Closing the Incentive Gap: The Role of Public and Private Actors in Governing Indonesia's Tuna Fisheries

Abstract

Indonesia is one of the world's largest tuna producing countries, yet regulatory oversight remains weak and management is poor. Incentive-based approaches are a way to improve state-based resource management, but they often require strong government regulation. In this paper, we use principal -agent theory and the notion of the 'incentive gap' to explore how incentives could be brought to bear in Indonesia through a combination of private and public actors. With a shared fish stock like tuna, we argue that a double principal -agent problem emerges, where information, asymmetries between various players complicate management. We focus on the problems of adverse selection and moral hazard in three different tuna fisheries in Indonesia to identify the nature of the incentive gap, and comment on the mix of public and private actors currently engaged in tuna fishery governance towards reducing the gap. The double principal -agent problem is a useful yet underutilized framework to understand the dynamics of shared stocks management. In this first application to a developing country fishery, we conclude that information asymmetries cannot be overcome without the involvement of private actors, who are increasingly becoming important in aligning regional and global objectives with those of fishers themselves.

The Sustainable Seafood Movement Is a Governance Concert, with the Audience Playing a Key Role

“…This paper arose through reflections on our previous empirical work on the tuna industry [5,16,[39][40][41][42][43]. We became aware of the lack of analysis on the role of consumers in work on market-led approaches for sustainability.…”

Private governance of ocean resources

“…By creating new systems of control in supply chains and setting new standards for how transparent the fishing industry should be, it can increase firm accountability towards reaching sustainability goals. However, perhaps the clearer interaction traceability can play is increasing the information available on food safety, as well as sustainability aspects related to how fish were caught, where, by who and in what quantities (Bailey et al 2016b). In this way, traceability can help states to support their sustainability governance and procurement strategies.…”

“…Similarly, as international requirements for traceability increase in response to IUU regulation (as well as emerging issues of human trafficking), states and firms acting alone will be challenged in a similar way. While direct partnerships between companies and governments remain relatively rare in the marine environment (see, as exceptions, Bailey et al 2016b;Adolf et al 2016), there are a wide range of examples where civil society groups are providing a facilitative role in the development of sustainability partnerships, either by assisting the capacity of firms or states to meet legislative or voluntary market-based requirements, or by establishing dialogue between key actors to stimulate innovation in sustainability governance arrangements.…”

“…Instead it requires diverse and effective institutions and is connected to ideas of values and principles (Symes 2006). Prominent examples of such initiatives are fisheries certification and seafood recommendation lists, where consumers are informed on sustainability aspects of fisheries and aquaculture products, and traceability schemes, where consumers can obtain detailed information on how and where their fish was caught (for example, Parkes et al 2010;Bailey et al 2016b). Moreover, rather than being strictly commercial or idealist, these sustainability initiatives are often the result of cooperation between private companies and civil society.…”

New tuna regimes

“…In this paper we analyse the extent to which MSC fisheries and chain of custody certifications have increased transparency through improved monitoring and control and how the associated disclosure has closed what others have labelled a 'double' principal-agent gap (Jensen & Vestergaard (2001), Bailey et al (2016)). As explained below, we examine how the MSC certification program closes first the incentive gap between the PNA and member states, and second the gap between the member states and distant water fishing purse seine fishing fleets operating in the PNA waters.…”