Why modern slavery is a harmful subsidy in the fishing industry – for people and fish

By Stella Freitag

Last week, we had the pleasure of having Professor Daniel Pauly of the University of British Columbia, one of the world-leading marine biology experts, present to Walkfree Foundation as part of a visit to the University of Western Australia where an Indian Ocean node of his Sea Around Us project is being established.

Professor Pauly spoke about his decades of research about the human impact on global fisheries, and more specifically, how the depletion of fisheries and modern slavery are more closely intertwined than one would assume. Here is some food for thought… At the Walk Free Foundation, we know that modern slavery cannot be viewed in a vacuum. It is a complex crime, with devastating impacts on those in slavery, but also their families, local communities as well as local and global economies. Any short-term profits gained through modern slavery, can hold back emerging economies in the longer term or result in established economies becoming unsustainable. In line with this, modern slavery is also contributing to increased pressure on the world’s marine biodiversity, caused by years and years of us overfishing the oceans.

The economics of fishing are unique. In contrast to other industries such as agriculture, where the economy of scale can increase profit, excessive fishing decreases profit. Past a certain point (the “bionomic equilibrium”), the total cost needed to sustain fishing endeavours will exceed revenue. In part, this reflects the reality that in the fishing industry you are generally not “growing” your product, but simply “exploiting” the product, that is, the fish. Stress on the ocean’s biodiversity, such as overfishing, naturally decreases abundance. The current approach to fishing means fish stocks cannot replenish as quickly as they are depleted. After this point, you end up with less profit, even when you fish more.

One solution to replenish fish stocks is to establish marine reserves.  Fortunately, a range of countries have already begun to implement this approach (see map on global distribution of marine protected areas below).

Another solution is to tap into the economic model of fisheries. By restricting catches to the level that maximizes profits, whilst achieving a sustainable limit on fishing, fish stocks are given the time they need to replenish. Australia is the only country globally which has policies that set catch limits to the maximum economic yield.

So, what does modern slavery have to do with this?

Fixed costs are fishing expenses that are not dependent on the level of level of fishing that takes place. They tend to be time-related, such as crew salaries, depreciation and opportunity cost of capital and depreciation. Variable costs depend on the amount of fishing carried out. Examples include fuel and maintenance costs of vessels.

Crew salaries are determined by opportunity cost –which is basically the salary a person could have received if they had taken another job, as, say, a barman at a restaurant or harvesting fruit on a farm. In countries where poverty and unemployment are rife, crew salaries can be as low as zero because the opportunity costs are extremely low. What if you can force your crew to work for you and pay them nothing (or very little) for the work they’re doing? Naturally, it decreases the fixed costs and thus, the overall costs – which means the tipping point where it becomes uneconomical to fish more, is pushed down the track. So, you can keep fishing more and longer, accepting two harmful spin offs from this this scenario.

Firstly, the environmental consequences are clear.  Fish stocks are increasingly depleted, depriving developing countries of vital food stocks and sources of income. Secondly, there may be add-on effects for the families of fishers being forced to work for little or no money on fishing boats. In a situation where the primary wage-earner working on a fishing vessel is getting horrendously underpaid (or not getting paid at all), it might drive other family members to look for any work they can get to boost their family’s income. We know from Global Slavery Index that people will be more vulnerable to being exploited when they are desperate and in distress. In these circumstances, where the primary income cannot sustain a family’s life and where opportunity costs are low, whole families can get trapped in a vicious cycle of exploitation. This might mean making their children work instead of going to school and women perpetually taking jobs with inhumane working conditions.

Slavery in the seafood industry and the abuse of workers on Thai fishing vessels operating in South East Asian waters has become increasingly well documented. Researchers and investigative journalists have documented the abuse of migrant workers on fishing vessels, often young men and boys, who have endured brutal treatment including physical abuse, excessive and inhumane working hours, sleep and food deprivation. Ongoing reports of worker exploitation in seafood pre-processing facilities were also evident, with workers from Myanmar, Cambodia and Laos working excessive hours in oppressive and abusive conditions.

In Professor Daniel Pauly’s words: “Slavery is a subsidy” – just like some governments give subsidies to the fishing industry for fuel and for building new vessels, modern slavery is another perverse subsidy of the fishing industry. As Professor Pauly’s suggests “there is not much of a relationship between subsidies and the price of fish”. Instead, such subsidies are both harmful for marine biodiversity as well as people’s livelihoods and the economic development of countries.

This underscores what the Walk Free Foundation’s research already indicates. Modern slavery does not make economic sense in any industry or business. It comes at a serious cost. As with many corrupt criminal practices, modern slavery suppresses the economy and reduces sustainable development. This has also been recognised as part of Goal 8.7 in the Sustainable Development Goals.

In the case of fisheries, this means: underpaying and exploiting workers may be temporarily increasing profitability, but in the longer-term overfishing is diminishing the profitability of fishing, holding back the economies and communities who rely on these vital pathways out of poverty.

Walk Free Foundation’s research aims to further explore this link between the fishing industry and modern slavery in their upcoming research.