PAYING THE PRICE SMall scale fishers and the world trade organization's negotiations on fisheries subsidies

What is the World Trade Organization and why is it negotiating about fisheries subsidies?

The World Trade Organization (WTO) is a global organisation that has established rules on global trade since 1995 for its 164 member countries. Often the rules promote ‘freeing’ trade from government actions like subsidies, trade taxes, regulation and requirements that is argued apparently distort global trade.

The issue of fisheries subsidies first arose in 2001, progressing slowly and then stalling for several years before being given new life with the Sustainable Development Goals that called for their conclusion by 2020. Proponents argue that fisheries subsidies make it possible for vessels to fish unsustainably or illegally and their removal would undermine this. There are many different interests in the talks including large commercial interests who want to protect their ability to subsidise while preventing others, even poorer countries and small subsidisers, from being able to do so.

What sort of subsidies do these talks apply to?

Currently the ‘scope’ of the agreement is for subsidies to “marine wild capture fish and fishing-related activities at sea”. This means that inland fisheries and aquaculture are currently excluded from negotiations. It defines fishing to include “searching for, attracting, locating, catching, taking or harvesting fish” or any activity that can be expected to result in those activities.

It also applies to “fishing-related activities” which includes the “landing, packaging, processing, transshipping or transporting of fish” and the “provisioning of personnel, fuel, gear and other supplies at sea”. It’s important that this is limited only to activities “at sea” as otherwise this can imply that any government support for assisting communities that want to land, package or process fish harvested wouldn’t be allowed. However even though it is in principle limited to coastal fishing, this latter part can affect inland fishing as well as many involve shared investments and activities.

How are these negotiations happening?

The negotiations are being conducted under three main areas and aim to eliminate or limit subsidies in each of these categories:

  • Illegal, Unreported and Unregulated (IUU) Fishing;
  • Overfished stocks; and
  • Overfishing and Overcapacity.

Small-scale fishers aren’t really responsible for the devastation of global fish stocks so why do the talks include small-scale fishers?

The negotiations span all subsidies to all fishers in principle under the three areas mentioned above. However there is a fight going on to secure exemptions for small fishers through 'Special and Differential Treatment'. Currently the exemptions for small-scale fishers applies to fishers who meet the criteria of being low income, resource-poor and undertake livelihood fishing and fishing related activities within the 12 nautical miles from the coastal baseline. Under the current proposals the exemptions for Overfishing and Overcapacity would be permanent for those fishers who meet all aspects of that criteria while the exemptions for subsidies for IUU fishing and Overfished Stocks would only apply for two years after which such subsidies would be considered illegal under the WTO.

But I’m a small-scale fisher who fishes beyond 12 nautical miles, what happens to me?

As of now, this means that you’re included in many of the subsidy bans being proposed in the agreement from the day it begins. So any bans on subsidies for fishing that could be determined as IUU, of stocks that are overfished or subsidies that increase your capacity could be prohibited. However the negotiations are not concluded yet and there may be space to expand the exemptions to a country’s Exclusive Economic Zone but this will require strong intervention by governments and fishing communities.

What is IUU fishing and who gets to determine it?

IUU stands for Illegal, Unreported and Unregulated fishing and is one of the main aims for banning subsidies in these talks. Currently only coastal states and Regional Fisheries Management Organisations (RFMOs) can make determinations on IUU fishing but the current proposal at the WTO expands this to include flag states for vessels with their flags.

The definitions of IUU fishing are currently being borrowed from the Food and Agriculture Organisation (FAO). Illegal fishing includes fishing without the permission of the country where the fishing is happening, against its laws and regulations or against the management measures of that country. Unreported is fishing that has not been reported or has been misreported to national authorities against the local laws or in areas of a regional management organisations looks after but misreported. Unregulated fishing essentially applies to fishing that goes against any conservation or management measures that a country has put in place.

What does this mean for Developing Countries who don't have the capacities in place to monitor all the fishing in their waters?

Currently the proposals say that each country shall have laws, regulations and administrative procedures in place to prevent IUU subsidies being granted when the agreement comes into force. Failure to have such procedures in place could leave the subsidy programs open to challenge by foreign governments in the WTO.

A lot of small-scale fishing in developing countries could be classed as ‘unreported’, largely due to the current limits of fisheries capacity and associated infrastructure. Even government mechanisms for registration may be limited. This means that many of the subsidy bans would apply to the actions of small-scale fishers. It is estimated that Indonesia's small-scale fisheries are 95% unreported which raises concerns about how the government will be able to ensure that reporting procedures for all small-scale fishing is implemented to prevent subsidy programs for small-scale fishers being banned.

This highlights the inadequate nature of the current exemptions for developing countries in the negotiations. The current 2 year transition period for developing countries to implement such reforms fails to acknowledge the realities of capacities and resources in these countries. While having catch levels reported will assist in management of resources approaching this goal through the threat of preventing subsidies to some of the most vulnerable communities won't support conservation or development.

How does this affect small-scale fishers including so-called IUU fishers in developing countries?

The current proposal for IUU fishing says that the subsidy bans shouldn’t apply to those fishers who meet the criteria of being low income, resource poor and livelihood fishing in developing or least developed countries for fishing within 12 nautical miles from the coastline and in the case of subsidies for IUU fishing that only applies for 2 years. Any small-scale fishers who undertake unregulated or unreported fishing beyond the 12 nautical mile area from the coastline will not be allowed to receive subsidies for such fishing.

In addition, once the proposed timeframe passes all subsidies for fishing that may be determined to be IUU fishing will be prohibited regardless of where the fishing takes place.

How does it involve ‘overfished stocks’ and what happens if our country doesn’t have timely data on fish stocks?

The current proposals say that a country can’t provide a subsidy for fishing regarding a fish stock that is deemed to be overfished. There is still an ongoing negotiation about what and who gets to determine whether or not a stock is classified as overfished. It is also unclear what it means to provide a subsidy for fishing ‘regarding’ a stock and how this applies to different types of fishing that capture multiple species.

This also raises a number of concerns for those countries, largely developing countries, which don’t have the capacity to monitor and manage their stocks. For those well-resourced developed countries this may mean that they are able to clearly determine stock levels and then proceed to continue subsidising. The developing countries who don’t have the domestic capacity to monitor and rely on regional fisheries management organisations will be placed at a disadvantage. It also raises the concern that the WTO, a body with no fisheries management experience may be making rulings about the management measures of a country.

What about small-scale fishers who don’t have access to all the most up-to-date information about fish-stock assessments?

Again there is a proposal that developing and least developed countries subsidies relating to overfished stocks are allowed provided it takes place within their territorial sea, i.e. the 12 nautical miles from the coastline, for a period of 2 years. For small-scale fishers who regularly fish or want to regularly fish beyond that area, this could be a problem especially if they don’t have access to up-to-date fishing data on the status of stocks and regularly catch multiple species.

What about subsidies for overfishing and overcapacity?

Currently there is a list of subsidies that aren’t allowed related to overfishing and overcapacity and these include subsidies for the construction, buying, modernising or upgrading of vessels; buying machines or equipment for vessels like fishing gear and engines, fish processing machinery, refrigerators or fish finding technology; for fuel, ice or bait; personnel costs, income support for operators; price support of fish caught; and for support at sea or operating losses.

So at least the big subsidisers won’t be able fund their fleets anymore?

Sadly it’s not that simple. Following the list of banned subsidies, there is a proposal that says the countries can still use those subsidies provided that their stocks are sustainably managed. This means that those big subsidisers who have the fisheries management capacity to measure fish stocks and subsidising capacity are able to keep on subsidising. Those countries that have already subsidised the building of their fleets can still receive subsidies if they are fishing in someone else's waters provided those stocks are sustainably managed. This also means that those who have the greatest historical responsibility for the depletion of global fish stocks – the big subsidisers with their large capacity – aren’t shouldering the burden of the bans.

What if our country doesn’t have the technical capacity to demonstrate the sustainability of fish stocks?

This is one of the big issues with the proposal mentioned above and places those countries who don’t have the capacity to manage (or measure) their fish, or rely on external agencies to support them with data and modelling, at a disadvantage. Big fishing nations like the EU will be able to provide accurate information about the status of all their stocks to the WTO allowing them to be able to continue subsidising as well as challenge any country that is subsidising fleets that they believe aren’t managing their stocks properly (or are seen as a commercial threat). For developing countries who rely on others to support them, this may only happen periodically and only on a number of targeted species hampering their ability to provide support to fishers who want to expand.

Further all of the flexibilities in the proposed agreement are reliant upon a country having fulfilled all of the notification requirements. Those currently include a wide range of data and information about the fishery stocks, conservation and management measures, fleets stocks, and vessels. Many developing countries already struggle to meet all the obligations for providing information to the WTO and making such things a requirement to utilise any flexibilities will result in the agreement being unworkable for many countries. This will result in flow on impacts to small-scale fishers and those communities who would rely on those flexibilities to continue to receive government support.

What if we have developmental aspirations and need government support?

For countries that want to develop greater domestic fishing capacity and small-scale fishers who are wanting to grow their industry, the provision of subsidies that enhance capacity are critical. There are some proposals on the table to ensure this. The first suggests a set of exceptions for capacity building subsidies and they apply to the entire exclusive economic zone (EEZ) for least-developed countries, and to within the 12 nautical mile territorial waters for developing countries, but for any developing country that meets a set criteria this will extend to the entire EEZ. The first criteria relates to Gross National Income per capita, annual share of global marine capture, engaging in distant water fishing and the contribution of agriculture, forestry and fishing to a country’s Gross Domestic Productivity.

The other alternative proposal has a more restrictive of criteria for exemptions. Firstly like above it has an exemption for least-developed countries and their fishing. For developing countries it applies a similar exemption for small-scale fishers fishing within the 12 nautical mile area, which initially was for a maximum of 7 years but the latest proposal has removed the time-constraint so it would be permanent for that type of fishing. It also has a clause for developing countries to expand this exemption to their entire EEZ but only for a maximum of 5 years (but can be extended annually if they catch less than 0.7% of global marine fish production, provide less than USD$25million in subsidies and other WTO members agree to allow it).

However, any proposal to ensure future growth and capacity for developing countries is facing major challenges in the negotiations from several developed countries. While expanding the exception to the exclusive economic zone for all developing and least-developed countries would best provide protection for small-scale fishers, this is being strongly resisted. This means that those most responsible for overfishing, and whom have already received their capacity building subsidies, are not being constrained but small-scale fishers who fish beyond 12 nautical miles are.

What does this imply for small-fishers in the future?

Losing important subsidies that support livelihoods and incomes for small fishers in developing and least developed countries will be challenging by itself. This will have an even worse impact on SSFs when coupled with the fact that many of these countries are reducing or removing (or already done) import duties on fish products under bilateral or regional Free Trade Agreements (FTAs).

These FTAs may also allow foreign fishing trawlers to access territorial waters under investment provisions. This means that SSF will have to compete with bigger producers, often from richer countries, even in their own markets without any support from their own governments. The way the negotiations are moving, it may be that these large producers are themselves continuing to receive subsidies. This may have the potential to wipe out small-scale fishing from many developing and least developed countries.

How can we make sure that small-scale fishers don’t lose critical government support?

With the push to conclude negotiations in November this year we are running out of time to ensure that the voices and concerns of small-scale fishers are reflected in any outcome. Now is the time to raise your voice to ensure that your country takes a position in the talks that protects small-scale fishers lives and livelihoods. Organisations all over the world are trying to make any outcome the best it can be and that means holding those most responsible for overfishing accountable while not making developing countries and their communities bear the burden of the deal. Sustainable fishing is possible and that starts with supporting small-scale fishers and conservation measures that aren’t held to ransom in the WTO.

For more information contact: campaigner@pang.org.fj



Created with images by orythys - "boat sea ocean" • Quangpraha - "fishermen beach boat" • joakant - "fish swarm underwater"