Auditing the Blue Economy: An oceanic responsibility

Why is the Blue Economy the new buzzword? In a world where environmental concerns and sustainability have taken centre stage, the concept of the Blue Economy emerges as a captivating notion. It focuses on the responsible utilisation of the planet's ocean resources to nurture sustainable economic growth while safeguarding the health and resilience of our marine ecosystems. The Food and Agriculture Organisation estimates that blue economy industries assure the livelihoods of 660 to 820 million people worldwide. According to the World Wildlife Fund, the goods and services the ocean provides are worth at least $2.5 trillion per year, which could place the Ocean as the seventh-largest economy in the world. On the ecological front, the World Bank estimates that oceans absorb about 25 per cent of the extra carbon dioxide added to the atmosphere by burning fossil fuels. Further, oil and gas remain major sources of world energy, with roughly 30 per cent of production being offshore. The Blue Economy aligns not only with Sustainable Development Goal (SDG) 14, which focuses on preserving our oceans and marine resources, but goes further, playing a vital role in achieving other SDGs like taking action on climate (SDG 13), ensuring everyone has access to clean water and sanitation (SDG 6), and making affordable, clean energy (SDG 7).

 

In the Indian context, the significance of the Blue Economy is evident from the following facts - a 7,500-kilometre-long coastline, a sprawling Exclusive Economic Zone (EEZ) spanning approximately 2.2 million square kilometres, over 95 per cent of the country's trade by volume and 65 per cent by value are handled by our ports and harbours, and over 145 million people are employed in the fisheries sector. It is no wonder that the vision of New India 2030 highlighted the blue economy as one of the ten core dimensions of growth. The Blue Economy is a vital component of India's vision of becoming a $10 trillion economy by 2030. Recognising its immense potential, the Government of India is investing heavily in the maritime sector to become a major blue economy. Recently, the Prime Minister launched maritime projects worth Rs 23,000 crore and unveiled the long-term vision document for the country’s “Blue Economy” in October 2023. The India Middle-East Europe Economic (IMEC) Corridor, linking Europe, the Middle East, and India, is another landmark project envisioned to drastically improve India’s maritime economy and interaction with the world.

Given the magnitude of the Blue Economy's impact, the Comptroller and Auditor General of India (CAG) has a critical role to play in achieving the United Nations’ Sustainable Development Goal (SDG) 14, which aims to reverse the damage done to the oceans and promote the development of the Blue Economy. However, auditing the Blue Economy poses unique challenges due to its diverse and multidimensional nature. The complex interplay of sectors such as fisheries, aquaculture, maritime transportation, renewable energy, and marine ecosystem conservation demands a holistic approach to audit. Collecting and analysing data from multiple sources, including government agencies, research institutions, and industry, makes auditing more arduous. Moreover, the absence of a well-defined framework and policies to regulate the Blue Economy and the unavailability of reliable and standardised data at the granular level make the audit of the Blue Economy a formidable task.

To address these multiple audit challenges, the CAG decided to cooperate with Supreme Audit Institutions (SAI) of other countries to exchange audit experiences in this emerging sector and to develop common audit guidelines. During its tenure as the SAI20 chair, the CAG initially hosted a meeting of the Senior Officers of SAI 20 at Guwahati in March 2023, wherein the complexities of auditing the ever-evolving Blue Economy sector were deliberated. This was followed by the SAI20 Summit at Goa in June 2023, wherein a Compendium devoted to the Blue Economy was brought out. SAI India, in partnership with SAI20 members and various Supreme Audit Institutions, shared 16 case studies drawn from their audit experiences in the Compendium. This compendium proved to be an important forum for fostering cooperation, collaboration, and sharing of knowledge amongst the international public sector auditors. It highlighted the need to overcome the challenges relating to the audit of the Blue Economy, the requirement of specialised audit teams, capacity-building initiatives, and the development of tailored auditing guidelines to meet the sector's dynamic demands. The SAI20 Communique, unanimously adopted during the SAI20 Summit, further fortified the belief in inclusive capacity building, engagement with international SAI forums, and the creation of practical audit tools for the Blue Economy.

During the SAI20 Summit, the Comptroller and Auditor General of India (CAG) also announced the establishment of a Centre of Excellence in the Blue Economy, at SAI India's renowned International Centre for Environment Audit and Sustainable Development (iCED) in Jaipur. The CAG’s vision for this centre encompasses a more extensive role beyond research. It aims to facilitate learning and the exchange of knowledge to enhance the capabilities of audit institutions in the field of the Blue Economy. Within a few months of its inception, the Centre has already conducted two international webinars and a few national training courses on the Blue Economy. The Centre has also come out with two research papers on marine renewable energy and sustainable livelihood and gender equity with a special focus on marine fisheries.

The CAG has recently undertaken an important audit in the realm of the Blue Economy - a Performance Audit on the Conservation of Coastal Ecosystems (Union Government Report No. 4 of 2022). More importantly, the CAG has identified the ‘Blue Economy’ as the sector for carrying out the first medium-term three-year horizontal audit during the period 2024 to 2027. As part of this medium-term audit, various domain areas of the Blue Economy would be audited at different Ministries of the Union Government, various State Governments, and even Public Sector Undertakings, with audit reports brought out every year over a three-year period. As a culmination of this comprehensive audit exercise, a Compendium of audit findings on the Blue Economy is planned to be published.

As India embarks on the journey of tapping into the vast economic potential of the oceans, the CAG is gearing up to build capacity for auditing this sector, cooperate with other Supreme Audit Institutions (SAIs) to develop auditing guidelines, share mutual experiences, and to carry out comprehensive audits on various facets of the Blue Economy over a three-year period.
 

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K S Subramanian is the Additional Deputy CAG