Decree lifts ban on fishing boat imports

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)