Atlantic, Arctic & Pacific : Opportunities In Russia’s Fishing Industry

Russia’s huge landmass gives it access to three of the worlds largest oceans, the Atlantic, with the Sea Of Azov, Black Sea, Baltic, Barents and White Sea; the Arctic, with the Kara, Laptev, Chuckchi and East Siberian Seas, and the Pacific with the Bering, Okhotsk and Japan Seas. Russia’s Federal Agency for Fishery estimates the potential of the fishing industry at 2 trillion rubles (US$31.7 billion), according to Ilya Shestakov, the Agency’s Director last week.

“We have conducted research, and estimate the multiplicative effect of (Russian) fishing industry at 2 trillion rules, which is slightly less than 2% of Russia’s GDP.” he said, adding that ” There are also investment programs.” Russia also provides other incentives, including the free use of land, to help develop it’s Far Eastern regions.

According to Shestakov, currently the sector is actively attracting credit resources and has huge investment potential. “Sberbank acts as the main creditor of the sector.” he noted. Russia’s fishing fleet currently stands at 550 vessels, while about 7,900 companies with 60,000 employees work in the Russian fishing industry. Sberbank estimates the sector’s exports at US$4.5 billion.

Russia also possesses a significant Exclusive Economic Zone, a sea zone prescribed by the 1982 United Nations Convention On The Law Of The Sea over which Russia has special rights regarding the exploration and use of marine resources, including energy production from water and wind. It stretches from the baseline out to 200 nautical miles from its coast, and includes Russia’s continental shelf.

Fisheries management is regulated by Russian federal laws. The federal law “On Fisheries and Protection of Aquatic Biological Resources” of December 2004 (referred to below as the Law on Fisheries) divides fisheries into three main categories” industrial, recreational, and subsistence fisheries of indigenous groups. Industrial fisheries includes coastal fisheries, while the definition is also currently under review.

Russia’s Law on Fisheries requires that total allowable catch (TAC) levels are set for fishery stocks. It defines these levels as the “scientifically justified annual catch of aquatic biological resources of particular species in a fishing area”. However, the Law on Fisheries then goes on to state that industrial fisheries are not necessarily required to base their catch on TAC. The Law does not explain this further, but calls for the federal government to issue a special TAC setting statute. Pacific salmon is the main stock that will probably not have TAC, but will have regulated fishing effort instead.

The Law on Fisheries also gives a definition of a fishing unit area and sets general principles for their use. The compiling of lists of fishing unit areas is delegated to the regional authorities. The Law on Fisheries has gaps and its application is criticized by parliamentarians and stakeholders. It may be expected that in the coming years at least two new federal laws, “On Coastal Fisheries” and “On Aquaculture”, will be considered by Russian legislators. Apart from TAC settings, fisheries are also regulated by the so-called Fishing Rules (Pravila rybolovstva). These rules are set separately for different geographical regions.

With Russia’s Siberian and Far Eastern coastlines starting to open up, and increasing demand from consumers in relatively nearby and wealthy Asian cities, the demand for Russian seafood is increasing. Regions such as Northern Krasnoyarsk, Yakutia, Chukotka, Kamchatka, Magadan and Khabarovsk Krai all possess shipping fleets – much of it regionally experienced, yet in need of foreign investment.  That consumer market also potentially extends deep into Europe – with sought-after Kamchatka salmon and crab now able to hit tables in the EU thanks to the new Trans-Siberian Land Bridge. Foreign investment opportunities await, as do increasing amounts of Russian seafood on plates throughout the EU and Asia for those who are willing to get into the market.