Posted inOpinion / Our region

Caught in a net: Making the WTO fisheries subsidies agreement work for development and sustainability?

PANG interviews TDP Senior Programme Officer, Peter Lunenborg on his views and opinion of the recently established Fisheries Subsidies Agreement in the Pacific

In June this year, the World Trade Organisation’s 12th Ministerial Conference (MC 12), adopted the Agreement on Fisheries Subsidies, an interim or partial agreement on prohibiting fisheries subsidies. PANG conducted an interview with Peter Lunenborg, the Senior Program Officer in the Trade for Development Programme (TDP) at the South Centre, a Geneva based intergovernmental organisation. After Colombia’s accession, the South Centre has 55 member countries. The TDP assists developing countries inter alia in WTO negotiations including those on fisheries subsidies. 

What do you think of the Fisheries Subsidies Agreement?

The fact that WTO members could reach an agreement is commendable as quite some time has passed in these negotiations.  The mandate for fisheries subsidies negotiations was agreed in 2005 but between 2007 and 2016 the negotiations were essentially stagnant. Members restarted in earnest from 2016 after the adoption of the Sustainable Development Goals, which includes SDG 14.6. SDG 14.6 is to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing and eliminate subsidies that contribute to IUU fishing.

This agreement is a good first step. Nonetheless what has been agreed is a partial agreement and thus the SDG 14.6 target has not fully been met. Ministers clearly recognize that further actions are necessary for a comprehensive and effective agreement. In particular, there are no disciplines on subsidies contributing to overfishing and overcapacity which is a core area of work under SDG 14.6. 

Which subsidies to IUU fishing are prohibited under this Agreement? 

In the case of Illegal, Unregulated and Unreported (IUU) fishing, governments first need to find a vessel or operator that has been engaged in IUU fishing. When a determination of IUU fishing has been made, it is then contestable – it means you must go to the flag member if known and the subsidizing member, and you need to discuss that determination. Thereafter, once the procedures are followed, there is a temporary prohibition. It is not a permanent prohibition, but only a temporary prohibition for subsidies to a single vessel or operator. So, this is very much a case-by-case approach that relies on self-reporting. It all starts out with a determination. Unfortunately, many developing countries do not have the capacity to make determinations or to share them effectively with flag or subsidizing countries. Additional supporting measures would be useful such as a system for filing and sharing IUU fishing determination which could be established as part of the Fisheries Fund currently being discussed.  

Are there other subsidy prohibitions?

Now, the second one is subsidies to an overfished stock. An ooverfished stock must be declared. In the high seas, you cannot have a declared overfished stock. So, this is only talking about fish stocks, which are mostly in Exclusive Economic Zones (EEZs). However, subsidies are exempted if the subsidies or other measures are implemented to rebuild the stock to a biological sustainable level. This means subsidies can continue if you have a plan, or you have some measures, which have the aim of rebuilding the stock. The text is vague because it does not say when i.e., after one year or 10 years or 30 years nor does it elaborate on demonstrating the measures taken to prove that a Member is in fact rebuilding an overfished stock. 

The other prohibition relates to subsidies to high seas fishing outside the competence of a Regional Fisheries Management Organisation (RFMO). The text does not make an explicit reference to unregulated high seas fishing, but rather about high seas fishing which is outside the competence of a RFMO. An area or species might be under the competence of the RFMO, but it does not mean that there is regulation, and if there is regulation it is not necessarily effective.

There are five RFMOs that are responsible for 91 percent of the high seas, and we have a host of other RFMOs – it means that all the high seas are essentially under the competence of the RFMOs. This means there is effectively no subsidy prohibition because there are few high seas areas which are not under the competence of a RFMO.

There has been talk about legal scrubbing in Geneva. What is your take on it?

The text of the Agreement on Fisheries Subsidies contains certain provisions which might need some clarification. One of these relates to the provision of information of subsidies to the existing subsidies committee (note: officially called the Subsidies and Countervailing Measures Committee) and how this applies to the information examined by the Fisheries Subsidies Committee who do not receive such information. There is also a hanging paragraph in the agreement which creates uncertainty as to specifically which commitments it applies to. Further there are terms that are not clearly defined leaving them open to interpretation and dispute. Reaffirming that we are seeking an “effective” agreement, an adjective not mentioned in the agreement itself, but stated in the preamble of the Decision adopting the agreement, would also create a strong signal. There are many other issues that could be resolved through a legal scrubbing which is quite a standard, quick and helpful process to ensure legal consistency and assist Members to follow through on their domestic ratification procedures.

I do not think that a collective discussion to scrub the text will open up the Agreement. In contrast, it could create some common understanding that would pave the way for more effective implementation of the Agreement once it enters into force. And in any case, parliamentary committees are likely to come across these same issues when they scrutinise the text during their domestic ratification process. Any unresolved issues, even if it looks minor, could come back to haunt us. 

How should we proceed with agreement and the negotiations?

The target for the complete agreement is MC13 which is around the corner, likely in 2023 or within four years after the interim agreement enters into force. So, we might have another agreement very soon if all efforts are undertaken.

I think we should take a step back and look again at Member proposals which have been made. In total there have been 14 textual proposals on the core prohibitions of the overfishing and overcapacity pillar since 2016.

One pathway is to look at a more robust sustainability flexibility or to have a list of prohibitions which might be smaller than what was contemplated before MC12 or a combination of both, which is the approach taken in the Agreement on Subsidies on Countervailing Measures.  

At any rate, we should also consider focusing disciplines on large scale fisheries because every individual member wants to protect the small-scale fishing sectors for multiple reasons i.e., livelihood, employment and so on. 

Globally, around 6.6 percent of fishing vessels are large scale, and they account for half of gross tonnage. So, South Centre did some research a few years ago, and found that a relatively small number of large-scale vessels account for more than half the global fishing capacity. 

Instead of having a discipline that is difficult to operate and may include millions of small-scale vessels, perhaps we just zoom in, on those 6 or 7 percent of vessels and their operators where we should discipline subsidies. With that we have covered more than half of global fishing capacity as large-scale fishers and their operators catch most of the fish.  There are different estimates out there – for example one estimation is that more than 70 percent of most subsidies go to large scale fisheries. If we want to have an effective prohibition, the most logical place is to look at large scale fisheries.

This opinion is by Peter Lunenborg, Senior Program Officer in the Trade for Development Programme (TDP), during an interview with PANG on 17 November 2022.

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