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Rule change sees foreign investors back in Indonesia's fisheries scene

Mongabay - March 10, 2023

Basten Gokkon, Jakarta – The Indonesian government has rolled out a new fisheries management policy that, among other things, caps the catch quota for industrial fishers, but also allows foreign investment back into the marine capture sector.

The government issued a decree on the policy change on March 6, aimed at maximizing state revenue from the fisheries sector. A key policy change is the introduction of quota-based capture in six fishing zones for industrial, local, and non-commercial fishers.

The other major change is the lifting of a ban on foreign investment in the marine capture sector. The ban had been imposed in 2016 by the fisheries minister at the time, Susi Pudjiastuti, who blamed foreign-funded fleets for contributing to the depletion of Indonesia's fish stocks.

Mongabay reviewed the decree and found that foreign-funded fishing companies will now be allowed to operate in zones that cover some of Indonesia's richest marine ecosystems, such as the Natuna Sea, Arafura Sea, Cendrawasih Bay, and Sawu Sea. Even so, some restrictions remain; the foreign stake in a given company is capped at 49%, with the controlling stake held by local investors.

Sakti Wahyu Trenggono, the current fisheries minister, said he "really want[s]" these fishing zones to "thrive and bring in investors from abroad," as quoted by state news agency Antara.

The new capture quota, meanwhile, is based on the potential fish stocks and total allowable catch (TAC). The previous policy allowed all fishing operators – from artisanal to industrial – to catch as much fish as they wanted as long as the total capture did not exceed the TAC, capped at 80% of the estimated fish stock. The new quota system will allocate a percentage of the TAC to each category of fisher.

Those affected are industrial, local, and non-commercial fishers, while small fishers are exempted from the quota. In addition, industrial fishers are not allowed to operate within 12 nautical miles (22 kilometers) of the coast. The fisheries ministry says this approach should help reduce pressure on fish stocks and maintain their sustainability, while also encouraging and benefiting small fishers, who make up the majority of Indonesia's fishers.

The new policy also does away with criminal penalties for violations, prescribing instead administrative sanctions such as fines and permit revocation. This is a direct consequence of the hugely controversial 2020 Job Creation Law, which ushered in sweeping deregulation across a wide swath of industries.

These key changes have raised concerns among some marine conservationists and defenders of artisanal fishers' rights, who say that the new policy is mostly oriented toward the large-scale exploitation of Indonesia's marine resources when more than half of fishing zones in the country are already "fully exploited."

"I think the new strategy looks like handing out land concessions, but at sea," Parid Ridwanuddin, the coastal and marine campaign manager at Walhi, the largest environmental advocacy NGO in Indonesia, told Mongabay in an interview.

The latest data released by the fisheries ministry put Indonesia's estimated fish stocks at 12 million metric tons, down almost 4% from the 12.5 million metric tons estimated in 2017. The data also show that 53% of the country's 11 fisheries management zones, known as WPPs, were now deemed "fully exploited," up from 44% in 2017, indicating that more stringent monitoring is required.

As an example, under the new scheme, the ministry says zone 3 – encompassing the eastern seas of Halmahera, Seram, Arafura, Timor and Banda, and the bays of Tomini and Tolo – has an annual catch quota of up to 3.4 million metric tons. The quota for industrial fishing is 2.7 million metric tons, or nearly 80% of the allocated quota. However, the ministry says the area covering the Banda Sea and Tolo Bay has been designated only for local fishers because it's a key fish breeding and nursery site.

"The quota-based fisheries policy has given a privilege to large-scale fishing businesses and marginalized small-scale fishers," Parid said.

Indonesia's wild capture fisheries employ around 2.7 million workers, most of them small-scale operators with vessels smaller than 10 gross tonnage. Under the business-as-usual scenario, capture fisheries is projected to expand at an annual rate of 2.1% from 2012 to 2030. The ministry's data show that the average total catch over the past five years was 7 million metric tons annually, valued at up to 140 trillion rupiah ($9 billion).

The country's capture fisheries sector, which serves both the domestic and export markets, had since 2016 been off-limits to foreign investors, in an effort by then-minister Susi Pudjiastuti to tackle illegal, unreported and unregulated (IUU) fishing by foreign vessels in Indonesian waters. By 2018, official estimates for the country's total fish stocks showed a 5% increase from the previous two years, which fisheries experts largely attributed to Susi's efforts to keep illegal foreign fishing boats out of the country's waters.

Susan Herawati, general secretary of the advocacy group Coalition for Fisheries Justice (KIARA), said the new policy fails to uphold the principles of equitable and sustainable fisheries and instead prioritizes raking in the maximum state revenue possible from the sector.

She said the new policy creates uncertainty over the definition of a small fisher and a local fisher, with the only distinction being that local fishers are only allowed to operate within a 12-nautical-mile band from shore. Susan said some artisanal fishers, such as those in the Riau Islands, East Java, and North Sulawesi, often travel much farther than this in search of fish.

She also noted that local fishers who fit the definition will now have to pay fees for certification, resource exploitation, port services, quality inspection, and training, among others, just like industrial fishers, as the government looks to collect non-tax revenue.

Susan also warned of a weakened deterrent effect for fisheries crimes as the new regulation only prescribes administrative sanctions. The fisheries ministry has acknowledged that compliance among fishing companies in Indonesia is low. The ministry has officially registered just 6,000 fishing permits, but the transportation ministry records some 23,000 permitted vessels. Regular patrols are costly and limited due to lack of infrastructure and human resources, especially for a massive archipelago like Indonesia with its thousands of islands.

"KIARA together with traditional fishers in Indonesia strongly demand the government stop and revoke the quota-based fisheries management decree because it is against the principles of sustainable fisheries and marine in Indonesia, and it's against the country's fisheries law," Susan said.

Source: https://news.mongabay.com/2023/03/indonesia-fisheries-management-policy-foreign-investment-marine-sustainable