Developing countries are losing billions of dollars due to illegal, unreported and unregulated (IUU) fishing, which siphons off revenue through illicit financial flows, according to a new study by the Financial Transparency Coalition (FTC).
The study reveals that the top 10 companies involved in IUU fishing are responsible for nearly a quarter of all reported cases: eight are from China – led by Nasdaq-listed Pingtan Marine Enterprise Ltd – one is from Colombia and another from Spain.
The Spanish tuna giant Albacora SA emerges as Europe’s largest alleged IUU fishing company and has received millions of dollars in EU and other subsidies, claims the report by a coalition of 11 non-profit organisations. Neither Pingtan Marine Enterprise Ltd nor Albacora SA responded to a request for comment.
“Illegal fishing is a massive industry directly threatening the livelihoods of millions of people across the world, especially [those] living in poor coastal communities in developing countries already affected by the Covid-19 pandemic, the cost-of-living crisis and the impact of climate change,” said Matti Kohonen, one of the report’s authors and the executive director of the FTC.
More than 90% of global fisheries stocks are being fully exploited, overexploited or depleted, according to the UN. IUU fishing is a major driver of the marine ecosystem’s destruction and accounts for one-fifth of the global fisheries’ catches, worth up to $23.5bn (£20bn) annually, the third most lucrative natural resource crime after timber and mining.
Overall, global losses due to IUU fishing are estimated to be up to $50bn (£44bn), according to one study.
Africa is the most affected continent, losing some $11.2bn (£9.76bn) in revenue annually from IUU fishing while concentrating 48.9% of identified industrial and semi-industrial vessels involved in the practice, the FTC report found. Of that total, 40% are in west Africa alone, which has become a global epicenter for IUU fishing.
Elsewhere, Argentina loses between $2bn to $3.6bn (£1.74bn to £3.14bn) in terms of IUU fishing catch per year, Chile estimates its losses at $397m (£346m) and Indonesia’s are at $4bn (£3.49bn) annually, equivalent to the country’s annual net rubber exports, it concluded.
IUU fishing represents around 20% of the global fish catch, according to a 2013 report by the Pew Trust, thus playing a key role in overfishing. The greatest declines in fish stocks are expected to happen in the coastal regions that are most food insecure and more dependent on artisanal fishing for protein.
In addition to the problems caused by food insecurity, Kohonen said developing countries lose billions of dollars in illicit money flows due to illegal fishing while “vessel owners continue operating with complete impunity, using complex company structures and other schemes to hide their identity and evade prosecution ”.
The report warns that almost no countries require information about owners when registering vessels or requesting fishing licenses, meaning that those ultimately responsible for these activities are not punished – rather, fines are issued to the captains and crews of the vessels.
It suggests that fishing vessel owners should be required to report the ultimate beneficial ownership when registering a vessel or requesting a license by regional fisheries management organisations, flag states and coastal states.
Collecting such ownership data, it says, would allow the application of laws to combat money laundering, tax and financial crimes, thus creating ways to tackle the underlying fisheries-related crimes and abuses.
Fishing vessels flagged to Asia – particularly China, which has, by far, the world’s largest distant-water fleet – represent 54.7% of reported IUU fishing by industrial and semi-industrial vessels, followed by Latin America (16.1%), Africa (13.5 %) and Europe (12.8%).
At the same time, 8.76% of identified illegal vessels use flags of convenience such as Panama and the Cayman Islands, which have lax controls and low or no effective taxes.
The report urges the EU, the US and Japan – which together account for 55% of the seafood market – to ramp up their commitment to tackle IUU fishing by eliminating the drivers that enable the financial secrecy to happen in the first place, such as the use of shell companies, joint ventures and flags of convenience.
Worldwide, 820 million people rely on fishing for their livelihoods, according to the UN’s Food and Agriculture Organisation. In some regions like West Africa, up to a quarter of the workforce are involved in fishing. Fish consumption also accounts for a sixth of the global population’s intake of animal proteins, and more than half in countries such as Bangladesh, Cambodia, the Gambia, Ghana, Indonesia, Sierra Leone and Sri Lanka.