The Asia-Pacific region dwarfs the rest of the world in seafood production and consumption. Almost 70% of the world’s fishing vessels are in Asia, placing intense pressure on fish stocks. Evidence of overfishing is widespread. Countries like Indonesia, whose territorial seas are vast and whose population depends on seafood for food security, are starting to search for solutions to the problem. With this in mind, the fisheries industry and financial and governance experts from around the world gathered on July 27th and 28th at The Economist’s South-East Asia and Pacific Regional Fisheries Summit to discuss how to speed the transition to sustainable fisheries in Southeast Asia.
Trawling through options
Indonesia’s bold steps to forcibly expel illegal foreign fishing vessels from its waters loomed large at the summit. It was addressed in a keynote speech by the leader of these efforts the Indonesian Minister of Maritime Affairs and Fisheries, Susi Pudjiastuti. Seizing and blowing up illegal foreign fishing vessels is decisive, but managing a vast domestic fleet of mostly small-scale fishers is a more detailed enterprise. Ms Pudjiastuti announced that Indonesia would begin to make efforts in this direction, placing seasonal limits on fishing within the next year and eventually regulating “what, how and how much” is harvested.
Such limits will be difficult to enforce across the Indonesian archipelago, but without them there is no viable solution to the problem of overfishing. Indonesia is hardly unique in its predicament. The issue of unlimited access to fisheries is typical of South-East Asia and many developing nations around the world. The result is a significant loss of revenues and food security. Findings of a joint project between academics at the University of California, Santa Barbara, and the Ministry of Fisheries in Indonesia were realised at the summit. They revealed that better managing fisheries could add several billion dollars of value to Indonesia’s economy annually.
Watershed moment
With that much potential value in play, the fisheries sector should present an attractive investment opportunity. However, traditional lenders and investors have shied away from financing fisheries, especially those on a smaller scale which have few ecological or economic indicators available. The lack of formal access rights also critically erodes investment opportunities in fisheries, where investors see only predictions of declining fish stocks and no collateral beyond leaky wooden boats. Productive fisheries must offer investment opportunities. However, the Director of Sustainable Finance for the Indonesian Financial Services Authority (OJK), Edy Setiawan, pointed out that the Indonesian financial institutions “lack understanding and lack trust in fishermen”.
Ways forward
Moving toward sustainable fisheries that generate wealth in countries like Indonesia is a complex process, requiring not only large-scale investments, but also fundamental changes across government, harvesters, suppliers, the fishing community, and scientific and financial institutions. The lack of understanding and trust between these actors, along with the problem of unrestricted access to fisheries, are fundamental hurdles.
The effort to better understand these obstacles and accelerate change resulted in a lively discussion at the summit, which focused on three parallel topics:
Accelerating the transition to sustainable fisheries management
Well-defined access rights are fundamental to sustainable fishing and wealth generation. Better science and data, enforcement, and management capacity will play a role in transforming how fisheries are managed.
Deploying capital for fisheries reform
One success story is the recent infusion of capital from an impact investor into Bali Seafood International’s efforts to shorten the supply chain and pay more for sustainably caught fish in Sumbawa, Indonesia. How to scale up that kind of investment remains an open question.
Building sustainable supply chains
More sustainable fisheries could be achieved by placing import restrictions on untraceable fish, and through players throughout the supply chain capitalising on the potential returns of sustainable fishing. The latter movement will be especially powerful if supply-chain improvements ensure that economic rents go to fishing communities, which are culturally important in Indonesia, the region, and in many countries the world over.
The South-East Asia and Pacific Regional Fisheries Summit is not the end of the conversation. Experiments by fishing businesses, governments and the investment community are underway. The results of these efforts, as well as reports from the working groups created at this summit, will be reported on in February 2017 at The Economist’s World Ocean Summit in Bali. This even wider forum will expand the discussion from fisheries to the potential of a broad range of sustainable ocean industries.
