North Atlantic pushing “integrated approach” to fisheries management in Indonesia

Nonprofits have been advocating more sustainable fisheries management in Indonesia and the rest of the developing world for a long time. Yet, in the words of Gerald Knecht, CEO of P.T. Bali Seafood International (BSI), they have largely “failed to move the needle.”

In Indonesia for example, the size of the country (with 800,000 small vessels active in the fishery), lack of capital and weak rule of law have meant that most NGO and NPO efforts have not achieved long-term change.

Knecht is an advocate for a new way forward. He proposes a model—an integrated approach—that includes both a profit-making and a non-profit side. The profit-making side provides incentives for improvement and funds to sustain the nonprofit side, creating a virtuous circle.

As the effort is collaborative, some explanation of the interconnections is necessary. Knecht is the founder of North Atlantic, Inc., a Portland, Maine, U.S.A.-based supplier of sustainably sourced and “socially responsible” seafood.

One of North Atlantic’s shareholders (holding 36 percent) is Aavishkaar Venture Management Services, headquartered in Mumbai, India. The fund, largely backed by European sovereign wealth funds, invests in early-stage development projects in India and other developing countries. A perquisite for Aavishkaar investment is that their projects must have the potential to positively transform the lives of local residents in the areas they work in.

BSI is a wholly-owned Indonesian subsidiary of North Atlantic and intends to establish small processing plants in local ports in Indonesia. Under the current system, small fishermen sell their catches to local brokers, who transport it on to the major markets on the island of Java, the center of commerce for the archipelagic nation, for further processing. There is little fisheries management, no cold-chain record and much spoilage loss. These brokers also act as lenders to the fishermen.

Knecht proposes a system under which a limited-entry fishery would be established for small vessels (under 30 gross tons). The system would be a “TURF-reserve” system. TURF stands for Territorial Use Rights for Fishing. An area of water running alongshore for 60 miles and extending 12 miles into the sea would be designated for the use of vessels licensed and based in ports in the area. A further “reserve” area would extend seaward as a sanctuary for conservation.

This differs from “catch shares” or “individual transferrable quotas” in that it regulates effort (number of vessels, tonnage, gear) rather than total allowable catch. Though fishermen might sell out, and might also use their license as loan collateral, absentee ownership would not be allowed. Operation of multiple vessels by a single owner would be allowed, however, so that there may be some degree of concentration of ownership of licenses.

The mini-plant owned by BSI would add value through faster local processing and implementing a proper cold chain, and a portion of these increased profits would come back to a nonprofit organization co-owned by BSI and the vessel-license holders. This organization, Lesser Sunda Sustainable Fisheries Initiative (LSSFI), would provide micro-lending, education on such topics as best practices, finance and health, and encourage use of eco-friendly fishing gear, such as circle hooks. The vessel licenses would be held in trust by BSI, which would facilitate transfers and also act as steward of vessel-tracking data.

Vessel tracking is a big part of the program, to keep vessels within their TURF area. The program will use an innovative vessel tracking system made by San Francisco-based Pelagic Data Systems (PDS). PDS’ vessel tracking system differs from the Automatic Identification System (AIS) and the Vessel Monitoring System (VMS) used in the U.S. fishery in that those systems utilize VHS radio or satellite signals, while the Pelagic system stores data until within range of a cellphone signal, which the system then uses to send the data. Additionally, the pelagic system is solar-powered, while the former requires an onboard power supply. It is a low-cost passive system suitable for small artisanal fishers, Knecht said.

The role of for-profit BSI in managing the nonprofit and regulatory sides of the plan may be viewed as either problematic or beneficial. To some degree, BSI will gain privileged access to the resource, as fishermen who choose to sell their catch elsewhere, beyond a certain limit, would be asked to leave the LSSFI and lose access to the ancillary services it provides. However, the model has the positive point of feeding profits back into the system providing incentives to fishermen to follow best practices, and to fund the nonprofit side.

Knecht said that NGOs are only recently beginning to accept the public-private partnership idea. He described his early efforts, in 2009, to collaborate with NGOs and government bodies, mainly run by scientists, as “like pulling teeth.”

But now, he said he believes, there is a greater acceptance that industry has play a role the difficult process of encouraging small-scale fisheries to become more sustainable.