Insurance industry unknowingly supports illegal fishing, UBC researchers say
Many boats involved in illegal, unreported and unregulated (IUU) fishing are able to get insurance, suggesting that the insurance industry is inadvertently supporting illegal fishing, according to new Canadian research.
But that means it may also be able to help curb that kind of activity, say researchers at the University of British Columbia.
The most popular type of maritime insurance is called protection and indemnity insurance, and it's required by law for many vessels larger than 1,000 gross tonnes. It protects vessel operators in case of third-party liability or pollution deemed to be caused by the vessel.
The researchers went through lists of 480 confirmed or suspected illicit fishing boats, such as the European Commission's Regional fisheries management organisation's IUU list and Interpol's Purple Notice lists. Among those, they found 67 vessels listed as insured clients of 17 different maritime insurers who posted lists of their clients online, the researchers reported in a recent article in the journal Frontiers in Ecology and the Environment.
Rashid Sumaila, a professor at the UBC Institute for the Oceans and Fisheries and co-author of the paper, called that "a sizable number."
"That means that the insurance companies, without knowing, are helping these businesses to keep going on," he added.
The researchers note that many insurers don't have searchable databases on their websites, so the number of insured illegal vessels is probably an underestimate, especially when it comes to those in China, Taiwan, Mexico and the Philippines, whose insurers typically could not be identified.
Sumaila said illegal fishing is a risky activity.
In fact, the paper found that even though smaller fishing vessels aren't required by law to have insurance, many of the list did, suggesting some "may view insurance … as a necessary cost in order to maintain profitability and/or reduce exposure to risk and accidental losses."
"Restricting access to insurance could play a major role in ending illegal fishing, and right now, it's a largely overlooked method," Dana Miller, who led the research while she was a postdoctoral researcher working with Sumaila, said in a news release.
Insurers surprised
Sumaila said Miller visited the offices of a number of insurers and showed them the evidence that they were insuring illegal fishing vessel.
"Some of them were quite surprised," he said. "They didn't know. They didn't even think about it."
He said insurance companies that insure illegal fishing vessels without knowing about their illegal activities are underestimating their risk and charging them less than they should.
The researchers recommend that insurers consult lists of illegal, unreported and unregulated fishing boats before deciding whether fishing vessels are eligible for coverage, and should not grant insurance to any vessels appearing on the list.
Michael Csorba, chairman of the International Union of Marine Insurance Inland Hull, Fishing and Yacht Committee and the president of the ocean marine division at Great American Insurance Corp., said insurers already avoid insuring operators known to have constantly been involved in illegal, unreported or unregulated fishing.
But he said the risk to insurers if they do insure such vessels is "remote," since insurers can void a policy if a client is known to have been involved in illegal activity, and clients are required to fully and voluntarily disclose to the insurer all facts material to the calculation of risk.
'Not really feasible'
Asked about the idea of checking lists of IUU vessels when deciding insurance coverage eligibility, he responded in an email to CBC News, "There is not one source/database to go to for illegal fishing activity so this is not really feasible."
He added, "Governments and various agencies are trying to control IUU's. I do not believe insurance to be the solution."
Sumaila agreed that insurers can void insurance if they find out a vessel has been involved in illegal activity, but said that may be hard to determine when a claim is made.
"If you do your due diligence from the beginning, it's better than waiting until something happens," he said.
He acknowledged there is no central database IUU vessels to consult, and said that's something researchers could develop – his own research group is considering it.
But he said getting insurers involved may be a much less expensive way to prevent illegal fishing than traditional methods like government enforcement.
