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RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHVK #0103/01 2621020
ZNR UUUUU ZZH
R 181020Z SEP 08
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1011
INFO RULSJGA/USCG HQ WASHDC
RUCPDOC/USDOC WASHINGTON DC
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHUL/AMEMBASSY SEOUL 0267
RUEHKO/AMEMBASSY TOKYO 0129
RUEHVK/AMCONSUL VLADIVOSTOK 1100

UNCLAS SECTION 01 OF 02 VLADIVOSTOK 000103 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL SENV ECON RS
SUBJECT: WHAT'S RUINING FISHING AND WHY LEGAL CATCH DOESN'T PAY 
 
REF: VLADIVOSTOK 082 
 
VLADIVOSTO 00000103  001.2 OF 002 
 
 
¶1.  Summary.  Industry experts gathered in Vladivostok for the 
2008 Fishery Congress to discuss problems facing Russia's 
fishing industry.  Participants outlined several problems which 
include an obsolete fleet, confusing regulations, lack of 
processing facilities, and dwindling fisheries.  An 
ever-worsening situation has resulted in a decline in total 
official catch for Russian boats of 56 percent over the two past 
decades. 
 
---------------------------- 
New Conference, New Promises 
---------------------------- 
 
¶2.  Fishing industry experts gathered for the Fifth Annual 
Fisheries Congress in Vladivostok September 3-5 to discuss 
strategies for sustainable development of the industry. 
Speakers and participants focused on protecting marine 
resources, combating illegal fishing, and promoting and 
marketing sustainable fishing practices.  Many participants 
commented that little follow-up was made on issues raised at 
last year's congress, and that federal officials followed 
through on few of the promises made in earlier years.  They also 
noted that participation by foreigners was down this year.  The 
main problems the industry faces are outlined below. 
 
--------------- 
Rusty Old Ships 
--------------- 
 
¶3.  Russia's fishing fleet is woefully outdated.  Most vessels 
are over twenty years old and not equipped with modern 
navigation and tracking technologies, and are therefore unable 
to fish extensively in international waters.  Most banks are 
unwilling to finance fleet modernization, as they consider the 
industry to too big a financial risk with boats being movable 
assets that can easily disappear to North Korea or elsewhere. 
Though the government has acknowledged the credit problem, it 
has thus far refrained from taking action to provide alternative 
sources of funding.  In addition, the inefficient old fleet 
results in increased fuel consumption.  Fishermen at the 
conference stated that fuel now amounts to 30 percent of the 
cost of their catch. 
 
-------------------------------- 
Dwindling Fisheries and Poaching 
-------------------------------- 
 
¶4.  Poaching remains a serious problem.  Illegal fishing of 
protected species, unlicensed foreign boats in Russian waters, 
and catches exceeding quotas continue to deplete fisheries and 
seriously impact legitimate fishermen.  Although Russia banned 
the export of live crab in May 2007, large amounts continue to 
be smuggled out of the country, primarily to Japan, South Korea 
and China.  More than 30,000 tons of crab were taken from 
Russian waters during the first half of the year and sold to 
Asian markets.  The amount is already triple the legal quota for 
the year.  Experts at the conference estimated that at least 30 
fishing boats continue to regularly poach crab in the waters of 
the Russian Far East, most of which are Cambodian-flagged with 
Russian crews.  Vladimir Belyaev, a representative of the 
Federal Fisheries Agency in Moscow, noted that, so far, the 
Japanese and South Korean governments are reluctant to cooperate 
in preventing illegal fishing, and refuse to share information 
regarding the quantities of crab and fish delivered by poachers. 
 
----------------------------- 
Lack of Processing Facilities 
----------------------------- 
 
¶5.  Russia lacks fish processing facilities, which reduces the 
potential for adding value to the fish caught.  It is hardly in 
a fishing boat captain's interest to haul his catch back to 
Kamchatka or Sakhalin when he could take it directly to 
processing plants in China, Japan, or Korea.  Currently, exports 
of fish that actually make it back to Russian shores are in the 
form of unprocessed frozen fish.  During the Soviet era the 
government operated both on-shore fish processing facilities and 
maintained giant processing ships offshore. 
 
------------------------------------- 
New Regulations that Beg to Be Abused 
------------------------------------- 
 
¶6.  Russian-flagged boats are now required by law to bring their 
catch back to Russian ports for inspection.  The rule was 
designed to bolster the local fish processing business and 
provide tax revenue.  In practice, however, the system remains 
so complicated that it almost begs to be abused.  High port and 
 
VLADIVOSTO 00000103  002.2 OF 002 
 
 
customs dues coupled and excessive controls at Russia's fishing 
ports simply encourage boats to go directly to foreign ports 
where they are welcome to sell their catch.  Even though Russian 
fishermen do pay customs duties to land their catch in Japanese 
or South Korean ports, overall costs remain significantly lower, 
and procedures take hours instead of days. 
 
------------------------------ 
"The Stupidity of Bureaucrats" 
------------------------------ 
 
¶7.  More than forty federal agencies regulate the fishing 
industry, often unpredictably, overstepping their mandates and 
issuing contradictory regulations.  As one participant put it, 
"we need to fight more against the stupidity of bureaucrats than 
against poachers."  For example, a bureaucratic disagreement 
over the interpretation of a new fishery law turned the 2008 Sea 
of Okhotsk pollock season into a disaster for many Far East 
fishing companies.  The Northeastern Border Guard Directorate 
narrowly interpreted the new regulations and accused nearly all 
of the pollock fishermen in the area of poaching and other 
violations, detaining dozens of boats for weeks pending 
investigation and court decisions.  The RFE Military 
Prosecutor's Office eventually stepped in and found the 
Directorate's actions inappropriate, ruling in favor of the 
fishermen.  By then the season had been disrupted, companies 
were unable to meet their quotas, and they suffered heavy 
financial losses due both to lost productivity and un-refunded 
fines. 
 
------------ 
GOR Response 
------------ 
 
¶8.  Within the framework of a recently enacted national program, 
Moscow has pledged to allocate 62 billion rubles (2.5 billion 
USD) to support and encourage Russia's fishing industry.  Thirty 
percent of the program's budget will be allocated to the Russian 
Far East to build 27 new research and fishing vessels, fifty 
fish farms, and to expand fishing port facilities in 
Vladivostok, Petropavlovsk-Kamchatskiy, Nevelsk, and in a number 
of smaller towns.   The GOR has also set up a fisheries 
protection program through 2020. Federal fish hatcheries in the 
Russian Far East are also meant to increase production and guard 
against precipitous declines in fish stocks. 
 
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Comment 
------- 
 
¶9.  Prospects for the Russian fishing industry in the Far East 
remain less than promising, but the conference does bring 
together the right players and is a necessary forum that may 
eventually bring results.  Greater participation by the US in 
the forum would be welcome and could contribute to the 
industry's success and could provide some opportunities for the 
American seafood industry.  But, while officials annually 
discuss various big-picture reforms to improve the industry, 
they tend to avoid details and ignore the immediate needs of the 
industry, leaving the most pressing problems unresolved. 
Regulations, taxation, and a lack of subsidies make legitimate 
fishing unprofitable.  The 62 billion rubles allocated to 
develop the industry is a negligible sum considering the 
significant problems which fishermen of the Russian Far East 
meet daily.  As one participant at the conference candidly 
assessed, "catching legally earns you nothing." 
ARMBRUSTER