RESOURCE-BASED COMMERCIAL FISHERIES MANAGEMENT IN EASTERN INDONESIA

Management may be defined as a way or strategy to attain set objectives. It is a system by which people are organized to meet certain purposes. Aside from people as the central element of management, there are also things, alive and dead, which are used in order to arrive at the set objectives.

Aside from people as the central element of management, there are also things, alive and dead, which are used in order to arrive at the set objectives.Live things are natural resources usually used as input factors, while dead things are tools or equipment.Management as a system consists of sub-systems.Though there are various different breakdowns of management sub-systems, four that are commonly used are planning, organizing, actuating, and controlling.
A commercial fishery has a set of objectives, looking from producers, consumers.traders.and government viewpoints.The producers are fish- ers who want to have better Iandings and income.
The objective of consumers could be simply in the form of having enough fish to eat.Traders usu- ally want to have more money, while government objectives are to generate the income needed to run its tasks, duties.and functions.Thbrefore management of a commercial fishery is not that easy.While the consumers want to have cheap fish and hence expect excess market supply, traders may try to maintain higher prices.In a similar manner, government may set up the fishery to be sustainable in the long run so that it can serve the coming generation.Conversely, the existing fishers could have a short-term strategy to exploit fish resources as much as they can.Hence, man- agement of a commercial fishery may entail conflicts among its beneficiaries.
Since commercial fishing has an economic orientation, it should be a profitable business.In other words, commercial fishing should be properly managed in such a way that the business re- sults in economic rents.Two common ways to gen- erate economic rents are to reduce costs and in- crease revenues.An increase in revenue may be realised by taking as many fish as possible.How- ever, this is not wise from marine biological and environmental perspectives.Fish resources are susceptible to excess fishing.Therefore fishing should be properly managed and the management of fishing is essentially a resource management question.
Resource management and fishery business management are interrelated.One may have sound resource management that sustains long term resource availability.However. it may not bring about expected benefits if business is weakly managed.On the other hand.business may be accurately designed to generate high profit.Yet if resources are depleted because of excessive fishing, thep profitable business may not be sustained.
Based oh this interrelationship, it may be said that the management of fish resources and the man- agement of a fishing company could be portrayed as a coin with two sides.where neither can be left behind.Both aspects should be considered in dt'veloping a commercial fishery.In other words, to have a profitable commercial fishery.the activity must be based on fish resource availability.
This paper attempts to describe the relation- ship between fish resources and business manage- ment that provides long term benefits.A modest term normally used for this relationship is "re- source-based commercial fishery management".The experience of P.T. Usaha Mina (henceforth Usaha Mina) in developing small-scale commer- cial fishing is used as an example in this paper.
Based on the experience of Usaha Mina.implications for the development of small-scale commer- cial fishing in eastern waters of Indonesia are dis- r:ussed.

FISHERIES IN EASTERN INDONESIA
Eastern Indonesia refers to the provinces or areas in east Indonesia consisting of Bali, Nusa Tenggara, East Kalimantan, Sulawesi, Maluku.and lrian Jaya.In total, eastern Indonesia com- prises l1 provinces.The waters bordered by these provinces are Makasar Strait, Flores Sea, Maluku Sea, Sulawesi Sea, Halmahera Sea, Banda Sea, Arafura Sea, the Pacific and Indian Oceans.With hundreds of small and big islands, bays, and straits, the area has potential for marine fishor- ies development.
'' President Director of PT Usaha Mina (Persero).Indonesia The fisheries of eastern Indonesia differ somewhat {rom those of western Indonesia.The differences are related to geographical conditions and economic development.The accessibility of east Indonesia is relatively difficult and it is less popu- lated than the west.Hence considering numbers of local fish consumers, the west Indonesian region has a bigger market.Being constrained by a smaller domestic market.the lishery in eastern lndonesia is outwardlv directed to supply export markets.This direction determines the types of fishing technology employed.The major differ- ences between eastern ancl western Indonesia fisheries are given in Tabld 1.
In terms ol'the numbers of fishery establish- ments (companies and households), the east is slightlv bigger than the west.The numbers of fishers in east and west Indonesia are comparable.About 30'2, of the total of Inclonesian full time fishers stay in eastern Indonesia.Since eastern Indo- nesia is less populated than the west, the distribution of fishery establishments and the number of fishers indicates that there are relatively more people in eastern lndonesia who rely on fishing fbr their living.This dependency on fishing may be explained by the fact that the east has more water than land.Consequently, more fishing fleets can operate in the east than in the west.
Although about 54% of the total fishing fleets are operating in eastern Indonesian waters, the size and type of the boats are less developed.Of the total non-motorised boats in Indonesia, fishers in the east own 68%.The more modern the fishing boats, the less chance that they are owned by east Indonesian fishers.That is to say the fishery of east Indonesia is more traditional and smaller in scale than that in the west.Hence.al-though eastern Indonesia has more fishing fleets and broader waters, its fish landings are less than those of west Indonesia (Table 1).
The difference between eastern and western Indonesia may be seen from the availability of fish resources.Applying more powerful tools and us- ing more accurate data, recent estimates show that the total MSY for Indonesian waters is 6.1 million tonnes per year (Table 2).Defining that the opti- mal rate of resource utilisation is 100% of MSY. it is estimated that some waters, especially the ones in west Indonesia, have been fully or over ex- ploited.The resources in east Indonesian waters, on the other hand, are under exploited and there- fore provide more opportunity for development (Table 3).Despite fish resources being available.the development of commercial fisheries in east- ern Indonesia is not free from inherited and struc- tural pioblems, particularly those of investment and marketing.Unlike in Java and other regions in west Indonesia where investors compete t<l get into the business because they are driven by the market, this not the case for remote and isolated areas of eastern Indonesia.The lack of support- ing facilities and infrastructure as well as the same level of bank interest rate prevailing throughout the country, make investment in commercial fisheries in eastern Indonesia uncompetitive.There are ideas to bring fish landed in eastern Indone- sia to the lucrative markets of west Indonesia.Yet, expensive transportation costs hinder the realisation of these ideas.Above all, fish deteriorate and spoil, so that bringing fresh fish from eastern to west Indonesia does not make economic sense if premium prices are small.As a result, in spite of having the natural resources, the devel- opment of commercial fisheries in eastern Indo- nesia cannot be accelerated.The government of lndonesia has set up vari.ous fisheries development programs.Fisheries have been constantly promoted as a source of international earnings and a trigger for coastal ru- ral development.In other words, what is expected from fisheries is not confined solely to fishing ar:- tivities.but rather broader activities covering pro- cessing, marketing.and input provisions.So com.mercial fishing includes not only fishing, but also forward and backward linkage activities.To realise such fisheries business.resources should be made available.Otherwise businesS will cease.as resources are no longer available.Hence, in order to have a sustainable fisheries business.the availability of resources is vitally important.ln other words.long-term profitable commercial fislr- eries only can be realised iffish resources are taken into consideration.
The following section will discuss the roles of Usaha Mina in developing small-scale commercial fisheries.By having an export orientation busi- ness that entails and requires good quality prod- ucts.the landings ol'small-scale fishers can enter international markets.Being provided with mar- keting and input supplies helps fishers.who have little capital and little business managernent ex- perience, They are guaranteed access to fishing grounds and the facilities provided by Usaha Mina.The collaboration between Usaha Mina and small- scale fishers has developed as a prototype of a lo- cal people-based fisheries industry relationship.
THE EXPERIENCE OF USAHA MINA Developing Collaborative Fishing with Small-scale Fishers Usaha Mina is a government-owned c(rml)any, which was established in 1973.The main business of the companv is tuna and skipjack fishing.The objective of the companv is to carry out and sup- port government economic development programs, especially those dealing with fisheries.To meet the objective, the scope of works of Usaha Mina includes fishing, fish processing and marketing, dockyard services and workshops for boat maintenance and repair, and provision of input factors.* Diversifying target fish away from only tuna and skipjack to other high value pelagic and demersal fish.It should be pointed out that diversification has taken place slowly, and that pole-and-line fishing remains ther r:ore activity.Consequently, skipjack and tuna are the dominant catch.* Diversifying the final products from frozen to semi-processed and finally processed fish.
* Applying new fishing strategies by installing fish- aggregating devices (rumpon).The deployment 8 clf rumpon was an entry point to involve small- sctrle fishers in the production line of the oompany.It also created a new system ofresource acr:essibilitv.
The reorientation was performed as a response to a new business environment and resource man- agement approach.Under the current arrange.ments of the national fisheries development pro.gram, management of fish resources is a serious question.Rational fisheries resource management is explicitly stipulated as an objective.Following this arrangement, it is important not only to catch more fish.but also to have more returns.There are various ways to come up with more returns, but sound resource management is very important.As explained earlier, only proper fish resource management will sustain long term re- turns.
Usaha Mina is committed to develop small- scale fishers in eastern Indonesia.Partnership relationships between the company and small.scale fishers have been developed and practiced since 1985.Starting in Sorong, Irian Jaya, it has spread to other parts of lrianJaya and covers some fishing bases in Maluku and Sulawesi.The suc- cess of the partnership relationship has become the main contribution of Usaha Mina production.The company that just focused on fishing by us- ing its own pole-and-line vessels and crews now has a range of activities, which involve small-scale fishers.This collaboration allows the company to buy fish from small-scale fishers who use their own gear and vessels.
Oneof the missionsundertaken by Usaha Mina is to empower small.scalefishers.From that per- spective, collaboration with small-scale fishers is structured in such a way that an individual small- scale fisher may become a fishing entrepreneur.svstems by which other small-scale fishers may be involved.This development of outstanding cooperative members means that their membership of cooperatives are terminated.
Beside the above system, Usaha Mina also de- velops upstream and downstream partnerships with other companies, such as those running fish processing activities and dockyard services (Table 4).l'hese relationships are established with the objective of controlling input factors used in fish- ing.A specific relationship is established for each partner.derpending on shares and obligations.
Partnership in fishing activities relies on mu- tual benefits that can tre achieved by Usaha Mina and its partners.The target is to increase effi- ciency, shown by increases in fish landings pro- 4. cured by Usaha Mina.At the same time, benefit,s that can be derived by partner fishers are protit' ability and certainty of the business.In order to achieve benefits for both parties.they must work hand in hand.Usaha Mina bears all the operatittg costs and risks in the operations of fisher's boats.The fish price paid by Usaha Mina to fishers should be able to be used to cover the investment value of fishing boats and equipment within their er:ononrir: life.This model is has become known as thc nucleus-small holders system (PIR system).'lir maintain this type of cooperation, all factors dq- termining the success of fishing operations should be under the shared control of Usaha Mina as thc nucleus of the company and the fishers as thc plasma of the system.
To facilitate the growth of collaborative fish- ing between Usaha Mina and small-scale fishers, a link with dockyard and ship building companies was needed.This kind of link is needed also by the Dockyard Company if it wants to guarantee lhe market flow of its product.Based on this situ' ation, a three party mutual collaboration between Llsaha Mina.fishers and a dockyard company was established.This collaboration can help fishers expand their business as they now operate their own boats.The result of this collaboration for lJsaha Mina is to have more fish.Boats providecl by the Dockyard Company are credited to smallscale fishers without collateral.Management of lishing activities.marketing of the catch, as well as fish quality control is the responsibility of Usaha Mina.The fishers pay for the boats by instalment to the Dockyard Company.The amount of the instalment depends on the amount of fish landed and is deducted directly by Usaha Mina from the value of fish landings.
The type of boat procurement through this scheme is successf'ul fbr the following reasons: 1.The payment for a boat by the fisher to the Dockyard Company depends on the amount of catch so that the risks of'catch fluctuation are shared between fishers.Usaha Mina antl the Dockyard Oompzrnv.
2. The involvement of the f)ockyard Comptrny directly in fishing act,ivities has promptecl the company to provide good quality boats.:1.The credit provicled bv the Dockyard Compan.y  is without collatcral inrrl <loes not follow formal banking procc<l ures. (lredit, is given bv considering tlre reputation anrl achievemcnts of individual Ilslrcrs.10   The devekrpment of collaboration between Llsaha Mina and small-scale fishers is presented in Table 5.Currently, there are at least 16 fisher groups and cooperatives involved in the produc- tion line of Usaha Mina.The historical trend shows that every year; a new group or cooperative is es- tablished.Those who concentrate on fishing are not only individual fishers, groups or cooperatives, but also private companies.This development can be used to show that the responsibilities of Usaha Mina for the extension and guidance of small-scale fishers have been successful.
There are three partners that work in dockvar(l $ervi(:es and lbur partners which work in fish processing and marketing.The relationship with [hese seven companies shows that forward and backward-linked activities are crucial ones.The partner companies are both national and multintrtional firms.This paves the wa.y for Usaha Mina to develop local and international marketing channels.
Table 6 shows that the-roles of small-scale partners have grown significantly in terms of sales, landings and fishing fleets.At the time the part- nerships were established, landings of Usaha Mina's own fleets were about 1O times than its partner's.By 1987, the situation had reversed and landings of partner's fleets were about double the landings of Usaha Mina.In 1996. the role of part- ners in this matter reached seven times that of the main company.Emerging Problems Faced by Usaha Mina Usaha Mina's main objective is growth by letting its partners grow.In other words, mutual growth is the basis for increasing the future role and performance of Usaha Mina.However, some problems have occurred and are likely to affect the performance of the company, now and in the future.The problems are elucidated below: l.Pole-and-line fishing as the core business of Usaha Mina has rapidlv developed in the area.
The policy of the central government to promnte eastern Indonesian provinces attracts domestic and foreign investors to enter the fisheries business.These investors bring their bigger boats and sometimes operate better facilities.At the same time.small-scale fishers have modernised their boats so that they can capitalise their profits or have access to subsidised government credit.Together with more fishing fleets operated bv Llsaha Mina (Table 6); the result htrs been a substanbial increase in fishing effort that may be adversel.vaffecting total landings.As more pole-trnd line boats are opcrutcd.nrore live baitfish are required.'l'he higlrt:r dcmand lbr live baitfish has promptetl smlll-sr:al<: fishers to invest in the lift net fishery.Apart from being used as live baitfish, the production of lift nets is also demanded by local and export markets for human consumption.The competition between whether the fish are used as baitfish or human food cannot be avoided.In some areas, especially isolated ones, there are no other buyers other than pole-and-line fishers.but in many other places both type of buyers erxist which drives up the price of baitf ish.

j-r
If pole line and lilt net fishers can be organised into the same groul) or cooperative then transactions between fishers is c:onducted within the group.The experiernt:e of'Usaha Mina shows that if the lift net ber:omes a component of pole-and- line fishing, the suppl.v of baitfish i.s not a serious problem.The prrir:e of baitfish may be set at the level where all are slt.isfied.The payment to lift net {'ishers rnay bt-'arranged to be a part of the selling price o{' thc catch o{' pole-and-liners.Making the lift net fisherv a component of pole- and-line fishing mav bring about several conse- quen(:es.First, all poler-and-line-fishing companies shr.ruld have their own lilt net.This will radically <;hange the existing situntion where some companies just concentrate on fishing and never invest in the supply of baitfish.Such companies normally go around to fin<l available baitfish and offer higher prices to lift net fishers who were estab- lished by or have become a component of'other pole-and-line fishing companies.Of course they can offer higher prices for baitfish as they have not paid the investment and management costs of a lift net. The second consequence is that there is a pos- sibility of increasing the number of lift net fish- ers, which eventually may affect the long-ternr availability of resources.To prevent Nhe clecline of' the baitfish resource, its management must be addressed by managers (government).Two main aspects that should be considered by the managers are: (1) to provide opportunities for local traditional lift net fishers and (2) to determine ratronal amounts of allowable baitfish catch.The allowable catch should be further broken down in terms the amount of gear or fishing effort.
The high demand for baitfish may encourage fishers to increase their fishing effort.Without management of the resource, fishers may enlarge their gear, expand to new fishing grounds.or pro- long fishing hours.At tbe same time, outsiderrs may look at the situation as an opportunity to invest.Coupled with the increasing demand for tht: catch of lift nets for human consumption.the fishing effort may sttbstantiallv increase.This increasc of lishing effort may devastate existing traditional systems such as territorial use righbs and the prop- ertv rights of local fishers.
The call for better resource managemenb also applies to tuna and skipjack resources.Intensive tuna purse seine fishing in EEZ waters causes a IFR Journal Vol.IV No.2. 1998 declining catch of skipjack in pole-and-line fish- ing in inshore and territorial waters.For instance, it can be seen in Table 6 that the total landings of Usaha Mina peaked in early 1990s.Thenceforth, it was difficult to reach the same level of land- ings.Field observations also in$icate that small- scale fishers face a declining catch that forces them out of fishing.
There is also evidence that large-scale tuna and skipjack fishing do not operate only in the EEZ, but also in the territorial and inshore waters which are designated for small-scale fishers.The entry of large-scale fishers who are often supported by multinational companies or wrapped in nepotism with official connections make their businesses are so strong that the small-scale fishers and the pre- viously existing companies suffer both physical and economic set backs.
The management of tuna and skipjack re- sources, therefore, should be approprialely ad- dressed in order to sustain the life of small-scale fishers and national pole-and-line fishing companies.The fisheries managers in this concern are confrontecl with the choices of improving and proter:ting srnall-scale fishers or promoting large-scale investors who may run efficient business, but have limited trickle down effects.It should be kept in mind that the choices have implications for lift net fisheries.

CO-MANAGEMENT OF POLE-AND-LINE FISHINC
Usaha Mina has developed co-management in pole-and-line fishing.Co-management refers to sharing of responsibilities between Usaha Mina and fishers in the management of fisheries re- sources.Certainly, this co-management should be carried out at local l,evel, covering the waters in which fishing activities are conducted.More spe- r:ifically, co-management is applied in the waters around rumpon or in the areas that are still af- fct;ted by the existence of rumpon.
Before collaboration was embodied, individual fishers fished in all coastal waters, wherever they liked.Some fishers had gear and others just worked as boat crews.The gear and boats owned b;l manv fishers were traditional in nature, being able to catch onlv in coastal waters.Under these circumstances, landings were small and volatile because fishing was highly determined by season and the capa<:ity of boats.Generally, the landings were sold locallv.Due to lirnited krcal demand, fish lrrices were low and r:onsequently did not encour- age f ishers to pnxluce more.A{ter all.fishers were r:onsiderecl poor.
With the collaboration cleveloped bv Usaha Mina.all the afbrementioned shortcomings were overcome.The partnership brought about a new business environment as whatever the landings of small fishers: Usaha Mina buys them as the nucleus f irm.This results in bigger fisher returns and earnings.'l'htevaluation done by eithcr Usaha Mina or government research institutes showed that fishers inrrome in<:rensed several times.lead- ing to better social ancl economic conditions (Nikijuluw et al.,199 11.The ;lartnershilr o;rened the chance for fishers to control fishing grounds.'l'he waters around rLrnlpons are clersignated fbr fishers who work un- der partnership arratrgements.lrr this regarcl, other fishers partit:ularl.ythose using large-scale boats and gears are not nllowed to fish in the wa- ters arouncl the runrpon.lndeed it is not an easv task to patrol the nrnrpon.However.any time fish- ers are out fishing.they can recognise whether those operating their boats bv the rumpon are their fellows or other fishers.That is to say that deplo.y-ment of rumpons creates new approaches to re- source management in which rights to atx:r:ss or to withdraw fish resources are established.
The responsibility of'Usaha Mina is to bear all costs related to instalment and repair of'rurnpon.The responsibilities of fishers are to use, take care.and patrol the rumpon.The benefit derived by fishers is that they can achieve efficient fishing op- erations as fuel costs decline and catch inr:reases.
The benefit for Usaha Mina is to have more fish supplied by fishers.The availability of rumpons has changed fishing strategies.Hunting or sailing around to find fishing grounds have been replar:ecl bv directing the boat to rumpons.In other words, fishing grounds were changed from "anywhere" to certain places.As a result, many areas that do not have rumpons tend to be free from fishing activi- ties.While fishing intensity int:reases in the wa- ters aronnd rumpons, fishing effort declines in other areas.The placement of rumlx)ns therrelirrc afTects the availabilitv and sustainabilitv of'f ish.If a rumpon is placed in spawning or nursery nr.
eas, vonng and immature fish may he r:aught. (krn- sequently recruitment fails and fish stock declines.
The same thing happens if a rumpon is plar:ed in H spawning grounds.To avoid these possibilities, rumpons deployed by Usaha Mina are not placed in such areas.

CONCLUDING REMARKS
An important question that should be answered in this workshop is whether there is more invest- ment opportunities in commercial fishing in east- ern lndonesia.Looked at from the perspective of the target fish resources, one may sav that there are opportunities.However, considering local eco- nomic factors, the chance and priority given to small-scale fishers, and the rights of local fishers to fish.which are nested in customary laws, ancl distribution and trickle down processes.one may argue that the development of large-scale commer- cial fishing in eastern Indonesia is no longer ap- propriate.If so.what is the strategy and how can the available resources can be optimally utilised?
The experience of Usaha Mina and many small farnrers in the area provides evidence that lishery development in eastern Indonesia should be based on f'ull participation bv small fishers.However, to let the small-fishers run their businesses by them- sclves is not the right strategy, as they face difficulties in marketing.input supplies.and boat and g(-'ar procurement.Therefore.collaborative fishing which is based on the availability and sustainability of the resources and capability of lishers should be I'urther promoted.With the guid- ance of govcrnment, proper, efficient, and fair col- laborative st:hemes between national companies and small fishers can be defined.The government should also deterrnine the path of fisheries devel- opment bv setting up a long-term strategy.On the basis of such a strategy.fishing companies can further define their business path and be guided to long term investment planning.

For
about 25 years, Usaha Mina has grown and constantly reoriented its activities to improve company performance.Reorientation programs in- clude: * Expanding from Sororrg l.o new fishing grounds and operation bast s in other parts of eastern Indonesia.The lishing grounds of the company's fleet are now throughout eastern Indonesian waters.

Table 1 .
Diff'erence between eastern and western Indonesian fisheries.1985

Table 2 .
The MSY and utilization of Indonesian marine fish resources.
The empowerment of individual fishers is phased IFR Journal Vtl.IVNo.2,199t1

Table 4 .
I(evs to the success of collaborative arrangements between Usaha Mina and small-scale fishers.
Table 6 also shows that sales increased tremendously from about Rp 3 billion in 1985 to somewhat more than Rp 46 billion in 1996.