Using beneficial ownership information in fisheries governance

Overview

Over the past decade, significant advances have been made in transparency over the individuals who ultimately own, control, and derive benefit from companies and other corporate vehicles – the beneficial owners. [1] In recent years, there has been considerable attention on the challenges of fisheries governance and the barriers posed by the abuse of corporate vehicles and opaque ownership. Fisheries are a public resource, and the industry continues to lag behind comparable sectors in terms of effective governance and oversight. Public procurement and the extractive industries have seen significant moves over the past decade towards greater beneficial ownership transparency (BOT), that is, the collection, use, and sharing of information about the beneficial owners of the corporate vehicles involved. However, progress with similar moves in the area of fisheries has been considerably slower.

The challenges in the collective management and monitoring of international fish stocks and waters, along with a desire to protect the commercial interests of nationally owned fishing operations, have led to a patchy and at times inconsistent regulatory framework across countries and waters, leaving plenty of room for abuse. Fishing licences, vessel owners, the vessel’s flag, crew, landing points, and processing plants can all be based in or from different jurisdictions, and fishing activity is often carried out thousands of miles away from the location of the individuals who own, control, or derive benefit from the operations.

Fisheries is a valuable sector, and its mismanagement can have profound adverse environmental, social, and economic consequences. It is estimated that the harvesting of naturally occurring fish stocks generates more than USD 141 billion in revenues annually. [2] However, the sector is facing key challenges around sustainability and accountability, which are exacerbated by illegal, unreported, and unregulated (IUU) fishing operations. These are estimated to generate somewhere between USD 15 and 36 billion annually in illicit earnings, and have significantly increased the extinction threat faced by marine species. [3] The proportion of fish stocks being harvested at unsustainable levels is estimated to have increased from 10% in the mid-1970s to 35.4% in 2019. [4]

Additionally, IUU fishing has been linked to organised criminal groups and criminal activity, including forced labour, modern slavery, human trafficking, and other human rights abuses. [5] IUU fishing activities were found to coincide with other offences – especially trafficking, tax evasion, fraud, and organised crime – in as much as 60% of cases. [6] Illicit financial flows arising from documented IUU fishing cases to date are estimated at USD 11.49 billion for the African continent. [7] Nevertheless, it remains largely opaque who owns, controls, and derives benefit from fishing rights and quotas, the vessels involved, fisheries-related crimes, and the actual fish harvested.

A growing body of publications by civil society and multilateral organisations are calling for BOT in the fisheries sector. However, there remains a gap in the literature in terms of how beneficial ownership (BO) information and central government registers can practically contribute to fisheries governance. Given the number of countries that are implementing BOT for corporate vehicles, it is necessary to look at how ongoing efforts can be leveraged to ensure they result in useful and usable information for the fisheries sector. Perhaps unsurprisingly, as anti-money laundering (AML) has been the core policy driver of BOT reforms, much of the initial focus has been on how BOT can tackle fisheries crime and its proceeds. This rather narrow focus fails to include how BOT can help strengthen fisheries-related policies and governance as a whole. In order for the fisheries sector to benefit from the reforms already underway, it is critical to sketch out the potential use cases for BO data and ensure BOT policymakers have a basic understanding of the use cases of BOT in fisheries and engage potential users as part of the reform process.

Emerging research shows that countries pursuing domestic policy objectives implement more effective reforms than countries seeking to comply with international standards. [8] This briefing will therefore take a holistic framing on how BOT can improve the fisheries sector, beyond tackling crime, through the implementation of national central BO registers. This collected information can also be shared and used across borders, including with and by regional fishing management organisations (RFMOs).

This briefing identifies two principal ways in which BO data can be used to achieve broader policy aims for the fisheries sector. It can help:

1. strengthen the governance and oversight of fisheries tenure [9]; and
2. detect and investigate fisheries-related crimes and their proceeds.

Better BOT can also indirectly and systemically improve fisheries governance.

In addition, this briefing details the main considerations for leveraging existing efforts to implement BOT for AML purposes to achieve these aims, and provides guidance on how jurisdictions can do so. This includes:

• defining beneficial ownership in law, and understanding the conceptual difference between the beneficial ownership of corporate vehicles and that of their underlying assets, such as fishing licences and vessels;
• assessing whether relevant corporate vehicles are sufficiently covered by existing efforts, and how to cover additional corporate vehicles;
• understanding how and at which point to collect data;
• understanding how to structure and make data available to relevant users, including sharing the information across borders, potentially via RFMOs.

Because fisheries sectors are highly transnational in nature, involving corporate vehicles and vessels from a range of different countries, standardisation of the implementation of BOT across different jurisdictions is key to enabling the sharing and interoperability of data. Jurisdictions with fisheries sectors, RFMOs, and multilateral organisations should advocate for and require minimum legal, policy, technical, and data standards as well as complementary measures.

However, BOT is not a panacea to the problems facing the fisheries industry, and its impact will depend in part on a range of complementary measures. The question of vessel ownership is central to this discussion. Given the scope and complexity of this subject and the fact that it also has a bearing on other matters beyond fisheries, whilst the use of BO data relating to vessels in fisheries will be covered, practical considerations relating to its collection are not within scope of this briefing.

Next page: Background