Layoffs loom in Chile in wake of new calamar gigante law

A controversial law that restricts the harvest of calamar gigante in Chile to artisan hand-lines will take effect in August.

Industrial fishers are warning the change will cut them out of the business and could yield as many as 1,700 layoffs initially, plus plant closures and an impact on third-party suppliers. 

The new law targets trawling methods used by six industrial firms that catch calamar gigante (Dosidicus gigas), also referred to jumbo squid or pota, putting in place fines of up to USD 38,000 (EUR 33,300) for violators. 

Passed into law in January of this year, the bill generated an intense debate and protests as the industrial fishers warned it was a decision based on politics and not technical merit.

According to Andrés Fosk Belan, general manager of Landes, one of the industrial calamar gigante producers, the law was passed without a thorough discussion and with only the artisan sector in mind, “under a guise of sustainability.”

Fosk told SeafoodSource that currently calamar gigante represents around 33 percent of his company’s revenues, although there are other producers which would see 50 percent of their revenues lost due to the change. In its case, Landes expects it will have to slash 200 jobs due to the restriction, out of around 500 total employees.

Moreover, he added that the industrial sector generates significant additional revenue through exports and indirect employment. Once it passes, around 40,000 tons of industrial production could be lost.

Marcel Moenne, general manager of Pacific Blu, another commercial calamar gigante-fishing firm, said he believes that the law is at heart not just a bad idea, but unconstitutional and creates a situation where “nobody wins” and criticized its approval process.

“They did not hold any hearings to listen to the industry players, and in the end the Senate pushed forward political, not technical, criteria,” Moenne told SeafoodSource. “As a company, we consider that this must be one of the worst regulatory errors that has been made in the country.”

In Pacific Blu’s case, around 400 workers are expected to be impacted by the new regulation with layoffs. But Moenne added that the impact does not stop there, as some 76 local small businesses that supply goods and services to support the process would also be affected. 

In Landes case, additional employees could be affected, and the company’s fishing fleet could also feel pain from the law’s fallout, which would also leave its mark on maintenance and support crews. The company has also frozen a USD 6 million (EUR 5.3 million) investment it had planned for its plant in Talcahuano.

Other producers, such as Alimar, are warning of similar consequences. Alimar, which previously pulled in as much as one-third of its revenues from calamar gigante, expects to cut 300 employees and close its processing plant in Coronel, according to statements Alimar President Roberto Izquierdo made to ADN Radio.

According to Fosk, the nets used to harvest calamar gigante in Chile are deployed at around 50 meters, and do not touch the ocean floor. Even if they did, he argued, it would still be a legal and sound practice for harvest.  

The government, through Chileam Minister of Economy, Development and Tourism José Ramón Valente, called the layoffs “unjust” and said in a report on Radio Agricultura that the administration never supported the law. He did not get into specifics but said that a new bill with changes to the calamar gigante law is required, but that greater support in the country’s congress is needed to get to the issues at the heart of the matter. 

Officials had been urged to veto the bill in January but balked after protests from the artisanal sector. Executives from the commercial fishing sector warned that the calamar gigante law is not the only issue where the government’s moves are causing problems.

“The behavior of the government has been erratic, unorganized, and even negligent, but not just with the [calamar gigante] law, but also the advance of the annulment of Chile’s fishing law framework,” Moenne warned. 

Photo courtesy of Landes