Indonesia

The new regulations, which have long been demanded by fish canners and other seafood processors, are aimed at increasing the supply of fish to local processors, as currently all fish caught by foreign fishing boats is taken away for processing elsewhere in Asia.

According to government figures Indonesia's marine fisheries catch has grown steadily for more than a decade, reaching 4.7 million metric tons (mt) in 2003, up 48% from 3.2 million mt in 1993. However, government figures do not reveal the true picture as the large marine catch taken by foreign fishing vessels is unrecorded as very little is processed in Indonesia. Consequently government fisheries statistics reflect the activities of the domestic fishing fleet which is generally undeveloped in comparison with the country's large fishery resources.

Under recently introduced Indonesia Ministerial Decree No 17/2006, the catch from foreign fishing vessels will be recorded in the future so that more accurate information on the fisheries industry can be gathered. Fishery catches will no longer be allowed to be shipped out of Indonesia without being recorded.

“All the bounty that is caught will have to be landed on Indonesian soil first so that it can be recorded on our database. The aim is to monitor the size of catches,” explained Martini Husein, the Maritime Affairs and Fisheries Ministry's director general for marketing, after the new regulations were announced.

In addition to improving monitoring of fisheries catches, the requirement that all catches should be landed in Indonesia will increase the supply of fish to local processors, many of which operate below capacity due to insufficient supplies being landed by the domestic fishing fleet.

“I am optimistic about the new regulations. The government finally has listened to the fishing and processing industry. It depends on the Minister of Fisheries and our present minister, Freddy Numberi, is proactive,” commented Hendri Sutandinata, chairman of the Indonesian Fish Cannery Association.

“There has been no significant improvement in the fish canning industry during the past few years. There is a shortage of seafood material. The industry's canned tuna exports are worth US$100 million a year. It's been constant for the past five years. The main reason for the shortage of fish for canning is that we do not have many large fishing boats. Most are small and 90% are without motors. These belong to inshore fishermen.”

Indonesia is the world's largest archipelagic nation and comprises more than 17,000 islands. Covering about 5.8 million square kilometres in area, the country's marine waters are estimated to be capable of producing a sustainable 6.26 million mt of fishery products annually. Indonesia's territorial waters are believed to be capable of supplying about 4.4 million mt of the total tonnage while a further 1.86 million mt can be fished from Exclusive Economic Zone (EEZ) waters. At present deep sea fishing in the EEZ has not been fully developed, while inshore coastal fishing areas already are fully exploited.

Current production of skipjack and other tuna is low compared with Indonesia's overall fisheries production. One major reason is a shortage of fishing vessels over 200 tonnes. To overcome the problem the government has issued licenses to foreign vessels that pass minimum international standards to operate in Indonesia's EEZ. Some vessels are chartered or leased by the government while others have formed joint venture partnerships with local companies.

Government restrictions on the import of second hand industrial scale fishing vessels to protect the domestic ship building industry prevented Indonesia's deep sea fishing industry from developing during the 1980s and 1990s as locally built large fishing vessels were too expensive for most fishing companies to afford.

“Businessmen weigh up what is more profitable – buying a new vessel or second hand, so they thought it is not worth buying new purse seiners,” Sutandinata said. “Small 100 to 200 tonne boats are no problem and we make a lot here. Big capacity fishing vessels they had to buy second hand, but in the past you could not buy a foreign fishing vessel, just a small locally made vessel. But small purse seiners are not efficient and cannot catch a lot. This was the situation from 1980 to 1998. There is a big price difference between a new and a second hand vessel.”

According to Fishery Ministry figures, about 700,000 fishing boats are in use, of which almost half are non-powered. About 25% of fishing boats are fitted with inboard or outboard motors. Just 4% of vessels are classified as large wooden plank built vessels. Few large, modern deep sea fishing vessels are locally owned.

While the new regulations covering foreign fishing vessels will increase fish supplies to the domestic market, the new controls are expected to encourage foreign fishing vessel owners to establish local fish processing facilities. The Fish Cannery Association believes that the new proposed investment is not needed.

“The new government regulations ask for fishing vessel owners to invest in processing plants here, but our association does not think this is necessary as we have underutilised facilities,” Sutandinata pointed out. “We estimate only about 30% of the tuna and sardine canning capacity is currently in use and that about 70% of our present capacity is still available for use. Our canning association members are talking mostly to the Philippines fishing fleet owners as only they catch tuna, while Thai and Chinese vessels are catching mostly bottom fish for filleting. But another fishery association wants Thai and Chinese fishing vessel owners to process their catch here.”

A flood of investment in new fish processing plants is not expected, however, as foreign fishing companies are waiting to see how the new regulations take effect.

“Foreign fishing companies are still in the 'wait and see' mode before they invest. Maybe it will take another year. Investors will not come in straight away. They will see how things go,” Sutandinata said. “We are looking forward to see a new improvement. The main challenge is how the government can control and monitor the foreign fishing vessels.”

Tuna canning plants are located in Medan in Sumatra, Surabaya and Banyuwangi in East Java, Cilecap in central Java, Bitung in North Sulawesi and Sorong in Irian Jaya. Bitung is one of the major tuna canning centres with more than 30 canneries in operation at one time until a shortage of tuna supplies caused some to close down.

Most tuna canning plants that pack skipjack, yellow fin and albacore tuna are capable of processing 50 to 100 mt of tuna meat daily.

With foreign fishing vessels taking their catches away for processing elsewhere, Indonesian tuna canners import part of their supplies from nearby Pacific countries to ensure sufficient supplies are available to operate their canneries. The promised new regulations should ensure that sufficient local supplies are available in future.

“Some tuna are imported as we do not have the material; mostly from Pacific countries. They are caught mostly by Japanese and Taiwanese vessels,” Sutandinata said. “If all the tuna caught in Indonesian waters were processed before export except sashimi, it would be enough. We are pushing for this and the government is making a draft of that regulation. It does not require a new law. It would cover all fish. The fish canning industry and all fish processors would benefit.”

“Foreign fishing vessels do not land their catch here. There was a requirement to do so but the control and monitoring was weak. Now all vessels are required to have a vessel monitoring system installed.”

Tuna in cans is produced for export only. An estimated 3,350 containers are shipped each year holding 4.69 million cases containing 225 million cans worth about US$100 million.

Canned sardines and mackerel are produced mainly for domestic consumption. Total production of canned sardines and mackerel is 300 million cans a year. Canned sardines are the major product and account for 90% or 270 million cans of the combined production figure while the annual production figure for canned mackerel is 30 million cans.

Other canned products are mostly crab meat and shrimp. Also packed for export, production numbers are lower than for canned fish.

“About 99% of the canned tuna is exported. Tuna is too expensive for people here. Also, they are not used to eating tuna,” Sutandinata commented. Noting that about 90% of canned sardines are supplied to the local market, he added: “Canned sardines are eaten by all Indonesians whether living in the cities or the countryside. A small can of sardines costs Rp 2,500 (£0.15 or 28 US cents) retail. There is always a drop in sales if the price is increased, but then sales pick up again. Total canned sardine and mackerel sales are stable.”

Meanwhile, the government has already started renegotiating bilateral fishing agreements with several countries which will require foreign vessels to land their catch in Indonesia for processing.

“A government to government agreement with Thailand expired in 2006 and one with China expires this year. Thai and Chinese fishing boats just fish and take their catch away,” Sutandinata said. “The agreement with the Philippines expired 2005. Indonesia also has fishing agreements with Taiwan, Japan and others, but these are not government to government. Taiwanese companies have fish processing investments here.”

In August 2006, Indonesia and Thailand concluded a new government to government agreement under which Thai fishing companies operating in Indonesian waters will be required to set up processing plants in Indonesia.

The agreement was made under Indonesia Ministerial Decree No 17/2006 that allows foreign fishing vessels to operate in Indonesia's EEZ on condition that they set up fishing processing plants in Indonesia.

“If Thai fishing firms want to operate in Indonesian waters they will have to establish processing plants in Indonesia. But for types of fish that currently cannot be processed here, Thai fishing firms will be allowed to export them or enter into collaborative ventures with local firms to process them,” Aji Sudarso, head of data and information at the Maritime Affairs and Fisheries Ministry in Jakarta was reported as saying by the Jakarta Post.

According to Indonesian officials, Thai fishing companies plan to set up processing joint ventures with about 10 to 16 Indonesian companies.

The Indonesian government has issued licenses for 355 Thai fishing boats to fish in Indonesian waters but only 306 are doing so at present.

The government is also planning to apply similar arrangements to fishing boats from the Philippines and China.