Background Institutional Change in the Chilean Salmon Industry as a Reaction to the Sanitary Crisis

54 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 looking at this case is to attempt to understand the complex nature of institutional change in managing NR sustainably.The data and information for this case study were collected via numerous interviews with key informants conducted between Nov-Dec 2011 in Chile, as well as secondary sources, such as government reports and industry-specific news media.

3. Institutional Change in the Chilean Salmon Industry as a Reaction to the Sanitary Crisis

3.1 Background

The Chilean salmon industry, one of the leading exporters of farmed salmon, experienced successful growth from the 1990s until 2008. The emergence of this industry brought economic growth to the region by creating much needed employment. However, the situation changed drastically when the sanitary crisis emerged, caused by the spread of virus called infectious salmon anemia ISA, a disease that affects only Atlantic salmon see Box 1. This halted the growth of the industry and had a huge impact that extended well beyond the industry itself. In just one year 2008-9 the volume of Atlantic salmon 3 production fell by 47.8, from 370,000 tons to 203,000 tons Baillarie, Kehdy and Auszenker 2010, and sales fell by 12.9 to US2,169 million FOBin 2009. 4 Such a sudden drop in production created negative chain reactions throughout the regional economy, caused a high level of unemployment and the bankruptcy of many salmon farms, with a total estimated bank debt of US1600 –2500 million Larrain 2011. It is reasonable to say that this incident stunted the growth trajectory for this industry. Responding to the crisis government created a task force called mesa de salmon Roundtable in 2008. The Roundtable consisted of representatives from the relevant major public sectors and was placed directly under the authority of the president of Chile. It was considered that a rapid decision-making process to resolve the issue is achieved by limiting the participation public sectors. After almost two years of negotiation to find a solution to the problem by the Roundtable, a new legal framework, called Ley Aquacultura Ley No. 20.434 was established in Chile in 2010. The law modified a previous existing law, the General Law of Fishery and Aquaculture Ley General de Pesca y Acuicultura: LGPA, Ley No. 18.892 and resulted in the creation of new institutions that were more favorable to managing NR sustainably.

3.2 Changes made in the formal rules: The new Aquaculture Law