BEP#1: Governance and Finance in the Blue Economy: What’s happening
May 28, 2021

Welcome to the first edition of NLAI's Blue Economy Pulse. Over time, Pulse will explore the many facets of the Blue Economy, including marine planning and implementation, combining synergistic sustainable ocean activities, stakeholder inclusion and science, technology and innovation. In this edition we focus on blue economy governance and finance, two areas ripe for innovation to deliver new ways of perceiving and investing in ocean wealth and sustainable development.

Here are just some of the highlights we noted in April, officially designated as “The Month of Planet Earth” in the Philippines.

Blue Economy Governance

One year after Seychelles legally designated 30% of its territorial waters as marine protected areas ten years ahead of international targets, as an integral part of the first comprehensive large-scale Marine Spatial Plan in the western Indian Ocean, the country has begun implementation. 13 new areas are protected encompassing 410,000 square kilometres of the island nation's Exclusive Economic Zone (EEZ) and efforts are now underway to develop a legal and strategic framework as well as a management plan for each of these sites. Africa’s smallest country remains undaunted by the prospect of managing protected areas which amount to the size of Sweden, with differing biodiversity and sustainable use designations. We anticipate Seychelles’ many international allies will support the country in implementing this ambitious ocean protection scheme and indeed some have announced their intentions already.

Further north, India is also looking to the Indian Ocean as a source of prosperity, with the blue economy viewed as one of the country’s 10 core dimensions of economic growth in its 2030 vision. Members of a new Blue Economy Coordination Committee have just been appointed, to coordinate and integrate activities between stakeholder central ministries, states and union territories and other agencies. The committee will also ensure integration of national and state plans, policies and programmes in six functional clusters and harmonise national activities with international best practices and treaty obligations.

Inspiration

Meanwhile in the Caribbean Barbados’ Minister of Maritime Affairs and the Blue Economy announced his department “are on a real mission to transformation” at a consecration ceremony for the ministry’s new headquarters. In its first two years of operation the Ministry has initiated improvements in fisheries, fish markets and shipping legislation. During a virtual meeting in March the fledgling Ministry also shared some of the lessons it has learned with ocean stakeholders and members of the public in Belize, as their new Ministry of Blue Economy and Aviation gathers steam. Minister Andre Perez is currently presiding over the development of Belize’s first five-year National Blue Economy Strategy and Plan. “Know who you are, what you stand for, what you believe in and what you are doing this for and what you determine to be success in the whole scheme of things. Involve everybody…. go where the people are to get your education” recommended Minister Kirk Humphrey. An inspiring example of an inclusive approach to framing a national blue economy.

During the Philippines' National Fisheries Summit held in April, a resolution calling for the establishment of a Department of Fisheries and Aquatic Resources, a level up from the current Bureau of Fisheries and Aquatic Resources under the auspices of the Department of Agriculture, was adopted. This has become a common refrain from various senators in recent years. Situated at the apex of The Coral Triangle, the epicentre of marine biodiversity globally, the Philippines is endowed with 2.2m square kilometres of ocean teeming with life. As an unfortunate result the region is also a hotspot of illegal, unreported and unregulated fishing, which compounds existing stressors on the marine environment such as climate change and marine pollution. Poverty in the Philippine fisheries industry is high and at 26.2% is well above the national poverty estimate of 16.6%. Proponents of a new Department of Fisheries and Aquatic Resources, a concept consistently supported by Agriculture Secretary Dr. William Dar and proposed in three bills in the Senate and at least 12 bills in the House of Representatives, argue this would command the level of financial and human resources required to support the country’s globally significant fisheries and its 1.9 million fisherfolk to thrive, rather than survive. A theme which resonates strongly with us.

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Ocean action and climate action are intrinsically linked, and a timely reminder of the significance of this linkage for policy-makers came at the end of the month via a report from the UN Framework Convention on Climate Change. Recommendations at the national level include promoting the understanding that climate action equals ocean action and vice versa; investment in ocean science and monitoring; raising climate ambition inclusive of the ocean, including in Nationally Determined Contributions and National Action Plans; developing integrated national policies for ocean and climate action and strengthening leadership at all levels.

Ocean finance

A year ago BNP Paribas made a commitment to support SDG 14: Life Below Water, which according to the bank is the SDG least supported by companies and is also among the least funded SDGs by both Official Development Assistance and philanthropic development funding (OECD 2020). Considering the ocean is the largest ecosystem on earth, covering two thirds of the planet, this is disappointing progress. To change this BNP Paribas sees raising awareness as key. It has committed to finance activities with a potential impact on the ocean in the most responsible way possible, notably shipping, fishing, aquaculture and offshore infrastructures, and to dedicating EUR 1 billion to financing shipping’s ecological transition by 2025. The bank also seeks to support innovation by investing in sustainable aquaculture and alternatives to plastic packaging from petrochemical sources.

European asset manager DWS Investment S.A. has launched a DWS Concept ESG Blue Economy Fund to invest in companies that are active in the fields of mitigating ocean acidification, reducing marine pollution, conserving and sustaining marine resources and ecosystems, and sustainable fisheries. Other investment areas include sustainable consumption, reduction of carbon emissions and ocean-dependent sectors including shipping and ports, energy and resources, tourism, coastal protection and aquaculture.

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Alongside governments the multilateral development banks have a central role to play in supporting and financing the transition to sustainable ocean economies. As ADB’s Vice-President for Finance and Risk Management Ingrid van Wees notes, “with the total asset value of the ocean estimated at $24 trillion and the global ocean economy estimated at $3 trillion per year, there is no shortage of investment opportunities, yet investments themselves have fallen short. In the last 10 years, only $13 billion has been invested in sustainable projects via philanthropy and official development assistance, and even less by the corporate sector”.

Governments can repurpose infrastructure funds towards ocean-friendly green-grey approaches, integrated solid waste management, ecologically-sensitive port facilities and municipal and industrial wastewater and effluent treatment, ADB suggests. And development banks can develop blue project selection criteria and policy frameworks, create financial instruments and products, mobilise concessional finance to de-risk private sector investments and prepare bankable project pipelines. With world economies under strain due to covid-19 responses, reform of the international sovereign debt situation and new nature performance bonds are being mooted to address multiple development goals. Several countries are contemplating blue bonds to plug their financing gap, including Thailand, where proceeds could support ocean and marine resources and the sustainable development of Thailand's seas, which contribute up to 12% of the country's GDP.

Finally, to close this first edition of Blue Economy Pulse we share news of a Blue Economy Think Tank event hosted last month by The Bahamas Development Bank. With over 340 registered participants and 20 panelists from the Bahamas and further afield, the event’s over-arching theme “From Small Island State to Big Ocean Nation” highlighted ways for local communities to benefit from increased sustainable use of ocean resources in four areas: food, bio extractives, the maritime industry and energy, and arts, culture and tourism. To support innovation the Bank is offering a grant of up to $7,500 in each of these four themes. This regional event amply illustrates the sheer breadth of a blue economy; the ocean is everyone’s business.

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