State Fisheries Committee outlining new policy for capture quota allocation

October 29, 2007 15:55

With the current term of five-year quota shares for commercial fishery expiring in 2008, Russia's State Fisheries Committee is stepping up efforts to draft quota allocation policy for the period beyond the deadline. In particular, during the next share-out the government body is planning to distribute the quota shares between the users for a period of ten years, which is twice longer than the previous five year shares practiced from 2004-2008. It will be one of the first and most important measures to be taken in order to support the nation's fishermen, head of the Committee Andrey Krainy told Kommersant.

The Committee is not going to introduce substantial changes of the current quota distribution system based on the historical principle. However, the market will be cleared from quota profiteers and those who have been harvesting less than 50% of the quota with the remaining shares sold to other companies. In general, the Committee's idea is to stop quota speculation, Krainy underlined.

Foreign capital

The State Fisheries Committee is also planning to draw up legislation to block companies with foreign capital from getting quota shares for exploitation of Russian aquatic resources. Now there are some fifteen fishing companies with foreign capital, according to Krainy. There is also a risk group containing Russian companies which have taken loans from foreigners. That has been a common practice when later a loan will be transformed into shares and the State Fisheries Committee now plans to put an end to this practice.

Andrey Krainy thinks that the maximum share of foreign entities in the capital of the Russian fishing companies should be 25% minus one share or, even better, 0%. The names of Russian companies with foreign capital stake are well known to the Committee, Krainy noted. He says that they are certainly not going to take away those shares from foreigners, but they will rather offer them redemption of the stock at the market value of the shares. Russian owners will also be able to take soft loans to buy back those shares.

At present, according to Krainy, more than 50% of Russia's Alaska pollock harvest is controlled by foreign companies. More specifically, some 600,000 tonnes out of 1 million tonnes of the APO TAC are not controlled by Russian interests. About 90% of Alaska pollock currently on sale in Russian retail shops is labeled as made in China or Japan, though this pollock is harvested in the Russian territorial waters and then exported abroad where it is dressed, frozen and packed. Fish processing industries of such countries-importers have flourished thanks to supplies of Alaska pollock from Russia, Krainy underlined. When the Russian fish plants are modernized and loaded at full extent (up from the current 30%), Russia will be able to export fish by itself to Europe and the USA. At the same time, if the nation's APO catches are landed for processing at home, the current fish processing capacities will be inadequate to handle the huge in the demand. In this potential situation Russian businesses could take loans to speed up building of new factories within less than one year. Besides, Chinese and Japanese companies could also come to Russia to build their factories here thus to contribute to development of Russian local communities, Krainy said.

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