[The Viewpoint] The 12th WTO Ministerial Conference and its Impact on Fisheries Subsidies

The 12th Ministerial Conference (“MC 12”) of the World Trade Organization (“WTO”) was concluded in Geneva on 17th June 2022. After numerous delays (owing to the pandemic), it was finally concluded this year, with, the “Geneva Package”. This conference addressed a multitude of trade related issues that were long overdue. The negotiations addressed issues including but not limited to Emergency Response to Food Insecurity, response to COVID-19 Pandemic, Trade Related Aspects of Intellectual Property Rights (TRIPs) concerning the COVID-19 vaccines, E-commerce moratorium and Work Program and Fishery Subsidies.

In the Article titled ‘Grant of fisheries subsides: India’s approach’ published on March 11, 2022, a theoretical background on fisheries subsidies and the stance taken by India with respect to a complete ban on grant of such subsides were explored. The issues arising due to lack of any specific agreement dealing with the subject area were also highlighted along with India’s position as a developing country. For the purposes of this Article, the main focus is on the decision arrived at the MC 12, through negotiations on the subject matter concerning fisheries subsidies. The negotiations undertaken by numerous member nations, helped in arriving at a multilateral deal laying down rules governing fishery subsidies, in the form of an Agreement. However, it must be kept in mind that, with the participation of 164 member nations, this result broadly encompasses the needs of these nations, involved in the negotiation process and therefore, there still is room to make the Agreement airtight, before its final implementation.

A glance of the Draft Ministerial Decision laying down the Agreement on Fisheries Subsidies, i.e., WT/MIN(22)/33 WT/L/1144 released on June 22^nd, 2022, would reveal a multitude of things. The Agreement, under Article 3, specifically prohibits subsidies that are provided on mediums leading to Illegal, Unreported and Unregulated (“IUU”) fishing. Such mediums could encompass within its purview, fishing vessels and operators that are subsidized by the governments which have a direct impact on the act of fishing and its consequent effect on the marine resources. Article 4 of the Agreement also provides for prohibition on provision of subsidies on fishing of stocks that are already in overfished condition. However, it is pertinent to note that, the rule also provides for continuation in the provision of such subsides in case, the grant leads to rebuilding the fish stocks to a sustainable level. Further, the Agreement also provides for prohibiting subsidies for fishing on high seas, that is, the areas which are located outside the jurisdiction of coastal countries as well as Regional Fisheries Management Organizations (“RFMOs”) under Article 5. There is also a two-year transition period provided to Least Developed Countries (“LDCs”) as well as developing countries with respect to IUU fishing. This step is in place to ensure that such countries can continue providing subsidies and have the time and resources to eventually phase the subsidies out after certain conditions which support their global volume of marine production are met.

One of the many things that can be discerned upon a bare perusal of the Agreement is that this Agreement explicitly provides for prohibitions in terms of subsidies that further IUU Fishing and Overfished Stocks. Further, an aspect that most developing and LDCs were aiming for in pursuance of imposition of a complete ban on such subsidies, as mentioned above, is the implementation of Special and Differential Treatment (“SDT”) which can be seen from the two-year transition period being granted to the countries concerned with respect to subsidies leading to IUU Fishing.

India being a developing country as well as a nation whose fishing sector ranks second, would be deeply impacted by any decision taken with regard to subsidies being granted on fishing activities and therefore, has always taken a strong stance regarding implementation of prohibition on grant of such subsidies. India’s stand clearly states its position as a fishing nation wherein it has highlighted that unlike many other nations with the advanced capacity and capabilities in terms of fishing activities, it does not exploit the marine resources indiscriminately. It also stated that due to India’s vast heritage, it has primarily relied on small scale and traditional fisherman. Therefore, the exploitation in terms of granting capacity enhancing subsidies, leading to overfishing and IUU fishing is not something that India as a nation has ever indulged in. Further, as a nation, India provides the lowest fishery subsidies despite its population. It was also stated that with the current mechanisms in place, India has been extremely disciplined in its approach towards granting fisheries subsidies as well as utilizing the already existing marine resources with utmost care and precaution, keeping the sustainable development goals in mind.

Further, India has been of the opinion that due to the large-scale destruction of marine resources caused by the developed nations using their advanced technology, as well as their other capabilities in terms of the fishing sector, it is unfair for nations like India to suffer the consequences of actions which were not caused by them. Therefore, India maintained its position that all the member countries of the WTO, who have indulged in provision of subsidies or taken part in the act of industrial fishing which has consequently led to the depletion of fishing stocks as well as overexploitation and overfishing, should be at the receiving end of imposition of ban on such subsidies. From the stance taken by India, it is evident that, two principles have been relied on, i.e. “Polluter Pays” and “Common But Differentiated Responsibilities” in order to lay emphasis on the fact that the economic needs of nations like India as well as other developing and LDCs should not bear the brunt of imposition of a ban or prohibition of fishery subsidies due to acts of a few developed nations resulting in complete depletion and over exploitation of marine resources.

However, it is pertinent to note that India has, against this two-year transition period which has currently been envisaged in the Agreement, taken a position in so far as to relay that this transition period, encompassing the SDT principle under WTO should be of at least 25 years. This was in order to provide the developing as well as LDCs with ample time to phase out such subsides, not at the cost of the economic needs of the country.

The Agreement on Fisheries Subsidies, which has been a product of multiple deliberations and negotiations by the member countries at the WTO, seeks to eliminate the subsidies granted on fishing vessels or fishing operators mainly to curb the issue of IUU fishing. Such elimination would bring about a discipline in terms of utilization of marine resources, specifically targeting fishing activities and subsidies on the trade on such activities. This in turn would prove beneficial to coastal countries which includes India, in terms of protecting their marine resources and ensuring that there is no over exploitation or even exploitation by other developed nations. For a country like India, it would hugely impact the fishing industry as it involves fisherman from communities that must deal with problem of overfished stocks and overexploited resources and have to bear the consequences of the same. Further, one of the key aspects of the Agreement that stands as a major highlight is granting of subsidies to overfished stocks in case there are measures in place in order to rebuild the depleted stocks to bring it to a biologically sustainable level.

However, the main issue remains that even though an Agreement on Fisheries Subsidies was reached at the Ministerial Conference, the problem with regard to providing subsidies on not the act of fishing itself, but the stages leading to completion of the act of fishing, i.e., subsidies being provided on the vessel or the operator, has not been adequately addressed in the Agreement. Consequently, the Agreement also does not provide a prohibition on any WTO member granting or maintaining subsidy on a vessel or operator, apart from those subsidies directly contributing to IUU Fishing, which stand prohibited.  Lastly, it is also significant to note that subsidies being granted on overcapacity and overfishing have been left outside the purview of this Agreement and the same will only be deliberated upon during the MC 13.

Prashanth Shivadass is a Partner & Nandini Nair is an Associate at Shivadass & Shivadass (Law Chambers).

The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s).