2. Aquaculture in Indonesia

2.1 The Aquaculture Framework

As the world’s largest archipelagic nation with more than 17,000 small islands and a coastline of about 95,000 km, Indonesia has an enormous potential for aquaculture development. The aquaculture industry plays a central role in Indonesia as it enhances economic growth. Aquaculture is also an important contributor to the four national pillars of development recognized by the Indonesian government, as economic growth, the creation of job opportunities, reduction of poverty and environmental recovery and mitigation (KKP, 2010).

The strength of Indonesia aquaculture is the availability of space, high biodiversity, favourable geography, climate and human resources (FAO, 2010a). Against its extraordinary geographical settings and long history of the sector, Indonesia’s aquaculture revolves around another scenario involving complex policy and economic pressures, at both the national and international levels.
Nationally, the main strengths are the rapid expansion of aquaculture vis/a/vis the slower growth of captures fisheries. This is coupled with a recent decentralized administrative process that has given the local administrative levels new and wider responsibilities (Nurhidayah, 2010). Internationally, the economic pressures are for gaining stronger markets, particularly in the USA and Europe, both of them demanding more stringent regulations for input from Indonesia.

2.2 G overnmental Structure and Organization for Aquaculture in Indonesia

The institutional and legislative framework for aquaculture in Indonesia is huge and complex albeit somewhat uncoordinated, particularly at the local level. A number of ministerial authorities deal with aquaculture activities within all administrative levels, from central to provincial to local government. MMAF is the principal agency responsible for planning, management and administration of marine and fisheries sectors in Indonesia. The Directorate General of Aquaculture (DGA) is the government policymaking agency in charge of aquaculture development, whereas at the local level it is in the hands of the local fisheries services of the provinces and districts/ municipalities. The Agency for Marine Affairs and Fisheries Research and Development (AMAFRAD) supervises research and development activities related to marine issues and fisheries on the national level.
CARD, which coordinates the bilateral project on the Indonesian side, is one of the research centres under AMAFRAD. The municipal or regency level is the granted authority for 4 nautical miles (nm) seaward from shoreline. The provincial level has authority to manage the near coastal stripes between 4 and 12 nm seaward from the shoreline, while the central government is in charge of aquaculture operations 12 nm offshore (Nurhidayah, 2010). Emphasis has been given to the institutional development of groups of farmers to raise their role through extended activities, business counselling/guidance and training (Nurdjana, 2006).
There are also several professional and commercial bodies working in close cooperation with the government and entrepreneurs. Despite these efforts, public/ stakeholder participation in decision making is not yet fully established. Although the administrative and legislative/regulatory tools for an expanding aquaculture development are in place, some critical tools for zoning and the application of EIA procedures, etc., are still to be fully implemented. 

2.3 Regulatory Framework of Marine Finfish Aquaculture in Indonesia

Policies dealing with environmental issues in aquaculture are based on FAO Code of Conduct for Responsible Fisheries Guidelines Nr. 4 on Aquaculture Development (FAO, 1997). FAO encourages administrative States to establish, maintain, and develop appropriate legal and regulatory framework for facilitating the development of responsible aquaculture.
According to the current regulations in Indonesia, EIA of aquaculture activity applies only to large-scale intensive farming in seawater extending over 5 ha or having more than 1,000 cages. Besides, only new fish farms require an EIA whereas old or those farms expanding in size are exempt from it (Sugama, 2007 and Phillips et al., 2009). Full EIA is not applicable as nowadays most farms cover small areas and have less than 1000 cages. EIA is issued according to the Ministry of Environment’s Decree No. 17/2001 and closely linked to licensing procedures. Environmental monitoring is specified within the EIA but then again only required for larger farms.
National water quality standards have been established for aquaculture, but effectiveness and technical appropriateness is still lacking in Indonesia. Farm licences are issued by the local authority but are required only for large-scale intensive farming. Small-scale fish breeders and local farms are exempt from licences. As a result, EIA is not applicable to the bulk of aquaculture production in Indonesia. The allocation of licences is done taking into consideration farm location and size, fish species and carrying capacity. However, scarce data and inappropriate methods applied for siting aquaculture operations and estimating carrying capacity of fish farming at the feasibility level remains a major constraint. Site selection and estimations of local and cumulative carrying capacities should be done in the early stages of the developments. This would enhance decision making concerning the allocation of licences and enforcement of regulations, thus boosting investments.

2.4 Expansion of Marine Finfish Aquaculture in Indonesia

Overall aquaculture production of marine finfish for export in Indonesia amounts currently to about 25,000 t/year. The cultured commodities are mainly based on good economic sense, i.e., price and widely accepted markets. Grouper and Asia sea bass are the species most farmed. The exporting markets for live grouper are China, Hong Kong, Malaysia and Singapore. Sea bass is exported mainly as fillets to Australia, USA, Thailand and Hong Kong. Most of the production is cultivated in the centers of investment, Lampung, Batam and Bali, all of them close and/or with good access to target markets and production infrastructure. Farms use traditional technologies consisting mainly of floating net cages made of wooden rafts (see Figure 1), but there is a trend towards farms with several large circular cages (see Figure 2). In the centres of investment fish farms are predominantly medium-scale (farms with 20 to 100 cages) and largescale (farms with over 100 cages). As most of these farms employ traditional technology there is ample scope for expansion of the activity in the existing sites. In addition the potential for expansion of the activity into new centres of investment is tremendous as according to estimates only about 1 percent of the suitable area for development of the industry is in use so far (Nurdjana, 2006). Several centers for expansion have been identified including Lombok, Sumbawa, Manado and Morotai. These coastal areas offer excellent conditions for marine finfish aquaculture but much of the areas are ecologically sensitive coral reefs and mangrove. Besides, the industry is likely to conflict with the tourism sector and global conservation initiates.
Hence the use of state-of-the-art spatial planning tools is essential. In addition to good environmental characteristics capable of absorbing the waste from fish farm operations, aquaculture sites should be located dowsntream from important ecosystems and biosecurity assets. Much attention shall also be given to conflicts with other activities and access to markets and production infrastructure.