ISSUE SUMMARY N0.1 Underwriting Overfishing 9/99

Even as fish stocks dwindle, some of the world’s richest nations are paying billions of dollars to keep flagging fishing industries afloat. The result: a growing series of economic, social, and environmental crises around the world.

It’s well documented that the world’s oceans are being Growing Fleets, Declining Stocks Today’s worldwide overfished. And it’s not news that one of the culprits In 1998, the United Nations Food and Agricultural fishing fleet is is the continuing failure of many maritime nations Organization (FAO) reported, according to 1996 estimated to be to impose proper limits on fishing within national figures, that at least 60% of the world’s most valuable borders and beyond. But there’s a “hidden” factor up to two and a fish species are either overfished or fished to the limit. driving overfishing of which few are aware: massive half times the capacity Yet during that same period, the world marine catch government payments to the fishing industry. reached an all time high of 87 million tonnes of fish. needed to sustainably Estimated at tens of billions of dollars per year, How can that be? these subsidies are equivalent to roughly 20% to 25% fish the oceans. of the value of the landed fish catch worldwide. This The answer: Even as stocks of valuable fish have scale of subsidization is a huge incentive for companies shrunk, the size of the world’s fishing fleets has to expand high-tech fishing fleets and to overfish. exploded. Fishermen are using bigger and faster boats, Today’s global fishing fleet is estimated to be up to with sophisticated devices to locate fish far below the surface. Taken all together, larger and more efficient fleets have dramatically raised the world’s fishing capacity, often leading to excess fishing effort, which FACT puts unacceptable pressure on fish stocks. At least 60 percent of

WWF/J W LaTourrette All of this makes as little economic sense as it does the world’s 200 most environmental sense. As one stock after another is valuable fish species fished to “commercial extinction,” fishermen are are either overfished deprived of valuable sources of income. And with or fished to the limit

Threatened swordfish are one of the victims fish more difficult to find, the average fisherman of subsidized fishing. must work harder to catch less. In a rational business sector, these kinds of declining returns would lead to shrinking investments and shrinking capacity. But two and a half times the capacity needed to sustainably global fishing capacity is still too high, and is growing fish the oceans. With a figure like that, government fast in some key fisheries. In particular previously support to the fishing industry urgently needs to be unexploited deep-ocean fisheries are increasingly reduced and reformed. To address the problem, WWF under pressure. Government subsidies that – which has been working worldwide to conserve cause overcapacity help make this economic marine resources for more than 20 years – has made and environmental folly possible. the reduction of harmful fisheries subsidies a core element of its ongoing Endangered Seas Campaign.

Endangered Seas Campaign WWF/Elizabeth Kemf WWF-Canon/Michel Gunther

The ultimate solution to the global fisheries crisis Better management alone will Impacts on is better management of national and international not solve the problem as long as the Marine fisheries, using measures such as setting reasonable there are irrational economic Environment catch limits and limits on the use of destructive gear. But better management alone will not solve the incentives to increase fishing. The environmental impacts problem as long as there are irrational economic of destructive fishing aren’t incentives to increase fishing. Some major fisheries limited to the target fish remain outside of current management plans, many WWF alone. Longline boats that of which are inadequate or insufficiently enforced. catch species such as tuna At the close of the 20th century, the world’s oceans also hook albatrosses, sharks, are rife with illegal and uncontrolled fishing. For and sea turtles in large example, illegal hunting in the Southern Ocean is numbers. Bottom trawlers driving the Patagonian toothfish, popular in today’s literally scrape the ocean upscale restaurants, towards extinction. It’s time floor, damaging the habitats to give management efforts a hand by cutting the of species such as corals, destructive subsidies that keep so many unnecessary sponges, and rays. In the fishing boats afloat. Australian authorities caught this subsidized Southern North Sea, bottom boat pirate fishing for the increasingly trawlers drag the sea bed up Fishing for Funds sought-after Patagonian toothfish. to three or four times per year, giving animals and Governments have a long list of ways to subsidize plants very little time to the fishing industry. From tax breaks to direct cash recover before it is scoured payments, from income supports to free port facilities, The variety of ways governments again, changing the marine from cheap fuel to reduced insurance, the variety of subsidize fishing – from tax environment forever. subsidies is a bureaucrat’s dream. breaks to cheap fuel – is a Governments can’t be blamed for wanting to bureaucrat’s dream. encourage investment in a sector that helps provide food security and that often offers jobs in struggling coastal regions. And some developing countries have a legitimate need to expand their fishing industry, even as fishing capacity worldwide needs to shrink. Fishery subsidies can also play an important role in promoting the adoption of environmentally friendly fishing techniques, such as helping fishermen adapt to new bans on driftnets, or supporting small-scale environmentally sustainable fishing. In fact, when properly designed, government supports can help reduce overcapacity. Fishing subsidies have far reaching consequences, affecting artisanal fishers from Mauritania to Malaysia, such as these counting their catch.

In short, not all fisheries And when it comes to employment, subsidies subsidies are bad have a dismal record and an even bleaker future. By encouraging overfishing and dependence on But most are far from good. A recent World Bank public support, subsidy regimes can produce very study suggests that at most 5% of all fisheries subsidies unsustainable results. In the case of Newfoundland, have a positive environmental aim. And even subsidies generations of subsidized fishermen have ended up designed to help fleets shrink – such as ‘vessel seeing one of the world’s most valuable and productive buy-back’ or decommissioning programmes – fisheries, North Atlantic cod, completely crash, have often failed to achieve their goals. In several resulting in massive and long-lasting unemployment. cases, buy-back programmes have actually provided funds that wind up being used for new technologies Many maritime powers, such as Europe, often export their overcapacity that increase overall capacity. In other cases, capacity to foreign waters. reductions have been achieved in one nation’s waters by simply exporting capacity to foreign fishing grounds – a phenomenon that has played a significant role in the ‘serial depletion’ of commercial fisheries. A recent World Bank study suggests that at most 5% of all fisheries subsidies have a positive environmental aim. WWF/Catherine Cheung

“Fisheries subsidies are widespread, trade distorting, and undermine the sustainable use of fish resources.” World Trade Organization

The Rich Get Richer WWF’s Endangered Seas WWF-Canon/John Newby Campaign is committed Where subsidies do lead to short-term benefits, to reducing harmful the goods often go to a select few. In many cases, government subsidies to subsidies – like fish – go to the fishermen (or, to be the fisheries sector. Since more precise, the boat owners) who know best how working with the UN to catch them. The largest companies, with the money Environment Program in and sophistication to deal with the politics and 1997 to sponsor the first bureaucracies surrounding subsidies programmes, international conference on have the edge. In Europe, some of the biggest the link between subsidies payments go to Spanish companies that are among and fisheries depletion, WWF the world’s leading fishing conglomerates, while poor has helped lead the way on coastal fishing communities in countries such as this important issue. Greece, may see very little of the EU money destined to support European fisheries. And when reality hits, When you do the arithmetic, and fish stocks crash or capacity must be cut, it’s the many fisheries subsidies create a no-win situation. hired hands, not the big boat owners, who usually Staying alive: Fishers’ livelihoods depend on end up in the unemployment line. responsible fisheries management. They threaten future fisheries, the long-term Internationally, the inequities are harsher still. health of our marine

WWF The world’s largest economies dole out the largest environment, and the subsidies. Often subsidies are used to support fishing very people they are operations in the waters of other countries. For The world’s largest economies intended to help most, example, the European Union uses public money dole out the largest subsidies. the fishermen. Through to buy access for it’s overlarge fleet to the rich fishing work at the international waters of developing West African states, whose fishing level and in key countries, capacity remains underdeveloped. For example, EU WWF is determined to make subsidies enable large European shrimp trawlers to the reform of fisheries fish the waters of Guinea-Bissau by underwriting up subsidies a “win-win” to 46% of their operation – allowing them to stay in proposition for our marine business even after actual profits from catches alone ecosystem and for those are zero. whose lives depend on Lopsided subsidies distribution also distorts fishing. The time has come international trade in fish products, skews prices, to stop underwriting and affects market access and production patterns. overfishing. It’s one reason why the World Trade Organization has begun to look at fisheries subsidies. The normally conservative WTO Secretariat has stated, “Fisheries subsidies are widespread, trade distorting, and undermine the sustainable use of fish resources.” WWF

Referees on the Subsidies Playing Field

APEC, the Asia-Pacific trade forum, began looking at fisheries subsidies in 1997, during broader sectoral trade talks. But APEC’s main focus has been on promoting trade

in fish products – despite Where Does the Money Go? formal APEC statements that WWF/Lesa Griffith conservation of fish stocks is Good data on fisheries subsidies is scarce. That’s why an equally important goal. even the estimated amounts of subsidies vary by tens of billions of dollars. In most cases, governments The UN Food and Agriculture themselves don’t know where many of their subsidies Organization (FAO) has a end up, or they don’t report it publicly, or both. broad mandate to deal In 1998, WWF found that more than 90% of fisheries with international fisheries subsidies violate current WTO rules that require problems. In February 1999, their detailed disclosure. For example, according to FAO members adopted a a World Bank report in 1996, Japan is conservatively Lanzarote, Canary Islands – voluntary ‘International estimated to have granted more than three-quarters WWF’s Ezequiel Navio Vasseur discusses Plan of Action’ on fishing decreasing fish catches with local artisinal of a billion dollars in fisheries subsidies. However, fisherman. capacity which urges Japan’s WTO notification for the same year reveals governments to examine only two subsidies – one for $7 million, and another fishery subsidies, and to for which no totals are offered. The United States reduce those contributing has similarly failed to report the bulk of its subsidies. Japan is conservatively estimated to overcapacity. While the EU appears more fully in compliance, to have granted more than three- The World Trade hundreds of millions of dollars in annual EU fisheries quarters of a billion dollars in Organization (WTO) supports still aren’t adequately disclosed. fisheries subsidies in 1996 that puts some basic limits on This lack of transparency not only makes the subsidies subsidies that interfere should have been reported to effects hard to monitor, it invites incompetence and with international trade. abuse. In a 1998 report, for example, the European the WTO, but were not. But the existing rules Community’s Court of Auditors discovered cannot adequately deal widespread irregularities and multiple failures in with subsidies that cause the administration of the EU fisheries subsidies overfishing – and even rules regime, including miscalculation of payments, that simply require subsidies and frequent failure to verify recipients’ eligibility to be reported to the WTO requirements. While the EU is the only major are widely disregarded. subsidizer so far to take the step of conducting Fortunately, momentum is such a review, these problems are typical of massive, building for the WTO to take unmonitored subsidy regimes. a serious look at agreeing new fishery subsidies rules in the next few years. WWF Underwriting Overfishing

References

EC Court of Auditors, Special Report 18/98 Concerning the Community Measures to Encourage the Creation of Joint Enterprises in the Fisheries Sector, European Commission, 1998. The Road to Reform The Footprint of Distant Water Fleets on World Fisheries, WWF Fisheries subsidies are drawing growing attention. International, September 1998. Milazzo, Mateo, Subsidies in World Studies of fisheries subsidies and their impacts are Halting overfishing is key to safeguarding Fisheries: A Reexamination, World important marine ecosystems and their underway at the Organization for Economic Bank Technical Paper No. 406, World resources. Cooperation and Development (OECD), in APEC Bank, April 1998.

(the Pacific Rim trade forum), and within the EU. Subsidies and Depletion of World The FAO recently adopted a voluntary “plan of Fisheries: Case Studies, WWF International, September 1997. action” for the management of fishing capacity that At present, governments are continuing to provide The State of the World Fisheries and urges governments to assess the effects of subsidies billions of dollars in counterproductive subsidies to Aquaculture – 1998, UN Food and on their fleet capacity levels. And WTO action to the fishing sector, exacerbating overcapacity and Agriculture Organization, 1999. agree new standards on fisheries subsidies looks impeding the development of sustainable fishing Additional photo increasingly likely. practices. Just as is the case in so many of the world’s credits depleted fishing grounds – where less fishing is the Meanwhile, there are signs of progress in key Whale shark, page 2 key to achieving larger catches – reduced and reformed WWF subsidizing nations. Countries such as Iceland, New fisheries subsidies would be a significant step towards Fisher women, page 4 Zealand, and Norway have substantially cut back on a more sustainable and profitable industry. The time WWF/WTE public supports to their fishing industries. The EU to put a halt to subsidies that underwrite overfishing is reviewing some aspects of its’ subsidy policy, with is now. Printed on recycled paper some officials taking an increasingly critical stance. The US is looking at reforms, and is reportedly taking steps to improve its data collection and disclosure. To guarantee sustainable fisheries But while the wheels have started to turn in the search around the world, nations need for solutions to the fisheries subsidies problem, it is to reduce and reform fisheries just the beginning. To guarantee sustainable fisheries around the world, nations need to work in the subsidies that contribute to Endangered Seas Campaign following areas: overcapacity and overfishing. • Reduce and reform fisheries subsidies that contribute For more information, contact: to overcapacity and overfishing. WWF’s Endangered Seas Campaign • Cooperate, through bodies such as the FAO and 1250 24th Street, N.W. Washington, D.C. 20037, USA WTO, to create new international rules on the use Tel: 1-202-293-4800 and administration of fisheries subsidies. Fax: 1-202-293-9211 • Make available to the public the details of their Web: www.panda.org/endangeredseas/ subsidies - such as the amount, purpose, and recipients WWF’s International - in compliance with international rules and data Avenue du Mont Blanc 1196 Gland collection efforts. Switzerland Tel: 41 22 364 9028 Fax: 41 22 364 0526 E-mail: [email protected]