Kiribati’s Phoenix Islands Protected Area (PIPA) is a California-size, multi-use marine protected area (MPA) that hosts some of the world’s most pristine coral reefs as well as abundant marine and bird life. It is the world’s largest and deepest UNESCO World Heritage Site.
To ensure the long-term viability of the protected area, conservation partners established an endowment fund under the Phoenix Islands Protected Area Trust. Here, PIPA Trust Executive Director Teuea Toatu* answers questions about PIPA, the endowment and its significance to conservation, sustainable development and the long-term well-being of people in the region and around the world.
1. As a native of Kiribati, what do you think is the importance of PIPA for the people of your country? And beyond your country?
The importance of PIPA as Kiribati’s flagship conservation project cannot be over-emphasized. Many international organizations and governments have already expressed strong support for PIPA in recognition of its unique universal value and global importance to the future of the world's food supply (tuna) and for the people of Kiribati, and the importance of having large marine reserves for resilience to climate change and other environmental issues.
Much of the debate on PIPA to date is somewhat polarized by the economic losses that may occur should PIPA be fully closed off from all extractive activities, including commercial fishing. Critics are putting forward a case for compensation. Less is understood or discussed about the potential “win-win” outcomes and the economic benefits of marine protected areas for the community at large.
I strongly believe that protecting PIPA will do a lot more good for the people of Kiribati, and the wider global community, than by not protecting it, especially in terms of ensuring a sustainable supply of fish stock for present and future generations. Accordingly, PIPA should not be viewed as a sacrifice by the Government of Kiribati but as an investment to protect the natural capital and the marine ecosystem of PIPA for the long term and to sustain its benefits for present and future generations of Kiribati citizens. So much is at stake. Every day we defer action is a day too many, and will only increase costs in the future, leading to even greater losses of benefits.
2. How does the PIPA Trust work? Can you describe how the money is invested and managed, and how the investment supports the protected area?
The Phoenix Islands Protected Area (PIPA) Trust is a financing vehicle established under the laws of the Republic of Kiribati to support conservation efforts in the Phoenix Islands. The main objective of the trust is to address the need for a long-term, sustainable approach to funding the conservation of terrestrial and marine biodiversity in the Phoenix Islands group as outlined in the PIPA Management Plan.
An important element is the creation of the PIPA Trust Endowment Fund. The aim was to capitalize the endowment through private and public contributions at a level that would generate an income stream sufficient to cover the financial obligations of the trust, which include operational costs of the trust, core management costs of PIPA and a planned reverse fishing license through which Kiribati would be compensated for the income lost from commercial fishing license fees by Distant Water Fishing Nations. By utilizing only the interest income, the capital value of the endowment will not be impaired.
Initially, the PIPA partners set an overall goal of $25 million for the endowment, with an interim target of $13.5 million by 2014. Conservation International and the Government of Kiribati have each contributed $2.5 million to the endowment, so the trust has $5 million as a starting base. These contributions, together with contributions from other donors, will be invested in an endowment fund that will be managed by a qualified investment manager appointed by the PIPA Trust Board.
3. Why is the trust important for PIPA?
Kiribati cannot fulfill its aspirations and goals for PIPA without adequate financing to support its operations on a sustained basis. It should be remembered that when PIPA was first established in 2008, it was done on the basis that it should be a self-sustaining and self-financing operation. It was also the aim of the PIPA partners that PIPA should benefit the future generations of Kiribati citizens without impacting negatively on current national expenditures for health, education and social welfare. This motivated the enactment of the PIPA Trust Act by Parliament in 2009, which legalized the establishment of the PIPA Trust as a charitable nongovernment organization (NGO). The main objective of the trust is to address the need for a long-term, sustainable approach to funding PIPA and the implementation of its management plan.
One important role of the trust that is often overlooked is the planned creation of a unique "reverse fishing license" financing program, whereby the Government of Kiribati will be reimbursed by the PIPA Trust for the amount that they would have made from selling fishing licenses if PIPA were not protected. This program is key to the strong political support from the Government of Kiribati and other stakeholders that PIPA has been enjoying, as it ensures that no financial loss will be borne by Kiribati and its people. This makes PIPA a win-win model. With the maturation of the Vessel Day Scheme
for purse seiners it is increasingly recognized that fully protecting PIPA may not require compensation due to the ability of Kiribati to spatially restrict where Vessel Days are used.
4. What are the long-term goals for the trust? Why should donors invest in it?
The long-term goal of the Trust is the establishment of a sufficiently endowed perpetual fund that would be able to provide the financial resources necessary to ensure effective, long-term protection, conservation and management of the terrestrial and marine biodiversity in the Phoenix Islands, including its cultural and historical heritage and values, through investment in conservation and sustainable development, sustained financing for protected areas management and financial support to applied research.
Donors should invest in the trust because they will be supporting the PIPA programs that the trust will finance, and thereby are contributing to the realization of the huge ecological and economic benefits that PIPA will bring to Kiribati, the region and the wider global community.
PIPA provides critical habitat for a vast array of marine and bird species, and is important to regional and global fisheries management and to the future of the world’s food supply. PIPA is expected to make a significant contribution to management of tuna stocks in the region. There is evidence that tuna spawns in PIPA and further research is needed to better understand the significance of these spawning grounds. The effective protection of these spawning grounds and related habitats will help ensure recruitment and replenishment of tuna stock within the PIPA region.
Another compelling reason for investment is the unique importance of PIPA to science and research. Because of the relative absence of human stress (since all but one island are uninhabited), PIPA is in itself a unique natural laboratory for understanding, identifying and monitoring the process of climate change impact on coral reefs, sea level change, assessing growth rates and age of reefs and reef builders (both geologically and historically), and evaluating the impacts of water temperature changes and acidification on ecosystem health. PIPA is well suited to serve as a benchmark for understanding and potentially restoring other degraded hard coral systems in Kiribati and elsewhere in the Pacific.
Last, but not the least, PIPA provides the Government of Kiribati the opportunity to diversify its economic options, particularly through the development of ecotourism to capitalize on PIPA’s universal value and pristine ecosystems. For a small island nation with limited resources and a narrow production base, this is indeed a welcome opportunity. Given the productivity linkages of tourism to the wider economy, there will be a wide range of other income-generating opportunities that will emerge from this development, including employment from which I-Kiribati people can benefit. It is important to note that without the PIPA project most of the islands in the Phoenix group would have remained idle assets. Therefore, PIPA represents the Government of Kiribati’s interest in exploring new development models for Kiribati’s natural resources that are less dependent on resource exploitation and consumption. This is smart thinking that should be supported.
Underpinning all of the above is a transparent and accountable governance structure of PIPA that has been in place since PIPA’s establishment in 2006. Added to this is the strong political support from the highest level of the Kiribati government, which fosters local ownership and enhances the sustainability of the project.
* PIPA Trust Executive Director Teuea Toatu is Kiribati national and an economist. He obtained a Ph.D. in economics in 2001 from the Australian National University (ANU) in Canberra, Australia. Before taking the position of executive director of the PIPA Trust in August 2011, he worked at the Commonwealth Secretariat in London as head of the Project Management Division from 2004 to 2011. Before that, he was a research fellow and lecturer in economics at ANU and University of the South Pacific. He also previously served as an economist for the Pacific Islands Forum Secretariat in Fiji. Currently, he is a member of the Kiribati Investment Committee that oversees the management of the Kiribati government reserve fund invested offshore.