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Vietnam Steps Up Efforts to Protect Fishing Fleet


Planting Dreams by Pham Huy Thong/Craig Thomas Gallery, HCMC, Vietnam

In a time of heightened tensions between Asian nations with claims to the waters of the East and South China Seas, the deployment of an offshore oil rig back in May by Beijing in disputed waters with Vietnam was not going to be an event without ramifications. The rig’s deployment by the Chinese National Offshore Oil Company (CNOOC) in waters just 120 nautical miles (222km) off Vietnam’s coast set off a nationalistic furor in Vietnam, provoking anti-Chinese protests and riots across Vietnam, destroying factories, and resulting in the deaths of at least four workers. With the removal of the rig ahead of schedule on July 16, diplomats of neighboring nations may breathing sighs of relief, but Vietnamese authorities are not letting their guard down and are busy making contingency plans to maintain their sovereign waters and prepare for any further aggression from China.

One such front in the battle to maintaining sovereignty over the disputed waters will continue to be fought by Vietnamese fishermen. Frequent clashes between Vietnamese and Chinese civilian naval vessels and fishing boats have occurred since the deployment of the Chinese rig in waters traditionally fished by Vietnamese. Tensions between Vietnamese fishermen and the Chinese patrol boats sent to protect the rig have led to numerous collisions (China records over 1,400) and resulted in the sinking of a Vietnamese vessel, which had been rammed by a larger Chinese vessel. While the rig has been removed from the disputed waters, tensions still remain. Last week, the captain of a Vietnamese fishing boat reported his boat was rammed by a Chinese vessel in waters near Hoang Sa (Paracel) Islands. The captain reported the crew of the Chinese vessel smashed his cabin and cut some wires before taking away equipment including two-way radios, fish detectors, and around three tons of fish. A local official remarked that 27 other fishing boats from his province of Quang Ngai had been stopped, chased and damaged so far this year, with 15 of the attacks taking place after the rig’s deployment. The province is home to 5,459 fishing boats, all of which are are constructed of wood and thus vulnerable to attack.

Vietnamese state authorities are now seeking to further protect their fishermen through the issuance of a draft circular last week by the State Bank of Vietnam (SBV).  The draft circular calls for a new loan program whereby Vietnamese fishermen will be encouraged to apply for subsidized loans at one to four percent for the construction of sturdier and faster ships for deep-sea fishing. Under the new VND4.5 trillion ($211.5 million) program, individuals and organizations are eligible for 11-year loans and will only need to pledge the new ships as collateral. The terms of the loans are structured to incentivize borrowers to build stronger metal boats with larger engines, rather than slower, more fragile wooden boats. Borrowers can borrow up to 95 percent of the cost of a new boat if constructed of metal at an interest rate of seven percent, with the SBV providing a six per cent subsidy for boats with 800 horsepower or more. Metal boats with horsepower of between 400-800HP can borrow up to 90 per cent with a five percent subsidy. Wooden vessels are only eligible for 70 percent financing at the same seven percent interest rate, though only a three percent subsidy will be provided. The new loan program is expected to take effect starting August 25.

Other efforts to boost the catch and protect fishermen come from Japan, which announced the launch last week of a composite-hulled tuna fishing ship in Nha Trang City. A Japanese company, Yanmar, expects to build 180 of these tuna boats in conjunction with the Ship Institute at the University of Nha Trang, for the central provinces of Binh Dinh, Phu Yen and Khanh Hoa. Yanmar expects to export 4,500 tonnes of Vietnamese tuna to Japan every year starting from 2015. Earlier this month, Japanese Foreign Minister Fumio Kishida visited Hanoi and announced Japan would give six used naval boats worth an estimated 500 million Yen ($4.86 million) to Vietnam to boost its patrol and surveillance capacity in the East Sea.

The new loan program, as well as the efforts by Japan, are seen by many as a direct consequence of increased aggression by Beijing’s maritime forces in the disputed territorial waters of what Vietnam calls the East Sea. An unnamed Vietinbank official, speaking of the SBV loan program, said: “The decree gives great encouragement to fishermen to go offshore,” adding “These credit support policies will help fishermen feel confident about taking loans to build large vessels and invest in modern equipment for fishing in the high seas, thus helping develop the economy and ensure the country’s sovereignty over its waters and islands.”

The fight over fishing rights, while drawing less attention than the battle over oil and mineral deposits, has certainly been more deadly, and Vietnam authorities have cause to worry. Earlier this year, China began the implementation of rules requiring foreign fishermen to obtain Beijing’s approval to operate in waters it claims — virtually 90 percent of the entire South China Sea, parts of which are also claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam under their own 200-mile exclusive economic zones.

Prior to the latest incidents related to China’s rig, there have been a number of aggressive actions undertaken by Chinese vessels. In 2005, Chinese civilian law enforcement vessels killed nine Vietnamese fishermen in the South China Sea, and another Vietnamese fisherman was killed in 2007, after a Chinese navy vessel sank a Vietnamese fishing vessel. In July 2012, a Chinese fleet of 30 vessels, with 550 fishermen onboard and a 3,000-ton supply ship alongside, visited the disputed Nansha Islands, known outside China as the Spratly Islands — parts of which are also claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam. And in March 2013, Vietnam accused a Chinese vessel of chasing and firing at a Vietnamese fishing boat in disputed waters. Many other small skirmishes go unreported.

To protect this new fleet of Vietnamese fishing vessels, as well as existing boats, a new Vietnam Fisheries Resources Surveillance force was set up in April. The force, established under the Ministry of Agriculture and Rural Development, is expected to ensure the enforcement of fishing laws and help develop the marine economy, which encompasses shipping, aquaculture and fisheries. The marine economy currently accounts for 49 percent of the Vietnam’s GDP, which authorities are seeking to increase to 55 percent 2020.

With the potential for an enlarged deep-sea fishing fleet. protected by a surveillance force, we should see greater fishing activity by Vietnamese boats in the near future. How Beijing reacts to the increased presence of Vietnamese fishermen and patrol boats in waters it claims is uncertain. What is certain is Beijing is unlikely to take kindly to these efforts by Vietnam and will counterpunch — perhaps sending another massive flotilla of fishing vessels and civilian naval vessels or additional rigs into the disputed waters with an accompanying protective fleet. Hoang Anh Tuan, director of the Institute for Foreign Policy and Strategic Studies in Hanoi, worries that if the last oil rig was 120 miles away, the next deployment could entail two or three rigs dropped 80 miles off the coast. Given the unpredictable nature of Beijing’s actions toward its neighbors, and faced with domestic criticism on how they reacted to the May deployment of the Chinese oil rig, Vietnamese authorities would do well to prepare a response for every possible contingency.



Gary Sands

Gary Sands is a Senior Analyst at Wikistrat, a crowdsourced consultancy, and a Director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, U.S. News and World Report, Newsweek, Washington Times, The Diplomat, The National Interest, International Policy Digest, Asia Times, EurasiaNet, Eurasia Review, Indo-Pacific Review, the South China Morning Post, and the Global Times. He was previously employed in lending and advisory roles at Shell Capital, ABB Structured Finance, and the U.S. Overseas Private Investment Corporation. He earned his Masters of Business Administration in International Business from the George Washington University in Washington, D.C. and a Bachelor of Science in Finance at the University of Connecticut in Storrs, Connecticut. He spent six years in Shanghai from 2006-2012, four years in Rio de Janeiro, and is currently based in Ho Chi Minh City, Vietnam. Twitter@ForeignDevil666