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The Corrupt Design in Lobster Downstreaming

Monday, April 22, 2024

Ministry of Fisheries produced some strange regulations about the cultivation and export of lobsters. Those involved include former generals, high rank police officers and prosecutors.

arsip tempo : 172127149145.

The Corrupt Design in Lobster Downstreaming. tempo : 172127149145.

AT first glance, it appears to be in the interests of the people, but the three measures by Maritime Affairs and Fisheries Minister Sakti Wahyu Trenggono to increase state revenues from lobsters have a suspicious aroma to them. The three new regulations cover cultivation of lobster larvae, the setting of the minimum price and exports of the commodity worth Rp419 trillion. There is a distinct impression that the measures by Minister Trenggono have been designed to enrich a small number of people behind the cover of ‘downstreaming’ lobsters.

We begin with Maritime Affairs and Fisheries Minister Regulation No. 7/2024, which allows the resumption of lobster exports. In this regulation, Trenggono has changed the word “export” to “transporting out of the country.” Businesspeople involved are obliged to only cultivate larvae in Indonesia or in Vietnam—the main export destination. Vietnam? It is here that the regulation becomes strange: if businesses can cultivate them in Indonesia, why do the larvae have to be exported and nurtured overseas?

Another regulation, No. 24/2024, sets the minimum price for lobster larvae from fishermen at Rp8,500 each. However, the current export price is Rp10,000. Rather than making a loss, these fishermen might well sell the larvae on the black market. The increase in the catch quota of 90 percent, or 419 million larvae per year, also gives the impression of being a sweetener so fishermen do not lose out as a result of these regulations. This increase in the quota is included in the third regulation, No. 28/2024.

The governments of Indonesia and Vietnam have already nominated five companies from each country to form partnerships to manage this commodity. The Indonesian companies will supply larvae to cultivation companies in Vietnam, then the Vietnamese companies will export the fully-grown lobsters to China, where they sell for around Rp1 million each.

The high price at which lobsters are sold overseas should push minister Trenggono to ramp up the downstreaming of lobsters in Indonesia. This way, Indonesia would make huge profits. The cultivation of lobsters in Vietnam—even if it involves Indonesian companies—also sounds strange. It is obviously a way of making quick profits. The sale of larvae to Vietnam will naturally bring in money faster for investors than waiting eight to 12 months until the lobsters in Indonesia are fully grown.

Moreover, Minister Trenggono’s claim that the state will receive non-tax revenues from these exports is also illogical. In order to maximize these non-tax revenues, the Maritime Affairs Ministry is to establish a public service agency that will buy larvae from fishermen, then sell them on to exporters with a profit margin of around Rp3,000 each. But this calculation could be misleading because the price set by the government is below the market price. It is highly likely that fishermen will be reluctant to sell larvae to this ministerial body.

Meanwhile, exporters will not hesitate to buy and sell larvae on the black market that has flourished since the government banned their export. After all, these transactions are still profitable because the price of larvae in Vietnam is very high.

Minister Trenggono’s lobster policies are even more suspicious because the companies that will be involved in exports were not chosen through a strict selection process. The track records of these five cultivation and export companies are rather dubious, and the provisions and appointment process are also vague.

An investigation by this magazine found that the domestic partner companies are owned by former senior law enforcement officials such as police officers, prosecutors and also military personnel. Before being appointed Maritime Affairs and Fisheries Minister, Trenggono was Deputy Defense Minister. It is fair to suspect that the companies involved are only rent seekers, not real exporters.

Therefore, if not corrected, the consequence of Minister Trenggono’s policies will be the destruction of Indonesian maritime resources. The reduction in the minimum size of lobsters that can be exported as well as the increase in the number of types of lobsters can be exploited will lead to large-scale exploitation. The downstreaming of lobsters is simply a contrivance that—it is easy to suspect—is a design for corruption through the extraction of abundant natural resources.

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