On The Couch With Indonesia’s Iron Lady

After ordering destruction of hundreds of IUU vessels, Minister Susi Pudjiastuti reveals her plans to boost local tuna processing output and exports.

Among a busy seafood week in Brussels, Atuna grabbed the chance to sit with the acclaimed Indonesian Fisheries Minister, Susi Pudjiastuti, to catch a glimpse of the personality behind the Iron Lady persona, and understand her future plans for a country that has been pioneering in the IUU fishing fight.

Described as a strong and feisty woman by those that accompany her, it’s obvious that Minister Pudjiastuti’s work to stop illegal fishing operators intruding on Indonesia’s waters, is applauded loudly by the officials and the people of Indonesia. This fight within her was channeled through her words, but she also revealed a softer and very humorous character when discussing what’s gone wrong in the past and how Indonesia has to change for the sake of its people’s livelihoods.

While the recognition she gets nationwide and increasingly on an international scale is valued greatly by the Minister, her firm focus now is to gain the same acknowledgement from the European Commission, in the shape of trade benefits, and for Indonesia to also attract investment from foreign firms to develop the country’s tuna processing industry. She underlined this goal as a speaker at the recent European Tuna Conference, organized by Atuna.

Living up to her Iron Lady persona, she’s adamant that the country will get what it wants eventually.

Asking Pudjiastuti why she thinks Indonesia is an attractive investment ground for foreign companies, Atuna was told that the nation is opening up the possibility for up to 100 percent ownership, meaning firms can fully control what they want to do.

“In the outer islands, we even give incentives on tax,” she explained, “and the government is investing a lot to develop the infrastructure, which should be very interesting to foreign firms.”

As well as this, referring to her hardline IUU approach, which has seen the destruction of hundreds of boats that encroach on the country’s EEZ, she stresses that Indonesia is the most advanced country in eradicating illegal fishing operations, offering processors a good guarantee of a bountiful supply of legal catch.

Close to a yellowfin tuna breeding zone, Indonesia, according to Pudjiastuti, can guarantee investors fresh catch with quick delivery. “The tuna is close to the shore,” she says, “so the freshness is high, and I think that’s important to processors.”

While these factors place Indonesia in a potentially attractive position for foreign investors, there is one issue that the Minister is defiantly firm on, and that’s related to fishing access.

“Foreign fishing rights are shut down,” and there are no plans to open them up, she strongly asserts, not even for those that pump money into production.

Other nations that have tried to increase foreign investments in their tuna processing sector in the past, taking PNG for example, have compensated firms with reduced or even free fishing rights in their waters.

In past years this has caused a situation where canneries in both Indonesia and PNG have remained largely unproductive, processing far below potential capacity, despite the fact that high volume tuna catches are being hauled in by their own vessels in close-by waters. The fishing companies involved with the canneries point at several factors, such as energy costs and a lack of infrastructure, for why processing locally is unfeasible.

In the case of both countries, local catches were ending up instead at processing plants in the Philippines and Thailand, and thus not contributing to the local economies.

Minister Pudjiastuti is confident that this story will not repeat itself in Indonesia, stressing “we don’t give fishing rights to foreign firms, and we won’t.” She explained that the nation has “learnt that opening up its waters is easily creating the chance for IUU fishing operations.”

With this said, she does believe that the option for 100 percent ownership in processing is incentive enough for foreign investment, and adds that firms can always contribute in growing local fishing capacity, not in the form of joint ventures, but by offering financial help. “Ownership has to be Indonesian.”

At this point in the conversation, Pudjiastuti dropped her Iron Lady exterior somewhat, and showed her care for the people of Indonesia, and for the sustainability and development of their businesses.

She believes that financial investment from foreign companies doesn’t only improve local tuna catch, but makes supply to local canneries stronger, and stresses that this is an appropriate cooperation for business to enhance livelihood, and vice versa.

So far, the Minister states that Indonesia has not been able to position itself on the global tuna trade map with the prominence she’d hope for. With relatively tuna-rich waters and a long history of its flagged fleet reporting one of the largest tuna catches, Indonesia’s comparative role in global tuna trade has been far less significant, and according to her there are several reasons why.

She explained that transportation to the main gateways for exports has been challenging, and therefore, a lot of the country’s tuna catch is sold in the domestic market. This is positive in one sense, she believes, as ultimately it is greatly important for a nation to feed their people high protein food. However, she still sees major potential for tuna export, and the positive impact this in turn has on the economy.

Another large obstacle Indonesia has faced, she states, is a higher import tariff rate in the EU market for tuna products, compared to other major industry players. Minister Pudjiastuti explains that the duty level is an average of 15 percent for Indonesia, while countries like the Philippines, PNG, Fiji and others, enjoy free trade with the bloc.

In light of the nation’s IUU efforts particularly, she said: “I think this is unfair treatment from the European Union, after all we have done in the last few years. Indonesia should be rewarded for that.”

Acknowledging that negotiations for a potential bilateral Free Trade Agreement (FTA) with the EU have started, and that these should be comprehensive, the Minister believes that the EU should be able to initiate such a trade benefit reward more quickly and easily.

“We have not only combatted IUU for the sake of our own economy, but we have protected the stock of yellowfin, which breed in our zone, and swim all over the world. Through this protection we have also secured sustainability of business for everyone, not only for the Indonesian economy.”

Pudjiastuti is confident the EU will hear her call, and will move faster to help and assist Indonesia and its tuna industry to get the best benefit in response to the country’s actions and its sustainability program over the last years.

Such benefits, she insists, have already been answered in the US market, another major tuna export destination in which Indonesia’s processors are keen to significantly expand.

“These markets must assist us”, she stressed; “in order to be fair, transparent and responsible markets.”