Panama’s Second Yellow Card: Global Takeaways in Combatting IUU Fishing and EU Trade-Related Measures

Introduction

International fisheries law instruments generally look unfavourably upon the implementation of unilateral trade-related measures to combat illegal unreported and unregulated (IUU) fishing (IPOA-IUU, para. 66). This remains the case despite their persistence in practice (Churchill 2019) and arguable necessity in stimulating or crystallising multilateral innovation. Nonetheless, 2019 concluded with numerous proposals for expanding unilateral trade-related measures, including the USA’s proposed identification of states for the bycatch of seabirds or for illegal fishing in foreign exclusive economic zones (2019 NOAA Report to Congress, pp. 14 and 22; Albatross and Petrel Conservation Act (introduced), Sec. 601). While broadening unilateral trade-related measures may occur through legislative reform, another avenue is their development and clarification through implementation. This piece focuses on the expansion and clarifications of EU trade-related measures evident in the December 2019 pre-identification of Panama as a non-cooperating third country in fighting illegal, unreported and unregulated (IUU) fishing (Commission Decision 2020/C 13/06, colloquially referred to as a ‘yellow card’).

A brief introduction to the EU’s non-cooperating third country identification procedure will include the importance of delving into Commission Decisions to fully appreciate the current scope for identification. This post then identifies three takeaways from Commission Decision 2020/C 13/06 that will ultimately contribute to determining whether a third country is listed and then subject to unilateral EU trade-related measures (Council Regulation (EC) No 1005/2008, Articles 38, 6(2) and 7(1)). These takeaways should be taken into account by all states wishing to retain access to the largest single market for fish and fish products in the world (SOFIA 2018, p. 56), as well as other competing ‘global leaders’ (NOC Committee Accomplishments Report 2017, p 1). This post concludes with a look to the future in the context of wider EU identification trends.

The Non-Cooperating Third Country Identification Procedure

In the 11 years since Council Regulation (EC) No 1005/2008 was published, considerable academic attention has been given to Chapters VI-VII on the EU’s unilateral non-cooperating third country identification procedure (including at EJIL:Talk!). In short, various retorsion measures are taken by the EU in respect of listed non-cooperating third countries, with identification by the Commission being a central element of this 5-stage process:

“A third country may be identified as a non-cooperating third country if it fails to discharge the duties incumbent upon it under international law as flag, port, coastal or market State, to take action to prevent, deter and eliminate IUU fishing” (Article 31(3)).

Space limits repeating previous overviews (Honniball 2019, pp. 4-7), however it is worth noting that Chapter VI of Council Regulation (EC) No 1005/2008 provides the Commission considerable procedural and substantive discretion in implementing the non-cooperating third country identification procedure. Article 31(4)-(7) simply includes a non-exhaustive list of elements for consideration or taking into account by the Commission in identifying third countries. Neither the ‘duties incumbent’ nor their international legal sources are defined in any great detail for any of the state capacities listed.

Therefore, in order to provide greater transparency to the identification process it is vital that we delve into the accessible Commission Decisions (pre-identification/‘yellow card’), Commission Notices (revocation/‘green card’), Commission Implementing Decisions (identification/‘red card I’) and Council Implementing Decisions (listing/‘red card II’ and delisting/‘green card’) to evaluate the current scope of identification and listing of third countries. Only through comparative analysis of decisions and notices may we illuminate the current reasoning of the Commission on the duties incumbent upon third countries under international law as flag, port, coastal or market state, to take action to prevent, deter and eliminate IUU fishing (EC Overview 2020). Unpublished Action Plans (Council Regulation (EC) No 1005/2008, Article 32(1)(b)) will provide further insight if released under a document access request (Regulation (EC) No 1049/2001).

Takeaways from Commission Decision 2020/C 13/06

Pre-identifications including Commission Decision 2020/C 13/06 provide the most publicly-accessible detail on the Commission’s process and reasoning. When compared to previous Commission Decisions, Commission Decision 2020/C 13/06 demonstrates one procedural and two substantive takeaways that are of equal application to all third countries wishing to avoid listing and thus retaining EU market access.

Continuous Engagement and Cyclic Dialogues

We often talk of steps in the EU process, ending in revocation or delisting (e.g. Tsai and Yi 2019). This includes third countries, who develop ‘roadmaps’ to regaining EU market access (Sri Lanka 2016, p. 5) – i.e. a hurdle to overcome as opposed to a continuous review. Nonetheless ‘green cards’, including the one Panama previously received in 2014 (Commission Notice 2014/C 364/02) following its 2012 ‘yellow card’ (Commission Decision 2012C 354/01) consistently reiterate that further steps are not precluded. Commission Decision 2020/C 13/06 is the first example of a state receiving a second pre-identification for failing to discharge its duties, despite previously introducing sufficient measures to terminate the first pre-identification. This serves as a warning to all third countries – including those with a ‘green card’ – to take note that the process is continuous. Current engagement with the EU may be informal, but the possibility of reviving formal dialogues on non-cooperation is very real.

Commission Decision 2020/C 13/06 also provides insights on the workings of the process. EU information gathering (para. 28) and information requests (para. 50) concerning Panama’s fisheries governance were continuous to-date, despite the 2014 ‘green card’. Given the Commission began visiting Panama in January 2019 and pre-identification occurred in December 2019, the dialogue was also escalated from informal to formal again at a considerably faster rate than previous pre-identifications (e.g. 2 years between visits and pre-identification of Belize, Panama and Sri Lanka: Commission Decision 2012C 354/01).

EU’s Dynamic Interpretation of Relevant Duties under International Law

A second and related takeaway evident in Panama’s cyclic dialogues is confirmation that the Commission takes a dynamic approach to interpretation and implementation of the duties incumbent on states under international law. This includes both the breadth of duties reviewed and the depth of duties incumbent upon each state capacity.

Concerning breadth, Panama’s 2012 pre-identification makes no reference to a failure to fulfil market state duties, only touching upon traceability in respect of flag state obligations (Commission Decision 2012C 354/01 para. 270). Yet by 2019 the EU’s confidence and experience had significantly grown, resulting in the analysis and conclusion “Panama has failed to enforce rules to ensure traceability of fish or fishery products through the market in accordance with paragraphs 67 to 69 and 71 to 72 of the IPOA-IUU” (Commission Decision 2020/C 13/06 para. 45).

Concerning depth, port state duties were only briefly touched upon in 2012 in respect of regional reporting requirements (Commission Decision 2012C 354/01 paras. 258, 272). However, Panama acceded to the PSMA in 2016, resulting in the 2019 pre-identification including increased scrutiny and detailing various port state failures including upon inadequate inspections and insufficient denial of port services to foreign vessels (Commission Decision 2020/C 13/06 paras. 47, 61-64, with 64 going beyond the PSMA requirements (art. 7(2)).

Due Diligence and the Exercise of Enforcement Jurisdiction

While Article 31(5)(b) of Council Regulation (EC) No 1005/2008 requires the Commission to take into account the third country’s exercise of enforcement jurisdiction, and a section entitled “failure to cooperate and to enforce” is a staple of establishing the threshold of ‘non-cooperation’, it is clear that priority is placed upon the adequate exercise of prescriptive jurisdiction. Insufficient fines and control deficiencies may have contributed to Panama’s first pre-identification (Commission Decision 2012C 354/01 paras. 242, 261), but it was the adoption of legal instruments and decrees which “was decisive for the conclusion of the démarches vis-à-vis Panama, in October 2014” (Commission Decision 2020/C 13/06 paras. 37, 52, i.e. the ‘green card’).

Nonetheless, ‘sufficient’ enforcement has been given increasing detail in the published concerns of the Commission, including both in terms of legal framework and implementation (e.g. Commission Decision 2015/C 324/10 paras. 72-73; Commission Decision 2019/C 373/04, paras. 32-36). For states such as Panama a sufficient legislative framework is now largely in place, discharging their prescriptive jurisdiction duties. Commission Decision 2020/C 13/06 is thus instrumental in representing the first case of a state being subject to a ‘yellow card’ on the principal basis it failed to exercise adequate enforcement jurisdiction. All bar 1 paragraph (para. 62) focus on Panama’s lack of fisheries law implementation, control and enforcement.

It is thus no longer the case that one may escape EU market restrictions by simply putting adequate laws in place. One must also demonstrate that adequate enforcement jurisdiction is being exercised in all state capacities, including sufficiently severe sanctions that discharge the duties flowing from treaty law (UNCLOS, Compliance Agreement, UNFSA), persuasive soft law instruments (IPOA-IUU) and the nature of due diligence obligations:

“It is an obligation which entails not only the adoption of appropriate rules and measures, but also a certain level of vigilance in their enforcement and the exercise of administrative control applicable to public and private operators” (Pulp Mills Judgment, para. 197 (emphasis added); approvingly cited in an IUU fishing context by SRFC Advisory Opinion and South China Sea Award).

Conclusions

In this new decade the second pre-identification of Panama as a non-cooperating third country affirms the beginning of a new direction in the EU’s formal dialogues, a direction that includes a deeper analysis of compliance with due diligence obligations as interpreted by the Commission. The EU’s arguable successes in stimulating third countries’ legislative reform (Honniball 2019; Improving International Ocean Governance – Two years of progress, pp. 3-4) appears to have resulted in the Commission additionally turning the non-cooperating identification procedure towards enforcement reforms – both in terms of the enforcement framework and its implementation. A lack of vigilance in fisheries law enforcement may no longer simply be a contributing factor in the imposition of trade-restrictive measures but rather may form the very core of their rationale.

This development could be a welcome addition to the depth of mechanisms attempting to ensure states fulfil their legal responsibilities with law in action and not just in the books. However, it does raise questions including how successful such enforcement-focused trade measures can be when contrasted with the clear end result of targeting prescriptive duties? Insufficient prescription is resolved through improved legal frameworks that require irregular updates as duties evolve. For sufficient enforcement there is no clear end result as it remains a continuous endeavour. This then raises the question of whether the EU will – or should – keep under review the enforcement practices of third countries, and which ones? Answers will have to be found in analysing future Commission Decisions and whether additional or alternative multilateral efforts develop, such as through Regional Fisheries Management Organisations or Arrangements.

Furthermore, in the wider context one should also be aware that in October 2019 the geographic scope of formal dialogues also expanded to include South America (Ecuador: Commission Decision 2019/C 373/04). Equally, the scope of state capacities raised in Commission Decisions (i.e. flag, coastal, port, market and state of nationality) has steadily increased from a rough average of 2-3 pre-2014 to 4-5 post-2014. In this respect, other takeaways may become apparent including the recurrence of EU requests for oversight of processing plants to demonstrate sufficient traceability as a market state (Commission Decision 2019/C 373/04, paras. 22-26; Commission Decision 2020/C 13/06, paras. 42-45). That nut is however beyond cracking here, as van der Marel 2020 (p. 185) recently concluded “[w]hilst some traceability is undoubtedly required from states to fulfil their international obligations in relation to fishing, there is little clarity over what exactly is required”.

Finally, one should recall that thematic fields of maritime governance are porous. For example, successful developments in the governance of shipping often transfer to fisheries governance and vice versa. Developments in the use of trade-related fisheries measures could therefore easily jump to other areas of ocean law.