Insurer ends coverage for illegally fishing fleet in progressive step
Press Release Date: March 23, 2022
Insurance company Hydor has ended its contract with a fleet of vessels that were discovered fishing illegally across the Atlantic by the Environmental Justice Foundation (EJF). Without insurance, the fleet operators are at risk of severe financial losses. Oceana, who worked with EJF to warn Hydor about its unwitting association with an illegal fleet, says that other insurers should follow suit to tighten the net and make illegal fishing untenable.
The fleet was blacklisted by the International Commission for the Conservation of Atlantic Tunas (ICCAT) late last year, after having been discovered engaging in illegal, unreported and unregulated (IUU) tuna fishing.
The operator took extensive actions that raise suspicion it was attempting to avoid any oversight for its suspected illegal activity. For example, the vessels appear to have started off flying the flags of one nation, only to switch to another. There is also a good indication that they were ‘stateless’ for a time – registered to no country’s flag at all.
EJF’s investigation further uncovered evidence that the vessels appeared to have changed names: they left West Africa under one identity and entered port in Mauritius using a different identity, switching ID codes mid-voyage on the ‘automatic identification system’ that is used by fishing vessels to prevent collisions.
EJF’s investigations also revealed suspected illegal transhipments. Under this practice, vessels meet at sea to transfer catch, supplies, or crew. While this can occur legally if properly registered and monitored, it is often used by illegal operators to ‘launder’ fish caught illegally and perpetuate the abuse and enslavement of crew, by enabling vessels to stay away from port for months or even years.
Pascale Moehrle, Executive Director of Oceana in Europe, said: “There are clear actions companies can take to avoid becoming embroiled with illegal fishing. By using the freely available Combined IUU Fishing Vessel List, companies such as Hydor can easily identify vessels that have been found to engage in IUU fishing and ensure they are not provided with insurance coverage or other essential services that keep them afloat. They can also help to increase transparency in the fishing sector, for instance by requiring that vessels they provide services to are actively using vessel tracking technology and are registered with a unique vessel identifier such as an International Maritime Organisation number.”
Steve Trent, CEO and founder of the Environmental Justice Foundation said: “I would like to commend Hydor for working with us on this case. If it was commonplace for the insurance industry to require transparency, and sever all ties with illegally fishing vessels it would not only help to end the destruction of our ocean ecosystems and human rights abuse at sea, it would reduce the risk for insurers being damaged by such association.”
The decision by Hydor to end the coverage could be an effective way of making IUU fishing unworkable for operators, if it becomes commonplace across the insurance industry, say EJF and Oceana. By withholding coverage for vessels engaged in illegal fishing, insurers are reducing operators’ access to essential services that keep them in business. Alongside increasing financial risk for operators, this action could also prevent illicit operators from making fraudulent insurance claims after deliberately and unlawfully sinking their own vessels, an evasive tactic that has been attempted in the past.
In many countries, insurers are legally prohibited from supporting illegal fishing operations. Those who do may be at risk of prosecution, which can end in financial or even custodial penalties. Even in countries without these laws, it puts companies at increased risk of fraudulent claims, financial losses, and reputational damage. IUU fishing can be linked to other criminal activities, including human trafficking, slavery, and the transportation of arms and drugs – an association no insurance company wants.
- The vessels, currently named Israr 1, 2, and 3 are listed on ICCAT’s IUU Vessel List for fishing for tuna and tuna-like species in the area managed by ICCAT without an ICCAT authorisation.
- Additionally, key suspected illegal activities of the fleet include:
- Fishing in the waters of a coastal state without authorisation or in violation of that state’s laws and regulations;
- Fishing without nationality;
- Engaging in non-compliant transhipments at sea. For more information see: https://www.iccat.int/com2021/ENG/COC_312_ENG.pdf.
- EJF is continuing to monitor the whereabouts of the fleet and has evidence that it has shifted its operations from the Atlantic to the Indian Ocean, leaving the jurisdiction of ICCAT. While the vessels do have permission to fish in the Indian Ocean as a result of the switch to their new flag – Oman – early evidence raises the suspicion that they may be continuing to use illegal transhipment, in breach of the rules of the Indian Ocean Tuna Commission.
- Further risk control measures for insurance companies include:
- Integrating screening of the Combined IUU Fishing Vessel List into existing due diligence processes when screening new clients, before providing them with services.
- Introducing advisory (re)insurance policy wording (e.g., warranty, clause) that explicitly excludes coverage associated with the activities of vessels engaging in IUU fishing.
- Promoting transparency within the global fishing industry by providing coverage only to vessels actively using vessel tracking technology, VMS, and AIS and encouraging the use of IMO numbers.
- Further guidance for insurance companies includes: