ADDRESSING FRAUD, CORRUPTION, AND MONEY LAUNDERING IN FISHERIES IN THE PHILIPPINES AND INDONESIA Dr Mary Ann Palma Australian National Centre for Ocean Resources and Security (ANCORS), University of Wollongong Following the Proceeds of Environmental Crime: Fish, Forests and Filthy Lucre February 2010  Wollongong, NSW, Australia

Outline of the Presentation examples of law enforcement activities against illegal fishing in the Philippines and Indonesia gaps in fisheries legislation that prevent the Philippines from addressing fraud, corruption, and money laundering in fisheries key areas that need consideration to provide a clear connection between illegal fishing and other illicit activities

Examples of illegal fishing activities Many prohibitions under fisheries legislation Disguising catch as legal or coming from licensed vessels Transport, processing and export of illegally caught fish How about –Fraudulent declaration to customs –Avoidance of taxes and other charges

Available measures to address illegal fishing Flag State measures –Registration of fishing vessels –Authorisation to fish –Record of fishing vessels Coastal State measures –Licensing of foreign fishing vessels –Observer programmes –Boarding, inspection and arrest of vessels –Vessel monitoring system –Entry and exit reports in the EEZ Port State measures –Advanced notice of entry –Inspections at port Market State measures –Catch certification –Traceability system –Harmonised commodity description and coding system –Food safety –Eco-labelling Enforcement actions –Revocation of a licence –Denial of landing of catch –Administrative and criminal sanctions

Measures Implemented in Indonesia Licensing of fishing vessels –fishery business licence –Fishing licence –Fishing carrier licence Restrictions on fishing gears Surveillance operations –At sea –Air –Community based VMS Enumeration in ports Port inspection Fisheries courts

Measures Implemented in the Philippines Licensing of fishing vessels –Local licence –International fishing permit Fish worker permits Regulation on fishing gears Fishing patrols Boarding and inspection of vessels PN affiliated and reserve units Port enumeration and inspection Catch certification Fishing logbooks

Fisheries Sanctions in Indonesia and the Philippines Revocation of licence Sequestration of vessels Confiscation of catch and fishing implements De-registration of vessels Fines Imprisonment

What do these measures address? Fisheries violations or illegal fishing Unreported fishing Directed at fishing vessels and fishermen Fisheries management issues Fisheries regulations in the Philippines and Indonesia do not address regulatory fraud, corruption, and money laundering

Applicable Philippine measures against corruption and anti-money laundering outside the fisheries management framework Task forces and inter-agency councils –graft and corruption –money laundering –organised crime or transnational crime Anti-money laundering law (RA 9160) –Enumerates a number of unlawful activities, none of which directly refer to fisheries matters except for: theft of fish from fishponds unlawful importation of goods fraudulent practices against custom revenues

Anti-graft and corrupt practices act (RA 3109) provides examples of corrupt practices by public officers: –Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for any other person, in connection with any contract or transaction between the Government and any other part, wherein the public officer in his official capacity has to intervene under the law –Directly or indirectly requesting or receiving any gift, present or other pecuniary or material benefit, for himself or for another, from any person for whom the public officer, in any manner or capacity, has secured or obtained, or will secure or obtain, any Government permit or license, in consideration for the help given or to be given –Neglecting or refusing, after due demand or request, without sufficient justification, to act within a reasonable time on any matter pending before him for the purpose of obtaining, directly or indirectly, from any person interested in the matter some pecuniary or material benefit or advantage, or for the purpose of favouring his own interest or giving undue advantage in favour of or discriminating against any other interested party –Directly or indirectly having financing or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest –Directly or indirectly becoming interested, for personal gain, or having a material interest in any transaction or act requiring the approval of a board, panel or group of which he is a member, and which exercises discretion in such approval, even if he votes against the same or does not participate in the action of the board, committee, panel or group. –Knowingly approving or granting any license, permit, privilege or benefit in favour of any person not qualified for or not legally entitled to such license, permit, privilege or advantage, or of a mere representative or dummy of one who is not so qualified or entitled –Divulging valuable information of a confidential character, acquired by his office or by him on account of his official position to unauthorized persons, or releasing such information in advance of its authorized release date

Proposed Bill to revise the Anti-Money Laundering Act Expansion of the definition of “unlawful activities” to include –Violations of sections of the Philippine Fisheries Code –Violations of the revised Forestry Code –Violations of the Wildlife Resources Conservation and Protection Act –Forgeries and counterfeiting

Areas to be considered to provide the link between illegal fishing and other illicit activities What types of illegal fishing activities should be considered as crime Who are the relevant actors Studies on the use of fishing vessels for other illegal activities Beneficial ownership of fishing vessels and nature of fisheries businesses Use fisheries enforcement mechanisms to support FIU work Transparent system of record keeping and putting in place appropriate checks and verification methods Intelligence gathering Strengthened inter-agency cooperation Mutual legal assistance between States

Institutions involved in fisheries management and enforcement Fisheries Environment Shipping Customs Quarantine Immigration Foreign affairs Trade and industry Port and post-harvest Navy, coastguard, police Courts Local governments Role of the fishing industry, banks, and commercial institutions?

Summary fisheries law enforcement in Indonesia and the Philippines is undertaken both on land and at sea not only to prevent unlawful fishing from its source but also to target destinations of illegally caught fish law enforcement activities focus primarily on deterring acts of illegal fishing rather than associated activities such as fraud, corruption, and money laundering fisheries laws and regulations do not directly address the link between illegal fishing and other illegal activities there is potential for fisheries related measures to be improved in such a way as to minimise fraud and corruption an effective legal and institutional framework merging elements from both fisheries and non-fisheries related measures would need to be developed