Title: Comparison of vessel monitoring system (VMS) between Iceland and Indonesia

Author(s): Muhamad Suhendar
Final project
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One method to support a fisheries MCS system, recommended by the Food and Agriculture Organization (FAO), is using a Vessel Monitoring System (VMS). The purpose of the paper is to analyze the use of VMS technology in Indonesia and to explore potential for improvement. Firstly, the Indonesian VMS is compared to the Icelandic VMS system, to identify opportunities for improvement. Secondly, the costs and benefits of suggested improvements are estimated. The analysis of the Indonesian VMS system revealed weaknesses and constraints. The most important weakness has to do with inefficient use of data caused by underdeveloped software solutions. Comparison to the Icelandic VMS system revealed substantial opportunities to improve the usefulness and effectiveness of the system by reducing time delay and developing a better system interface. The costs and benefits of the necessary investment were estimated. The costs are estimated at $1 million. The overall yearly loss of revenue due to illegal fishing in Indonesia was however estimated at around $9 million. Based on data on the extent of illegal fishing under different VMS systems suggests that an improved VMS might reduce illegal fishing by up to 50% over a 10 year period. Given these assumptions the benefits of the improvements to the VMS far exceed the cost, in fact the ratio of benefits to costs is about 17, the benefits are 17 times larger than the cost. The breakeven point is after only about 15 months, and the internal rate of return is 80%. The results of sensitivity analysis reveal that the result of positive net benefits is robust against very large changes in model assumptions.

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