EXECUTIVE SUMMARY
- Illegal, unreported and unregulated (IUU) fishing has been a significant problem for Vietnam’s booming fishing industry. This issue escalated into a major policy concern for Vietnam when the European Commission (EC) issued the country a “yellow card” warning in October 2017.
- In addition to causing economic losses, IUU fishing raises concerns about the legitimacy of Vietnam’s maritime claims in the South China Sea.
- Vietnam has taken significant steps to address the issue of IUU fishing, motivated not only by the desire to have the yellow card lifted, but also to transition towards a more sustainable fishing industry, enhance its international reputation, and affirm its commitment to a rules-based international order.
- Despite making considerable progress, Vietnam continues to face multifaceted challenges. These include the lack of an effective surveillance system, inadequate enforcement capabilities, and the need to maintain a robust fishing fleet to counteract China’s “grey zone” tactics in the South China Sea.
- Addressing the issue of IUU fishing will contribute to a more sustainable fishing industry, improve the livelihoods of millions of fishermen, drive economic growth, and strengthen Vietnam’s efforts in protecting its maritime sovereignty.
*Nguyen Khac Giang is Visiting Fellow in the Vietnam Studies Programme at ISEAS – Yusof Ishak Institute. He was previously Research Fellow at the Vietnam Center for Economic and Strategic Studies.
ISEAS Perspective 2024/18, 8 March 2024
INTRODUCTION
Illegal, unreported and unregulated (IUU) fishing poses a significant threat to Vietnam’s thriving fishing industry, which recorded an export value of US$9.2 billion in 2023,[1] ranking as the world’s third-largest. Since 2017, the European Commission (EC) has issued a “yellow card” warning against the country’s fishing industry for its failure to comply with EC regulations on IUU fishing. Given that the European Union (EU) is the world’s largest market for seafood products globally, the EC’s warning has placed a considerable burden on Vietnam’s seafood exports.[2] Furthermore, the yellow card has caused reputational damage to Vietnam’s seafood in other markets and hampered Vietnam’s efforts to legitimise its maritime claims in the South China Sea.
The Vietnamese government has made significant efforts to implement the recommendations of the EC in order to combat IUU fishing. Despite these efforts, the EC has not yet withdrawn its warning. This article analyses the economic and political impact of IUU fishing on Vietnam, assesses the challenges faced by the country in addressing the issue, and proposes steps that the Vietnamese government should take to expedite the resolution process.
THE EC’S YELLOW CARD
Vietnamese fishing vessels have been notorious for illegally trespassing into other countries’ maritime territories, sometimes venturing as far as the South Pacific. For instance, between 2013 and 2017, 20 Vietnamese vessels were apprehended and prosecuted for illegally fishing within Australia’s Exclusive Economic Zone (EEZ).[3] According to statistics from Vietnam’s Directorate of Fisheries, from December 2013 to the end of 2016, 726 fishing boats and 5,752 fishers were arrested by foreign authorities for engaging in IUU fishing activities.[4]
Before 2017, Hanoi had not taken strong measures to combat IUU fishing. This was partly due to a limited surveillance capacity, but also because the government was focused on strengthening its fishing fleet as a tool to counteract China’s “grey zone” tactics in the South China Sea. It only became a policy priority in 2017 when the EC issued a “yellow card” against the country.
As the EU is the largest seafood market globally, accounting for 34 percent of total market imports, it wields the market power to unilaterally impose sanctions on violators.[5] In 2008, the European Commission established a legal framework (Decision No. 1005/2008) to prevent, deter, and eliminate the trade of IUU seafood products into the EU.[6] This framework allows the EU to issue formal warnings (yellow cards) to non-EU countries with inadequate measures in place to combat IUU fishing activities. Failure to improve can result in a ban on their fish from the EU market (red card), among other penalties. By 2023, the EU had issued warnings to a total of 27 countries, with six countries receiving a red card. In Southeast Asia, four countries were warned: Thailand and the Philippines had their warnings lifted, Cambodia was red-carded, and Vietnam remains yellow-carded.
Despite strong political determination, tackling IUU fishing and removing the EC warning remains a daunting task for Vietnam. Its domestic waters have seen a sharp decline in fish stock due to overfishing.[7] Additionally, escalating tensions in the South China Sea, a traditional fishing ground for Vietnamese fishermen, have made fishing a perilous and challenging endeavour. Similar to their counterparts in the Philippines, Vietnamese vessels are frequently harassed and even attacked by China’s maritime militia and law enforcement vessels.[8] As a result, many Vietnamese fishermen have turned to the waters of other countries, contributing to the issue of IUU fishing.
ECONOMIC AND POLITICAL TOLLS
While IUU fishing may offer short-term benefits to a small group of fishermen, it inflicts substantial damage on the wider fishing industry. In Southeast Asia, Vietnam bears the second-highest economic loss from the issue, estimated at US$1.6 billion annually.[9] More alarmingly, in the long term, IUU fishing exacerbates the depletion of seafood resources. In the period 2016-20, Vietnam had a fish stock of approximately 3.95 million tonnes, with a total allowable catch of 1.67 million tonnes per year.[10] However, the total catch of Vietnam is estimated to be as huge as around 3.8 million tonnes per year, making it impossible for fish stocks to recover.[11]
In an era of growing consumer awareness about environmental sustainability, IUU fishing also profoundly impacts Vietnam’s trade with key markets, particularly the EU. Traditionally one of the top destinations for Vietnam’s seafood products, the EU has become less accessible due to the EC’s yellow card. This warning subjects all Vietnamese seafood exports to the EU to pre-checks, leading to increased costs and longer delivery times, not to mention the reputational damage that renders Vietnamese seafood less attractive to EU consumers. Consequently, while the EU used to account for up to 35 per cent of Vietnam’s seafood export value in 2017, this figure dropped to just 12 per cent in 2022.[12]
Moreover, there is a looming threat of an escalation to a “red card,” which would result in a total ban on Vietnam’s seafood products, which could potentially cause a loss of US$500 million per year in Vietnam’s export revenue. The seafood harvesting and processing sectors, projected to decline by as much as 30 per cent in capacity, would be among the hardest hit, jeopardising millions of jobs.[13] Additionally, if other high-value markets such as Japan and the United States also adopt EU standards, Vietnam’s seafood exports might face even greater challenges. The yellow card and the possibility of a red card also undermine the preferential tariff treatment Vietnam enjoys under the EU-Vietnam Free Trade Agreement.[14]
Politically, the IUU fishing issue also weakens Vietnam’s position in the South China Sea. This is because China could exploit the issue to undermine Vietnam’s maritime claims and drive a wedge between Vietnam and other regional countries.[15] Vietnam’s IUU fishing has also led to diplomatic tensions with other Southeast Asian nations, undermining the solidarity of ASEAN on South China Sea issues. Furthermore, in the event of a “red card” from the EC and similar sanctions from the United States and Japan, Vietnam’s fishing industry would suffer greatly. Without access to key markets, the income of Vietnamese fishermen would further decline, potentially leading to a lack of motivation for them to continue fishing. This could severely impact Hanoi’s strategy of encouraging fishermen to “hold fast to the sea” in order to defend the country’s maritime claims.[16]
VIETNAM’S UPHILL BATTLE AGAINST IUU FISHING
The Vietnamese government has prioritised fighting IUU fishing since 2017. For example, it has achieved notable progress in revamping the legal framework against IUU fishing in line with the EC’s recommendations. This includes the formulation, finalisation and promulgation of a fisheries law, two decrees, and 10 guiding circulars and legal documents.[17] Additionally, a National Steering Committee on IUU Fishing Prevention has been established in Hanoi, led by a deputy prime minister, and extensive awareness campaigns have been conducted in 28 coastal provinces. Significant resources have also been allocated towards enhancing surveillance capabilities.[18]
Vietnam has also been proactively cooperating with other countries and transnational organisations to tackle IUU fishing, particularly with nations where Vietnamese IUU fishing violations occur frequently. It has signed memoranda of understanding to prevent IUU fishing with Australia and the United States, established a hotline with the Philippines, and is in the process of negotiating similar hotlines with Indonesia, Malaysia, Thailand and Cambodia.[19] Vietnam became a signatory of the United Nations Fish Stocks Agreement in 2018 and the Agreement on Port State Measures in 2019. Currently, Vietnam is a cooperating non-member of the Western and Central Pacific Fisheries Commission (WCPFC) and participates in the Ocean and Fisheries Working Group of the Asia-Pacific Economic Cooperation.[20]
The EC has recognised Vietnam’s significant improvements in the monitoring, control and surveillance of fishing vessels, as well as its efforts to install monitoring systems, provide regulations and implement gear marking for fishing vessels.[21] Since the initial nine recommendations in 2017, the EC’s most recent inspection in October 2023 revealed that only two key issues remain unresolved: IUU fishing outside of Vietnam’s EEZ and the traceability of fishery products.[22]
Despite a robust regulatory framework, Vietnam has struggled to prevent its fishermen from engaging in IUU fishing in other countries’ waters. In the first eight months of 2023, a total of 36 vessels with 202 fishermen were detained by foreign countries, including Malaysia, Indonesia, Thailand and Cambodia. Although the number of violations has drastically declined by 84.35 per cent compared to 2016,[23] the EC has made it clear that it will not lift the yellow card warning if this issue is not completely resolved.[24] According to the IUU Fishing Risk Index, which assesses countries’ vulnerabilities and responses to IUU fishing activities (with a ranking of 1 being the best and 5 being the worst), Vietnam’s score for 2023 is 2.57. Although this marks a significant improvement from the 2019 score of 3.16, Vietnam remains in the bottom 17 of 152 countries and territories included in the index.[25]
There are four main reasons why the problem of Vietnamese fishing violations in foreign waters persists.
First, implementing comprehensive governance and surveillance systems across 28 coastal provinces is difficult, particularly given Vietnam’s decentralised administrative system. While the central government considers resolving the IUU fishing issue a priority, some provincial authorities have not taken it seriously enough, leading to inconsistent fisheries management and sanctioning of violations across the provinces. For instance, six out of 28 provinces still have not established a local Fisheries Surveillance force (Kiểm ngư), making it difficult to effectively manage fishing activities.[26] During the October 2023 session of the National Assembly, Minister of Agriculture and Rural Development Le Minh Hoan expressed his frustration that nearly 60 per cent of violations in various provinces have not been properly addressed. He even threatened to escalate the issue to the prime minister for disciplinary measures against officials who have been negligent.[27]
Second, unlike neighbouring countries such as Thailand and the Philippines, Vietnam has struggled to build a comprehensive fishery production chain linking fishermen, port authorities, fisheries management authorities, and businesses. This makes it challenging to ensure sufficient and accurate traceability mechanisms in fishery processing plants. The fragmented fishing ecosystem explains why Vietnam has not completed the process of registering fishing boats and of issuing fisheries exploitation permits. It also has not finished updating the data on fishing vessels into the national fisheries database (VNFishbase). As of 29 August 2023, only 71,658 out of 86,820 fishing boats measuring six meters or longer (82.5 per cent) have been registered and updated in the database. Meanwhile, the number of boats that have been newly granted valid permits is only about 70 per cent.[28]
Third, Vietnam still struggles with the issue of enforcement. The problem of fishing boats operating without fully meeting all the necessary conditions persists. Despite the installation of vessel monitoring systems (VMS) on almost all boats (28,753 out of 29,381 boats with a length of 15 meters or more),[29] many still turn off or remove the VMS in order to install it on other boats and fish in prohibited areas, evading supervision from authorities in the process, and engaging in illegal fishing in foreign waters. Although such actions may result in hefty administrative fines if caught, these measures have not been strong enough to deter fishermen effectively.
Fourth, the goal of combating IUU fishing is occasionally compromised by Vietnam’s effort to protect its maritime claims in the South China Sea. For Hanoi, fishermen play a crucial role in exerting its maritime sovereignty, highlighted by the slogan “Each fishing boat is a living landmark, each fisherman is a soldier protecting the sovereignty of the sea and islands.”[30] For example, while anti-IUU fishing recommendations emphasise the need to reduce fisheries subsidies, the Vietnamese government has increased fishing subsidies in various forms since 2014.[31] These fisheries support policies, without adequate supervision and management, might perpetuate IUU fishing practices.[32]
CONCLUSION
In order to effectively address the issue of IUU fishing and remove the EC yellow card, Vietnam must strengthen law enforcement, including considering the criminalisation of IUU fishing and stricter sanctions against violations.[33] For various reasons,[34] Vietnam has not criminalised IUU fishing although this issue has been widely discussed. Vietnam also needs to establish a sustainable production chain to ensure traceability and better governance for the fishing industry. Minister of Agriculture and Rural Development Lê Minh Hoan has stated that creating a comprehensive ecosystem for the fishing industry, similar to that of the Philippines or Thailand, is essential to make Vietnam’s fishing industry sustainable and to combat IUU fishing.[35]
Relatedly, the Vietnamese government must take appropriate actions to ensure the livelihoods of fishermen and workers in the supporting industry. Due to efforts to combat overfishing and prevent IUU fishing, the number of Vietnamese fishing vessels has significantly decreased from 110,950 in 2017 to 86,800 in 2023, with a projected continued decrease to 83,600 by 2030.[36] Consequently, the number of individuals employed in the marine fishing industry is expected to decrease from 730,000 to 600,000 by 2030. As such, it is crucial that the authorities provide adequate support and training for those who may lose their jobs as a result of these changes.
Vietnam also needs to enhance international cooperation with Regional Fisheries Management Organizations (RFMOs) and neighbouring countries for good practices in fishing governance. For this purpose, Vietnam can learn from regional countries, particularly South Korea, Thailand and the Philippines, who have successfully worked with RFMOs to have their yellow cards lifted.[37] In the masterplan to combat IUU fishing by 2025, which was approved by the government in 2022, Vietnam has made a commitment to become an official member of WCPFC, ratify the International Labour Organization’s Work in Fishing Convention (C188), and accelerate negotiations with neighbouring countries and several Pacific Island nations for Vietnamese fishing vessels to legally operate in their waters.[38]
To balance the risk of IUU fishing and the need to maintain maritime sovereignty, Vietnam has taken steps to develop a more professionalised maritime militia force instead of relying on fishermen to protect its maritime claims. Since 2019, Vietnam has established “standing maritime squadrons” to support law enforcement agencies under the management of provincial military commands.[39] Empowering this force – in accordance with international law – will alleviate the burden on Vietnam’s maritime law enforcement in dealing with China’s grey zone tactics.[40] This approach will also help reduce risks for fishermen and make it politically feasible to decrease the number of fishing vessels as recommended by the EC.
The EC has carried out four inspections over the past six years to evaluate Vietnam’s improvements in fisheries governance. Another round of inspections is scheduled for May 2024. The Vietnamese government aims to get the “yellow card” lifted by then. Whether Hanoi will be successful in this effort remains to be seen, but it is safe to say that the process of getting the yellow card removed has greatly benefited Vietnam in several ways. It presents an opportunity to rethink the sustainability of the fishing industry, a situation that is particularly important given Vietnam’s rapidly depleting fish stocks. The process has also encouraged Vietnam to actively engage with international partners and neighbouring countries, and to participate in various forums and international conventions to combat IUU fishing. As an emerging middle power, Vietnam’s interest lies in upholding a rules-based international order, and following the anti-IUU fishing framework is a vital part of this commitment. Moreover, as more resources are channelled into making the fishing industry more sustainable, Vietnam now has the financial, technical, and political capability to become a “maritime economy” by 2030.[41] This not only promises to improve the livelihood of millions of fishermen, thus contributing to economic growth, but also strengthen Vietnam’s ability to safeguard its maritime sovereignty.
ENDNOTES
For endnotes, please refer to the original pdf document.
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