In just a few days savvy investors will be able to put their money where there mouths are by investing in the world’s first investment fund devoted strictly to fish.
Amundi Japan (which manages a $35 billion fund) is hoping to raise at least $500 million in investment dollars on the back of a booming global appetite for fish. Its pitch is straightforward: As demand for fish grows, the richer those who engage in the industry of fishing become. That includes fishing boat and engine makers, processing plants, chains of seafood and sushi restaurants and, especially, aquaculture or fish farms.
Twinned with the fact that the most-populous countries on the planet – China, India and Brazil – are still growing and growing slightly wealthier, thus more desirous of healthy eating, and it’s looking bad for the planet’s dwindling fish stocks.
That’s not to say there’s not money to be made off fish and all if its ancillary businesses; Amundi’s managers are predicting investors will double their money within six years, as demand continues to grow.
Researchers at Amundi, a merger formed by French-based Credit Agricole and Societe-Generale’s asset management businesses, suggest global seafood consumption will grow from 110 million tons today to more than 132 million tons by 2030. Its public mutual fund will be available for investment beginning August 9 and begin operating on August 20.
The downside, of course, is that as demand for fish goes up the supply goes down. Contrary to some popular opinion, fish are not an infinite resource. Such cynics (realists?) as the World Wildlife Fund predict that at the current rate of taking the world’s bluefin tuna stocks, for example, could expire by 2012 and that all the fish we currently know will be gone by 2050, replaced by fish we currently refuse to take because they are hard to catch or have no taste or jellyfish, the cockroach of the sea.
Critics compare the investment opportunity to offering a rainforest depletion fund or a real estate development project in the middle of a panda refuge.
The so-called “themed investment” fund is the product of investment bankers watching the headlines. “There’s a reasonably good correlation between per capital GDP growth and consumption of fish in emerging markets, which are growing fast with huge populations, so we thought this could be an interesting investment story,” Amundi’s chief investment officer Masato Degawa told the WSJ.
Statistics bear him out: According to the U.N.’s Food and Agriculture Organization, global fish consumption per person has increased to more than 35 pounds a year in 2007 from 23 pounds in 1980. During the same period total production of fish around the globe increased from 72 million to 140 million tons. In China, for example, the average consumption of fish per person increased by nearly five pounds to 58 pounds per person between 2001 and 2007.
The world’s leaders in per-capita-fish-consumption are all in Asia: Despite its rapacious seafood appetite, Japan ranks fourth in the world, with each Japanese eating more than his/her bodyweight in fish, about 155 pounds a year.
The planet’s highest rate is in the Maldives, where each person eats 336 pounds a year! But don’t let those numbers confuse: Japan is still the world’s leader in fish eating. It’s 127 million people eat more than 20 billion pounds of seafood each year, while in the Maldives, its 1,200 islands boasting just 335,000 people, takes just 112 million pounds.
What about the bluefin tuna, which everyone but the Japanese seems to think, is endangered. Tuna fishers and processors are viable investments according to Amundi. “We are not the police,” said Degawa
Some of the news reports of the unique fund as reported in business journals around the globe caution that there may be one potential “sticking point” to the investment: Overfishing.
Hopefully the fund’s salesmen will caution potential investors that if there are no more fish in the sea there won’t be much need for fishing boats, fishing rods or even seafood markets. To that end, Amundi predicts that the bulk of its fish fund investments will be in fish farming, a booming industry, since levels of caught fish have evened off since 1990.
The Times-Picayune in New Orleans reports that some of our friends in Louisiana were part of hearings recently in New Orleans held to vet plans for a national ocean policy, which would benefit the Gulf of Mexico region more than anywhere in the U.S. Chris Kirkham reports: “Several high-level Obama administration officials heard more than three hours worth of testimony from environmental groups, fishing organizations, scientists and the oil and gas industry about development of a national policy aimed at protecting the oceans and streamlining government management.
Comments for the national ocean policy task force reflected the wide-ranging pressures on the Gulf of Mexico’s resources: oil and gas pipelines and drilling activity; pollution from the Mississippi River creating a vast “dead zone” in the Gulf; overfishing that puts some species at risk; and the large-scale collapse of Louisiana’s coastal wetlands, which provide a nursery for Gulf seafood and serve as the infrastructure for ports and energy production.
“Over the past 20 years or so, we have watched as the dead zone has grown, and no funding has come down to do anything about it. We have watched as our coast has disappeared,” said Tracy Kuhns, who lives in the Lafitte area and runs Louisiana Bayoukeeper, a coastal advocacy group. “It’s not just a wetlands, it’s not just a swamp out there. People live there. When we lose all that we lose our culture, and our livelihoods.”
Obama has asked the ocean policy task force to draft an ocean policy plan by Dec. 9. Monday’s meeting in New Orleans was one of six the group is holding across the United States. The specifics they will address in their plan are unclear at this point. An interim report from the task force issued last month mentions pollution from rivers and the need to better integrate the way federal agencies manage ocean resources.
“Right now it’s pretty obvious the oceans are becoming increasingly crowded places, and we’re seeing more and more conflicts across that space,” said Jane Lubchenco, the administrator of the National Oceanic and Atmospheric Administration who is on the ocean policy task force, as well as a new federal inter-agency working group to address Louisiana’s coastal land loss. “That will inevitably require doing things differently, but what that is we don’t really know.”
Although Monday’s meeting was tailored to ocean policy, the bulk of the comments focused on coastal collapse in Louisiana.
“The nation cannot continue to watch Louisiana disappear. Thinking big and thinking bold is urgent,” said Robert Twilley, associate vice chancellor for research at Louisiana State University and a professor of oceanography and coastal sciences. “Supporting aggressive actions that are not paralyzed by conflicting federal policy should be of the highest priority.”
Dealing with coastal restoration should not be viewed as an either-or decision by policymakers in Washington, said Denise Reed, a coastal researcher at the University of New Orleans.
“It’s not about a choice between navigation and ecosystem restoration, it’s about interdependence. We want to do navigation on this river and we want to do oil and gas, ” she said. “Louisiana is undoubtedly in a crisis, and we don’t need short-term fixes, we need deliberative thinking about what the next century holds.”
Many recreational and for-hire fishing groups cautioned they should be included upfront in any plans the federal government has for ocean conservation.
“There’s a lot of people who make their living on the water here, ” said Gary Williams, a charter boat captain in Mississippi. “Whatever we do, we need to make sure that we can continue to do so.”
Jim Grant, a representative with oil company BP America, said any changes should consider effects on the Gulf’s energy economy.
“We caution the task force to carefully weigh policies that may set up exclusionary zones, disrupt the (federal government’s) leasing program or disrupt opportunities for economic growth.”
The equation is straightforward: Too many people attempting to live permanently in the Galapagos + too few jobs to go around = a percentage are resorting to illegal economies to survive. Shark finning is one of those illegalities, and still growing. Financed by mafias based in mainland Ecuador, fins are taken – hacked off, the useless carcasses tossed overboard – and sent abroad for shark fin soup. Japanese are the biggest culprits though there are restaurants as far away as Norway and Germany, which sell the soup as well. The sad reality is that not only is it a complete waste of the shark but the fins have absolutely no taste, no nutritional value. It’s all about the show. If you can afford shark fin soup – at a business meeting, wedding, anniversary – it means you’ve got the bucks to spend on a frivolity.
You’ve seen the television ads recently promoting various shark weeks? Fear continues to sell mediocre TV, thus the boom of such shows. Another statistic: How many people are killed by sharks each year worldwide? On average, four or five. How many sharks does man kill each year, some for food, others for showy displays of money? More than seventy million. It’s the sharks that should be swimming away from us as fast as they can.
Over fishing around the globe is a huge problem. The over fishing of sharks, especially the big ones, known as “apex predators” (including the great white and reef sharks) is particularly damaging to the marine cycle since sharks maintain the populations of smaller fish that in turn feed on smaller fish that people consume commercially. Minus the predators, these sub-predators run rampant and decimate smaller fish stocks. While we may think there are unlimited numbers of fish in the sea, the more we rapaciously take the fewer species will live on into the coming decades. One more statistic? The World Wildlife Fund expects all of the fish that we know today to be gone by 2050. That’s what we should be scared of, not the very slim potential of becoming lunch while enjoying a sunny holiday at the beach. (To find a detailed chart and database of the world’s endangered sharks, visit the Shark Foundation.)
Recent attempts to bolster international fishing laws may be getting an extra push in the U.S. pending the passage of legislation now being considered in the Senate (and recently passed in the House). The legislation is designed to close most of the loopholes in the current ban on shark finning in American waters. Hopefully other nations will follow suit. (International Fisheries Law and Policy Portal.)
In the Galapagos we spent time with Godfrey Merlen, who represents San Francisco-based Wild Aid there. A twenty-year resident, he leads the group’s local efforts against illegal wildlife trafficking. Small groups of paid informants keep him alert to who in the relatively small community are shark finning (as well as poaching sea cucumbers and other at-risk species). Unfortunately once the fins are back in mainland Ecuador, even when seized by officials they often end up back in the illegal markets. Corruption is a boom business in Ecuador too.
“Over fishing of a number species is a reality in the Galapagos and in some ways – for some species, like lobsters – it’s a little bit late to talk about. We also know that thousands and thousands of sea cucumbers are recovered from illegal fisheries every year, which has had a depressing effect on the remaining population and makes management of it near impossible.
“Still, even though we know it’s going on, illegal sea cucumber gathering is an active component of the fisheries here and brings in considerable money. Just recently, at the end February, there was a capture of thirty sacks of cucumbers on the mainland, about 3,000 pounds, with an estimated value of about $200,000. This is a lot of money and a lot of sea cucumbers. Most of them came from right here in the Galapagos Marine Reserve. Local fishermen say, What are we supposed to do, what are we supposed to fish? Lobster and grouper are nearly gone. So they get into the illegal market very, very simply and easily. Though the national park has patrol boats and keeps up vigilance the area is enormous and enforcement is difficult.As a result it’s been extremely easy to export illegal produce from the Galapagos.
“It’s exactly the same with the shark fin. Sharking finning, the removal of the fins and leaving the bodies to rot either in the ocean or on the shoreline, has become very common in Galapagos. Again, the fishermen say, “I have a lot of debt, I need to buy a new motor for my boat, and I don’t have any money.” Then someone comes along and says, Well, okay, I’ll lend you money but what I want is sea cucumbers, shark fins, sea lion penises, seahorses, whatever is the going mode especially in the far eastern countries where money is not a problem. Huge sums of money can be poured into a place like the Galapagos to fuel an illegal fishery. In the long run of course things can only go from bad to worse for the fishery.
“As resources decline whether through legal or illegal fisheries the resource is the basis of the fisherman’s economy. As those resources decline, incomes decline too and the cost of living keeps going up. Sooner or later the price of fuel will jump back up; currently it’s a very false $1 a gallon for diesel. What the fishermen fail to understand is that ultimately all these illegal activities combined with the lack of a sufficiently strong fisheries management, at a certain point the fishing sector of the economy will collapse.
“At the moment the fisherman finds himself in a really hot spot, partially through his own failure to appreciate the risks he’s running. He may make money today but tomorrow he will not make money. He’s already discovered that with the sea cucumber. Basically the fishermen have very little money because the resource is disappearing.”
It would be wrong on its face to say that tourism is the biggest problem facing the Galapagos today. Simultaneously, it is accurate to say that the growth in tourism in the one-of-a-kind archipelago is the primary reason the islands are “in danger.” Those are not my words, but UNESCO’s, in 2007 … the same year Ecuador’s new president claimed the islands were at “great risk” and signed a decree making their protection a national priority. You get the sense that just defining the exact problem facing the Galapagos, for both locals and outsiders, is tricky.
With ninety seven percent of the islands off-limits and under national park protection – small, guided tours limited to 60 designated sites – the system that introduces tourists to the nineteen Galapagos islands has long been regarded a model of eco-tourism. But the success of that model is what puts them at such risk today: In 1991 there were 41,000 visitors, this year there will be close to 200,000; during that same period human population has risen from a few thousand to 40,000. Those are a lot of combined footsteps – as well as ship and plane traffic — for such a fragile eco-system (the so-called “Mona Lisa of biodiversity”).
The sudden arrival of so many people from so many parts of the world introduces parasites which threaten both flora and fauna; permanent residents arrive desirous of re-creating their mainland lifestyles, including cars, dogs and cats, and air conditioning; tour operators are pushing to expand their offerings to include sport fishing and skydiving.The Ecuadorian government has tried, with limited success, to limit migration and is considering raising the national park fee paid by every tourist from $100 to $135, an attempt to slow the numbers.
Jack Nelson is one of the Galapagos’ most-veteran tour operators, coming to the islands to live permanently in 1967. Like others like him, in different settings around the world who have watched their own personal paradises become overly popular, he is alarmed.“To a tourist, things look good. You still see a lot of animals, and not many other people,” he says. “But get outside those controlled (national park) parameters, and you’ll find a big mess nobody can figure out what to do about.”
While we were filming in and around the islands we met longtime Galapagos guide Sylvia Vargas on a few occasions. A native Ecuadorian, she’s been coming here for more than twenty years and has lived in Puerto Ayora off and on since first visiting as a teenager. She feels both blessed to be working in such an incredible place and worried that tourism and migration may be taking too big a toll.
“Personally, I think tourism should be capped for the moment. Higher entry fees haven’t worked to slow the growth. One tour operator I work for recently told me that the people who are coming to the Galapagos today are coming with a different idea about the place – they don’t ask as much anymore about wildlife, their first questions are about the comfort of the ship. They want more air-conditioning, more service, nicer cabins, a massage, a more comfortable mattress and expect a lot of chemicals on board to keep things clean and tidy … all of which have a direct impact on the Galapagos. More energy used, more garbage created, more pollution.
“I came first in 1984 when there were two thousand people living in town and two cars. I knew everyone on the street and was offered food by friends every day. The electricity on the island used to shut down at night. Now there are twenty times as many people and two hundred times as many cars. And we have electricity twenty-four hours a day. I miss the peacefulness of back then.
“But I have talked with people who work as guides in other places and they always say that we Galapagos guides are spoiled because we see such incredible wildlife every day. I guess they are right. But for me the most popular sites are too crowded, sometimes there are so many people I feel … embarrassed.
“My biggest worry is that more people living here means more demand for everything. I don’t see people thinking about having a different lifestyle than what they have on the mainland. They will tell you they came to the Galapagos to live in a peaceful place, but they expect to have exactly the same things that they had on the mainland. Why would you have a pet dog or cat here? Why would you have a car if you live in town? Why would you build a new house with air conditioning, when electricity is so hard to create? At Christmas on the mainland we decorate our houses with lots of outdoors lights and now they do the same thing here even though the power comes from a gas generator and the gas comes from far away.”
This land of volcanoes and earthquakes — the western frontier of the literary “Ring of Fire” — is still a month away from true spring. Dirty, crusted snow lies beneath the leafless trees and in the gutters along Petropavlovsk’s main streets, which already look pretty grim, lined as they are by Soviet-era buildings. The only hints of color in town are the red-and-yellow hot dog-beer-and-coffee stands across from Lenin Square and the colorfully painted walls of a local gym. Otherwise, from the bottle-strewn banks of the fishing harbor to the top of the hills looking out over Avachinskaya Bay, the operative description of this city at the tip of the Kamchatka Peninsula is … grey.
Long a place shrouded in secrecy, Kamchatka was until recently known to Westerners only as a closed military region or as a name on the Risk board. We are at the very edge of the Russian Far East, a region known locally as “the back of the beyond.” The seven hundred and fifty mile long peninsula is lined by a pair of mountain ranges – the Sredenny (Central) and Vostochny (Eastern) – and from the air looks like a big fish. The Kamchatka River fills the trough between the two ranges. Encircling the city are snow-capped volcanoes, nearly 300 dot the peninsula, a tenth still active. When I ask the first people I meet — two young journalism students, Victoria and Ivan – if they remember the last eruption they smile, wracking their memories.
“I think it was like two weeks ago,” says Victoria. “But they happen so often, it’s hard to be sure. And earthquakes, too. But we are used to them. Why do you think the buildings are so … solid.”
Three-quarters of the peninsula’s 400,000 people live in Petropavlovsk, the capital city founded by Russian explorer Vitus Bering and named after his two ships, the St. Peter and St. Paul. The Russians and Ukrainians came to work at its once-booming navy station; ten miles across the bay sits Russia’s second largest nuclear submarine base. The indigenous Itelmen and Koryaks are still mostly nomadic reindeer herders. Judging by the attire of the locals waiting in long lines at bus stops, the biggest imports are patent leather jackets and boots with spiked heels (for women) and camouflage (for men).
The peninsula is known for an amazing diversity and abundance of wildlife: Sable, ermine, Siberian bighorn (or snow) sheep, the Kamchatka brown bear, crab and, of course, salmon in large quantities. Today it’s said that Kamchatka’s industries can be divided into two categories: fishing and those that support fishing, though like so many parts of the world it is at risk of being over-fished. At the dock I eat thick slabs of brown bread slathered with red caviar.
As I munch on the dock I watch big fishing boats being readied to head back out to sea. When I ask what they fish, the answer is simple: “Whales.”
“But isn’t whaling illegal?”
“Listen,” says a fisherman in blue rubber bibs hosing down the back ramp of one of the gunmetal grey boats. “I know in Alaska it is illegal to shoot even a bird. But here, this is Russia. Nothing is illegal.”
Fish are ninety-three percent of Kamchatka’s exports, particularly salmon and king crab (though after walking the city for a day, I have to say it was very, very difficult to find either … or even a restaurant to ask for them. “Eating out is not popular,” admits the only guidebook reference to food I could find). Kamchatka’s biggest import is fuel, which in the recent past led to some trouble. I ask why there appear to be so many burned-out homes along the main street. “About ten years ago we did not receive enough coal,” says a man drinking coffee across from Lenin Square. “So people were using open fires to heat inside. Obviously there were some … problems.”
The fall of the Soviet Union in 1990 opened the region to the outside world and there is something of a tourist industry here, though small A land still being born thanks to the near-constant volcanic activity, Kamchatka can be a place of breathtaking beauty and unique wildlife; this afternoon when the sun pops out and the sky clears a perimeter lined with snow-capped mountains is revealed across the wind-swept bay.
It is a strange place. There is a saying here which loosely translates as, “In the winter it’s not too cold, but in the summer it’s not very warm!” Pharmacologists are on record that a cup of fresh Kamchatka water drunk in the morning heals the liver and stomach, cleans the blood vessels and prohibits bacteria. Other scientific studies detail increased levels of radioactivity in both air and water, thanks to the decommissioning of nuclear subs taking place just across the bay. Which makes me somewhat reluctant to drink from its taps or, if I could find one, eat one of those giant king crabs.
The only Russian phrase I pick up during a day of wandering PK? “Kamchatka, ehto strannoe mesto” (It’s a strange place).
For the past couple nights I’ve dreamed about being attacked by giant calamari; not the fried variety, but the long, gelatinous type, which invariably wrap me up in big squid rings, locking my arms to my side and push me into the sea. Which I’m sure has everything to do with spending the day in Hakodate, on the big island of Hokkaido, Japan’s squid capital.
The streets leading to the morning market are heavy with restaurants, each featuring an illustration of a squid on its awning, billboard or even in neon. At open-air shops tanks of still swimming squid are surrounded by trays of squid on ice, squid wrapped tight in plastic, dried squid, hammered squid, all cut, sliced and diced. Souvenir shops feature plastic squids, squid pens, even drinking cups made from … squid. You won’t be surprised that squid have been a staple here for thousands of years.
(The biggest squid ever caught? Twenty-four feet long. The largest invertebrate on the planet, they are thought to grow to as long as sixty feet but because they live at such great depths have never been studied in the wild.)
My question for these shopkeepers and restaurant owners, of course, is: Are they at risk of taking too many squid from the sea? Long thought beyond risk of being over fished – they don’t live long anyway, are a very prolific species and fluctuate naturally – the reason they seem to be safe will surprise you.
Normally at home along the coast from Mexico to Chile they are deep-sea creatures, living at depths of 3,000 to 5,000 feet they’re increasingly being found in the colder waters off California, Canada and Alaska. Jumbo squid, six to eight feet long, are booming in areas where they have not previously boomed. The reason for the boom takes us back to Japan, especially the big market at Tuskiji in Tokyo where we were a few days before. Guess what is the main predator of squid? Blue fin tuna. Which are now being badly over fished and sold by the thousands a day in Japan’s markets.
Lots of fingers point to Japan as the greatest threat to the depletion of fish around the world. The Japanese are the world’s biggest consumer of fish; Tuskiji is like an extraordinary mortuary for global sea life. Not only do the Japanese pose a problem for other countries’ fish stocks, but also threaten the world’s fish stocks as a whole. Each day, tens of thousands of tons of marine life, clawed from rocks and scooped from oceans by factory ships working 24 hours a day, are auctioned in the early hours. Japan’s taste for seafood only appears limited by price and availability. The United Nations Food and Agriculture Organization estimates Japan devours 30 percent of the world’s fresh fish, close to 170 pounds a year for each man, woman and child. Australians, by comparison, manage just 40 pounds.
Some conservationists and marine scientists are increasingly raising questions about how long Japan’s appetite can be accepted as an unquestioned cultural imperative. The constant plundering of the ocean is devastating fish stocks and destroying ecosystems. While we ponder that, there remains one good thing in the sea: There are plenty of squid … so get out the calamari recipes.