March 11, 2013

 

Vietnam to impose heavy fine on institutions that flout seafood trade rule

 

 

Vietnam will impose a heavy fine on institutions which cooperate with foreign merchants to collect aquatic materials in the local market, according to a draft decree of pecuniary penalty on violations in seafood trade.

 

The new regulation has been applauded by domestic seafood companies, which have complained the scarcity of materials due to competition from foreign merchants.

 

Tran Van Linh, General Director of Thuan Phuoc Seafood and Trade Company, has noted that the new regulation will help prevent foreign merchants from scrambling for aquatic materials with domestic seafood companies, thus helping to meet domestic enterprises' need for materials.

 

Foreign merchants have been flocking to Vietnam to collect aquatic materials directly from fishermen at the ports, especially in the central region.

 

Most of the foreign merchants are from China. In order to compete with domestic enterprises, Chinese merchants attempt to offer higher prices to fishermen.

 

As a result, Vietnam's aquatic materials have been declining across the border, while domestic enterprises did not have materials to keep production. A report by the Ministry of Agriculture and Rural Development (MARD) said that Vietnamese enterprises have to import 60%-70% of materials needed for production.

 

According to Nguyen Ngoc Duc, Director of De Khang Phu Thanh Seafood Processing Company, merchants from Australia, South Korea and Taiwan have also sourced for materials.

 

Since foreign merchants pay higher prices, Vietnamese fishermen prefer selling fishes to them instead of local companies.

 

Tran Thien Hai, Chair of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that the new regulation will benefit Vietnamese fishermen as well.

 

Vietnamese fishermen have been affected by businesses with Chinese merchants, who ordered large quantities of products but did not come back to receive deliveries or making payment.

 

Many exporters are not sure if the regulation can be implemented, as it would be very difficult to find evidences proving that domestic merchants have worked with foreign merchants to collect materials.

 

Deputy Chair of the Ca Mau province, Le Dung, has also expressed concern of the difficulty of punishing violators. However, Dung believes that the strong measures would, to some extent, deter offenders.