PT Bali has opened the first of four processing plants at the heart of fishing communities in Indonesia. They form part of a wider plan to build a more sustainable future for fisheries, protecting stock while boosting earnings for local people.
PT Bali Seafood International might just offer us a glimpse of the global future of fisheries. It has opened a new fish processing plant on the remote Indonesian island of Sumbawa, between Bali and Timor. The factory is at the heart of a new approach which aims to guarantee the sustainability of the supply of fish and boost the income of the local population – while building a profitable business. The fish processing facility offers a unique combination of economic rationality, income improvement for small fisherman, and social benefits for the community.
A ‘triple bottom line’
The firm is a wholly-owned subsidiary of the US company North Atlantic which specializes in sustainable and responsible seafood. Jerry Knecht – who founded North Atlantic and also heads PT Bali – says the latter involves a ‘triple bottom line’: it’s about conservation and social impact as well as profit.
The new factory is helping to streamline the supply chain in a country where small-scale fishers have traditionally been dependent on middle-men to get their product to market. Issues around sanitation and the lack of a proper cold chain also mean they get less income than they could for their catch.
Around 150 people are now employed in and around the factory. The company is aiming to do business directly with around 450 small boats operated by over 1,000 people – who will of course then be able to better support their families.
Streamlining the supply chain
Using this approach means more money can go into communities and promoting sustainable approaches to fishing. Says Knecht: “By streamlining the supply chain, we recapture about 40% of the value of the product itself and we use that captured value to encourage local fishers to employ sustainable fishing methods. We can provide a totally transparent supply chain so the consumer can buy knowing they are not eating the last fish in the ocean. And we’re boosting income: local fishers can expect a 15% increase in their income this year.”
“We can provide a totally transparent supply chain”- Jerry Knecht, PT Bali
The company has also established a number of ancillary businesses providing access to fishing equipment and capital, and delivering initiatives on health and computer literacy. Some of the activity is currently reliant on philanthropic support. PT Bali has been a client of the Rabo Rural Fund since 2016. The fund and Rabobank Foundation were amongst its first lenders, providing a five year facility for the construction of the plant at Sumbawa as well as working capital.
“The PT Bali project is a great example of our work to help improve livelihoods by providing expertise and networks as well as financial backing during the initial stages,” says Marianne van Duin, Investment Manager for the Rabo Rural Fund. “We expect the first factory to run independently within five years.”
Jerry Knecht is confident that in spite of the difficulties he and his colleagues have faced – for instance when dealing with bureaucratic processes and a system where corruption is rife – they now understand how to deliver change. This involves for instance obtaining support in principle and then allowing the paperwork to fall into place when everyone wants to be part of an ongoing success.
“PT Bali combines sustainability and poverty reduction”- Jerry Knecht, PT Bali
A game changer
PT Bali’s initiative is consistent with the UN’s Sustainable Development Goals in a number of ways – it supports life below water, serves to reduce inequalities, promotes responsible consumption and contributes to meeting the objective of ‘no poverty’. The company plans to build another three plants in Indonesia in the coming years.
For Knecht, the approach is one that could be used elsewhere in Asia and the global South: “Investment in fisheries management, to bring sustainability while reducing poverty, is being pursued worldwide by the World Bank and many others, but the PT Bali initiative is the first time it’s been done by a private sector player. It’s entirely scalable and it’s really the only way forward for countries like Indonesia where the rule of law and government capacity are weak. It doesn’t depend on government for anything. It is potentially a game-changer.”
Van Duin agrees. “This initiative has enormous potential for artisanal fishing communities worldwide,” she says. “We are hoping to begin rolling it out in other Southeast Asian countries by 2020.”