Reporting on international fishing can often feel like investigating organized crime. Everyone knows how things are run, but the truth is obscured by shell companies, back-door dealings, and plausible deniability.



This is why it’s remarkable that a recent, bungled initial public stock offering from a major Chinese tuna firm accidentally revealed something close to the truth about China’s fishing industry.



The failed IPO is the work of China Tuna Industry Group, which from 2011 to 2013 was the largest Chinese supplier of premium tuna to Japan’s hungry sushi market. Over 70% of its $62m in annual sales are made to a single company, Toyo Reizo, a subsidiary of Japan’s Mitsubishi Corp. Hoping to raise over $100m to expand this profitable operation, China Tuna filed draft documents for the IPO in June.



China Tuna’s target fish stocks, Bigeye and Yellowfin tuna, are both in decline. The International Union for the Conservation of Nature lists Yellowfin tuna as “near threatened,” two steps into a seven-point scale that ends with extinction. Bigeye tuna, meanwhile, are already seriously overfished, as the Pacific Islands Forum Fisheries Agency declared this summer.

But for the IPO to succeed, the company had to convince potential shareholders that chasing after dwindling resources would be a profitable venture. So China Tuna leapfrogged over more recent data to cite a 2011 fisheries assessment that rated Bigeye tuna at a “healthy level of abundance” and “not overfished”.

Despite this claim’s shady appearance, it’s hard to know whether China Tuna’s overly rosy assessment of Bigeye tuna stocks was deliberate. The IPO filing is a draft, so fact-checking is by definition ongoing.

But the company did declare in the draft IPO that it intended to circumvent international conservation limits on tuna – by simply ignoring them. In a series of circular arguments, the document stated that China, which presides over the world’s largest long-distance fishing fleet, would not crack down on companies engaged in illegal fishing because it never had in the past; that the catch limits set by the Regional Fisheries Management Organizations apply only to China the country, not to actual Chinese fishing boats; and that even if the catch limits did apply, the regional fisheries organizations would not enforce them because “there is no sanction for non-compliance with Bigeye catch limits.”



I wanted to contact China Tuna for comment on these statements. The IPO revealed that China Tuna is a transnational corporation under the communist Chinese flag, operating Japanese and Chinese vessels and registered in the Cayman Islands. Its primary shareholders are Li Li, a 24-year-old woman with a passport from St Kitts, and her dad, Li Zhenyu.



As I tried to track down Li Li’s tuna giant, I discovered that like many big fishing companies, China Tuna is hard to reach. Seeking a phone number for the firm’s operations office in Hong Kong, I found that not only is China Tuna’s office number unlisted – the company doesn’t even have an office.



So I tracked the address in the IPO filing back to a firm named Asialink. At first Asialink denied any connection with China Tuna. When confronted with the fact that its address had been listed in a recent publicly filed document as China Tuna’s operations headquarters, Asialink acknowledged a connection, but refused to provide any comment or additional contact information.



Then I called China Tuna’s biggest subsidiary, Dalian Ocean Fishing. The woman who answered the phone at first claimed no knowledge of China Tuna. After a little more conversation, she acknowledged that China Tuna was Dalian’s parent corporation, but refused to comment further or put me in touch with company directors.



I have yet to speak with anyone who admits to working directly for China Tuna. But the firm’s combination of bravado and impenetrable corporate structure offer clues as to why the health of the oceans is in freefall. China has told the world that from 2000 to 2011 it caught 368,000 tons of fish annually in international waters. But as the Wall Street Journal reported in 2012, the European Commission estimates the catch at closer to 4.6m tons or 12 times greater.



So China Tuna is obviously not the only Chinese company implementing the “overfish-wildly-and-rely-on-not-getting-caught” business plan, just the first to boast about it to potential shareholders.

Greenpeace filed a complaint in September with the Hong Kong Stock Exchange, stating that China Tuna was deliberately misleading investors about the health of tuna populations. Campaigner Elsa Lee was amazed not at China Tuna’s Machiavellian business plan, but at its candor. “Having a company write it down, and in some sense shamelessly admitting that they’re running around the rules,” she says, “is really quite amazing.”

In a letter of response to Greenpeace, China’s Bureau of Fisheries stated that while Dalian Ocean Fishing, China Tuna’s subsidiary, currently holds licenses for 17 vessels to operate in the Pacific, “the Ministry does not give approval to companies registered overseas to conduct offshore fishing activities, and thus the company’s actions are already in violation of relevant laws and regulations.” So it would appear that China issued fishing licenses to China Tuna without realizing it’s a Cayman Islands company run by a foreign national.



The statement was also at odds with the company’s draft IPO, which described a series of tax breaks and state grants from the Chinese government for its deep sea fishing activity.



The Bureau of Fisheries also told Greenpeace that it was shocked – shocked! – to find overfishing in its establishment. Overfishing occurs because “China is a developing country, its offshore fishing companies are still weak, levels of management are still uneven, and the management system still needs to be steadily improved,” states the agency.



Perhaps. Once wholly state-owned, 70% of the Chinese fishing industry has been privatized in recent years. It’s certainly plausible that the government is struggling to retool.



But China expert Tabitha Mallory believes there is more to it. She says fishing lies at the intersection of Chinese ambitions for military expansion and food security. While many political analysts refer to the 21st century as “the China century”, Mallory told the US-China Economic and Security Review Commission in 2012, China also calls it “the ocean century.” She points to a 2010 Chinese task force report stating that “marine biological resources are seen as the largest store of protein, therefore owning and mastering the ocean means owning and mastering the future”.



In this view, fishing boats become Trojan horses for expanding international power. China does, in fact, send military boats along with fishing boats into disputed fishing waters, sparking clashes with neighbors such as Japan, Vietnam, and South Korea. China would not be the first nation to tie fishing to military or political expansion, however. For example, my own reporting on tuna in the Western and Central Pacific suggests the United States bases its aid to allies in the region at least in part on tuna treaties.

Although the Hong Kong Stock Exchange recently ordered China Tuna to suspend its draft IPO, the document offers unusual if indirect acknowledgement of China’s habitual overfishing all over the globe. Glenn Hurry, head of the Western and Central Pacific Fisheries Commission, says China will “hopefully face hard questions at the next regional fisheries meeting.” But don’t hold your breath. The fisheries management organizations that regulate the world’s ocean commons, like the rest of the fishing world, are completely nontransparent. No media allowed.

Shannon Service frequently reports on oceans and fishing, and is currently working on a documentary, The Ghost Fleet, about slavery in the international fishing industry.

This story was produced by the Food and Environment Reporting Network, an independent, non-profit news organization focusing on food, agriculture, and environmental health.

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