EU fight against IUU fishing: more transparency is needed

On this 5 June, the International Day against Illegal, Unreported and Unregulated (IUU) fishing is celebrated by the European Union. While the EU can boast of having an ambitious legislation for fighting against IUU fishing, transparency in the implementation of this legislation needs to be improved.

When the European Commission notifies a third country that it could be considered a non-cooperating country in the fight against IUU fishing, it provides that country with an action plan which it considers should be put in place to avoid a 'red card', - the final notification which entails significant sanctions, such as a ban of EU imports of fishery products from that country. The notification procedure is stopped when the EU considers that the third country has implemented the necessary measures. But on what basis does the EU stop the procedure? Hard to say since these elements remain confidential. Therefore, is it guaranteed that the third country has implemented all the necessary measures to effectively combat IUU fishing? In view of what happened in South Korea early 2019, it’s far from certain.

The case of South Korea
On 26 November 2013, the European Commission notified South Korea that it could potentially be considered a non-cooperating country in the fight against IUU fishing. This decision[1] exhaustively and thoroughly describes Korea's failure to comply with the IUU Regulation, including illegal fishing operations off the coast of Africa.

A year and a half later, on 29 April 2015, the Official Journal publishes a short notice of just one page stating that the European Commission is putting an end to the procedure because "The Republic of Korea has introduced the necessary measures for the cessation of IUU fishing activities in question and the prevention of any future such activities, rectifying any act or omission leading to the notification of the possibility of being identified as non-cooperating countries in fighting IUU fishing." (JO C 142).

But in February 2019, a group of NGOs announced that the Korean government had failed in its obligations to fight IUU fishing: "The South Korean government has failed to sanction two vessels found fishing illegally in Antarctic waters, instead allowing the owner to sell this valuable catch on the global seafood market."[2].

Is this a sign that Korea, contrary to what was announced by the EU in 2015, had not implemented all the necessary measures to combat IUU fishing?

Our request for access to documents

To find out for sure, on 20 February 2019, CFFA asked the Commission to communicate the action plan it had proposed Korea to implement in order to avoid being identified as a non-cooperating third country, as well as the report drawn up by DG Mare on the basis of which the Commission had put an end to the notification procedure regarding Korea.

DG MARE replied on 13 March 2019 that the requested documents contained very sensitive information which is at the heart of bilateral relations with Korea to combat IUU fishing and that the success of the formal dialogue with Korea depended on the confidentiality of their exchanges. As a result, these documents could not be disclosed. As for the report prepared by DG MARE which, in our opinion, had necessarily served as a basis for taking the decision to end the process, DG MARE simply replied that it did not exist!

This answer was not acceptable. Why should the publication of the action plan jeopardize bilateral relations with Korea, except to hide from the public elements that would be inconsistent with the decision to end the procedure vis-à-vis this country? And how to believe that this decision would have been adopted without any evaluation report having been drawn up, showing that the deficiencies had been fully addressed?

Therefore, in accordance with Regulation 1049/2001 on public access to EU institutions documents, we decided to confirm our request for information with the General Secretariat of the European Commission, on 25 March 2019.

The General Secretariat replied on 8 May 2019, sending us the following documents, - de facto acknowledging that the categorical rejection by DG MARE of our first request was unfounded.

1) the letter sent on 26 November 2013 to Korea with the action plan attached to this letter
2) three documents, corresponding, according to the General Secretariat, to our demand for the report which formed the basis for the decision to end the procedure regarding Korea:

(i) the "Note to file" established on 10 March 2015, at the end of a mission carried out by a team of DG MARE in Korea on 24 and 25 February 2015,

(ii) the DG Mare note of 17 March 2015 to the Commissioner responsible for fisheries

(iii) the letter of 21 April 2015 from the Commissioner responsible for fisheries to Korea Minister of Oceans and Fisheries

What do we learn from the documents provided?

Many essential passages of the documents sent are hidden. This prevents us from knowing the details of the reasons which led to the Commission decision to end the procedure regarding Korea.

The letter addressed to the Minister of Oceans and Fisheries of Korea only underlines that Korea has revised its legal framework for fisheries by adopting a law on the development of distant water fisheries, by updating the fisheries management system and by strengthening respect for the port State obligations, but it does not describe the evidence leading to that assessment.

One thing is clear though: the position of the Commission lacks coherence.

Indeed, the letter of 26 November 2013 was explicit: all measures proposed in the plan of action should be implemented, without exception[3]. The notice published in the Official Journal in 2015, announcing the end of the procedure, also indicated that Korea had taken “the necessary measures to stop IUU fishing activities and prevent new ones”, and that it had “rectified any act or omission leading to the notification of the possibility of being identified as non-cooperating countries in fighting IUU fishing”.

But then, why, in the response from the General Secretariat of the Commission that we received on 9 May 2019, is it mentioned that "… the evaluation under Regulation (EC) No 1005/2008 is fully ongoing.”[4]?

Either the action plan has been fully implemented or it has not been. Since the evaluation is still ongoing, this means that the second hypothesis is the most probable.

It suggests that the procedure of notification of Korea as a non-cooperating country in the fight against IUU fishing was stopped although the plan of action proposed by the Commission was not fully implemented, contrary to what was required.

Beyond this, it is very unfortunate that the Commission refuses to provide us with the elements that would have allowed us to develop our own opinion of Korea's real - or not - willingness to fight IUU fishing.

This decision is unfounded in law. Since the decision to take action has been the subject of a reasoned decision published in the Official Journal, the decision to terminate the action must, in all legal logic, be the subject of a similar reasoned decision published in the Official Journal. The simple information note that has been published does not correspond to what was required.

The Commission justifies its attitude by the fact that the disclosure of the information contained in the hidden parts of the documents provided to us would undermine the protection of the public interest as regards international relations[5].

This position of the Commission is surprising.

Indeed, while the decision to initiate the procedure, published in the Official Journal, contains very harsh assessments of Korea, on the other hand, the publication of elements which are supposed to show the progress made by that country to fight IUU fishing would undermine the EU relations with this country? This is rather contradictory.

By not disclosing these elements, the Commission is actually acting as if the real progress made is actually much less significant than what was officially announced.

The case of South Korea shows the need for the European Commission to publish the action plans proposed to third countries that are in the process of being notified as non-cooperating parties, as well as the publication of actions taken by these third States, particular when those actions result in the termination of the procedure.

This is essential to guarantee the efficiency of the EU IUU regulation, and, when the notification procedure concerns illegal distant water fishing activities by third countries, to contribute to the protection of developing countries fishing communities who are often the first victims of these illegal activities.  

[1] Published in EU Official Journal OJ C 346 of 27 November 2013 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013D1127(02)&from=EN

[2] https://ejfoundation.org/news-media/2019/korean-government-allows-illegally-caught-fish-onto-global-seafood-market-1

[3] It reads: « As a consequence, the Commission invites the Republic of Korea : 1. to take all necessary measures to implement the actions contained in the action plan. … »

[4] Page 7

[5] « The EU main interest is to encourage the Republic of Korea (as well as other third countries) to comply with the relevant international obligations in a smooth and peaceful manner without recourse to more onerous international dispute settlement procedures and without any further interference that might aggravate the dispute.

In this context, an atmosphere of trust and confidentiality is a prerequisite for a successful completion of the dialogue with the country concerned in the perspective of inducing them to comply with their conservation and cooperation obligations. The breach of the trust would jeopardise the relations between the EU and the countries concerned. Disclosure of information included in the internal documents and concerning the assessment of the compliance of third countries with their international obligations would compromise the EU objective of resolving this matter with these countries in a cooperative manner and in a climate of mutual trust and in a long standing perspective.

Disclosure of the information relating to internal national reform processes could also be detrimental to legitimate trade flows between the parties and put at stake the credibility of the Republic of Korea as fish supplier at global level. » (cf. p. 6)

African artisanal fishers and NGOs jointly complain to the EU against Italy turning a blind eye to its trawlers’ illegal activities in West Africa

The Coalition for Fair Fisheries Arrangements (CFFA), the African Confederation of Artisanal Fisheries Professional Organizations (CAOPA), The Regional Partnership for Coastal and Marine Conservation (PRCM), Danish Living Seas and Bloom have jointly lodged a complaint to the EU, asking the European Commission to launch an infringement procedure against Italy. They argue that the Italian fisheries authorities have failed to comply with their obligations, under the Common Fisheries Policy (CFP), to sanction the illegal activities of Italian trawlers in the waters of Sierra Leone. These vessels have been making incursions in the inshore zone reserved for artisanal fisheries, catching species which they were not allowed to catch and transshipping without authorization.

These Italian vessels have a history of illegal operations, documented by Greenpeace, Oceana and CFFA[1]: catching sharks and infringing rules on finning, making illegal incursions in neighboring West African countries waters, fishing with the wrong fishing gear in The Gambia.

Gaoussou Gueye, President of the CAOPA states that ‘when they come to our countries, the EU people are always talking about how important it is to fight illegal fishing. They always argue that EU fleets fish legally and sustainably. Still, some EU vessels are involved in operations that are far from sustainable, some downright illegal, like the activities carried out by these Italian trawlers over many years in West Africa. If the EU wants to have credibility and be trusted by African countries, then it should not accept such behavior by one of its Member States’ fleet. These Italian trawlers have to be monitored and properly sanctioned when they don’t respect the laws of our countries or the Common Fisheries Policy’.

These Italian trawlers, owned by two Sicilian companies, have never been sanctioned by Italy for their unlawful activities. In December 2016, an infringement procedure was opened by the European Commission against Italy related to some of these illegal activities in the Gambia and Guinea Bissau but, to this day, more than two years later, this infringement procedure has not been followed up by the Commission.

At a time when the European Union is championing sustainable fisheries globally and claims to be leading the fight against IUU fishing, it is unacceptable that it lets some EU-flagged vessels conduct IUU activities in the waters of African countries with total impunity. The EU must take action now.

For more information, you can contact

CFFA Secretariat

cffa.cape@gmail.com

[1] Greenpeace, “Four illegal fishing cases found in Sierra Leone in four days”, April 20, 2017: http://www.greenpeace.org/africa/en/Press-Centre-Hub/4-illegal-fishing-cases-found-Sierra-Leone/.

Oceana, “Fishing the Boundaries of Law: How the Exclusivity Clause in EU Fisheries Agreements was Undermined”, Sept. 2017 https://usa.oceana.org/publications/reports/fishing-boundaries-law-how-exclusivity-clause-eu-fisheries-agreements-was.

CFFA, “EU Common Fisheries Policy External Dimension: Improving sustainability through an ambitious revision of the Fishing Authorization Regulation”, Sept. 2016:

The AKWAABA spirit: the key role of women in Ivory Coast artisanal fisheries

Alexandre Rodriguez, Executive Secretary of the EU Long Distance Fishing Fleets Advisory Council (LDAC) shares with us his personal reflexions after a visit to the wompen fish processors in Abidjan.

Abidjan, 28 August 2018

This week, I had the occasion to travel to Cote d´Ivoire invited by one of our partner organisations in Africa, the Ministerial Conference on Fisheries Cooperation among African States Bordering the Atlantic Ocean (ATLAFCO-COMHAFAT). It was a fruitful and intensive 2.5 days where we were able to agree on the plan of action for African Atlantic States for sustainable fisheries in 2019 and 2020.

I spoke to Mr. Gaoussou Gueye, the President of the African Confederation on Artisanal Fisheries (CAOPA) who was also attending the proceedings, on the possibility of meeting our common friend Micheline Dion, responsible of CAOPA Women's Programme, at her workplace to see some “real action in the field”.

I could not be any luckier as the president of CAOPA, apart from being an excellent human being with a big heart, is as well respected professional and widely known for his work amongst West African fishing communities. So it was not very difficult for him to contact Micheline and arrange a short visit to the port to see the work of the  women´s fish processors cooperative she is running.

We took a local taxi and arrived at Locodjro Miami, a quiet suburb 12km off Plateau. We arrived at a little dock surrounded by a beautiful scenery with the tall skyscrapers and the foreign industrial tuna purse seiners moored in the Port of Abidjan, on the other side of the bay.

As soon as we stepped out of the taxi, we were received with a big smile and a warm welcome by Micheline and her fellow women who gave us the classical “bonne arrivée” greeting. I start suddenly feeling this subtle sensation of heartwarming hospitality which is embedded in the Akwaaba spirit, a word that comes from Twi, a language of the Ashanti people of the neighboring nation Ghana, and carries the same meaning in the Ivorian dialect.

Micheline was one of the founders and main architects behind the creation of the Women's Processors Cooperative in Locodjro with the aim to improve revenues and working conditions for the local community living from the processing of fish, particularly tropical tuna but also other species such as langoustine.

Gaoussou and Micheline seemed to know every single person and they both talked cheerfully to any worker with whom we crossed paths, listening carefully to each of their concerns and hopes. Through cleverly posed questions , they adeptly managed to introduce me into the dialogue so I felt part of the community and also could start asking my own questions regarding daily conditions at work.

The activity was quite small when we arrived as most of the pirogues that catch the tunas were out at sea. They all leave early in the morning and come back at sunset. I could see la pirogue du chef, who was moored on that day. I asked how much fish they usually got from the pirogues, and they say that it varies from day to day but ranges from 200 kg up to 1 tonne per day.

Micheline explained that the work is very much dependent on the supply of raw tuna. Overall, she estimated that they work in total about 2-3 months a year overall. In terms of employment, the Cooperative currently employs 902 pêcheurs (fishers), 305 transformatrices (women processors), 173 découpeurs/ses (fish cutters) and 283 chargeurs (loaders), mostly locals from the Abidjan area. In the words of Micheline, “chaque élément de la chaîne de valeur est important et joue un rôle clé du fonctionnement”. This includes also some volunteers which have offered their help for different tasks such as cleaning the premises or doing the basic accounting.

I had been really impressed so far by what I was seeing together with the clarity of thought and explanations from Micheline on how the Cooperative should work. This is why I asked her to draw me a sketch on the value chain so I could understand well the whole economic cycle. She patiently explained me that their work can be summarised in 5 basic steps:

1. Débarquement: The fresh daily catch from pirogues is landed or transported at the designated landing site (PDA in French), at the little embarcadère.

2. Triage: The catch is sorted, separated and labelled on a separate area, and allocated to each of the fishermen and their wives and families for sale at the auction. The women are also present at the market´s auction through a reserved space where they can oversee the whole process.

3. Conservation: The prime fish goes to a frigorific chamber for being sold to restaurants and local markets. The remaining tuna is conserved either in salt and ice and put into tanks made of wood and filled with ice and sealed with salt so it makes a crust and the fish can be conserved outside at least for 2-3 days.

4. Découpage: This is where the fresh tuna is cut normally in three pieces and separated in different buckets, with the head decoupled and given to the women. The tail and the trunk/loin are set in different cubes.

5. Transformation: I was amazed to see the old style ovens made of iron and ignited with charcoal for the poisson fumé.

There are also a number of ancillary services under development such as a medical room (salle de soins), changing rooms, a canteen for workers, a multipurpose training room, a kindergarten and a storeroom.

Micheline explained that they have also accountants recording all income and expenses and doing the bookkeeping work. They also coordinate the provision of all necessary supplies including 25k bags of salt, that the Cooperative is able to purchase at a more competitive price than for individual fishers as they have a concerted power of negotiation.

My personal reflection of this visit is that all the foundations for setting a professional organisation in place are there. However, their activity was hindered by two major factors: the lack of financial resources for both the maintenance of the premises and the improvements required for meeting the health and sanitary standards for conservation and selling of fish; and the shortage in regular fish supply for ensuring jobs and provide economic returns to the activities. This initiative is an example of how added value can be given to fishing activities by creating a collaborative economy that helps to improve living conditions and fix the local population through decent jobs.

To address these shortcomings, some actions could be considered:

• The hiring of teachers and caretakers for the kindergarten would allow women which have to carry all day their babies on their shoulders while working to better perform their tasks while having peace of mind that their kids are well looked after under a safe environment. This initiative would also serve to prepare children to enter  primary school and would also avoid exposing small kids to smokes and chemicals from the fumage de poisson or to infections and diseases related to poor evacuation systems for fish waste.

• Despite having managed to sign an agreement with Spanish private tuna operators from OPAGAC landing a share of their catches for a regular supply when landing or refueling/loading their vessels at Abidjan port, the Cooperative is encountering difficulties and restrictions due to internal problems with local administrations and private agents operating in the fish trade in the port of Abidjan. A system from Ivorian authorities to guarantee that direct supply is available to this women free of charge without administrative or de facto blockages is required with immediate action.

• The techniques and conditions used to preserve the fish are very precarious to say the least, with very old tanks placed outdoors and no doors. The fish is sunk in ice in tanks made of wood or old plastic materials which not fit for the purpose of ensuring the cold chain. The use of improved ovens (FTT) should be generalised.

• There is a lack of a proper sewage and water drainage system in the sheds to evacuate the dirty oil and water discarded when processing fish at the transformation space; The cutting area space has to be done outdoors due to the small space and lack of maintenance and small size of the room that has been kindly funded by the Government of Morocco. Proper investment should be further devoted to improve these infrastructures.

All the above shortcomings could be addressed with political and administrative goodwill as well as support from donors. Adequate resources and ongoing support must be provided by relevant local, national and international organisation using for example existing funds related to sectorial support under SFPAs or projects on development for cooperation by the EU or sponsored by international organisations such as the World Bank or the African Bank for Development.

I would like to end up this article with a quote from Pope Francis wrote in its Encyclical from 2015 Laudato Si, very linked with the UN Sustainable Development Goals and addressed not only to Christian people but to all religions and peoples from the world: An “ethical economy must serve all people without exclusion that endows any person with dignity, opportunity and basic resources”.

The International Fight Against IUU fishing: Moving from criminal to social justice?

To mark the first International day for the fight against IUU fishing, CFFA's brief paper looks critically at the concept of IUU fishing and the policy ideas on how best to fight it. We argue that popular images of IUU fishing are misleading and fail to reflect the nature of the most serious  threats to coastal communities. A key aspect lies with the corrupt relationships between governments, political elites and businesses exploiting marine and coastal resources. Because of this, we argue that relying on 'criminal justice' as a solution is insufficient for coastal communities and small-scale fishers. 

Blue Bond…Saving your fish or bankrupting the oceans?

Read our new report...

To save the oceans and reform unsustainable fisheries, we need the help of private investors - and on a huge scale. This is an idea that many international conservation organisations and investment banks have been promoting for years, including the likes of Credit Suisse, who now hosts an annual conference on ‘conservation finance’ from its New York offices.  

Many reports have been written on the business case for private capital markets to finance ocean conservation and fisheries reforms. The arguments are very simple: governments don’t have the resources to fund conservation, and the traditional sources of extra finance (coming from donors and philanthropists) are completely inadequate. Conservation and fisheries reform should therefore be more open to private investors - who have a great deal of money. Investing in conservation and fisheries reforms is lucrative - sustainable fisheries will increase the wealth potential from the seas, and therefore can give investors a good return on their money.

There are many proposals on how to attract millions of dollars for marine conservation from private investors. One of them is for governments and companies to issue blue bonds. This is in fact a well established strategy - the World Bank and the European Investment Bank started issuing ‘green bonds’ in 2007/8. These raise money from private financial markets which is then ring-fenced for specific green projects and activities. The green bond market has done exceptionally well - last year, governments, multilateral development banks and companies raised 130 billion USD through green bonds - nearly twice as much as they did in 2016. 

This year, the concept of a “blue bond” has finally become reality. The Seychelles has announced its intention to issue the world’s first blue bond, with the help of the World Bank and the UN’s Global Environment Facility. It is likely that the Seychelles blue bond will be quite small - 15 to 20 million USD. But the importance is that Seychelles is being used as ‘proof of concept’. The hope is that other developing and small-island coastal states will follow its example. Indeed, last year Fiji issued the first national green bond for a small-island developing state, and Nigeria also issued its first green bond. NatureVest - a US based organisation set up by JP Morgan and The Nature Conservation to specialise in leveraging private capital for conservation - thinks that in 10 years they will be selling a billion USD of blue bonds. 

The dangers of the blue bond market? 

 Raising funds through international capital markets could end up delivering the promised “triple win outcomes”: good for the environment, good for poorer communities, and good for the investors. But is this model safe to replicate?

So many organisations are supporting conservation finance in general, and the concept of green or blue bonds specifically. There are many reports describing how these are vital if we are to save the planet. Yet hardly any of these consider what might go wrong. In CFFA’s publication on blue bonds, we set out the reasons why the blue bond market are not attractive for small-scale fishers, and why the claims made about blue bonds are dubious.

Credit Suisse and the first tuna bond

The report includes a case study from Mozambique. Mozambique raised 850 million USD to finance the launch of its national tuna fishing company, dubbed by others as the world’s first ‘tuna bonds’. At first glance, this has nothing to do with blue bonds. However, just like a blue bond, the issuer claimed the money would be spent on sustainable fishing and the funds will have an enormously positive outcome on the national economy. The bond was financed and arranged by Credit Suisse, in collaboration with other European and Russian banks, some of whom also support conservation finance and green bonds. In fact, in 2013 - when Credit Suisse was finalising the arrangement for Mozambique’s tuna bonds, the bank was working with WWF and other conservation organisations on initiatives such as 50in10 and the Global Ocean Partnership. It is a bank that was - and still is - at the forefront of a global campaign to raise ethical financing to save the ocean. 

The tuna bonds did bankrupt Mozambique. They also provided millions of dollars in fees for Credit Suisse and other banks, accounting firms and lawyers. The tuna bonds were issued in secrecy and have led to a range of concerns about high level corruption and conflicts of interest. The prospectus for the bonds - sent out to investors but kept confidential - was deceitful and it massively overvalued the business proposal. Mozambique’s tuna fishing company and the expensive fishing vessels it bought from France, do not generate enough income to pay off the investors or pay its workers. Mozambique has defaulted on its repayments, and is struggling to get a bailout from the IMF. Remarkably, the case of Mozambique does not seem to be discussed at Credit Suisse’s annual conferences in New York, when the network of bankers and conservation organisations come together to plan how to promote blue bonds and other innovative financial instruments. 

Mozambique is an extreme example of the risks of ‘sovereign bonds’ - whereby governments raise money through international capital markets. But Mozambique is not the only example. In the last decade, more and more African governments have decided to raise cash through the bond markets. Before 2006, only South Africa had done so. But by last year, African governments accounted for 40 billion USD in bond debts; meaning bonds have become almost as important for African governments as development aid. The Seychelles, Ghana, the Democratic of Congo and Mozambique have been the first countries to default on these debts, but there is a growing concern that others will follow. 

So why should we be concerned about a growth in the blue bond market? Our report raises the following issues: 

Countries can easily raise too much cash through bonds - leading to unsustainable debt. 

This is a risk made more likely where valuations on potential returns lack credibility. This is an aspect that characterises fisheries - there are now many reports that claim the wealth from the oceans is massively under appreciated, and if developing countries could impose better management and deal with illegal fishing (and sell blue carbon credits) - then governments could make millions of dollars in extra taxes and levies. The trouble, however, is that these projections on the enormous wealth potential of the oceans have often been based on dodgy statistics, and they rely on a fantasy, whereby African governments can easily develop their ‘blue economy’ into a sustainable cash cow that will then fund pro-poor and environmentally friendly development. 

As it is, exaggerated and simplistic reports on the wealth potential of the oceans could easily be used in the prospectus sent to investors, who end up believing that the government is in a good position to earn enough money to pay back the debts, when they are clearly not. 

In fact, deciding how much money to raise in bonds is not always based on the likely economic returns for the bond issuer. In Mozambique, Credit Suisse originally raised 500 million USD for the tuna company. But they found there was a strong demand among investors, so a further 350 million USD was issued. The case is much worse than that - Credit Suisse ended up issuing 2 billion USD in bonds for Mozambique, which included raising cash for two other companies that were set up to provide monitoring and control of the country’s EEZ. There was no information made available to investors that might convince them 2 billion USD was not a viable investment, although because the government of Mozambique had guaranteed the loans, investors were probably not too worried. 

Overvaluing bonds means the country may default on repayments, which means it is forced into debt restructuring (as is the case in Ghana and Mozambique), which tends to harm service delivery for the poor. Alternatively - and possibly more likely for ethical bonds - the government relies on other income streams to make up the shortfall. In Africa, by far the largest source of foreign cash available to governments is from the export of primary commodities, such as from oil, gas and mining, or fish. Blue bonds - as with green bonds - may not be very sustainable debt, meaning there is pressure to promote other polluting industries to compensate.  

This risk of bonds may seem similar to other forms of government borrowing, such as concessional loans from development banks. However, bonds are far more expensive for developing countries - they have much higher interest rate payments, and also much higher fees for the bank managers. Unfortunately, the drive to encourage developing countries to raise more money on private capital markets, which is a policy promoted by so many aid agencies often under the guise of ‘blending private and public finances’, may be causing a reduction in concessional loans and aid grants. 

Bonds are at risk of corruption and fraud

The ease in which governments can raise too much money from bonds makes them vulnerable to corruption. This is also facilitated by the lack of transparency that seems to be a characteristic of bonds. Again, Mozambique is possibly the stand out example, but there have been others. Tanzania raised 600 million USD in 2013 from issuing a sovereign bond. Yet investigations found that the lead bank manager - Standard Bank - colluded with Tanzanian authorities to increase the bank fees for the bond, which was then used as money to pay a kick back for being awarded the deal. 

National bonds are not normally used to fund a specific project, but are rather sums of money that are distributed to a range of projects based on an eligibility criteria. There is a great deal of discretion in how the proceeds are used. Conflicts of interests and kick-backs are therefore inherent risks. In theory, ethical bonds may come with higher standards for accountability and transparency than other types of bonds. Indeed, voluntary standards on green bonds focus on ensuring that there is reporting on how the bonds were used. But generally bond issuers are expected to self-report, and there is no requirement for external auditing. 

The possibility that bank managers and governments abuse blue bonds for personal gain should be considered a risk in the emerging blue bond market. The fact that Credit Suisse and other European banks have been caught up in corruption related to bonds is further proof. Yet this is not mentioned in any of the promotional material for conservation finance. This contrasts to funds provided by donors and multilateral banks, for they have made attempts to introduce anti-corruption guidelines and safeguards. Private financial markets are much more relaxed on this. 

The same is true on human rights. Donors and multilateral banks generally have grievance mechanisms and social and environmental safeguard mechanisms. They may not work very well in all cases, but there is no such framework in place for bonds, ethical or not. 

Aligning marine conservation to ‘profit maximisation’ 

It is an explicit objective of conservation finance is to make sure that investments in conservation are profitable. For blue bonds, choices on how money will be used are therefore likely to be influenced by profit maximisation. This is worrying for groups who depend on the ocean but don’t generate a lot of money, such as subsistence and small-scale fishers. Generally the promotional material for conservation finance tells us that the benefits of these investments will be shared well, and that they will have a pro-poor impact. That seems unlikely.

A fundamental problem with relying on private capital markets to fund conservation is that the only measure of success is money. Non-monetary values do not translate well into financial instruments. The policy of encouraging governments in developing countries to raise funds through private capital markets has been strongly criticised for encouraging the privatisation of public goods and promoting the interests of multinational firms, and at the expense of local economies and businesses. 

The spectre of blue washing

One of the main criticism of ‘green bonds’ is that they are not always very green. We don’t know yet what the concept of blue in blue bonds is, but we should assume it includes environmental sustainability. 

Governments or companies can call their bond whatever they like. However, voluntary standards and labelling schemes have been integral to the growth of the green bond market. The standards are vague, and encourage bond issuers to pay for a third party assessment that demonstrates the ‘greenness’ of the proposal. The actual definition of ‘green’ is left open to interpretation. 

Four international companies have cornered the market in providing these assessments. This is a weak system - companies providing assessments and labels have a vested interest in providing favourable assessments - as this will lead to more business and a better market standing.  One of the key dilemmas facing these assessments is flagging the ‘rebound effect’. A simple example is a scheme to reduce the energy consumption of transport, which leads to savings. However, cheaper transport means people travel more, meaning the net impact of the investment was unsuccessful in reducing energy consumption and the release of carbon.  These rebound effects of green financed projects are thought to be common, but it can take time to measure and detect. Third party assessments of green bonds often raise these issues, but it is not considered sufficient to give a bond a negative assessment. We therefore have green bonds passed as green by third party assessors for oil companies.

A further weakness of the green bond market is that the focus is on the use of proceeds. A key risk is that governments issue green bonds, but continue to invest and promote other polluting industries. Assessments of green bonds do not consider ‘policy coherence’, meaning a country such as Nigeria can raise a green bond while continuing to be heavily dependent on the export of fossil fuels. 

The same problem manifests with investors and banks. Institutions like Credit Suisse or JP Morgan  are enthusiastically promoting green bonds, but have much larger investments in dirty bonds. The same has been true for the World Bank Group, who has promoted the green bond market while generating more funds for the establishment of new coal plants. 

Unlike other types of financing, green bonds also lack discipline. That is, money is provided upfront for green investments, but there is no way to return money if the impact of the investment was disappointing, even if there was interest in undertaking end of project assessments, which does not appear as a feature of green bonds at all. 

A dilemma: dealing with the risks of the blue bond market

Organisations worried about these risks presented by conservation finance and the growth of blue bonds are confronted with a dilemma. A pragmatic approach could be to focus on mitigating the risks, including campaigning for stronger voluntary guidelines, commitments from banks to be transparent, and for social and environmental safeguards to be put in place by governments and financial institutes. Civil society organisations may also decide to invest time and resources in monitoring blue bonds and undertaking their own independent assessments. 

But mitigating risks will be time consuming and may be unsuccessful. Indeed, the logic behind conservation capital is dubious. The underlying argument put forward that private financial markets will save the planet is unconvincing. 

The ‘financing gap’ is ideological. The inability of governments to ensure marine ecosystems are used in a sustainable way is not simply down to a lack of resources and money; the root causes in most places is political in nature. We should not imagine that somehow governments will become responsible stewards of marine ecosystems simply by ensuring they have access to more funds through debt instruments. Indeed, given what we know about international debt markets in Africa, relying on these further will most likely lead to a growing funding gap for African governments.  

Estimates of the financing gap for conservation are also a fabrication. There are many different ways in which changes could be achieved to support sustainable fishing and marine conservation, such as prioritising sustainable small-scale fisheries over other commercial industrial fishing companies. If funding is an issue, then other more sustainable sources of funds should be encouraged, such, raising taxes on polluting industries, or reducing government spending on other areas, such as the military.  But there is no reason to believe that the only source of financing left for the ocean comes from private capital markets. There is also good reason to believe that following this path will provide disproportionate benefits for wealthier sections of society. 

Ultimately conservation finance requires blind faith in the fairy tale that the only way we can achieve sustainable marine ecosystems is by making vast amounts of profits in the process, for ever. The move towards sustainable use of marine ecosystems will also require difficult choices to reduce growth and limit consumption. Sadly, there is a distinct possibility that the push for increased private financing is being made by a coalition of organisations that all have vested interests; investors seeking to display their social and environmental credentials, NGOs looking to increase their own funding, banks that charge lucrative fees, and governments looking for additional short-term cash. 

The FiTI Awakens....

On 27th April 2017, the Fisheries Transparency Initiative (FiTI) was officially launched in Bali. It was the result of two years of consultations, led by an international advisory group, composed of senior government officials, representatives from both large scale and small-scale fisheries, international organisations, including the World Bank, the African Bank for Development, as well as leading fisheries NGOs. The key outcome of the launch was the ‘FiTI Standard’ that sets out how the FiTI works and what information will need to be made available by implementing countries. 

At the time of the launch, at least four countries are committed to implementing the FiTI: Mauritania, the Seychelles, Indonesia and The Republic of Guinea. Governments of several other countries have also indicated an interest. The International Board of the FiTi includes people working in governments from the four implementing countries as well as Sweden, representation from international NGOs (Greenpeace, Bread for the World, Oceana, WWF). Industry representatives on the FiTI International Board have been harder to find, and so far there is only one commitment from the industrial sector, that of the Russian fishing fleet. However, what is positive is that half of the seats available for industry representatives will be reserved for the small-scale sector, and CAOPA are now confirmed as being part of the FiTI governing board, as is a representative from Traditional Fisherfolk Union of Indonesia. 

Development of the FiTI Standard

That the FiTI has got this far demonstrates widespread agreement that lack of transparency has been a problem in fisheries. This has been a key point for advocacy by many NGOs working on fisheries reforms, as well as a long standing issue raised by small-scale fishing communities. Although there has been disagreement on how far transparency should go (and what constitutes commercially sensitive information), intergovernmental organisations, such as the European Commission, as well as representatives of the industrial fisheries sector are also beginning to come out in support. 

At the outset the FiTI was focused on improving transparency on who has a right to fish, what is paid for that right and what is caught. However, this was considered too narrow, and a large part of the work by the international advisory group was to re-think what type of information the FiTI should include and why. As a result of this process the FiTI Standard now includes 12 reporting elements. These are thematic areas on which countries are requested to publish information. The 12 requirements are: 

1. The establishment of a public registry of national fisheries laws, regulations and official policy documents.

2. The publication of a summary of laws and decrees on fisheries tenure arrangements.

3. The disclosure of all foreign fishing access agreements, as well as related studies on the environmental, social and economic impacts of these agreements. 

4. The publication of national reports on the state of fish stocks.

5. The publication of an up-to-date online registry of authorised large-scale vessels, as well as information on their payments and recorded catches (aggregated for each flag state) and studies on social, economic and environmental impacts. 

6. The publication of information on the small-scale sector, including the numbers of fishers, their catches and financial transfers to the state and any studies on the social and economic impacts of this sector 

7. The publication of information on the post-harvest sector and fish trade.

8. The publication of information on law enforcement efforts, including a description of efforts to ensure compliance by fishers and a record of offences and protections in the sector.

9. The publication of information on labour standards in the fisheries sector and efforts to enforce these. 

10. Disclosure of information on government transfers and fisheries subsidies.

11. The publication of information on official development assistance regarding public sector projects related to fisheries and marine conservation.

12. Information on the country’s status regarding beneficial ownership transparency.

At the outset it was envisaged that implementing the FiTI would involve the production of a comprehensive national report with all the information and data required to satisfy these reporting elements. Some thematic areas would be reported on each year, others every two years. Towards the end of the conceptual phase of the FiTI, it was realised the idea of countries having to produce substantial reports each year was unattractive. Not only was this considered costly, but most importantly it could undermine other efforts to compile and publish data on the fisheries sector. Now the emphasis is for governments to publish information on their own websites, not through a FiTI report. The role of the FiTi will be primarily one of verifying this public information. The ambition of the FiTI therefore is to see public authorities improve their own approach to providing credible information, rather than producing lengthy independent technical reports.

One of the early criticisms of the FiTi was that it puts a disproportionate burden on developing countries, because many have limited capacity to collect and publish information. There was a concern that this would make the FiTI unfeasible for poorer countries, including those with substantial small-scale fisheries. The FiTI Standard therefore emphasises the idea of ‘progressive improvement’. Countries are expected to publish, in an accessible way, what information they do have. In the event that they do not have certain information requested under the FiTi Standard, they are under an obligation to develop plans and timeframes to collect and publish this information. A failure to have any of the information required by the FiTI does not exclude countries from obtaining a ‘compliant status’, as long as they are being honest about the lack of their data and agree on a timeframe and plan to improve the situation. 

How the FiTI attempts to improve fisheries information at the national level. 

Transparency is widely regarded as a necessary component of responsible fisheries management, and there are three main ways in which the FiTI could make a positive impact. 

Firstly, the FiTI strives to reveal data that has otherwise been obscured from public scrutiny. This is perhaps what most people think of in terms of a transparency initiative. For example, in many countries information on authorised fishing vessels, access agreements and aggregated catches has been considered confidential, or at least authorities have not considered it necessary to make this information public. 

Secondly, the FiTI attempts to verify if information in the public domain is reliable and complete. The FiTI requires an external assessment of information by an independent consultant, as well as further verification of the findings by a national multi-stakeholder group, composed by CSOs, industry and government representatives. As such, the FiTI is not simply aimed at lifting the lid on confidentiality, but also at providing improved credibility of data held by public authorities. 

Thirdly, the FiTI is designed to reveal where public authorities simply do not collate information and it requires the national multi-stakeholder group to come to an agreement on how these gaps in knowledge will be addressed. As such, the FiTI provides the opportunity for countries to take stock of existing knowledge on the fisheries sector, and develop national plans for improvements.

These three aspects to the FiTI need to be given equal recognition. In some countries the most important contribution of the FiTI will be to highlight where data already in the public domain contains errors, and in other cases the contribution will lie in exposing and addressing the limited approaches to gathering data for publication.  

How information from the FiTi supports international fisheries governance reform efforts

The FiTi has a narrow objective of increasing the availability and credibility of fisheries information. It does not attempt to engage in any further advocacy, such as commenting on the effectiveness of fisheries management or the sustainability of fishing. Nevertheless, the FiTI has been developed so that it supports several other international fisheries governance reform efforts. This includes, for example: 

1. By requiring national authorities to publish the most recent studies on status of fish stocks, as well as information on catches and discards, the FiTI aims to contribute to national debates on the adequacy of policies and practices to achieve sustainable fishing. 
2. The FiTI obliges implementing countries to publish information on fisheries access agreements, including disclosing any studies on the social, economic and environmental impacts of these agreements. Such step has already been taken by the EU, and is increasingly required by Regional Fisheries Management Organisations, but has been resisted by most of the other main fishing nations and coastal countries involved in fishing access agreements. For the EU, the FiTI will contribute to establishing a ‘level playing field’, while more importantly it could lead to increased national debates on the foreign fishing agreements and their wider impacts, including on small-scale fisheries and food security. 
3. The FiTI supports international efforts to address illegal fishing and unsustainable levels of legal fishing. It requires countries to disclose detailed lists of licensed vessels, as well as information on prosecutions and resources used for law enforcement. It is widely recognised that lack of transparency has facilitated frauds and corruption in the fisheries sector. This list of licensed vessels will also further contribute to the FAO’s efforts to establish a global record of fishing vessels.  
4. The FiTI requests information on tenure arrangements to be published, including a description of how national authorities are ensuring informal fishing rights are codified and protected. In this way the FiTI supports the implementation of the International Guidelines on the Responsible Governance of Tenure. 
5. The FiTI requires governments to collate and publish various information on the small-scale fishing sector, including information on their social, economic and food security contributions. If this information is not available, then countries have to agree on a time frame for this information to be collated and publicised. The FiTI therefore supports the implementation of the FAO’s Guidelines on Securing Sustainable Small-Scale Fisheries in the Context of Food Security and Poverty Eradication . 
6. The FiTI requests implementing countries to disclose information on national efforts to collate information on the Beneficial ownership of fishing vessels. In the short term it will not mean countries will produce complete lists of beneficial owners, but it is intended to galvanise international awareness and support for beneficial ownership transparency. 
7. The inclusion of information on labour standards in the fisheries sector supports international efforts to abolish slavery and human trafficking , and can be used to further advocate for the promotion of the ILO Work in Fishing Convention ratification. 
8. The request to publish information on government transfers to the fisheries sector supports international efforts, including through the WTO, to increase awareness of the scale and impact of fisheries subsidies, and is intended to stimulate national debates on the contribution of capacity enhancing subsidies to unsustainable fishing, as well as the distribution of subsidies among different fisheries sectors, such as between large scale and small-scale fisheries. 
9. The request to collate and publish information on development projects in the fisheries sector supports international efforts to increase aid effectiveness, and compliments the International Aid Transparency Initiative. 

Will FiTI have a lasting impact on fisheries governance?

The core assumption of the FiTI is that increasing public access to information will enhance active participation in national debates on fisheries reforms, and raise the prospect of accountability by public authorities. 

A key issue is whether there is the capacity and interest, at the national level, to undertake further analysis of the information produced. The FiTI could succeed in raising public information, but the lack of interest or capacity to do anything with this information will not lead to positive changes in fisheries governance. This needs to be assessed as FiTI is implemented in different countries. The risk may be overstated, as the demand for increased transparency has been prevalent for many years, including among environmental organisations and groups working on the rights of small-scale fisheries. Nevertheless, to increase the its will require support to local groups and researchers, including journalists, to do more with data being provided by governments participating in the FiTI. 

Ultimately, however, the success of the FiTI helping to achieve lasting governance reforms rests on the assumption that transparency can lead to accountability. If new information supports policy recommendations or reveals instances of abuse of powers, corruption or frauds, none of this will lead to change if public authorities or the private sector face little pressure from their citizens and from the international community to reform. 

In these cases, the risk for the FiTI is that is will offer governments and companies a façade of respectability, while allowing for a continuation of business as normal. This threat is particularly prevalent in countries characterised by authoritarian governments, limited means of participation in decision making processes and low levels of individual and media freedoms. 

It is therefore crucial that those engaged in the FiTI, including at the international level, promote further efforts to understand and confront forms of oppression, authoritarianism, lack of individual and media freedoms that undermine good governance of fisheries.

Two other issues will also affect whether the FiTI has lasting impacts on fisheries governance. 

Approaching access to information as a right

The FiTI Standard makes no attempt to encourage national authorities to legislate for access to information. Indeed, a criticism of other existing transparency initiatives is they treat freedom of information and participation as a voluntary gesture, rather than as a right. It would be far better if countries established laws guaranteeing citizens the right to access information and the right for participation in decision making. In the long term, this may be viewed as a stronger approach, otherwise the gains made by FiTI may be short lived, dependent on the good will of authorities and foreign fishing partners. 

This limitation to the FiTI remains important, and arguably it should do more to promote access to information as a right. The European Union’s Aarhus Convention provides one of the strongest examples, and forms the basis for the UN’s Bali Guidelines on establishing laws and institutions on access to information, participation and access to justice. It was perhaps a missed opportunity not to link the Bali Guidelines to the launch of FiTI, which took place in the same city. Ultimately the goal of the FiTI should be to ensure implementing countries adopt similar legislation to the Aarhus Convention, otherwise their commitment to transparency may be precarious and open to doubt. 

Trading on ‘compliant’ status

A further issue with the FiTI lies with the implications of labelling countries as ‘compliant’ with the Standard. To some, this may be seen as an attractive dimension to the FiTI. As more countries sign up, others will be forced to follow suit, with the end result being a gradual improvement to transparency across more and more countries. A similar logic is used for other international voluntary initiatives, such as eco-labelling. Those fisheries that can demonstrate environmental credentials via voluntary certification schemes, are rewarded by more secure market access, meaning those that do not are forced to engage with these voluntary eco-labelling efforts if they wish to maintain their market access share or increase it. 

The worry for those countries that decide not to engage with the FiTI is that this decision may be viewed negatively by others, and it could influence decisions on access to foreign donor funding, or even the negotiation of trade agreements. There may be genuine reasons why a country does not want to be part of the FiTI, such as lack of resources or simply that the country feels it s doing wellto improve civic engagement without the need of an international initiative. Indeed, at the launch of the FiTi Standard in Bali, the head of the Fisheries Forum Agency from the Pacific expressed doubt about the demand for the FiTI among its member states. 

Moreover, achieving compliant status for the FiTI does not mean a country is more transparent than another who is not part of the initiative, in the same way obtaining an eco-label does not mean a fishery is better managed than one without. This is particularly true of the FiTI, as the decision to emphasise ‘progressive improvement’ means a country can, for a time, be compliant without publishing much information. Perhaps less information than another country that is not involved in the FiTI. 

The dilemma here is that transparency is important, and there must be international pressure on countries to reform. Lack of transparency in the fisheries is a well recognized and widespread problem andprogress to improve this has been very slow in many countries. Public fisheries access agreements should not be entered in to with countries that manage fisheries in a highly opaque way, and it would be justified to favour investments in countries where fisheries is managed more openly. The FiTI provides a mechanism to help countries improve and communicate their commitment to responsible fisheries. However, achieving a ‘compliant’ status with the FiTI should not be taken at face value to mean a country is necessarily more transparent than others. More importantly, nor does it mean that the country is necessarily managing its fisheries in a responsible way. The FiTI does not provide this analysis. 

The status of a country in the FiTI should therefore not be used to justify trade and investment decisions. Some of the countries involved in the initiative may hope that it does. This would be a source of concern, including for those countries that may have legitimate reasons to not engage with the initiative.

Going forward with the FiTI

The FiTI provides a practical way of improving the availability and reliability of information on fisheries. The FiTi therefore fills an important gap in international fisheries reform efforts, as no other initiative exists that tackles the issue of transparency in a concerted way. 

There are opportunities to use the data stemming from the FiTI to advance fisheries reforms efforts, and where appropriate to put pressure for increased accountability of national authorities and the private sector. A lot depends on how citizens and stakeholders respond to increased information provided as a result of the FiTI, and the extent to which participating countries embrace the ideal of “progressive improvements” and multi-stakeholder participation. The success of the FiTI in many contexts will therefore be influenced by resources and capacities of civil society organisations, fishing organisations and journalists to promote and engage in public debates and decision making processes. Ultimately the impact of the FiTi will be dependent on the willingness of those in positions of authority to listen and act on the recommendations from civil society and the fisheries sector. However, a threat to the credibility of the FiTI lies in the prospect of it being implemented in countries where governments continue to limit individual and media freedoms and genuine participation in decision making. The FiTI must not be allowed to provide such governments with a status of legitimacy.