Peru, Chile and their fish: what’s at stake at The Hague

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I do not know who will win the case between Peru and Chile at The Hague. The universe of people with enough knowledge of the International Court of Justice to intelligently weigh in on the case is a very small one, and the vast majority of us do not belong to it. Both Alvaro Vargas Llosa’s defeatism and the triumphalism exhibited just about everywhere else in the Peruvian press are premature. We’ll see who wins when the court announces its decision.

My feeling, however, is that it matters less who wins that disputed portion of the Pacific Ocean than how the winner manages its newly won resources.

38,000 square kilometers of the Pacific are in dispute at The Hague. The dispute does not turn just on questions of national pride, but of economics, as well. The disputed seas could yield Peru some $800 million to $900 million in fish per year, according to the Financial Times.

That is an impressive economic boon. It would be a short-lived one, however, if the resources are not managed well, and there’s the rub. There is a long history of overfishing in Peru’s waters, and that continues to this day.

Earlier this year, the Vice Minister for Fishing, Patricia Majluf, resigned after being asked to raise the quota for hake despite scientific evidence that its stocks were still low. On her way out, Majluf gave a damning indictment of the state of the Peruvian fishing industry: no one was abiding by the quotas, companies were fishing for species that they were not licensed to extract, companies were rigging scales and GPS systems to evade government regulation.

Peru’s fishing grounds represent an example of the “tragedy of the commons.” If every company maximizes its short-term profits by exceeding the quotas, there will not be enough fish to reproduce for the next season. At the same time, no one company has an incentive to curtail its fishing if the rest of the industry does not follow suit.

That is where the government is supposed to step in to regulate the industry, but according to Majluf, it is failing to do so. The ministry is controlled by the fishing industry, she says, and it is the very businessmen, rather than independent policymakers, who are setting the rules and enforcement mechanisms.

Another example of this was highlighted just a few weeks ago by the TV program Panorama. An investigative report discovered that anchovy that was supposed to be fished only for human consumption was instead being used to produce fishmeal. No enforcement mechanisms were in place to stop this trade.

Meanwhile, Chile is liberalizing its own fishing laws, allowing previously-prohibited practices that would boost short-term yields but put the population at risk long-term.

Borders are a human construction, one that fish do not respect. If bait fish in the disputed area are overfished, it could damage fishing stocks in both Peru and Chile. Whoever wins the disputed section of the sea therefore has a responsibility to manage it responsibly: to establish quotas based upon real science and to enforce them vigorously.
Nick Rosen argues that whoever wins the ruling at The Hague, we should be rooting for a sensible fishing policy.

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