Logo of Phnom Penh Post newspaper Phnom Penh Post - New school of thought on country's fish exports

New school of thought on country's fish exports

New school of thought on country's fish exports

A new report from the Cambodia Development Resource Institute (CDRI) has revealed

that the legal export of every fish over the last 20 years has been done under the

strict control of a state-owned company. CDRI said the system was inefficient and

constrained fish and trade exports.

The little-known Kampuchea Fish Import and Export Company (KAMFIMEX) is managed by

the Ministry of Agriculture, Forestry and Fisheries. It has the "sole authority

to control fish exports", including the power to grant licenses to other operators.

The CDRI report stated that the company gets to set its own buying price. Both CDRI

and Enterprise Development Cambodia (EDC), an NGO, said the company had operated

in a monopolistic position which had contributed to smuggling.

"Faced with this export system, it is not surprising that perhaps half of all

fish exports from Cambodia are smuggled out illegally," CDRI's report stated,

explaining that this resulted in the government losing revenue.

CDRI's July 23 report drew on research from the Ministry of Commerce (MoC) and EDC.

Their research criticized KAMFIMEX as a monopoly purchaser of fish for export, and

noted that government interventions and non-competitive practices had restricted

trade and export activities.

Among these were official and unofficial taxes, and barriers to entering the export

business such as export licenses, cartels and collusive behavior.

The strongest criticism of KAMFIMEX came from within the government itself. Sok Siphana,

secretary of state at the MoC, said the country had tremendous potential for exports,

employment and growth, but was losing out from such outdated institutional practices.

"KAMFIMEX needs to be re-evaluated [to determine] its new role in the free market

system," Siphana said. "The monopoly needs to be removed - it doesn't serve

any purpose or add any value to the process and MAFF knows that.

"Let the free market thrive. We need to make the fisheries industry competitive

and must remove all the dead weight. KAMFIMEX is a dinosaur, it has outlived its

day," he concluded.

However the director of MAFF's fisheries department, Nao Thouk, denied KAMFIMEX was

a monopoly or that licenses to export could only be obtained through the company.

He said NGOs who claimed that were "biased".

"More than ten companies have licenses to export without going through KAMFIMEX,"

Thouk said. "They don't have control over the prices, and they have had a lot

of competitors especially since I became director in late 2000."

Other observers, such as Bruce McKenney, CDRI's manager of natural resources and

environment, questioned the competitiveness of the industry.

"Recently there has been an effort to provide licenses which may weaken the

monopoly position of KAMFIMEX," he said. "But the question remains - is

KAMFIMEX and the current export system an efficient and effective way to market fish

exports?"

Nao Thouk said a sub-decree to turn KAMFIMEX into a public enterprise had been drafted

in 1999 and was submitted to the Council of Ministers late last year.

He said it was likely to be approved within a month, and explained that as a public

enterprise all profits from the company would still flow to the government. It would,

however, be managed by a board of directors instead of MAFF, and would compete with

private companies.

Rin Seyha, manager at EDC, said the current lack of competition was "killing

the fishery industry", and felt KAMFIMEX should be shut down, not turned into

a public enterprise.

"Our experiences with many sectors show that they privatize state-owned companies

and call them autonomous, but in reality they continue to be run by political parties,"

he said. "[KAMFIMEX] should be eliminated - they don't have marketing or processing

skills so why do they keep going?"

EDC's report estimated that 400,000 tons of fish is harvested annually in Cambodia.

Three-quarters is consumed locally with the remainder exported to Thailand and Vietnam.

Small amounts are also exported to Hong Kong, Singapore and the USA.

Seyha said government controls made it very difficult for private companies to process

in Cambodia, which cost the country in numerous ways.

"We are exporting raw materials to Thailand and Vietnam and losing value-added

processing opportunities, local capacity and labor costs," he said. "We

should be processing the fish here."

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