Closing the governance gap on illicit fisheries activitiesKieran KelleherFisheries Team Leader

THE WORLD BANKWashington DC

key messageskey 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

PROFISHGlobal Program on Fisheries

contentscontents

PROFISHGlobal Program on Fisheries

1. World Bank perspective

2. examples

3. actions tackling corruption ALLFISH - building a responsible

international seafood industry ‘name and shame lists’

4. conclusions

IUU and illicit fisheries activitiesIUU 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)

policies institutions hearts and minds effective

operational mechanisms

illicit fisheries activities are part of a illicit fisheries activities are part of a broader governance failurebroader governance failure

The World Bank defines governance as the set of traditions and institutions by which authority in a country is exercised. It includes:

(1) the process by which governments are selected, monitored and replaced,

(2)(2) the capacity of the government to the capacity of the government to effectively formulate and implement sound effectively formulate and implement sound policies, andpolicies, and

(3)(3) the respect of citizens and the state for the the respect of citizens and the state for the institutions that govern economic and social institutions that govern economic and social interactions among them.interactions among them.

all six influence the level of illicit

fishing activities

the World Bank measures the World Bank measures six dimensions of governance six dimensions of governance*

1. political stability and absence of violence

2. regulatory quality3. government effectiveness 4. rule of law; and 5. control of corruption6. voice and accountability

* See World Bank Institute: Governance indicators by country

linking governance to wealthlinking governance to wealthillegal fisheries activities cause loss of wealthillegal fisheries activities cause loss of wealth

Factors best explaining intangible capital

school years per capita rule of law index

3911254,232Mozambique

84151648,241Switzerland

Intangible capital

%

Produced capital

%

Natural resources

%

Wealth per capita

$

Country

World Bank 2006 “Where Is the Wealth of Nations?”

2. impacts and examples2. 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!

illicit fisheries activities have illicit fisheries activities have a wide range of impactsa 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 – SomaliaSomalia, G. Guinea, Caribbean

the ice plant storythe ice plant storyand the letter to the Presidentand 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

its not just deterrenceits not just deterrence

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

The Economist Aug 10th 2006

the ‘rule of law’ must be seen to be the ‘rule of law’ must be seen to be ‘legitimate’‘legitimate’

Norway: “it is prohibited to catch …” EC: “it is prohibited to have on board …”

sensible, cost effective regulations laws that have the support of the fishers

“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 in Danish waters and dumped the catch there’.”

– K. B. Christensen, Danish Society for a Living Sea

3. World Bank 3. World Bank ACTIONSACTIONS

WB Governace and Anti-Corruption Strategyis 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)

PROFISHGlobal Program on Fisheries

simple cost-effective measuressimple 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

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

a typology of corruption in fisheriesa typology of corruption in fisheries

Value chain Corruption character

Actors Incentives Possible actions

Science

Allocation and Access

Commerce and Trade

International

Political dimensions

Enforcement

World Bank / IUCN Workshop in 2008

Area Character ofCorruption

Actors Incentives Possible actions

Science

Allocation and Access

Political dimensions

International

Commerce and Trade

Enforcement

Misuse of knowledge

Leakage of advice (e.g. prior knowledge of quota changes)

Granting of licenses

Provision of subsidies (state capture)

Quotas grossly exceed scientific advice on TAC Bribery of customs, fisheries and sanitary inspectors, port police

Auction rings

Scientific advisors

Fisheries directors or ministers

Industry lobbyists

Politicians Company

officials/ vessels owners

Customs officers, police

Vessel/ sanitary inspectors

Naval officers Auctioneers Traders

Job security

Personal gain

Political gain (including elections)

National pride

Keep scientific advice and independent

Public dissemination of science findings

Transparency – public lists of licenses, license holders; information on who gets the benefits

Corruption hotline Training / adequate

remuneration Informed / balanced

media/ free press Codes of practice/ &

procedures ‘Name and shame’ lists

of vessels or companies

World Bank / IUCN Workshop, 2008

30

Processing capacity

30 million tons

fishmealprocessing capacity

factories

Rent loss ~ $200 million

Rent loss ~ $200 million

improved transparency and improved transparency and control is a key to reforms in control is a key to reforms in

the world’s largest fisherythe world’s largest fishery

fishingfleet

capacity

20

Fleet catching capacity

18-20 million tons

boats

8

2

5Scientific advice catch

2 – 8 million tons

El Nino(2 million)

La Nina (8 million)

fish

8

control is a key part of reforms in the control is a key part of reforms in the world’s largest fisheryworld’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

ALLFISHALLFISH

Alliance for Responsible Fisheries targeted actions to establish a vision of a targeted actions to establish a vision of a

responsibleresponsible industryindustry

start small and build on lessonsstart 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

drive corporate social responsibility drive corporate social responsibility along value chainsalong 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

ALLFISH: first steps in a global public ALLFISH: first steps in a global public private partnershipprivate 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

name and shame name and shame lists of irresponsible vesselslists of irresponsible vessels

AA. RFMO lists plus BB. ‘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’

enforcement must be enforcement must be cost effective 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

conclusionsconclusions

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

PROFISHGlobal Program on Fisheries

ReferencesReferences

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

www.worldbank.org/fish

PROFISHGlobal Program on Fisheries

10th Annual Forum on the Global Fish Crisis

no political willingness

ho! ho! he bribed the

minister for the shrimp

license

forget fishing,

more money in

aquaculture

…we fish responsibly .. …it’s the laws

that are wrong!

…ther’s no control over small-scale

fishing

it’s too many fishers

it’s not us, its the foreign

boats

no enforcement