Chile Fishermen Fight to Recover From Quake

Chile Fishermen Fight to Recover From Quake

The 8.8-magnitude earthquake on Feb. 27 and subsequent tsunami devastated fish-meal processing plants and other facilities in Chile’s southern Biobio region, the center of the country’s open-seas fishing industry.

Some companies, however, are hesitant to invest in reconstruction until they know what their share will be in the annual catch of key species like Jack mackerel, anchovy and sardines.

The Maximum Capture Limits law, which went into effect in 2000, gives the country’s fishing companies individual percentages of the total capture limit for different species based on the average amount each company has captured over the previous three years. The law works to prevent overfishing and the depletion of stocks.

“It’s the mechanism used in the entire modern world in order to manage fishing resources correctly,” said Hector Bacigalupo, director of Chilean fishing industry association Sonapesca.

The law expires in December 2012, and industry leaders are uncertain how quotas will be assigned after that. They are also unsure what their harvests, and therefore revenues, will be. Fishing authorities are expected to have a proposal ready by year- end for Congress to debate.

For companies whose facilities were destroyed, investing in new plants is too risky when changes in the law could alter production capacity, said Mr. Bacigalupo. “If you’re not sure that you are going to continue to possess the percentage of the quota you have today, how can you invest? I’m going to make a tremendous investment, I complete it, and then a few months later I’m going to hand the keys over to someone else? In this scenario, you cannot invest,” he said.

The workers who man the boats and run the processing plants also wonder what comes next. There have been 1,200 layoffs, and job security is threatened by the law’s uncertainty, said Paola Sanhueza, president of a local fishery workers’ union.

Biobio is home to a number of industries, such as forestry, but fishing is one of the biggest. The open-seas fishing sector in Chile primarily exports fish meal, fish oil, and processed fish products for human consumption. Fishing and aquaculture accounted for $3.8 billion of Chile’s $53 billion in 2009 exports.

Industry factories in the Biobio region lost 40% of their capacity, which will cost $450 million in lost revenue this year, according to industry trade group Asociacion de Industriales Pesqueros.

Local fishing firms Alimentos Marinos Alimar SA and Sociedad Pesquera Landes SA, which account for 15% of the employment in the region, suffered some of the worst damage. Alimar, the biggest fishing firm in the region, saw its main fish-meal plant in the port city of Talcahuano destroyed.

Landes’s frozen and smoked fish plants in Talcahuano were destroyed. “Reconstruction will take at least 18 months, so it’s not economically viable to reconstruct an industry whose capture limits have a horizon of barely 30 months,” said Eduardo Bohorodzaner, president of Landes. “Without a clear bill before 2011, reinvestments for our company will not be easy.”