Fisheries industry up for $1b in investment

Rendi A. Witular, The Jakarta Post, Jakarta

Hoping to take advantage of Indonesia's vast, largely untapped maritime resources, investors from China, Thailand and the Philippines are currently filing with the government investment proposals worth a total of some US$1 billion.

The investment, expected to start flowing early next year, will be spent mostly in eastern Indonesia, including Maluku and Papua, Minister of Fisheries and Maritime Affairs Freddy Numberi told The Jakarta Post.

"The investors are currently filing their proposals with our ministry, while at the same time seeking land to set up their fishing processing plants. Several of them will operate in Ambon, Merauke and Timika," said Freddy.

He said five investors from China were planning to invest a total of $500 million, while two investors from the Philippine and three from Thailand were likely to invest a total of $500 million.

With 5.8 million square kilometers of ocean, Indonesia has the potential to yield 6.4 million tons of fish per year. The United Nation's Food and Agriculture Organization has set catch limits at 80 percent of the total potential yield of the area, or some 5.12 million tons per year.

However, the value of Indonesia's fishery industry remains low at about Rp 46.6 trillion (US$4.52 billion), or 2.21 percent of gross domestic product. According to some local fisheries, this is due in part to a lack of support from the government.

The situation is also exacerbated by the practice of illegal, unregulated and unreported fishing, which reportedly cause the country losses of about $1.9 billion per year in lost revenue from legal fishing.

As part of the fight against illegal fishing, Freddy said his ministry had revoked the licenses of 237 foreign fishing vessels between October and August for misusing their licenses, as well as the licenses of several local vessels for not having proper certification.

"We have revoked the licenses of several fishing vessels owned by foreign and local companies. Most of the vessels are owned by Chinese companies. There are also some used vessels from Taiwan that have been seized for poaching," he said.

At present, 705 registered foreign fishing vessels are operating in Indonesian waters, with some 302 vessels from Thailand, 286 from China and 117 from the Philippines.

The ministry announced earlier this year that it would not issue new licenses to foreign vessels to fish in Indonesian waters, to help reduce illegal fishing as well as to provide more opportunities for local fishermen.

Starting in 2007, the ministry expects there to be no more fishing vessels from the Philippines, Thailand and China to be operating in the country, after their current contracts expire.

A bilateral agreement with the Philippines on fishing in Indonesian waters will expire next December, with Thailand in September next year and with China July next year.

However, vessels from these countries can continue to operate in Indonesia under a joint investment or joint operation scheme, which requires them to establish processing and supporting plants in Indonesia, and sell the majority of their catch in the domestic market.