Rendi A. Witular, The Jakarta Post | Fri, 02/05/2010 9:33 AM
Lengthy bureaucratic processes and a lack of financing have reportedly driven businesspeople away from the resource-rich fisheries sector. Accounting for around 3 percent of the gross domestic product (GDP), the government has grossly mismanaged the sector, critics say. The Jakarta Post’s Rendi A. Witular recently talked with Maritime Affairs and Fisheries Minister Fadel Muhammad on his strategy in lifting the sector from this predicament. Here are some excerpts from the interview:
Question: What problems were spotted in the ministry during your first 100 days in office?
Answer: The most important issues dampening business appetites to engage in the sector were largely related to lengthy bureaucratic chains that end up creating bottlenecks in the provision of operational licenses for the business sector. The bureaucracy processes are just so ridiculously long and tedious.
Do you think the lengthy bureaucratic processes are there for rent-seeking?
Definitely. (Officials) have somehow made the bureaucracy process so difficult for so many years. Under my management there will be no illegal fees for bureaucratic processes. Business operators can now get an operating license for just about anything within around three days — a process that took anywhere from six months to one year previously. I’ve received numerous complaints from fishingboat operators who say licenses that are valid for one year take six months to process.
What other crucial issues have you detected?
The fisheries sector has the least exposure to banking resources. This is because banks have less knowledge about this sector and (small and medium-size) fisheries businesses, especially in regional areas. But also local administrations and businessmen have less capacity in designing good proposals to request bank loans. My plan to resolve this is to intensively promote the industry to the banking sector, as well as to provide assistance in getting loans. At present bank loans for the fisheries sector only account for 0.05 percent of the total loans disbursed. Other issues hampering loan exposure is that banks are often reluctant to use fishing boats as collateral. We are trying to settle this by urging small and medium-enterprise operators to apply for government-sponsored loans (KUR) that require them to provide only 30 percent of the necessary collateral.
Increasing loan exposure will also help us focus on developing fish cultivation business, as well as revitalizing salt business. I expect the salt deficit, which has absorbed huge amounts of currency reserves, will be resolved by increasing salt output at home and limiting imports.
Are you going to continue the policy of importing patrol boats?
I don’t think so. I’m currently reviewing all procurements of patrol boats. I have ordered my officials to repeat bidding processes for such procurements, and to prioritize local producers and cut imports. An example of this is the re-tender of a patrol boat procurement worth around US$70 million. Because of this new policy, an Australian company has recently filed for litigation with the Central Jakarta District Court, demanding we stick to the previous bidding process, even though we had not announced any winners yet. I’ve told the Australian company we have a different policy now, which prioritizes local producers.
What are your strategies to tackle the massive illegal fishing problem allegedly supported by ministry officials?
I will not tolerate any violations committed by my officials. I don’t care if this illegal poaching is backed up by powerful organized criminal groups. I will not spare any of them. I have ordered my officials to directly confiscate fishing boats allegedly committing illegal poaching. We will no longer auction these boats because often the winner is the previous owner of the boats. This happens all the time. I think it is no longer effective to auction confiscated boats. I will instead donate the boats to universities for research, or give them to local administrations to empower local fishermen. The confiscation and donation of boats will not wait for legal proceedings.
My other strategies are to force local and foreign companies to have processing facilities operating before they can receive licenses to fish. With the facilities we expect to create more employment and added value. Foreign companies and joint ventures here regularly ship their catches overseas without being processed here. This can no longer be tolerated. We are not going to allow them to fish here unless they have built processing plants. I am also in the process of revising all regulations related to fishing in the open seas, with the aim of eliminating loopholes that can be used by poachers to escape justice. Under the review, we will also require foreign fishing boats operating here to have local crews. I expect the regulation revisions will be completed by March.
Are you going to grant special licenses for certain countries to be able fish here freely?
That’s not going to happen under my management. In the past, this policy has proven to create losses on our side.
