Japan Casts Nets In Troubled Waters. Some South Pacific nations now are denying fishing access to their northern neighbor. TUNA CONTROVERSY

ENTANGLED in a web of fishing issues, Japan's image in the South Pacific is suffering. Japan considers the South Pacific its back yard. It's a crucial source of food and holds potentially vast seabed mineral resources. But even as Tokyo boosts aid to the region, it seems slow to expend diplomatic capital in resolving two controversial issues: fishing access rights and gill netting.

The longest running dispute is over a regional fishing-access pact favored by South Pacific nations but opposed by Japan. Neither side has budged, and a string of Pacific micro-states have refused to renew Japan's tuna-fishing rights.

Papua New Guinea canceled in 1987. Tuvalu and the French Pacific Territories (including New Caledonia and French Polynesia) followed suit last year. Each now denies Japanese boats access to fishing grounds within their sizable exclusive economic zones. Several more island nations will decide to renew or cancel in the coming months.

The island states are willing to give Japan low access fees, but they also want closer scrutiny of catches and contractual guarantees. Japan thinks it can get better terms by negotiating on a country-by-country basis.

Japanese fishermen argue they can't afford even a small increase in access fees. They say their tuna market is static and costs keep rising. Despite the loss of income, the tiny, aid-dependent nations are standing together on this one.

``Why should we subsidize the biggest fishing fleet in the world?'' asks Philip Muller, director of the Forum Fisheries Agency, based in Honiara, Solomon Islands. The agency, funded by the South Pacific Forum, is currently negotiating on behalf of most of the countries in the South Pacific.

Officially, Japan denies its blossoming Pacific development aid program is being used as leverage to secure a fishing deal. New hospitals, docks, roads, and airport facilities, courtesy of Japan, are springing up all over the Pacific islands. But ``because the Japanese government is giving more, Japan says to us their fisherman should pay less,'' Mr. Muller says.

It's been nearly two years since the Forum Fisheries Agency first requested talks with Japan. Criticism of Japan has grown since an official chastisement at the annual South Pacific Forum meeting in September 1988.

The dispute may provide an opening for the Soviet Union to score a diplomatic and economic coup. Soviet diplomats met last week with Muller to express an interest in multilateral and bilateral fishing agreements. Papua New Guinea has one of the area's largest, most productive fishing zones. ``With no income from Japan for two years, it will be seriously looking at Soviet offers,'' Muller predicts.

But a breakthrough with Japan may be coming. Recently, both sides agreed to talks ``perhaps later this month or in mid-June,'' Muller says. ``There's some optimism. But our relationship is not exactly at a high point.''

On top of this dispute, another controversy has erupted over an increase of Japanese, Taiwanese, and Korean gill-net fishing boats in the region.

Gill-net fishing involves laying massive nylon nets 30 feet deep and 20-30 miles long. Unlike trawlers and purse-seine nets which target particular species, gill nets scoop up almost everything. Prized albacore tuna is the goal of gill netting, but often other marine species such as dolphins and turtles are caught, injured by the net, and fall back into the sea.

But South Pacific nations are not as concerned about the impact of gill netting on marine life in general as on tuna stocks and the region's fishing industry.

During the 1988-89 fishing season, 130 Taiwanese and some 30 Japanese and a few South Korean gill netters have swooped in. They are projected to take 40,000 to 50,000 tons of albacore (white meat) tuna from about 1,000 miles east of New Zealand and in the Tasman Sea. ``That's grossly in excess of a likely sustainable yield - double what would we would be comfortable with,'' says John Hamilton, senior fisheries scientist at the South Pacific Commission, in Noumea, New Caledonia.

New Zealand fishermen have been especially vocal over the gill netters' arrival. Gill nets are ``the marine equivalent of genocide - a water holocaust,'' says Mike Moore, New Zealand's minister of external relations and trade.

Scientists say that in less than two years, gill netters could decimate this new fishery.

Since the gill-netting is going on in international waters, it isn't illegal. But South Pacific nations are making it as difficult for the gill netters as possible. They've denied the boats access to ports, area canneries, and cold storage facilities. The French territory of New Caledonia was the only exception. But recently it also joined the ban.

Under diplomatic pressure from the US, New Zealand, and other South Pacific nations, Japan and Taiwan officials say they're making every effort to curb the gill netters. But these fishermen don't belong to established fishing organizations. ``They're viewed as renegades in their own countries,'' Mr. Hamilton says.

But fishing isn't just another industry to South Pacific island nations. ``In some cases it's everything,'' Hamilton says. Fishing is crucial to most island economies and development plans. For many, apart from coconuts and a few root crops, it is the only significant exploitable natural resource.