On Fisheries Subsidies

WTO as an institution continues to be perceived as an effective rules-based organization, the Appellate Body crisis notwithstanding. With the appointment of a new Director General to lead the WTO, and the possibility of the next WTO ministerial conference to be held in July 2021, there is renewed focus and vigour to show a concrete outcome at the WTO. This time round, the disciplines on fisheries subsidies has been hailed as the poster child of an organization seeking to validate its relevance.

Given the critical role of fisheries in the context of livelihood and nutritional support for a significant portion of the world’s population, ensuring sustainability of fisheries, undoubtedly, is a common global concern. The proposed WTO disciplines on fisheries are aimed at ensuring that subsidies do not incentivise fishing even when fish stocks are already declining.

The WTO disciplines, in isolation, however, are insufficient to address what is predominantly an issue of conservation and management. The United Nations Sustainable Development (UN-SDG) Goal 14.6, is often cited as providing the mandate and impetus for fisheries subsidies. It is however worthwhile examining SDG 14 as a whole. Simply titled “Life Under Water”, SDG 14 relates to conservation and sustainable use of the oceans, sea and marine resources for sustainable development.

That “subsidies” is only one limb of the problem, was also clearly recognized under SDG 14. It acknowledges that fisheries is a complex issue requiring multiple action points and “sustainable development goals”, and lists 10 sub-categories, one of which, SDG 14.6, pertains to addressing the issue of fisheries subsidies under the WTO. The remainder of the goals under SDG 14, range from aspects relating to addressing marine pollution, to sustainable management and protection of marine and coastal ecosystems, to effective regulation of harvesting to address overfishing, and IUU fishing, to enhancing the conservation and sustainable use of oceans and their resources by implementing international law as reflected in the United Nations Convention on Law of the Sea (UNCLOS).

The UNCLOS, which has 167 member signatories, recognizes sovereign rights of the coastal states over the 12 nautical miles of territorial sea, and 200 nautical miles of exclusive economic zone (EEZ). The high seas which lie beyond the EEZ, is the area over which each country has rights, and concomitant responsibility. Addressing the development of an international legally binding instrument under UNCLOS on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction- which constitute close to two-thirds of our oceans, has been ongoing for several years now, without much success. Negotiations on each of the other 9 sub-goals of SDG 14, is also ongoing, without any concrete outcome.

The thrust of the fisheries subsidies negotiations at the WTO is to discipline three kinds of subsidies, namely: subsidies contributing to illegal, unreported and unregulated (IUU) fishing; subsidies contributing to overcapacity and overfishing (OCOF); and subsidies towards overfished stocks. Prior to the applicability of WTO rules on subsidies for each of these categories, there is a threshold issue of whether there has been IUU fishing or OCOF fishing or there exist overfished stocks.

The legal framework governing this space is comprised of a fragmented set of rules and regulations: the UNCLOS, as well as the Regional Fisheries Management Organizations (RFMOs). The United Nations Agreement on Port State Measures (PSMA), is the first binding international agreement to specifically target IUU fishing. As of now, it has 69 member signatories.

Questions remain about the nature and scope of a WTO agreement on Fisheries subsidies. For instance, can fisheries disciplines at the WTO succeed without the concomitant strengthening of determination of IUU, OCOF and overfished stocks, under the various other legal instruments? When a dispute arises, what would be the scope and standard of review of a WTO panel or appellate body, to address the threshold issue of whether there has indeed been IUU or OCOF? Would these be questions of fact that are presented? Or can these be evaluated based on application of non-WTO law?

The WTO disciplines on fisheries subsidies, will perhaps be the first time that a fundamental problem of conservation and sustainable development, will be sought to be disciplined through the economic tool of regulating subsidies. It can have only a limited outcome. A comprehensive solution to addressing sustainable fisheries, cannot rest on the shoulders of the WTO alone.