The Black Market In Bluefin: The Role Of “Bluefin Inc.” (Part 5)ff

16 November 2010 European Union

By Martin Foster and Marina Walker Guevara
Source: Seven-month probe by the International Consortium of Investigative Journalists

A tourist eats tuna sushi near Tokyo's Tsukiji fish market. Credit: Kyodo /Landov

Mount Fuji rises across the bay from the 16th century port of Shimizu — a sight fit for a post card. The town has seen better days — its businesses shuttered, fishing boats driven into bankruptcy, and the only department store closed. But the city’s core business — marine and overland trade — has assured its survival. Shimizu is the primary port of landing for tuna in Japan.

 

Hundreds of tons of tuna arrive here daily from all over the world, but none has the allure of the giant Eastern Atlantic bluefin tuna, a fish that once caught is nurtured for months at sea ranches in the Mediterranean to increase its fat content — and its yen value. Once considered a low-class dish, today the Atlantic bluefin is favored by sushi eaters across Japan. 

 

A single large fish can fetch more than $100,000 at market.

 

So last year, when Japanese customs decided to stop the importation of more than 3,500 tons of Eastern Atlantic bluefin, the global tuna industry paused for a moment in disbelief. Instead of quickly being trucked to Tokyo’s Tsukiji market and other distribution centers, huge consignments of the bluefin were held in deep-freeze storage warehouses in Shimizu and other cities throughout Japan. The reason: officials suspected the fish were illegally caught.

 

What’s extraordinary about the case is not so much the potential crimes involved — fraudulent paperwork and fish caught above national quotas — but that the Japanese were finally cracking down on a notoriously off-the-books trade.

 

For decades Japan has been the final stop of an Eastern Atlantic bluefin tuna supply chain riddled with fraud, criminal misconduct, and lack of oversight. European and North African fleets grossly overfished in the Mediterranean, fattening ranches became centers for the laundering of tuna, and officials from Europe to Japan looked the other way, while stocks of one of the most valued sea creatures were depleted with increasingly little hope of recovery.

 

The lack of accountability created a massive black market, according to a seven-month inquiry by the International Consortium of Investigative Journalists. More than one out of three Eastern Atlantic bluefin caught between 1998 and 2007 was fished illegally, ICIJ found, feeding an illicit market worth $400 million a year.

 

During some years, Japan’s bluefin supply exceeded the legal quotas of Eastern Atlantic bluefin tuna by 50 percent, say industry veterans. “When the quota was 21,500 tons, in actual fact about 34,000 tons came to Japan,” said Koji Hayashi, trading manager at Shimizu-based Try Inc., the second largest distributor of frozen bluefin tuna in Japan. So plentiful were the fish, Hayashi recalled, that prices plummeted.

 

Frozen bluefin tuna at Tsukiji market in central Tokyo. Credit: bass_nroll/ Flickr.

 

Three-quarters of the world’s bluefin tuna end up in the country’s restaurants, convenience stores and markets, while the rest goes to Europe and the U.S. Some of Japan’s leading trading houses and seafood companies, led by Mitsubishi Corporation, sit atop well-oiled structures that move the fish from the tuna ranches in the Mediterranean to the Japanese dinner table — an intricate web of wholesalers, brokers, importers, and retailers.

 

For the Japanese, history may be repeating itself. Just four years ago, an official investigation by Japan and Australia uncovered massive Japanese illegal catches and laundering of southern bluefin tuna, a sister species to the Atlantic bluefin. The investigation was a huge embarrassment for Japan, forcing it to overhaul its fishery management system.

 

In the Mediterranean, even more drastic reforms will likely be needed, experts say. Earlier this year, Japan led an effort to defeat a proposal to list Eastern Atlantic bluefin tuna under CITES — the Convention on International Trade in Endangered Species — a move that would have banned the bluefin trade. Instead, Japanese officials insist the fishery should continue to be regulated by the Madrid-based International Commission for the Conservation of Atlantic Tunas (ICCAT), a body with 47 member states and the EU that is widely faulted for the dire state of the bluefin stock. 

 

“The stock of bluefin tuna, by far the most valued tuna species, has been so heavily overfished in recent times that its collapse has become a very serious and threatening possibility,” admitted ICCAT Chairman Fabio Hazin at a 2008 meeting of the industry and the commission in Tokyo. “The Commission’s inability to halt the decline of the bluefin tuna stocks for the past years has seriously jeopardized its credibility, raising grave concerns about its actual competence to manage the tuna stocks under its mandate.”

 

In 2008, Japan supported ICCAT’s efforts to develop a new system to track bluefin from vessel to market, the Bluefin Tuna Catch Document Scheme (BCD). Through this program, each catch gets a unique identifying number that accompanies it through its months-long journey from the vessels to the ranches and to its final destination. Along the way, players must fill out forms and provide timely information on the size of the catch, the vessels and ranches involved, and even the weight of the fish.

 

In fact, it was irregularities in these documents that raised concerns among Japanese officials about potential illegal shipments in 2009. Information was missing, dates didn’t match, and discrepancies in weight and number of fish suggested that illegalities could have occurred at the ranches. For example, documents showed that some ranches had killed more fattened tuna than they originally took in — an impossibility, given that bluefin do not reproduce in captivity. “We said, ‘This is nonsense!’” stated Masanori Miyahara, Japan’s ICCAT chief delegate, whose colleagues demanded explanations from EU officials about the discrepancies. “If they couldn’t make an explanation as to the legality of the fish, we said, ‘Then don’t bring it to us.’”

 

ICIJ gained access to the BCD database through an ICCAT member country and found that the data is full of holes, making it nearly impossible for regulators to track the trade from vessel to market as the program originally intended. For example, at least 96 records of bluefin shipments to Japan in 2008 and 2009— equivalent to 5,000 tons — could not be traced back to a ranch or vessel in the database.

 

 

Bluefin’s Top Market

Frozen bluefin tuna landing at Shimizu and other ports are trucked at temperatures of minus 55 C to major markets throughout Japan, including Tsukiji — a landmark in central Tokyo and the world’s largest seafood market. More than 450 species of fresh, frozen, and processed seafood are offered on any given day at the market. Fish valued at $5.2 billion flowed through Tsukiji in 2009, according to the Tokyo Metropolitan Government.

 

With operations leased out to seven wholesalers and more than 700 intermediary wholesalers who deal everything from flowers and chicken eggs to Japanese pickles, the giant, sprawling market can be a busy place. Early morning visitors are likely to take in fast-paced auctions that run via a system of nods, winks, and arcane signs mostly unintelligible to outsiders, while unique turret trucks buzz around a maze of puddle streaked alleys. 

 

Auctions may be the most visible sign of economic activity surrounding tuna, but today nearly all of the frozen and farmed bluefin entering Japan is sold by wholesalers directly to buyers.

 

Mitsubishi Corporation is the single largest buyer of Atlantic bluefin. Credit: Scilla Alleci.

 

Japan’s big trading houses and fishing companies control most of the complex trading structure that moves bluefin from Mediterranean ranches to Tsukiji and other large markets, and from there to food stores and restaurants across Japan. As the Japanese developed a taste for toro, the fatty belly flesh of the bluefin, companies ranging from corporate giants Mitsubishi and Sojitz to seafood traders like Maruha became instrumental to the ranching business that ballooned in the Mediterranean in the mid-1990s. The Japanese teamed up with local partners from Spain to Croatia, financing fishing campaigns in advance, providing technical support, and underwriting loans for ranches.

 

“They invest in all of that, and in the end they are the bosses,” observed Dalibor Kustura, a Croatian bluefin fisherman referring to Japanese interests in Mediterranean ranches. “They sell fish and everything. They are not owners, but they are owners.”

 

With Japanese support, ranching dramatically changed the outlook of the bluefin industry in the Mediterranean. Instead of fishing, killing the bluefin and landing it at ports, the fish were towed live — sometimes for months — to sea ranches where they were fattened for as long as a year before being slaughtered and shipped in huge reefer vessels slated for Japan. Ranches spread across the Mediterranean, some in little regulated places like Cyprus, Turkey and Tunisia. With live fish in underwater pens, the ranches proved to be easy places to hide illegally caught bluefin. Indeed, the facilities quickly became a worrisome counterpart to the oversized and out-of-control Mediterranean fleets of purse seining vessels, ships equipped with giant nets capable of catching entire schools of the fish.

 

Fleets routinely overfished their ICCAT-established quotas, sometimes by 100 percent, and ranches hid what they were doing. The ranches, in effect, “laundered” the extra fish by under-reporting the amount they took in and manipulating fattening ratios to account for the weight of the off-the-books catches, according to interviews with ranchers, inspectors and officials.

 

 Illegalities occurred, fishermen and officials said, because the demand for bluefin in Japan was so huge. “The Japanese needed it. They wanted more and more. Anything,” said a scientist who works closely with the bluefin industry in Croatia.

 

Japan’s taste for tuna is a rather modern trend. In fact, up until the mid 19th century, the Japanese found the easily spoiled, bloody tuna fish unappealing. Some decades later, exposure to American-style foods during World War II created demand for fattier fish, say historians. But it wasn’t until the 1960s that Atlantic bluefin from North America entered the local market.

 

Traver Riggins, Scilla Alecci, and Miranda Patrucic contributed to this story

This articles is part of a series of 6 articles: Please read atuna.com tomorrow for Part 6