IUU Fishing and the exploitation

of Flags of Convenience
Duncan Copeland
Environmental Justice Foundation
www.ejfoundation.org
 What are Flags of Convenience
(FoC)?
• ‘Where beneficial ownership and control of a vessel is found to lie elsewhere
than the country of the flag the vessel is flying’ (ITF) – genuine link
• In general FoC State operate ‘open’ registries, allowing foreign ownership;
make a business of selling their flags
• Around 44 countries recognised by various bodies (FAO, ITF etc) as FoC.
Some countries particularly significant to fisheries:
– Panama, Honduras, Cambodia, St. Vincent
– New registers are emerging, including Tanzania and Togo

• Relatively quick, easy and cheap to acquire – can often be done online or by
fax, take as little as 24 hours
• FoC used extensively by maritime sector, mostly merchant marine
• Fishing vessels (including support vessels) constitute only between 7-15%
of total
Flag of Convenience States
 How Flags of Convenience
facilitate IUU fishing
• Reduce operating costs (licences,
insurance, taxes, VMS, safety, labour
laws)
• Hide beneficial ownership (often
advertised by FoC register)
• Avoid prosecution
• ‘Flag Hopping’
• Undermine RFMOs (often not party to
agreements)
 Legal Framework
• UNCLOS (159 ratifications), UNFSA (76),
‘Compliance Agreement’ (39) all binding
• Code of Conduct for Responsible Fisheries and
IPOA-IUU - voluntary
• Key component is that the Flag State is
responsible for vessels in its registry
• Requirement of genuine link between vessel and
Flag State – BUT this has never been defined
and is left to States to interpret
 FoC vs FoNC
• Flags of Non-Compliance
• Do not have an open registry but are notorious for failing
to enforce responsibilities in regards to IUU
• China, South Korea, Taiwan, historically some EU States
 Why FoC States fail to fulfil Flag
State Responsibilities
• Either unable or unwilling
• Many FoC registries are developing States, with little
capacity to control DWFV
• Open Registries viewed as source of Govt. revenue
• Many registries run by private companies that have
vested interest in flagging as many vessels as possible
(sometimes not transparent with Flag State)
 Do FoC States benefit financially
from flagging fishing vessels?
• Difficulty assessing revenue streams as total numbers of vessels
not clear

• Fishing vessels on average 7-15% of total registered vessels

• Average revenue of around US$2200/vessel

• All FoC registries combined accruing between US$3-4 million/yr

• Compared to millions lost by individual states (e.g. Sierra Leone

US$29/yr) and the US$10-23 billion lost to IUU globally.
 Who Benefits?
• Majority of companies exploiting Flags of Convenience East Asian
and EU based

• Taiwan, South Korean, Japan, China

• Spain (decrease 2005-2009); EU overall (increasing)

• Increasingly FoC vessels being transferred to shell companies

registered in FoC States
– e.g. Panama 220% increase 2005 - 2009

©FAO
 Key EJF investigation findings
Reefers

• Provide logistical support to DWFV, and tranship at sea to transport to market

– single reefer can support large numbers of vessels
• Disproportionate number of reefers carry FoC registration
• Almost all reefers documented as engaged in IUU in West Africa by EJF
flying FoC
• Key role played by reefers must be addressed as part of action
• Even ‘whitelisted’ reefers predominantly FoC – e.g ICCAT 86% of fish
carriers (150) fly FoC (though whitelisted
does not necessarily preclude IUU activities
e.g. Bluefin tuna)
 Crew Conditions

• FoC also allow owners to avoid labour and safety regulations

• ITF considers fishing industry to have worst cases of abuse in
maritime sector, particularly IUU and FoC vessels
• Incarceration, unsafe working conditions, verbal and physical abuse,
withholding of pay, extremely poor sanitary, food and living standards, travel documents confiscated
• Poor safety has lead to vessel sinkings, deaths
• Worse cases meet ILO definitions of forced labour
• New EJF report and film ‘All at Sea – the abuse of human rights aboard illegal fishing vessels’
 Impacts on Trade

• FoC system provides unfair competition to legitimately

flagged and operating vessels
• Compromises effectiveness and reputation of supply chain
traceability systems
• Increases likelihood of illegal fish being stamped legal and
entering EU market
• Overall impact on public perception and support for fisheries

• Opportunity for industry to take it’s own steps to address

issue? – refusal to deal with FoC vessels
 Addressing Flags of Convenience in IUU Fishing
European Union

• Council Regulation (EC) No 1005/2008 establishing a Community system to prevent,

deter, and eliminate illegal, unreported and unregulated fishing

• Chapter VI and VII – Non-cooperation Third Countries and Measures

– Identification of non-cooperating Third Countries
– Establishment of a list of non-cooperating Third Countries
– Essentially a trade sanction on importation of fish

• Closure of EU Member State FoC registries to fisheries (fishing and reefers) vessels

• Establishment of requirement that Member States are responsible for ALL vessels
under national ownership, no matter what flag (Taiwan example)
International

 Need for international binding agreement (FAO) that ends the

exploitation of FoC by IUU vessels
 set out criteria and enforceable measures to ensure Flag States fulfil
international responsibilities

 Development of recognition of IUU fishing (including exploitation of

FoC) as international organised crime (UNODC)
 allow international investigation and prosecution of beneficial owners

 Actions to ensure that individual States (including EU Members)

delist and close open registries to Fishing and Support Vessels

 Measures to prevent nationals from flagging fishing vessels to FoC

 Establishment of global record and fishing vessel identification system