A Chinese company accused of financing forced labour, torture, and poaching has been linked to fishing boats found with "thousands" of dead sharks in Timor-Leste waters in September.
Timor-Leste National Police (PNTL) and Sea Shepherd's Ocean Warrior conducted a joint raid of 15 boats, which the team said revealed "thousands and thousands of [dead] sharks", including protected species.
- The Timor-Leste Government suspended the fishing licences granted to a related entity of Pingtan Marine Enterprise
- A report to NASDAQ investors claimed Pingtan oversees a syndicate financing criminal activity
- Several US law firms have filed class actions alleging Pingtan misled investors by failing to disclose it was banned from Indonesian waters and was accused of financing crime
After the September raid, the Timor-Leste Government suspended the fishing licences it had granted Hong Long Fisheries, a related entity of Pingtan Marine Enterprise.
"We received information from our neighbour country [Indonesia] that Hong Long Fisheries has [been] involved in illegal fishing and has [a] negative record in the past," Fisheries Minister Estanislau da Silva said.
In 2016 the Jakarta Administrative Court upheld the Indonesian Fisheries Ministry's decision to cancel a fishing licence granted to PT Dwikarya Reksa Abadi, a company related to and controlled by Pingtan Marine Enterprise.
The Fisheries Ministry had earlier found Dwikarya tortured crew members, engaged in forced labour and other serious breaches of labour laws, illicitly traded in protected species, and paid bribes to public officials.
Dwikarya claimed the allegations were baseless, but the Administrative Court was not required to make specific findings on this to uphold the company's licence cancellation.
A report to NASDAQ investors in May this year by market research group and "short seller" Aurelius Value claimed Hong Long Fisheries was part of a syndicate overseen by Pingtan Marine Enterprise, which was financing criminal activity.
"Pingtan is used as a financing mechanism that has already funnelled $910 million from investors to the syndicate through related party transactions that appear to be largely fraudulent," the report said.
In June, several United States law firms announced they had filed class actions alleging Pingtan Marine Enterprise misled investors by failing to disclose it was banned from Indonesian waters and had been accused of financing illegal activity.
Timor-Leste campaign leader for Sea Shepherd's Ocean Warrior, Gary Stokes, said his team helped PNTL collect and make copies of Hong Long Fisheries applications and licences found on the boats in September.
"We actually got the evidence, we're treating them all as just one company now," he said.
Mr Stokes said most of the deck crew on the boats in Timor-Leste were from the Philippines.
"A few of them did talk to us and said that they haven't been paid their full wages, they haven't been paid any of the catch bonuses which they were promised, to the point where they weren't even getting food," he said.
"They were not happy, the conditions they were in were pretty horrific."
Mr Stokes also said a mothership linked to Pingtan Marine Enterprise was found in a marine reserve near the Galapagos Islands this year with illegal fishing hauls, mostly sharks.
Australia warned Timor-Leste about possible link to Pingtan
Timor-Leste's Director General of Fisheries Acacio Gutteres told the ABC that his Government asked Australia, Indonesia, and Papua New Guinea for a due diligence check before it issued the licences last November.
"Australia sent an inspector, an Australian official, they came here to have an inspection of these Chinese boats," a spokeswoman translating for Mr Gutteres said.
But a spokesman for the Australian Fisheries Management Authority (AFMA) said "at no stage" did Australia give Timor-Leste endorsement to grant licences to Hong Long Fisheries.
The spokesman said AFMA told Timor-Leste in August 2016 that Pingtan Marine Enterprise was being investigated by Indonesia for illegal fishing.
"Australia informed [Timor-Leste] that whilst we were unaware of any information directly linking Hong Long Fisheries to IUU [illegal, unreported, and unregulated] fishing, we advised there may be a possibility that the two companies, Pingtan Marine Enterprise and Hong Long Fisheries, could be linked," the spokesman said.
Timor-Leste authorities inspected the 15 boats in February, after a video from a Portuguese news agency, Lusa, showed dead sharks on board.
The inspections revealed more than 40 tonnes of sharks, which the Government said could contravene Timor-Leste law and the fishing licence conditions.
But Mr Gutteres told the ABC there was "no evidence" the 15 boats were taking protected shark species in February, so there was no reason to suspend the licences then.
His spokeswoman said a case related to Hong Long Fisheries' September shark haul was currently before a district court.
"The case is still in the process and hasn't found any evidence," she said.
The ABC understands Timor-Leste's anti-corruption commission is also investigating the decision to grant the licences.
Why did Timor-Leste grant the fishing licences?
The Timor-Leste Government should have known about Hong Long Fisheries' connection to Pingtan Marine Enterprise, said Fundasaun Mahein, a local organisation analysing maritime security policy in Timor-Leste.
The organisation's director, Nelson Belo, said he was worried Hong Long Fisheries' licences could be renewed again.
"This is the big question for the public in Timor and also internationally: why did the Timorese Government use a company with a bad international reputation?" he said.
"This needs to be investigated; the process was not very transparent, so it was very easy to do a deal."
The country had been "deceived" into granting licences to Hong Long Fisheries in 2016, said marine scientist Dr Karen Edyvane, a visiting professor with the National University of Timor-Leste.
"Timor-Leste desperately needs to develop its fisheries resources, it is food insecure, so it was quite a legitimate agreement to make with Hong Long Fisheries to develop its national fisheries."
According to Dr Edyvane, Timor-Leste needs help from specialist agencies like Interpol and neighbouring countries to manage illegal fishing.
"You need specialist advice and training to be able to tackle international crime; Timor-Leste doesn't have that expertise," she said.
During a recent visit to Perth, Timor-Leste's Prime Minister Mari Alkatiri accepted Australia's long-standing offer to supply two Guardian-class patrol boats, along with training and other support.
A statement from the Prime Minister Malcolm Turnbull's office said the boats, to be supplied by Austal Ships, were under construction and would not be delivered to Timor-Leste until 2023.
Pingtan Marine Enterprise, which has described itself as the second-largest Chinese fishing company operating in international waters, said in a May press release that it had ceased all operations in Indonesian waters in February 2015.
"Pingtan has not been cited by or had any action brought to it by the Indonesian Government, or any governmental body," it said.
Pingtan Marine Enterprise has been contacted for comment.