CASE NUMBER: 347
CASE MNEMONIC: VIETSHMP
CASE NAME: Vietnam Shrimp Industry
1. The Issue
Northern consumer demand for shrimp in recent years has reoriented several coastal areas of developing countries, particularly in Asia, towards the intensive production of shrimp for export. Parallel to increased demand, farm-raised shrimp has increased from 6 percent of the global shrimp production in 1970 to 26 percent in 1990. About 75 percent of the world's prawns come from Asia. Shrimp aquaculture clears mangrove forests to construct large, brackish water ponds. Mangrove ecosystems, the "rainforests of the sea" protect coastal areas from waves and storms, serve as spawning grounds for marine life, and provide habitat to diverse and endangered species. Destruction of the mangroves for intensive aquaculture allows for short term profit due to the high volume of shrimp produced. However, in the Southeast Asian nations replicating this short lifespan practice, experience has shown that the ponds must be abandoned, usually in less than a decade, because of the resulting pollution. Intensive aquaculture utilizes antibiotics and chemical additives to increase production, eventually poisoning the shrimp ponds and surrounding watersheds. The ponds quickly become useless and the industry must find new mangroves to repeat the process. Now, Viet Nam is attempting to replicate the other nations attempt at get rich aquaculture enterprises, with little notice to the resultant environmental degradation, as well as the boom and bust cycle of the aquaculture industry. Within Viet Nam's recent Five Year Party Congress SocioEconomic Strategy Report, aquaculture is encouraged as an export commodity. Aquaculture is flourishing predominantly in coastal Minh Hai Province, in the South of Viet Nam.
Viet Nam, a nation with a rich and embattled history, faces yet another determinant struggle as it contends with its current development choices and concurrent environmental ramifications. A densely populated country of 74 million people, Viet Nam is one of the poorest countries in Asia with a per capita GNP of about US$220. According to the World Bank, more than half of the rural population falls below the absolute poverty line.
In the late 1980s, the country's leaders changed the course of the economy by introducing Doi Moi, economic renovation. Since the gradual introduction of the market-oriented reforms, Viet Nam has recorded some of the highest economic growth rates in the region. Viet Nam has emerged from economic and political isolation, attracting the international attention of investors, economists, and regional political leaders all of whom hope to witness, and profit from, the development of the next anticipated Asian "Tiger". At the same time, biologists, foresters, and conservationists are discovering that, while under severe environmental strain, Viet Nam is a threatened "hotspot" of biodiversity and varied ecosystems.
With an increasingly outward stance towards the world economy, farmers and coastal fisherman are using every method to intensify production. This is quickly leading to environmental degradation, threatening the long-term sustainability of Viet Nam's development. One of the fastest growing sectors of Viet Nam's exports is shrimp aquaculture.
Since Doi Moi, the government of Viet Nam has transferred over 500,000 hectares of coastal mangrove areas into prawn farms. In Minh Hai province, over 70 percent of mangroves have been destroyed for shrimp farming.
Because severely indebted countries like Viet Nam must repay their ever increasing debt to multilaterals like the World Bank in foreign currencies, their economies are reoriented towards exporting to earn foreign exchange. The World Bank currently has a coastal wetlands project, that, under the guise of sustainable development, continues to support aquaculture. The World Bank is lending $60 million for this project.
However, according to Choeng-Hoy Chung, author of the World Bank's environment report, Viet Nam's shrimp industry has been hit by a "mystery virus" (white spot disease) in 1996 that will likely decimate 80 percent of the harvest this year." The "mystery virus" is no mystery. Outbreaks of disease and subsequent plummets in shrimp production has repeated itself all over Asia. Heavy use of antibiotics has led to the proliferation of drug-resistant bacteria.
The Bank is now trying to treat the infected ponds with chlorine. The Bank's own recommendations flowing from the Environmental Priorities document asks, "should a moratorium be instituted against new shrimp aquaculture investments in acid sulphate coastal areas which require mangrove destruction? Given the study's assessment, the answer is yes." Yet, shrimp aquaculture remains of the focal projects for the Bank.
3. Related Cases
SHRIMP Shrimp and Sea Turtles case
THAISHMP Thai Shrimp Export case
MANGROVE Mangrove Protection case
HAWKSBIL Hawksbill Turtle case
GREEN Green Turtle Loss/ Qatar case
4. Draft Author: Sandy Buffett (August 1996)
B. LEGAL FILTERS
5. Discourse and Status: DISagree and ALLEGation
Several NGOs, such as Earth Island Institute and the Third World Network, are calling for an awareness campaign for Northern consumers to halt the consumption of shrimp. Thailand recently passed legislation banning the release of salinated shrimp pond water into public freshwater resources. The World Bank environment report has also suggested the government of Viet Nam to implement a moratorium on future aquaculture expansion.
6. Forum and Scope: VIETnam and UNILATeral
7. Decision Breadth: 1
8. Legal Standing: NGO
C. GEOGRAPHIC FILTERS
a. Geographic Domain: Asia
b. Geographic Conflict Site: East Asia
c. Geographic Impact Area: Viet Nam
10. Sub-National Factors: YES
Viet Nam, a nation facing rapid development and integration into the global economy, is quickly taking on a huge burden of debt from multilateral and bilateral loan agreements. Viet Nam's total debt stock in 1995 was US $25 billion. In order to pay off the debt in foreign exchange, the national government is encouraging all types of natural resource-based exports, in effective, unsustainably using its natural capital to finance its growth. Provincial authorities and local populations have little voice over policy dictated from Hanoi and deals made with foreign investors. Thus, the interests of the people and natural environment of Minh Hai province may be being sacrificed for the development path prescribed from the capitol city.
11. Type of Habitat: TROPical
D. TRADE FILTERS
12. Type of Measure: REGSTD
13. Direct vs. Indirect impacts: INDirect
14. Relation of Trade Measure to Resource Impact
a. Directly Related: No b. Indirectly Related: Yes SHRIMP c. Not Related: No d. Related to Process: Yes Habitat Loss 15. Trade Product Identification: SHRIMP
16. Economic Data
Viet Nam's economy has experienced dynamic growth since Doi Moi reforms. In 1995, the economy grew 9.5 percent and the total GDP was over $18 billion dollars. Agriculture, forestry, and fisheries account for 27.2 percent of GDP. Total exports of marine products in Viet Nam was $370 million in 1993. More than 42 thousand tons of shrimp were exported to Japan and the United States.
The global commodity market for shrimp is notably volatile. The example of the 1989 plunge in shrimp prices has been linked to the death of the Japanese Emperor, Japan being the largest consumer of shrimp products. Increasing reliance of entire provinces on a single commodity such as shrimp exports places Minh Hai province at significant risk of collapse of the local economy after the demonstrated "boom" cycle ends. Taiwan's shrimp industry crashed in 1989, with an 80 percent decrease in production due to rampant disease and pollution. Already, Viet Nam's industry has demonstrated this cycle, with an average of 210 kg/ha production in 1993, followed by an average of 40 kg/ha in 1994.
. The economic value of mangroves is underrecognized because many of the benefits derived are often outside of the money economy. These benefits included traditional herbs and coastal typhoon protection, as well as spawning ground for fish and habitat for birds.
17. Degree of Competitive Impact: LOW
18. Industry Sector: Food
19. Exporter and Importer: VIETnam and JAPAN and US
Over 700,000 metric tons of prawns were imported by Japan and the USA in 1993. US consumption of shrimp has increased 29 percent per captia since 1970.
E. ENVIRONMENT FILTERS
20. Environmental Problem Type: HABITAT
The mangrove ecosystems provide a variety of sustainable economic benefits. Roof thatching materials, fuelwood, paper production, charcoal, honey, and medicinal plants are some of the items derived from healthy mangrove areas. Mangroves provide essential habitat for turtles, dolphins, rare birds, as well as providing local communities with vital sources of dietary protein. Coastal fish spawn in mangrove areas, so the fishing economy is dependent on the integrity of mangroves. They also protect coastal villages from costly, if not deadly, typhoon damages.
Traditional extensive shrimp farming systems allowed for a diversity of species, reliance on the natural food chain, and flushing of the ponds by the tides. Modern intensive farming, uses dry feeds, antibiotics, and complex pumping and aerator systems. This type of production requires full-scale clearance of mangrove habitat into virtual chlorinated swimming pools. The ponds must be repeatedly pumped and treated to remove the resulting pollution which often leaches into fresh groundwater systems.
In 1950, Viet Nam had over 400,000 hectares of mangrove forests. In 1983, that number had dwindled to 2,000 remaining hectares. This fraction of the original habitat is now threatened by commercial aquaculture.
21. Species Information
Species name: Shrimp (Penaeid) Species type: Crustacean Diversity: There is a high degree of biodiversity in species type. Among hundreds of species of penaeid shrimp, only a few are used in captive breeding due to their high rates of growth. Species are introduced by shipments of cultured larvae, the preferred species being the P. japonicus, Indo-Pacific P. monodon and the Eastern Pacific P. Vannamei. The commonly known "black tiger prawn" accounts for 56 percent of global shrimp production. Centralized cultivation and non-endemic species introduction has contributed to the spread of disease in aquaculture, as well as genetic mixing with endemic species.
22. Impact and Effect: HIGH and PRODuct
23. Urgency and Lifetime: 24. Substitutes: Like Products, alternative farming methods. If intensive aquaculture is halted before destruction of the mangrove areas, other forms of aquatic production are possible, such as crabs, oysters, and shellfish, as well as seawood production.
F. OTHER FACTORS
25. Culture: YES
26. Human Rights: YES
As shrimp are generally too expensive for local consumption because of the high price fetched on the global market, 90 percent is exported. When foreign companies come into these regions to establish the industry, customary and communal user rights are denied, marginalizing local communities from traditional sources of livelihood. Local populations have no access to land title, allowing the full-scale conversion of indigenously utilized land into the hands of foreign investor. Previously utilized for a wide range of resources outside the formal economy, regions are converted into a single use determined by an outside company. Profits then flow to the source of the original capital, most often a foreign corporation.
Nearby drinking water sources are often polluted from the resulting pond effluent. Thus, the preferences and demands of Northern consumers is met at the expense of the degradation of watersheds and salinization of agricultural land in the developing world.
27. Trans-Boundary Issues: YES
28. Relevant Literature
Brady, Shirley."Small shrimp getting fried in Vietnam", The International Institute for Sustainable Development, Hannson, Bjorn et al. "A partnership for long-term food security and local empowerment" (An analysis of aquaculture in Viet Nam), Hiebert, Murray. "Food or Forests", Far Eastern Economic Review, April 7, 1994. Khor, Martin. "The Aquaculture Disaster", Third World Resurgence, No. 59, p. 10. Le Dien Duc, World Conservation Monitoring Union, "Viet Nam's Biodiversity", Appendix 8- Wetlands Information, Nixon, Will. "Rainforest Shrimp", Mother Jones, The Mangrove Action Project, Earth Island Institute Home Page,
Primavera, J. Honculada, "Shrimp Farming in the Asia Pacific: Environment and Trade Issues and Regional Cooperation, East-West Center. Nautilus Institute Home Page.
Shiva, Vandana. "The Damaging Social and Environment Effects of Aquaculture", Third World Resurgence, No. 59, p. 22.
World Bank, Viet Nam Environmental Program and Policy Priorities for a Socialist Economy in Transition, Report No. 13200-VN (February 27, 1995) For further information on environmental issues in Viet Nam, go to Viet Nam, Environment and Development