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A Tale of Two Countries Links Developed World Fishing Subsidies with Environmental and Social Impacts

Nairobi/Geneva, 27 December 2001 - Developing countries which open up their waters to foreign fishing fleets may lose far more than they gain, studies show.

Research, carried out by national organizations in collaboration with the United Nations Environment Programme (UNEP), indicates that the eventual costs, in terms of loss of income for local fishermen, environmental damage and the depletion of native fish stocks, can far outweigh the short term financial gains generated from foreign governments and fleets.

The findings, part of UNEP's work on trade liberalization and subsidies, have come from studies in Argentina and Senegal where foreign fleets have, in recent years, been given access to those countries' coastal waters.

Klaus Toepfer, UNEP's Executive Director, said: "Fish stocks in many parts of the world are suffering as too many, often heavily subsidized, vessels chase a dwindling number of fish. Some developing countries with reasonably healthy levels of stocks have, in their search for foreign, external, earnings needed to pay off debts and to stimulate economic growth, entered into fishing agreements which allow foreign fleets into their waters. But our research indicates that, unless strict safeguards are in place, this can be a costly mistake".

"Last week European fisheries ministers agreed deep cuts in quotas, as well as other measures, designed to help Europe's depleted fish stocks recover. We welcome this decision. But we would urge governments from developed countries to be cautious about exporting over capacity to the waters of developing countries until such countries have the necessary policies and regulations which can ensure the sustainable management of their fish stocks," he said.

"Many local people rely on fish for their livelihoods and as a key source protein needed for health and well being. Over exploitation by foreign fleets can drive these people into ever greater poverty as well as robbing the marine environment of a key link in the food chain upon which creatures like whales, dolphins and seals depend, "said Mr Toepfer.

Hussein Abaza, head of UNEP's Economics and Trade Branch based in Geneva, Switzerland, said: "Unraveling the precise impacts of trade liberalization and subsidizes on the environment is not an easy business. Many of the impacts can be hidden, indirect and not immediately obvious. Nevertheless, our two country studies have shed some important light on this crucial and sometimes controversial area. They have also given some strong pointers as to actions that need to be taken if developing countries are to truly benefit".

"We have been encouraged in our work by the outcome of the recent World Trade Organization ministerial meeting in Doha where issues of trade and its impact on the environment was put firmly on the agenda for the next round of trade talks. Tackling the issue of fishing subsidies was one of the specific recommendations made," he added.

Argentina
Exploitation of fish stocks was "insignificant in Argentina", where beef is the favored form of protein, until the government opened up its waters to European and other fleets, mainly from south east Asia including Korea and Japan, during the 1980s and early 1990s.

The report notes that these subsidized fleets were attracted to Argentinean waters partly as a result of "diminishing resources in oceans under developed countries jurisdiction".

Various other factors triggered the boom in the export of Argentinean fish including deregulation, free movement of foreign capital and a reduction of export taxes.

Argentina also negotiated agreements with the European Union (EU) which not only gave European boats access to Argentinean waters, but also set up joint-ventures with companies in receipt of EU subsidies. Temporary fishing licenses were also granted to other foreign fleets.

The impacts, both environmental and socio-economic, have been stark, the UNEP-commissioned study has found.

Initially, exports grew by 478 per cent between 1985 and 1995 as the number of fish caught mushroomed. However the quantity of fish caught has, since 1997, fallen dramatically as a result of over-exploitation of key stocks. Indeed between 1997 and 1999, the catch dropped by a quarter and instead of generating money, revenues declined during that period by 14 per cent.

"The Argentina study strongly links over fishing and the depletion of fish stocks to subsidies from developed countries for fishing overseas. It points out a clear link between these trade distortions and the negative environmental effects on the (Argentinean) fishery sector," says the UNEP study.

The study also notes that local, mainly small-scale, fishermen with traditional boats have suffered as a result of the influx of large, factory-style, vessels mostly from European and Asian countries whose capacity increased five fold between 1990 and 1995.

It points out that the foreign fleets came into waters where there was "little control" over the levels of fish taken.

Senegal
Senegal began a major export of fish to the European market in the late 1980s. Two thirds of its export revenues now come from fish exports to Europe. This growth was driven by a series of trade-related actions and agreements which favored such trade.

These included the Lome Agreements, allowing Senegalese fish products access to Europe free of customs charges and an export subsidy of 15 per cent, which rose to 25 per cent. Initially this was on canned tuna but was extended to all fish products.

The trade was also boosted by a 50 per cent devaluation in the Senegalese Franc and by agreements made between the government and a range of foreign fishing fleets giving them access to Senegalese waters.

The UNEP-commissioned study says the trade liberalization has had a devastating effect on some key stocks, especially those deep-living, coastal species, favored by European consumers.

The switching of the local Senegalese fishing effort to export species has also had a serious impact on local food supplies.

"There is a risk of local market supply shortages in the near future as fishing effort shifts from locally consumed species to those destined for export, " says the UNEP report.

The sharp decline in some stocks is also due to the massive wastage of the fish caught. Instead of developing modern, fish processing, factories existing, old-fashioned ones, were merely expanded.

"This is because most of the developed countries wanted to fish in Senegalese waters, instead of giving preferential tariffs for value added Senegalese fish products. Thus?..there was a tendency to export raw fresh and frozen fish rather than processed fish. The wastage rate?..was very high and the pressure on resources (fish stocks) increased," says the report.

The Way Forward
The UNEP country studies conclude that the harmful impacts on the marine environment in Senegal and Argentina are not so much a result of trade liberalization, but because of the lack of sufficient, accompanying, policies required to ensure the sustainable management of fish stocks. Trade distortions and over fishing resulting from distant, subsidized, fishing fleets, are two areas of concern.

The studies suggest a range of measures that could be taken to make fisheries in such countries more environmentally-friendly and sustainable.

In the case of a country like Argentina, there may be an argument for introducing trade-able quotas.

This should be backed up by fines for vessels exceeding quotas alongside greater enforcement and policing of the fisheries there. The type of fishing gear allowed also needs reviewing among a string of measures "that need to be applied to forestall the collapse and unsustainable use of fisheries resources".

The report estimates that the cost to the economy of the current, unsustainable fishing of one species alone- hake- has cost Argentina $500 million. It suggests that a better managed fishery could benefit the economy by as much as $5 billion.

In the case of a country like Senegal, there are recommendations that foreign fishing fleets should be charged more for gaining access to its fishing grounds and that agreements should be suspended in cases where a stock is seriously depleted.

It also suggests that agreements should be limited to species in relative abundance and that a quota system should be considered.

Meanwhile differential fuel prices could be introduced for small boats versus large fleets so that local employment and the supply of local markets is preserved.

The report argues that adding value to Senegal's fish exports is also crucial. Policies to deliver this might include grants and tax and customs advantages making it financially attractive to invest in modern, less wasteful, fishing processing facilities.
It also suggests that Senegal diversify its exports away from Europe to Africa and Asia to reduce the pressure on those species favored by European Consumers.

Notes to Editors:
UNEP will be organizing a second international technical workshop on fisheries subsidizes in Geneva on 20 March 2002, just prior to the next World Trade Organization Committee on Trade and the Environment meeting.

A synthesis report, which includes the country studies on Argentian and Senegal, can be found at http://www.unep.ch/etu/doha/papers.htm

Economic Reforms, Trade Liberalization and the Environment can be found at http://www.unep.ch/etu/doha/pdfs/papers/synthesisround2.pdf

For More Information Please Contact: Tore J Brevik, UNEP Spokesman/Director of the Division of Communications and Public Information, on Tel: 254 2 623292, e-mail: tore.brevik@unep.org or Nick Nuttall, UNEP Head of Media, on Tel: 254 2 623084, Mobile: 254 (0) 733 632755, e-mail: nick.nuttall@unep.org or Hussein Abaza on Tel: 41 22 917 8298, e-mail: hussein.abaza@unep.ch

UNEP News Release 01/126

Thursday 27 Dec 2001
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