On the incentives (and disincentives) around IUU Fishing / by Francisco Blaha

While trying to find something for my present job here in the Marshall Islands, I found this paper by Sumalia, Alder and Keith, that I really liked back in 2005, and still valid today. We talk a lot about curbing IUU with all sorts of technological tools and schemes, yet the very basic source of any cheating of any systems is grounded on the incentives for doing that and the chances to get away (and I'm saying this as ex fisherman and a regulatory advisor).

 is not personal... is just bussines

is not personal... is just bussines

We still making systems, regulations and ecolabels requirements that are based on some sort of moral code which we all know is very shifty and based on your needs and position in life... furthermore, and in my experience, those that have upper-hand of not having much of an incentive to cheat because their countries of origin are well off (in many cases based on the colonialism of their ancestors, but thats another story), are equally susceptible to "cheating the system" as those who are economically vulnerable or desperate. 

While the paper goes over various areas I love this bit:

The basic idea is that a vessel contemplating engaging in IUU fishing will undertake a subjective cost-benefit analysis. The following direct drivers and motivators play a role in fishers’ decision-making on whether to IUU or not to IUU:

  1. benefits that can be realized by engaging in the illegal activity;
  2. the probability that the illegal activity is detected or the detection likelihood driver. This depends mainly on the level of enforcement or the set of regulations in place;
  3. the penalty the fisher faces if caught;
  4. the cost to the fisher in engaging in avoidance activities. This depends on the set of regulations in place and the size of the budget allocated by the fisher to this activity;
  5. the degree of the fishers’ moral and social standing in society and how it is likely to be affected by engaging in IUU fishing (if we modify this to address both moral standing and sense of fairness. It will be seen that, in the case of high seas fishing and RFMO regimes, the concept of fairness can act as a positive driver of IUU fishing). 

Benefits from IUU fishing as a driver
For many fishers, the potential to benefit from IUU fishing motivates them to engage in the illegal activity. To some extent the higher the economic return in a ‘legal’ fishery the lower is the tendency to engage in IUU fishing. In other words, if a fisher is doing well financially, i.e., making a sizeable profit from fishing ‘legally’ then the probability of cheating is low, alternatively if the fisher is losing money, and there is the potential to derive benefits from ‘illegal’ fishing then the probability of cheating increases. There is also the factor of greed, i.e., the fisher may be making a profit but still engages in IUU fishing because of the desire to increase profits.

The following factors are important in determining the potential benefit to the fisher if they cheat:

  • catches—the more catch that can be realized by engaging in IUU fishing the higher the probability that a fisher will engage in IUU fishing, ceteris paribus;
  • catch per unit effort or the time it takes to catch the fish is also a consideration since the more time spent searching for fish to and from the fishing grounds, the more the cost and the probability of getting caught increases;
  • price—this is related to catch and if prices are too low then in most cases there will not be a financial incentive to cheat. This logic breaks down when food security is a driving factor. However, for the purposes of this study food security is not the focus;
  • cost of fishing, which includes consideration of the cost if labor, capital, fuel, license and royalty payments, etc.

The expected penalty drivers

Detection likelihood driver: The higher the probability of getting caught the lower the incentive to cheat, ceteris paribus, and hence, the higher the risk that the violator will be caught. The major factors that contribute to this driver are,

  1. the effectiveness and efficiency of the enforcement system;
  2. social acceptance of cheating in society;
  3. awareness of the regulations; and
  4. the level of nongovernmental or private organizations involvement in detecting infringements.

The avoidance driver: A rational fisher engaging in IUU fishing in a situation where there is some degree of enforcement will take measures (such as engaging in transhipment of catch) to reduce the chances of being detected, this is denoted as avoidance activity.

The penalty driver: The severity of the penalty when someone is caught is also an important driver in the decision of a fisher to cheat. The more severe the penalty the lower the likelihood is of cheating, ceteris paribus. This driver is related to the detection likelihood driver in that if there is no enforcement then the severity of the penalty is meaningless.

Moral and social drivers

Many have observed that the deterrence model alone does not adequately explain why people engage or choose not to engage in illegal activities such as IUU fishing; rather moral and social factors also play a crucial role. It has been observed that a given population of fishers, for example, can be classified into (i) chronic violators, (ii) moderate violators and (iii) non-violators

Chronic and non-violators generally make up a small portion of a given population. The former have the tendency to undertake IUU activities no matter what, while non-violators will not engage in IUU fishing under any condition. Moderate violators, on the other hand, will only bypass regulations if the potential economic gain is high enough to cover the potential penalty they may face given the size of the penalty when caught, and the probability of being caught.

Secondary influences that may affect the decision of moderate violators to IUU or not to IUU are the legitimacy of the regulation (and fishery management organization), and the norms of behaviour, including both the general behaviour of the fishers and the moral code of the individual fisher.

Furthermore, they go and develop a mathematical model for the analysis of the cost and benefit aspects of risks of IUU fishing. A key result of their study is that (for the cases they analysed) the expected benefits from IUU fishing far exceed the expected cost of being apprehended. For an assumed 1 in 5 chance of being apprehended, our calculations show that reported fines for the vessels apprehended will have to be increased by 24 times for the expected cost to be at least as much as the expected benefits.

----

Reality for me is that combating IUU fishing has to do more with human behaviour than with just technology trying to find out the cheating . We are in fishing because of the money, doesn't matter in which side you are (there is not many people working for free in the fisheries world!

Hence, if as a fisher, I see an incentive from perfect reporting, full compliance and so on reflected in terms of cheaper access fees, lesser cost of inspection, better media presence, etc, etc… or no tariffs for countries with best performance. Chances are I will do the right thing because is more cost-effective than doing the wrong thing… but we still are not at that level of discussion yet, and we need to get there with realistic terms and people.