The Art of Fishing Laundering
It might seem like a sensible logistics exercise, but in reality, transshipment enables destructive IUU fishing across the world.
Malaysia, Vietnam, Indonesia
In southwestern Vietnam, Tinh, 34, works aboard a fishing boat that goes out to sea for three months at a time.
He and his crew would travel down the South China Sea towards the maritime border between Malaysia and Indonesia, where they would hunt mainly for sardines, red bigeyes, and rosy snappers.
Once the boat’s storage hold is full, his company will send what is known as a “logistic ship” or “mothership”, a large refrigerated vessel which will bring the catch back to shore, and restock the boat with fuel and supplies – allowing his boat to continue fishing almost indefinitely.
This transfer is known as “transshipment”, a controversial practice that can be an efficient logistics exercise, but one that’s also often used to enable what the industry calls “IUU fishing” – illegal, unreported and unregulated fishing.
IUU fishing is one of the biggest threats to the world’s oceans, causing massive disruptions to marine ecosystems and fuelling pollution through unsustainable practices, all while affecting the financial and food security of coastal communities around the world.
Transshipment enables all this by obscuring where and how seafood is caught, as transfers take place far away from port authorities, making it difficult to tackle overfishing and other IUU fishing practices.
There’s also the potential for human rights abuses. An investigation by Greenpeace showed how transshipment in Thailand led to the deaths of six fishers who had been at sea continuously for nine months. The rest of their shipmates were found to be suffering from beriberi, brought about by severe malnutrition.
That’s why across the South China Sea, off the coast of Malaysia, there is a hunt going on for boats like Tinh’s.
Transshipment is illegal in Malaysia. When we met him, Captain Hamiludin Che Awang of the Malaysian Maritime Enforcement Agency (MMEA) and his crew aboard the KM Pekan had spent the past few days tracking a few suspect boats. They were ready to commandeer them and arrest those on board. The MMEA regularly sinks the boats of those found guilty of IUU fishing — as a deterrent.
But despite being able to see over 90 boats on the horizon, right outside Malaysia’s maritime border, there’s nothing Capt. Hamiludin can do.
“Just yesterday, we saw two Vietnamese fishing vessels inside our waters, but as we came close, they made a dash for their territory,” he said to R.AGE journalists working with the Environmental Reporting Collective (ERC) who were witnessing the operation aboard his ship. “I know that as soon as we leave the area, they will re-enter our waters.”
The stakes on this maritime game of cat-and-mouse are about as high as it gets. In 2019, Malaysian authorities reported losses of RM4.2 billion (US$995 million) to IUU fishing in 2019, much of it facilitated by transshipment.
It is no surprise, then, that some of these fishing companies pay tontos (informers) to tip them off on the MMEA vessels’ locations, said Capt Hamiludin.
In the same waters but further to the east, Indonesian authorities have also cracked down hard on transshipment, having lost an estimated US$4 billion to IUU fishing in 2020. Indonesia recently began allowing transshipment, but under strict regulation.
In addition to the economic impact, IUU fishing enabled by transshipment has also had an alarming impact on marine ecosystems in the South China Sea.
ERC journalists across the region collaborated to interview fishers in the Philippines, Malaysia, Vietnam, and Indonesia. All spoke about an alarming decline in seafood stock due to unregulated fishing. Studies have estimated that the stock could be as low as 5% of what it was in the 1950s.
The problem of transshipment, however, isn’t one to be solved only in the South China Sea.
In July 2020, the Ecuadorian navy spotted a fleet of over 200 Chinese vessels fishing near the Galapagos islands. The incident sparked concerns in the international community about overfishing, especially due to the unique biodiversity around the UNESCO World Heritage Site.
WWF Ecuador mentioned the Chinese fleet’s use of transshipment as a particular concern, because “they do not return to port… the fishing operation doesn’t stop”.
The fleet would eventually grow to over 300 vessels, all Chinese-flagged or Chinese-owned, fishing massive amounts of seafood while skirting the maritime borders of several South American countries.
And just like it was for the Ecuadorian navy, there is little authorities like Capt. Hamiludin can do but watch as these vessels plunder the seas just beyond their reach.
IUU fishing has been a source of tension between Southeast Asian nations for some time, be it over fishers being exploited as forced labour in neighbouring countries, or economic losses from illegal fishing in each others’ waters.
For example, the Malaysian fishers and officials interviewed by ERC often pointed to Vietnamese fishing companies as the biggest perpetrators of IUU fishing in the South China Sea.
The Malaysian Fishery Department told ERC that 80% of the over 300 IUU fishers they arrested in 2019 and 2020 were from Vietnam.
In Indonesia, 299 of the 516 vessels caught for violating fishing regulations between 2014 and 2019 were from Vietnam. It should be noted though, that even though Malaysian and Indonesian fishers are often caught in each others’ waters, a treaty between the two countries means these fishers are simply ordered to turn back instead of being arrested.
The situation is exacerbated in the South China Sea due to the complex history of territorial disputes and overlapping maritime boundaries among the countries surrounding it.
"Many of my colleagues were unjustly imprisoned,” said Tinh. “They fished in overlapping waters. The Vietnamese thought it was Vietnamese. The Malaysians and Indonesians thought it was theirs and caught the Vietnamese fishermen."
Nevertheless, Tinh admits that his boat has strayed into Malaysian and Indonesian waters many times when chasing schools of fish.
“The captain knew he was breaking the law, but he still did it because there’s more fish there,” said Tinh.
“The fishing grounds around Vietnam are all exhausted. We only get two-thirds or even half of what we would get from Malaysian and Indonesian waters.”
The reason for this, according to a Vietnamese fishing boat captain who only wished to be known as Duy, is China.
China has the largest fishing fleet in the world by far, with around 17,000 distant-water vessels operating around the world, such as those off the Ecuadorian coast, and even as far as the Antarctic.
Closer home, fishing in the South China Sea is also dominated by Chinese fleets.
According to Duy, Vietnamese fishers can no longer fish around the contested Paracel and Spratly Islands off Vietnam’s east coast (but also close to China and the Philippines) like previous generations of fishers did.
“They are our country's waters, but the Chinese coast guard often catches and even shoots at fishermen. We can't be productive when we must spend so much time fighting against these attacks.
“Vietnamese fishermen are often mobilized by the government to go to the Paracels and Spratlys to fish and ensure the sovereignty of the country,” said Duy.
“But what if our boats are damaged by the Chinese? We don’t get much financial support from the state to repair our boats.
"Moreover, the fishing grounds there are not as abundant anymore. Chinese fishing boats wipe out fish," he added.
Researcher Nguyen The Phuong from the South China Sea Chronicle Initiative added that Vietnam’s large near-shore fishing fleet and its “scraper trawling’ fishing method are also major factors, having damaged the marine environment and seafood stocks around its shores.
Because of the need to fish further off-shore, transshipment – which is legal in Vietnam – has become a necessity for many Vietnamese fishing operations.
“Investing in logistics vessels is a strategy of Vietnam, helping fishermen stay at sea longer and increase catches,” said Phuong.
“The Vietnamese fishermen don't want to break the law, but the situation forces them to do so.”
From Oceans to Markets
Transshipment can facilitate IUU fishing in almost any sea in the world, but its impact can also be felt on land.
Consumers can be buying illegally-caught seafood without even knowing it, as transshipment allows fish to be “laundered”. Illegal catch is mixed with legal catch aboard motherships out at sea, so authorities would be none the wiser.
According to some estimates, as many as 20% of global fishing catch is from IUU sources. This can cost local economies billions of dollars, just as it has in Malaysia, Indonesia, and the Philippines, harming poorer coastal communities the most.
Illegal catch can also travel far and wide, with one MMEA officer saying that once it’s laundered via transshipment, it could easily pass export requirements — even those as strict as the European Union’s.
This means that consumers around the world could unknowingly be consuming seafood that was caught illegally, by exploited fishers, and/or without any sustainable measures in place.
In response to questions from R.AGE, the European Commission said that in 2010, it had enforced regulations to prevent, deter, and eliminate IUU activities. Only marine fishery products with catch certificates — proving that the catch was made in accordance with relevant laws, regulations, and conservation measures — can be imported to the EU.
To date, 93 countries have committed to comply with the EU’s requirements. Those that do not, risk being issued a “yellow card” warning, which may escalate to a “red card” — a total ban from the EU market.
Vietnam, for example, received a yellow card in 2017, and its exports to the EU have suffered as a result, dropping from US$415 million in 2017 to US$314 million in 2020.
“The yellow card starts a formal dialogue where both sides work together to solve all issues of concern. In most cases, this dialogue is productive and the pre-identification can be removed (green card),” said the European Commission in its statement. “Otherwise the Commission will identify the third country as non-cooperating, red carded and be subsequently banned from exporting to the EU market.”
To Ban, or Not to Ban
For years, the government of Indonesia has taken a hard stance on transshipment. A study in 2014 found that much of the illegal fishing in its vast waters was facilitated by transshipment, with boats regularly turning off their location transmitters to avoid detection.
“In many cases, they deliberately did it so that they could illegally transfer the cargo at the (maritime) borders, in Indonesia’s exclusive economic zone, or the open seas,” said Achmad Santosa, former coordinator of Taskforce 115, a multi-institutional task force set up by Indonesian President Joko Widodo in October 2015 to combat fish theft.
According to Achmad, most Indonesian fishing vessels at the time were essentially controlled by foreign entities or businessmen, who had acquired controlling stakes in Indonesian fishing companies.
These boats would transfer their catch to motherships, also owned by foreign companies, which would then launder the catch to other countries – presumably their own.
In an attempt to end this practice, then-Maritime Affairs and Fisheries minister Susi Pudjiastuti issued Ministerial Regulation No. 57, which essentially banned transshipment by Indonesian companies.
The ban, though criticised, appeared to work. Domestic fish supplies increased soon after, according to Suhana, a lecturer with the Bogor Agriculture Institute. Fishers could no longer transship their catch to motherships destined for other countries, leading to an additional 50 million tonnes of fish being brought back to Indonesian shores from Jan-April 2015, compared to the same period the year before.
On top of that, the government also banned foreign ownership of Indonesian companies involved in capture fishing, which researchers say led to a considerable decline in fish theft.
However, there were growing calls for the government to allow transshipment under strict controls, as certain local fishing operations (particularly the tuna fishing industry) needed transshipment for logistics purposes.
The ban was eventually overturned in Nov 2020, and Indonesia now uses a completely different approach recommended by the UN’s Food and Agriculture Organisation (FAO) – legal transshipment.
The FAO had initiated a study in 2017 out of concern over links between transshipment and IUU fishing, as well as organised crime syndicates. The study was released in 2020, and it provided recommendations to ensure transshipment is practised legally, ethically, and sustainably.
One of the main measures taken by Indonesia based on the study was to ensure all transshipment vessels have an observer on board to record detailed catch data.
"(The observers’) task is very strategic, providing accurate, detailed and deep data that cannot be obtained from other data collections such as fishing logbooks." said Trian Yunanda, Director of Fish Resources Management in the Directorate General of Capture Fisheries.
While it may be too soon to tell if Indonesia’s legal transshipment regulations are successfully preventing IUU fishing, an expert is calling for more concerted efforts by governments to go after the “big fish” behind these criminal syndicates.
The FAO study noted how transshipment and IUU could be used for transnational crimes such as money laundering, arms smuggling, or human trafficking.
“What we catch now are the fry, not the sharks. The thinking of law enforcers needs to change if you want to arrest the transshipment problem or even these organised crime syndicates," said Retired Captain Martin A. Sebastian, a maritime security and diplomacy expert and senior consultant with the United Nations Office on Drugs and Crime.
"If we work together to bust the big fish, we can trace the rest and the money we seize can be used to boost the law enforcement agencies.”
Capt. Martin believes poor governance and mismanagement in the fishery industry are the real reason IUU fishing shows no signs of abating.
"Transshipment boils down to the issue of mismanagement. These reefers are taking advantage of our lack of interest in managing our maritime estates.
“Are we really taking care of our fishermen? Are they getting paid the right amount? Do we have proper fish landing facilities that allow fishermen to land their fish fast?
“These are all the issues that will encourage our fishermen to trade at sea, instead of bringing their haul back,” he said.
The Human Cost
Back aboard the KM Pekan, Capt Hamiludin’s search for IUU and transshipment boats was facing familiar challenges. Not only were all the suspected boats skirting the borders just beyond his jurisdiction, but heavy weather was also setting in.
The massive waves forced the ship to seek refuge at the nearby island of Pulau Perhentian. After two days of waiting for conditions to improve, the waves only got worse, leaving Capt Hamiludin to make the tough call to return to shore, empty-handed.
While countries continue to grapple with such challenges in curbing IUU fishing and transshipment, fishers like Tinh and their communities continue to pay a heavy price.
Last year, Tinh and his crewmates were arrested in Indonesian waters. Indonesian law allows occasional crew members like Tinh to avoid jail time, but due to Covid-19 travel restrictions, he ended up being detained for over a year.
“If I can come home, I’ll never go to the sea again,” he said at the time, speaking to an ERC journalist on the phone from Tanjung Pinang prison in Indonesia, where the hunger and cramped conditions left him traumatised.
By the time he was finally repatriated to Vietnam in June, his family was saddled with a debt equivalent to US$1,300. His wife borrowed the amount from a local ship owner to pay Tinh’s fine and secure his return ticket.
“Now, to repay the debt, I have to comply with what the lender has asked, which is to work as a crew member on his boat. That means another six months at sea, before I can be fully free,” he added.
“After that, I will say goodbye to the ocean. I will never go back.”