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We have spent the last few days contemplating with marine experts the real and terrifying challenges our oceans face and what we, as a philanthropic foundation, can do to stimulate urgent thought and action largely absent in Asia around the consumption and trade in fish.
While there is growing attention from governments (local, national and regional bodies), NGOs and philanthropic funders in the U.S., Europe, Australia and New Zealand, despite being an important consumer and producer, there has been little attention paid to the challenges in Asia, where an estimated 40 percent of major fish stocks are overexploited or collapsed. At the same time, as a region where poor coastal populations are largely dependent on fisheries for their only source of protein and employment, the issues are particularly urgent.
It’s worth reminding ourselves of just how significant those challenges are and why we in Asia should particularly take note.
Oceans cover 70 percent of our planet and are indispensable to life. They generate 50 percent of the oxygen we breathe, absorb warming greenhouse gases, help regulate our climate and are a critical source of food for us all, but most importantly the 1 billion of our world’s poorest for whom fish is their only source of animal protein.
Yet as we have written about here and here, we are depleting, polluting and warming our oceans at unprecedented rates. We are not caring for our greatest resource in the rush to take more and produce more. While population growth has averaged 1.7 percent each year over the past 50 years, with greater global affluence, rates of fish consumption are increasing at an annual rate of 3.2 percent, according to the FAO’s 2012 State of the World’s Fisheries and Aquaculture. How will it be when our current population of 7 billion reaches an expected 9 billion by 2050?
Over the past 50 years we have consumed an estimated 90 percent of the ocean’s big fish, encouraged by $27 billion each year in misguided government subsidies for fuel or boat construction offered to the industrial-scale fishing fleets that have led the devastating global scramble to harvest, according to a Pew Environment Group report. Estimates are that about half the world’s wild capture production comes from the smaller coastal fisheries that can be just as destructive, usually are unregulated and yet are a vital source of employment and protein.
The total number of fishing vessels in the world in 2010 is estimated at about 4.36 million and again it’s worth noting that Asia has the largest fleet, accounting for 73 percent of the world total, according to the FAO.
World per capita food fish supply increased from an average of 9.9 kg in the 1960s to 18.4 kg in 2009, and likely 18.6 kg in 2010 when all the numbers are in. Of the 126 million tonnes available for human consumption in 2009, Asia accounted for two-thirds of which 42.8 million tonnes was consumed outside China (15.4 kg per capita).
China, which is expected to pull an additional 300 million people out of rural poverty and into relative urban affluence over the next two decades, has a long way to go. Already over the past 50 years, that country’s share in world fish production rose from 7 percent to 35 percent in 2010, largely fueled by growth in aquaculture there, while fish consumption per capita rose to 31.9 kg in 2009, with an average annual rate of growth of 6 percent between 1990-2009. China is also the world’s largest single exporter, responsible for 12 percent of world trade by volume.
China now produces more than 60 percent of the world’s aquaculture by volume, while Asia as a whole accounts for 89 percent of global volume. This is not, however, taking pressure off our oceans as many people seem to believe. fishmeal itself contains fish and for the more expensive fish the conversion rates are not good. World aquaculture production reached an all-time high in 2010 of 60 million tons, meaning we now farm about half our global consumption.
This massive and growing consumption has meant that most of the stocks of the top ten species, which account for about 30 percent of world marine capture fisheries production, are fully exploited and have no potential for increases in production. Our fishing capacity, meanwhile, is estimated to be as much as two to four times that needed to harvest the sustainable yield catch from the world’s fisheries.
Meanwhile, not only are we emptying our oceans of life, by overfishing, we are killing what’s left with our bad terrestrial habits.
Acidification and the accompanying ocean warming are continuing apace as our marine life absorbs carbon dioxide and other greenhouse gases emitted by our factories, power plants and transport sector. This has been devastating to our coral reefs, the habitat for 25 percent of our marine species.
Humans are also responsible for a wide assortment of pollutants from oil spills to plastic waste to industrial and municipal effluent, to agricultural runoff from fertilizers that has created whole coastal dead zones.
And I could go on about Illegal, Unreported and Unregulated Fishing, which is an industry unto its own and about which not enough is known but its links to human trafficking, drugs, and terrorism finance have been sporadically documented. With lack of attention to fisheries in Asia and close to zero regulation, this is a particular challenge in terms of even beginning to think about how to stimulate action.
Still, it’s not all gloom and doom – at least in Europe, the U.S., Australia and new Zealand, where NGO pressure and governments (both local and national, as well as regional bodies) have started to focus on the myriad challenges.
According to the FAO report, good progress is being made in reducing exploitation rates and restoring overexploited fish stocks and marine ecosystems through effective management. In the United States of America, 67 percent of all stocks are now being sustainably harvested, while only 17 percent are still overexploited. In New Zealand, 69 percent of stocks are above management targets, reflecting mandatory rebuilding plans for all fisheries that are still below target thresholds. Similarly, Australia reports overfishing for only 12 percent of stocks in 2009. There is also growing EU and USA action around IUU fishing.
But where is Asia in this equation – China, southeast Asia, Japan and India, which together consumed two-thirds of the world’s fish, farm more than 80 percent and export a large chunk to the rest of the world. On marine issues, both governments and NGOs are largely silent, with the exception of the creation of marine protected areas which in concept are important but reality need to be better conceived with proper fisheries management, governance, linkages and adequate funding for monitoring and enforcement.
The reality exists that none of the Asian nations have adequate fisheries management plans, import or export regulations or reliable stock assessments, to their own detriment. IUU fishing is rampant. Yet, fisheries are a vital source of employment and food for the region. Food security and potentially even social stability are at stake.
The question we have been asking ourselves – beyond those provoked by the challenges above – is: What role should a significant global trader such as Hong Kong play in this equation?
Once a fishing village with a booming fishing industry that sustained our appetite for highly commercial species such as snapper and grouper producing 90 percent of the fish we consumed, Hong Kong now imports 90 percent of what it consumes from 140 nations globally. The lack of fish in our oceans caused the government to buy out the once substantial trawling fleets and close Hong Kong waters to commercial fishing.
Despite the declining productivity of our own seas, our appetite for fish, particularly endangered luxury species, has only increased with our greater affluence. In 2009, an average of 71.6 kgs of seafood was consumed per person. That’s 3.9 times higher than the global average and up from 9.9 kg in the 1960s.
So the question remains: should not Hong Kong, a significant consumer of seafood and as such a contributor to global ocean challenges not act now to help save our seas? The key to keep our oceans from emptying completely will be for governments to adopt policies that encourage sustainable consumption and to regulate the fishing and seafood-related industry more carefully.
- Green Blog: A Milestone Looms for Farm-Raised Fish (green.blogs.nytimes.com)
- Fishers Fight Over Dwindling Catch (ipsnews.net)
- David Bank: Fish 2.0: Investing in Sustainable Oceans and Fisheries (huffingtonpost.com)
- What’s up with Sustainable Seafood? (jenniferbrowne.org)
- World Fisheries: are we managing an effective decline? (worldfishing.net)
- The high seas are too precious to be left to plunderers and polluters | Callum Roberts (guardian.co.uk)
Reprinted from the South China Morning News, January 16, opinion written by Sophie Le Clue, ADMCF’s director of environmental programs:
In one sense, 2011 was a good year for sharks. The movement in Asia against consuming shark fin gained momentum against a
backdrop of new legislation to ban the trade in California as well as several Canadian cities. In a domino effect, shark sanctuaries were declared worldwide, covering thousands of square kilometers.
In China, the business community also rallied against shark fin. To date, 142 business leaders including chairmen and chief
executives of leading companies such as Lenovo, Haier and China Merchants Bank pledged not to eat it, while hotels and clubs have committed to not serving the infamous soup.
On the government side, in 2011 45 members of the Chinese People’s Political Consultative Conference signed the “Motion on
Development of Regulations on Prohibiting Shark Fin Trade”. Some members of the National People’s Congress also signed the
motion, which will be considered by the government later this year.
Meanwhile, the Hong Kong and Shanghai Hotels Group’s surprising and insightful move to ban the product across all outlets, including its famed Peninsula hotels, was perhaps a fitting end to the year.
Despite these moves, there is a long way to go. There are enormous challenges to implementing regulatory controls and many shark populations globally remain endangered, some threatened with extinction in the near future.
As a result, eyes are now firmly on Hong Kong, the centre of the global shark fin trade and itself a driving force in declining shark
populations.Yet it seems resolute in enabling such ecologically important endangered species to be traded with little regulatory control.
Approximately 10,000 tonnes of shark fin from millions of sharks are imported into Hong Kong every year with virtually no regulation as to species. According to some estimates, this equates to around half of the global trade.
To provide context: of the 507 shark species, only 256 have been assessed by the World Conservation Union (IUCN) to determine their conservation status and of these, 56 per cent, or 143 species, have been identified as threatened with extinction, either now or in the near future. Many of these species are freely traded in Hong Kong.
Last year, questions by legislators on the topic of shark fin met with the standard response: that the government adheres strictly to Cites (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) requirements.
Quite why this prevents the government from regulating trade in endangered species not under Cites remains to be seen.
The paradox, however, is startling. Cites was drafted as a result of a resolution adopted in 1963 at an IUCN meeting and came into force as an international agreement in 1975.
By placing trade restrictions on species at risk, it aims to ensure that the international trade in wild animals and plants does not
threaten their survival. Yet it only includes three species of shark, despite valiant efforts to introduce several others in 2010,
when countries with vested interests in the trade, such as Japan, reportedly bargained with fellow signatories to ensure that highly lucrative shark species – albeit critically endangered – were not included in the convention’s regulatory appendices.
Science and sustainability, the cornerstone of conservation, clearly gave way to commercial interests. For sharks at least, Cites is failing. So when an administration such as Hong Kong hides behind its Cites’ commitment in response to questions about the shark trade, despite the convention’s obvious failings, we know we are in troubled waters.
We can only hope that the next chief executive will have more foresight. Hong Kong remains a gateway to the shark fin trade in
Asia; with a little vision it could make eating shark fin history and have a major impact on an issue of global significance.
Concern is growing globally about water resources and the potential for conflict in regions where they are scarce. But are investors and businesses in Asia adequately factoring water into risk assessments?
A recent Neilson study showed that worry about water shortages has overtaken global warming as the top issue, with 75 percent of respondents identifying this as something they worry most about. That represents an increase of 13 percent over the previous year.
And the concern is not without basis. Worldwide, almost 1 billion people lack access to safe drinking water while 70 percent of industrial waste in developing nations is dumped untreated into waterways, further limiting what is often already stretched supply.
Yet investors and leaders of industry may not be paying attention, considering water challenges simply an environmental problem rather than a fundamental business risk.
In China, the water landscape is particularly stark. We hear much about that country’s economic growth averaging 10 percent over the past 20 years, the massive and wholesale transformation of the economy at rapid pace, but not so much about the horrendous cost to the environment that already weighs heavily on GDP .
We hear much less about the dead and dying rivers, the over-pumped aquifers, the creeping desertification in previously agricultural areas, the thinned soil from over-use of pesticides, the power plants without adequate water to function, the massive and growing health care costs from poisonings and escalating cancer rates.
We hear very little about the growing numbers of protests nationwide linked to pollution incidents.
The government is clearly concerned. The official response in China has been a tightening regulatory environment, and a move toward real pricing of the precious resource, or the investment opportunities that an inevitable clean up will bring.
The recently approved, 12th five-year plan for the first time features climate change and energy, sets lower growth targets for the country and favors investment in industries that promote pollution clean up and cleaner processes generally.
Clearly, there are thus significant ramifications across a broad range of industries in China but are investors prepared? Are they staying ahead of the water risk curve, engaging in the due diligence and mitigation efforts needed to survive the inevitable and seismic shifts around water?
China Water Risk (CWR) is ADMCF’s redesigned follow-on from Asia Water Project, the pilot initiative launched 18 months ago to inform investors and companies of both risk and opportunities around water crisis in China.
This initiative, which launches later this month at www.chinawaterrisk.org, is designed to influence capital allocation to industries in China located in water-appropriate regions, with solid mitigation strategies built around water.
Per capita global water resources are 6,280 cubic meters on average but people in China have less than 1/3 of that amount at 1.816 cubic meters.
So, the country with 20 percent of the world’s population has access to only 7 percent of global water resources, while an estimated 300 million people in the country are without access to safe drinking water.
And this is not just a problem for rural areas in China. In 2007, research showed that 60% of China’s cities faced water scarcity and 110 cities faced serious water shortages.
Pollution of groundwater follows from the low urban sewage treatment rate, which was only 73 percent in 2009, according to a recent article in China Business Times. Hundreds of new sewage treatment plants have been built nationwide in recent years and sit idle because of the high cost of operating them.
The Beijing-based Institute for Public & Environmental Affairs in its water pollution map (an inspiration for China Water Risk and a CWR partner) lists hundreds of violations by sewage plants.
According to the Ministry of Environmental Protection, 77 percent of 26 key lakes and reservoirs, 43 percent of 7 major river basins are considered unfit for human contact. Meanwhile, 19 percent of monitored rivers and basins, 35 percent of lakes are reservoirs are believed unfit even for agricultural or industrial use.
The World Bank has warned of “catastrophic “ consequences for future generations if the government does not act to solve quickly the acute water shortage and pollution problems. The report urged new pricing, management and regulatory strategies.
In China, agriculture has been by far the largest consumer of water at 62 percent, and the largest polluter, with pesticides and fertilizers responsible for about half of contamination of waterways.
With water scarcity becoming more evident, waterways increasingly unfit for irrigation coupled with the fact that China holds only 7 percent of the world’s arable land, food security has by all accounts become of national concern.
Part of the problem around agriculture and food security in China has been that regions south of the Yangtze account for 33 percent of the country’s total farmland and 83 percent of the country’s water resources. North of the Yangtze, however, lies 67 percent of national farmland but only 17 percent of water resources
Exacerbating the problem, the country is the globally the largest consumer of pesticides and this has contributed heavily not only to aquifer and waterway pollution but to depletion of farmlands.
Meanwhile, as environmental and labor regulations tightened in the West pushing up prices at home, Foreign Direct Investment has flooded into China, fueling the factories, building the industry that is now feeding, clothing and housing the world.
Last year, FDI was estimated at $105.7 billion, surging 17.4 percent over the previous year. This is also helping build a huge middle class and affluent consumer market in China that is expected to almost triple to 400 million by 2020.
According to a September HSBC report, already next year China will replace Japan as the world’s largest consumer of luxury items – something unthinkable just a decade ago.
A joint report published in 2007 by the World Bank and the Chinese government estimated the combined health and non-health cost of outdoor air and water pollution at approximately $100 billion a year, or about 5.8% of China’s GDP.
Water pollution, meanwhile, worsens China’s severe water scarcity problems, with the overall cost of water shortages estimated at 1% of GDP.
The weight on economic growth is certainly of concern to Beijing, but equally concerning is the growing discontent in China related to pollution incidents and scarcity. In 2005, the last year for which government figures have been released, there were an estimated 50,000 protests nationwide related to pollution incidents.
This comes in response to significant growth of so-called cancer villages, or clusters of cancers invariably located near heavily polluting factories, fast-growing rates of urban cancers and outbreaks of illness or poisonings related to drinking polluted water.
Many of these protests have been centered around specific polluters and in several instances have forced factories or power plants to close. This then involves not just reputational risk but threatens serious economic losses for polluters.
There are also additional considerations around political risk. Concern is that as climate change potentially exacerbates the country’s water shortages, the government sees the need to exert further control over domestic water resources with far-reaching consequences.
Of the 261 International rivers globally, 15 originate in China, including the Mekong, Ganges, Brahmaputra and Indus rivers. These international rivers span 16 nations and China has no formal agreements or treaties regarding the use of these rivers with any of its neighbors.
What is patently clear, is that no investor or business leader can step into China without carefully considering the water challenges facing each industry and then positioning to mitigate risk. At the same time, don’t investors and business leaders want to position themselves to take advantage of potentially huge opportunity?