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The IUU Fishing Blog

Illegal Fishing, Europe and the Global Oceans

Insurers can help combat the marine overfishing crisis

As the World Bank points out, the oceans have a vast potential to unlock sustainable development, being also a key factor in the regulation of the Earth’s climate systems.  The ocean feeds and provides work security for millions of people, including some of the world’s poorest.

Like other sectors, marine insurance providers and their reinsurers have a long-term interest in the preservation of healthy and productive oceans. Not only is the health of the oceans a fundamental factor for the wellbeing of human communities, but many industries depend on the ongoing availability of marine resources for their very survival. Amongst these, the fishing industry is one of the most vulnerable to marine mismanagement.

Unfortunately, such mismanagement is observable today in the form of inadequate fishery regulation, as well as malpractice and even crime associated to industrial and semi-industrial ventures. In 2012, 160 million tons of fish were produced, generating over US$ 129 billion exports. Yet, commercial fish stocks have been consistently overexploited in a manner that is detrimental to productivity and overall ocean health. The FAO estimates that around 57% of commercial fish stocks are exploited to full capacity, with most of the remaining stock being either overexploited, depleted or vulnerable to overexploitation.

Overfishing is a consequence of several factors: overcapacity, misunderstanding of stock, defective capture regulation, poor vessel management and insufficient enforcement – they all play a role. The impact that insurers can have on the regulation of fisheries may be limited, but there is one area where their contribution can have a significant positive effect: the fight against illegal, unreported and unregulated (IUU) fishing.

It is thought that IUU fishing costs around 10 Bn Euros per year to the global economy, accounting for around 15% of global catch – a vast amount of non-compliant catch that directly prejudices any operators in the industry that systematically observe conservation rules.

One of the key factors in the eradication of IUU fishing is the control of fishing vessel operations through monitoring, control and surveillance (MCS). Whilst some fishing nations, coastal States and regional fishery management organisations have invested significantly in MCS measures, any gaps are routinely exploited by IUU fishing operators through the deployment of practices designed to circumvent controls.

Experience of IUU fishing modi operandi has been documented by Interpol by way of Purple Notices. Practices vary, including unauthorised transhipments of cargo with a view to blurring traceability, deploying destructive fishing arts or mis-declaring catch to the relevant authorities.[1] Some, such as obscuring a vessel’s identity and nationality, swapping names amongst fleet vessels in order to illicitly share licences, and performing unauthorised transhipments at sea should be of interest to insurers because they may carry a direct impact to the risks being insured, as well as an increased risk of fraud.

Earlier this year a Nigerian flagged industrial fishing vessel, Thunder, sunk despite being in good condition – scuttling being strongly suspected – off the coast of Sao Tome, where it caused damage to local ecosystems with ensuing pollution. Thunder had a long history of IUU fishing in the Southern Ocean, had been blacklisted by NGOs and regional fishery management organisations, and had an Interpol Purple Notice to its name. Yet, Thunder is not the only example of repeated malpractice in the fishing industry – other vessels continue to be in operation whose practices constitute a breach of all known conservation principles.

Insurers and their brokers should take care in their due diligence practices to identify vessels who repeatedly engage in IUU fishing. In order to acquaint themselves with the names of regular perpetrators, they should become familair with the EU’s IUU Fishing List. Further, they should request that industrial and semi-industrial fishing vessels of 24 metres or over seeking P&I insurance obtain an IMO number, since this ensures more clarity in establishing a vessel’s identity in cases of doubt. In addition, improved MCS in the shape of operative VMS and AIS vessel tracking systems help improve vessel activity control.

In addition, it is also worth considering the content of Article 37 of EU Council Regulation 1005 / 2008, whereby community vessels involved in IUU fishing are only permitted entrance to home port, and third country vessels are not allowed entry to EU ports except in cases of force majeur or distress. Further, the provision of services, including chartering and the supply of provisions and fuel is prohibited in respect of third country vessels in the EU IUU vessel list Whilst insurance services are not specifically mentioned by Regulation 1005 / 2008, and whilst insurance services are not necessarily dependent on the vessel being in port for their provision, it seems somewhat incongruous to assume that the provision of insurance may be privileged to the detriment of other service providers.

To conclude – whilst most insurers have already adopted policies whereby claims related to IUu activity are not covered by any existing insurances, any company with ethical practices concerned with ocean protection, sustainability and blue development should consider adopting a policy whereby vessels in the EU IUU list are deemed uninsurable risks.

Mercedes Rosello

November, 2015


[1] See Article 3 of EU Council Regulation 1005 / 2008 for a non-exhaustive list of IUU fishing practices: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02008R1005-20110309&from=EN



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