The nexus between illegal fishing and fisheries subsidies

5 September 2018
  • Illegal, unreported, and unregulated (IUU) fishing is a great threat to the sustainability of oceans and marine ecosystems.
  • For World Trade Organization disciplines on IUU fishing to be effective, there is a need to look beyond the lists of regional fisheries management organisations to determine cases of IUU fishing activity.
  • People break the rules, not boats. Subsidy prohibitions based on IUU activity should therefore target the beneficial owner of a vessel, not the vessel itself.
  • Enhancing subsidy and licence transparency is a crucial aspect of the fight against illegal fishing.

 

If you read the most recent update to the UN Food and Agriculture Organization’s (FAO) State of World Fisheries and Aquaculture, you know that the trend lines for world capture fisheries are not great. The total amount of capture harvest has been static for decades but the percentage that is overfished continues to grow and the amount of underfished fisheries (think of it as spare capacity) continues to drop.

While the majority of world fisheries are still sustainability harvested, the course is of concern. This makes sense in a world with growing populations and a larger percentage of those people entering the middle class and demanding access to the same tasty protein that the rich world has enjoyed.

As we know from economics, static supply and increasing demand means that prices will rise, and where prices rise incentives rise for people to break the rules and cheat or for governments to set the bar too low and enable legal overfishing.

OceanMind primarily helps governments and businesses address the first issue by providing intelligence reports on possible non-compliance for investigation or third party validation that everything is fine for businesses. We also work with fisheries authorities to develop and implement regulations that enable sustainable fishing based on vessel activity in their waters.

But there’s another aspect of fisheries sustainability that shows up in our work and has huge (mostly negative) potential impact: subsidies.

Economists generally abhor subsidies as distorting the markets, which can lead people to devote resources to activities that are not actually the best use of time and money. In the world of fisheries, this can have disastrous consequences given our ability to pull fish out of the water effectively.

Partly for this reason, the World Trade Organization (WTO) has been working on a binding agreement to hopefully limit subsidies in fisheries, particularly those that encourage overcapacity and overfishing. However, these negotiations have been going on since 2001 (!) and I was presented with an opportunity to find out why when I was invited by the International Centre for Trade and Sustainable Development (ICTSD) to come to Geneva and speak to some of the delegates meeting at the WTO about the nexus between illegal, unreported, and unregulated (IUU) fishing and fisheries subsidies.

In previous work with the Coast Guard, I participated in a very small way in the review and development of the Port State Measures Agreement (PSMA), which took about a decade. That gave me a good viewpoint into how complicated these issues can be, but that process does not hold a candle to the ongoing WTO deliberations on fisheries subsidies, which probably have a greater likely impact on global fisheries’ sustainability than the PSMA.

Trade issues are not my area of expertise. But I looked through the current working language as it related to IUU fishing and I want to share a few of the key issues I see with my hopes and recommendations for how it works out.

The definition of “IUU fishing” is problem number one. There is a clear desire not to provide subsidies to vessel operators engaged in IUU fishing, but how do you decide who has done it?

Illegal, unregulated, and unreported fishing has a very specific and technical definition under international agreements which is actually quite broad, but in practice it has been rounded down to a simplistic view that the only illegal vessel is one that is on the IUU list of a regional fisheries management organisation (RFMO), one of the international bodies where countries jointly manage highly migratory or straddling fish stocks that are shared across borders.

It is also important to know that RFMOs are not managing the majority of the world’s fisheries, which are mostly inside national waters. Violations of the rules inside these waters may lead to sanctions or penalties, but very rarely do they lead to designation of an IUU fishing vessel under an RFMO list. Using just these lists would be the lowest common denominator in deciding whose subsidies should be removed or withheld.

However, if we do not use the IUU vessels lists, what is the best indicator? We are literally talking about taking money away from people. There should be as few subsidies as possible in fisheries, but in the absence of a complete prohibition, any allegation of IUU fishing should lead to subsidies being placed in escrow or withheld pending investigation by national authorities. This will not be as simple as using the IUU vessels lists, but it captures the full range of IUU fishing activity and can lead to actions that really push people where it matters: in their wallets.

It is also important to make sure that any penalties are targeted at the people and companies profiting from the activity in question. As we like to say in the compliance world: boats don’t break the rules, people do.

There is a lot of depersonalisation of IUU fishing given the focus on vessels where we speak as if it had a brain and knowingly went into a closed area with prohibited gear or fished beyond the end of an expired license. This is obviously ridiculous but it is how almost every press release in the world reads for fisheries violations.

Any meaningful attempt to sanction fishing subsidies based on IUU activity should therefore target the beneficial owner of the vessel, who may have different types of subsidies in play, including subsidies for fuel and tax reliefs that are currently open to negotiation.

All of this would be much simpler if national authorities made public their vessel registries, fishing licenses, and lists of subsidy recipients.

OceanMind spends quite a bit of time helping governments and businesses research ownership and flag registry information using our extensive databases as well as developing new relationships and sources to overcome the silos of information that discourage cross-border cooperation on fisheries intelligence and enforcement.

The compliance community does not do a good job of reminding everyone that the low-hanging fruit of fisheries compliance is in making sure that registries, licenses, and subsidies are publicly available so that other countries, the public, and even officials within the same government can see how their tax money and common marine resources are being used.

Once the information is more freely available, there is still the task of conducting analysis to dig through the data to find out where the problems might be, but that’s a discussion for another time.

I look forward to seeing a strong, transparent, and enforceable agreement text in the near future!

 

This blog post builds on discussions at the seminar Negotiations on Fisheries Subsidies: Understanding Subsidies and IUU Fishing organised by ICTSD in Geneva on 23 July 23.

A. Bradley Soule is Chief Fisheries Analyst at OceanMind. You can follow him @absoule.