Decree lifts ban on fishing boat imports

JAKARTA (JP): After weeks of waiting for a solid, legal basis to follow up a government announcement on reform measures in the fisheries sector, businesses can now finally start laying down plans to import fishing vessels.

In Ministerial Decree No. 508/1996, signed by the minister of agriculture early this month but made public only two days ago, the government will officially allow Indonesian fishing companies to import, albeit on a limited basis, new steel long liners weighing 100 gross tons to 350 gross tons (GT), tuna and skipjack purse seiners of 100 GT to 800 GT, fish and shrimp trawlers, bouke ami and squid-jiggers of 100GT and 300 GT, and fish-lading vessels of over 100 GT.

According to the decree, fishing companies may import vessels after obtaining a license to conduct a fishing business and after guaranteeing that the ships will be used by the companies themselves and operate them only within the country's exclusive economic zones (EEZ) and territorial waters within 200 miles of the coasts.

The decree also states that companies may import such vessels only if domestic production is inadequate.

The importation of used fishing vessels is only allowed for vessels that have been in service for 10 years at the most and must gain beforehand approval from the Directorate General of Fisheries.

When the government -- represented by at least four ministers -- announced this decree on July 4, reporters attending the press conference tried to get hold of more information on the current situation of the fishing industry.

The ministers were pressed with questions on the production capacity of Indonesia's shipyards, the number of imports -- or the proportion of imported vessels compared to domestic makes -- allowed by the decree and the possibility of following up the decree with facilitation, particularly in the financing sector.

All that was clear was that Indonesia would need an additional 240 new ships a year in order to increase fishery production by 5 percent a year, and that chartered foreign vessels would no longer be allowed to operate in Indonesia by the year 2000.

The government said that "details" of the decree would be handled by a "special team" consisting of officials from related government offices.

Fishing firms

Until now, deep-sea fishing in territorial waters and the EEZ -- mostly in the eastern part of Indonesia -- is done by large, modern foreign fleets which bear foreign flags but are chartered by Indonesian companies.

The high number of chartered ships operating in Indonesia is a result of the government's previous ban on ship importation, or "nationalization" of such vessels.

The basis of the ban, the government argues, is that Indonesian fishing companies should "love homemade products" and use domestically-manufactured ships.

Such a ruling has been criticized by local businesses who complain that locally-manufactured vessels are too expensive and that banks are reluctant to provide them with loans because the business is considered a risky one.

Fishing companies are also doubtful whether they can rely on the quality and promptness of locally-manufactured fishing vessels.

According to the Ministry of Industry and Trade, Indonesia currently has 233 shipyards, but only nine of them are capable of manufacturing ships of over 4,000 deadweight tons.

As a result, most fishing vessels operating in Indonesia's territorial waters and the EEZ are foreign ones and this -- as bemoaned by local fishing companies -- has in turn led to illegal fishing and exports.

Another result of the ban on imports of fishing vessels is that the tapping of fishery resources in Indonesia has never reached its optimum.

With hardly any fishing done by domestically-manufactured fleets and with a large proportion of the catch taken straight out of the country -- or illegally exported -- the fishery sector has grown by a mere 5.65 percent a year in the 1993/1995 period, with production reaching 4.2 million tons last year.

In the same period, fishery exports increased by only 4.18 percent in volume and by 9.68 percent in value, reaching 574,234 tons worth $1.8 billion in 1995.

Overall, Minister of Agriculture Sjarifudin Baharsjah said that Indonesia has utilized less than 20 percent of its fishery resources in the EEZ.

The Association of Indonesian Fishing Companies, in a paper presented at a seminar on fisheries held by Bogor Agricultural University last month, pointed out that the demand for various reef fish, including snapper and grouper, is actually growing rapidly.

Exports of snapper, in particular, showed a sharp increase to countries such as Hong Kong, Singapore, Taiwan and Japan.

Now, due to the government's recent deregulation, Indonesia has a hope of meeting this increasing demand.

Businesspeople and legislators mostly welcomed the deregulation, saying that it was a long-awaited step towards utilizing Indonesia's fisheries resources up to its maximum sustainable yield.

Vice chairman of the Association of Indonesian Tuna Companies, Harini Nalendra, was quoted by the Bisnis Indonesia daily as saying that the deregulation of the fishery sector has finally touched the "interest of the business world".

"The deregulation this time is a big step to creating a better atmosphere in the fishing business," he said.

Harini acknowledged that the government's decision to allow Indonesian fishing companies to import used fishing vessels was an important step and a sign of the government's "serious efforts" to add to the number of Indonesian fishing vessels.

But many observers felt the government should put more effort into making the deregulation an applicable one, such as by providing small and medium-scale businesses financing facilities which will allow them to buy the vessels.

Without such facilities, the deregulation will only benefit large-scale fishing companies who have the funds to buy the ships, which cost well over Rp 1 billion (US$425,710) each. (pwn)