BSI, Japan to aid Indonesia in creation, management of fishing cooperatives

Indonesia’s Marine and Fisheries Ministry (KKP) has been collaborating with the Japan International Cooperation Agency (JICA) on a sustainable fishery resource management and utilization project, which may get a jump-start from an American entrepreneur.

A new focus by the Indonesian government of fisheries cooperatives, which has included workshops in Indonesia and a two-week training program for officials in Japan, has led the government of President Joko Widodo to investigate the potential of implementing such cooperatives in Indonesia.

The training, which kicked off in July, was aimed at developing personnel with the potential to contribute to the development of marine and fishery cooperatives in Indonesia, particularly by developing and improving various systems in fisheries cooperative institutions, JICA Fisheries Policy Adviser Nomura Ichiro said in a press release.

Japan has long and varied experience in fisheries cooperatives, as coastal fishing rights have been managed through them by law since the Act on Fisheries Cooperative Associations (FCA) of 1948. Fisheries cooperatives in Japan perform many functions: A marketing function, which includes transportation, processing, storage and sales; a savings and loan and insurance business; and a procurement business for supplying fishing gear, spare parts, ice, and fuel. Well-operated cooperatives can act as the backbone of a fishery, Nomura said.

"The operation of public facilities at the fishing port is also managed by the FCA. Some of them are mooring facilities, rescue activities for marine accidents and fishing gear repairs, restaurant businesses, and seafood shops. Finally, FCA provides cooperation and welfare assistance by providing insurance and providing funds,” Nomura said.

A challenge to implementing a system like Japan’s in Indonesia is that Japan has a tradition of strong governance institutions, while Indonesia does not. While data from the Ministry of Cooperatives and Small and Medium Enterprises (KUKM) for 2018 shows that there are around 2,884 fishery cooperatives in Indonesia, most are tiny. That number includes 2,802 micro-scale business units, 69 small-scale business units, and 13 medium-scale business units.

Additionally, 42 percent are inactive, and only 271 have actually registered as cooperatives by obtaining a cooperative master number. In Indonesia, a cooperative is considered active if it holds a cooperative employee meeting once a year. KUKM has been pushing to reform and strengthen cooperatives in Indonesia, under direction from the Widodo administration, and as a result, the contribution of cooperatives to the country’s GDP has increased.

However, to accelerate the adoption process, the Widodo government is exploring the potential of building on a system developed by U.S. businessman Jerry Knecht and his company, PT Bali Seafood International (BSI), which may offer an option for expansion that does not depend on government management.

BSI is a wholly-owned Indonesian subsidiary of North Atlantic, Inc. (NAI), a Portland, Maine, U.S.A.-based importing firm founded by Jerry Knecht, focused on sustainably sourced and socially responsible seafood. BSI opened a new fish processing plant in Santong, Sumbawa, Indonesia in 2018.  Its concept goes beyond the mere business operation of a processing plant. Knecht calls it the “triple bottom-line,” meaning it has resource management and social benefits along with a business profit. Both the resource management model and the social benefits model are somewhat along the lines of the Japanese system.

Knecht has proposed the establishment of a “TURF-Reserve” system. TURF stands for Territorial Use Rights for Fishing. Under the system, an area of water running alongshore for 60 kilometers and extending 12 kilometers out to sea is designated for the use of vessels licensed and based in ports in the area. An adjacent “reserve” area would extend seaward as a sanctuary for conservation. Japan’s system also grants access to the cooperative of a nearby port, though it does not always include the “reserve” component, unless so decided in the local cooperative’s management plans.

“Most other NGO programs rely on the government to manage and build supporting institutions for fisheries management, when it is abundantly clear that there is weak rule of law for enforcement and the government has neither the capacity nor the political will to build or manage institutions needed to support fisheries management,” Knecht said.

In the BSI model, some of the profits go to a nonprofit organization called Makmur di Tempat, co-owned by BSI, local vessel-license holders, and villages. This organization provides micro-lending; education on such topics as best practices, finance and health; ice, fuel, and bait; and encourages use of improved fishing gear.

The model has caught the attention of the Indonesian government. Knecht told SeafoodSource in December that NAI/BSI has received a mandate from President Widodo’s office and subsequently from KKP to replicate its model in up to seven new locations over the next five years of Widodo’s administration.

“The mandate is because of our triple bottom-line approach to fisheries, which benefits all stakeholders,” Knecht said.

Photo courtesy of Andrea Izzotti/Shutterstock