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Insuring against IUU fishing

Insuring against Illegal, Unreported, and Unregulated (IUU) Fishing

Project Lead: ORRAA
Support: Global Fishing Watch, Trygg Mat Tracking, Oceana, AXA XL
Financial Support: Gordon and Betty Moore Foundation

Summary 

ORRAA is leading a project to reduce the negative impacts of IUU fishing on global fisheries and the communities that rely on them by developing tools to help insurers better assess risk. This project will reduce access to insurance for vessels engaged in this illicit activity, thereby disincentivising and reducing it.

Challenge 

IUU fishing undercuts effective fisheries management and harms ocean ecosystems. It is estimated that it costs the global economy over US$20 billion annually, leading to some fish stocks being on the verge of collapse. IUU fishing has become pervasive by taking advantage of the lack of transparency in the fishing industry, using gaps in regulation and monitoring of the high seas and at ports to operate undetected.

With 12% of the world’s population relying on fisheries for their livelihoods, this activity threatens the economic security of millions of small-scale fishers and their communities. In addition, IUU fishing is closely associated with labour and human rights abuses. 

Solution

Removing access to insurance is one lever that has significant potential to reduce IUU fishing globally. ORRAA, with project delivery partners Global Fishing Watch and Trygg Mat Tracking, is leading the development of a rapid risk assessment tool to help insurers evaluate the past behaviours and characteristics of vessels to estimate their likelihood of engaging in IUU fishing.  

This tool will help insurers fill information gaps on the vessels they insure and will create a positive cycle of information-sharing, leading to increased transparency and improved risk assessments. 

The initiative, with support from AXA XL and Oceania, has also worked to assess the feasibility of requiring International Maritime Organisation (IMO) numbers – unique and permanent vessel identifiers – as a condition of insurance as well as developing policy language to stop coverage and prevent claims payments if a vessel is found to be linked to IUU fishing. 

The project builds on the 2017 Insurance Industry Statement Against IUU Fishing and the 2018 Oceana IUU Fishing Risk Assessment Checklist – engaging insurers in implementing the commitments made in 2017 to not knowingly insure vessels that have been involved in IUU fishing.

Scalability and Next Steps

Throughout 2022, the project team will be engaging with insurers to build the rapid risk assessment tool and pilot its implementation. As the initial success of this initiative, AXA XL has taken the first steps to add additional checks on fishing vessels, including requiring IMO numbers.

Cutting off access to insurance makes it more costly for IUU fishing vessels to operate and disincentivises engaging in this illicit activity. It can also help insurers avoid costly claims and exposure to potential liability, making the business case clear.

Putting an end to IUU fishing requires a multi-sector approach that includes the use of technology, expertise from civil society, policy action from governments, and the engagement of private sector actors and local communities. ORRAA’s role in catalysing this collaboration is central to presenting a unified front to reduce IUU fishing.