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Copeinca Peruvian authorities, on June 28, 2008 resolved to adopt an individual quota system through the passing of the Individual Quota Law, which establishes individual capture limits per vessel for anchovy fishing in Peruvian waters. The individual quota system is set to replace the current Olympic quota fishing system in Peru, presumably within the next two fishing seasons.
The Individual Quota system is expected to be very beneficial to the long-term sustainability of the resource and to the preservation of the environment.
As opposed to the current system in which the fishing companies race to catch as much anchovy as possible within pre-defined total quotas and periods for the industry as a whole, the Individual Quota Law establishes individual quotas per vessel. This quotas can be accumulated to other vessels within the same company, and can only be sold to third parties together with the corresponding vessel.
The new system will initially be applied to the center -north of the country (North of 16th parallel) but could be extended to the south in the future.
Under the new law the individual limits will be assigned as follows: 60% according to the vessel catch statistics (the best capture of the last 5 years), and 40% according to the licensed capacity of the vessel. An exemption will be made in the case of the wood fleet (smaller fishing vessels) and 100% of the limit will be awarded based on their catch statistics (best capture of the last 5 years).
If a company wishes to accumulate licenses to some of its vessels, the remaining ones will no longer be able to fish anchovy, and can be used for human consumption, sold or scrapped.
The wooden fleet will not be able to merge with the industrial fleet, until two years after this new law is in place.
Steep penalties will be imposed to any vessel fishing over its individual limit or to persons in any way breaking the new fishing law.
The system will be in place for 10 years, and can be renewed for same length periods.
Under the new system, there will not be unilateral lay-offs, but workers can choose to retire if they wish.
The workers that chooses to retire will receive a package that contemplates a one-time retirement bonus of up to 18 months of salary; up to three years of training (either for another job or to open a small business), and a subsidy of 20% of the monthly salary for two years after retirement. This package will be paid for by the companies owning the vessels.
In case a worker over 50 years of age wishes to opt for early retirement, a subsidy of up to 50% of salary will be awarded until the worker reaches the age of 55. At age 55 the worker will be able to access his standard retirement fund if he fulfills the conditions to do so. This subsidy will also be paid for by the companies owning the vessels.
In addition, the new system will require a contribution of USD 1.95 per processed ton of anchovy to be paid by all processing plants, for the next 10 years. This contribution will go to a fishermen retirement fund.
The new law will be applicable as soon as the corresponding regulation is ready, expectedly within the next two fishing seasons.
Copeinca has previously communicated its expectations toward a transition to an ITQ system in Peru, most recently re-iterated on 27 May 2008; then expected to be implemented between 2008 and 2009 if approved by the current government.
Source: www.elperuano.com.pe
For further information, please contact: CEO Samuel Dyer, sdyerc@copeinca.com.pe CFO Eduardo Castro-Mendivil, ecastromendi@copeinca.com.pe Tel. (511) 213-4000
About Copeinca ASA Copeinca ASA is one of the largest fishmeal and fish oil producers in Peru. The Company produces its fishmeal and fish oil from anchovy harvested off the coast of Peru, and most of it`s production is exported. Key countries for export are China, Japan, Germany, Canada, Chile and Denmark. Typical customers are fish and animal feed producers. Copeinca ASA runs its operations out of Lima and has its own fleet. Copeinca ASA has 10 plants located in strategic locations all around the Peruvian coast line. The company has around 2,000 part and full time employees.
