In the case of Ukraine’s fishing industry, the rot may have started from the head, but it has reached all the way to the tail.
Can reform start the same way?
That’s what the new chief of the state fish agency, Yarema Kovaliv, is pledging after more than a month on the job.
His predecessor, Oleh Nikolenko, was fired after an internal investigation by the Agriculture Ministry suspected him of causing $9.4 million in losses to the state, including $8 million from a fishing vessel and embezzlement of $1.4 million from bank acounts of the Sevastopol port.
At the local level, the existing “Soviet administration system” of fishing industry polices “does not allow for efficient use of fish resources…and promotes corruption, extortion, bribery,” according to an industry development paper published by the Agriculture Ministry.
The report calls the agency an “organized crime group.”
Kovaliv, who last had a non-executive role at the Arricano real estate firm, sees an agency that is rotten to its core everywhere he looks.
Appointments of officials are bribe-driven, artificial fishing quotas are set to extract bribes from fishermen, unlawful fees are extorted for use of aquatic resources, public funds get embezzled, corrupt public procurement schemes persist, and statistical data is falsified.
“Wherever you dig there is an established system of getting profits,” Kovaliv told the Kyiv Post at his office on May 19, referring to the agency’s practices.
He wants to make electronic registries of fishing ships open to the public, as well as all fishing quotas. “It’s a ‘quick-win’ situation. This can be done in a matter of weeks,” Kovaliv said.
Over the next three months he plans to reduce staff and dismiss corrupt department heads, reorganize the agency and enforce control over poaching.
Appointed on April 8, the Ivano-Frankivsk native wants to change the “business as usual” approach that since 1991 saw all but 11 of Ukraine’s 250 ocean vessels – once Europe’s largest fleet – either get scrapped, embezzled or fall into foreign ownership, Kovaliv said. Only one vessel currently fishes under the Ukrainian flag.
Not a single kilogram of 37,200 tons of fish caught in the ocean last year reached the domestic market.
“I understand that at some point the fish inspection or me personally will become enemies for many people. But I will only react to constructive critics,” Kovaliv said.
What belongs to Ukraine’s fishing fleet is outdated and energy consuming, and the current system “does not encourage officials towards modernization and improvement of fishery legislation. Officials…are bound to keep the running of corruption schemes that bring them illegal profits at any cost,” the ministry report says.
As a maritime state with 8.6 million hectares of water bodies, of which 890,000 hectares are inland waters, Ukraine imported 88 percent of the fish it consumed in 2014, according to the agriculture ministry.
In 1991, at the dawn of independence, 95 percent of consumption was from domestic production.
The share of unregulated turnover of fish products on the national market exceeds 70 percent, according to various experts cited by the agriculture ministry. Likewise, no one knows how many fish are left in Ukrainian waters.
The agency and its inspection bodies have been contributing to fish poaching by either turning a blind eye or fishing themselves, Kovaliv said.
“Fish inspection is the quintessence of bribery,” he quoted Prime Minister Arseniy Yatsenyuk as saying.
However, there is little choice for an ordinary inspector who earns Hr 1,500 ($65) per month, Kovaliv said. The agency’s 2015 budget of Hr 59.6 million ($2.6 million) is not enough to cover fuel costs for inspectors to go on raids.
Thus, reorganizing fish inspection is among his first priorities. He hopes to trim the staff of 5,000 people in the next two years, and hire professionals at higher salaries.
The greatest challenge is finding qualified personnel with integrity.
“Experience and honesty are very often incompatible in this sphere,” Kovaliv said, adding that he has already fired the heads of the Zaporizhya fish protection unit, Enerhodar sub-unit of Zaporizhya Oblast, Donetsk Oblast, while investigations are underway in Mykolaiv and Ivano-Frankivsk.
The agency’s shortcomings are also reflected on the fish market.
According to Food and Agriculture Organization of the United Nations, Ukraine has the largest artificial water body system in Europe, consisting of 2,780 freshwater ponds, with a total area of more than 2,230 square kilometers.
Yet last year 8.9 tons of fish was caught in inland waters, three times less than in 1991. The aquaculture industry, which includes fish farming, yielded 24,400 tons of fish in 2014, six times less than in 1991.
Production could benefit from slashing some of the 10 certificates that are required to lease a lake to fish and creating a “one-stop shop” for the procedure to reduce opportunities for corruption, Kovaliv said.
Kyiv Post staff writer Olena Gordiienko can be reached at [email protected].
