Madagascar agrees to a 10 year fisheries agreement with Chinese consortium

At the beginning of September, Hery Rajaonarimampianina, the president of Madagascar, attended the Beijing Summit of the Forum on China-Africa Cooperation. It was announced during this visit that the two countries had finalised a 10 year investment agreement, entered into between the Malagasy Agency for Economic Development and Promotion of Enterprises, and the Chinese business consortium, Taihe Century Investments Developments Corporation. It is an agreement that has been presented as part of Madagascar’s blue economy initiative.

Published details of the investment agreement remain limited. According to sources in Madagascar, the President had negotiated the deal with almost no input from administration, parliament or civil society, and the country’s main development partners, including the World Bank and the EU were not aware of the deal either. Yet what we know so far suggests the investment agreement could be disastrous for the country, particularly for the artisanal fisheries sector.

A sustainable blue economy?

According to a press release, the 10 year agreement comes with a promise of investment by the Taihe corporation of up to 2.7 billion USD. It is not clear precisely how this money will be used, although it is described that the funds will go towards building fisheries infrastructure, support for fisheries management and the fight against IUU fishing. Part of the investment will also go towards a bamboo forestation project. In return, the Chinese consortium will be allowed to deploy up to 330 vessels in coastal fisheries. The press release makes a bold claim that the agreement will see 10,000 new jobs created.

A representative of the artisanal fishing sector emphasized that "the state is robbing coastal fishermen of their livelihood". Not only he is concerned about the number of boats to come, but he also points out that the 3,600 jobs promised in the short term represent only 3% of the number of artisanal fishermen who live on these fisheries resources and who are already having great difficulty in making ends meet. "Bringing several hundred ships would mean the disappearance of the 100,000 small scale Malagasy fishermen and their families! This will create unemployment, insecurity and increased risk of conflict between communities. Depending on the type of boats that come, there is a fear of fish habitat degradation and overexploitation. Indeed, we only have one or two operational coast guard boats ". He also fears that this agreement will benefit only a handful of people, with corruption jeopardizing the future of entire fishing communities.

The signing of this agreement comes also as the country moves near to the Presidential elections—starting in November. The deal may be a bid to show the country that the President, who is standing for re-election, is bringing in much needed foreign investment—Madagascar remains one of the poorest countries in the world.

Yet news of the agreement has already caused protest among fishing communities. Most fish stocks have been heavily exploited for years, including valuable crustaceans and demersal fishes, not only caught by local small-scale fishers, but also also targeted by foreign owned semi-industrial and industrial trawlers. Indeed, according to a review of fisheries undertaken by Smartfish in 2014, almost all commercial fisheries have been fully exploited, or are being overfished. Conflict between local artisanal fisheries—thought to number over 100,000, and foreign owned trawlers (and commercial prawn farms) has been reported for many years.

Whether Chinese firms will actually bring the full quota of new boats to the country remains uncertain, and no one is sure what type of vessels will be involved and what type of species will be targeted. Nevertheless, a framework agreement that permits 330 vessels represents an enormous addition to the overall fishing capacity in the fisheries sector.

It is also unlikely that the 2.7 billion USD will materialise in full. Similar commitments were made when Mauritania agreed to a 100 million USD investment by Chinese state corporation, Poly Hon Don in 2011. This again was negotiated by the President without consultation, and the investment agreement only became public when it was leaked in the press. While the company has brought its full quota of 100 vessels to Mauritania, evidence that this deal has created new jobs for locals or massive investment for local fisheries is lacking. Indeed, information on the activities of the Chinese company remains closely guarded by the Mauritanian authorities, who have also consented to special rules for the company to export fish without the usual government oversight. It is an example that those protesting the new deal in Madagascar should consider carefully.

Implications for development partners and the EU

For development partners, who have provided Madagascar with millions over the years to improve fisheries management, the announcement must be considered deeply worrying. Similar events have happened in other countries. In addition to Mauritania, a few years ago the President of Mozambique concluded a secret billion dollar investment in the tuna fishing sector, leading to its development partners temporarily suspending aid to the country.

For the EU, the situation in Madagascar is highly sensitive. Development aid and trade deals were suspended in 2009 due to the unconstitutional removal of the democratically elected President by the ruling party. Sanctions were lifted in 2014 and the EU has subsequently committed over 500 million Euros to the country to 2020, as well as funding fisheries development programmes including Smartfish.

At the same time, the European Commission is beginning negotiations for a renewal of its sustainable fisheries partnership agreement with Madagascar. The previous protocol agreement, covering the period of 2014 to 2018, was worth over 6 million Euros, with nearly half of this money being directed to improving fisheries management. Yet the finalisation of a new protocol will have to be based on full transparency by the Malagasy government, including on its existing fisheries agreements with other foreign countries and companies.

It is therefore paramount that the government of Madagascar responds to calls for publishing all details of this new investment agreement, and that there is the opportunity for this agreement to be given full scrutiny by parliament, civil society and development partners, before it is allowed to progress further. Without this commitment, the notion that the country’s leaders support a sustainable ‘blue economy’ must be considered dubious.

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