Indonesia

Indonesia has introduced new regulations to increase the volume of marine fish processed locally as part of efforts to expand the potentially large fisheries processing industry and increase employment for low income coastal fishing communities.

The government’s long awaited decision to support the fisheries processing sector is also expected to benefit the wider domestic fishing community as foreign companies planning to fish in Indonesian waters could chose to team up with local fishing enterprises and expand the size of the nation’s deep sea fishing fleet.

New regulations promoting domestic fisheries processing contained in the Minister of Marine Fisheries Decree 05/2008 and the Directorate General of Fishery Products Processing and Marketing Decree No 33/2008 were issued earlier this year following sustained lobbying by fish processing and exporting companies during recent years requesting government support in reducing the large volume of unprocessed fish exported directly by foreign vessels fishing in Indonesian waters.

“Now all fish caught in domestic waters should be processed locally unless they are higher value species when they can be exported fresh such as tuna for sashimi and other specified products. We export live fish to Hong Kong, China, Singapore and Taiwan which is big business,” commented director of foreign market development, Saut Hutagalung, of the Directorate General of Fisheries Product Processing and Marketing under the Ministry of Marine Affairs and Fisheries.

“Processing companies are mostly domestic investments while fish canning enterprises are foreign and local joint venture companies for sardine, tuna and land snails, while frogs’ legs are exported frozen. The main issue is meeting quality standards for international market requirements. Meeting safety standards is a must. Our target is that fishery products both for export and the local market should reach food safety standards, for example, by not containing heavy metals.”

Indonesia has great fisheries development potential but faces great challenges. Containing 17,504 islands and boasting a total coastal length of 95,991km, Indonesia is the world’s largest archipelago and has a population of 240 million people, 60% of whom live on the island of Java which accounts for just 8% of the country’s land area.

“With such an extensive area we have abundant fish resources,” Hutagalung noted. “The question is how to manage these resources to benefit people and the country.”

According to government figures Indonesia produced 8 million tonnes of fisheries products in 2007. Marine capture fisheries is the largest sector producing 4.9 million tonnes accounting for 63% of output while aquaculture enterprises produced 3.1 million tonnes.

“In 2000 fisheries output was 70% marine capture and 30% aquaculture but seven years later the figures are 63% marine capture and 37% aquaculture. This is good as we are trying to decrease the pressure on marine fisheries,” Hutagalung commented. “In the long term the market is not only concerned with food safety but the environment. We want more aquaculture production but it will take time. We have to start now and then relax on marine fisheries.”

Aquaculture is most developed in west, central and east Java where the main output is prawns and small pelagic capture fish. Cage culture is used for groupa and rabbit fish which are produced for live export. Aquaculture also is practised in south Sulawesi, north Sumatra and Bali. Fisheries activities in eastern Indonesia involve mainly tuna fishing and small local coastal fisheries.

“Seaweed production is growing significantly. It’s quick earnings as it takes just 45 days to harvest, so it’s very important for poverty alleviation,” Hutagalung said.

Major marine fisheries areas are located in southern Indonesia and extend into the Indian Ocean, also in eastern Indonesia in the Arafura Sea.

The country’s largest fishing port is located in the capital, Jakarta, on the north coast of West Java. Other major fishing ports are located at Kandari in southern Sulawesi and at Pelabubon Rake on the south coast of West Java. Fishing vessels often land their catch at Indonesian fishing ports other than their own; one example being fishing boats from Jakarta which often unload their catch in Bali, a major tourism centre.

“The number of fishing boats has grown as investment has increased from Indonesian fishing companies. Also, we see fishing boat investment from abroad from China, Thailand and Taiwan. These foreign joint venture investments are for export production,” Hutagalung explained, “Most investment is in fishing boats and fish processing such as filleting, surimi products and prawns. Our three traditional export markets are Japan, the United States and Europe. These three account for about 70% of Indonesia’s total fishery exports.”

Fishery products form an important part of the typical Indonesian diet and account for 65% of the national protein supply. In addition, fishery products are an important source of foreign exchange earnings. According to government figures, exports reached a record US$2.3 billion in 2007. Hutagalung noted that government plans call for fishery exports to increase 15% in export value to $2.6 billion in 2008.

Fish consumption is highest in Indonesia’s eastern Mollucas region where consumption is about 48kg per capita annually compared to the national average of about 26kg per capita. The lowest average consumption is just 12kg per capita in Yogjakarta in eastern Java where local authorities are trying to improve the image of fish products by providing fish to schools to serve at lunch and distributing fish among housewives to prepare for their families.

“Fisheries policy is about how to sustain utilisable fishery resources to improve fishermen’s income, especially in coastal areas, and to increase fisheries’ contribution to the economy in foreign exchange earnings and by creating job opportunities. Fisheries policy also involves providing good quality animal protein to people,” Hutagalung remarked.

“Fisheries issues include fishermen’s income, the contribution to the economy and how to sustain the environment. Good habitat and coastal system are needed. Our task is to improve the fish contribution to the national diet. The middle and upper class represent 20% of the population and they eat imported fish. Our concern is the other 80% section of the population, so we focus on how to increase the fishery contribution to protein supply.”

According to government figures the fisheries sector provides 6.8 million jobs. With the typical Indonesian family unit numbering five people, the fisheries sector is estimated to support 34 million people throughout the country. By comparison, with some 60% of the population estimated to be involved in the combined agricultural and fisheries sectors, the number of people employed in agriculture stands at about 120 million.

“One of the government’s targets is to provide more jobs. The government has launched its local fish processing programme to increase fish processing for export,” Hutagalung said. “We will start with part-processed fishery products. Products that have a higher market value should be exported fresh by the fishing companies, for example, tuna sashimi will be marketed fresh to Japan.”

Prospects for improved processed fishery product exports are bright as Indonesia has successfully tackled a number of quality problems that earlier affected fishery exports to the European Union. Indonesian exporters faced difficulties supplying the EU market prior to 2005 due to several reasons including antibiotic residues that were detected in shrimp produced by the aquaculture sector and fish handling problems that affected the marine capture fisheries sector.

In March 2006 the EEC Commission issued directive 232/2006 stating that any fisheries consignment from Indonesia entering a European port would be subject to individual inspection.

“The problem for Indonesian exporters is the added cost and time involved as containers are at the ports for two to three weeks. With EU support we were able to work at improving fishery quality management including the Ministry staff to meet the EU standards requirement,” Hutagalung explained. “We send our staff to Europe for training so we can improve our technical skills; also, to strengthen our Quality Control laboratory facilities. The fourth reason is to improve Indonesian exporters compliance with international standards.”

EU support has enabled Indonesia to tackle quality problems affecting its fishery exports, the number of problems reported declining each year recently.

After the EU identified 49 fishery quality problem cases in 2005, the number dropped to 34 cases in 2006.

“We worked hard with the EU in 2006. By the end of the year we had reduced the number to 34 cases and then that dropped to 17 cases in 2007,” Hutagalung noted. “In the first four months of 2008 we had only two cases, so we hope we will not have many more cases in future.

“The EEC Commission is now considering to lift Ban 23B. That would be very good news for us.”

Meanwhile, protecting fisheries habitat has become an import issue for Indonesia recently and other nearby countries in the Pacific region. Realising that sustainable fisheries involve protecting the countries large coral reef systems, the government is working with other countries in the Asia-Pacific region on a joint coral reef conservation initiative.

“Fish catching techniques and aquaculture technology should be environmentally friendly. That’s why we are trying to conserve coral reefs,” Hutagalung said. “We have had no fish dynamiting regulations so we have to tackle this day by day. We ask government ministers to make speeches about this problem. There should be an alternative way to catch fish, so our fishery development centres should show people better technology. Our staff visit areas where dynamite is used for fishing but we cannot work 24 hours a day. These people must be given an alternative livelihood or fishing technique.”

Protecting coral reefs is an international activity. Indonesia is working with Papua New Guinea, the Solomon Islands, Timor Leste, the Philippines and Malaysia to protect the region’s large coral reef resources with assistance from the United States and Australia.

“There are 75,000km2 of coral reefs covering the six countries. This is the most important fisheries reserve,” Hutagalung remarked. “Conserving coral reefs means that photo-plankton and other food resources will be available for fish. The food web will see a big improvement and this gives a better food supply to fish.”

Plans call for a ministerial meeting to be held in Indonesia attended by the six nations later this year in preparation for a ministerial summit in Indonesia’s tuna fishing centre in Minado, northern Sulawesi in May 2009.

“Before the conference next year there will be a summit on the coral triangle covering the six countries,” Hutagalung said, “The World Ocean Conference is our response how to follow up concerns on global warming as scientists believe that coral can lower CO2. Coral reefs are 'the Amazon of the sea' and play the same role as land forests.”

Looking ahead to future developments in Indonesia’s fisheries sector, Hutagalung noted that the government’s decision to support the expansion of domestic processing marks an important change in official policy and is expected to provide important support for further sustainable fisheries growth. With foreign fishing vessels required to land more of their catch in Indonesia, tracking fish catches will become more effective supported by appropriate enforcement methods.

“What is new now is that we have a government that fully supports overcoming illegal fishing including foreign vessels entering our territorial waters. Also, it is good policy that it is mandatory to process locally,” Hutagalung commented. “By 2009 we plan to increase processing to 20%. We have canning and processing factories already but they are under utilised. If we get 20% of production processed then that will be good progress as it will increase utilisation of processing units and so more jobs will be created.

“Now we are in good shape in food security. This is important to the market. The next target is to ensure discipline to comply with quality standards. We hope that good government, stable politics and social affairs will allow a better contribution by fisheries to the economy.”