Fishy Business: The Damage Done by Industrial Fishing in Developing Countries
A new study estimates the economic impact on developing countries of industrial fishing methods by vessels from distant countries operating in foreign waters.
Every year, industrial fishing vessels unintentionally capture 38 million tonnes of sea creatures, which get discarded into the water dead or dying; this represents around 40% of the global fish catch and includes 300,000 small whales and dolphins and 250,000 endangered loggerhead turtles. Apart from the direct damage to biodiversity, this constitutes an economic loss of opportunity. In a new report by the ODI – Overseas evelopment Institute, a global affairs think tank—we estimate the economic impact on developing countries of allowing companies that indulge in similar and other irregular practices to operate in their waters.
The list is long: bycatch and incidental fishing, lack of transparency, underreporting catch tonnage, participation in the saiko barter system, corruption, fishing without a license, exceeding quotas, human rights abuses, and shark finning, among others. These actions do not necessarily entail illegal, irregular, or unreported (IUU) fishing; however, they can be exceedingly harmful. Why, then, allow such companies in your waters?
Why Ecuador, Peru, Senegal, Ghana, and the Philippines
In the new ODI report, we assess the impact of companies previously engaged in wrongdoing or unsustainable practices on Ecuador, Peru, Senegal, Ghana, and the Philippines. We estimate it in human terms by appraising the potential effects on the economy, jobs, and well-being of citizens in these five countries. We have focused on Peru, Ecuador, Senegal, Ghana, and the Philippines because these are some of the most vulnerable countries to overfishing, but also because their waters show a significant presence of foreign distant-water fishing (DWF) fleets. Distant-water fishing refers, in very general terms, to fishing conducted by vessels from one country in the waters of another country or international waters.
DWF vessels’ state-of-the-art technologies allow them to fish non-stop and travel to remote areas, often competing unfairly with smaller domestic vessels. Unrestrained DWF has been associated with overfishing, IUU fishing, and the depletion of fish stocks at an unsustainable rate. This not only affects the availability of resources for local fishermen but also disrupts the ecological balance of the marine ecosystem.
For example, in Senegal and Ghana, fish provide more than 60% of the animal protein needed for a healthy diet. In some isolated coastal communities, almost all protein comes from fish. Peru’s fish production and exports have been increasing consistently, and their contribution to the economy is enormous. Meanwhile, in Senegal, Ghana,and the Philippines, to different degrees,many communities rely on fish and fishing activities for livelihoods, and fisheries make a significant contribution to their economic development.
How we identified the companies’ presence in these waters
We combined different types of data –fisheries data and satellite data— with maps, deep learning tools, and economic and poverty indicators to first work out what kinds of DWF vessels and domestic vessels were present in these waters. Flag registration offered the landscape of domestic fleets, while satellite data revealed the presence of foreign fleets in these waters. We looked at more than fifty thousand vessels. To determine the type of vessels that were categorized as multipurpose or of an unknown type, we used deep learning algorithms to identify fishing maneuvers that would indicate the type of vessel.
Then, we identified the companies owning or operating these vessels and, one by one, investigated whether they have been reported as indulging in wrongdoing or unsustainable practices before using around 30 sources of trustworthy information, from the US Treasury Department to NGOs and investigative journalists. When the information was controversial, we verified it with alternative sources. Finally, we assessed the cost of working with the firms identified as previously engaged in wrongdoing, illegal, or unsustainable practices. We calculated this loss of opportunity’s impact on the economy, jobs, and poverty.
The investigation does not imply that all ships included in the estimates are currently engaged in IUU fishing, nor does it suggest that these companies have committed significant violations during the study period. Nevertheless, this analysis provides an in-depth look at the economic consequences stemming from the activities of these companies. It serves as a foundation for advocating policy and enforcement reforms that could benefit the economies, employment, and overall welfare of the five nations in question.
Economic, Employment, and Poverty Impacts
The economic ramifications of unsustainable fishing practices by different corporations are profound. Collectively, the fishing operations could represent a missed economic opportunity equivalent to 0.26% of the combined GDP of the five countries, affecting 30,0174 jobs and contributing to 142,192 individuals living in poverty. This loss was not distributed evenly across the five countries. For example, in Senegal, the impact of these companies’ fishing activities on the economy amounts to around a significant 0.2% loss in the national GDP. In Ghana, the impact was estimated to be an additional 27,000 individuals living in poverty.
When vessels, often backed by foreign entities but not always, engage in overfishing, they significantly deplete fish stocks and jeopardize the sustainability of local fishing industries. This depletion directly affects the revenue streams of the countries involved, impacting local communities that rely on fishing as a primary source of income, as well as their futures.
The depletion of fish stocks poses a direct threat to employment within the local fishing sectors of the affected countries. Thousands of jobs are at risk, spanning from direct fishing activities to ancillary industries such as fish processing and marketing. This not only threatens individual livelihoods but also exacerbates poverty levels among coastal communities, highlighting the human cost of unsustainable fishing practices.
Unsustainable fishing practices contribute significantly to the destruction of marine habitats, including the depletion of fish stocks. This environmental degradation poses severe risks and undermines crucial ecosystem services, such as food security and protection against natural disasters.
Examples of Wrongdoing and Unsustainable Practices
A handful of conglomerates –19 companies – owning or operating 657 vessels in these waters were found to be previously involved in unsustainable practices.
For example, lost or abandoned fishing gear continues to trap and kill marine life in a phenomenon known as ghost fishing. Discarded fishing gear, like drifting fish aggregating devices (FADs), can get stuck on coral reefs and other sensitive habitats and continue capturing fish and other animals. This not only results in wasteful loss of marine life but also contributes to the degradation of marine ecosystems. This is a problem in Galapagos, Ecuador, for example.
Fish Aggregating Devices (FADs) are objects used to attract ocean-going pelagic fish such as tuna; while offering benefits for fishery management and operations, they also pose risks to marine ecosystems and the sustainability of fish stocks. They can be anchored to the ocean floor in coastal areas or left to drift in the open ocean. The use of FADs has increased significantly since the 1990s, leading to higher bycatch rates of non-target species, including sharks and billfish, which are more vulnerable due to their life histories.
The ecological toll of FADs is considerable; they alter the natural behaviors of fish, leading to potential overfishing of juvenile tuna and other species that congregate around these devices. Moreover, FADs can impact coastal ecosystems when they become detached and wash up on reefs or beaches. The materials used in FADs, such as bamboo, can also introduce foreign elements into marine environments, further disrupting local ecosystems.
According to industry standards, incidental fishing cannot exceed 5% of a vessel’s total catch; it refers to the catch portion that was unintentionally caught but retained. This is an issue for some domestic companies in Peru, driven by the huge fishmeal industry. Incidental catch should be distinguished from discards (accidental catch caught and then returned to the sea, mostly dead or dying) and bycatch (including non-targeted species caught alongside the targeted species).
Initially, the saiko trade involved industrial fishing vessels exchanging their unwanted catch for food and livestock provided by canoes at sea, mainly in Ghana. This system has since been transformed, with industrial vessels now intentionally catching species for the saiko trade, which disrupts local markets and contributes to the trade of juvenile fish. Despite the Ghanaian government’s ban on the saiko trade in late 2021 due to its illegality under national law, investigations by the Environmental Justice Foundation (EJF) have revealed that the practice persists and has become more overt. EJF’s research has tracked significant quantities of small pelagic and juvenile demersal fish being packaged and sold at Ghana’s major industrial port, which are then distributed throughout the country.
Finning refers to the practice of cutting off the fins of sharks and discarding the rest of their bodies back into the ocean. Again, this issue has been spotted in Peru. This often occurs while the sharks are still alive, leaving them unable to swim properly, which typically results in suffocation, death from predators, or other fatal outcomes. Despite being illegal in many countries, finning is driven by the high value of shark fins, primarily for use in shark fin soup, a delicacy in some cultures.
Allowing access to fishing grounds and port infrastructures to vessels with a prior record of wrongdoing raises the danger of backsliding on sustainable fishing commitments. It signifies, too, a missed opportunity for the long-term development and well-being of local fishing communities in these countries.
Other Findings: The Presence of Foreign Fleets
Surprisingly, the largest fleets in the countries under study are not necessarily the fleets with vessels flagged in those same countries. The largest fishing nations are Ecuador (because of its large domestic artisanal fleet), followed by China, Peru, Spain, Japan, Panama, and Taiwan.
In fact, a total of 192 vessels were found to be connected to Chinese interests but flagged to any of the five countries except for Peru. This incorporation of foreign vessels into domestic fleets raises questions, as it can generate market distortions, encourage the excess of sustainable catch limits, and threaten food security and livelihoods.
The report’s analysis of vessels’ fishing maneuvers in these Exclusive Economic Zones (EEZs) shows intense competition between domestic and foreign fleets of the same fishing type. Foreign DWF vessels’ technical capacity to fish non-stop and travel to remote areas often awards them a competitive advantage.
Recommendations and Solutions
This research underlines for policymakers the impact of ships with a history of Unsustainable practices on development, and we also hope that it really helps build a business case for reform, supporting artisanal fishers and other types of sustainable fishing. The report advocates for a comprehensive approach to address the challenges posed by unsustainable fishing practices. Key recommendations include:
- Strengthening Regulatory Frameworks: Enhancing national and international regulatory frameworks to prevent overfishing and ensure sustainable fishing practices.
- Improving Monitoring and Enforcement: Implementing robust monitoring and enforcement mechanisms to deter IUU fishing and ensure compliance with fishing regulations.
- Promoting Sustainable Fishing: Encouraging the adoption of sustainable fishing practices among DWFs to protect marine biodiversity and ensure the long-term viability of fish stocks.
- International Cooperation: Fostering international cooperation to address the transboundary nature of marine ecosystems and the global scale of the fishing industry.
The “Fishy Business” report underscores the urgent need to address the detrimental impacts of unsustainable fishing practices by DWFs on the economies, employment, and ecological well-being of Ecuador, Ghana, Peru, the Philippines, and Senegal. The report’s findings highlight the broader implications for global marine biodiversity and the livelihoods of millions dependent on sustainable fishing industries. It calls for concerted efforts at both national and international levels to ensure the sustainability of the world’s fisheries and the well-being of coastal communities worldwide.
