This year saw the launch of the Fisheries Industry Transparency Initiative - the FITI. A lot of the details of how it will work remain to be developed. It is being created by the German based organization, Humboldt-Viadrina Governance Platform, founded by Professor Eigen, a member of the Africa Progress Panel, one of the founders of Transparency International and the Extractive Industry Transparency Initiative. The launch of the FITI was held in Mauritania at a meeting co-hosted by the government when the Nouakchott Declaration was signed on January 20th. In this Mohamed Ould Abdel Aziz, President of the Islamic Republic of Mauritania committed Mauritania to be the first country to implement the FITI.
CFFA and its partners, in particular the CAOPA, have been campaigning for transparency and political reforms in fisheries for a long time. In 2011, we undertook a survey in 11 African countries that revealed most countries keep the details of licenses and access agreements confidential. It is also extremely hard for local civil society groups to get information on the income from fishing and how governments use this. The majority of fisheries management authorities surveyed do not have a website or an annual report. Millions of dollars are being spent on developing fisheries in Africa, but limited information on projects, outcomes and evaluations is shared with civil society, including fishing communities.
Many examples over the past few years highlight why a growing number of organizations are calling for improved transparency. The licensing of Russian and Asian trawlers in Senegal, Mauritania and Guinea-Bissau is a vivid example – secret access agreements between the Senegal government and foreign agencies caused a major threat to the domestic fisheries sector, leading to widespread protests. In Mozambique, in 2013, the government raised 850 million USD to finance a private fishing company, but the lack of transparency surrounding this deal has generated international criticisms including donors threatening to suspend aid to the country.
Progress to increase transparency in fisheries has been disappointing. Perhaps the best achievements have been made by the European Union, who responded positively to demands to start publishing internal evaluations of their access agreements. A proposed EU regulation on fishing authorisations may also oblige EU fishing companies to disclose information on all their fishing operations in foreign countries, while the EU tuna fleet has recently launched the Tuna Transparency Initiative. These are small steps, and efforts to reform fisheries, such as by the African Union, require stronger commitments on how fisheries governance should be more open and accountable.
The announcement of the FITI is therefore extremely interesting. It could be a practical way of getting the fishing sector to be managed more openly. However, transparency initiatives have some major limitations and remain controversial among some experts. In this article we contribute to the development of the FITI by describing some of these limitations and pitfalls surrounding transparency initiatives, and we highlight 6 key issues that should be discussed in going forward.
How will the FITI work?
The Extractive Industries Transparency Initiative (EITI) is the inspiration for the FITI. The EITI was developed due to the concern that in many resource rich countries, revenues from oil, gas and mining is often plundered by elites and does little to contribute to national development. Reliance by governments on income from extractive industries is often depicted as a ‘curse’ – being linked to worsening democracy, high levels of government corruption, civil conflict and various other economic and social problems.
EITI therefore became the leading international response to tackling this ‘resource curse’. It developed a multi-stakeholder system for accounting on extractive industry revenues. With a Secretariat now in Norway, an International Advisory Group informs its operation, containing representatives from NGOs, companies and governments. These members of the advisory group review the EITI Standards and its implementation, with all decisions having to be agreed by each member.
Governments signing up to the EITI establish a national committee to oversee its implementation, comprising the government, resident mining companies and selected local civil society groups. They then provide accounts on the revenues from mining that are verified by an independent auditor. These annual EITI reports should demonstrate to the public that what the companies say they are paying is what the government declares as its income. Countries that start the process of implementing EITI are considered “implementing countries”, and those that produce verified reports are “EITI Compliant”.
EITI has been remarkably successful in its coverage. It was established in the early 2000s, with Nigeria being the first developing country to implement the model. Since then 48 countries have started implementing EITI, with 31 now fully compliant. Most of these are from developing countries in Africa, but EITI has been fully implemented in Norway, and UK and the US are in the process of doing the same. In total EITI reports have tracked over 1.5 trillion USD in extractive industry payments.
So, the proposed FITI will probably work along similar lines to the EITI, and will establish an international advisory body with 3 stakeholder groups – industry, civil society and governments. It will develop a set of standards – i.e. what information needs to be published for a country to be compliant with the FITI, and it will develop a verification system to ensure published data is credible. We should expect that in countries working towards the FITI, there will also be a national coordinating committee comprising the government, local civil society and industry representation.
While the EITI has focused on revenue payments, the FITI will probably look at a broader range of issues, likely to include transparency in access arrangements (i.e. licensing, charter arrangements, joint ventures and bi-lateral access agreements), meaning FITI compliant countries would have to publish each year a comprehensive list of companies licensed to fish in their waters, and some information on what the conditions of this license arrangement is. Who are the beneficial owners of vessels could become a key issue.
Depending on how ambitious it wants to be, the FITI could include data from the industry on catches, by-catches and discards, and perhaps data on other topics including private investments and development aid payments. EITI has gradually expanded its standards, and we could see something similar for the FITI – it may start with a focus on a limited range of information, with the idea that it could become more comprehensive further down the line.
What are the limitations of the EITI?
The main concern about the EITI has been its impact. Has it really made any difference?
The EITI sold itself as a major policy tool to reduce the opportunity for corruption, improve the development of countries that had large extractive industry sectors, and make the governance of these industries more democratically accountable. Its framing of the problem was broad, meaning a common understanding of its success, and how this could be measured, has been hard to materialise. A great deal of literature on the impact of extractive industries in developing countries cast doubt over the existence of a resource curse, suggesting the EITI was established on a contested understanding of the problem.
Irrespective of what aspect of the resource curse is chosen, it is uncertain whether EITI has made a significant positive impact in most countries. There are individual examples of where EITI reports have revealed accounting mistakes and perhaps some frauds, but EITI has not been able to deliver widespread improvements in reducing corruption, improving the returns from extractive industries or contributing to development. Some believe this is due to the limited scope of its standards. EITI reporting requirements have not managed to cover the full range of financial transactions that would reveal corruption and frauds, including tax evasion, conflicts of interests and bribery.
In 2013, EITI developed an expanded list of standards that hope to overcome this. Yet it is increasingly understood that expectations surrounding the EITI have probably been unreasonable. To imagine that publishing accounts on revenue payments would simply lift a lid on the undemocratic and corrupt behaviours of governments and powerful multinational companies, allowing citizens to influence the sector, was wishful thinking.
Over the last decade or so since EITI was launched, most people studying transparency realise a lot depends on how information is disclosed, how civil society can use this information and the extent to which governments and companies can be sanctioned. The link between transparency or open government and democratic accountability (as explained here) is highly complex and variable. Research on the relationship between transparency and corruption, for example, suggests that voluntary disclosure of information by states and companies is not very effective – far more is achieved where information is leaked or obtained through the use of freedom of information laws. When governments and companies control the flow of potentially sensitive information, it tends not to be very revealing.
When transparency becomes contentious
Criticisms of EITI go further than it simply being less effective than hoped for. Some think EITI has been harmful. During the 1990s and early 2000s, there was an increasingly negative literature about the social, environmental and political impact of oil, gas and other mining in developing countries. This included the Extractive Industry Review set up by the World Bank, which recommended the Bank and other development agencies to only invest in extractive industries where countries were politically stable, had low levels of corruption and respected the rights of indigenous communities.
The Bank contested this advice, and went on to increase its investments in the extractive industry sector in countries where the risks of project failures and unintended harms was very high. This was justified on the basis that the Bank would improve the governance of extractive industry projects, and that a new transparency initiative would ensure the industry was better governed than before. According to scholars such as Sarah Bracking, EITI deflected criticisms of corporations and investors, and reinforced a belief that the problem in the extractive industries lies almost entirely with bad governance and corruption in developing countries – little to do with foreign investors and corporations.
Those disappointed with EITI argue it has allowed companies with dubious track records on the environment and taxation to claim they are acting responsibly, and it has allowed praise (and perhaps increased donor aid) to be given to highly corrupt governments, without asking them to make meaningful reforms. Just as corporate social responsibility has been dubbed ‘green-washing’, the EITI has been accused of ‘clear-washing’. As Kees Visser concluded on his critical review of the EITI:
"There are serious issues with the EITI’s presentation of ‘win-win’ scenarios, where the introduction of transparency in the extractive industries is projected as a sufficient condition to foster long-term ‘win-win’ for all stakeholders. This completely ignores the fundamentally conflicting interests between some of the actors involved in resource extraction situations and the differences in their respective capacities to exercise power"
Very few people would argue against access to information. But why and how transparency is approached reveals ideological tensions. As some academics, such as Afshin Mehrpouya, have argued, transparency initiatives (or good governance reforms in general) can be designed to support the functioning of the market and the interests of profit accumulation, rather than deepen democratic accountability in ways that would protect people from the negative impacts of corporate interests:
"This disregard for the political dimension of individual freedom and (hence) democracy, coupled with the parallel obsession with economic freedom (property rights, consumer choice) and market efficiency, is reflected in the nature of the transparency pressures exerted by neoliberal international organizations such as the IMF or the World Bank. These pressures have been primarily framed around market efficiency, with the aim of creating the institutional conditions necessary for market stability and efficiency. In contrast, democratic transparency has occupied only a marginal, if any, place in restructuring transnational agendas"
Moving forward with the FITI
Fisheries does need to become more transparent - information on who is allowed to fish under what conditions; how much fish is taken, how much money is being paid by whom for what, and how are investments and profits are being used, should all be in the public domain. Whether a multi-stakeholder initiative based on the EITI model is the best way of achieving this remains open for debate. Research shows that relying on governments and companies to disclose information does not tend to reveal a great deal about their own failings or involvement in corruption or frauds. Likewise, transparency can be supported by governments and businesses for attracting investments and improving market competitiveness, and therefore is not really about transferring political powers or increasing democratic accountability. These are serious considerations for the FITI.
The limitations and pitfalls of transparency initiatives may dissuade some people to get involved. There may be preference to advocate for more direct ways to gain information from governments and companies, such as expanding Europe's Aarhus Convention to other continents. But waiting for governments to implement and respect freedom of information laws, or expecting confidential information to be leaked or uncovered by researchers is also unlikely in the short to medium term. An FITI may therefore be a practical solution, if not an ideal one. Of course, lasting political reforms cannot begin and end with an FITI – a lot needs to happen beyond that.
But as we have some momentum with the FITI, it is important to begin a discussion on how it can learn from the EITI and increase its potential impact. The following issues may help inform this discussion:
1] Given its early days the FITI has yet to develop a clear message on why it is needed. We therefore need a debate about what facet(s) of the fisheries crisis are we expecting a transparency initiative to help to address: overfishing, the inability of fisheries to support economic growth, the marginalization of small-scale fishing communities, worsening food security? This in turn will influence what data is important for the FITI to publish, and how we measure its success over time. If the FITI is framed primarily to stop illegal fishing, for example, it may end up publishing data that has little to do with resolving food security concerns, or local development.
2] We need to be aware of the competing interests involved in a multi-stakeholder initiative. Having governments, donors, big companies, small scale fishing organizations and NGOs sitting round the same table sounds very attractive, but unless we recognize that each partner’s interests and power are quite different, multi-stakeholder initiatives can be disappointing. They can become a mechanism for domination rather than empowerment. From an early point in the FITI, it is therefore useful to identify the competing interests of different stakeholders in supporting this idea, and to appreciate that if it is consensus driven it might not achieve very much, allowing for the status quo to prevail, and if it is more ambitious it will inevitably produce outcomes that will have winners and losers, meaning it might not be supported by sufficient numbers of countries and industry representatives. There might not be a win win situation.
3] How will the FITI manage a situation where a 'compliant' country restricts freedom of information? Should the FITI encourage or oblige implementing countries to enact reforms on public access to information in fisheries, so that researchers, NGOs and journalists can access information beyond that which is contained in FITI reports? Without this commitment then FITI reporting may slide towards positive public relations for governments and companies.
4] We need to think carefully about civil society engagement. There is a tricky issue of who is represented as civil society on the multi-stakeholder committees and international advisory group. Civil society is hardly homogenous, and the usual list of NGOs considered for these roles do not share the same ideology or interests. Who should decide who speaks for the interests of ‘civil society’, including within implementing countries? Civil society representation should not become an avenue for NGOs favored by the local government or international donors to speak on behalf of civil society or coastal communities interests, when few have the mandate to play that role. Perhaps multi-stakeholder committees are superfluous, tokenistic rather than absolutely necessary to achieve the overall objective? We should explore other approaches for making sure the process of generating new data supports wider efforts for democratic accountability, which may give a greater role to parliaments or rely on the establishment of civic assemblies. Pursuing this could mean the FITI has a wider positive impact on democratic processes within countries, whereas the undemocratic committee approach could be regressive.
5] Related, for an FITI to be successful there probably needs to be support to community-based groups, the local media and other local NGOs to have the capacity to use data and information to interrogate policies and the behaviours of companies/states. It is normal for transparency initiatives to produce data that needs to be analyzed before it makes sense or is any use. Big NGOs, companies and consultants may have the time and resources to do this analysis, but community based organizations and local media may not.
6] Finally, the FITI may experience problems in defining the ‘industry’. Is the industry to be covered by the FITI large scale, commercial fishing, or does it include small-scale fisheries as well? It is possible that the FITI could fall into the trap of seeing big companies as being “the fisheries sector”. Clearly, small-scale fishing communities are part of the industry, and a part that matters most to determining local development, livelihoods and food security in many countries. How will the definition and implementation of standards of transparency involve/be applied to the small-scale sector?