Emmanuel Essien embarked on an observer mission in July 2019 but never returned. An observer’s job is to collect data on fishing activities and report on illegal practices occurring at sea.

The vessel he accompanied on that fateful Monday is registered locally as Kenbonad Fisheries Ltd, but investigations have shown that it is owned and operated by the Chinese company, Dalian Mengxin Ocean Fishery Co. Ltd.

“The Ghanaian law expressly forbids foreign ownership of industrial trawl vessels operating under the Ghanaian flag both in terms of ownership on paper, and, crucially, in terms of those who profit from the vessel – known as the ‘beneficial owners,” says Steve Trent, Director of Environmental Justice Foundation (EJF).

“The new 2019 Companies Act (Act 992) clarifies the definition of a beneficial owner, showing clearly that the way Chinese fishing corporations are using Ghanaian front companies is illegal,” he adds.

Ghana fishery officials have failed to take any action against fishing vessels owned by Dalian Mengxin despite the widespread evidence of beneficial ownership. As at 2021, twelve vessels owned by the Dalian Megxin were fronted by five companies registered locally in Ghana. These companies are listed in the table below:

Source: 2021 List of Licensed Vessels in Ghana, Ministry of Fisheries and Aquaculture, Ghana

A three-month investigation by Gideon Sarpong based on interviews with dozens of fishery experts, court records and company financial documents has shown a network of Chinese control and ownership of many industrial fishing vessels currently operating in Ghanaian waters in contravention of local laws.

The investigation revealed that these Chinese companies; Shandong Zhonglu Oceanic Fisheries Company Limited and Rongcheng Marine Fishery Co. Ltd have set up over ten “front” companies holding fishing licenses from the Ministry of Fisheries and Aquaculture in Ghana.

The investigation also shows that illegal trawler activities have significantly reduced Ghana’s fish stock, draining the economy of over $50m a year according to the Environmental Justice Foundation (EJF).

In June this year, the European Union issued a warning (yellow card) to Ghana for what it described as the country’s failure to impose, “effective sanctions on vessels engaging in or supporting IUU fishing activities.”

As a seafood market for Ghana-flagged trawl fleet, Ghana risks losing access to the European Union market as result of the lack of transparency around vessel operations and opaque ownership arrangements. This has however prompted very little reforms in the country.

Several years of calls for reforms from civil society actors, academia and the EU have so far yielded very little results.

Hidden Chinese Fleet – Shandong Zhonglu Oceanic Fisheries Co. Ltd

Shandong Zhonglu Oceanic Fisheries Co. Ltd, is a publicly traded Chinese company which has admitted to using a Special Purpose Vehicle via an operational lease to exert control over a number of Ghanaian registered companies.

The company headed by Lu Lianxing, a member of the Communist Party of China has its principal place of business at Qingdao in Shandong.

In its 2019 annual report, the company disclosed that it had a 100 percent share ownership of the following companies; Laif Fisheries Company Limited, Yaw Addo Fisheries Company Limited, Zhong Gha Foods Company Limited and Africa Star Fisheries Limited. It also described these companies as “significant foreign operating entities.”

A review of the Ghana’s 2021 licensed fishing vessels revealed that three of the companies owned by Shandong Zhonglu Ocean Fisheries Co. Ltd. had obtained licenses to operate five fishing vessels in Ghana.

This is listed below:

Source: Ministry of Fisheries, Ghana Licensed Vessels 2021

Section 47 of Ghana’s Fisheries Act prescribes clearly the requirements for obtaining a license for in Ghana.

Qualification as local industrial or semi-industrial fishing vessel:

(1) A local industrial or semi-industrial fishing vessel is a fishing vessel

(a) owned or controlled by a citizen, the Government, or owned or controlled by a company or partnership registered by law in the Republic which has its principal place of business in the Republic and the share of which is beneficially owned wholly by the Government, a citizen, a public corporation established by law in the Republic or a combination of any of them.

Fisheries expert Steve Trent argues that based on Ghana’s law and “given that the vessels appear to be operating under the flag of Ghana, it would indicate that either the vessels “did not declare their true beneficial ownership, or that the Ministry of Fisheries and Aquaculture Development (MOFAD) contravened the Fisheries Act by granting the vessels authorization.”

Rongcheng Marine Fishery Co. Ltd

The investigation also showed that 10 registered fishing vessels in Ghana, comprising the LU RONG YUAN YU fleet of vessels were owned and controlled by the Chinese company Rongcheng Marine Fishery Co. Ltd. This company had also set up front companies to conceal their influence and circumvent local laws in Ghana.

Rongcheng Marine Fishery Co. Ltd, which owns the LU RONG YUAN YU fleet of vessels was established in August 2011 with a principal place of operations in Rongcheng, Shandong Province. It was found that in the EU list of approved vessels from China, Rongcheng Marine Fishery Co. Ltd was identified as the owner of all LU RONG YUAN YU fleet of vessels whereas the situation was entirely different in Ghana.

A review of vessel licensing documents showed that the LU RONG YUAN YU fleet of vessels were fronted by six different companies all of which were only traced to P. O. box addresses.

This is listed below:

Source: Ministry of Fisheries, Ghana Licensed Vessels 2021

Repeated attempts were made to locate the contact details for these companies to approach them for comment, despite the lack of publicly accessible contact data or websites in Ghana.

Both Shandong Zhonglu Oceanic Fisheries Co. Ltd and Rongcheng Marine Fishery Co. Ltd did not respond to requests for comments.

Fisheries expert and director of coastal governance NGO, Hen Mpoano, Kofi Agbogah said Ghanaian subsidiary companies acquire licenses directly from the Ministry of Fisheries “through some opaque and phony arrangements”, while the vessels are “manned by Chinese owners.”

“This is illegal,” he added.

Impact-Economic and Biodiversity

The lack of transparency which allows these companies to set up opaque corporate structures and work through Ghanaian ‘front’ companies to obtain licenses to fish deprives Ghana of $23.7 million every year in revenue.

Illegal fishing which is linked to opaque ownership structures is also having a severe impact on Ghana’s ‘small pelagic’ fish populations, as sardinella is already on the brink of collapse, with landings having crashed by 80% over the past twenty years.

Francis Adam, President of the Central Region Fishermen and a local fisherman in Ghana confirmed the findings of this report.

“I have been in the fishing business for over three decades but the last decade, has been most challenging due to dramatic reduction in our catches as a result of influx of foreign vessels,” he said.

The World Bank has estimated that incomes of artisanal fishers in West Africa have reduced by 40 percent over the past decade plunging thousands of fishers and their dependents into abject poverty.

All of these revelations raise important questions about why officials in Ghana have failed to take any urgent action to deal with the perpetrators and the beneficiaries of this illegal fishing practices.

In September 2021, Ghana’s Fisheries Minister Hawa Koomson called on the media and civil society organisations to assist the ministry in addressing the challenge of illegal fishing in Ghana.

The minister has however failed to respond to the findings of this investigation two months after it was presented to her.

The World Bank raised concerns about Ghana government’s “weak commitment to reducing the industrial segment’s fishing capacity.”

It noted that the government is “highly influenced by forces within the industrial segment” and raised concerns that foreign-owned vessels being allowed to register in Ghana under beneficial ownership arrangements were not being investigated.

For a country with close to 25 percent of its population living below the poverty line, “Ghana’s valuable fisheries resources are being sold off for negligible returns to foreign operators in breach of the law,” says Trent.

He adds, “the minister must immediately resolve the issue of overcapacity in Ghanaian waters in-line with scientific advice so as to counter the collapse, or near collapse, of fish populations in the country.”

Just like the bleak short-term prospects facing Ghana’s fishery sector, Essien’s family also face an uncertain future.

“We are simply in the dark, no information from the ministry and no compensation. It is sad how a nation will treat one of its own workers,” says James, Essien’s brother.

“My mother keeps calling me, saying: “have you heard from the police? Tell them to bring my son.”

So far, investigations into Essien’s disappearance by Ghana’s Attorney General has not resulted in any prosecutions.

…………………….

Reporting and writing by Gideon Sarpong. Daniel Abugre Anyorigya contributed to this report.

This article was developed with support from the Africa-China Reporting Project.

The post China’s trespassing vessels and the economic impact on Ghana’s fisheries sector appeared first on iWatch Africa.

The job of a vessel observer is to ensure that licensed vessels comply with the local laws.  In Ghana, an observer’s allegations if proven to be true could result in a minimum $1m fine.

 “I don’t believe the government and the authorities valued the work my brother was doing,” said James, the elder brother of Emmanuel. “If they did, they would attach some seriousness and urgency to the investigation. We know nothing. We don’t understand how it can take so long.”

“Bribery and corruption are rife in the sector, with observers forced to accept bribes from Chinese officers to stop them from reporting on illegal activities,” said Steve Trent, Director of Environmental Justice Foundation (EJF).

A new EJF report estimates that Ghana could generate between US$14-24 million annually from its trawl sector by way of fishing license fees and fisheries-related infringements but fisheries resources are being sold off for negligible returns.

A three month investigation by Gideon Sarpong and Elfredah Kevin-Alerechi based on interviews with dozens of fishery experts, court records and company and financial documents has established a hidden network of Chinese control and ownership of many industrial fishing vessels operating in Ghanaian waters in contravention of local laws.

The investigation also shows that these Chinese companies commonly operate through “front” companies to obtain fishing licenses and with very minimal action from regulatory bodies. The investigation established that in contravention of the Ghana’s Fisheries Management Plan, the Fisheries Commission in 2019 granted three fishing licenses to Shandong Zhonglu Oceanic Fisheries Co. Ltd, a publicly traded Chinese company which made millions of dollars in profit from its operations in Ghana in 2018.

Transhipment activities in Ghana and Nigeria

At an open shed along the coast of Elmina, one can hear the chatter of resting fishers dominated by the painted hulls of newly returned pirogues strewn with flags and washing. Some of these canoes are also seen stacked with slabs of mixed frozen fish at the port.

 Francis Adam, President of the Central Region Fishermen explains why frozen fish can be found in some canoes: “Industrial fishing trawlers licensed to harvest demersal (bottom-dwelling) species deliberately target the staple catch of the artisanal fishers, the small pelagics, and sell such fishes back to the local coastal communities at a profit.” This process is known as transhipment or ‘Saiko’ in Ghana.

Transhipment is a severely destructive form of illegal fishing according to Ghana’s Fisheries Act 625 of 2002, which expressively prohibits the practice. The law seems to be of little consequence as this very profitable venture takes place openly at the Elmina Port.

Francis bemoaned the decreasingly rate of catches by artisanal fishers in Ghana and directly blamed “Saiko” for the drop. “I have been in the fishing business for over three decades but the last decade, has been most challenging due to dramatic reduction in our catches as a result of Saiko,” he said.

Although fishing effort by the artisanal fleet has been increasing, catches of small pelagics fell to only 19,608 metric tonnes in 2016, a sharp decline from the peak in reported landings of 138,955 metric tonnes recorded in 1996, the Fisheries Scientific and Technical Working Group (STWG) has estimated. The report also warned that Ghana’s pelagic fish stock is in imminent danger and could collapse completely by the close of 2020.

An average saiko canoe lands in a single trip the equivalent of approximately 450 artisanal fishing trips. “This is a major threat to over 100,000 artisanal fishers in Ghana who depend on fishing for their livelihoods and the long-term viability of Ghana’s fisheries,” says Dr. Isaac Okyere, a researcher at the University of Cape Coast.  He added: “It has now become obvious that the small pelagic fish they catch is no more a by-catch. The by-catch has become the target and the demarsal fish has become the by-catch.”

“A fish population is just like a human population, if we start killing our children, what will become of society. It is a whole lot of illegality; from the net they [Chinese Trawlers] are using, from where they are fishing, from the species they are catching and from their sizes,” says Dr. Okyere.

Meanwhile in Nigeria, the situation is not entirely different. Foreign owned vessels in connivance with some local fishermen and security officials engage in transhipment activities, despite prohibition by the Sea Fisheries Act says Mr. Monwon, a local fisher.

Transhipment activities by Chinese owned trawlers are considered a major problem in Oyorokoto, in the Niger Delta region. Mr. Monwon, recounted how he was threatened at sea after confronting a Chinese manned vessel and blamed transhipment activities for dwindling catch and economic hardship facing many residents of Oyorokoto who depend on artisanal fishing for their livelihoods.

“After they have finished fishing, we hardly see fishes to catch”, said Mr. Monwom pointing to a fishing vessel at a far distance.

Head of artisanal fishermen in Bonny, Promise Bristol also shared similar sentiments: “foreign trawlers connive with security agents to attack local fishermen who rebel against their illegal activities.”

Could it be that Emmanuel’s dedication to fighting illegal trawler activities might have unsettled his Chinese crew and resulted in his disappearance?

James, Emmanuel’s brother believes there was foul play: “I suspect there was a co-ordinated attempt to take him off. He was going to write up a report. Perhaps there was a disagreement. Perhaps the Chinese didn’t like it.”

It has been over a year since Emmanuel went missing and checks at the Attorney General’s office in Ghana suggests that there has not been an official report or any prosecution by the State.

In the same month Emmanuel went missing, an industrial Chinese trawler, Lu Rong Yuan Yu 956 (AF 756) fronted by Gyinam Fisheries Limited in Ghana was arrested and fined $1m for engaging in illegal, unreported and unregulated (IUU) fishing.

The Lu Rong Yuan Yu 956 (AF 756) in spite of failing to pay the $1m fine in October 2019 was re-licensed to fish again, and in May 2020 was re-arrested for almost identical illegal fishing offences.

 “Opaque ownership arrangements in Ghana’s fishing industry are a root cause of governance and management failures in the sector and are certainly impeding effective prosecutions for fisheries offences. Prosecutions fail to target the beneficial owners –often a much larger entity with a controlling interest in the vessel – to ensure sanctions imposed are proportionate and have a deterrent effect,” says Trent.

Marine Police Director, DCOP Iddi Seidu whose unit led the arrest admitted that “strict enforcement and application of the fisheries laws” is critical in dealing with this menace.

Hidden Chinese Fleet in West Africa

So far, several petitions by Ghana National Canoe Fishermen Council (GNCFC) to the Fisheries Commission and the president of Ghana have failed to curb this practice.

Our investigation uncovered that in 2019, fishing licenses were granted to three Chinese vessels in contravention of the government’s own Fisheries Management Plan which states that 48 trawlers are the most that the fishery can sustain, and also in violation of a government moratorium dating from 2012.

As at 2017, the number of licensed vessels in Ghana stood at 76. In that same year, the Fisheries Ministry halted publication of the vessel license registry and ownership information, a step many experts have described as a significant blow to transparency and accountability.

Shandong Zhonglu Oceanic Fisheries Co. Ltd, is a publicly traded Chinese company which has admitted to using a Special Purpose Vehicle via an operational lease to exert control over a number of Ghanaian registered companies. The companies; Laif Fisheries Company Limited, Yaw Addo Fisheries Company Limited, Zhong Gha Foods Company Limited and Africa Star Fisheries Limited were described as “significant foreign operating entities” in its 2018/9 annual report.  The company in its annual report and on its website also admitted to receiving fishing licenses from officials in Ghana for three fishing vessels in April 2019. The company financials showed that it generated significant returns from its operations in Ghana. In 2018 alone, it made over $4.5M in profits from its fishing establishments within country.

“The Ghanaian law expressly forbids foreign ownership of industrial trawl vessels operating under the Ghanaian flag both in terms of ownership on paper, and, crucially, in terms of those who profit from the vessel – known as the ‘beneficial owners’,” says Trent.

“The new 2019 Companies Act (Act 992) clarifies the definition of a beneficial owner, showing clearly that the way Chinese fishing corporations are using Ghanaian front companies is illegal,” he adds.

In a strongly worded letter to the director of the Fisheries Commission in Ghana in May 2020 the GNCFC argued that they are “firmly opposed” to any decision to issue license to new vessels to fish in Ghana.

Ghanaian subsidiary companies acquire licenses directly from the Ministry of Agriculture “through some opaque and phony arrangements”, while the vessels are “manned by Chinese owners, this is illegal,” says Kofi Agbogah, director of the Ghanaian fisheries and coastal governance NGO, Hen Mpoano.

 “With powerful interests at play, this will require political commitment at the highest levels of government to oversee reforms and ensure progress is not derailed by political lobbying or interference,” Trent recommends.

The director of Fisheries Commission in Ghana, Arthur Dadzie failed to respond to several requests for an interview for this report.

Our investigation also uncovered that nine vessels owned and controlled by Chinese companies had set up front companies to conceal their influence and circumvent local laws in Ghana.

These nine Ghanaian-flagged trawlers authorised to export catches to the European Union appeared on the Chinese list of establishments authorised to also export fisheries products to the EU.

A 2019 World Bank report highlighted the Ghanaian government’s “weak commitment to reducing the industrial segment’s fishing capacity.” The report further noted that the government is “highly influenced by forces within the industrial segment” and raised concerns that foreign-owned vessels being allowed to register in Ghana under beneficial ownership arrangements were not being investigated.

 “The European Commission must use all tools foreseen under the EU IUU Regulation if it is demonstrated that Ghana has failed to discharge its duties to effectively address IUU fishing under international law,” says Trent.

Illegal and destructive practices by foreign owned trawlers are draining the Ghanaian economy of $50m a year according to EJF.

Meanwhile in Nigeria, many marine and coastal ecosystems are close to collapse due to IUU fishing, Prof. Chioma Nzeh of the Department of Zoology, University of Ilorin reveals.

Annually, Nigeria loses as much as $70million to IUU activities Nigeria Navy reports in a 2018 estimate.

Many of these Chinese fishing vessels do not have fishing licences, and they fish as far as four nautical miles depriving local fishers of their daily catch. Four Chinese fishing vessels were arrested by the Nigerian Navy in August 2017 while fishing within the Non Trawling Zone (2-6 nautical miles).

The Nigeria Government should do the needful to come up with “effective laws, and there must be proper monitoring from officials of federal Department of fisheries (FDF)”, said Nene Jamabo, Rivers State Chairman and Fisheries Association of Nigeria.

However in Ghana, Emmanuel’s family is no closer to knowing the truth about what happened to their son on that fateful day. Despite an investigation which showed that the Meng Xin 15 belongs to a Chinese state-owned enterprise, Dalian Meng Xin Ocean Fisheries no action has been taken so far by the Ghanaian government against the vessel owners and the crew.

“My mother keeps calling me, saying: “have you heard from the police? Tell them to bring my son,” says James.

Political Inaction and weak penalty system

All of these revelations raise important questions about why officials in Ghana and Nigeria have failed to take any urgent action to deal with the perpetrators and beneficiaries of illegal fishing practices?

Kofi Agbogah and Francis Adam, who have been at the forefront of activism against IUU, directly blamed powerful political players who encourage these licensing arrangements and illegal fishing practices.

“A number of “politically exposed persons” (a term used in the 2019 Companies Act) hold directorships and shares in local companies that hold the licences for trawl vessels operating in Ghana,’ said Trent. “We have heard allegations of such individuals lobbying for the registration of new vessels and for enforcement proceedings to be dropped, sanctions reduced or licenses reinstated.”

From 2007 to 2015, 199 fishing vessels were arrested for various fishery offences in Ghana according to a USAID report. The report also noted that “some fines were not paid in full and in some cases the Minister of Fisheries accepted less the amount imposed.”

For a country with close to 25 percent of its population living below the poverty line, “Ghana’s valuable fisheries resources are being sold off for negligible returns to foreign operators in breach of the law,” says Trent.

The World Bank has estimated that incomes of artisanal fishers in West Africa have reduced by 40 percent over the past decade plunging many fishers into abject poverty.

Ghana’s Fisheries Minister, Elizabeth Afoley Quaye, who declined a request for an interview came under intense criticism after she backed illegal transshipment activities in March 2020. She has since revised her position but has done “very little to curb the practice” according to local fishers.

EU and International Action

The European Union Council imposed a three year ban on Ghana in 2012 for failure to monitor fishing fleets, neglecting to impose sanctions on illegal fishing operators, and failing to develop robust fisheries laws.

As a market for seafood caught by the Ghana-flagged trawl fleet, Francis Adam, an advocate against IUU is of the view that the “EU may be the final hope Ghana and Nigeria may have to restore some order” in the fisheries sector.

Francis is convinced that a recent threat of a ban by the EU could be the jolt needed for reforms within the fisheries sector in Ghana.

But with the EU embroiled in a contentious BREXIT negotiations, Dirk Siebels, member of Global Initiative Against Transnational Crime, believes that officials in Ghana and Nigeria need the “political will, coupled with transparent processes” to curb transshipment and illegal trawler activities.

Meanwhile, EJF has recommended that both Ghana and Chinese governments “must collaborate” to ensure that the “perpetrators and beneficiaries of illegal fishing are identified and held to account in a transparent processes.”

For Dr. Okyere, the solution must be a radical one: “if we truly are serious about stopping the destructive nature of transshipment, then all industrial trawling in our waters must be halted entirely until significant reforms are done. (Phentermine) ”

Reporting and writing by Gideon Sarpong (Ghana) and Elfreda Kevin-Alerechi (Nigeria).

This article was developed with the support of the Money Trail Project (www.money-trail.org).

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