Nghe An fishermen in debt because of 'ship 67'
(Baonghean.vn) - After 5 years of operating offshore fishing vessels with the fleet named 67 of Nghe An fishermen, it can be seen that, besides some vessels operating effectively and paying debts on time, the majority operate inefficiently, are in debt, and the banks are holding bad debts that are difficult to collect.
Many difficulties and shortcomings
When we arrived at the Lach Quen fishing port (Quynh Luu), we saw a series of large ships with large engines parked close together. According to the fishermen, most of them were ship 67 that had been docked for a long time.
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| The ships named 67 of Nghe An, built with steel hulls worth tens of billions of dong, are anchored at Lach Quen fishing port. Photo: Xuan Hoang |
Mr. Ho Dinh Viet in Son Hai commune (Quynh Luu), ownerShip 67License plate NA 97777 TS said that his fishing boat has an engine capacity of 818 CV, fishing by purse seine, newly built with a capital of 8.9 billion VND, of which 6.5 billion VND was borrowed from the Bank for Agriculture and Rural Development, Quynh Luu District Branch according to the program of Decree 67. After the first few years of seafood exploitation, Mr. Viet has paid off 1.7 billion VND to the bank.
But the joy was short-lived. For many reasons, Mr. Viet’s ship 67 gradually lost efficiency and the more it went to sea, the more it lost money. Since 2020, the ship has been stuck on the shore, with no money to pay off the bank loan.
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| Fishing boat NA 97777 TS of fisherman Ho Dinh Viet in Son Hai commune, Quynh Luu district is operating ineffectively and has no money to pay the bank. Photo: Xuan Hoang |
“There was a time when I hired someone to go to sea, hoping to salvage some money to pay off the debt, but every trip was a loss, especially when the price of fuel was high, forcing the ship to stay ashore for a long time. I also really wanted to pay the debt on time, but due to depleted fishery resources, high costs, and the ship going to sea at a loss, it was very difficult, and now I don’t know what to do. The bank has filed a lawsuit in court. My wish is to quickly liquidate the ship to reduce the large debt that has been with me for a long time, because if the ship is anchored for a long time, it will deteriorate and lose value,” Mr. Viet shared.
Currently, in the districts of Quynh Luu, Dien Chau, and Hoang Mai town, there are many fishermen in the same situation as Mr. Viet. Typically, ship owners Ho Sy Loc, Nguyen Thai Son, and Dau Dinh Kham (Hoang Mai town) each owe from 8 to 9 billion VND; especially fisherman Ngo Tri Dong in Dien Chau district owes more than 19 billion VND... That is a huge debt for fishermen.
Mr. Phan Dinh Thong - Director of the Branch of the Bank for Agriculture and Rural Development in Quynh Luu District said: Out of 22 ship owners who borrowed capital from the branch, 1 ship owner has paid off the loan so far; of the remaining 21 ship owners, more than half have bad debt. Therefore, if the fishermen do not repay the loan, the bank will have to file a lawsuit to recover the capital.
“The customer’s responsibility is to find a source to repay the debt as committed. In case the bank has urged the customer to pay but the customer still does not repay the debt, the bank must file a lawsuit to recover the debt. Once the lawsuit is filed, the customer needs to cooperate with the bank and the court to quickly liquidate the ship, in order to limit the situation of the ship deteriorating and losing value.”
According to data from Nghe An Fisheries Sub-Department, as of March 2023, out of 104 ships 67, the number of ships operating at a low level, inefficiently, unable to pay principal/interest as committed is 4 ships (accounting for 3.85%), with outstanding debt of VND 28,677 billion. The number of ships converted to bad debt is 63 ships (accounting for 60.57%) with a total bad debt of VND 415,258 billion, accounting for 74.32% of the total outstanding loan balance according to Decree 67.
Of the total 63 ships in the bad debt group, 30 ships were unable to repay loans and violated regulations atcredit contracthave been sued by banks or the enforcement agency has handled the assets to recover capital for the bank. Of these, 10 ships have been successfully auctioned. However, the auction was also difficult and the price was heavily reduced, with some ships being reduced by up to 80% compared to the new construction price, causing the ship owners to suffer double losses.
Insurance concerns
Another problem that makes many ship owners 67 upset and disappointed is that after purchasing insurance to go to sea, if the ship unfortunately encounters an accident, the insurance company makes things difficult, forcing the ship owner to sue in court.
Fisherman Pham Van Cong in Thanh Cong village, Quynh Long commune, Quynh Luu district, owner of ship 67 with license plate NA 97768 TS, said that because at the end of 2019, JPICO Insurance Company stopped selling insurance for fishing boat 67, at the beginning of 2022 he switched to buying insurance from BSH Insurance Company (Saigon - Hanoi Insurance Company). In June 2022, while fishing in the open sea, Mr. Cong's ship 67 unfortunately had an accident and sank. Mr. Cong and the crew escaped death thanks to a timely rescue by a friendly ship.
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| Fishermen said that the reason dozens of 67 ships are not operating effectively is partly due to increasingly difficult fishing grounds. Photo: Xuan Hoang |
The sinking of Mr. Cong’s boat was investigated and confirmed clearly by the authorities. However, when he filed a claim for insurance compensation, the insurance company still refused with many reasons (which Mr. Cong said was the insurance company “deliberately making things difficult”). With no other choice, Mr. Cong had to ask for a lawyer and sue in court.
“The level of fishermen like us is limited, so we have to seek the support of lawyers. If we are not accepted in court, we will lose our ship worth tens of billions of dong and owe the bank more than 5 billion dong,” Mr. Pham Van Cong worriedly expressed.
A representative of BSH Insurance Company, Nghe An Branch, said that in the case of the owner of ship 67 - Mr. Pham Van Cong, the company has received the compensation request and the company has responded in writing stating the reasons for not being compensated; that is: Mr. Cong's fishing boat 67 sank because of a lot of water entering the engine room through cracks/tears on the wooden planks on both sides of the ship and the bottom of the ship that existed before. When encountering bad weather, strong waves hit, making these cracks/tears larger, allowing water to enter faster. The ship was not fully equipped with titles and did not have enough minimum safety crew according to regulations...
Not only BSH Insurance, but before that many fishing boats 67 offishermenAfter purchasing insurance from JPICO Insurance Company, they also had to sue in court. According to data from the Department of Agriculture and Rural Development, as of March 2023, 12 newly built ships under Decree No. 67 encountered risks (fire, sinking) while participating in fishing. Of which, 8 ships have been compensated by JPICO Insurance Company, the remaining 4 ships (with outstanding debt of VND 27,548 billion) are waiting for the insurance agency to consider and process compensation when they meet the conditions according to regulations.
Speaking to reporters, Mr. Nguyen Van Le - Director of PJICO Insurance Company, Nghe An Branch, said that in recent years, the company has resolved the risks for many ship owners 67 in accordance with regulations. The reason why 4 ships that burned and sank have not been compensated is because there is not enough legal basis for compensation.
“In cases where compensation is refused, the company will base it on the results of the investigation and verification by an independent appraisal unit. The company will not arbitrarily give reasons for refusing compensation without any basis. After going to court, we will follow the court's decision to implement it.”
Banking perspective
Bringing up the issue of the owner of ship 67 owing to the bank to discuss with the banking sector, the representative of the State Bank of Vietnam (SBV) Nghe An Branch said that the unified handling direction of the SBV Nghe An Branch over the past years is: For the group of fishermen facing difficulties due to objective reasons in the exploitation and fishing process such as natural disasters, epidemics, etc. but with good will to repay the debt, the banking sector, directly the lending banks, will create all possible conditions to support the fishermen to overcome difficulties and create revenue to repay the debt.
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| Fishermen unload seafood after catching at Quynh Phuong fishing port, Hoang Mai town. Photo: Xuan Hoang |
In the coming time, the State Bank of Vietnam Nghe An Branch will continue to direct commercial banks to closely coordinate with local authorities and relevant agencies to urgently review and classify ship owners, thereby providing appropriate support and handling solutions. For cases where ship owners deliberately delay debt repayment, the State Bank of Vietnam Nghe An Branch will direct banks to coordinate with relevant agencies and local authorities to handle debt collection in accordance with the law, such as filing a lawsuit in court, handling collateral, etc.
In fact, the lawsuit against the debt repayment of ship 67 is facing many difficulties due to the lengthy lawsuit process, the execution of the judgment as well as the auction of the ship takes a lot of time and effort. Not to mention, if the fishing boat is on shore for too long, its value will decrease significantly, and at the same time, many costs of preservation and maintenance will arise, greatly affecting the debt collection of the banks.
Regarding the reasons for the ineffectiveness of newly built ships under Decree 67 and the delay in debt repayment, according to the Department of Agriculture and Rural Development, since the end of 2019, aquatic resources have decreased significantly, and aquatic species with high economic value have increasingly declined. In addition, there is a lack of marine labor and high fuel prices; fishing vessels have been in operation for 7-8 years, the hulls (especially steel-hulled vessels), engines, equipment, etc. are degraded and damaged, requiring repair and maintenance at high costs.
Mr. Tran Xuan Hoc - Deputy Director of the Department of Agriculture and Rural Development said that commercial banks that lend money to build new fishing vessels under Decree 67 need to consider changing the way they calculate debt repayments for fishermen during difficult times. Regarding filing a lawsuit in court, it is necessary to carefully consider the cause of outstanding debt (especially for ship owners facing difficulties due to objective reasons), as well as create conditions for ship 67 to go to sea to generate income and sources of debt repayment for ship owners.
Implementing the shipbuilding policy according to Decree 67/CP, Nghe An province has deployed loans to support fisheries development.close104 new fishing boats, with a total disbursed amount of nearly 856 billion VND. Of which, 9 are steel-hulled boats, 5 are composite-hulled boats and 90 are wooden-hulled boats, with a total engine capacity ofmaindesigned to be 83,832 CV.
