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The Future of Seafood Security: The Fight Against Illegal Fishing and Seafood Fraud

Jimmy Galle sorts through shrimp caught on the Gulf coast on June 4, 2010.

Endnotes and citations are available in the PDF and Scribd versions.

This issue brief contains a correction.

In December 2006, the U.S. Congress passed a comprehensive reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act, which governs America’s fisheries. In the decade since, this law has been lauded around the globe as a model for both ending overfishing and allowing science to drive management of the world’s last major commercial hunting industry. As a result, regulators are required to set catch limits at the most sustainable levels possible. It has been so effective that the European Union used it as a model for revising its comparable law, the Common Fisheries Policy, in 2014. The upshot of the 2006 Magnuson-Stevens Act reauthorization is that overfishing has effectively been ended in U.S. waters. And yet, despite this fact, Americans are still consuming millions of tons of unsustainably caught seafood every year.

According to the National Oceanic and Atmospheric Administration, or NOAA, more than 90 percent of the seafood consumed in the United States is imported. This means it is harvested, farmed, or processed in nations that, in almost all cases, lack the high standards that the United States has mandated for domestic producers. Making matters more difficult, it is exceedingly hard for buyers who seek sustainable seafood to identify its provenance with any degree of confidence; mislabeling—either accidental or purposeful—is rampant. So the combination in many countries of low enforcement capacity on the water and in processing facilities and substantial short-term economic incentives for unscrupulous fishermen and dealers means that those who would seek to exploit or circumvent national and international standards and regulations have all but unlimited capacity to do so.

Therefore, while American fisheries approach the 10th anniversary of the enactment of some of the world’s strongest seafood sustainability standards, much work remains in the fight to maintain global fish populations, the industry that relies on them, and, ultimately, the primary source of protein for more than one billion people worldwide. President Barack Obama’s administration, with assistance from leaders in Congress, has begun to take significant steps toward addressing the two-track problems of combating illegal, unreported, and unregulated fishing activity—also known as IUU fishing—and enhancing the traceability of seafood in order to combat trade in fraudulent fish. NOAA recently ended the public comment period on a new proposed rule that would boost efforts on both fronts, and last fall, the U.S. Senate acted to ratify a treaty requiring countries where fishermen land their products—known as port states—to take additional measures to block vessels engaged in illegal fishing activity from entering their harbors.

Congress also passed bipartisan legislation allowing the treaty’s provisions to take effect here in the United States. The Illegal, Unreported, and Unregulated Fishing Enforcement Act was sponsored in the Senate by Sen. Lisa Murkowski (R-AK) and in the U.S. House of Representatives by Rep. Madeleine Bordallo (D-Guam). Collectively, these bills had 46 cosponsors from both parties. The legislation, which also included provisions to strengthen domestic enforcement capacity, sailed through both houses of Congress to become law in November of last year.

This issue brief will define IUU fishing and the lack of traceability in the seafood supply chain, outline the problems they cause, and analyze the measures that the Obama administration and Congress have already put forward. While these efforts have set the United States on a path toward greater transparency and enforcement capacity, more effort is needed to ensure a sustainable future for global seafood and the fishing industry.

Specifically, the Obama administration should leverage the bipartisan support for stronger enforcement authority to fight IUU fishing and seafood fraud globally. There is also a ripe opportunity for collaboration with fishing industry groups and international partners, particularly the European Union, which has already established a new process for identifying and sanctioning nations that fail to address seafood problems in their supply chains. Developing a U.S. system that can work hand in glove with the EU system would be a huge driver of change in this industry since, together, the United States and the European Union account for more than two-thirds of global seafood imports by value.

NOAA and other federal agency partners are addressing the 15 recommendations put forth by a presidential task force consisting of 14 federal agencies. The interagency task force was established to tackle the challenges of illegal fishing and seafood fraud under a wide range of authorities. In March 2015, the task force issued its action plan, and among the most notable actions currently underway is NOAA’s promulgation of a draft rulemaking that sets traceability standards for 13 at-risk groups of species. The agency is on track to finalize these new rules by the end of this year. While completion of the rules for these 13 groups of species is a strong first step, industry members, regulators, and seafood consumers should continue to support the rapid and robust expansion of the national seafood traceability program to include all seafood and make this a high priority for the next presidential administration.

The successful implementation of these reforms will help level the playing field for the American fishing industry—which has already made such significant strides to effectively end overfishing in U.S. waters—as well as other good actors around the world; promote effective fisheries management through accountability; and ensure that diners can indulge in everything from anchovies to yellowfin tuna with full confidence that the fish they paid for is the fish they are about to consume.

Defining IUU fishing and seafood fraud

There are three categories of IUU fishing activity—illegal, unregulated, and unreported—all of which constitute threats to global fish populations and to fishery management regimes. Illegal fishing is activity that occurs in areas or using methods not allowed by the regulating authority: for example, harvesting species in a marine protected area where fishing activity is prohibited or when fishing vessels from one country operate in another country’s exclusive economic zone without permission. Unregulated fishing occurs in areas not subject to any regulatory structure, such as vessels operating on the high seas. International agreements exist under which countries set restrictions on high-seas fishing activity, but vessels from nations that are not party to these agreements are not bound by them, meaning that the captains of these boats can operate free from regulations and without considering the long-term health of fish populations. Unreported fishing is activity that is simply not recorded by any management authority, presumably because no such authority exists.

Unlawful activity associated with the seafood trade can also extend beyond these parameters to include even more nefarious crimes. Last year, reports by The Guardian, The New York Times, and the Associated Press detailed the prevalence of human trafficking and slave labor on Thai fishing vessels, as well as in some shoreside processing plants. The lack of transparency in the seafood supply chain allows fish and shrimp that are caught or produced in conjunction with these horrific human rights abuses to enter the global market. This is particularly troubling since, “The U.S. counts Thailand as one of its top seafood suppliers, and buys about 20 percent of the country’s $7 billion annual exports in the industry,” according to the Associated Press.

In addition to the risk of such atrocities, there are massive environmental and economic consequences of IUU fishing. NOAA estimates that it costs the global fishing industry between $10 billion and $23 billion per year in price suppression and lost revenue.* It is also a huge contributor to the decline of global fish stocks. Failure to control unreported catches has led to the overfishing of species such as bluefin tuna in the Mediterranean Sea and cod in the North Sea, among others.

The deceit does not stop once the fish hit the dock. Seafood fraud—substituting a lower value species for a higher one, mislabeling fish to avoid breaching quota allotments or avoid tariffs, adding water weight to fish products, or using unspecified chemicals or additives—can occur at any point along a supply chain, as a single piece of fish can change hands multiple times after it leaves the fisherman who catches or harvests it and before it gets to the diner who eats it.

In 2011, The Boston Globe published the results of a five-month long investigation that found that 48 percent of fish sold in “134 restaurants, grocery stores, and seafood markets from Leominster to Provincetown” were not the same species that the menu or label claimed they were. Cheaper Pacific cod was touted as “local”; $23 flounder entrees were actually farmed catfish from Vietnam that retailed for $4 per pound; and so-called white tuna at some sushi bars turned out to be escolar, a product often referred to in the industry as the Ex-Lax fish for its effects on some consumers’ gastrointestinal tracts.

All of these exploitative and dishonest tactics not only erode consumers’ confidence—and in some cases jeopardize their health—but they also impose a significant economic burden on law-abiding U.S. fishermen. Last month, the Maine Lobster Marketing Collaborative released a survey of more than 7,000 restaurants nationwide that found that “restaurants selling lobster are charging $6.22 more, on average, when it comes from Maine and its provenance is identified by name on the menu,” according to the Portland Press Herald. Maine’s lobstermen have a centuries-old history of stewardship and independence that makes their product a remarkable—and, in the New England region, a rare—example of fisheries management done right. Yet these sacrifices come with an economic cost to fishermen. The results of this survey show that the cost should be offset with a clear financial benefit, but in order for this benefit to be a driver of behavioral change, it must be returned exclusively to the Maine fishermen who bear the costs rather than to those who choose to apply the label to any lobster regardless of where it originated.

What are we doing about it?

The Obama administration has recognized the threats that IUU fishing activity poses to U.S. domestic fishing fleets and, by extension, U.S. coastal economies. It has also noted the need to crack down on fish fraud and the reality that the will and technology exist today to put a serious dent in this international criminal activity. The issue has also garnered support on both sides of the aisle. The Illegal, Unreported, and Unregulated Fishing Enforcement Act of 2015, introduced by Sen. Murkowski and Rep. Bordallo, garnered 46 bipartisan—and bicoastal—co-sponsors and was signed into law in November by President Obama.

The Obama administration and Congress have further demonstrated their commitment to the fight against illegal fishing by signing and ratifying the Port State Measures Agreement, or PSMA, earlier this year. In October 2015, Congress passed implementing legislation for this international treaty, which boosts the authority of port states. The treaty requires member countries to collect certain information from foreign vessels before they are permitted to enter a port and sell their catch. As of May 5, 2016, 30 nations—representing nearly two-thirds of worldwide fish imports—have ratified the treaty, and as a result, it will formally enter into force on June 5. The Illegal, Unreported, and Unregulated Fishing Enforcement Act of 2015 also includes provisions to implement the PSMA domestically.

The administration first announced its Presidential Task Force on Combating IUU Fishing and Seafood Fraud in June 2014 at Our Ocean, an international conference convened by long-time ocean champion Secretary of State John Kerry. The goal of the task force is to eliminate illegal and fraudulent seafood products from the U.S. market. Comprising representatives from the 14 federal agencies with jurisdictional authority over the seafood industry, the task force worked together to develop a 15-point action plan, finalized in March 2015, that outlines recommendations to increase both enforcement for laws against illegal fishing and the availability of information regarding the origins of seafood.

Presidential task force 15-point action plan

Recommendation 1: International—Port State Measures
Recommendation 2: International—Best Practices
Recommendation 3: International—Maritime Awareness
Recommendation 4: International—Free Trade Agreements
Recommendation 5: International—Fishery Subsidies
Recommendation 6: International—Capacity Building
Recommendation 7: International—Diplomatic Priority
Recommendation 8: Enforcement—Information Sharing
Recommendation 9: Enforcement—Customs Mutual Assistance Agreements
Recommendation 10: Enforcement–Species Name and Code
Recommendation 11: Enforcement—Enforcement Authorities
Recommendation 12: Enforcement—Enforcement Authorities
Recommendation 13: Partnerships—Forum
Recommendations 14 and 15: Traceability—Traceability Program

In February 2016, as its first major action to implement the traceability recommendations, NOAA released a proposed rule for a national seafood traceability program developed in consultation with the task force and reflecting input from a diverse set of stakeholders. The proposed rule includes provisions to trace 13 at-risk species groups: abalone, Atlantic cod, Pacific cod, blue crab, red king crab, dolphinfish, grouper, red snapper, sea cucumber, shrimp, sharks, and swordfish, as well as albacore, bigeye, skipjack, and yellowfin tuna.

Species were determined to be “at risk” using guidelines developed by the task force that flagged those species with a history of violations against them or those known to have other species frequently substituted for them. The proposed rule stipulates that any at-risk species sold in the United States will require key data elements—such as when and where each fish was caught—that must follow the product from the point of catch or harvest to the first domestic point of sale. Information will be collected and transferred using a standardized electronic international trade data system, or ITDS, also known as the Single Window system. The ITDS, to be finalized in December 2016, will act as a centralized access point that connects trade partners and federal agencies involved in regulating all imported and exported product. The system will streamline data collection and eliminate the need for each agency to complete duplicative documents.

In April 2016, the task force also released a public notice regarding the Commerce Trusted Trader Program, which was established as part of the seafood traceability initiative. The voluntary program streamlines the entry of seafood products into the United States for holders of NOAA-issued international fisheries’ trade permits. NOAA is currently requesting comments on the design and implementation of this system, which will reduce inspections and targeting of certified permit holders. The Commerce Trusted Trader Program will act within the national traceability program to provide benefits to good actors in the seafood supply chain with the goal of creating a more efficient seafood supply chain.

High priority for ocean advocates

The environmental community generally believes that NOAA’s proposed rule is a significant and positive first step but that additional action is necessary to eliminate illegal fishing and seafood fraud. Groups such as Oceana and the World Wildlife Fund have stressed that the final rule must include a timeline to expand traceability from the initial at-risk species list to all seafood sold in the United States. The U.S. Food and Drug Administration, or FDA, lists 1,850 seafood species that are sold in the United States. By limiting traceability to 13 “at risk” species groups, the regulation could create a new incentive for seafood scofflaws to mislabel these species in order to avoid the new data reporting requirements. Such a reaction would lead to a futile game of whack-a-mole for already resource-strapped fisheries enforcement agencies.

The list also misses numerous species that are still at high risk for illegal fishing. A recent report published by the World Wildlife Fund found that “over 85 percent of global fish stocks can be considered at significant risk of illegal, unreported, and unregulated fishing.” In addition, Oceana, through rigorous DNA analyses of retail seafood products in multiple cities, found that one-third of seafood tested was mislabeled and that many species that were substituted in for high-profile species are not included in NOAA’s at-risk species list.

Supporters of enhanced traceability in the seafood supply chain have also stressed the need to track fish from the point of catch or harvest to the end consumer—colloquially, from bait to plate—in order to hold bad actors accountable. The proposed rule requires traceability until the first point of sale in the United States. However, seafood fraud can occur at any step of the seafood supply chain. Landing a fish at the dock would be considered the first point of sale, but a fish may be transferred to processors and wholesale distributors in multiple locations before ending up on a restaurant plate.

Ferreting out such illegal activity within U.S. borders is one thing, but when the supply chain expands overseas, it becomes exponentially more difficult. In order to create a comprehensive full-chain system, the environmental community has encouraged the interagency task force to utilize all available authorities in the final traceability rule. Although the proposed rule relies on the authority granted under the Magnuson-Stevens Act, additional regulation—such as food safety and illegal wildlife trade laws—can and should be applied to these situations. Some environmental groups have also advocated for more information to reach the final consumer, such as the catch location and method. In the absence of traceability measures that extend to the consumer, an individual shopping at a grocery store has little to no information about the fish they purchase beyond the legal requirement that it be labeled with its country of origin. Even then, the labeling requirement only relates to the country where the fish was most recently processed, which may not be where it was caught. While it may require more work on the task force’s part, the Obama administration should lay the groundwork for the next rulemaking process required to build on NOAA’s progress and finish the job, ensuring that traceability information ultimately extends to the final point of seafood sale.

Fishing industry members’ reactions diverge

Opposition to the traceability program centers on the arguments that the cost of compliance and the outlined reporting requirements will be too high and that the feasibility of implementation is too severe. The National Fisheries Institute, or NFI, a trade organization supported by the seafood industry, has repeatedly spoken out against the proposed rule. The NFI does not oppose traceability standards; instead, it suggests that they should be voluntary and that there is no need for additional regulations that would impose new costs. The task force counters this assertion, estimating that the total cost of implementation would be just $60,000 in total for compliance across the approximately 2,000 importers that would be affected.

Of course, the NFI does not speak for the entire fishing industry. A 2016 Oceana report featured interviews with 16 industry representatives along the supply chain explaining the importance of traceability to their businesses. They suggested that the only way to be sure that the information consumers receive about fish is accurate is through a national program, and they expressed concerns that with voluntary or self-regulated systems, there may be little enforcement or third-party verification. “Without traceability and without valid data, you cannot have sustainability,” said Reese Antley, vice president of operations at Wood’s Fisheries in Port St. Joe, Florida.

U.S. industry support for traceability is especially prominent among shrimpers. The Southern Shrimp Alliance, a collection of industry members, and the American Shrimp Processors Association have advocated for the inclusion of shrimp in the final implementation of the rule, noting that shrimp imports to the United States were valued at $6.7 billion in 2014 and that there is a high risk of fraud and illegal activity associated with the product. Shrimp have been connected to human rights abuses and even slavery in Thailand, both in processing plants and in the industry that catches the fish used in aquaculture feed. Ensuring that shrimp is accounted for in the traceability rule would allow American shrimpers to differentiate their product from others in the market and would permit consumers to make informed decisions about the seafood they purchase, as well as provide more incentive to international producers to clean up their acts.

However, shrimp traceability may be delayed from inclusion in the final rule. This is because data collection for U.S. domestic aquaculture is regulated on a state-by-state basis and not subject to the same unified reporting requirements as wild-caught product. In order to comply with international trade laws, the reporting requirements must be uniform for all domestic and imported product. The information needed to comply with the proposed rule could be provided through basic reporting requirements that likely exist under state and federal laws. Harmonizing these requirements should be a top priority for NOAA and state regulators to ensure that shrimp—the most consumed type of seafood in America, according to NFI—can be included under the rule.

A model from across the Atlantic

Some foreign governments have expressed concerns that the proposed rule violates World Trade Organization standards by requiring more information from foreign industry than domestic, or by requiring excessive information in order to combat IUU fishing and seafood fraud, thus inhibiting trade. However, NOAA has specifically designed the rule to meet international trade standards. In the regulatory review of the proposed rule, the agency explains that for all of the at-risk species and species groups listed, the top three exporters to the United States also export the same products to the European Union, which already has similar requirements for these species. Additionally, NOAA notes that the information requirements are the same for all domestic and imported suppliers, eliminating the potential for bias.

The European Union has been a leader in the fight against illegal fishing since passing new IUU rules in 2008 and 2009. Under the EU regulations, all imported seafood must include a catch certification in order to be permitted in any member state. As a result, seafood mislabeling rates in the European Union are down to just 4.93 percent from approximately 30 percent in the five years since implementation of its traceability program. In addition, due to the establishment of a community IUU vessel list, port state control over non-EU fishing vessels, and a list of noncooperating countries, the European Union has inspected thousands of fishing vessels and investigated more than 200 cases of presumed IUU fishing. The reporting requirements outlined in the U.S. proposed rule are similar to the European Union’s reporting requirements, and NOAA believes that this will not be a significant burden for exporters already compliant with the EU program.

Together, the United States and the European Union comprise 68.3 percent of global seafood imports by value. Therefore, by teaming up, these two seafood superpowers could impose strong standards that would drive suppliers around the globe to crack down on IUU activity.

Conclusion

With the Port State Measures Agreement on the cusp of entering into force and the European Union already implementing strict trade standards aimed at stemming the flow of fraudulent fish, the United States is primed for action to ensure that American consumers and fishermen get an equivalent level of protection against unsavory actors overseas. Just as U.S. law served as the model for the European Union to reform its fishery management regime, so the United States should now look to replicate the European model in dealing with international fisheries issues.

NOAA’s proposed rule represents a strong first step toward securing the domestic seafood supply chain, but in order for the regulation to be truly effective over the long term, NOAA will ultimately need to address all species and the full length of the supply chain. The clock will run out on the Obama administration before it will be able to expand the current list of at-risk species or improve labeling requirements. But as congressional action has already shown, the issue is truly nonpartisan. Protecting America’s living marine resources, the industries that rely on them, and the consumers that love them must remain at the top of the to-do list for the next president—regardless of party affiliation or political philosophy.

Michael Conathan is the Director of Ocean Policy at the Center for American Progress. Avery Siciliano is a Research Associate for Ocean Policy at the Center. Shiva Polefka, a Policy Analyst at the Center, contributed to this report.

*Correction, June 28, 2016: This issue brief incorrectly named the industry affected by the cost of price suppression and lost revenue. The correct industry is the global fishing industry.