Series of Article on Ahead of Ministerial Conference 13th WTO, Abu Dhabi 2024
Ahead of the 13th WTO Ministerial Conference on 26-29 February 2024 in Abu Dhabi. One of the issues discussed was fisheries subsidies. In this issue, there are three pillars which are central to the discussion, namely Pillar 1 concerning IUU Fishing (Illegal Unreported Unregulated Fishing), Pillar 2 concerning Overfished stock, and Pillar 3 concerning Overcapacity and Overfishing.
Pillars 1 and 2 were agreed upon at the 12th WTO Ministerial Conference in Geneva, Switzerland in 2022.[1] It is hoped that the agreement will not apply, because it does not resolve problems in the fisheries sector, especially IUU Fishing and Overfished stock. Moreover, it will prohibit fisheries subsidies that have been given to fishermen. The agreement will take effect if it gets support from 54.45% of the quorum of 164 WTO member countries, which means it must be agreed upon by 107 countries first in order for it to take effect.
Based on the list of WTO countries that have ratified the agreement, there are 34 countries that have ratified and/or approved the agreement produced on Pillar 1 and Pillar 2. These include the United States, the European Union, the United Kingdom, Australia, Switzerland and Singapore.[2]
During its development, Indonesia was not yet one of the countries that ratified or approved the agreement. Because, considering aspects of subsidies that are prohibited by the WTO will have an impact on small fishermen. Indeed, Indonesia should not ratify this agreement, considering that millions of fishermen and even the fisheries sector in Indonesia will be threatened by this agreement.
WTO Prohibited of Fisheries Subsidies
In the draft negotiation text on the Overcapacity and Overfishing Pillar, the WTO wants to eliminate fisheries subsidies that have been provided by developing and less developed countries without exception. A country is considered to be violating WTO provisions if it provides subsidies specifically to fishermen. Because it is considered to distort trade. Below are subsidies prohibited by the WTO given to the fisheries sector.
There are 8 (eight) types of fisheries subsidies prohibited by the WTO, namely:[3]
- subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels;
- subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish);
- subsidies to the purchase/costs of fuel, ice, or bait;
- subsidies to costs of personnel, social charges, or insurance;
- income support of vessels or operators or the workers they employ;
- price support of fish caught;
- subsidies to at-sea support;
- subsidies covering operating losses of vessels or fishing or fishing related activities.
Subsidies which are prohibited by the WTO are certainly contrary to the 1945 Constitution and Law no. 7 of 2016 concerning Protection and Empowerment of Fishermen, Fish Farmers and Salt Farmers. Moreover, Article 18 of Law 7/2016 states that “the Central Government and Regional Governments, in accordance with their authority, provide infrastructure for fisheries businesses and salt businesses.“[4] If the WTO agreement is later ratified and/or agreed upon, the Indonesian Government will be stripped of its authority to provide support or subsidies in any form to fishermen.
In fact, the 8 (eight) prohibited fisheries subsidies above are subsidies that should be given to fishermen. For example, fuel oil (BBM) subsidies, fishermen’s insurance and support for fishermen’s fishing gear. This will be completely prohibited by the WTO if the fisheries subsidy agreement is ratified. If it is prohibited, what will be the sustainability and fate of small fishermen?
Then, the draft text of this agreement creates injustice for developing countries. Because, developing countries are only given an exception period to continue providing subsidies in accordance with the 8 subsidies above for only 7 years after this agreement comes into force. Then it can be extended for 2 years. That means developing countries can only provide subsidies limited to a maximum of 9 years after the agreement comes into force.
Article 5.5 Fisheries Subsidies (draft text of Overfishing and Overcapacity – OFOC)
“5.5 A developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities within its exclusive economic zone and the area of competence of a relevant RFMO/A [for a maximum of 7 years after the entry into force of this Agreement][up to the year 2030]. Subsidies granted or maintained under this paragraph shall be exempt from actions based on Articles 5.1 and 10 of this Agreement for a period of 2 additional years after the end of the period referred to in the prior sentence. A developing country Member intending to invoke this provision shall inform the Committee in writing within one year of the date of entry into force of this Agreement”.[5]
In fact, developing countries should get special and differential treatment (SDT)[6] rights in the fisheries subsidy agreement and not developed countries. However, this is limited by the existence of this fisheries subsidy agreement. What must be limited are developed countries, because so far developed countries have provided fantastic subsidies in the fisheries sector.
Data shows that the global fisheries subsidy figure is USD 35.4 billion annually, and as much as USD 22 billion is used for detrimental subsidies. There are five countries that provide very large subsidies in the fisheries sector, namely: China, the European Union, the United States, the Republic of Korea and Japan).[7]
Discriminatory of WTO on Fisheries Subsidy Agreement
The issue of the right to special and different treatment (SDT) for developing countries also does not exist in the context of the distance traveled by fishermen who receive subsidies. It is stated in the draft agreement text that fishermen who go to sea below 12 or 24 Nautical Miles (NM) from the coastline/island line will still receive subsidies. Meanwhile, if it exceeds 12 or 24 NM, then you are prohibited from getting subsidies.
The distance traveled by Indonesian fishermen is quite far, even exceeding 12 or 24 NM. In several reports in the media, Indonesian fishermen went to sea in Australian waters. In fact, activities like this have been going on for decades.[8] If that is the case, then Indonesian fishermen who go to sea beyond 12 or 24 NM will no longer receive subsidies such as fuel and fishermen’s insurance. Even though the UNCLOS rules state up to 250 NM, it is more flexible than the WTO which limits it to 12 or 24 NM.
Article 5.5 (c) Fisheries Subsidies Draft Text:
“A developing country Member may grant or maintain the subsidies referred to in Article 5.1 for low income, resource-poor and livelihood fishing or fishing related activities, up to [12][24] nautical miles measured from the baselines, including archipelagic baselines”.[9]
Apart from being discriminatory, the distance of 12 or 24 NM also threatens the sustainability of small fishermen’s lives. In the Indonesian context, the large number of coasts and islands that are being reclaimed affects fish catches for fishermen. Because, of course, fish are already rare along the coast due to the reclamation project. Data shows that there were 37 reclamation projects in 2016.[10] This resulted in small fishermen having to struggle to get fish over longer distances and also having to fight with big fleet.
Author:
Rahmat Maulana Sidik
Executive Director, Indonesia for Global Justice (IGJ)
Office Address:
Jl. Rengas Besar No. 35C, Jatipadang, Pasar Minggu, Jakarta Selatan, DKI Jakarta
Website: www.igj.or.id
Email: Rahmat.maulana@igj.or.id
[1]https://www.wto.org/english/news_e/news22_e/wtmin22w22.pdf.
[2]https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_acceptances_e.htm.
[3] https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN22/W20.pdf&Open=True.
[4] Link: https://peraturan.bpk.go.id/Details/37237/uu-no-7-tahun-2016.
[5] https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN22/W20.pdf&Open=True.
[6] https://www.wto.org/english/tratop_e/dda_e/status_e/sdt_e.htm.
[7] Link: https://news.mongabay.com/2022/06/wto-finally-nets-deal-curbing-fisheries-subsidies-but-tables-key-bits-for-later/.
[8] Link: https://news.detik.com/abc-australia/d-6701614/pemerintah-australia-tidak-akan-hukum-nelayan-indonesia-yang-terdampar.
[9] draft text OFOC: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN22/W20.pdf&Open=True.
[10] Link: https://www.suara.com/bisnis/2016/10/04/183704/total-ada-37-proyek-reklamasi-di-indonesia.