While on a tour of the Kamchatka Territory, Prime Minister Vladimir Putin visits the trawler Mikhail Staritsyn for an informal meeting with fishermen
Transcript of the meeting:
Vladimir Putin: I'd like to greet everyone again. Good evening. It's a bit late here already you know. And we've just been unable to adjust to local time, still living on Moscow time.
We regularly attend to the problems of the fishing industry, as I'm sure you know. It's something that affects you personally. It's about your work and life. We see the effect of our efforts - fish yields have increased. Last year, despite the so-called global crisis, the situation in the industries was tolerable, but not without losses. But the fishing industry ended the year with a surplus, growing by over 9%.
In the first six months of this year, it grew by over 19%. Last year, the total fish yield stood between 3.5 and 3.7 million metric tons, to the best of my knowledge, and this year it's already reached 2.5 million metric tons. The progress is obvious.
We've moved forward on a few issues recently. But we need to review some issues again and discuss them with you to move them along. It's necessary to eliminate administrative barriers and improve legislation, notably financial regulations.
Today I'll meet with the leaders of the regions that contribute to the fishing industry and government officials to review the issues we'll discuss here today.
Before that official meeting, I'd like to listen to those who work on the open sea. If you have any proposals, concerns or remarks - feel free to speak. We could discuss them at the official meeting later today.
So that's all I have to say by way of an introduction. The floor is yours.
Question: Mr Prime Minister, thank you very much for the support you have provided to the long-line fleet. We can now go out to sea and catch fish and earn enough money to provide for our families.
However, five long-liners out of 12 remain at port. They say this is because there are no quotas for them. What should be done so that these vessels can be used?
Vladimir Putin: If I understand you correctly, you're referring to the vessels purchased using the German loan?
Remark: Correct.
Vladimir Putin: There are 27 such vessels, to the best of my knowledge?
Remark: Yes, 27.
Vladimir Putin: So the documents have been processed for 12 vessels, and seven are being used at sea. Five vessels are not being used, that is true. It's a matter of quotas and also excise duties. Part of them...
How many of them are there? Twelve here, 27 in total, 15 outside Russia, in the ports of China and South Korea, and those need to be relocated here. Incidentally, I'm sure you know that the vessels purchased using the German loan with the guarantee of the Russian government were not registered in the Russian Federation - they were registered abroad, in Cyprus, for example, and they moved to the ports of China and South Korea after awhile.
We're trying to create the conditions for fishermen to work here, under the Russian flag, and to distribute quotas between the vessels under the Russian flag only. We made these quotas quite big, as you requested, so that the quotas can be used as the basis when planning for new vessels or purchasing new equipment, with a longer production cycle.
We hope that the rest of the vessels will also bear the Russian flag and get involved in the work here. Also, it's understood that the loan needs to be paid back. We agreed to create favourable conditions for the owners of the vessels to pay back the loans. As far as I know, they requested a payment period of 20 years, but were given only five years.
I would say that these are quite special and favourable conditions. You only have to work. As for fishing quotas, the issue seems easy, we simply have to take them from somewhere. The head of the Federal Agency for Fishery is here, I have already tasked him with this. How are the things going now?
Andrei Krainy (Head of the Federal Agency for Fisheries): Mr Putin, we have distributed all quotas, 100% of them for the next ten years, and so I'd like to suggest the following decision for these five long-liners. We should issue the corresponding instruction to Vnesheconombank and allow it to transfer vessels over to other companies in the Far East or Kamchatka or sell them. We don't have these quotas under the counter, and we can't take them out and give them to Akros.
Vladimir Putin: You have distributed the quotas for the next ten years?
Andrei Krainy: We have distributed all the quotas till 2017. This measure we took, and the fishermen can confirm this, allowed companies to plan for a longer term.
Vladimir Putin: I know that they have asked for this.
Andrei Krainy: This has attracted new investment in the industry. We have prepared an album to show what has been done on Kamchatka alone over the past two years. This measure was absolutely the right move. Akros did not receive the needed quotas because quotas are limited, this is true. To be able to service a loan, a company needs to have at least seven vessels fishing, and if there are only five vessels, they have to be sold to other companies on Kamchatka.
Vladimir Putin: They can also be leased or rented...
Andrei Krainy: That's true.
Vladimir Putin: They don't have to necessarily sell them.
Andrei Krainy: No, they don't. They can rent them, but they have to obtain permission to do this from Vnesheconombank.
Vladimir Putin: The Federal Agency for Fishery is not planning to redistribute the fishing quotas, is it?
Andrei Krainy: No, it isn't. I can assure you that everyone sitting at this table and all Russian fishermen will be against redistributing the quotas. Isn't this right, colleagues?
Vladimir Putin: You mean that the vessels that were somewhere abroad, they simply...
Andrei Krainy: No, these companies with vessels somewhere abroad have quotas, Mr Putin. The only unsettled quota issue is with these five long-liners. Those 15 sterkoders that are currently at Qingdao or Busan have quotas and we simply need to get them back here, put them under the Russian jurisdiction, hoist the Russian flag on them and they will begin fishing. These companies have the quotas.
Vladimir Putin: Let them return and work here. They are idling on the sea, as far as I know, none of them has left the port since 2005. Otherwise we will lose them.
Andrei Krainy: Sakhalin is working. You have tasked Sakhalin Governor Alexander Khoroshavin with looking into this issue together with the Vnesheconombank. As far as I know, progress is being made, and I believe this issue will be settled within a few weeks.
Vladimir Putin: The issue with these vessels docked here is just an issue of which fleet they belong to?
Andrei Krainy: Yes, all the vessels sail under the Russian jurisdiction and the Russian flag.
Vladimir Putin: We have to help them.
Andrei Krainy: It was easier. They've never left Kamchatka, they just sit here.
Vladimir Putin: All the same.
Andrei Krainy: Why does Vnesheconombank take decisions on those vessels in Korea or China so cautiously? There is fear that as soon as we lift the security freeze from these vessels to transfer them into the Russian registry...
Vladimir Putin: ...they will be sold.
Andrei Krainy: ...so-called third-party claims may arise.
Vladimir Putin: What is the problem? Do the ship owners agree to lease or rent their ships?
Andrei Krainy: Yes. The ship owners are ready to use these ships, we only need to get them back here.
Vladimir Putin: No, I mean those five vessels that are here.
Andrei Krainy: I spoke to the owner of that company, they are ready.
Vladimir Putin: Now you are waiting for a decision from Vnesheconombank?
Andrei Krainy: Yes.
Vladimir Putin: The bank now has to grant permission for this? Good, we will discuss it.
Andrei Krainy: Moreover, there is a company on Kamchatka that is willing to rent a long-liner and use it.
Vladimir Putin: Good. I will discuss it with Vnesheconombank's management.
Remark: These ships are in a good condition and are ready to work if there are quotas.
Vladimir Putin: Good. I will definitely discuss this issue with Vnesheconombank's management. Yes, please.
Question: Mr Putin, much has been said recently about extending the coastal fishing zone in the Far East. Fishing companies, which have their processing facilities on the coast, will profit significantly from this. Could you please tell us what changes will be made to the rules regarding commercial fishing in the region?
Vladimir Putin: Fishermen have repeatedly raised this issue, including those from Russia's Far East. We have taken such a decision for the Barents Sea. A similar decision has effectively already been taken for the Far East, including Kamchatka.
The corresponding commission held a meeting quite recently, on August 17 I believe, at which it took a positive decision on this issue. The decision is to allow the companies working in the coastal fishing zone to fish in the exclusive economic zone.
This decision will be formalised in a government resolution within a week or ten days, but the decision has already been taken. Yes, but this doesn't mean that large vessels could go back there.
Remark: No, they won't go back there. Large vessels should not be allowed to pass. I understand this very well.
Vladimir Putin: When the commission took this decision, it proceeded from this premise so as not to upset the biological balance in the coastal zone. Those who work in the coastal zone can go and fish there, but large vessels should not be allowed to fish in the coastal zone with their bulky fishing gear.
Question: Mr Putin, fishermen have a question: in January 2009 a resolution was adopted, which says that produce from the fishing area must pass through the nearest Russian port. We have only one port on the Kamchatka Peninsula - Petropalovsk-Kamchatsky.
Suppose it will take four days to get from the Bering Sea to Petropalovsk, one day to resolve all border issues, and two days to return and unload the produce from the Far East coast. All in all, seven days are lost. This is a very big loss for any fishing company.
Our fishermen met with administration officials of the Kamchatka Territory more than once. We suggested solving this problem by opening up new eastern coastal sections - the Korfa Gulf and Tilichiki. It could be a small port, but we need it at least for the fishing season, the start of navigation - from May to October. Kamchatka's western coast has Ust-Khairyuzovo, Oktyabrsky and Ozyornaya. We made such proposals. But the border patrol is a separate and serious agency, and they are not going to allow this for the time being.
Vladimir Putin: But they are.
Remark: I don't think we'll get anywhere without your help.
Vladimir Putin: I've just spoken on the phone with the head of the Border Service. It occurred to me that you might raise this issue during our conversation. So I talked to him and he told me: We don't object. The issue boils down to capital investment - it is necessary to build the border infrastructure.
The border strategy, specifically the development of the national border infrastructure, provides for its construction on the Kamchatka Peninsula, but, unfortunately, from 2013-2014, I think. We will bring it closer; this issue is about funding. I'll try to move the funding to the end of this year and the beginning of next year to start the construction of these border points for servicing ships.
Remark: Thank you.
Vladimir Putin: But the border guards do not object to this. They know and understand the problem.
Remark: The issue is money.
Vladimir Putin: It will be necessary to provide accommodations for people and install the equipment. They should have a working place. This is all understandable. I don't think that this is so expensive, and we'll try to provide the funds earlier.
Question: Mr Putin, I have a request, not a question. A company has quotas in the inland waters (territorial waters) and in the exclusive convention zone. As for vessels, out of the eight types of vessels that we have, six have the right to operate in both. But here is the problem - never-ending formalities with border guards - according to Order 560 from 2007. We file an application with the relevant documents three days in advance. They process the papers during three working days and then issue either a permit or reject the application. If we receive a permit, we call for a squad and they come, register the vessel and we leave. We work for a day or two and then come back. We call for the squad four hours in advance. They come and again inspect the vessel and allow us to unload. We unload raw fish and then call for the squad again. They come and go through the motions, and our vessel departs. We have huge losses here.
We didn't have such problems in the Soviet Union. The vessel was registered (cargo monitoring and inspection, quarantine control) and free to go and fish here or in the Sea of Okhotsk or in the Bering Sea. Just go and fish. But now it takes more time to process the papers for both large and small vessels than for those vessels that are bound for foreign ports or fish in the zones of foreign countries. How can this issue be resolved and these restrictions lifted?
Vladimir Putin: We need to take two decisions: amend the current law, On the Border, and the government resolution you mentioned, to add to them.
The issue here is the notification requirement for border crossings. On the whole, the border guards do not object to this, either. They promised to submit a draft law by September 1. This is one of the issues I discussed with them today. Actually, they claimed that the draft law has already been submitted to the government, although I haven't seen it yet. But we'll sort this out. At any rate, they promised to submit this draft by September 1.
Remark: That would be good.
Vladimir Putin: The only thing I wanted to say is that this notification principle of crossing the state border is not to be used by large vessels for fishing in the coastal zone. Do you know what I mean? I report that I'm going to unload or to refuel. I cross the coastal zone, lower my trail net and begin to operate.
Remark: There is an order from the Federal Agency - a list of ships that have the right to operate...
Vladimir Putin: After all, we are not monitoring you; you lower the trail nets or you don't; we don't really know.
Andrei Krainy: Mr Putin, it's not that quick or easy to operate or to make a catch. And the fishermen know - today quotas are issued for 10 years, and if you violate the fishing rules, you get a yellow card the first time and a red card the second time. You will lose your quota rights.
Vladimir Putin: Well, all right. If the head of the agency thinks so.
Andrei Krainy: I don't believe they will violate the rules.
Vladimir Putin: Well, that's it. Now the border guards are proposing a law, and we will make a decision - we'll change the government resolution, if you all agree, we'll do so. We strive to protect your interests. Sometimes the state does so with excessive force, thereby creating conditions for corruption and slow response, excessive administrative barriers, but lately we have, as you can see, tried to deal with the issues. We will move in this direction.
Remark: It's simply common sense that dictates doing this.
Vladimir Putin: You see, when I sign the relevant documents, I rely on expert opinion. And the experts say large vessels should not be allowed to fish in the coastal area or else we will overfish and destroy this supply. That's how the Japanese have overfished everything in their waters...
Remark: We need to introduce a monitoring system.
Vladimir Putin: The system is there. And the fish ... The Japanese, too, have a system as the captain just showed - and all equipment on his ship is Japanese. Still, there is no fish left there, and the crabs were all caught, everything was swept clean. We just have to be more careful with this. As for these excessive administrative barriers, I agree with you completely.
Remark: It seems we have a single goal - the efficiency of using the fleet. Right? Why do you have to run around for three or four days, when you reached the port... This is security.
Vladimir Putin: We will work on this. Please, are there any more suggestions?
Question: Mr Putin, when shipping fish to the domestic market today, we have to pass very strict veterinary inspections. This involves very high costs. The supervisory authority sets high standards. And sometimes, of course, it's easier, cheaper and faster for us to send products overseas than to the domestic market. Is it possible to avoid and reduce costs, particularly in veterinary clearance?
Vladimir Putin: Yes, it's possible. In general, a decision has been made on this issue, and we will finalize it shortly. This system will work. What does it entail? The Federal Agency for Fishery (Rosrybolovstvo) will perform this function from the fishing zone to the shore. The Federal Service for Supervision of Consumer Protection and Welfare (Rospotrebnadzor) will do so from the coast to the consumer. That is all.
Remark: It costs up to 100,000 roubles to register one ship, and this is only to file documents.
Vladimir Putin: And I want to stress that we will, in fact, introduce such a procedure on your recommendation, on the recommendation of fishermen themselves.
Andrei Krainy: Mr Putin, the government has all the documents it needs for this. The session will open - we are just waiting for the start of the next State Duma session - and we'll submit a draft law to the Duma.
Remark: We can't operate like this.
Remark: When there is veterinary control - here we make available our products for inspection, obtain permits - and that's all. But when we take our products to Vladivostok, they do not accept these documents...
Vladimir Putin: That's what we try to simplify, to make the appropriate changes to the existing legislation - two agencies that will make the final decision. I repeat, from ship to shore - Rosrybolovstvo, from the shore to the consumer - Rospotrebnadzor. And that's all. One solution for all products.
Yevgeny Sadovnikov (captain of the trawler Mikhail Staritsin): Mr Putin, so we just walked through the ship. In general, vessels of this generation form the basis of the entire fishing fleet - different types, but one generation. They are outdated in every sense of the word. But this, of course, entails ... We need to keep an eye on them somehow, to invest in ship repairs and maintenance; we must invest in upgrades to increase our competitiveness. For example, this vessel consumes 18 tonnes of fuel oil per day. That's a lot, of course.
True, in these two crisis years, the government, of course, helped us pay for the very same lease payments, parts of them, with subsidised loan interest. Will the government continue to help us in this endeavour? Will the government help us in the implementation of, maybe, a ship-building programme? But again, if it is a domestically built ship, it has to be competitive, because in general, we are used to working with good equipment, and our work should be economically substantiated. Now there are very large costs. How does the government envision helping us? We're not able to manage on our own steam.
Vladimir Putin: Mr Sadovnikov, we started from this point in 2009, when it was hard for everyone, including fishermen. As you correctly pointed out - we are subsidising interest rates on loans taken out for the purchase of vessels, equipment and so on, subsidising the lease payments and so on. This is all built into a comprehensive federal programme, which will operate until 2014. We have allocated somewhere around 32 billion roubles for this. This programme will work.
Regarding subsidies, in 2009 they were provided, 2010 is ready and they will be provided for 2011 as well. How much is it, do you remember?
Remark: Around 700 million has been allocated for 2011 to subsidise two-thirds of the interest rate.
Vladimir Putin: Yes, that means, if there is 700 million, I can say that in 2009 it was a little bigger than one billion - 1.07 billion roubles, to be exact. In 2010, it is 600 million, and in 2011 it will be a little more than that.
Remark: Mr Putin, many regions provide two-thirds subsidies, and many regions, like Kamchatka, subsidize one-third more - that makes it 100%.
Vladimir Putin: Mr Sadovnikov is interested in what the Government will do. So, we will do this. The issue of building modern ships - this is, of course, a major issue, and one that is very complex and large. To do this, we resorted to issuing quotas for 10 years, so that you can now use this allocation to work with banking institutions.
I think Mr Sadovnikov is right. We need to consider additional measures to support special shipbuilding for fishing. This, incidentally, is a niche that we can fully occupy - large tonnage vessels. South Korea has it in Pusan, but we do not - there are, actually, few such shipyards in the world. In terms of fishing ships, we are definitely capable of building modern vessels. And it should be a separate programme within the framework of the newly established company - a joint stock state company.
Yevgeny Sadovnikov: Mr Putin, in this regard, we've received our quotas for 10 years. We are concerned about this formulation, since after this period, the quotas will be distributed subject to purchase, let's say, sponsorship of our shipbuilding industry, which, unfortunately, is not competitive today. We have already seen that it is better to have healthy competition, and it is currently cheaper and more economically advantageous to buy foreign vessels, unfortunately.
Vladimir Putin: Mr Sadovnikov, this issue is a universal one for us. Our airlines say the same thing. They say - give us the opportunity to buy Airbuses and Boeings with zero import duties on aircraft. With all due respect, Mr Sadovnikov, if we simply did that - we would never have our own aircraft industry, and Russia would lose all of its skills and competence in this area. Therefore, we need to find a happy medium. We need to allow import purchases on some things, but we also need to be clear with the buyers that in such-and-such a time we will have a domestic shipbuilding programme, and we will gradually tighten the screws associated with imports. We do the same thing for the automotive industry, and I think we need to do the same in this field.
Yevgeny Sadovnikov: That explains it, the motto during the U.S. crisis - "Be American - Buy American." And we are in favour of our manufacturers. Fully in favour.
Vladimir Putin: Mr Sadovnikov, I say that at some point, you can and should be allowed to purchase what is best, but there must be some planning horizon in the shipbuilding industry and for ship-building technology consumers. Everyone should know when, from what time, let's be frank, some preferences will be given to domestic manufacturers as the quality of their products improves.
Remark: Mr Putin, here in early summer, we held a major meeting in Vladivostok with fishermen from all over Russia. We already have projects, new projects, joint Russian-Norwegian projects. We agreed that at first, in the early years, we need to import duty-free technological equipment that we do not yet produce domestically. But we need to build ships in Russia using imported technology.
Vladimir Putin: Right now we plan to build two shipyards, one with the Japanese, the other with South Korea. These will have modern technology, modern equipment.
Remark: Yes, that's the solution. Bring the Norwegians, Spanish, Koreans here.
Vladimir Vasiliev: Mr Putin, I have the following question. In the not too distant past, our country's flag was seen in all the oceans. Currently, we have lost, to a certain extent, the priority in fishing. We should take fish in the oceans; we will always be able to catch our own fish. What does our country think about this?
Vladimir Putin: Good for you, Mr Vasiliev, right! First we have to eat our neighbours' fish, and then our own.
Vladimir Vasiliev: We need ships, new ships. And state support.
Vladimir Putin: You see, we try to maintain both. All of these subsidies take a lot of money out of the state budget.
Andrei Krainy: Colleagues, allow me to say a few words. In the first place, we have lost nothing, thank God. We re-signed agreements with all the countries - Morocco, Mauritania, and in Africa, with Namibia...
Vladimir Putin: By the way, they are being very friendly and amenable...
Andrei Krainy: And Namibians still remember how we helped them when they fought with South Africa, so we have a good relationship. We have now fully regained our presence in the Eastern Central Atlantic. Now, we will sign an agreement with Peru, and will be allowed into the Peruvian zone. A research vessel is on its way to Peru now. But, we, of course, need a new fleet... And, of course, the state will support us.
However, Mr Putin, we will always be able to fish in our own zone. At present, we are all piling up at the 200-mile zone resources, our own, and they are certainly rich - the Barents and Bering Seas - but using our resources like this means undermining our own fishing zone. We must fish elsewhere. We have lost nothing in terms of international practice - we have re-signed all our agreements.
Yevgeny Sadovnikov: Mr Putin, I have the following question - maybe it's not very relevant, but it's such a shame for our fishing industry. We watch TV as our distinguished people - artists, athletes, and many others - are awarded. Present here are the representatives of different companies; tell me, who has been awarded government awards in the last 10 years, or even 15 years? Fishermen, I mean. And we have many distinguished people.
Vladimir Putin: I can show you right now who is to blame for that.
Andrei Krainy: Mr Putin, only when you point your finger, make no mistake, please, because I represent the governor.
Vladimir Putin: Why are you the governor? You're just the head of the industry.
Andrei Krainy: I represent the governor in terms of procedure. But I can tell you about it, colleagues.
Vladimir Putin: Well, the governor is also here, so we can also point the finger at him.
Andrei Krainy: Kamchatka, in this sense, is a truly disadvantaged region. But, in fairness, Russian President Dmitry Medvedev has only just signed the decrees. Large groups of people from Kaliningrad, Murmansk and Primorye have been awarded. So your trade unions and your regional directors need...
Vladimir Putin: Well, what will they say: Award me, I'm good?
Andrei Krainy: The company director should file...
Vladimir Putin: Wait a second! It is you, as the leader of the industry and governor, who should monitor what happens on the ships.
Andrei Krainy: Agreed. A draft decree will be prepared for Kamchatka. But by the way, this is the only region that is left neglected now. This issue was raised a year ago, and we have responded promptly. In the past, we had, of course, captains as Heroes of Socialist Labour, and the shipping vessels were really honoured. This affects the image of the industry because the work is really very hard. Therefore, we accept this criticism and the relevant draft decree will be prepared.
Vladimir Putin: In effect, Mr Sadovnikov raised an important issue. A moral incentive is often more important than material gain for an honest man.
Andrei Krainy: Agreed. Mr Putin, we are also awarding Kamchatka residents with a large number of departmental awards. We also have an insignia for fishing industry veterans, a medal in two classes, and certificates of honour and gratitude. For example, on Fisherman's Day we have awarded 1,150 people in the industry with departmental honours.
Vladimir Putin: In any case, thank you very much for today's conversation.
Response: Thank you.
Vladimir Putin: Thank you very much.
