Article II 6/2024 - PERPETUATING INEQUITY IN SEAFOOD MARKETS: THE UNFAIR COST-BURDEN FACED BY SMALL-SCALE FISHERIES WHEN TRYING TO MEET MARKET REQUIREMENTS

By Martin Purves
Oceans and their biodiversity are crucial in providing food and livelihoods for one-third of the global population. Small-scale fisheries (SSF) play an essential role in food security and nutrition and are recognised for their valuable contribution to sustainable food systems, development, and poverty eradication. However, their remoteness from international markets, high transportation costs and vulnerability to external economic shocks often make them more vulnerable to the impacts of biodiversity loss and climate change. SSF communities also often have relatively limited political power and powerful interest groups often benefit from existing arrangements where SSF have restricted access to global seafood markets. Non-tariff measures (NTMs) can further limit market access for these fisheries, exacerbating inequities. Certification requirements in seafood markets can undermine the Sustainable Development Goals (SDGs). This paper argues that global retailers must adopt inclusive practices to avoid perpetuating or worsening inequity, and should adopt policies that better support small-scale fisheries.
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Oceans and their biodiversity play a crucial role in providing food and livelihoods for approximately one-third of the global population, especially in coastal least-developed countries (LDCs) and small island developing states (SIDS)1.

Fifteen SIDS and eleven LDCs are located in the Asia-Pacific region, each facing specific social, economic and environmental vulnerabilities and constraints. For many SIDS, the majority of their natural resources come from the ocean, with the Exclusive Economic Zones (EEZs) of SIDS comprising, on average, 28 times the land mass of these countries. Their small population size, remoteness from international markets, high transportation costs, vulnerability to exogenous economic shocks and fragile land and marine ecosystems make SIDS particularly vulnerable to biodiversity loss and climate change because of their lack of economic alternatives2.

A sustainable ocean economy should put people at its centre - enabling human rights, facilitating the equitable distribution of ocean wealth and ensuring equal opportunities for all. Such equal access to resources will help ensure fair opportunities consistent with sustainable development. A sustainable ocean economy should further promote accountable and transparent business practices, including addressing labour rights abuses, tax evasion and corruption. It should also recognise the specific climate vulnerabilities and financing and capacity constraints of developing countries, particularly SIDS and LDCs3 4.

However, access to ocean resources and sectors is rarely equitably distributed. Many of their benefits are accumulated by a few, while most harms from development are borne by the most vulnerable in society. Inequity is a systemic feature of the current ocean economy. It is often embedded in existing political and economic systems, resulting from historical legacies and prevailing norms. Addressing existing inequalities, preventing the widening of ocean inequities, and promoting equity within and between countries, are integral to a sustainable ocean economy 2.

At the local scale, small-scale fishing communities, particularly indigenous, women and other minority subgroups, often have relatively limited political power, are less likely to be included in decision-making processes and suffer disproportionately from depleted ecosystems. Although small-scale fishers are often prioritised in fisheries management rhetoric, they mostly remain locked out of governance processes5.
1.Mingbao, C., Yuhao, W. and Zhibin, X. (2024) A framework for assessing the blue equity of social-ocean systems in marine governance transformation. Frontiers in Marine Science: 11.
2 United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS).
3 Österblom, H., C.C.C. Wabnitz, D. Tladi et al. (2020) Towards Ocean Equity. Washington, DC: World Resources Institute. Available online at www.oceanpanel.org/how-distribute-benefitsocean-equitably.
4 Blasiak, R. (2019). Climate change vulnerability and ocean governance (Chapter 34). In: Predicting Future Oceans. Editor(s): Cisneros-Montemayor, A.M, Cheung, W.L. and Ota, Y. Elsevier.
5 Jentoft, S. & Chuenpagdee, R. (2015). In: Interactive Governance for Small-Scale Fisheries Vol. 13 (Springer International Publishing, 2015).
This inequitable distribution of ocean resources results in negative impacts on the environment and social systems, resulting in the loss of livelihoods, limited financial opportunities for vulnerable groups, and challenges to nutritional and food security, which can have long-lasting impacts. Powerful interest groups, such as state and political actors, the private sector, and even some non-profit organisations and communities, often benefit from such existing arrangements. When the unequal distribution of ocean resources and their benefits are challenged, it is perceived as a direct threat to such interests. The status quo often suits these groups, and disrupting existing systems can be met with strong resistance. Inequality has often become ingrained with economic development and political stability.
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What type of future do we want?

Perpetuating inequity is not a viable long-term option. Food systems need to be transformed to address inequalities, rising levels of hunger and malnutrition. Biodiversity loss, pollution, and carbon emissions driven by our food systems need to be stemmed and reversed to secure livelihoods in the long term. Small-scale fisheries play an essential role in food security and nutrition. According to estimates, small-scale fisheries employ more than 90% of the approximately 120 million people employed in fisheries. An estimated 97% of these fish workers live in developing countries. In addition, about half of those working in small-scale fisheries are women, mostly engaged in post-harvest activities, especially marketing and processing6. Small-scale fisheries are increasingly being recognised, especially in developing countries, for their contribution to sustainable food systems and the opportunities they present for sustainable development and poverty eradication.

The 2030 Agenda for Sustainable Development is the plan of action to achieve sustainable development in its three dimensions – economic, social and environmental – in a balanced and integrated manner. It provides a vision for a world free of hunger and extreme poverty, with social justice and a healthy natural environment. The 17 Sustainable Development Goals (SDGs) of the Agenda provide the blueprint to achieve this vision. In fisheries, much emphasis is often placed on contributing to the targets under SDG14 ‘Life Below Water’. SDG14 targets also contribute to, and are required to achieve the other SDG targets in many ways. For example, a recent study showed that curtailing overfishing and ensuring equitable distribution of benefits (specifically highlighted through Small Island Developing States and Least Developed Countries) are expected to positively impact other SDG targets (Figure 1).

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Underpinning the SDGs are the principles of equity (that everyone has a fair and just opportunity to access what they need to thrive) and justice. SDG 14b specifically calls for “...access for small-scale artisanal fishers to marine resources and markets”, while SDG Target 2.3 states: “by 2030, double the agricultural productivity and the incomes of small-scale food producers, particularly women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment”.

Key stakeholders in the sector recognise that environmental sustainability cannot be achieved if inequity is present; it is impossible to have a sustainable ocean economy without addressing the fact that 90%8 of fishers globally have inequitable access to ocean resources. The SDGs call for all businesses to contribute to their successful delivery, and collaborative partnerships are a key part of achieving a change that individual businesses cannot achieve alone. By taking a leadership approach and embedding SDG14b in their seafood procurement policies, global retailers would be aligned with other industry groups that embed the SDG agenda alongside their other activities, such as the Global Coffee Forum, World Banana Forum, Ethical Tea Partnership and Better Cotton Initiative. SDG14 cannot be achieved in isolation; it is widely recognised that the Global Goals are inherently interconnected. Action taken toward one Goal can support or hinder the achievement of others. While taking these interconnections into account is challenging, it is essential if we are to avoid our actions having negative unintended consequences and if we are to achieve holistic solutions9. All solutions must also be inclusive – at the core of the SDGs is the principle that ‘no one is left behind’10.
6. Zelasney, J., Ford, A., Westlund, L., Ward, A. and Riego Peñarubia, O. eds. (2020) Securing sustainable small-scale fisheries: Showcasing applied practices in value chains, post-harvest operations and trade. FAO Fisheries and Aquaculture Technical Paper No. 652. Rome, FAO. https://doi.org/10.4060/ca8402e
7. Nippon Foundation-Nereus Program. (2017) Oceans and Sustainable Development Goals: Cobenefit, Climate Change and Social Equity. Vancouver, p.28, www.nereusprogram.org
8. FAO, (2015) The Voluntary Guidelines for Securing Sustainable Small-Scale Fisheries in the Context of Food Security and Poverty Eradication (SSF Guidelines). FAO, Rome.
9. UN Global Compact. (2021) How business leadership can advance Goal 14 on Life Below Water.
10. Tulder, R. van (2018) Business & The Sustainable Development Goals: A Framework for Effective Corporate Involvement, Rotterdam School of Management, Erasmus University, Rotterdam.

While many of seafood businesses and global retailers acknowledge support to SDG14 within their sustainability plans, they do not always explicitly support SDG14b. In some instances, the seafood procurement policies of retailers are in fact, undermining the delivery of SDG14b. Only 35% of the 36 retailers considered in a recent study to investigate whether their seafood procurement policies were contributing to social transformation, had specific policies in place to preferentially source wild capture seafood from small-scale artisanal fisheries11.

What are non-tariff measures and trade barriers and how can they further drive inequity?

Trade measures are often categorised as tariffs or non-tariff measures (NTM). Globally, import tariffs for fisheries and aquaculture products play an important role in market access. NTMs – policy measures other than tariffs that can affect trade, and are often taken to protect human or animal health or the environment – also play a very important in this regard. According to the United Nations Conference on Trade and Development (UNCTAD), there are, on average, about 2.5 times more specific NTMs applicable to fisheries and aquaculture products than for manufactured products. The application of NTMs can substantially reduce market opportunities for small and medium-size producers, especially due to the existence of asymmetries of information; and the costs associated with obtaining up-to-date and accurate information about market regulations, import requirements, and other market access elements12.

Compliance with private sustainability and certification standards remains an issue for small-scale fishers to overcome to access many international markets. Retailers in many developed countries increasingly set sustainability and social responsibility requirements when sourcing their products. While these programs have a role to play in sustainability, they tend to marginalise small-scale operators who do not have the requisite financial, technological or human resources to meet such requirements. The wide range of fisheries certification schemes poses further challenges for small-scale fisheries operators12.

The UN FAO Committee on Fisheries (COFI) is a global intergovernmental forum where major international fisheries and aquaculture problems and issues are examined and recommendations addressed to governments, regional fishery bodies, NGOs, fish workers, FAO, and the international community. The 19th session of COFI’s Sub-Committee on Fish Trade held in Bergen, Norway, in September 2023, advised that “certification standards are not always well-tailored to SSF and could act as non-tariff trade barriers. The Sub-Committee expressed support for the analysis of certification schemes for SSF and called for a judicious review of the FAO ecolabelling guidelines as part of efforts to ensure sustainable market access and trade for SSF, noting that concepts around sustainability have evolved since the FAO ecolabeling guidelines were adopted more than a decade ago”13.
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The leading private standard for ‘sustainable’ fisheries is the Marine Stewardship Council (MSC). The vast majority of MSC-certified catch comes from large-scale industrial fisheries, with just 20% of MSCcertified fisheries and 7% of the overall MSC-certified catch from 2009 to 2017 being caught by small-scale vessels14. Many small-scale fisheries have been struggling to meet the costs of MSC certification, which includes the high assessment costs and logo royalties, due to low or non-existent price premiums in the market. Nyiawung et al. (2021) found that certification of small-scale fisheries can be exceptional and elusive, even to those who work years and decades to become certified. They concluded that there is a need to move beyond a narrow focus on certification and certifiability. They noted that the discrepancy between how the MSC promotes its brand and the patterns of actual uptake that lean towards large-scale industrial fisheries risks triggering charges of “greenwashing” with decision-makers and consumers15.

New research published earlier this year also found that the MSC is failing to identify forced labour violations in the fisheries, which it certifies despite claims to the contrary. Data from 3 313 tuna vessels listed on MSC’s website found that 74% of MSC’s certified sustainable tuna was untraceable to vessel owners or fishing employers16. The authors argue that when consumers buy eco-labelled tuna, it would be reasonable for them to perceive that the MSC logo signifies that the product was made without crime and human rights abuse, especially where those assurances were made. The same is true for a supermarket buyer or a government perceiving that the tuna goods need no further human rights due diligence16.
11. Pita, C. & A. Ford. (2023) Sustainable seafood and small-scale fisheries: improving retail procurement. IIED, London. iied.org/21306IIED
12. COFI. (2022) Small-scale Fisheries and International Trade. 18th Session of the COFI Sub- Committee on Fish Trade. April 2022.
13. FAO. 2024. Committee on Fisheries: Report of the 19th Session of the Sub-Committee on Fish Trade, Bergen, Norway, 11–15 September 2023
14. Le Manach, F., Jacquet, J.L., Bailey, M., Jouanneau, C. & C. Nouvian. 2020. Small is beautiful, but large is certified: A comparison between fisheries the Marine Stewardship Council (MSC) features in its promotional materials and MSC-certified fisheries. PLoS One. 2020 May 4;15(5).
15. Nyiawung, R.A., Raj, A. & P. Foley. 2021. Marine Stewardship Council sustainability certification in developing countries: Certifiability and beyond in Kerala, India and The Gambia, West Africa, Marine Policy, Vol 129.
16. Nakamura, K. (2024) Is tuna ecolabeling causing fishers more harm than good?. npj Ocean Sustain 3, 39. https://doi.org/10.1038/s44183-024-00074-6
Another major problem with certified industrial fisheries is the prevalence of subsidies. The more pernicious forms of fisheries subsidies primarily ‘disproportionally benefit big business’, creating and perpetuating inequity. The unfair competition between large fleets and individual artisanal fishermen also further fosters inequality, because these environmentally, socially and economically destructive subsidies primarily benefit large, industrial-scale fishers. Recent estimates have shown that of the USD 35.4 billion of global fisheries subsidies provided in 2018, more than 80% went to large-scale, industrial fisheries and the fishers involved received disproportionally (3.5 times) more subsidies than a fisher involved in small-scale fisheries17. The negative impacts of this unequal distribution of government support should be obvious. One might wonder why governments continue pursuing a strategy where public money is used to fuel inequality, the destruction of key ocean ecosystems and environmental devastation. Instead of supporting largescale industrial fisheries, these monies could instead be reinvested in sustainable fisheries, aquaculture and coastal community livelihoods to reduce the pressure on fish stocks.

Many MSC-certified fisheries are recipients of these harmful capacityenhancing subsidies that are used for fuel tax breaks, the technology used in ‘the race for fish’, and the construction of new vessels. For example, fuel tax exemptions for the EU fishing industry to the tune of €759 million to over €1.5 billion are of special concern in light of the global climate and biodiversity crises. By exempting marine fuel from taxation, the EU is using public money to subsidise the burning of fossil fuels and incentivise pollution. This money can be seen as a huge support mechanism to mostly large, industrial, and often destructive, fishing fleets. In the process, low-impact and small-scale fishers who won’t reap the benefits from these subsidies are sidelined and pay the price in declining fish stocks and marine health, as well as increased vulnerability to worsening climate change18.

In Pacific tuna fisheries, the fleets of all distant-water fishing nations (DWFNs), many of which are part of MSC-certified fisheries, have benefited and continue to benefit from subsidies19. For instance, Chinese fleets are receiving significant subsidies that can lower operating costs and allow companies to profit where they otherwise would make a loss20. This can give those vessel operators a significant competitive advantage over Pacific Island Countries’ domestic fishing fleets, which may not be in receipt of such lucrative subsidies21. Fisheries subsidies also often enable foreign fleets to operate at sub-market rates, putting local fleets out of competition for their own fishery resources22. Joint-ventures, pseudo-joint-ventures and charter agreements allow DWFN fleets to take further advantage of developing coastal states in agreements that disproportionately benefit the foreign fishing powers23.
17 Schuhbauer, A., Skerritt D.J., Ebrahim, N., Le Manach, F. & Sumaila U.R. (2020) The Global Fisheries Subsidies Divide Between Small- and Large-Scale Fisheries. Frontiers in Marine Science 7.
18 Our Fish. 2021. Climate Impacts & Fishing Industry Profits From EU Fuel Tax Subsidies.
19 Industrial Economics, Incorporated. 2023. Trade Flow Analysis of Pacific Tuna Fisheries Final Report. September 7, 2023.
20 World Bank Group (2017) Tuna fisheries. Pacific possible series, background paper no. 3 Washington, D.C. : World Bank Group.
21 Schuhbauer, A., Chuenpagdee, R. Cheung, W.L.W., Greer, K. & Sumaila, R. (2017). How subsidies affect the economic viability of small-scale fisheries, Marine Policy, Vol 82: 114-121.
22 Sumaila, R., Dyck, A. & Baske, A. (2014) Subsidies to tuna fisheries in the Western Central Pacific Ocean. Marine Policy. 43. 288–294.

Conclusion

A recent study published in Nature24 stated that “many seafood products marketed as ‘sustainable’ are not. More exacting sustainability standards are needed to respond to a fast-changing world and support the United Nations SDGs. Future fisheries must operate on principles that minimise impacts on marine life, adapt to climate change and allow regeneration of depleted biodiversity while supporting and enhancing the health, wellbeing and resilience of people and communities”.

One of the decisions from COFI’s 36th session held in Rome in July this year was to request “FAO’s assistance to address challenges in market access, fisheries statistics and cross-border trade, especially for SSF in the context of fish trade, including by updating the FAO ecolabeling guidelines to align with global instruments such as the Voluntary Guidelines for Small-scale Fisheries (VGSSF). Such an update of the Ecolabelling Guidelines, which were last revised in 2009, would provide an ideal opportunity to define sustainability in fisheries across the SDG targets and recognise the importance of climate change and social equity across seafood supply chains.

Global retailers who truly support sustainable development as envisioned under the SDGs, ‘where no one is left behind,’ should revisit their seafood procurement policies and ensure that they recognise the crucial role that small-scale fisheries play in achieving a better world. Seafood produced in industrial fisheries, propped up by harmful subsidies and relying on cheap, exploitative labour, cannot be called sustainable even if it is adorned with the familiar blue tick logo of the MSC!.
23 Havice, E., McCoy, A. & A. Lewis. (2019) Market and Industry Dynamics: Western and Central Pacific Ocean Distant Water Tuna Purse Seine Fishery, FFA Purse Seine Study 2019 Final Report.
24 Roberts, C., Béné, C., Bennett, N. et al. (2024) Rethinking sustainability of marine fisheries for a fast-changing planet. npj Ocean Sustain 3, 41. https://doi.org/10.1038/s44183-024-00078-2

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