By-Products

The biggest bone of contention regarding the ICR's research is the sale of the by-products, i.e. the edible parts of the whales that remain after scientists have collected their samples. Opponents of whaling describe this as disguised commerce while the ICR claims all the proceeds are ploughed back into the research.

Actually only two things can be definitively stated; the rest is a judgment call. The first is that were the ICR not to catch any whales, or if it were to catch them but not sell the by-products, it would need to find a new source of funding or cease the research. In other words, the research would probably stop if there were no by-products to sell. The other is that unless the ICR and Kyodo Senpaku are cooking the books (which would make them criminals), the research does not yield a financial profit, and is therefore not disguised commerce.

According to the ICR, a season's research in the Antarctic costs about 3,000 million yen ($23 mil.). It receives just over 500 million yen from the Fisheries Agency towards this cost, but can generate as much as 2,500 million yen from the sale of by-products (Table 4). The sale of by-products, therefore, is far and away the major source of financing for the research.

Table 4: Edible By-Products of Research Program, Wholesale Value

A staggering range of edible products results from the research (Table 5), attesting to the variety which characterises Japanese cuisine in general. The ICR consigns Kyodo Senpaku to sell these to licensed consignees at wholesale markets in various major cities, with the prices being set by the ICR. For this service Kyodo Senpaku receives a 5.5% commission (for the first three seasons this was 5%). The consignees then sell the products to brokers at the same price, for which they receive a 5.5% commission. After payment of these commissions, all monies from the sale revert to the ICR.

At this stage, the products enter the free market and prices are set by retailers. However, to ensure that former whaling communities receive their share at affordable prices (almost all are suffering financial hardship), Kyodo Senpaku sells about 8% of all by-products directly to them at the wholesale price.

Table 5: Edible Products Amassed in 1989-90

Notes:
1) Other than edible products, baleen and tympanic bullae are returned to Japan to meet a demand from sculptors of ornaments. In 1990-91, however, no baleen was collected as supplies remained from the previous season.
2) Of this, 274.5 kg were sold at special prices to crewmembers.

Charter Fees

Other than its commission for handling sales, Kyodo Senpaku receives charter fees for its vessels and crews from the ICR. As a large part of the ICR's income derives from the sale of by-products, and as the ICR pays charter fees to Kyodo Senpaku, it can be argued that Kyodo Senpaku is paid with money made catching whales. In other words, Kyodo Senpaku may call itself a charter company, but the only "proof" that it is not in fact a whaling company is the form in which income is received. There is no conclusion to this semantic argument, but it is interesting nonetheless to scrutinise the charter fees more closely. The ICR operates as a strictly non-profit organisation, but if it could be demonstrated that it was paying exorbitant charter fees to Kyodo Senpaku, one would have a case for arguing that the ICR serves as a cover for a commercial operation, Kyodo Senpaku.

There is a problem with this line of investigation, however: there are no other fishing fleets which bear comparison. The vessels and crews being chartered out by Kyodo Senpaku are unique, and even during the days of commercial whaling, vessels were not chartered, they belonged to the whaling companies themselves. There is also no precedent in the industry of an Antarctic minke whaling expedition taking so few whales - no expedition has ever been so economically inefficient.

For the first four seasons of the research program, the ICR wet-chartered vessels (crews included) at fixed rates which essentially did not change. In 1990-91, monthly rates were 286 million yen ($2.2 mil.) for the factory ship Nisshin Maru No. 3, and 96 million yen ($738,000) for the three catchers combined. As the length of the cruise was five months, Kyodo Senpaku received 1,909.1 million yen ($14.7 mil.) for its services.

For the 1991-92 cruise the terms of payment changed somewhat following the replacement of the factory ship. The cost of chartering the new vessel (excluding management, sailors, etc.) has been set at a fixed rate which will decrease by 25% annually to reflect depreciation. Initially the charter fee is higher than that of its predecessor, but when other factors are considered the ICR will save money in the long run, which means, of course, Kyodo Senpaku will receive less. In particular there is the smaller crew size: 91 compared with 115 aboard the old Nisshin Maru No. 3. Thus the total wet-charter fee will be slightly higher for three seasons, but from 1994 will be less.

If we combine the charter fees and commission for selling the by-products, we find that for the 1990-91 cruise Kyodo Senpaku received a total pre-tax income from the ICR of 2,051 million yen ($15.8 mil.). What does this figure mean? Is it exorbitant? Is it profiteering? As has already been stated, no meaningful comparison can be made with any other kind of fishing operation. The best we can do is to place it in the context of former commercial operations.

In terms of vessels and manpower, the peak season for Japanese whaling in the Antarctic was 1961-62. In that season, a total of 14,351 whales were reported caught, yielding more than 300,000 tonnes of salable products, including oil, edible parts, fertiliser, teeth and others (Table 6). By 1986-87, the last commercial season, production had fallen below 10,000 tonnes. Over the first four seasons of the ICR's research, production has ranged from just over 1,000 to nearly 1,500 tonnes.

During the 1970s and '80s, as quotas and therefore production fell, the industry naturally experienced a fall in income. Though this was to an extent offset by rising prices (a consequence of falling supply), the drop was nonetheless dramatic. The products from the 1961-62 season brought in 20,510 million yen ($157.8 mil.) on the wholesale market, or 73,836 million yen ($568 mil.) in 1991 terms(1). But in 1986-87, the last season of commercial whaling, the value was just 7,760 million yen ($59.7 mil.), or 7,814 million yen ($60.1 mil.) in 1991 terms(2).

Now that just 300-odd whales are being taken per season, it is not surprising that wholesale prices have risen sharply. This could be interpreted as profiteering, but more realistically it reflects the enormous increase in cost per unit effort of catching so few whales over the same period as would previously have been spent to catch several thousand. In any event, the income for the sale of by-products from the 1990-91 catch was down 65% from 1986-87 at just 2,705 million yen ($20.8 mil.).

The best way to assess the fortunes of Kyodo Senpaku is to compare income from whaling in 1990-91 with that of its predecessor Kyodo Hogei in 1986-87. In terms of operating costs, there are only two differences: four catcher boats were used in 1986-87, compared with the current three; and the total crew complement fell from 308 to 173. As one of these differences is on the plus side and one on the minus, they more or less cancel each other out. If we juxtapose the figures, then, we have an income from five months' of whaling in 1986-87 of 7,814 million yen ($60.1 mil.) at 1991 value, and in 1990-91 of 2,051 million yen ($15.8 mil.). In other words, whaling for the ICR rather than for itself has resulted in a drop in income for Kyodo Senpaku of 74%. On the basis of this statistic, it is hard to believe Kyodo Senpaku is overcharging the ICR for its services. The charter fees may or may not be unreasonable, but they are no substitute for catching thousands of whales.

Table 6: Products of Japanese Commercial Operations in Antarctic

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