Maritime Crime and the Role of Insurers

The concept of illegal, unreported and unregulated (IUU) fishing is usually associated with arrangements for the conservation and management of marine living resources. Yet, in recent years, this expression has become increasingly familiar in maritime security circles, often used to refer to a broad spectrum of criminal activities at sea. IUU fishing is characterised by operational opacity, which can provide opportunity and cover for complex transnational crimes, such as the trafficking of drugs and weapons, people smuggling, and grievous abuses of labour and human rights (UNODC, 2011), as well as ancillary crimes such as fraud and tax evasion (OEDC, 2016). Widespread techniques to hide unlawful or destructive operational patterns may include engaging in ‘transhipment’, namely the practice of transferring catch and other products from one vessel to another (FAO, 1996). This operation, which is often performed unsupervised at sea, can facilitate the fraudulent concealment and redirection of fishery products as well as illicit objects, or smuggling of people (UNODC, 2011).


Credit: NOAA Fisheries

Weak regulatory frameworks can enable illegal and undesirable fishing activity, as well as at sea criminality, particularly when they lack surveillance and enforcement capability (see Doumboya et al, 2017). Further, surveillance and enforcement irregularities can be associated to instances of corruption (Sundström, 2012). Whilst the existence and implementation of an adequate regime with appropriate disclosures and infraction responses lies with flag, port, and coastal State authorities depending on context, it is becoming increasingly apparent that private actors may have a significant role in shaping security risks. The insurance industry has recently been identified as one of such actors by scholars, and they may have an important role to play in the development of appropriate risk management mechanisms concerning the prevention and ultimate eradication of IUU fishing and associated crimes. As Miller et al have indicated, the provision of certain insurance services to fishing vessels identified as having been involved in IUU fishing operations appears to be far from uncommon. The authors have suggested that IUU vessel owners and operators choose to purchase insurance, even in contexts when it is not obligatory, as an operational cost that protects them against the potentially prohibitive costs of accidental third party damage (Miller et al, 2016). Subsequent scholarship has pointed out that the value of insurance to IUU fishing operators might also be related to the need to satisfy the legal requirements for compulsory insurance that exist under some port utilisation frameworks (Soyer et al, 2018).

These studies are valuable in demonstrating the extent to which liability insurers may be facilitating criminality at sea, and the extent to which adapting underwriting practices might be desirable to enhance awareness of significant data. This may include disclosure of the identity of beneficial owners, as well as those with direct operational responsibility (Griggs and Lugten, 2007). Similarly important is the existence of permanent forms of vessel identification, such as numbers assigned by the International Maritime Organization (Miller and Sumaila, 2014). Awareness of the presence of monitoring devices is also advisable, since it is common for vessels engaging in IUU fishing to be permitted to operate without vessel monitoring systems (Detsis et al, 2012), or automatic identification systems (Robards et al, 2016). Unfortunately, current research into the insurance practices of IUU fishing vessels includes little insight into the operational synergies between IUU fishing operations and related patterns of criminality – an association that recent scholarship has increasingly highlighted (De Coning, 2016; Lindley et al, 2019; Chapsos and Hamilton, 2018). Given that there is evidence of elements that facilitate the combination of IUU fishing with transnational criminal activities involving diverse forms of smuggling and trafficking, it is important to establish the insurance patterns of vessels involved in the latter, in respect of which there is currently insufficient information. Such data would be useful in the design of due diligence strategies for the marine insurance sector with regard to the selectivity of underwriting and claims practices.

Editors’s Note – For further information regarding due diligence and risk assessment in respect of IUU fishing for the insurance industry, please see the guidelines issued by Oceana, UNEP Finance Initiative, and the Principles for Sustainable Insurance. 

Editor’s Note – An earlier version of this post was first published at: GSDM Global.

Mercedes Rosello, April 2019


Insurers can help combat the marine overfishing crisis – here is how.

Note: This blog post was first published on Swiss Re Open Minds.

Image Credit: Sea Shepherd Global

Image Credit: Sea Shepherd Global

As the World Bank points out, the oceans have a vast potential to unlock sustainable development, being also a key factor in the regulation of the Earth’s climate systems. The ocean feeds and provides work security for millions of people, including some of the world’s poorest.

Like other sectors, marine insurance providers and their reinsurers have a long-term interest in the preservation of healthy and productive oceans. Not only is the health of the oceans a fundamental factor for the wellbeing of human communities, but many industries depend on the ongoing availability of marine resources for their very survival. Amongst these, the fishing industry is one of the most vulnerable to marine mismanagement.

Unfortunately, such mismanagement is observable today in the form of inadequate fishery regulation, as well as malpractice and even crime associated to industrial and semi-industrial ventures. In 2012, 160 million tons of fish were produced, generating over US$ 129 billion exports. Yet, commercial fish stocks have been consistently overexploited in a manner that is detrimental to productivity and overall ocean health. The FAO estimates that around 57% of commercial fish stocks are exploited to full capacity, with most of the remaining stock being either overexploited, depleted or vulnerable to overexploitation.

Overfishing is a consequence of several factors: overcapacity, misunderstanding of stock, defective capture regulation, poor vessel management and insufficient enforcement – they all play a role. The impact that insurers can have on the regulation of fisheries may be limited, but there is one area where their contribution can have a significant positive effect: the fight against illegal, unreported and unregulated (IUU) fishing.

It is thought that IUU fishing costs around 10 Bn Euros per year to the global economy, accounting for around 15% of global catch – a vast amount of non-compliant catch that directly prejudices any operators in the industry that systematically observe conservation rules.

One of the key factors in the eradication of IUU fishing is the control of fishing vessel operations through monitoring, control and surveillance (MCS). Whilst some fishing nations, coastal States and regional fishery management organisations have invested significantly in MCS measures, any gaps are routinely exploited by IUU fishing operators through the deployment of practices designed to circumvent controls.

Experience of IUU fishing modi operandi has been documented by Interpol by way of Purple Notices. Practices vary, including unauthorised transhipments of cargo with a view to blurring traceability, deploying destructive fishing arts or mis-declaring catch to the relevant authorities.[1] Some, such as obscuring a vessel’s identity and nationality, swapping names amongst fleet vessels in order to illicitly share licences, and performing unauthorised transhipments at sea should be of interest to insurers because they may carry a direct impact to the risks being insured, as well as an increased risk of fraud.

Earlier this year a Nigerian flagged industrial fishing vessel, Thunder, sunk despite being in good condition – scuttling being strongly suspected – off the coast of Sao Tome, where it caused damage to local ecosystems with ensuing pollution. Thunder had a long history of IUU fishing in the Southern Ocean, had been blacklisted by NGOs and regional fishery management organisations, and had an Interpol Purple Notice to its name. Yet, Thunder is not the only example of repeated malpractice in the fishing industry – other vessels continue to be in operation whose combined practices constitute a breach of all known conservation principles.

Insurers and their brokers should take care in their due diligence practices to identify vessels who repeatedly engage in IUU fishing. In order to acquaint themselves with the names of regular perpetrators, they should become familiar with the EU’s IUU Fishing List. Further, they should request that industrial and semi-industrial fishing vessels of 24 metres or over seeking P&I insurance obtain an IMO number, since this ensures more clarity in establishing a vessel’s identity in cases of doubt. In addition, improved MCS in the shape of operative VMS and AIS vessel tracking systems help improve vessel activity control.

In addition, it is also worth considering the content of Article 37 of EU Council Regulation 1005 / 2008, whereby community vessels involved in IUU fishing are only permitted entrance to home port, and third country vessels are not allowed entry to EU ports except in cases of force majeur or distress. Further, the provision of services, including chartering and the supply of provisions and fuel is prohibited in respect of third country vessels in the EU IUU vessel list Whilst insurance services are not specifically mentioned by Regulation 1005 / 2008, and whilst insurance services are not necessarily dependent on the vessel being in port for their provision, it seems somewhat incongruous to assume that the provision of insurance may be privileged to the detriment of other service providers.

To conclude – whilst most insurers have already adopted policies whereby claims related to IUu activity are not covered by any existing insurances, any company with ethical practices concerned with ocean protection, sustainability and blue development should consider adopting a policy whereby vessels in the EU IUU list are deemed uninsurable risks.

Mercedes Rosello

November, 2015

[1] See Article 3 of EU Council Regulation 1005 / 2008 for a non-exhaustive list of IUU fishing practices:

Why Addressing Illegal Fishing Could Help Combat Piracy

Large fishing vessel operating in the South Pacific (Credit:

Large fishing vessel operating in the South Pacific (Credit:

There are many factors that may compromise fish abundance. Some, like the effects of raising temperature, acidification, algal blooms or changing currents can be difficult to predict and act upon. But illegal fishing is one cause of stock depletion that can be addressed and controlled.

Our grossly oversized global fishing fleets are engaged in a fierce effort to capture their share of a decreasing volume of fish stocks. This level of competition, plus a lack of effective fishing vessel controls encourage illegal fishing, organised transnational fisheries crime and cross-over criminal activities.[1]

Like other types of unlawful maritime activity, illegal fishing takes place with more frequency and intensity in coastal maritime regions that governments are less able to monitor, access and control. In these areas, legitimate economic activities have little official protection against the threat of abuse and crime.

Large industrial vessels can illegally harvest vast quantities of fish that subsistence fisherfolk in vulnerable areas depend on. Local official corruption frequently results in the illegal operators being protected and encouraged to act again. Given the efficiency of modern fishing vessels, protracted predatory incursions into the traditional fishing grounds of others may cause enduring fish depletion.[2]

The collapse of fish stocks and ensuing marine environmental degradation are good reasons to put illegal fishing control high on governments agendas. However, recent research by Markus Ludwig and Matthias Fluckiger, of the University of Basel, has highlighted an additional, compelling reason why illegal fishing should be stopped: Piracy.

Photo Credit: Fara Abdi Warsameh, Associated Press

Photo Credit: Fara Abdi Warsameh, Associated Press

Narratives linking foreign illegal fishing as a driver for piracy are not new (see, for example, the work of Bueger on Somali piracy as a form of fisheries vigilantism in Somalia).[3]

However, the Basel University study is novel, taking a wide snapshot of data from 109 coastal countries on the strength of an original, objective methodology to draw its conclusion: That a significant decrease in fish catches can encourage piracy in fishing communities.

The study found that a 1% increase in fish catches can result in a decrease in piracy activity by 1%. The researchers point out that detected increases in piracy activity are likely to be a reaction to the temporary lack in available legitimate income opportunities, rather than a willingness to engage in lifelong criminal careers.

According to the study, the effect of negative fishery productivity changes can be far-reaching, given the detrimental effect that piracy can have on maritime economic activities like transport and other trade.

The logical conclusion is that combatting illegal fishing and prioritising policy measures to discourage it including the prosecution of those involved in fisheries illegality and crime may also be seen as tool to reducing incentives for piracy.

For access to the paper by Ludwig and Fluckiger, see .

[1] For more information on this topic, see Interpol’s Project Scale .

[2] For a recently reported example, see the case of the Fiji tuna fisheries .

[3] .