The European Union and sustainable fisheries regulations : a study on how a fisheries export ban by the European Union impacted the yellow-fin tuna value chain and showed the adaptive capacity of yellow-fin tuna exporte

The European Union and sustainable fisheries regulations

chain and showed the adaptive capacity of yellow-fin tuna exporters in Sri Lanka

Elise Hakkaart

Elise Hakkaart 10003204

MA Thesis Human Geography Supervisor: Joeri Scholtens Second reader: Eric Chu

1 Acknowledgements

There are several people I owe thanks to for helping me complete this study. First of all my supervisor Joeri Scholtens for his suggestions that formed the basis of this research and his

knowledge, ideas and suggestion during the whole process of writing a master’s thesis. Also, I want to acknowledge dr. Maarten Bavinck for his ideas and suggestions during the proposal writing stage of this project. Secondly, to my local supervisors dr. Nilantha Da Silva and dr. Oscar Amarasinghe of the University of Ruhuna, Sri Lanka for sharing their knowledge about Sri Lanka and the country’s fisheries industry. I must also thanks dr. Da Silva for inviting my fellow research student and me to her house and let us taste all sorts of Sri Lankan delights.

Furthermore I would like to thank Dilanthi Koralagama for helping us to get entrance to our research area so easily, mister Herman Kumara for providing us with translators and mister Steve Creech for giving me very useful contacts. I owe a huge thanks to Michelle Hu, my fellow student and with whom I spend 10 weeks together in Sri Lanka during the fieldwork. Without her this experience would not have been the same, and I feel like I made a friend for life. My gratitude goes out to Eran Fernando, who helped us not only as translator during the fieldwork but also helped us guide, interpret and understand more about, not only the Sri Lankan fisheries but also through introducing us to the numerous aspects of Sinhalese life. I must also thank Anton Britto for his sharing his knowledge on the fisheries industries in Sri Lanka and his patience with Michelle and me during our road trips.

Also I want to thank my family and friends for their support during the whole process and last but definitely not least, I want to thank the climate babes for the incredible Masters year.

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ONTENTS

2. Conceptual background to the study ... 8

2.1 The EU and Ecosystem integrity ... 8

2.2 The EU and IUU fishing ... 8

2.3 Placing Sri Lankan tuna fisheries in the global tuna value chain. ... 10

2.4 Introducing the Negombo tuna fishery sector ... 11

3. Methodology ... 12

3.1 Units of analysis ... 12

3.1.1 Primary unit of analysis –Sri Lankan Yellow-fin tuna exporters ... 12

3.1.2 Secondary Units of Analysis – Actors in the value chain and other officials ... 12

3.2 Mapping the value chain ... 13

3.3 Participatory Observation ... 13

3.4 Interviews ... 13

3.4.1 Semi structured interviews ... 14

3.4.2 Unstructured interviews ... 14

3.4.3 Structured interviews ... 14

3.4.4 Document analysis for secondary data resources... 15

3.5 Sampling and Representativeness ... 15

3.5.1 Sampling and representativeness of the primary unit of analysis ... 15

3.5.2 Sampling and representativeness of the second unit of analysis ... 15

3.6 Data Analysis ... 16

4. Theoretical framework ... 17

4.1 Value chain ... 17

4.1.1 Key actors and activities ... 17

4.1.2 Relationships within the value chain ... 18

4.1.3 Strategic position of firms within the value chain ... 19

4.1.4 Rents and Finance ... 19

4.1.5 Value Chain in Fisheries ... 20

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4.2 Adaptive capacity ... 21

4.2.1 Resilience, vulnerability and adaptive capacity... 21

4.2.2 Resources; social, financial and political capital ... 23

4.2.3 Governance structures and institutions ... 24

4.2.4 Operationalization adaptive capacity ... 24

4.3 Conceptual framework ... 25

5. Ethics ... 26

5.1 Gaining access to the first unit of analysis ... 26

5.2 Gaining access to the second unit of analysis ... 26

5.3 Limitations ... 27

6. The Value Chain for Yellow-fin Tuna in Sri Lanka ... 28

6.1 Main actors and activities in the value chain ... 28

6.1.1 The crew and boat owner ... 29

6.1.2 The export merchants ... 30

6.1.3 Processing and Export ... 32

6.2 Relationships within the value chain ... 32

6.3 Strategic position ... 33

6.4 External effects on the value chain ... 33

7. Adaptive capacity ... 34

7.1 Adaptive capacity before the EU ban- from yellow card to red card ... 34

7.2 Adaptive capacity during the EU ban – from red Card to the lift of the EU ban ... 35

7.2.1 Market adaptation... 35

7.2.2 Financial adaptation ... 36

7.2.3 Innovative adaptation ... 37

7.2.4 Political Adaptation ... 37

7.3 Adaptive capacity after the EU ban –from the lift of the EU ban to now ... 39

7.3.1 Chances and expectations ... 39

7.3.2 Concerns ... 40

8. Conclusion and long term governance consequences ... 41

8.1 Summary of the findings ... 41

8.2 Broader results of the ban ... 42

8.3 Theoretical reflection ... 42

8.3.1 Financial and social resources ... 42

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8.4 Policy recommendations ... 43

8.5 Final Conclusions ... 44

Literature ... 45

Appendix 1: Interview scheme ... 51

Appendix 2: List of interviews: ... 56

Appendix 3: Determinants of Adaptive capacity ... 59

Appendix 4: SEASL Member Companies ... 60

Appendix 5: List of approved export processing plants ... 61

Appendix 6: International Trade of fish and fisheries products Sri Lanka 2012-2015 ... 68

5 The purpose of this study is to explore the impacts of a European Union export ban that has been implemented by the European Commission. This ban is the consequence of new EU regulations that came into force in 2010 in order to combat illegal, Unreported and Unregulated (IUU) fishing. Sri Lanka received such a ban in 2015. Placing the ban on Sri Lanka meant that all fisheries products from Sri Lanka where restricted from reaching the European market. By imposing the ban on the fisheries branch all actors in the fisheries value chain were impacted, which provided an opportunity to examine what the consequences were on those who are impacted by the ban. The fisheries export ban has potentially a big influence on the exporters themselves, as their main export market got closed off. However no research in Sri Lanka has been done on exporters, so this research will follow an explorative design looking at the adaptive capacity of Sri Lankan yellow-fin tuna exporters. First the value chain before and during the ban will be examined and analysed, in an attempt to

understand the impact of the ban on the different actors. The data contracted from this analysis showed that yellow-fin tuna exporters, even though they lost their biggest export market, managed to survive the export ban. This is an unexpected finding and therefore this it was interesting to further study the adaptive capacity of the tuna exporters. This was done looking at their use social, financial and political resources. The research design for this study consists of mapping, participatory observations and interviews. The mapping and participatory observations is done with all

stakeholders in the value chain and took place in the harbour of Negombo, Sri Lanka in order to understand how the export value chain of yellow-fin tuna is constructed. Interviews with exporters were done in order to gain deep insight in their capacity to adapt to the EU ban and were undertaken mostly in the offices of exporters fish processing plants.

Findings reveal that under the pressure of income loss because of a closed of market, the exporters used their social and financial capitals to get loans, find alternative markets or transforming into export hubs. However, these new ways of adapting to the ban cannot be seen as viable alternatives to the EU market. Important to acknowledge is the way the exporters adapted to the ban was by using their political capital. This culminated in an intensive cooperation between the private and public sector started. Immediately after he got elected in 2015, president Sirisena called in actors from the fisheries export branch to consult about the EU ban. This resulted in a steering commission to combat IUU fishing containing both members from the government and the Seafood Export Association Sri Lanka (SEASL). Without the progress this commission made implementing IUU regulation, the ban would not have been lifted in April this year.

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Appendix 1 -Coding scheme Appendix 2 - List of interviews

Appendix 3 - Determinants for adaptive capacity Appendix 4 - List of SEASL members

Appendix 5 - List of EU approved export-processing plants

Appendix 6 – International trade of fish and fisheries products Sri Lanka 2011-2015

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CO Carbon Monoxide

DFAR Department of Fisheries and Aquatic Resources

EC European Commission

EDB Export Development Board

EEZ Exclusive Economic Zone

EU European Union

FAO Food and Agriculture Organisation

GDP Gross Domestic Product

GVC Global Value Chain

HACCP Hazard Analysis and Critical Control Points IPCC International Panel on Climate Change ISO International Standardization Organization IUU Illegal, Unregulated and Unreported Fishing

MDB Multiday Boat

MFAR Ministry of Fisheries and Aquatic Resources Development

Mt Metric tons

NARA National Aquatic Resources Research & Development Agency

NGO Non-Governmental Organisation

RFMO Regional Fisheries Management Organization

QMS Quality Measurement System

SEASL Seafood Exports Association Sri Lanka SES Social-Ecological System

UNODC United Nations on Drugs and Crime

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1. I

NTRODUCTION

Nowadays almost 75 percent of the world fisheries are significantly depleted, overexploited or fully exploited (FAO, 2012). Illegal Unregulated and Unreported (IUU) fishing is seen as one of the biggest contributors to this problem as it is estimated on average 18% (11-26 million tons) of the global catch is illegally caught each year (Petrossian, 2014; UNEP, 2016). Therefore IUU fishing is being called on of the major environmental challenges nowadays as IUU fishing undermines ecosystem integrity with consequences for both (global) society and economy (IUU Handbook, 2009). In the light of ecosystem integrity the European Union rules to combat illegal, unreported and unregulated (IUU) fishing (IUU Handbook, 2009). In short IUU fishing refers to “Fishing activities, which violate or disregard national or international rules governing fisheries” (Rigg et al, 2003:6). According to existing literature the management of fisheries is failing worldwide and there is still no consensus on what the best way is to govern fisheries, therefor more research is needed on how attempts at governing fisheries resources are working out in reality. As the EU has blacklisted and will continue to blacklist countries due to incompetent fisheries management, it is very interesting to study how such a ban affects the people involved. This is also the social relevance as the results will give an insight in the adaptive capacity of individuals and groups being placed under future bans.

This research looks at the impact of a EU ban on the small island state Sri Lanka. Sri Lanka has been warned by the EU multiple times for not actively combatting IUU fishing in Sri Lankan waters. This warning consisted of the possibility of an export ban of all fishery products from Sri Lanka to the EU market. This could have been disastrous for Sri Lanka since the EU was their biggest export market for fisheries products, and especially tuna. However, after two years of warning the Sri Lankan government, the EU imposed an actual export ban in January 2015 because the island state was ‘not complying with international rules on illegal fishing and their control systems were inadequate’ (EC press release database, 2014). The ban was active for one and a half year when in April 2016 the ban got lifted due to the fact that the Sri Lankan, in 2015 elected, government was able to implement the IUU regulations to the satisfaction of the EU. In the year and half of the export ban the Sri Lankan fisheries export branch had to survive a closed off EU market what makes it interesting to look further into how the yellow-fin value chain got impacted by such EU bans and therefore how Sri Lankan exporters were adapting to the new circumstances appearing because of the EU ban. Therefore, the main aim of this research is to examine the adaptive capacity of Sri Lankan tuna exporters, when experiencing shocks such as the EU ban through exploring changes in the yellow-fin tuna value chain. To research these impacts the following research question is formulated:

“How is the adaptive capacity shown by Sri Lankan tuna exporters when coping with the EU export ban?”

The main research question will be addressed by a variety of methods using the following sub questions:

 ‘How is the Sri Lankan yellow-fin tuna value chain constructed?’

 ‘What are the implications of the export value chain of yellow-fin tuna changes on Sri Lankan tuna export companies?’

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This research will be divided in 8 chapters. In the first chapter an introduction into this study is given. In the second chapter the conceptual background is described. The third chapter holds the

methodology. In the fourth chapter the theoretical framework is set out. Followed by the ethics in the fifth chapter. Results of the fieldwork are described in chapter six and seven. Finally, in the eighth chapter the conclusions are written down, hopefully with some useful recommendations.

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ONCEPTUAL BACKGROUND TO THE STUDY

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As the global temperature increases, sea level rises, oceans get more and more acidified and other climate change impacts are seriously affecting coastal areas European Union Member States expressed their commitment to protect the planet from degradation and take urgent action on climate change in the United Nations Agenda2030 for Sustainable Development.

This Agenda2030 describes climate change as “one of the greatest challenges of our time” and “worries about its adverse impacts undermines the ability of all countries to achieve sustainable development” (Agenda2030, 2015:4). Oceans are the main managing mechanism of the global climate, as they host sinks for greenhouse gases and they provide us water and oxygen. Because oceans, seas and coastal areas form an integrated and essential element of the Earth’s ecosystem, they contribute to poverty eradication by creating sustainable livelihoods and generating work. Over three billion people depend on marine and coastal resources for their livelihoods, so oceans are crucial for global food security and human health (Agenda2030, 2015). With that biological support system of our planet at risk, also the survival of many societies is threatened. The United Nations’ Agenda (Agenda2030, 2015) addresses all of these points with the concept of Ecosystem integrity. This concept allows for the provision of so-called supporting ecosystem services which, in turn, are the bases of important regulating, provisioning and cultural ecosystem services that are of crucial importance for humans. Ecosystem integrity calls for a new kind of ocean ecosystem governance. As oceans, seas and coastal areas form an integrated and essential element of the Earth’s ecosystem the are crucial for global food security and human health.

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IUU

Nowadays, one of the biggest threats for ecosystem integrity is Illegal Unreported and Unregulated fishing as breaking fisheries laws places marine biodiversity and sustainability of marine ecosystems in danger (Agenda2030, 2015). One of the biggest problems for sustainable fisheries comes from the fact that because of the transboundary identity of sustainable fisheries most of its challenges are not dealt within, but between the countries, regions or international institutes (Gupta, 2013). Most of the time IUU fishing is conducted by national or foreign vessels in waters under the jurisdiction of a state, without the permission of that state, or in contravention of the laws and regulations of that state. In order to stop illegal operators to gain any profit from their activities the European

Commission presented a legal framework that ensures coherent application of the IUU Regulations. These IUU regulations are centred on the legislative rules that only marine fishery products validated as legal by competent flag state or exporting state can be imported to or exported from the EU.

9 The following definitions of IUU fishing will be used in this study:

Illegal fishing: ‘specifically refers to fishing that is conducted by national or foreign vessels in waters under the jurisdiction of a state, without the permission of that state, or in contravention of the laws and regulations of that state. It also constitutes fishing that violates the laws, regulations, and conservation and management measures adopted by a fishing vessel’s flag state, or which generally violates national laws or international obligations, the obligations of cooperating states to relevant regional fisheries management organizations (RFMOs). Illegal fishing has been defined as an ‘environmental crime’ by the United Nations Office on Drugs and Crime (UNODC) and a number of NGOs and academic commentators, and was “identified as a ‘new trend in crime’ in the Salvador Declaration of the Twelfth United Nations Congress on Crime Prevention and Criminal Justice in 2010’ (Bondaroff et all, 2015:12).

Unreported fishing: ‘refers to fishing activities “which have not been reported, or have been

misreported, to the relevant national authority, in contravention of national laws and regulations,” or similar lack of reporting or misreporting to regional fisheries management organizations. Unreported fishing can be both intentional and unintentional. Fishers may only report a portion of a catch in order to fall within quotas, may fail to report the harvest of non-targeted species, or simply avoid reporting all together. A lack of reporting and underreporting catches is ‘a violation of quotas, and complicates scientific tallies of fish stocks, confounding conservation and management efforts’ (Bondaroff et all, 2015:12).

Unregulated fishing: ‘is a broader term that includes fishing conducted by vessels without nationality, or those flying the flag of a country not party to a RFMO within the jurisdiction of that RFMO, or more generally fishing in a manner that contravenes the regulations of the RFMO. This also includes fishing in areas or for fish where there are no applicable conservation or management measures, and “where such activities are conducted in a manner inconsistent with State responsibilities for the conservation of living marine resources under international law’ (Bondaroff et all, 2015:12).

IUU fishing thus constitutes of fishing that violates the laws, regulations, conservation and

management measures adopted by a fishing vessel’s flag state. Also generally violating national laws or international obligations to cooperate between states in order to implement relevant regional fisheries management organizations (RFMOs) is seen as IUU fishing. The RFMO regularly issues a list in which IUU vessels are identified. Also, the IUU regulations allows the EU to take action when rules on management and conservation of fisheries resources in national and international waters are violated, by blacklisting states that turn a blind eye to illegal fishing activities and therefor EU operators who fish illegally anywhere in the world, under any flag, face substantial

penalties proportionate to the economic value of their catch, which deprive them of any profit (Bondaroff et all, 2015).

In practise this means that the EU has warned, and is warning, several countries to halt IUU fishing and move to regulate practices in order to save the sustainable use of fishing practices. Although all sorts of countries get warnings, mostly smaller countries actually do get a ban. Sri Lanka is one of the countries that received several warnings from 2010 to 2015 (Smith, 2014). The small island state lacked strong and effective conservation and management measures to decrease IUU fishing, and therefore did not take enough action (IUU handbook, 2009/ EC press release database 2014b) Therefore, on 15/01/2015, the EU placed a ban on the import of fisheries products from Sri Lanka to

10 the EU (EC press release database, 2014b). This ban means that EU member states refuse import of fisheries products from Sri Lanka and also includes a ban on fishing in the waters of Sri Lanka by EU flagged vessels, on joint fishing operations, on the reflagging of EU vessels to Sri Lanka, and on any fisheries agreements (EC press release database, 2014b).

With this in mind and the fact that the EU currently is the largest fish market in the world, the EU can be seen as a very influential seafood trade block (Miller et al, 2014:138). Because of this position EU legislation holds the potential to be very effective in forcing ‘third country’ exporters to regulate their fisheries against IUU fishing (Wilkinson, 2015). However, a pivotal study by David Agnew (2009) found a significant relationship between World Bank governance indicators and levels of IUU fishing. They concluded “developing countries with poor governance records are [not] necessarily to blame for illegal fishing, but that they are more vulnerable to illegal activities, conducted by both their own fishers and vessels from distant water fishing nations”. Therefore it is necessary to stay critical and study the effects a EU ban has on those countries. Also important to keep in mind is that although the EU came up with a legal framework to deplete IUU fishing, the high seas are very difficult to patrol for not only jurisdictional but also spatial reasons, as the cover almost 45% of the planet, as well.

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The end of three decades of civil unrest in 2009 meant a significant growth for the fisheries sector through exploiting high seas for tuna fishing and value addition. In 2014 the fisheries sector accounts for 1.8% of the Sri Lankan GDP. The total fish production in 2014 amounted to 535,050 metric tons (Mt) and it value addition was Rs. 176,239 million (€ 1,2 billion). The fisheries sector grew in 2013 with 12.7% and in 2014 with 4.5% (MFAR, 2015). Over 192,000 households and 222,160 fishermen and women depend on the income gained through fishing and related activities. From 2002 on Sri Lanka has been steadily increasing its share in the international market. The fisheries sector has generated Rs. 34,797 million (€ 214 Mn.) of export earnings in the year 2014 and it was accounted for 2.4 percent of total export earnings. A positive trade balance of Rs. 15,937 million (€98,5 Mn.) was indicated for external trading of fish and fishery products (MFAR, 2015; EDB, 2016).

Sri Lanka is considered one of the best quality tuna suppliers to the world. These include sashimi quality tuna, tuna loins, fresh tuna steaks, tuna topping and tuna Saku blocks. Before the ban the European market was the main export market for tuna. Main importer was the United Kingdom followed by France, Italy, Netherlands and Germany for processed and semi processed products and Japan for fresh and frozen products. Especially Sri Lankan yellow-fin tuna is a wanted export product and its annual catch increased from 29,320 Mt. in 2000 to 45,200 Mt. in 2014 (MFAR, 2015).

11 However since the EU ban in 2015 the fisheries export income dropped from Rs. 26,230 million (€ 161 Mn) in 2014 to Rs. 16,665 (€ 103 Mn.) in 2015 (MFAR, 2015; EDB, 2016).

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Sri Lanka has 15 fisheries districts. Negombo is one of them and situated in the administrational district of Gampaha, in the Western Province of Sri Lanka. Negombo had 10.020 active fishermen in 2014, which accounts for the lowest number of all fisheries districts. However the negombo harbour, which was commissioned in 2009, holds the third largest amounts (646 in 2014) of multiday fishing boats (MDB) in Sri Lanka. These boats are used for marines fishing in the high seas and outside Sri Lankas’ Exclusive Economic Zone (EEZ). In 2014 the total catch of marine fish in Sri Lanka was

459.300 Mt. in which Negombo was accounted for 38,030 Mt. This is over 8% of the total fish catch.

The production of marine fish in Sri Lanka was 535,050 Mt. of which 38,348 Mt. was processed in the Gampaha district. Approximately 11,5 % was yellow-fin tuna (MFAR, 2015). This makes the tuna sector an important income branch in Negombo.

Fig 1. Gampaha District and Negombo city . Source: HIC

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3.

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ETHODOLOGY

When selecting research methods for this project, the nature and the setting of the study let to the decision to use an exploratory qualitative approach. Qualitative techniques include for example a) In-depth interviewing, b) participant observation, c) case studies or d) elite or expert interviewing, e) document analysis and f) experience surveys (Blumberg, 2005).

Exploratory research is useful when there is a lack of knowledge about the problems to be

addressed. The goal is to establish concepts and operational definitions that can be useful for future research. Exploratory studies are conducted when the area of the investigation is quite new and results from previous research are vague and important variables are not known or acceptably defined (Blumberg, 2005). In this research the main emphasis in the first part of this study was mapping the value chain. The mapping was done using participatory observation and several forms of interview techniques (primary data) but secondary data analysis were also used when available. The lack of reliable secondary data from Sri Lanka fisheries made the use of preliminary interviews necessary. The emphasis in the second part of this study was to find the ways in which yellow-fin tuna exporters showed resilience in order to survive the EU ban. The data collection was done via semi-structured interviews, in order to get more in-depth, rich information.

This research is carried out with a 10-week fieldwork from 23rd of March 2016 to 26th of May 2016 in Negombo fisheries District in Sri Lanka

3.1

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In order to study the impacts of the EU ban, two units of analysis are identified. The first unit of analysis is the Sri Lankan yellow-fin tuna exporters because they form the core group for this study and the second unit of analysis contains all the actors in the value chain.

3.1.1

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In aiming to assess the impact of the EU ban on the resilience of Tuna exporters, evidently follows that the primary unit of analysis for this research were the tuna exporters themselves. The tuna export companies were selected and contacted for the in-depth interviews through a list of exporters found on the website of the Seafood Exporters Association Sri Lanka (SEASL), contacts of local

supervisors, and contacts made during the fieldwork in the harbour of Negombo. Because the aim of this research is to understand the ways in which exporters adapted to the EU ban there has not been focussed on the differences between single export companies. However, to get an as complete as possible understanding of the adaptive capacity of the exporters there is taken into account that differences between export companies do exists as some have different export capacity then others and therefore have diverse ways to adapts, hence the selected exporters are owners of both larger or smaller, and also older or newer companies.

3.1.2

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As previous described is the main consequence of the EU ban loss of market access. In order to understand this impact of the EU ban on Tuna export companies, it is necessary to assess that loss of market assess, in the whole tuna sector. A secondary unit of analysis is therefore included, aiming to look into the value chain of tuna. Interviews have been conducted with key actors at different levels of the value chain. First contacts were made with crewmembers of the fishing boats and the boat owners. Secondly, interviews were done with fish merchants that buy fish from the boats in the study harbour, and then with representatives from fish export companies who are the key actors

13 that sell tuna (and other fish) to clients outside Sri Lanka and will therefor be affected by the EU ban. Further key actors in this second unit of analysis are organisations directly linked to the government which is the Export Development Board (EDB) of Sri Lanka and the private organisation of the Seafood Export Association of Sri Lanka (SEASL). Both organisations have influences on how the government handled the EU ban and therefore their knowledge is crucial in understanding the context of the resilience of the tuna exporters. Statistics from both the government and the EDB provides useful overviews into the nature tuna export companies, and the export value chain. Further consideration of methods and sampling for this unit of analysis is discussed later in the chapter. It is this unit of analysis that was most deeply studied through the course of the research process.

3.2

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The collection of data for the value chain analysis will be done using the framework as described in the theoretical framework. In practice cluster mapping was used, starting with identifying the key players in the fisheries sector who provide services to the value chain—such as fishers, merchants, exporters and also government officials. Also, an inventory was made, by doing participatory observation, on what services the key players currently exactly provide, and how that differs from how they worked before the ban.

Furthermore, the relationships within the value chain were mapped, as well as the strategic position within the value chain and the external forces on the value chain. Third, both unstructured as semi-structured interviews with stakeholders identified in the mapping and inventory exercises, were conducted to get a more in-depth overview on how the fish value chain is constructed and if the chain had changed due to the EU ban. Lastly, with the identification of the changes in the value chain an overview of how the value chain was influenced by the EU ban was given, and could therefor be used to look further the second part of this research on how resilience is shown by yellow-fin tuna exporters (Fries & Akin, 2004).

3.3

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In order to gain insight into the activities of the actors in the value chain participatory observations have been used main tool. Following Green and Thorogood (2004:132) observations are the ‘gold standard’ of qualitative methods to understand what people say and do, instead of only listen to what they say. Doing participatory observations is time consuming but necessary in order to understand this study and therefore part of the inductive, theory forming process of this research. Because of the exploratory nature of this research, the observations were done in an unstructured manner. Observations for this research were almost always done in the early morning between 5 and 8 o’clock, because that is the time most fisherman/boat owners and suppliers are present and what makes it easier to see what mechanisms are at work. Also observations were done at the processing plants of the exporters, as the value adding takes place during this process. The first three weeks the harbour was visited almost every day, to gain recognition and to build trust, which has been

beneficial for the interview process.

3.4

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Several interviewing techniques were used, based on what was considered the most appropriate for each group of interviewees, would give the most information or for practical reasons. The following interviews were used;

14 • semi structured interviews

• unstructured interviews • structured interviews

3.4.1

S

In this type of interview the questions are pre-planned prior to the interview but the interviewer gives the interviewee the chance to elaborate and explain particular issues through the use of open-ended questions. This method is used in order to get rich responses and in-depth information, not hindered by the use of a structured format (Bryman, 2008) Also it has been recommended that open-ended questions should be piloted in advance, so before doing an interview the questions where practised (Dörnyei, 2007). The information of the observations and the operationalization process has been used to carry out the key component of this research, namely semi- structured, in-depth interviews. The aim of the interviews has been to create clear, detailed stories of tuna exporters resilience capacities. Following Bryman (2008:442) the choice to do semi-structured interviews has been made because they allow for a flexible approach. With only the key questions already

formulated in advance, this interview method is really flexible, which is crucial in this exploratory research, because it allows for the development of new data from the informants opinions (Bryman, 2008:ibid). The interviewer met participants and the interview was done face to face with a

maximum participation of the interviewees in mind. The participants were strangers to the

interviewer, though their input is normally more effective when a friendlier environment is created (Blumberg et al., 2005). It has to be kept in mind that the interviewees’ interest in the process may not be obvious compared with the benefits to the interviewer (Thordarson, 2008).

3.4.2

U

Unstructured interviews are similar to normal conversations using no previously prepared list of questions. The interviewer enters into a conversation about a matter or matters relevant to the research in an impromptu setting without a planned sequence of questions. Information for the study is gathered in situations using a free flow of questions (Sekaran, 2003). The first objective to use unstructured interviews was to bring some preliminary issues into the study, giving ideas for further semi-structured interviews later on. Another objective was more practical, because the fieldwork took place over a time period of 10 weeks sometimes it happened that the interviewer randomly spoke to someone who gave valuable information about the fieldwork area and the people working and living in that area. Because of the unpreparedness of these talks, and the valuable information, this research also used unstructured interviews in order to get information.

3.4.3

S

This study also used structured interview due to practical reasons, as one of the key participants could not be met in person. Therefor a topic list was send to him by email, which he also responded over email. As the participant was one of the last persons to be interviewed, the interviewer already knew what kind of information was needed, and could therefore build a topic list with questions based on the unstructured and semi-structured interviews already done (Sekaran, 2003).

Nevertheless these questions were mostly open questions so the participant had to elaborate on his answers.

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3.4.4

D

Secondary data sources refer to the data that are available in documents. These documents can be letters, diaries, newspapers, journals or state documents (Bryman, 2008).

3.5

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3.5.1

S

The targets for the primary unit of analysis are all active Sri Lankan yellow fin tuna exporters. In order to identify the exporters, primary data as well as secondary data was used. In order to find out which exporters were active in the harbour of Negombo, mapping as explained before was used. To make sure the mapping was done rightly, also secondary data, in the form of two lists both containing Sri Lankan Fish Exporters were checked. One list with export companies got extracted from the website of the biggest seafood export association in Sri Lanka, called Sea Export Association of Sri Lanka (SEASL) (see appendix 4) This list contains members of the SEASL and is supposed to contain all export companies who are in business. After further investigation it turned out that this list was not completely up to date, as some of the export companies did not exist anymore and also many new companies were not on the list. In order to get a clear overview of all export companies existing, another list with “Approved fish processing establishments for export at 31 August 2015” (see appendix 5) was given to me by a contact person from the Export Development Bank. The EDB is the executive arm of the Export Development Council of Ministers, which is the policy-making body of the EDB (EDB, website 2016). Although processing establishments are not the same as export companies, most export companies do own a processing establishment, or sometimes share one. From those two lists only companies who fulfilled two criteria were selected, namely that they were in business, so they could tell their experiences with the EU ban and that they were selling yellow fin tuna. By doing that 20 companies were selected for further research, from which 10 were

interviewed, which counts as 50% of the sample. Consideration has been given to covering a diverse range of cases, therefore export companies with different profit levels were selected through purposeful sampling to try to present the broadest possible ‘picture’ for this research (Cresswell & Clark, 2011:173). The number of export companies’ chosen was relatively small because the aim has been to create in-depth stories of the yellow fin tuna exporters that will lend itself to development of detailed ethnographies of how their resilience (Hammersley & Atkinson, 2007). Therefore this approach has built an in depth picture into how the exporters operate, and then in turn how each exporter shows resilience with the EU ban. In terms of sampling the in depth qualitative nature of this part of the research has meant that there was not intensive focus on ‘representativeness’, as this is not as necessary in qualitative research (Bryman, 2008:366-367), or from the research’s ontological position.

3.5.2

S

The sampling unit of the second unit of analysis consists of all actors in value chain found during the mapping as described in the previous chapter.

The number of interviews fishermen/skippers/boat owners/suppliers assemblers/ suppliers was at least ten per actors unit, which is relatively small, but at all times saturation of information, was reached (Bryman, 2008). Here also, consideration has been given to covering a diverse range of cases, therefore boats with different attributes such as size, age of skippers and owners and focus of catch were selected through purposeful sampling. In this way this study tried to present the broadest

16 possible representation (Cresswell and Clark, 2011). All together 50 interviews were conducted with direct actors in the value chain. Therefore this approach mainly builds upon the framework as described in the theoretical framework (chapter 4), creating in-depth information on how the actors in the value chain operate and also looks into if and how the value chain has changed due to the EU ban. In terms of sampling the in depth qualitative nature of this part of the research has meant that there was not intensive focus on ‘representativeness’, as this is not as necessary in qualitative research (Bryman, 2008:366-367), or from the research’s ontological position. A full list of respondents is available in Appendix 2.

Triangulation of this data has been gained from interviews with individuals in the value chain and government officials in an attempt to gain new perspectives on the impacts of the ban.

3.6

D

A

In this exploratory qualitative research, the analysis of the observations began directly while in the field. The information gathered was used to inform lines of enquiry created from operationalization of the concepts detailed in the previous chapter. The collection of qualitative data for the first part of the research was done by structured mapping. The mapping was done in such a way that all

observed information could be directly placed into the right frame. The mapping results collected in ‘the field’ was directly followed with transcription and then coded using Atlas.ti. This was necessary to make sense of the data. The data gathered for the second part of the research came from in-depth interviews. The interviewer took notes during the interview. These notes were directly coded using Atlas.ti (see appendix 1). The data arranging was done in order to identify patterns and relationships with which to build theories, as described by Boeije (2010:76).

17

4.

T

HEORETICAL FRAMEWORK

This chapter provides the theoretical basis for the study. Two concepts are at the core of this research: value chains and adaptive capacity. First, the value chain help identify and address

bottlenecks that block economic opportunities, and can therefore help understand the effects of the EU ban on market access, as well as on adaptive capacity and outcomes (Fries & Akin, 2001).

Secondly, the concept of adaptive capacity is used to explore how individuals cope with crisis or “shocks” (Allison and Ellis, 2001). By looking at the different resources the exporters have and how they use those is useful to understand how Sri Lankan tuna exporters have adapted to the EU ban. Thirdly, a conceptual framework will show how these concepts influence one another.

4.1

V

The first step in this research is to understand the changes in the tuna value chain due to the ban. Therefore the concept of the “Value Chain ” will be elaborated on. Primary thing to understand is that all trade takes place within value chains. Kaplinsky and Morris (2000:4) define value chains as: ‘the full range of activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers, and final disposal after use’. Keane (2013) adds that nowadays the value chain has a more global character, which focuses “on the dynamics of interfirm linkages and international industrial organization, as opposed to considering production and export of goods in isolation” (Keane, 2013:3). Because of this interconnectedness global value chains (GVC) are seen as a key factor in improving overall people’s income. GVC is influenced by open trade policies, because of ‘a broadening of openness to more poor countries serves to reduce poverty’ (Berg and Krueger, 2002:30). These open trade policy influence government interventions, which allows for growth or creation of new markets (Keane, 2013).

4.1.1

K

In general a value chain consist of a supplier supplying raw material to processors, who process products/services and on their turn supply to consumers who distribute to consumers. In reality value chains systems are much more divers and complex as is shown in Figure 3, which compares a simplified value chain to a more ‘real’ and complex chain (Brown, Bessant, & Lamming, 2000).

figure 2. Value chain mapping: Theory and reality (Brown et all, 2000)

18 chain, because every actor in the value chain has to understand the overall costs and profit margin and be able to identify it, so that in the end the user is paying the total value added (Shank & Govindarjan, 1992; Galbraith & Kazanjian, 1986). A value chain consists of an upstream and downstream part. Suppliers of raw materials where value is often added by reducing the raw material costs with standard commodities and homogenous products are seen as upstream

competitors. Downstream competitors are closer to the end user and therefore have more emphasis on marketing. Between upstream and downstream actors are the processors chancing raw material into more complex products (Galbraith & Kazanjian, 1986). Every link in the chain executes value activities; these activities consist of information flows, inbound and outbound logistics and flow of finance.

Fig 3.The flow of information, logistics and finance (Thordarson, 2008)

As can be seen in the figure information flows in both directions. An example of this is information on consumer preference flowing through the marketing sector, secondary sector, and primary sector, production, all the way to the supplier. Information can also flow the other way around. An example of that is that a supplier provides information about ingredients in the products to the consumer. Inbound and outbound logistics flow downstream towards the customers and financial activities flow upstream through the value chain where the final payment comes from the consumer (Thordarson, 2008).

4.1.2

R

In a value chain all activities are linked and can therefore affect the performance of other firms (Porter 1985). Porter (1985) states that value adding often puts emphasis solely on purchasing raw materials at a low price and selling at a higher price, missing the importance of increased margin by close relationships and collaborations between suppliers and customers, creating mutual value among firms within the value chain. The value added concept ignores activity made further upstream, before raw materials enter a factory and also after they are shipped out on their way further downstream in the chain. Therefore it is possible that firms miss the opportunity to lower costs at these steps in the value chain (Thordarson, 2008). Also the potential of firms to share and obtain information of the market, participants and costumers to develop new products or improve existing ones, are key to innovation and performance of firms in the value chain. This ability to learn and share knowledge between people and firms using close collaboration creates a win-win scenario (Calantone et al., 2002; Pitta et al., 2004).

19 Alter and Hage (1993, cited in Knutsson, 2001) state that trust is considered to be one of the key incentives for successful alliances between firms. A lack of trust is therefore seen as one of the most damaging factors of a firm’s relationship with other actors in the chain. The use of power and the way it is distributed also influences the trust and therefore the cooperation between firms. When power is distributed destructively a successful and trustworthiness relationship cannot exist. But as long as all partner in the value chain benefit from the relationships, the value chain will be successful. However, for a long-term relationship it is essential that the actors in the chain treat each other with loyalty and respect (Pitta et al, 2004).

4.1.3

S

Firms focus on making strategic decisions and dedicate themselves to exclusive segments to gain superiority over their rivals in that focused area and as a consequence capture the value it creates for the customers (Thordarson, 2008). The strategic position of firms within the value chain is influenced by so called ‘driving forces’ causing changes affecting their competitive structures and business environment. The most common forces are (Thompson & Strickland, 2001).

• Increasing globalization

• Change in long-term industry growth rate

• Change in who buys the product and how it is used • Product innovation

• Technological changes • Marketing innovation • Entry or exit of major firms • Regulatory influences • Government policy changes • Reduction in uncertainty • Business risk or the opposite

The ability to change positions and strategy can strengthen its competitive forces. Such a structural change can help an industry or firm from stagnation to profitability (Thordarson, 2008). An example of a structural shift is the introduction of foreign markets (Porter, 1985).

4.1.4

R

F

According to Ricardo (1772-1823) “Rent is that portion of a land’s produce which is paid to the landlord for the use of the original and indestructible powers of its fertile soil” (Ricardo, 1817:33 cited in Kaplinski, 2000). Ricardo distinguishes between rent as a “factor income” (when paid for use of land or other vast resources) and “economic rent” (profit from operation) and also took into account the scarcity of land and unequal access of people to it (Thordarson, 2008). Freedman (1976) adds that: “…economic rent may arise not just from natural bounty, but also as producer surpluses that are created by purposive action. These augmented rents have become increasingly important since the rise of technological intensity in the mid nineteenth century” (cited in Kaplinski, 2000:123). Following these two descriptions of Ricardo (1817) and Freedman (1976) ‘economic rent’ is very dynamic and include technological capabilities, organizational capabilities, skills and marketing capabilities, often called core or dynamic capabilities in science (Kaplinski & Morris, 2000). When using this ‘economical rent’ in their advance firms can turn rent into consumer surplus and gain competitive advantages

20 relative to their rivals (Thordarson, 2008). Kaplinski & Morris (2000) state that not all rent is

economical, but can too arise from access of scarce natural resources, like fish stocks, or are

provided by external parties, as for example through government policy or international convention. In order to completely understand the income distribution, also a focus on entry barriers is required. As a consequence of strong competition profit can be lower but when a company is able to be dynamic it can strengthen its competitive position. For example endogenous rents or entry barriers created directly by actors could strengthen the position of the firms in the value chain. Another example is exogenous entry barriers, created from outside the value chain, as for example government policy or regulations (Kaplinski & Morris, 2000).

In order to understand why some activities in the chain have higher return than others, it is helpful to map the activity and the value creation of firms, using the concept of rent. When mapping the distribution of income it is important to acknowledge the barrier to the industry, limiting the competitive pressure, as with a higher barrier to enter the higher the level of profitability (Kaplinsky & Morris, 2000). Last but not least, to understand the distributional outcomes phenomenon it is necessary to focus on income at different levels of the value chain, instead of focusing only on profit (Thordarson, 2008).

4.1.5

V

C

F

Historically, fisheries market has been seen as being one of the most dynamic food supply chains in the world, especially in the upstream sector of it. The value chain in fisheries also differs from traditional industry and service in one key aspect, which is that the raw material comes from renewable resources. Nowadays, the chain is characterized by globalization and diversification (Tveteras & Kvaloy, 2006). Globalization can have a high impact on which activities are subject to increasing returns and which will be declining, and influence the nature of return, rent, etc.

throughout the various links in the value chain (Kaplinsky and Morris, 2000). And with international fish trade increasing over the last decades and mostly because of the rapid growth of export from developing to developed countries, has led to concerns about the sustainability of fisheries and distribution of value sharing to the upstream sectors in developing countries (Thordarson, 2008). If markets would work perfectly, everything will be sold for an acceptable price for both buyers and sellers. In such a perfect market for fisheries the first transaction would be a processor buying a fish from a vessel. Further on, a producer who buys from a vessel and sells it through a wholesaler to a secondary processor. The processor then makes value added fish fillet breaded and packed especially for the costumer (for example a supermarket). The last transaction is made by costumers, who buy the fish from the supermarket (Thordarson, 2008).

4.1.5

O

Firstly, to research the value chain of the Sri Lankan yellowfin tuna the framework as proposed in the research of Gestsson et al. (2010) is used, because it fits the value chain as described in the

theoretical framework. This framework looks at four key factors responsible for affecting a value chain. However, because of the explorative character of this study not all these indicators will be examined exactly as showed below but used as a handhold in order to help identify relevant indicators during the fieldwork.

1. The structure of the value chain and the main actors and activity a. The value addition in the value chain

21 c. Main activity

2. Relationship within the value chain a. Collaboration between actors b. Flow of information and knowledge c. Power and trust

d. Governance

3. The strategic position within the value chain a. Driving forces within the industry

b. Competitive advantage

4. External forces on the value chain a. Value chain in fisheries

b. Government intervention

The first part looks into the structure of the value chain and the actors and the activities within the system. More specifically this included looking at capacity, quantity and prices of products, including the value adding in the value chain.

The second part looks into the relationship between actors in the value chain. More specifically, how is the collaboration between the actors, and how is power and trust distributed. Also the governance of the value chain will be looked into, as this will explain who decides what to produce, how and when. In the third part the driving forces as mentioned in the theoretical framework are identified and analysed. The fourth part looks into external matters like the uniqueness of the fisheries and the ways government intervention for the industry.

4.2

A

Climate change and the capacity of the global community to adapt to those changes gained attention in the past decade, resulting in several climate change and adaptive capacity studies (Pielke et al., 2007). These studies raised awareness for the need of action on climate change, which resulted in the EU regulations against IUU fishing and therefore the EU ban on Sri Lankan fisheries export (European Commission, 2014). The majority of adaptation research originates within the frameworks of resilience and vulnerability(Eakin and Luers, 2006; Folke, 2006). In order to understand the concept of adaptive capacity, also the concepts of resilience and vulnerability will be first elaborated on.

4.2.1

R

,

The resilience perspective emerged form ecology in the 1960 through studies focussing on the relations between functioning systems, rather than the stability of its component populations, or even the ability to maintain a steady ecological state (Pimm, 1984; Gestsson et al., 1995; Folke et al, 1996). Furthermore, Holling (1973:17) defined ecological resilience “as the capacity to persist within a domain in the face of change” and proposed that “resilience determines the persistence of

relationships within a system and is a measure of the ability of these systems to absorb changes of state variables, driving variables, and parameters, and still persist”. Adger (2000) states that

22 in relation to social change. Adger (2000:358) defines social resilience “as the ability of human communities to withstand external shocks to their social infrastructure, such as environmental variability or social, economic and political upheaval”. The concept of social resilience thus captures the ability of people and ecosystems together to adapt to changing risks and opportunities (Adger, 2000). Another founder of resilience thinking is Gunderson (2000). Gunderson (2000) links ecological and social resilience as he states that changes in ecosystems are increasingly a consequence of human actions that cause loss of resilience. Folke et al. (2010) combines the ecological and social resilience as he writes about resilience thinking that addresses the dynamics and development of so called complex social–ecological systems (SES). Folke et al. (2002: 437) define resilience, for social-ecological systems, as “related to (i) the magnitude of shock that the system can absorb and remain within a given state; (ii) the degree to which the system is capable of self-organization; and (iii) the degree to which the system can build capacity for learning and adaptation”. Resilience is about management capacities when shocks appear. Management can destroy or build resilience,

depending on how the social-ecological system organizes itself in response to management actions (Folke et al, 2002).

The concept of vulnerability stands close to the concept of resilience and is broadly defined as susceptibility to harm (Eakin & Luers, 2006). Vulnerability has its roots in hazard-risk research with geography, poverty and development, food securities, and political ecology also influencing its conceptual development (Eakin & Luers, 2006). The International Panel in Climate Change (IPCC) describes vulnerability through three concepts: (i) the first concept is exposure, which is the extent to which the system is physically in harm's way. (ii) Sensitivity, is how affected a system is after being exposed to the stress. And lastly, (iii) adaptive capacity represents the system's ability to prepare for

and adjust to the stress, mainly to lessen the negative impacts and take advantage of the

opportunities (Smit et al., 2001; Adger et al., 2007). For the past decade the social science disciplines, such as political ecology and human geography, have pushed for the consideration of underlying social conditions that make humans vulnerable (Adger, 2006). These disciplines focus on ‘social vulnerability’ by highlighting socio-economic, demographic, cultural, and political characteristics, as well as the role of institutions and governance for shaping vulnerability (Adger, 1998; Cutter et al., 2003). Vulnerability and resilience thus have histories of alternative and sometime competing characterizations and interpretations, and the two are not merely opposite sides of the same coin (Gallopin, 2006). However, resilience is seen as more centrally focused on SES interactions, feedbacks and processes, wherevulnerability is actor-centric and more easily translatable to application and policy outcomes (Nelson et al, 2007). Resilience, vulnerability and adaptive capacity are thus closely linked concepts: adaptive capacity is one of the determinants of vulnerability, in addition to exposure and sensitivity (Adger, 2006). Resilience and adaptive capacity are used mutually throughout

literature (Gallopin, 2006; Folke, 2006).

Adaptive capacity, or adaptability, is furthermore described by Engle (2011) as the ability of a system to prepare for stresses and changes in advance or adjust and respond to the effects caused by the stresses. Also adaptive capacityfinds its origins in ecology as it was originally defined in biology to mean “an ability to become adapted (i.e., to be able to live and to reproduce) to a certain range of environmental contingencies” (Gallopin, 2006: 293). Species, populations, or individuals usually become better adapted by improving its conditions in its environment, even when nothing changes in the latter (Adger,2006). The International Panel Climate Change (IPCC) (2001:6; IPCC, 2007) defines adaptive capacity as: ‘The ability of a system to adjust to climate change (including climate variability and extremes) to moderate potential damages, to take advantage of opportunities, or to

23 cope with the consequences. However, Smithers and Smith (1997) make the division between

responses to impacts of biological systems that are reactive and human systems responses that are both reactive and proactive; as human systems are capable of learning and technical progress. The human system adaptive capacity includes the viability of social and economic activities, and the quality of human life. Decisions on adaptation are made by individuals, groups within society, institutions and governments on behalf of society. This so-called ‘collective action’ requires social networks and social capital. With all decisions made, one set of interests is privileged over another and creates winners and losers (Adger, 2003). Adger (2003) also argues that when examining the social dynamics and outcomes of adaptation, one must look beyond only accounting for economic costs and benefits of adaptation, but also needs to reflect on the relationship between individuals, their networks, social capital and institutions. Adaptive capacity of human systems can therefor also be defined as “the capacity of any human system from

the individual to humankind to increase (or at least maintain) the quality of life of its individual members in a given environment or range of environments” (Gallopin, 2006:293). This definition of the adaptive capacity of human systems by Gallopin (2006) will be the work definition for this study.

Fig.5 Vulnerability and resilience frameworks as linked through the concept of adaptive capacity ad presented by Nathan L. Engle in his article on Adaptive capacity and its assessment (2011)

4.2.2

R

;

,

When shocks appear, access to resources is critical for adaptive capacity. These resources are represented in social, financial and political capital. Social capital is “made up of the sharing of knowledge, sharing of financial risk, sharing of market information, or claims of reciprocity in times of crisis” and associated with “a progressive, flexible and therefore adaptive society” (Adger, 2003:37). The sharing of social capital is done through bonding social capital, which is based on family, kinship and locality, and bridging, which is made up of the economic and social ties external to the group. Bonding and bridging should be complementary in order to increase adaptive capacity and is realized when based on informal institutions but relying on legal sanctions. Financial capital is made up of the income and wealth distribution of an individual, group or institute. It is about the accessibility and availability of financial instruments and economic marginalization of people. Financial capital contains both monetary and physical assets. Financial assets are cash or readily converted into cash; they include private money of the entrepreneur as well as funds from financial institutions. Physical assets are less readily converted into cash; they are things such as real estate, equipment, and production infrastructure. In order to gain more adaptive capacity financial capital needs for greater access to knowledge, capabilities and an effective network (Carter et al, 2003). The last resource is political capital. Political capital refers to trust and power and is about access to a certain level of democracy, the capacity to make decisions, the access to political institutes on different levels, equity, participation and sovereignty.

Adger (2003) argues that collective action lies at the core of all adaptation decision-making. These collective actions are taken by a group in pursuit of members’ perceived interests whereby mutual benefits can be gained through cooperation. To come to positive outcomes, collective action requires networks and information flows between individuals, groups or institutes and government (informal

24 and formal rules for resource conservation, risk management, regional planning, participation, information distribution, technological innovation, property rights and risk sharing mechanisms). Social networks are scale dependent and exist both outside the state and between the state and other institutions.

4.2.3

G

Adaptive capacity is not only enhanced by bonding and bridging of social capital, but also by the distribution of financial capital and the power en trust relationship between elements political capital. The mix of these forms of capital are related to institutional and governance mechanisms (Engle & Lemos, 2010; Eakin and Lemos, 2006; Brooks, 2005; Adger, 2001). Governance allows for both ‘‘interventions aiming at changes in environment- related incentives, knowledge, institutions, decision making, and behaviors (. . .)’’ and ‘‘the set of regulatory processes, mechanisms and

organizations through which political actors influence environmental actions and outcomes’’ (Lemos & Agrawal, 2006:298). Institutions are defined by The Project of the International Human Dimensions Programme defines institutionsas “systems of rules, decision-making procedures, and programs that give rise to social practices, assign roles to the participants in these practices, and guide interactions among the occupants of the relevant roles” (IDGEC, 1999:14).

From a policy perspective, decision makers are interested in identifying and nurturing specific system characteristics that will increase adaptive capacity (Engle & Lemos, 2010). Governance structures associated with a particular sector or resource can both facilitate and encourage adaptation, or do the opposite and form an obstacle to adaptation (Adger et al., 2009). Engle (2010) argues that more flexible, democratic, and participatory forms of governance designs are assumed to increase adaptive capacity. But only when stakeholders are (i) represented, (ii) given the opportunity to participate actively, and (iii) making decisions equitably and democratically. They would also be likely to consider broader and diverse interests, including those of non-humans and future generations (Engle, idem). Gupta et al. (2010) write about the assumption that institutions support adaptive capacity when they meet fair governance criteria. Faire governance implies that resources are shared effective, efficient and indiscriminately. Furthermore, fair government includes legitimate, transparent, responsive policy-making that is accepted by members of society and has clear accountability procedures that assign responsibilities to different parties. This includes equitable policy processes and outcomes that take account of unequal circumstances in society (Biermann, 2007). Therefore, the criteria for fair governance include: (a) legitimacy, (b) equity, (c) responsiveness and (d) accountability (Gupta et al, 2010).

4.2.4

O

In order to understand the adaptive capacity of the yellow-fin tuna exporters as defined in the theoretical framework, seven determinants (appendix 3) as described by Eakin and Lemos (2006) are used.

1. Human capital

a. Knowledge (scientific, ‘local’, technical) b. Education level

c. Individual risk perception d. Labor

25 2. Information and technology

a. Communication networks b. Freedom of expression c. Innovative capacity

3. Material Resources and Infrastructure a. Transport

b. Supply and management c. Environmental quality

4. Organization and social Capital a. State-civil society relationships b. Local coping networks

c. Density of institutional relationships d. Social mobilization

5. Political capital a. Participation

b. Decision and management capacity c. Leadership legitimacy

6. Wealth and financial capital

a. Accessibility and availability of financial instruments b. Income and wealth distribution

c. Fiscal incentives for risk management 7. Institutions and entitlements

a. Participation

b. Technological innovation c. Risk sharing mechanisms d. Information dissemination

Because of the explorative character of this study not all these indicators will be examined, but used as a handhold in order to help identify relevant indicators during the fieldwork.