IUU fishing is attractive because it offers lower operating costs than law-abiding
fishing practices because there could be fishing costs that do not apply to IUU
vessels. For instance, IUU vessels will not be paying any taxes incurred in legitimate
fishing. In 2016, the fisheries sector only contributed to 0.02% of Indonesian GDP or
about IDR 986 billion (about USD 75 million). Even though Indonesia is the world’s
second largest producer for marine capture fisheries,
37 Indonesia’s tax revenues from
the fisheries sector rank the lowest compared to other sectors. Indonesia’s Ministry
of Marine Affairs and Fisheries pointed out that only 2217 out of 2910 registered
fisheries taxpayers paid their taxes.
38
Certain documents are required to conduct legitimate fishing in Indonesia. Each
person who owns or operates a foreign vessel capturing fish in Indonesia must obtain
a fishing permit known as SIPI (Surat Izin Penangkapan Ikan).
39 In addition to SIPI,
a transport permit known as SIKPI (Surat Izin Kapal Pengangkut Ikan) is also
required for owning and/or operating a transport vessel carrying fish in Indonesia’s
fisheries management zone.
40 Moreover, each person who carries out any fisheries
business in Indonesia must obtain a fisheries business permit known as SIUP (Surat
Izin Usaha Perikanan).
41 These permits are seen as operational costs that the IUU
vessels may try to avoid.
Large economic disparities between Indonesia and more developed countries also
create cheap labour for IUU fishing. Poverty and unemployment in many parts of
Indonesia may lure people who are desperate to find a job to operate IUU fishing for
even subsistence income. While honest fishing companies will be constrained by
labour conditions and regular maintenance of their vessels, IUU fishers will not. IUU
companies will likely neglect the safety and working conditions to maximise their
profits. For them, there is no point of maintaining ships that could be seized anytime
or ensuring good working conditions when they can find people who are willing to
fill the spots for a minimum wage and poor working environment.
42
As the primary legal instrument governing the ocean, UNCLOS requires the flag
State to “ensure safety at sea with regard, inter alia, (a) to the construction,
equipment and seaworthiness of ships; (b) the manning of ships, labour conditions
and the training of crews.”
43 Indonesian law itself has laid out detailed technical
requirements to ensure vessel safety.
44 It has also established the rights and obligations of seafarers working in Indonesian or foreign vessels.
45 More recently, Indonesia issued a regulation to ensure legal protection for Indonesians working in
37 FAO (2018), p. 9.
38 Ministry of Marine Affairs and Fisheries (2017).
39 Law No. 45 on Fisheries, Art. 27(2).
40 Id., Art. 28(2).
41 Id., Art. 92.
42 Telesetsky (2015), p. 957.
43 UNCLOS, Art. 94(3).
44 See Law No. 17 on Shipping.
45 See Government Regulation No. 7 of 2000 on Seafarers.
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127
fishing practices because there could be fishing costs that do not apply to IUU
vessels. For instance, IUU vessels will not be paying any taxes incurred in legitimate
fishing. In 2016, the fisheries sector only contributed to 0.02% of Indonesian GDP or
about IDR 986 billion (about USD 75 million). Even though Indonesia is the world’s
second largest producer for marine capture fisheries,
37 Indonesia’s tax revenues from
the fisheries sector rank the lowest compared to other sectors. Indonesia’s Ministry
of Marine Affairs and Fisheries pointed out that only 2217 out of 2910 registered
fisheries taxpayers paid their taxes.
38
Certain documents are required to conduct legitimate fishing in Indonesia. Each
person who owns or operates a foreign vessel capturing fish in Indonesia must obtain
a fishing permit known as SIPI (Surat Izin Penangkapan Ikan).
39 In addition to SIPI,
a transport permit known as SIKPI (Surat Izin Kapal Pengangkut Ikan) is also
required for owning and/or operating a transport vessel carrying fish in Indonesia’s
fisheries management zone.
40 Moreover, each person who carries out any fisheries
business in Indonesia must obtain a fisheries business permit known as SIUP (Surat
Izin Usaha Perikanan).
41 These permits are seen as operational costs that the IUU
vessels may try to avoid.
Large economic disparities between Indonesia and more developed countries also
create cheap labour for IUU fishing. Poverty and unemployment in many parts of
Indonesia may lure people who are desperate to find a job to operate IUU fishing for
even subsistence income. While honest fishing companies will be constrained by
labour conditions and regular maintenance of their vessels, IUU fishers will not. IUU
companies will likely neglect the safety and working conditions to maximise their
profits. For them, there is no point of maintaining ships that could be seized anytime
or ensuring good working conditions when they can find people who are willing to
fill the spots for a minimum wage and poor working environment.
42
As the primary legal instrument governing the ocean, UNCLOS requires the flag
State to “ensure safety at sea with regard, inter alia, (a) to the construction,
equipment and seaworthiness of ships; (b) the manning of ships, labour conditions
and the training of crews.”
43 Indonesian law itself has laid out detailed technical
requirements to ensure vessel safety.
44 It has also established the rights and obligations of seafarers working in Indonesian or foreign vessels.
45 More recently, Indonesia issued a regulation to ensure legal protection for Indonesians working in
37 FAO (2018), p. 9.
38 Ministry of Marine Affairs and Fisheries (2017).
39 Law No. 45 on Fisheries, Art. 27(2).
40 Id., Art. 28(2).
41 Id., Art. 92.
42 Telesetsky (2015), p. 957.
43 UNCLOS, Art. 94(3).
44 See Law No. 17 on Shipping.
45 See Government Regulation No. 7 of 2000 on Seafarers.
7 Market-Based Measures Against Illegal, Unreported and Unregulated Fishing in. . .
127