Releases

DOLE launches action program to workers affected by the tuna fishing ban

The Department of Labor and Employment (DOLE) in Region 12 launched Friday, February 26, 2010 the DOLE Action Program for workers displaced due to the tuna fishing ban in General Santos City.

DOLE 12 Regional Director Atty. Ma. Gloria Tango said that initially, the DOLE provided emergency employment assistance to workers displaced due to the ban by adopting the 60-40 mode of payment to workers for a period of 30 days. Sixty percent of the prevailing minimum wage in the region will come from DOLE while the remaining 40 percent will be shouldered by the participating affected company.

Tango said that the Damalerio Fishing Corporation (DFC), a group of companies composed of Celebes Tuna Fishing Corporation, Tuna Venture Corporation and Damalerio Fishing Enterprise availed of the said package of assistance that will benefit a total of 207 displaced workers.

Tango turned over the 1st tranche amounting to P456,435.00 representing the 60 percent of the workers minimum wage to Aurea Damalerio, President of the Damalerio Group of Companies held at the fishport compound last February 26, 2010.

The displaced workers of the companies will do maintenance work such as painting, welding, carpentry, electrical/mechanical repair, net-mending, refrigeration and hardware stock inventory.

Tango also said that NH Agro Industrial, Inc., another tuna fishing company affected by the closure of the 2 pockets in the Western and Central Pacific shall avail of DOLE’s Kabuhayan Starter Kits for its displaced workers or their beneficiaries.

She also said that youth beneficiaries/dependents of said workers will be prioritized in the Special Program for the Employment of Students (SPES) or the Kabataan Information Technology Opportunities (K-ITo) as mentors if they qualify.

Other affected companies may also avail of the Workers’ Income Augmentation Program (WINAP) of DOLE.

http://ro12.dole.gov.ph/default.php?retsamlakygee=93&resource=cfe6055d2e0503be378bb63449ec7ba6

CANADA: subsidies for the fish processing industry

I copy here under a press release by the Provincial Government of New Brunswick.

As you can see this Canadian Provincial Government is "providing a $3-million forgivable loan as part of a $12-million project that will help maintain more than 1,000 jobs in southwestern New Brunswick."

According to an online article of the Canadian Broadcasting Corporation, if Connors maintains the 1.000 jobs in Blacks Harbour, the loan will not have to pay back the loan.

News Release

Business New Brunswick

Province supports efficiency upgrades at Blacks Harbour fish processor

24 June 2010 Media Contact(s)

Ashley Bursey, communications, Business New Brunswick, 506-461-0942, ashley.bursey@gnb.ca; Mike Randall, communications, Connors Bros., 506-878-3025.

BLACKS HARBOUR (CNB) - The provincial government is making an investment to help Connors Bros. complete efficiency upgrades to its processing plant. Premier Shawn Graham made the announcement today.

Graham made the announcement during a tour of the plant with Fisheries Minister Rick Doucet; Nabil Salib, plant general manager and company vice-president; Tony Hooper, company vice-president; and Ron Schindler, company executive vice-president.

"This company has been a vital part of our provincial economy since the 1890s," said Graham. "As we move toward a self-sufficient future, our plan for lower taxes and our strategic investments in key industries are helping companies to jump into new markets and diversify their products. Connors Bros. is an important example of how the revitalization of a traditional industry can carry a company successfully into the future."

The provincial government is providing a $3-million forgivable loan as part of a $12-million project that will help maintain more than 1,000 jobs in southwestern New Brunswick.

Connors Bros. is one of Canada's oldest food producers and the largest producer of canned sardines worldwide. In 2004, the operations of Connors Bros. merged with those of Bumble Bee Seafoods LLC and Clover Leaf Seafoods Co.

"We are proud to call Blacks Harbour the Sardine Capital of the World," said Schindler. "The assistance from the province means we can continue to produce a variety of high-quality canned seafood to compete in a global market. This modernization initiative will improve plant efficiencies and working conditions while helping us become more energy-efficient. These changes will be good for business, for our employees and for our future."

The Blacks Harbour plant is the only sardine cannery in North America. Its various companies produce canned tuna, salmon, sardines, clams, oysters, other specialty seafood products and canned meat products to a global market.

"In New Brunswick, our people are our greatest resource," said Doucet. "Our government is pleased to support one of our province's oldest and most significant employers as it continues to improve this facility for its workers and to find innovative solutions to stay competitive in a dynamic world marketplace."

24-06-10

Here are the links to the Provincial press release and to the story published by CBC:

http://www2.gnb.ca/content/gnb/en/news/news_release.2010.06.1072.html

http://www.cbc.ca/canada/new-brunswick/story/2010/06/25/nb-sardines-conners-bros-jobs-607.html