Closing the governance gap on illicit fisheries activities

1. Closing the governance gap on illicit fisheries activities Kieran Kelleher Fisheries Team Leader THE WORLD BANK Washington DC THE WORLD BANK THE WORLD BANK

2. PROFISH Global Program on Fisheries key messages • illicit fisheries activities are a symptom of weak governance • policy and anti-corruption measures need to supplement direct efforts to combat illicit fishing activities • a responsible fishing industry is fundamental • some of the solutions are not within the fisheries sector • but fall under a broader governance agenda

3. PROFISH Global Program on Fisheries contents • World Bank perspective • examples • actions • tackling corruption • ALLFISH - building a responsible international seafood industry • ‘name and shame lists’ • conclusions

4. IUU and illicit fisheries activities • the term IUU tends to mix different but related problems • the term illicit fisheries activities used here covers a broader suite of related problems, for example: • fishing licenses issued for political or personal gain • selling subsidized fisheries fuel • transfer pricing (e.g. under-invoicing of exports)

5. policies • institutions • hearts and minds • effective operational mechanisms illicit fisheries activities are part of a broader governance failure The World Bank defines governance as the set of traditions and institutions by which authority in a country is exercised. It includes: • the process by which governments are selected, monitored and replaced, • the capacity of the government to effectively formulate and implement sound policies, and • the respect of citizens and the state for the institutions that govern economic and social interactions among them.

6. all six influence the level of illicit fishing activities the World Bank measures six dimensions of governance* • political stability and absence of violence • regulatory quality • government effectiveness • rule of law; and • control of corruption • voice and accountability * See World Bank Institute: Governance indicators by country

7. Country Wealth per capita $ Natural resources % Produced capital % Intangible capital % Switzerland 648,241 1 15 84 Mozambique 4,232 25 11 39 linking governance to wealthillegal fisheries activities cause loss of wealth Factors best explaining intangible capital • school years per capita • rule of law index World Bank 2006 “Where Is the Wealth of Nations?”

8. 2. impacts and examples • impacts • examples • the story of the ice plant and the President • what can we learn from parking fines? • not just legal – but legitimate!

9. illicit fisheries activities have a wide range of impacts • on the profits of legitimate businesses • on fish resources & market prices – illicit fish discounted • on public revenues – licenses, expert taxes, profit taxes • on reputation of exporting country and exporters • undermines regulatory fabric and rule of law • organized trade in illicit fish often requires corrupt officials (judges, police, politicians) • ‘survival of the most corrupt’ • often a disproportionate impact on the poor (dynamiting, fishing in area reserved for small-scale fishers) • on maritime security – Somalia, G. Guinea, Caribbean

10. the ice plant storyand the letter to the President • the Ice Company signed a 20-year contract to operate the ice plant in the country’s main fishing Port. • but the Ice Company found that a Supply Company had an exclusive contract to supply the Port with water and electricity • so the Ice Company could not buy the water or electricity directly from the Electricity and Water Company • but the Supply Company was charging about 30 times the price charged by the electricity company. • so the Ice Company closed the ice plant to avoid loss. • after years of argument and lack of ice for the fishers a contract for direct supply of electricity was signed. • then a new fisheries minister ordered the Port to cut this direct supply of water and electricity. • as a last resort the Ice Company wrote ‘this letter’ to the President

11. Diplomats and parking fines in New York UN diplomats New York exempt from parking fines no deterrence/ penalty so parking tickets: UK, Switzerland, Canada … 0 Russia ….. 30,000 tickets Chad, Nigeria, middle eastern highest correlation with WB governance score so not just deterrence but ‘culture’ of respect for rule of law its not just deterrence The Economist Aug 10th 2006

12. the ‘rule of law’ must be seen to be ‘legitimate’ • Norway: “it is prohibited to catch …” • EC: “it is prohibited to have on board …” “a Danish skipper was caught with more then 40% illegal fish on board. To the media the skipper says: ‘I was in Norwegian zone and because of their discard ban, I had to keep the fish on board’. … the Danish Ministry argues to us: ‘the skipper has no excuse for having illegal catch onboard – he have to sail inDanish waters and dumped the catch there’.” – K. B. Christensen, Danish Society for a Living Sea • sensible, cost effective regulations • laws that have the support of the fishers

13. PROFISH Global Program on Fisheries 3. World Bank ACTIONS • WB Governace and Anti-Corruption Strategy is the framework for Bank activities • examples of activities • training in implementation of Port State Measures (completed) • trials of low-cost vessel tracking (ongoing) • reforms in Peru (World Bank policy loan) • addressing corruption (workshop) • ALLFISH - building a ‘culture of responsibility’ (startup) • list of irresponsible vessels (on hold)

14. simple cost-effective measures • training in Port State measures in Dakar and Nuadhibou • port level cooperation, practical guidelines and training • police, port inspectors, sanitary authorities, customs, ships agents, coast guard working together • Bank/ Netherlands funding, FAO implementation • cost-effective tracking of small fishing vessels in Maldives (trials) • GPS + cell phone (no satellite) …. $100 / unit? • provide effort and location information • link to catch data • Bank/ Iceland funding

15. Tackling Corruption in Fisheries World Bank/ IUCN Workshop, 2008

16. a typology of corruption in fisheries World Bank / IUCN Workshop in 2008

17. World Bank / IUCN Workshop, 2008

18. 30 factories fishmeal processing capacity Processing capacity 30 million tons Rent loss ~ $200 million 20 boats fishing fleet capacity Fleet catching capacity 18-20 million tons Rent loss ~ $200 million 8 fish Scientific advice catch 2 – 8 million tons 5 2 El Nino (2 million) La Nina (8 million) improved transparency and control is a key to reforms in the world’s largest fishery 8

19. control is a key part of reforms in the world’s largest fishery • independent ‘determination’ of TAC – strict adherence to scientific advice • independent monitoring of all landings -industry funded - $6 million/ year • 100% VMS cover • ‘cleaning up’ the register of fishing vessels (measurements, safety, check authorization) • move to individual quota system • social safety net funded from increased returns

20. ALLFISH Alliance for Responsible Fisheriestargeted actions to establish a vision of a responsibleindustry

21. start small and build on lessons • partners • International Coalition of Fisheries Associations (ICFA - secretariat) – currently mainly OECD countries • FAO, World Bank, (others in discussion: GEF, GTZ, NEPAD, GAA, ISSF…) • core values of sustainable fisheries are shared by public and private sector stakeholders • ICFA commitment to • sustainable and socially-responsible supply chains • expansion to developing countries • be inclusive of small-scale producers

22. drive corporate social responsibility along value chains Clear vision of responsible industry Codes of conduct no illegal fish fair trade combat corruption active engagement with public sector Expand ICFA to developing countries financial and technical support to create common purpose and industry codes Active engagement with public sector Focus on selected value chains sustainable profitable and equitable trade 1 per major market as examples: ? Caribbean spiny lobster – US ? Nile perch to EU

23. ALLFISH: first steps in a global public private partnership • 3-year window to structure and pilot global codes of industry conduct and build corporate social responsibility • deliver a clear vision of a responsible private sector – environmentally sustainable, profitable, equitable • a structured approach for engagement of the private sector • focus on developing country seafood export value chains • build public private partnerships along selected seafood value chains • communicate informed and balanced positions on issues – e.g. endangered species, trade barriers, subsidies

24. name and shame lists of irresponsible vessels • A. RFMO lists plus • B. ‘national lists’ of primary offenders – foreign vessels ‘convicted’ of fishing without a license • link to beneficial ownership • gradually compile at regional – global level • Bank efforts – liability issue with IUCN – ‘on hold’

25. enforcement must be cost effective • common issues • fisheries, drugs, immigration, customs, marine pollution, money laundering, corruption, piracy • cost-effective use of assets and capacity • customs, police, coastguard, critical control points – ports, airports (live/ fresh fish) • vessels, aircraft, communications, information • new cost-effective technologies • remote sensing, tracking and traceability, e.g. France in Southern Ocean • effective regional cooperation essential • West Africa, South Pacific, Caribbean, Indian Ocean

26. PROFISH Global Program on Fisheries conclusions • illegal fishing is a symptom of weak governance • policy and anti-corruption measures need to supplement direct efforts to combat illegal fishing • a responsible fishing industry is fundamental • some of the solutions are not within the fisheries sector

27. References World Bank fisheries: www.worldbank.org/fish World Bank governance indicators: http://go.worldbank.org/5QM8VLZRW0 Where Is the Wealth of Nations? http://siteresources.worldbank.org/INTEEI/214578-1110886258964/20748034/All.pdf The Sunken Billions: www.worldbank.org/sunkenbillions Changing the Face of the Waters. The Challenge and Promise of Sustainable Aquaculture: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/12/03/000020953_20071203133332/Rendered/PDF/416940PAPER0Fa18082137015501PUBLIC1.pdf

28. PROFISH Global Program on Fisheries www.worldbank.org/fish Thank you

29. " responsibility for illegal fisheries activities?" it’s too many fishers no political willingness forget fishing, more money in aquaculture no enforcement ho! ho! he bribed the minister for the shrimp license it’s not us, its the foreign boats …ther’s no control over small-scale fishing …we fish responsibly .. …it’s the laws that are wrong! 10th Annual Forum on the Global Fish Crisis