The controversy over Kerala’s deep sea fishing contract with US firm

In 2020 and 2021, two MoUs were signed with EMCC International India- once by the KSIDC and next by a public sector undertaking.
Fishing boat at sea
Fishing boat at sea

On February 19, Friday, Opposition Leader Ramesh Chennithala called out the Pinarayi Vijayan-led government in Kerala for entering into a Memorandum of Understanding (MoU) with a US-based company for deep sea fishing in the state.

However, Minister Mercykutty Amma said that the Fisheries Ministry, which is in charge of giving license for deep sea trawling, has not signed any MoU with EMCC International India. Though the fisheries department may not have signed an MoU, two were signed between government public undertakings and EMCC. Documents accessed by TNM showed that the first MoU was signed between Kerala State Industrial Development Corporation Limited or KSIDC (for the government of Kerala) and EMCC in February 2020. Another MoU was signed between Kerala Shipping Inland Navigation Corporation Limited (KSINC) and the firm in February 2021.According to the MoUs, EMCC International India will invest Rs 5,324 crore in fisheries research and development for upgrading and promoting the deep sea fishing industry in Kerala. The company will build 400 ships and five mother vessels at Rs 2 crore and Rs 74 crore each respectively.

Accusing the Kerala government of engaging in large-scale corruption, Ramesh Chennithala pointed out that fishermen and political parties, including the CPI(M), have opposed foreign deep sea trawlers on the Kerala coast in the past. According to the Opposition, the move to allow foreign trawlers will impact the fishermen and lead to unscientific deep fishing.

The state Cabinet approved the draft fisheries policies in 2019, which protects deep-sea fishing from local and foreign trawlers, in addition to improving scientific methods of fishing and allowing fishermen to fix the price of the catch and sell it in the market. The opposition has said that these MoUs will go against the spirit of the fisheries policy.

How the project came about

In 2018, EMCC claimed to have met Kerala Fisheries, Harbour Engineering, and Cashew Industry Minister J Mercykutty Amma in New York and discussed the project “Fisheries Research and Development for the Up-gradation and Promotion of Deep-Sea Fishing Industry in Kerala, India.”

On August 2, 2019, the EMCC said it submitted its concept note (summary of proposal) for the project to KR Jyothilal IAS Principal Secretary at the Department of Fisheries, Harbour Engineering, and Cashew Industry, requesting a letter of intent (initial proposal for a project) from the Kerala government. 

On February 28, 2020, the EMCC signed an MoU with the Kerala government on “Fisheries Research and Development for the Up-gradation and Promotion of Deep-Sea Fishing Industry in Kerala, India” at ASCEND2020-Kerala global investors meet in the state. According to this MoU, the government of Kerala will assist EMCC to invest Rs 5,000 crore in the state for “Fisheries Research and Development.”

On October 30, 2020, EMCC submitted a request for land allotment in Kerala State Industrial Development Corporation (KSIDC) Mega Food Park at Pallipuram in Ernakulam for setting up a seafood processing centre.

On February 2, 2021, EMCC signed an MoU with Kerala Shipping Inland Navigation Corporation (KSINC) to build 400 ships and five mother vessels.

On February 3, 2021, EMCC received a letter from KSIDC, stating the allotment of 4 acres of land to set up a seafood processing unit.

On February 11, 2021, EMCC sent a letter to Kerala Industrial Minister EP Jayarajan, requesting Cabinet Approval for the project. 

What the firm proposes

In the letter to Industrial Minister EP Jayarajan, the US firm said that the proposal was based on Clause 2.9 of the Kerala government’s Fisheries Policy 2018. It says that “to reduce the stress on overfishing in Continental Shift area, deep-sea fishing vessels will be encouraged to move to Continental Slope area.”

A coastal nation has control over its resources within a continental shelf, which extends from the coastline of a continent to a point called a shelf break. Beyond this, the shelf descends towards the deep ocean floor called the continental slope.

Clause 2.2 in the same policy, however, asserts that “pressure will be put on the central government to stop local and foreign trawlers from doing deep-sea fishing to preserve the marine wealth.”

The company said that the project will provide jobs for 23,000 people in various categories in the project, logistics and merchandising resources, quality assurance professionals, researchers and scientists, technologists and marketers. It also said that approximately 16,000 fishermen will be trained and deployed across 40 pilot prototype vessels and 1,500 men and women will be trained and employed in 200 plus processing and retail outlets to be launched across the state.

Although the MoU makes no mention of the funding, the concept note said, “The project funding will be based on the BOOT (Build, Own, Operate and Transfer) system, and US-based EMCC Global Consortium through its Indian subsidiary EMCC International India shall be the source and guarantor of the funding.”

Kerala government denies signing MoU

Alleging that it was a corrupt deal, Chennithala appealed to the Pinarayi Vijayan government not to proceed with the project, saying it will adversely affect lakhs of fishermen. 

“There is a shortage of fish in the sea. How can the government come into an agreement with an American company for deep-sea fishing? This is against the interest of fishermen. This is corrupt and a high-level committee should probe the matter,” he said.

On the same day, responding to questions from reporters on Chennithala’s charges, Mercykutty Amma called the allegations baseless and with no merit. “The Opposition leader is speaking of an imaginary contract. No agreement has been signed by the government to allow fishing by the US firm,” she said. 

Releasing a letter from EMCC, Chennithala had also alleged that Minister Mercykutty Amma had met the EMCC officials. On February 20, Saturday, Chennithala also released a picture that purportedly showed EMCC officials meeting Mercykutty Amma at her office.

On Saturday, Kerala Chief Minister Pinarayi Vijayan stated that neither the state government nor any of its departments have signed an MoU in this regard. “It is normal for public sector undertakings like the KSINC to sign MoUs in any conferences or investment meets. It would come for the consideration of the government only later. A policy decision in this regard would be taken only then,” Pinarayi Vijayan said.

Chennithala alleged that the Chief Minister is not revealing the conditions of the deep-sea fishing contract.

Incidentally, in an interview to a television channel on February 20, Saturday evening, EMCC president Shibu said, “As the project is not in compliance with the Kerala fishing policy, they have decided not to invest Rs 5,000 crore in the fisheries research and development, but will go ahead with a Rs 100 crore project in the seafood processing unit (in Ernakulam).”

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