TNRC Blog How Data and Technology Can Help Address Corruption in IUU fishing

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Targeting Natural Resource Corruption

How Data and Technology Can Help Address Corruption in IUU fishing

December 2020 | TNRC Blog Post

This post captures insights on the promise and problems of using data and technology to address corruption in illegal, unreported and unregulated (IUU) fishing. These insights were contributed by experts on three continents at a TNRC virtual panel hosted by TraCCC, the Terrorism, Transnational Crime and Corruption Center of George Mason University, on December 2, 2020. Discussion focused on the different technologies becoming available, what they can deliver, and the issues involved in their deployment. The panel was attended virtually by participants based in 40 countries. A recording is above, and a PDF of the slides from the event can be downloaded here.

Speakers:
Dr. Rashid Sumaila, FRSC, Professor and Director, Fisheries Economics Research Unit and the Ocean/Canada Partnership, University of British Columbia
François Mosnier, Financial Research Analyst, Planet Tracker
Bubba Cook, Western and Central Pacific Tuna Programme Manager, WWF New Zealand
Michele Kuruc, J.D., Vice President, Ocean Policy, WWF US (Moderator)
Dr. Louise Shelley Director, TraCCC (Introductions)

Key Takeaways

The corruption that facilitates IUU fishing has high political, environmental and social costs that go far beyond the dollar figures cited. The flood of West African migrants to Europe, as traditional fishing grounds are fished out, is just one example of the global impact.
Profit margins in the fisheries sector are low and shrinking. Traditional approaches relying on fines to deter IUU fishing are not effective in an environment where profit margins are low and pressure to engage in unsustainable practices is growing.
A more promising approach is to support the raising of profit margins through traceability. Advances in technology make this possible, and the March 2020 comprehensive standards adopted by the Global Dialogue on Seafood Traceability (GDST) may be a game-changer.
Other technological advances to support traceability have great potential but have not yet been fully developed. These include unmanned surveillance vehicles, electronic monitoring, artificial intelligence, DNA barcoding and genetic analysis, biochemical tracking, integrated satellite imaging and tracking, catch documentation and blockchain traceability. These tools will ultimately make it possible to track the entire supply chain, expose criminal actors to greater risk of being caught, and thereby incentivize greater compliance.
Technology alone is not a silver bullet. It needs to be supported by a strong international regulatory framework, support from governments and consumers, and capacity enhancement, especially in the global south where 80 percent of IUU fishing takes place, often by vessels from developed countries.

What is the role of corruption in facilitating IUU fishing and how can we calculate the costs of this corruption?

Dr. Rashid Sumaila, FRSC: We can divide corruption in IUU fishing into three baskets:

Corruption in fisheries institutions. These monitoring and control systems are supposed to ensure that private actors do not reap excess profits and monopolize all the value derived from community resources. At the macro level, corruption in these institutions results in major policy failures in areas such as access agreements and harmful subsidies. At the micro level it is seen in bribes from individual companies to overlook under-reporting, over-fishing, or other violations.
Corruption at sea. These are the practices that facilitate modern slavery and destructive fishing techniques such as throwing away lower value fish and seafood parts.
Corruption in the seafood supply chain. This is where IUU products are laundered into the seafood supply chain, facilitated by corruption, lack of transparency and the complexity of the supply chain.

To calculate the true costs of all of this corruption, we need to account for a range of impacts beyond the landed value of the IUU catch itself, including

losses to legitimate businesses in the fish value chain
loss of jobs and household incomes in the community that would otherwise benefit from these fisheries resources
impact of lost tax revenues to the governments.

We can observe these cascading effects clearly in West Africa today, one of the hot spots for IUU fishing, and they are providing much of the impetus for the flood of West African migrants to Europe. In this way, the cost of corruption is felt far beyond the borders of the coastal countries directly concerned.

How does Planet Tracker’s approach to curbing IUU fishing differ from traditional approaches? How likely is it to succeed?

François Mosnier: We begin from the premise that average profit margins in the fisheries industry have been dropping in recent years, which produces a vicious cycle and results in more IUU fishing. The traditional approach is to try to make IUU fishing less profitable via fines and punishment. Our approach is to try to raise the profitability of legal fishing through traceability. Planet Tracker has calculated that effective use of traceability could double the profit margins of the average seafood processor. Now the task is to convince all participants that traceability will lead to higher profits, reduce incentives to engage in IUU fishing, and result in a sustainable fisheries industry. This innovation has not caught on enough to date because of barriers to traceability, including poor data capture and management, lack of inter-operability between systems, and gaps in the traceability chain.

A potential game-changer is the Global Dialogue on Seafood Traceability (GDST) and the comprehensive set of standards they adopted in March 2020. These have been endorsed by key organizations in the fisheries sector, including SeaBOS, the Global Tuna Alliance, and the UK Seafood Industry Alliance. GDST standards provide the first common language for traceability data, explain how data should be captured and managed, and are compatible with existing standards used by retailers.

The main challenge remaining is to reduce gaps in the traceability chain, especially at mixing points in the supply chain. Also, more documentation of the financial benefits of the system is needed in order to give owners and senior management of the processing companies confidence and incentives to invest in the IT systems and wider operating platforms required. We also need greater engagement with consumers and with investors in publicly owned companies so that they will advocate for traceability.

What new technologies are available to curb IUU fishing? How will they work?

Bubba Cook: There is an old adage: “What happens at sea stays at sea.” But technology is changing that. Emerging technologies promise to shed light on all aspects of at-sea activities and the seafood supply chain, which will one day enable us to better ensure accountability of the fishing industry and, in turn, sustainability of our ocean resources.

Unmanned surveillance vehicles have made significant advances, although they are still expensive and not yet a practical tool.
Electronic monitoring is moving forward to detect irregularities on board and is increasingly more effective through WiFi and satellite data transmission, and analysis aided by Artificial Intelligence.
Artificial Intelligence can independently identify illegal activities at sea by analyzing huge amounts of data more efficiently and effectively than ever. In combination with other technologies, it is expected to revolutionize fisheries monitoring, catch accounting and, potentially, even the identification of beneficial ownership.
DNA barcoding and genetic analysis have become much cheaper and faster, leading to solutions that can prevent fraud by companies mislabeling fish or selling seafood they have no right to catch.
Biochemical tracking can be used to determine exactly where the product originated, providing solutions similar to or supplementing genetic tools.
Integrated satellite imaging & tracking can indicate where fishing is occurring even if vessels are not actively transmitting a signal. Passive vessel detection technologies such as Synthetic Aperture Radar (SAR), Visual Imaging Infrared Radiometer Suite (VIIRS), and other emerging technologies combined with other required active transmitting systems such as Automated Identification Systems (AIS) and Vessel Monitoring Systems (VMS) are poised to make all vessel activities more visible and transparent than ever.
All catch documentation can be—and now should be—electronic, without the option of paper documentation, which is easily forged, delays detection and prosecution, and, ultimately, enables corruption and compromises traceability.
Blockchain traceability, if it operates as proposed, promises to have a substantial and material impact on IUU and corruption through both regulatory and market forces because it could potentially track products across the entire supply chain including up to the beneficial ownership of the vessel.

However, none of these technologies alone or in combination provide a silver bullet. A tool is only as effective as the policy and process that underlies its use and, even then, any information generated by technology is useless if it isn’t acted upon. Additionally, any device can be both a weapon or a tool. For instance, even in developed countries, big data management can be misused for private gain, as we saw from the Cambridge Analytica scandal. We should also consider technology within the larger scope than just IUU. For example, we should always discuss these issues within the broader perspective of Maritime Security and Maritime Domain Awareness as well as Supply Chain Integrity and Traceability in an effort to bring disparate resources to bear in common objectives where possible.

For any technology solution to be successful, we MUST create appropriate incentives for users. If actors seeking more integrity in the system must have the right incentives to take up the right technology, bad actors may be increasingly excluded from markets, thereby diminishing IUU and corruption. Most importantly, no technology or policy will work to detect corruption if there is not the political and institutional will to take action against it.

What are the main challenges to traceability in terms of capacity to utilize the data that traceability systems and technology are generating?

Bubba: Capacity exists globally, but not necessarily with individual countries. In the developed world there is capacity, but not always the willingness to use it. But in less developed countries there are major limitations on bandwidth and infrastructure.

Rashid: 80 percent of the IUU fishing takes place in the global south, often by vessels from developed countries. For these countries there are not just shortages of resources and technology; there are also concerns about what this all means for their independence and sovereignty.

François: Sometimes it is just as simple as using the tools we already have. The use of vessel management systems (VMS) has been mandatory in the EU for 8 years, but only 42 percent of large vessels comply. Why?

Is there any outside oversight of traceability statistics?

François: The data is only as good as the person who enters it, but there are also certification schemes that require third party verification.

Do we need governments to step in because of the collective action problem?

Rashid: Yes, indeed, we need a strong regulatory system, because fish is the most globally traded food product. and the ocean is global. But this regulatory system can be supported through technology.

François: Yes, the market will only work with international support. The role of governments is very important. For instance, the Port State Measures Agreement implemented by multiples countries. Including the US and the European Union, allows ports to block entry to ships suspected of engaging in IUU fishing.

What role is there for consumers? Journalists?

Bubba: The role of consumers is very important because they can drive market preference through their informed purchases. Tools are available that let consumers scan bar or QR codes while shopping, but they are still in their infancy, require active participation, and are only used by a relatively small segment of society. Additionally, we are not far from having apps that use passive detection and push notifications, for instance automatically notifying restaurant patrons about what menu items are sustainable. At the moment the information available it is not always reliable or granular enough to fully inform consumers, but it is coming.

François: This technology only works for people who care, but many people don’t care enough to use it. How do you get more people to pay for this additional benefit? And be willing to pay a higher price?

Rashid: Journalists can play a crucial role in informing the public and providing information. They have great power.

Are there any good models or best practices emerging that could guide efforts to harness trends in a positive direction?

Bubba: Iceland is in the lead. They manage their fisheries carefully and publicly post an incredible amount of information on their fisheries on a daily basis. All the information is captured electronically, which creates much more transparency at the waterline and through the supply chain to the point of first processing.

Rashid: We must also encourage interstate cooperation. There are 16 states fishing in the Gulf of Guinea, for example, and each behaves as if it were the only one. They need to work together and share information and technology. Three African countries who have made a start at working together are South Africa, Angola and Namibia.

What body of research would move the needle to fight corruption in this space?

Rashid: We need to focus more research on the global south. How can we improve the lives of fishing communities in a sustainable way, and how do we find alternative livelihoods for them, because fisheries won’t sustain them all?

What technology tool would make the biggest difference?

François: The internet of things (networking capability allowing information to be sent from all devices). If all the data were brought together, we would have a world where we could see who fished exactly where, and the dark markets would shrink.

Five years from now, what kind of tools and integration will we have?

Bubba: I’m reasonably confident that we will have significant progress toward fully operable electronic systems across the majority of the large industrial fleets in the next five years. The end goal is to also have fully interoperable systems, which will create unprecedented transparency and accountability among the large fleets. The small, artisanal fleets will be more challenging, but those challenges are not insurmountable. We may not get all the way there in five years, but we should make serious progress in that direction.