A new contract clause released by a leading global insurance and reinsurance marketplace essentially strips rights to insurance from any vessel found to be engaged in illegal, unreported, or unregulated (IUU) fishing.
The clause, issued by the London Insurance Market’s Joint Hull Committee – which represents and works with members of Lloyd’s Market Association and the International Underwriting Agency – allows insurers to waive coverage on vessels found to be listed on the IUU fishing lists of “one or more regional fisheries management organizations” (RFMOs) The clause also states that if a listed vessel is in the same ownership, same group of companies, or same management “as any other vessel” insured, underwriters may cancel the insurance of a “related vessel” with seven days notice.
The clause is the latest development in a multi-year push by nonprofit organizations against insurance companies. In February 2023, the Blue Marine Foundation called out London-based ship insurance companies for reportedly insuring 46 vessels that had “highly inconsistent” use of automatic identification systems, and filed complaints with the U.K.-based Financial Conduct Authority and the Prudential Regulatory Authority.
In September 2022, 18 insurers signed a pledge to use a new IUU tracking tool known as Vessel Viewer – a pilot project spearheaded by Global Fishing Watch, Trygg Mat Tracking, and the Ocean Risk and Resilience Action Alliance (ORRAA). At that time the tool had already been used by Norway-based marine insurance firm Hydor, which ended its coverage of an Atlantic tuna fishing fleet following an IUU investigation.
According to environmental non-governmental organization Oceana, prior to the introduction of the new clause, insurers were able to terminate insurance in the event of illegal fishing, but termination for vessels caught and listed on IUU registries for unreported or unregulated fishing was more difficult.
“This clause provides a route for insurers to remove insurance for any vessels, as well as any related owners or managers, that have been listed for IUU fishing,” Oceana said.
Oceana said cutting off insurance makes it much more costly and risky for fishing vessel owners and managers to operate, deterring IUU activity.
“This due diligence contractual wording demonstrates the important role that insurers and underwriters play to tackle IUU fishing. This is yet another positive step forward towards reducing the financial incentives for IUU fishing,” Oceana Executive Director and Vice President in Europe Pascale Moehrle said in a release.
ORRAA Executive Director Karen Sack said the Vessel Viewer tool, coupled with the new clause, means the insurance sector can now be a “key partner” in deterring IUU by making it too expensive for vessels to do business.
“ORRAA is working with Oceana, Global Fishing Watch, and TMT to help insurers do better due diligence on the vessels they insure to reduce their risk exposure,” Sack said. “This policy wording is a crucial part of cutting off access to insurance for these vessels and, in so doing, closing the net on IUU fishing.”
Photo courtesy of IUU Watch
