render an IUU-fishing reputation to a State can be a deal-breaker when such a State is
engaged in international trade on fish or fish products. This chapter, however, has
acknowledged that a State may behave a certain way either because it is unwilling or
unable to perform a particular act. Therefore, effective market-based measures must
be able to address these two scenarios, especially when dealing with developing or
less-developed flag States. The EU market-based measures are studied in the context
of Indonesia, to explore possible tools that Indonesia may implement in the fight
against IUU fishing in its waters or in its own fleets.
2 Economic Drivers of IUU Fishing in Indonesia
IUU fishing occurs because the expected gains of doing it exceed the probability of
detection and penalties.
23 Since it is a profit-driven activity, this part will address the
economic factors that drive IUU fishing in Indonesia. Because the fish stocks are
depleted while the seafood demand remains high, the competition for the remaining
fish stocks is getting fiercer given the current number of fishing vessels. Some
companies may no longer see legal fishing as sufficiently profitable. Thus, IUU
fishing is seen as an opportunity to gain easy access to limited resources and to profit
from them.
Even though individuals and companies can both benefit from IUU fishing,
companies generally have more avenues to reduce the costs of IUU fishing especially if they own and control subsidiaries across different jurisdictions. These
incentives derive from the fact that companies can shield themselves behind layers
of corporate ownership. However, large and well-established companies generally
have higher reputational costs to engage in IUU fishing. Based on a 2015 study,
11–16% of the world’s seafood production and 19–40% of the most significant and
most valuable stocks are produced and controlled by thirteen companies.
24 These
multinational corporations dominate the global seafood production, operate through
an extensive global network of subsidiaries and are involved in fisheries and
aquaculture decision-making.
25 Despite their domination, no study has found a
link between their multi-billion business and IUU fishing. Eight of the thirteen
corporations have even signed an agreement on ocean stewardship, which aims to
improve transparency and traceability of their catches to curb IUU fishing.
26
23 Charles et al. (1999), p. 96.
24 Österblom et al. (2015), pp. 5–6.
25 Ibid. Among the top thirteen seafood companies, four companies have headquarters in Norway
(Marine Harvest, Skretting, Austevoll Seafood, Ewos), three in Japan (Maruha Nichiro, Nippon
Suisan Kaisha, Kyokuyo), two in Thailand (Thai Union Frozen Products, Charoen Pokphand
Foods), one in South Korea (Dongwon Group), one in Spain (Pescanova), one in China (Pacific
Andes), and one in the United States (Trident Seafood).
26 Clercq (2016).
7 Market-Based Measures Against Illegal, Unreported and Unregulated Fishing in. . .
125
engaged in international trade on fish or fish products. This chapter, however, has
acknowledged that a State may behave a certain way either because it is unwilling or
unable to perform a particular act. Therefore, effective market-based measures must
be able to address these two scenarios, especially when dealing with developing or
less-developed flag States. The EU market-based measures are studied in the context
of Indonesia, to explore possible tools that Indonesia may implement in the fight
against IUU fishing in its waters or in its own fleets.
2 Economic Drivers of IUU Fishing in Indonesia
IUU fishing occurs because the expected gains of doing it exceed the probability of
detection and penalties.
23 Since it is a profit-driven activity, this part will address the
economic factors that drive IUU fishing in Indonesia. Because the fish stocks are
depleted while the seafood demand remains high, the competition for the remaining
fish stocks is getting fiercer given the current number of fishing vessels. Some
companies may no longer see legal fishing as sufficiently profitable. Thus, IUU
fishing is seen as an opportunity to gain easy access to limited resources and to profit
from them.
Even though individuals and companies can both benefit from IUU fishing,
companies generally have more avenues to reduce the costs of IUU fishing especially if they own and control subsidiaries across different jurisdictions. These
incentives derive from the fact that companies can shield themselves behind layers
of corporate ownership. However, large and well-established companies generally
have higher reputational costs to engage in IUU fishing. Based on a 2015 study,
11–16% of the world’s seafood production and 19–40% of the most significant and
most valuable stocks are produced and controlled by thirteen companies.
24 These
multinational corporations dominate the global seafood production, operate through
an extensive global network of subsidiaries and are involved in fisheries and
aquaculture decision-making.
25 Despite their domination, no study has found a
link between their multi-billion business and IUU fishing. Eight of the thirteen
corporations have even signed an agreement on ocean stewardship, which aims to
improve transparency and traceability of their catches to curb IUU fishing.
26
23 Charles et al. (1999), p. 96.
24 Österblom et al. (2015), pp. 5–6.
25 Ibid. Among the top thirteen seafood companies, four companies have headquarters in Norway
(Marine Harvest, Skretting, Austevoll Seafood, Ewos), three in Japan (Maruha Nichiro, Nippon
Suisan Kaisha, Kyokuyo), two in Thailand (Thai Union Frozen Products, Charoen Pokphand
Foods), one in South Korea (Dongwon Group), one in Spain (Pescanova), one in China (Pacific
Andes), and one in the United States (Trident Seafood).
26 Clercq (2016).
7 Market-Based Measures Against Illegal, Unreported and Unregulated Fishing in. . .
125