Fighting fish crime through global co-operation

fish-crimeAntonia Leroy and Robert Akam, Natural Resources Policy, OECD Trade and Agriculture Directorate

The captain of a boat sinking his ship a few hundred kilometres off the coast of West Africa to hide his illicit catch. Migrants transported across the Mediterranean on rusty, leaking fishing vessels. A tonne of cocaine worth €85 million found on a boat off the English coast. Indentured labourers alleged to have been murdered at sea.

This is the darker side of the global fisheries industry, where the challenges of policing the world’s oceans mean crimes can go undiscovered or unpunished. And when they are found out, the brazen flouting of laws is shocking. On 13-14 October 2016, the OECD, the UN Food and Agriculture Organization (FAO) and Office on Drugs and Crime (UNODC) are jointly holding a conference at the OECD to encourage global co-operation to prevent such crimes and ensure that those responsible are sanctioned for what they have done.

The Thunder, a trawler that illegally fished all around the world, is perhaps the most prominent case in recent years of a boat that travelled the globe, fishing without permission and yet often still managing to sell its catches. Interpol put out a Purple Warning, reserved for only a tiny number of boats, to show the severity of The Thunder’s crimes. Its voyages only came to an end after a 10,000 nautical mile chase across the high seas by the Bob Barker, a boat belonging to the NGO Sea Shepherd. And the trip only ended when the captain decided to sink his own ship to hide evidence of what happened.

Illegal and unreported fishing alone costs the global economy up to $23 billion each year, a figure which probably underestimates the full negative impact of these activities. Governments and international organisations need to also consider the economic losses faced by legitimate fishers whose catches may dwindle, or the costs associated with the criminality surrounding illegally-caught fish. Tax revenues from fishing also fall and the appropriate licencing fees are not collected. A ship like The Thunder will have caused untold economic disruption as it travelled across the world.

The crimes committed in the fisheries sector go far beyond illegal fishing. There have been a number of documented cases of fishing vessels being used to transport migrants and to facilitate human trafficking and drug smuggling. When these boats arrive in port, the criminality continues with bribery of local officials, the evasion of tax payments and laundering of the profits.

There is growing understanding that more action needs to be taken to tackle these problems. For example, the United States has designated large marine conservation areas in efforts to discourage illegal fishing and is even expanding the use of satellites to find the lights used by illegal fishers at night to attract their fish.

But individual countries face challenges in policing their own waters, let alone taking responsibility for boats that fly their flag on the other side of the world. Fisheries authorities are not mandated to fight crime, while customs and tax authorities may not be fully aware of the scale of the evasion and fraud issues. Gaps between the competencies of these different bodies need to be filled.

This conference is recognition that countries and international organisations agree they cannot work alone. A complex web of enforcement needs to be built to end criminals’ belief that they can conduct illegal operations at sea with impunity.

The resources exist but by working together we can make sure they are better deployed. The OECD’s work focuses on fighting tax crimes and developing a sustainable economy. This complements the FAO’s work on fisheries management, governance and sustainability issues. Both these organisations’ work is re-enforced by the UNODC which fights all aspects of transnational criminal operations, including human trafficking and drug smuggling. The work of these international organisations is buttressed by agencies such as Interpol and the World Wildlife Fund, as well as regional fisheries management authorities and regional economic blocs.

Together countries and organisations can support efforts to fight fisheries related crimes by sharing good practices, collaborating on projects and promoting effective inter-agency co-operation at national, regional and international level. At the end of this week we will have a stronger understanding of how this will be achieved in practice.

Useful links

OECD work on fisheries

OECD work on tax and crime

Fisheries: While stocks last? OECD Insights book

 

Managing expectations in fisheries

Fisheries handbookToday’s post is from Roger Martini of the OECD Fisheries Division

When I tell people I work in fisheries, the first question they ask is: “What fish can I eat?” Concern about the sustainability of fish stocks is widespread, and many people want to be sure they are making responsible choices when they buy fish. Given that most fisheries, especially in OECD countries, are managed by governments committed to their sustainable exploitation, this demonstrates a stunning lack of confidence in current approaches to fisheries management.

They are right to be concerned. It is estimated that about 30% of world fisheries are currently overexploited, with many depleted or recovering from depletion – and this is not specific to any region. Despite their best intentions, fisheries managers often struggle to effectively restrict harvest to sustainable limits. Fishers are often accused of being part of the problem by rushing to catch as many fish as they can, but this is unfair. They respond to the incentives that governments give them as the regulator of the fishery. Some rules encourage responsible behaviour, while others promote getting as much as you can today.

There are many reasons why fisheries become overexploited, but it usually comes down to asking fisheries to be and do too many things. Fisheries are often depended on to provide jobs and support rural communities, notably in developing countries where the sector acts as a buffer of last resort for marginalized populations. Communities seek to preserve fishing’s traditional role, and consumers are reluctant to find alternatives to culturally-important fish. Fisheries often have multiple objectives, not all of which are explicit, feasible or compatible. Something has to give, and usually it is the fish stock that suffers.

Our understanding has advanced greatly about how to manage a fishery sustainably and profitably. For example, we know that fishers are willing to take a long-term view of the fishery if they know they can benefit, even if it involves short-term sacrifices. Establishing individual or community rights to the fishery does this by giving fishers a stake in the health of the stock. Allowing fishers to trade these rights among themselves promotes more efficient fishers and reduces overcapacity and the pressure it places on management.

Half a century ago, the main interest that governments had in fisheries was how to expand them. That seems like a long time ago, but many of the policies developed back then are still around in one form or another. Subsidies for building vessels, or for their modernisation and improvement, once a way to bring economic development to coastal regions, now mainly aggravate problems of fleet overcapacity. Given that governments also spend considerable sums on decommissioning vessels – removing them from the fishing fleet – it seems strange that such policies could continue. But beneficiaries of existing programs can always be expected to resist change. The trick is to show them that the alternatives are even better.

The OECD Handbook for Fisheries Managers describes how to do just that. It demonstrates the importance of putting stock management first, having a sound objective-setting and policy-making process, and making practical changes that encourage progress. The advice put forward in the Handbook can help put fisheries on a sound footing such that one day when my friends see fish in the store they can buy it with confidence, knowing that the fishery it comes from is sustainable and responsible. And that’s what really matters.

Useful links

Fisheries: While stocks last?

OECD work on aquaculture

OECD work on the impact of climate change on fisheries

OECD work on the impact of globalisation on fisheries

OECD work on aquaculture certification schemes

OECD work on responsible fisheries policies

Net losses: tax crime and fishing

Pirate treasure
Pirate treasure

Earlier this year, the Parkham Women’s Institute in the south of England invited Colin Darch to speak about piracy. To get into the spirit of things, the ladies came equipped with eye patches, parrots, cutlasses, shiver-me-timbers accents, and all the usual pirate paraphernalia.  Mr Darch came to talk about being hijacked off Somalia and held hostage for 47 days. But whether the word “piracy” conjures up visions of Somali speedboats and AK47s or peg legs and the skull and crossbones, fish are probably pretty far down the list of things that spring to mind when somebody mentions pirates.

And yet, most of the “pirates” on the high seas today are involved in pirate fishing, or illegal, unreported and unregulated (IUU) fishing as it is known. As we said in the Insights book on fisheries While Stocks Last? these pirates are neither the vicious thugs portrayed by Robert Louis Stevenson nor the seductive rascals so beloved of Hollywood. All they have in common with the heroes of swashbuckling romances are ruthless, unscrupulous masters, and harsh and dangerous working conditions with more chance of getting killed than of getting rich. The International Transport Workers’ Federation gives numerous horrifying examples from fishers’ contracts. Chinese fishers from Yongchuan County in Sichuan province not only had to pay $470 to secure a place on a boat, they had to agree to have their appendix removed before going to sea and to pay $47 for the operation themselves. And remember, these are the ones who had a contract.

Fish piracy takes several forms. The “illegal” in IUU fishing is when vessels violate the laws of a fishery. “Unreported” is fishing that is undocumented or misreported to the relevant national authority or regional fisheries organisation. “Unregulated” fishing describes fishing by vessels without nationality, or vessels flying the flag of a country that isn’t a member of the regional organisation governing that fishing area or species. This is particularly attractive since many of the states offering flags of convenience are also tax havens. If you click on the unambiguously named www.flagsofconvenience.com, you’ll see how easy it is to move vessels from one register to another, even for a few months. The fact that some of the countries proposing flags are completely landlocked doesn’t seem to stop them having extensive fleets.

IUU fishing is also big business, but like any illegal activity it is hard to know exactly how much it is worth. According to some estimates, a quarter of the fish taken from the Antarctic fishing area could be IUU catches. The media regularly report scams involving millions of euros worth of fish, such as the six Scottish trawlermen convicted in 2010 of landing 15 million euros worth of illegal herring and mackerel over a three-year period.

Pirate fishing destroys the livelihood of other fishers and threatens the existence of fish species. Combating it is hard because the penalties for those caught are low compared with potential gains, and even catching them is difficult given the vast areas of ocean to be covered, the limited means of anti-piracy authorities, and the complicity of some states and customers, like the wholesalers those Scottish fishers sold their “black landings” to.

The method used in this case was “forensic accounting”, that revealed unexplained discrepancies between actual and declared incomes. Again, you probably never think of accountancy and tax inspectors when you think of the fight against piracy, but it’s a battle that’s been going on for centuries. Rudyard Kipling’s “Gentlemen” were being hunted down by King George’s tax men in the eighteenth century for smuggling brandy, tobacco and other illegal cargoes. Their modern counterparts are not just stealing fish, they’re also involved in people trafficking and drug running.

Tackling tax crime is one way of combating IUU and associated criminal activities. A report to the Third OECD Forum on Tax and Crime  taking place in Istanbul on 7-8 November discusses the extent of the problem, the form it takes and what can be done about it. Offences include the evasion of import and export duties on fish and fish products transported across national borders; fraudulent claims for VAT repayments; failure to account for income tax on the profits from fishing activity; and evasion of income tax and social security contributions and false claims for social security benefits by fishers and their families.

The complexity of the fisheries sector and the number of participants means that a broad range of actions need to be taken at various levels, ranging from technical training for local tax people to international cooperation such as sharing of information. Such recommendations may sound vague, but in preparing the report, the discussions between specialists from tax administrations, customs administrations, fisheries authorities and law enforcement “already yielded significant benefits through the sharing of experiences and analyses, highlighting further areas for research and, in a number of cases, leading to specific international co-operation in tackling actual cases of tax crime and illegal, unreported and unregulated fishing”.

The authors give concrete examples. For instance a large cash withdrawal made from a bank to pay a cash bonus to the crew of a fishing vessel was analysed by tax officials using the money laundering model found in the 2009 OECD Money Laundering Awareness Handbook for Tax Examiners and Tax Auditors (the very name strikes fear into the heart of the most ruthless pirate). The case also involved the sale of a fishing quota, which was illegal in itself. The sale was made via a company registered in an offshore jurisdiction through a bank account in an onshore financial centre. This led to a “multilateral tax compliance action” being undertaken by three countries, which demonstrated that each of the three had a different picture of the facts underlying the case. By working together, each country was able to apply its laws based on a clear understanding of the real transaction.

And if you’re wondering what happened after that misunderstanding at the Women’s Institute, the BBC has more.

Useful links

Evading the net: tax crime in the fisheries sector

OECD Forum on Tax and Crime

OECD work on fisheries

Expo 2012 in Yeosu, Korea: The Blue Economy

Click to see the “Living Ocean and Coast” theme of Expo 2012

How much are the oceans worth? Somewhere between $16 and $54 trillion a year according to this report. It may be more, nobody really knows, although Wealth Accounting and Valuation of Ecosystem Services (WAVES), a global partnership of developed and developing countries, international organisations, NGOs and academics, is hoping to find out over the next few years.

The Global Partnership for the Oceans cites figures for some parts of the ocean. Coral reefs for instance provide services to humans worth $172 billion annually. Fisheries are even more lucrative, with seafood sales at $190 billion a year for the catches alone, before the value added by processing. You could add another $50 billion if the fisheries were managed efficiently, according to a World Bank study quoted in Rebuilding Fisheries, a new OECD publication launched this week during OECD Day at Expo 2012 in Yeosu, Korea.

One statistic you’ll see quoted in most discussions about the oceans’ importance is that they cover 71% of the Earth’s surface. What’s less well-known is that the oceans supply almost 99% of the “living space” for our planet’s creatures, far more than the vertical strip of soil and sky we usually think about when biodiversity is mentioned. Very few humans live for long in this space, but two-thirds of us are within 100 km of the sea,  so coastal cities feature prominently in discussions of the blue economy (and in the data visualization tool our colleagues at the OECD Factblog developed for the Expo).

The theme of Expo 2012 is the “blue economy” – the various activities taking place on, under or near the ocean. As one of the world’s leading shipbuilding, trading and fishing nations, Korea has a vested interest in using ocean resources in a sustainable way. However, the aim of the exhibition, and the OECD’s contribution to it, is to show that the oceans are vital for all of us. On a global scale, for example, they regulate the world’s climate and provide 16% of the animal proteins we consume. They are important sources of oil and gas, and increasingly of renewable energies too.

Unfortunately, our attitudes have changed little from earlier times when it made sense to talk of “the infinite oceans”. Now, 85% of ocean fisheries are fully exploited, over exploited or depleted. Fertilizer run-off and fossil-fuel use have created 405 oxygen-starved dead zones worldwide, compared with 49 in the 1960s, covering a total area the size of the UK. While we’re making geographical comparisons, the “Great Pacific Garbage Patch” drifting around the North Pacific Subtropical Gyre, known as covers the ocean with plastic debris over an area as big as Texas. And according to some reports, just 15 of the world’s biggest ships may now emit as much pollution as all the world’s 760m cars.

None of these problems can be solved in isolation from the others, nor from a variety of external influences. Fisheries reform for instance can influence and be influenced by labour policy, regional development, environmental legislation, taxes, and tourism, and that’s just on a national scale. A similar list could be drawn up for any ocean-related issue, prompting OECD Deputy Secretary-General Yves Leterme to call for “a more holistic policy perspective to the management of the oceans, their uses and resources” in Yeosu. Leterme and the President of the Korea Maritime Institute (KMI), Dr.Hak-So Kim signed a Statement of Intent between the two organisations which underlines their intention to strengthen co-operation on work related to the future of the blue economy.

The Blue Economy – click to watch the video

Tragedy at sea

Free ebook!

At the start of the year, I was thinking of doing something about the Titanic, 2012 being the centenary of its sinking, and a chance to quote one of the greatest illustrations of hubris ever uttered (if it ever was): “God himself couldn’t sink this ship”. Technically, God didn’t, but as we all know, one of His icebergs did.

Then the Costa Concordia sank and I decided to wait. But for the past couple of days, the misadventures of the Concordia’s sister ship the Costa Allegra have featured prominently on the French news.

This is because, first of the association with the other vessel, and second because the Indian navy supplied spectacular footage of the cruise liner being towed by a fishing boat. And third because there were French people on board. (Localism is a long journalistic tradition. When the Titanic sank, Scottish daily The Aberdeen Press and Journal announced the news with the headline “Northeast man lost at sea”.)

Two questions come to mind. When will Costa change the name of whatever is left of their fleet to something forgettable? And why does a fishing boat need engines powerful enough to haul a gigantic cruise liner hundreds of miles across the ocean?

The unsurprising answer to the first question is as soon as possible. The more surprising answer to the second one is nets.  The Trevignon, the trawler that rescued the Costa Allegra, needs its 5000 horsepower engines to deploy a net that measures 1800 metres by 300 metres in a circle around the fish then lift a catch weighing a hundred tonnes or more out of the water and onto the deck in under 20 minutes.  

The fish it hunts are tuna, which as this video from the WWF shows, are bigger and faster than a Porsche. And more expensive too, the record being $736,000 for a single fish, or $2737 a kilo.  That’s over four times the record we talked about in this post in 2010, and even this will probably be beaten fairly soon because bluefin tuna are becoming ever rarer.

In fact, lots of fish are becoming rarer. Approximately 30% of the world’s fish stocks are overexploited, depleted, or recovering from depletion and 50% are fully exploited. One sign of this is the number of new species appearing in shops and restaurants to compensate for the lack of traditional species.

Green Economy in a Blue World a new report from the FAO, UNEP and other organisations shows that with up to 40% of the global population living within 100 kilometres of the coast, the world’s marine ecosystems (the “Blue World”) provide essential food, shelter and livelihoods to millions of people. Human impacts are taking an increasing toll on the health and productivity of the world’s oceans, but, the report argues, it’s possible to unlock the vast potential of the marine-based economy in a way that would significantly reduce damage to oceans, while alleviating poverty and improving livelihoods.

Useful links

OECD Green Growth Studies: Food and Agriculture focuses on primary agriculture, but also talks about fisheries and aquaculture .  

OECD Insights: Fisheries provides the answers to the following questions:

  • What did Queen Elizabeth have for her 80th birthday dinner, and why couldn’t she have it for her 81st?
  • What was a wondyrchurm, and what did the government decide to do about it?
  • Why was Prohibition good for gangsters and bad for fishers?
  • Who invented fish and chips?
  • How did an amateur taxidermist change the global food industry?
  • Whose contract says they can’t keep their appendix?
  • How much is a trawlerful of fish worth?
  • What does ghost fishing catch?

If you’re too modern to buy the print version of the book or too lazy to download the free ebook, you can look up the answers here.

Blood, sweat and fear

Even worse on a trawler

Like most of us these days, I do a search on Internet when writing something. Today, I wanted to write about the Chilean mine rescue, but I found another story about 33 miners. Their accident happened in England in 1838 and they all died, including Charles Hutchinson, aged nine.

Reports for Royal Commissions later in the century show that child labour was nothing exceptional: “Janet Snedden, aged 9… Comes down a quarter before 6 and goes up again about 4 p.m.” is a typical example.

The Coalmining History Resource Centre where I found the reports has a national database of mining deaths in the UK, showing that accidents were typical too. Today, only the location seems to have changed. Ask somebody to supply the missing word in “China. Mine…” and the chances are they’ll say explosion or disaster. Yet mining isn’t the most dangerous civilian profession in OECD countries at least. Another UK study concluded that the fatal accident rate among fishermen was 115 times greater than in the general British workforce.

Despite their radically different workplaces, mining and fishing are similar in that they depend on natural resources and on people putting their lives and health at risk to keep us supplied. Apart from the actual physical dangers, other aspects of workers’ conditions in these industries can be horrendous. The newly published OECD Insights on Fisheries cites the case of Chinese fishers who not only had to pay $470 to secure a place on a boat, but had to agree to have their appendix removed before going to sea and to pay $47 for the operation themselves. And these were among the lucky ones who actually had a contract.

Movies like Blood Diamond show the other prices to be paid when vital metals and minerals come from conflict zones and help to provoke and sustain the conflicts themselves.

Putting an end to a trade controlled by brutal, heavily-armed gangs with friends in high places isn’t going to be easy, but at the end of September, key players in the supply chain of tin-tantalum-tungsten and gold, met with government representatives and international and civil society organisations to finalise guidance on responsible supply chain management of conflict minerals at an OECD-ICGLR conference (International Conference on the Great Lakes Region).

The following week 11 African countries endorsed an OECD system for the responsible sourcing of minerals.

We’ll have to wait to see if words are followed by actions, but hopefully one day this business will seem as unthinkable as sending children down a mine.

Useful links

OECD work on due diligence in the mining and minerals sector

International Network on Conflict and Fragility

Consultation on the Guidelines for Multinational Enterprises and the UN “Protect, Respect and Remedy” Framework

 

Who knows where the cold wind blows?

A volcano erupts in Iceland and thousands of Kenyan farm workers lose their jobs. An oil rig sinks in the Gulf of Mexico, and retirees in Britain could see their pensions cut. Globalisation and interdependence aren’t just slogans.

The Kenyans were working for companies that export flowers to Europe using airfreight. The 500 tonnes of flowers exported daily brought in 71 billion shillings last year (around $900 million) making horticulture the country’s main foreign exchange earner, ahead of tourism at just over 50 billion shillings.

Kenya is only one of many countries pushing non-traditional agricultural exports. The idea is to integrate the global economy by exploiting improved communications and marketing networks and the large numbers of customers for out of season and exotic products in developed countries.

One way of looking at this is that everybody wins – one partner gets income and development opportunities, the other gets cheap luxuries. When things go wrong though, the risks are very unevenly shared. It’s one thing to go without fresh flowers or pineapples, another to have no job.

Exporters rely on cheap transport, and that in turn needs oil. The IEA chief economist has repeatedly warned that “we need to leave oil before it leaves us”. In the meantime though, the search is intensifying for new sources and ways to squeeze the last drop from existing ones. That’s why US President Obama lifted the ban on drilling in certain parts of the Gulf and elsewhere, and why companies like BP that exploit the resource are among the world’s richest firms.

Oil prices and the profits of oil companies fluctuate, but in the long run, they’re seen as a sound investment, making them attractive to pensions funds. Funds based in the UK invest heavily in BP (and earlier this month backed BP management against a campaign by NGOs concerning oil sands developments in Canada ).

Around $24 billion has been wiped off BP’s market capitalisation (over $170 billion before the accident), and the estimates of $2 to $3 billion for cleanup are huge, but not crippling for a company that size. BP will probably recover long before the Gulf coastline does if history is anything to go by. Exxon shares outperformed the market as a whole and the oil industry following the Exxon Valdez disaster in 1989.

We’ll look in more detail about a number of the issues raised here in forthcoming Insights books. Global agriculture is discussed in “Feeding 9 Billion People”, while From Crisis to Recovery will have a chapter on pensions and financial markets.

While Stocks Last has a chapter on fishing and the environment, describing the impact of oil pollution and other hazards on marine habitats. The Gulf provides examples of many of the issues raised. It already has a dead zone where run-off from agricultural chemicals washed down the Mississippi has caused an algal bloom that starves everything else of oxygen. Atlantic bluefin tuna are due to start spawning in the Gulf around now. And commercial and recreational fisheries could be devastated by the pollution.