Somalia Issues Fishing Licenses: Fees will Help Develop Fisheries Sector

Key Points

• For the first time in over two decades, offshore fishing licenses were issued, legally and transparently, by the Ministry of Fisheries and Marine Resources (MFMR) of the Federal Government of Somalia
• These licenses were issued in line with the National Security Council (NSC) agreement of February 2018, for the exclusive exploitation of tuna and tuna-like species beyond 24 nautical miles [1] from Somalia’s coast -- outside of the zone reserved for Somali fishers. 
• Under the terms and conditions of the licenses, and regional Conservation and Management Measures of the Indian Ocean Tuna Commission (IOTC), the licensed fishing vessels are required to record and report all their catch to the Somali authorities. 
• The compliance of licensed vessels is monitored by the MFMR through a satellite-based Vessel Monitoring System and through various reporting requirements. 
• A total of $1,045,000 in license fees was collected for the first year and has been deposited in an account at the Central Bank of Somalia. The funds are expected to be reinvested into developing the domestic fishing sector.

Background

• Tuna and tuna-like species are highly migratory and found throughout the Indian Ocean, both in the Exclusive Economic Zone (EEZ) of coastal states and on the high seas, in areas beyond national jurisdiction. As migratory species, they are most abundant in Somalia’s EEZ to purse seine fishing from July to November, and to longline fishing from January to June. 
• For many years and until the recent piracy outbreak starting in 2007, fishing vessels often operated in the Somali basin without proper documentation. 
• Since the formation of the Federal Government of Somalia in 2012, the official proclamation of the Somali EEZ in 2014, the participation of Somalia in the Indian Ocean Tuna Commission (IOTC), the revision of the national fisheries law in 2014, and the Interim Agreement on Revenue Sharing from licenses, Somalia has taken steps to draw benefits from the sustainable exploitation of its resources. 
• The framework of the UN Convention on the Law of the Sea provides for both the exploitation of fisheries resources by the domestic sector, but also by foreign vessels through specific agreements or other arrangements, such as fishing licenses.

The New Licensing Process

• In February 2018, an Interim Agreement on Revenue Sharing for the issuance of fishing licenses, was signed by Somalia’s NSC [2]. Under the terms of this public agreement, the MFMR was given responsibility for the issuance and management of offshore fishing licenses (beyond 24 nautical miles from the coast), with a view to allowing Somalia to raise revenue from offshore fisheries resources in its EEZ, particularly tuna and tuna-like resources. 
• A Memorandum of Understanding (MoU), defining the terms and conditions of the licenses, was prepared in mid-2018 with the support of development partners. The Ministry reached out to potential tuna fishing fleets from the European Union, China and Japan, among others. 
• The Chinese Offshore Fishing Association (COFA), was the only entity to express interest in licenses. In July 2018, COFA signed an MoU with the Ministry, outlining the terms and conditions for the operation of fishing vessels within Somalia’s EEZ. 
• Under the MoU, 31 Chinese tuna longline vessels were issued with a license to fish for tuna and tuna-like species in the EEZ. Due diligence was undertaken to review the applications for these vessels by the Ministry, with the assistance of Fish-I Africa [3]. 
• The first licenses were issued in mid-November 2018 by the Ministry and formally announced during a ceremony at the Ministry on December 12, 2018. 
• The issuance of these licenses allowed Somalia to raise over $1 million in revenue for the country, deposited in a bank account at the Central Bank of Somalia. In the absence of these licenses, the migratory tunas may have been harvested either on the high seas or in the EEZ of another coastal state, without any benefit to Somalia, as these vessels were already operating in the Indian Ocean, outside of the Somali EEZ. 
• This marked the first time in more than two decades that licenses were issued legally and transparently by Somalia. The MoU, which lays out terms and conditions of the licenses, the list of vessels licensed, and fees paid, was published on the Ministry’s website [4].

Control, Monitoring and Surveillance

• As part of the conditions under which the licenses were issued, vessels are monitored by a trained team at the Ministry through a satellite-based Vessel Monitoring System (VMS), vTrack from the Danish company VISMA, that was funded by the government of Italy and FAO. The Ministry continues to benefit from the support of the World Bank, FAO and Fish-I Africa in the monitoring of the fleet. 
• This VMS system allows for the vessels to be tracked in near-real time as updated positions are received every two hours. This ensures that vessels abide by the conditions of their licenses, and do not enter a zone delimitated to 24 nautical miles of the coast, which is reserved exclusively for Somali fishers. This restriction is aimed at avoiding conflicts between foreign fleets and artisanal Somali fishing boats, which operate mostly within this coastal area. 
• Reports and logbook data from the licensed vessels are being gathered to help ensure full compliance by fishing fleets and to improve knowledge of their operations and catch. 
• While the Monitoring Control and Surveillance (MCS) capacity of the Ministry is still being enhanced, the VMS system being used is one of the best available tools to ensure compliance by the foreign fleet. Data from the VMS will be combined with other reporting to help maintain the sustainability and full compliance of fishing activities. In the future, observers may also be deployed onboard licensed vessels to gather scientific data.

Potential Impacts

• Unlike bottom trawlers, the licensed vessels target tuna and tuna-like species using longline gear, without causing environmental damage to the habitat and damaging demersal structures such as coral reefs. 
• Longline operations can generate bycatch, including sharks, marine turtles and other pelagic fish. Under the terms of the licenses, and regional Conservation and Management Measures of the Indian Ocean Tuna Commission (IOTC), the licensed fishing vessels are required to record and report all their catch to the Somali authorities. This will allow the MFMR to better assess the impact of the licensed fleet on these species and strengthen its regulatory framework. Data and status of bycatch is also reviewed by the IOTC. 
• Catches from the vessels are not currently landed in Somalia and therefore have no impact on domestic prices of fisheries revenue for local producers. This could change in the future, but enhanced security and investments in infrastructure and port services will be required.

Regional Management

• Highly migratory species, including tuna and tuna-like species, are managed at the regional level by the IOTC, which comprises 31-member states. 
• Fishing vessels operating in the Indian Ocean, including in the EEZ of the coastal states, need to comply with IOTC Conservation and Management Measures, among others, resolutions on bycatch, e.g. sharks, marine turtles, at-sea transshipment and observers. 
• Under current IOTC Conservation and Management Measures:

- There is no requirement that observers are deployed by coastal states when vessels are operating in their waters

- The state where a vessel is registered (the flag State) has the responsibility to observe at least 5% of the fishing operations of their vessels in the Indian Ocean for the collection of scientific data (IOTC Resolution 11/04)

- Longline vessels may transship their catch at-sea within the IOTC area of competence, and EEZ of Somalia. However, this is strictly regulated and must comply with IOTC Resolution 18/06, i.e. with prior authorization of the coastal State if transshipment occurs in its EEZ, with prior authorization of the flag State of the fishing vessel, on a carrier vessel that is on the IOTC Record of Carrier Vessels and when carrier vessels transshipping at sea have an IOTC observer on board.

- Within the IOTC framework, there is no quota being distributed to IOTC contracting and cooperating parties now.

• Among the main tuna stocks targeted by the longliners in Somalia, yellowfin tuna (Thunnus albacares) is assessed to be overfished and overexploited. However, the Somali licenses are not expected to result in more fishing as these boats were already operating in the Indian Ocean outside of Somali waters. Moreover, IOTC has taken steps to reduce catches of yellowfin tuna which is to be implemented by the flag State, and not licensing States.

Revenue Mobilization for Somalia

• Somalia is joining many other member countries of the South West Indian Ocean Fisheries Commission (SWIOFC), which are issuing similar licenses to foreign fleets to generate revenue that can be reinvested to develop their own national fisheries sectors.
• Foreign vessels are typically operating either under fisheries agreements (e.g. Sustainable Fishing Partnership Agreement of the EU) or private licenses like the ones issued by Somalia. The MoU developed by Somalia and signed by COFA is not a fishing agreement per se, but an umbrella to define terms and conditions for private licenses. 
• Somalia has taken a step further in transparency by fully disclosing the terms and conditions of the licenses, the list of the licenses and the breakdown of the fees paid. 
• The fees collected by Somalia under the terms of these licenses are in line with license fees collected in the region. 
• Like most states in the region, the licensing fee is an annual flat fee, not linked to the quantities caught. This was agreed as a more practical system for the first year but may be revised once more data has been gathered and the capacity of the Somali authorities allows for such a system, which requires greater controls. 
• At the end of the first year of operation and after the relevant data has been collected, Somalia will re-evaluate the terms of the licenses, including fees, and revise if needed. 
• License fees for the first year, total $1,045,000, and have been deposited at the Central Bank of Somalia. The revenue shall be used in accordance with the provisions of the Interim Agreement of February 2018, as authorized by the committee, comprised of the Prime Minister of the FGS, the presidents of all the FMS and the Governor of Banadir. 
• The MFMR and the Ministries of the FMS are developing a workplan for these funds to be reinvested in the development of the domestic fishing sector. Somali authorities are also looking at potential support from the donor community to assist with the rebuilding of the fisheries sector, which is expected to play an important role in the rebuilding of the national economy.

[1]The licensing system and terms and conditions were developed with the support from development partners including the World Bank, FAO and the government of Italy.

[2] The NSC is comprised of the Prime Minister of the Federal Government of Somalia, the heads of the Federal Member States and the governor of Banadir.

[3] a network of eight coastal countries of the Western Indian Ocean aiming at stopping illegal fishing (https://fish-i-africa.org/)

[4] https://mfmr.gov.so/licences/, consulted February 22^nd, 2019.