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Spreading the word on Pacific actions for sustainable ocean fisheries management

Tag: competition

Like Water and Oil: Fish as a Geostrategic Resource

Categories News, NewsPosted on 7 August 2018
Like Water and Oil: Fish as a Geostrategic Resource
A crewmember on a Chinese trawler uses a grapple hook in an apparent attempt to snag the towed acoustic array of the U.S. military Sealift Command ocean surveillance ship USNS Impeccable. March 2009. Source: U.S. Navy
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Republished from New Security Beat, 7 August 2018

 

Access to and competition over natural resources has been one of the most common triggers for conflict. Throughout the centuries, countries and communities have fought over productive agricultural land, trade routes, spices, textiles, opium, and oil, to name just a few. But the battle over one natural resource—fish—has long been overlooked. As trends in the global fish industry increasingly mirror the conflict-ridden oil sector, fish may become the newest addition to the list of resources driving geopolitical competition. There are five parallels between oil and fish that call for increasing the sustainability of the fishing industry, or we might find ourselves facing what U.S. Coast Guard Captain Jay Caputo has called “a global fish war.”

A Concentrated Supply

Nearly half of the world’s total oil production in 2017 came from just five countries, and nearly half of the world’s proven recoverable crude is in the Middle East. As populations grow and economies develop, the Organization of Petroleum Exporting Countries (OPEC) projects global demand for crude oil will increase by 15 percent by 2040. Global dependence and the need to secure supplies have driven countries to war; since 1973, oil is linked to between 25 and 50 percent of all interstate conflicts worldwide.

Similarly, roughly 60 percent of the world’s tuna is caught in one geographic region, the Western and Central Pacific Ocean. As such, the Pacific could be the Middle East of tuna, where hungry nations compete for the valuable resource. Conflict over fish can already be found in South and Northeast Asia, Central and South America, as well as in African waters.

A Tool for Political Power

From the Arab oil embargoes in the 1970s, to Russia shutting off gas supplies to its enemies in the 2010s, energy is increasing wielded as a geopolitical weapon. For example, Moscow used its “petro-power” to provide heavily subsidized energy to Ukraine when it was led by Russia-leaning President Kuchma. Under Western-friendly President Yushchenko, Russia disrupted supplies and imposed punitive price increases.

Decades of politics and posturing in the Arabian Gulf continue to focus on oil. Following the resurgence of disagreements between the United States and Iran over the latter’s nuclear program, the Trump Administration re-imposed sanctions and moved to end oil shipments from Iran. Last weekend, Iran conducted military exercises in the Strait of Hormuz, which carries an estimated 20 percent of the oil traded worldwide, to demonstrate its ability to block the critical waterway.

Similarly, as one of the world’s most valuable fish species, tuna’s concentration in the Pacific has made sovereignty of those waters, and access to those fish, extremely valuable. With 22 small island states and territories within the Western and Central Pacific region alone, overfishing and squabbling over access and fishing rights is common. Political control of the Western and Central Pacific Fisheries Commission (WCPFC), which was created via an international agreement to manage the region’s fisheries, is highly sought after, and equity among members is a constant concern.

China, a member of the WCPFC and the most fish-dependent country in the world, uses its fishing fleet, according to the Department of Defense, as a third arm of its navy. In its 2017 annual report to Congress on military developments in China, the Pentagon stated that “China is building a state-owned fishing fleet for its maritime militia force in the South China Sea.” By sending its fishing fleet into disputed waters, China can use those vessels as an excuse to deploy its Coast Guard cutters to defend the “helpless” fishing vessels. China has threatened war if any other nation, including the United States, attempts to bar them from the surrounding waters. It is not a stretch to think that the Chinese strategy of leading with its fishing fleet will be implemented in other rich fishing regions, like the Pacific.

A Finite Resource

While the global supply of proved oil reserves is projected to meet global demand through the middle of this century, oil is a finite fossil resource that cannot be replenished, which makes it unlikely that our dependence on oil can be sustained over the long term.  Similarly, while fish are technically a renewable resource, their future is precarious. Nearly 90 percent of the world’s fish stocks are fully exploited or overexploited, and some scientists estimate that in 30 years there may be little or no seafood available.

While fish production, largely driven by aquaculture, is expected to increase 17 percentby 2025, it won’t keep up with demand, which is projected to increase by 21 percent. At the same time, external forces like climate change are pressuring global fisheries. And while ramping up aquaculture could help address the global fish shortage, it is not necessarily sustainable and faces some serious challenges. While it is unlikely that we are down to the last fish, within a foreseeable future, wild-caught fish could become a thing of the past.

A Critical Commodity

Oil is the world’s most traded commodity and its primary fuel, supplying 33 percent of all of our energy. Furthermore, the strong global economy and growing world population are expected to increase the demand for oil in the coming years. Petrochemicals are integralin everything from lipstick to electronics to aspirin; oil byproducts are used in the production of plastics, lubricants, waxes, pesticides, and fertilizers. In 2015, the oil and gas industry supported 10.3 million jobs and contributed more than $1.3 trillion to the U.S. economy alone.

Similarly, one billion people currently depend on fish to meet their nutritional needs—and this number will grow as the population does, especially in developing parts of the world. Fish is the world’s most highly traded food commodity. In addition to the roughly 100 million tonnes that are consumed for food each year, fish also provide fish oil, glue, animal feed, and fertilizer, and play a growing role in biomedical research. Even without counting aquaculture, marine fisheries provide approximately 260 million jobs worldwide. If the sector collapses due to unsustainable and illegal fishing practices, it will have calamitous consequences for societies around the world.

A Growing Illicit Economy

While the value of crude oil production alone is a staggering $1.7 trillion, nearly $133 billion (or about 8 percent) ends up in the black market every year. The illegal petroleum trade undercuts business, undermines governments, and damages the environment. The perpetrators are increasingly connected to transnational organized-crime syndicates and terrorist organizations. For example, ISIS made as much as $3 million a day after it took control of oil production capacity in Syria and Iraq.

The seafood industry is significantly smaller, with nearly $150 billion in sales each year. But illegal, unreported, and unregulated (IUU) fishing is valued at up to $36 billion a year—or about 25 percent of the legal market. Like oil, transnational criminal organizations exploit fish to fund their other activities: Mexican drug cartels, for example, diversify their income by trafficking in the totoaba fish, whose swim bladders sell for $20,000 per kilogram.

In the highly elastic illicit market, fishing vessels are used to traffic illegal drugs, arms, and even humans. Criminals can leverage their existing assets, especially boats, to move goods illegally through well-established global supply chains. In 2016, the U.S. Navy confiscated 1,500 Kalashnikov rifles, 200 rocket-propelled grenade launchers, and 21 machine guns from a small fishing craft in the Arabian Sea smuggling arms from Iran to Yemen. The former U.S. commander of the Fifth Fleet, Vice Adm. Kevin M. Donegan, said “out-of-work fishermen”  were moving all sorts of illegal goods throughout the region. And the U.S. Coast Guard recently seized more than 17,000 pounds of cocaine, worth nearly $260 million, from four fishing boats off the coasts of Central and South America. As fish stocks continue to decline, fishermen will find it increasingly attractive to use their vessels to smuggle illegal goods.

Clearly, there are significant differences between oil and fish, and how nations and non-state actors leverage them as tools of economics and power. However, the gap is not as wide as policymakers and the public may think. Today, the United States spends very little—about $800-900 million depending how you count—on fisheries management and law enforcement. The U.S. military spends upwards of $60 billion per year to maintain a military presence in the Persian Gulf alone, in part to protect access to its oil resources. As the strategic value of fish continues to rise, the management and security of the fishing industry deserves more political attention and smarter policies to ensure a more sustainable and secure future.

 

Johan Bergenas is the Senior Director of Public Policy at Vulcan Inc, the organization led by Microsoft cofounder Paul G. Allen.

Author Johan Bergenas

Seven Fijian fishing companies benefit from Tuna Support Fund

Categories News, NewsPosted on 20 November 2017
Seven Fijian fishing companies benefit from Tuna Support Fund
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Republished from the Fiji Sun, 8 October 2017

By Selita Bolanavanua

 

Seven fishing companies benefited from the Tuna Support Fund (TSF) when Acting Prime Minister and Minister for Economy Aiyaz Sayed-Khaiyum distributed about $3.2 million to them on October 7.

The TSF was setup in 2014 to mainly provide funding assistance to fishing companies that are locally owned and also controlled. The fund was created to assist these companies to raise their financial capacity to compete with foreign fishing companies that receive large subsidies from foreign Governments. To start the fund, Mr Sayed-Khaiyum said six cent per litre of bunker fuel levy was imposed of which 4 cents was transferred to the TSF account.

The issue of distributing the funds went on for two years and they finally came up with a formula (See: Box). Mr Sayed-Khaiyum said it was critically important for people to understand that fishing companies faced a lot of competition.

“The fishing industry is getting very restrictive because fish stocks are no longer as much as it uses to be,” he said. Moreover, there are more companies competing, more foreign companies that received subsidies, which resulted in local companies finding it difficult to compete with them.

The fishing business was prone to a number of anomalies, wherein some of them were engaged in corruption or misrepresentation of facts or not necessarily providing the right information both to the Fishing Industry Association and to the Ministry of Fisheries, Mr. Sayed-Khaiyum said.

TUNA SUPPORT FUND RECIPIENTS

Felixstow Ltd.

Hangton Pacific Company Ltd

Hou Fisheries Ltd

Sea Quest Fiji Ltd

Solander Pacific Ltd

Solander Viti Ltd

The Fiji Fish Marketing Group Ltd

Funding solution

Trying to allocate the funds was a long process, mentioned Mr Sayed-Khaiyum. From the Government’s perspective, he said there was need to support local companies, especially when they operated in an environment which was not just competitive but was also sometimes detrimental to the security of the Fijian companies. “It’s a tough business,” he said and stated that in the South Pacific, Fiji was the only country with a domestic Tuna Industry.

Reacting to the initiative, the Fiji Fish Marketing Group Ltd executive chairman Grahame Southwick acknowledged the initiative from the Government. He said; “The funds might not solve all their problems but it gives the necessary support at this particular time when they really in need.

The industry is suffering from many aspects, some of it is local but many are foreign basis and is not within the control of Fiji.” The aid from the government was a relief for the local companies.

“This gives us a bit of breathing space. We are happy now; this will take us through to the next critical years as we try and solve other problems,” he added.

Fishing trouble

Mr Southwick explained how some of them with experience of over 30 years in the fishing business had travelled through the tough road and listing the two main problems faced by the industry. 

For the past 10-15 years, over fishing has been going on in the Pacific and within Fiji.

“The overfishing that is going on in the Pacific is devastating, the controls within Fiji waters are quite strong but it can be a little bit better,” he added.

This was because there were too many licenses offered within the Fiji group, which was within the powers of Fiji to fix and we working towards tying to fix that problem. The other issue, which was of concern, was the foreign fleet fishing around Fiji on our perimeters, which was not sustainable.

“Just too many boats fishing in the high seas surrounding us preventing fish from coming into Fiji,” he said.

“We can’t stop them from fishing. Before the situation can improve, the regional over fishing and the fleet has to be slashed by at least 50 per cent.

These are long term problems, and for us companies to get through the next five to 10 years, it is going to be extremely difficult,” added Mr Southwick.

He also felt that these were problems that were not solved easily or quickly, and needed a few years of recovery.

He commented that it was a matter of trying to retain the skills, market, captains, engineers, knowledge and everything in the phase of major loses by the industry.

“Some of these generations of the fishing companies are not going to be around to see the recovery.

“It is going to be a long time before private business people can look into fishing industries and say; ‘oh this is a good industry to invest in’.”

Way forward

The TSF has been a blessing for the local shipping companies in the fishing space. This support is necessary so that local companies can get through this period so that in 10 – 15 years time all is not lost.

“If the industry fails, we will lose all our skills and market. The Fishing Industry must survive,” stressed Mr Southwick.

“The training, skills, engineers, the captains, fishermen, processing workers has to be reserved for the next five to 10 years down the trail.

“It is very close to failing and if it fails now, there is no future for this industry,” he added.

At the same time, it was also important to ensure that the companies receiving the funds were compliant with various regulatory requirements. And were above board in their dealings. Mr Sayed-Khaiyum said that there are fishing companies that don’t necessarily do the right thing.

For number of years, a lot of fishing companies hid behind different companies to hide their shareholding.

For instance, he mentioned how some fishing companies had stolen letterheads and made representations on different letterheads to the Fishing Industries and to the Ministry of Fisheries.

It is for this reason that only companies that were genuinely impacted benefited from the TSF.

Author Selita Bolanavanua

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