Does Disclosure of Illegal Fishing Information Lead to Reduction of Seafood Sales? Measuring the Power of 'Market Instrument' for Compliance Promotion

Abstract

EU and the US have conducted sanction policy against those countries whose vessels have committed serious illegal fishing activities (IUU activities), by publicly identifying such countries as “IUU fishing nations”. This study evaluates the sanction policy’s impact size on the seafood export value of sanctioned IUU countries and its trend in terms of several angles, hypothesizing that sanction policy will reduce seafood export value from IUU countries through reputational loss in increasingly environmentally aware global markets. This study have revealed that information disclosure sanction does significantly reduce the raw seafood export value from sanctioned countries to the world by approximately 10-20% on average, being controlled with their export value of other foods (e.g. meat, rice, sugar) and time-variant fixed effects. However, the significant impact seems not to surface when looking at each market (EU15, US, other countries) individually. The impact was weaker and less significant on processed products than on raw seafood. These findings offer a new empirical evidence which supports the effectiveness of non-compliance information disclosure as a “market instrument” which could eliminate or reduce the sales of seafood products from non-compliant sources, under some limitations. It is expected that the findings of this study contribute to better informed decisions of global fisheries and environment managers on how to best promote environmental compliance.