Winner | Asian Digital Media Awards 2020

For sustainable global fisheries, watchdogs zone in on onshore beneficial owners

Onshore owners of global fishing vessels have benefited from the illegal activities their crews practice, yet remain largely untouched by law enforcement.

When the STS-50 was seized in Indonesian waters for illegal fishing in April 2018, it became the poster child for global efforts to reveal the true identity behind vessel ownership.

The STS-50 had gone by other names in the past: Sea Breeze, Andrey Dolgov, STD No. 2, and Aida. Officially stateless, it had managed to evade authorities by flying eight different flags, including those of Sierra Leone, Togo, Cambodia, the South Korea, Japan, Micronesia, and Namibia. It was under one of those guises that it had previously been detained by Chinese authorities, only to get away. It was later seized again, in Mozambique, but slipped away from there, too.

Flying under different flags is one of myriad practices that many distant-water fishing vessels, like the STS-50, use to obscure their true identity and to support their illegal activities at sea. Distant-water fishing vessels have also been known to do other tricks, such as painting over the boat’s name without reporting, or naming fake shareholders, to confuse law enforcement and avoid punishment.

They catch economically valuable fish in unsustainable amounts and highly endangered marine species in other countries’ territorial waters or the unregulated high seas. In many cases, other crimes such as modern slavery also occur aboard these vessels.

But observers say the current enforcement and regulatory approaches to fisheries crimes have largely targeted the at-sea activity. While that’s important, a growing number of groups say bringing justice to the true funders and beneficiaries of these shady vessels may prove more efficient in rooting out illegal fishing.

“If you look at the highest risk actors out, very few of them are flagged, the vessels, very few of them are flagged with the company established where the owner is,” Duncan Copeland, executive director of Norway-based foundation Trygg Mat Tracking (TMT), told Mongabay.

“Most of them now are starting to use various companies that are actually shell companies, joint ventures,” he added.

The STS-50’s entry in Lloyd’s List Intelligence, the Facebook for commercial ships, features a nebulous web of companies, some registered in offshore tax havens, whose ownership is virtually impossible to determine. The list identifies Marine Fisheries Corporation Company Ltd. as the registered owner and Jiho Shipping Company Limited as the beneficial owner. Other firms it was previously registered to: Red Star Company Ltd., Dongwon Industries Company Ltd., STD Fisheries Company Ltd., and Suntai International Fishing Company.

Accountability for the STS-50’s illegal fishing activities went no further than its Russian captain, who was fined less than $14,000 by an Indonesian court. But the inability to go after the ultimate owners and operators of the vessel (and others engaged in illegal, unreported and unregulated, or IUU, fishing) irked authorities in Indonesia.

From the perspective of capturing violators, it’s already more taxing for law enforcers to deal with the constantly moving illegal fishers than a plantation or mining company. However, many of the enforcement and regulatory approaches to illegal fishing still prioritise controlling the at-sea activity of fishing vessels.

“So, whereas the extractive industry sector has become aware of the need to identify beneficial owners decades ago, it is only recently that similar thinking has reached the fisheries sector,” Steve Trent, executive director of UK-based NGO Environmental Justice Foundation (EJF), said in an email.

In the last decade, a growing number of international NGOs have worked in parallel to map out and highlight the onshore networks that fund and benefit from illegal fishing vessels around the world. They compile public and paid-for data, confidential information from various sources, field investigations and human intelligence, to connect the dots between the people sailing the vessels to those ultimately in charge.

“If you look at the big actors involved in illegal fishing operations, you can count the countries all on two hands, and the really big ones probably on one, and that probably matches exactly where beneficial owners are sitting as well,” TMT’s Copeland said.

Established in 2014, TMT has been developing its Fisheries Analytical Capacity Tool (FACT). This allows the group’s analysts to search across the global fleet to identify vessels, including the beneficial owners, insurers and charters, and then aggregate that information.

Copeland said companies from the world’s big fishing jurisdictions — such as Taiwan, China, Spain and Russia — use corporate schemes to obfuscate their ultimate ownership, such as establishing shell firms, joint ventures, and sailing their boats under a different flag from their home countries. These companies also falsify corporate and vessel information to get away from previous sanctions.

In some countries, fishing companies say data protection laws shield them from having their names attached to specific vessels in the public space, and that, therefore, beneficial ownership information should not fall in the public domain.

EJF says opaque ownership arrangements in the industrial fishing sector are impeding efforts to tackle illegal fishing and securing sustainable fisheries. In 2015, the group kicked off an investigation into the fishing sector in Ghana, which an important small-scale fleet, but also the largest domestic-flagged industrial trawl fleet in the region. West Africa is also one of the regions with the highest levels of illegal fishing, estimated to account for 37 per cent of all catch.

EJF found that enforcement actions were failing to achieve the needed results, namely the application of sanctions adequate in severity to deter future offenders. Fisheries enforcement has traditionally targeted the captains and, where possible, the registered owners of fishing vessels. But new foreign vessels continued to enter Ghana in spite of a moratorium on the issuance of new licenses to address severe depletion of stocks.

Years of investigation by EJF and its local and global partners revealed in a 2018 report the extent of Chinese involvement in Ghana’s fisheries in spite of a ban on foreign ownership and control of trawl vessels fishing under the Ghanaian flag. The group also discovered high-level political connections in the sector. In another report, EJF identified some of the networks that linked illegal fisheries practices in Ghana to the seafood trade in European markets.

“There is a critical need to expose the foreign and local networks that are perpetuating unsustainable and illegal practices and to hold them to account,” EJF’s Trent said. “In the long run, failing to hold to account the recipients of profits prevents the dismantling of networks behind illegal fishing operations.”

The STS-50 had used gillnets to target Antarctic toothfish (Dissostichus mawsoni), which plays a crucial role in the Southern Ocean ecosystem. Fishing for the species, often marketed as Chilean seabass, is regulated by the Convention for the Conservation of Antarctic Marine Living Resources. which bans gillnetting and imposes strict rules on fish caught in the Southern Ocean. Gillnets are described by Australia as a huge threat to “almost all marine life.”

The illegal global marine capture fisheries is estimated to be the third most lucrative natural resource crime, following illegal logging and mining. Up to $17.2 billion in gross revenues annually are redirected out of the global legitimate market through illicit trade, according to a 2020 study. The study also highlights that fisheries crimes extend beyond IUU fishing to include drug and gun trafficking, slavery at sea, money laundering, and corruption. They are transnationally organised, and occur throughout the entire fisheries value chain.

“People are pushing toward understanding that the vessels are just a glimpse of the issue and that targeting those who are operating maybe 200 more vessels and might be complicit in other activities, that’s what’s going to start changing the system,” Austin Brush, an analyst at U.S.-based research nonprofit C4ADS, told Mongabay.

When C4ADS began its initial work on IUU fishing in 2017, it realized that focusing on taking out individual fishing vessels had little effect on the bigger picture. So it decided to work on tying illegal activity at sea to onshore networks. The group applied a methodology it had previously used to investigate merchant vessels involved in illicit ship-to-ship transfers to evade sanctions.

Once C4ADS knew the methodology was applicable to the fishing industry, it expanded into large-scale application to investigations around the world to understand trends and typologies. It also applied it to large-scale fleet ownership analysis with the large-scale tuna purse seiner fleet, in order to see if the investigative methodology could be applied to a wider and more comprehensive fleet due diligence model.

“We found that we’re pretty successful in mapping out three to four layers of ownership behind that, and that includes identifying shareholders as companies, shareholders as individuals, management and other connections through identifiers such as phone numbers, shared addresses, shared email addresses,” Brush said.

In 2019, C4ADS published its report giving a global overview of onshore networks behind IUU fishing. It also aims to launch Triton, a fishing transparency portal that allows regulators, enforcement agencies and civil societies to explore ultimate beneficial ownership data behind the world’s industrial fishing fleets.

“I think ultimately to be able to have a fishing industry that’s functional and that is sustainable, you have to be able to tie up the activity to the onshore people that are responsible for managing that activity and also who ultimately profit from it,” Mary Utermohlen, program director C4ADS, told Mongabay.

“Without that, there’s not going to be any accountability in the fishing industry. We’ll never get to where we need to be in terms of sustainability and protecting our fishing stocks around the world,” Utermohlen added.

But when it comes to pushing for greater transparency in the global fishing industry, Copeland of TMT said this should mean having more transparency not only into who is licensed and authorised where, but also into where the vessels are operating, the ownership structure, and the access agreements.

He also highlighted the importance of countries having laws that would allow their nationals to be investigated for illegal fishing and associated crimes, regardless of their location in the world and the flag or the vessel under which they operate.

“And until you have this responsibility being taken by the governments themselves, not only for their boats but for their nationals, then we’ve got a big gap in the enforcement picture,” Copeland said.

Eradicating fisheries crimes eventually requires a broad portfolio of measures, from increased monitoring to strengthened corporate due diligence, and with full transparency throughout the seafood supply chains at the center of it, experts say.

Pressure coming from consumers demanding sustainably and ethically caught seafood is key in pushing more governments around the world to make concerted efforts in implementing transparency mechanisms designed to lift the lid on damaging fishing practices.

“Key markets such as the European Union and the United States should continue to leverage their market influence to encourage seafood exporting nations to further elevate their seafood standards so that product can be both sustainable and ethically sourced,” EJF’s Trent said.

This story was published with permission from Mongabay.com.

Thanks for reading to the end of this story!

We would be grateful if you would consider joining as a member of The EB Circle. This helps to keep our stories and resources free for all, and it also supports independent journalism dedicated to sustainable development. For a small donation of S$60 a year, your help would make such a big difference.

Find out more and join The EB Circle

blog comments powered by Disqus

Most popular

View all news

Industry Spotlight

View all

Feature Series

View all
Asia Pacific's Hub For Collaboration On Sustainable Development
An Eco-Business initiative
The SDG Co