MULTIPLE COMMUNITIES AND RIGHTS-BASED MANAGEMENT - Chairman: Guy Leyland, Western Australian Fisheries Industry Council, Mt Hawthorn

Bringing the State Back in: the Choice of Regulatory System in South Africa’s New Fisheries Policy - B. Hersoug and P. Holm
Property Rights and Recreational Fishing: Never the Twain Shall Meet? - J. McMurran
Negotiating the Establishment and Management of Indigenous Coastal and Marine Resources - D. Campbell
Recognition of and Provision for Indigenous and Coastal Community Fishing Rights Using Property Rights Instruments - M. Hooper and T. Lynch
The Implementation of an Italian Network of Marine Protected Areas: Rights-Based Strategies for Coastal Fisheries Management - F. Andaloro and L. Tunesi
Estuaries in Western Australia - An Integrated Approach to Management - J. Borg
United States’ Fishery Cooperatives: Rationalizing Fisheries through Privately Negotiated Contracts - J. Leblanc

Bringing the State Back in: the Choice of Regulatory System in South Africa’s New Fisheries Policy - B. Hersoug and P. Holm

B. Hersoug and P. Holm
The Norwegian College of Fishery Science, University of Tromsø
<[email protected]>, <[email protected]>

1. INTRODUCTION

Over the last 10-15 years there has been an increasing tendency to characterise modern fisheries management as a failure. According to FAO’s leading spokesman on the issue: “The description of the state of the resources and fisheries indicate clearly that, in the developing as well as in developed world, fisheries governance is “sick” (Garcia 1998). The symptoms of “sick governance” is according to Garcia:

i. Lack of political will for difficult adjustments
ii. Persistence of direct and indirect subsidies
iii. Lack of control on fleets by flag states
iv. Ineffective fishery commissions (no power)
v. Lack of control of access and unclear use-rights
vi. Top-down Command & Control management
vii. Disregard for traditional communities
viii. Power of industry lobbies resisting change
ix. Lack of implementation capacity.

The same story can be told for Canada, the United States, Norway and a number of other important fishing nations. Considering that fisheries management by central government was instituted due to market failure in the first place, government failure should be even more serious. Where economists generally point to inefficient and costly management measures, unable to produce resource-rents, social scientists are usually more concerned with the autocratic nature of management, not taking the fishermens’ own input into account and the consequences in terms of illegitimate management structures and measures. The state is being criticized by both groups, sometimes without reservation (Christy 1996, Hannesson 1996, Berkes 1989), at other times with more academic restraint, although the message may still be the same. We have also ourselves contributed to this “wave”, in search for better and more just management systems (Hersoug and Raanes 1997). Today, however, it is time for sobering up.

There is no doubt that management by the state is expensive and inefficient in many countries, developed as well as developing. It is, furthermore, beyond doubt that improvements can be made by introducing a clearer specification of rights as in the case of ITQs and/or by introducing various forms of co-management or user group participation. Although the general applicability of these reforms is still under discussion, they are about to be implemented in a large number of countries. Nevertheless, there are situations where only the state can do the job, where market solutions hardly work and where community-based schemes are inappropriate. We refer to the establishment of new fisheries policies where redistribution of rights and quotas (favouring previously disadvantaged groups) figures prominently. Although such cases may seem rare, they may become more common in the future, following democratisation of previously autocratic states. In this article we shall use South Africa’s new fisheries policy as a case and starting point. Why did South Africa choose to go for a state dominated system in the face of stern opposition from the existing industry and in spite of the general climate in favour of co-management and user-group participation propagated by the large and influential South African sector of non-governmental organisations (NGOs)? In more theoretical terms, the challenge is to delineate the capacity of different management systems to undertake certain key functions, of which redistribution is the central focus here.

In this account of the South African experience we start with a brief description of the three alternative systems and their capabilities for redistribution, followed by a short overview of the South African fishing industry, including the management structure. The section 4 gives a brief account of the policy process leading up to the new fisheries policy and the Marine Living Resources Act (1998). The section 4 deals with the possible options and the one chosen, while the section 6 discusses the refuted market alternative and the neglected community version. The section 7 deals with the extent of actual redistribution, with examples from the economically important hake sector and the equally important (in terms of employment) rock lobster sector. The seventh and last section deals with the practical and theoretical implications of our findings, with particular focus on necessary, but not sufficient, conditions for social development.

2. GOVERNING REDISTRIBUTION

A reform of fisheries policy, like the one presently attempted in South Africa, may be seen as a shift among three broad institutional orders: community, market and state (Streeck and Schmitter 1988, Apostle et al. 1998). First, the governance principles suggested by the community metaphor are characterised by close inter-personal ties, egalitarian, and often multiplex, social networks and shared identities. The state, which includes the institutions and structures of policy, law, and governance, is broadly characterised by hierarchical order, bureaucratic structures and authority relations, and professional, uni-dimensional relationships. The third metaphor, the market, suggests competition, economic efficiency and rationality. In contrast to those in the community, relationships in the market are impersonal, task-oriented and without inherent value. In contrast to the state, the market is characterised by decentralised exchange rather than central command and formal authority.

In the fisheries, the three contrasting institutional orders are reflected in each of the three dominant models of fisheries resource management. The state model corresponds to the centralised and bureaucratic form of management that presently forms the basis for fisheries management in most developed fisheries nations. While dominant, however, it is often claimed to be in a crisis (McGoodwin 1990, Crean and Symes 1996). Hence, the models drawing on the two other institutional orders are suggested as solutions. On the one hand, the ITQ model, now implemented in several countries, seeks to redress the inefficiencies of the state-centred model by using the mechanisms of the market for quota allocations. In contrast, the models of local management and co-management seek to (re)embed fisheries management in local community structures, or user-groups, to increase the legitimacy of resource regulations (Jentoft 1989, Dyer and McGoodwin 1994).

These three models have different features, and suggest very different solutions to the problems of the fisheries. The state model emphasises control and fits perfectly situations in which the main problem of the fisheries is over-exploitation and the control of fishing effort has first priority. The market model emphasises efficiency. It fits situations in which the main problems are economic problems due to over-capacity, under-development and inefficient allocation of resources are the main problems. The community model emphasises equitable distribution and legitimacy in the eyes of the fisheries population. It fits situations in which the main problems are lack of equitable and fair access to resources by users located in traditional fishing communities.

In the case of South African fisheries policy, we are interested in the consequences that the choice of governance principles has with regard to redistribution. Each of the three models has a distinct capacity for redistribution, albeit in somewhat different directions. In a market, redistribution will happen in accordance with the principles of efficiency. Those actors, able to exploit the most efficient strategies, will gain control over the resources. The scope and scale of the redistribution that will ensue is difficult to predict. What is important is that if the efficient structure is to be realised, attempts to influence the speed and direction of redistribution should be kept to a minimum. In South Africa, in which access to capital and information is highly skewed in favour of the rich white population, it seems unlikely that the market principle will work in favour of the previously disadvantaged groups.

According to the community principle, redistribution should take place in favour of the small, local and traditional participants. In the absence of formal, hierarchical and bureaucratic controls, it will be difficult for large-scale, rational enterprises to establish the predictability and formal guarantees of access to the resource that they thrive on. In the South African situation, relying on the community model could undermine the big companies in favour of the coastal population, at least in some sub-sectors. It also comes with the cost of not prescribing efficient mechanisms for controlling over-capacity and sustainable resource practices. The governance structures of the state emphasise control, including control over distribution and redistribution. How this potential for redistribution can be used, however, depends on the interests of these who gain control of the state apparatus. In the ideal Weberian¹ situation, the state bureaucracy remains in the hands of the political elite, which in a democracy like South Africa, is controlled by the people through elections. Thus, to the extent the government is committed to redistribution, that is what will be achieved. In modern, complex states, however, the elected politicians do not remain in complete control. Important policy decisions are delegated to the government and government bureaucracy, and may be influenced by lobbying or corporatist negotiation. To the extent the state is captured by organised interests, the capacity for redistribution will decrease.

¹ Max Weber (1924), German social scientist, who developed among other things, the ideal type of bureaucracy.

3. SOUTH AFRICAN FISHERIES

Even if South Africa is the top fishing nation in Africa, it is usually ranked about 30^th on the list of the world’s fishing nations, with a total catch of approximately 500 000t/yr. The fishery accounts for only 0,4% of GDP, but its regional and local importance is considerably larger than indicated by the national figures. Some 27 000 workers are employed in the formal sector, while an unknown number of people depend on fishing as a way of subsistence. In addition some 750 000 people are involved in recreational fisheries. Most of the industry is concentrated in Western Cape, in particular to Cape Town. The total (processed) value of the production is 2.1 billion Rands, of which 1 million Rands are generated by export. The industry consists of 19 different fisheries, the most important of which are described here (Table 1).

Table 1
Nominal catch and estimated value of South African commercial sea fisheries 1997
(Stuttaford 1999)

Industry sector	Volume (t)	Value (R’000)
Offshore trawl	182 321	989 744
Inshore trawl	15 150	68 736
Longlining	4 753	46 373
Pelagic	272 111	439 224
Rock Lobster	2 570	167 021
Squid	3 811	91 464
Line/small nets	17 221	128 239
Abalone	537	79 433
Oysters	708	10 142
Mussel farming	2 145	27 885
Prawns	514	17 044
Seaweed	991	4 971
Grand total	502 832	2070 283

The single most important fishery in South Africa is the demersal (offshore trawl) fishery for hake, dominated by a few vertically integrated companies, employing some 9000 people. Annual catch is around 150 000t, mainly caught by deep-sea vessels. There is a growing interest and demand for greater participation by longliners, which are more easily accessible for new entrants.

The second major fishery in economic terms is the pelagic fishery based on anchovy, pilchard and herring. The fishery employs nearly 5000 people along the West Coast, mainly on a seasonal basis, producing fish for canning as well as the meal and oil industry. Catches are erratic, causing boom and bust cycles that have important economic and social repercussions for the fishing communities.

There are two important rock lobster fisheries in South Africa - one each on the West and South Coasts. The West Coast fishery operates inshore and employs some 3500 people, mainly on a seasonal basis. The fishery is heavily oversubscribed, not only by registered fishermen, but by poachers and recreational fishermen, resulting in reduced quotas every year. The South Coast fishery is in better shape, being concentrated to only twelve companies, who use large vessels harvesting in deeper waters.

The line fisheries target tuna, squid and several demersal species. The fishery is characterised by over-capacity and declining catches, which is partly why this group would like to enter the hake sector. Finally there is a small, but heavily disputed, abalone fishery, formerly concentrated in a few processors and their connected divers. Today the divers have their own quotas and the number has been increased considerably over the last years. The fishery is, nevertheless, completely oversubscribed, partly due to heavy recreational catches in addition to a thriving illegal fishery, stimulated by the high prices that are perceived in the Far East.

Most available fisheries resources are fully exploited and the few potential “new resources” (such as for example orange roughy) need more research before their importance can be accurately assessed. Mariculture, and especially shellfish farming (3000t in 1997) is one alternative, but the number of protected locations are few and the sector will not be able to provide large numbers of jobs. The same applies to increased use of bycatch. There are, consequently, few openings for new entrants, be they fishermen formerly deprived of existing rights or black entrepreneurs who would like to participate in the industrial and semi-industrial fisheries. If new entrants are to be allowed into the established fisheries, old participants must quit. The dilemma is precisely formulated by Cochrane (1995): “The RDP aims of meeting basic needs and building the economy cannot be met by increasing exploitation pressure on these resources and improvement must come from better and broader utilisation”. The other alternative is redistribution - to the extent this is politically possible. Being a relatively marginal sector of the South African economy the fisheries administration is placed under the Ministry of Environmental Affairs and Tourism as a separate department. All the practical work is performed by Marine and Coastal Management (MCM) (formerly Sea Fisheries), acting as a chief directorate, located in Cape Town. Up to 1998 the Directorate consisted of three units; Administration, Control, monitoring and surveillance and Sea Fisheries Research Institute (SFRI). By the new administrative reform the new chief directorate now consists of four sub-directorates, (a) coastal and inshore resources management, (b) offshore resources management, (c) economics and resource development and (d) support services, with researchers and MCS personnel connected to each of the two management units. Considering that lack of legitimacy and trust were the main problems of the old administration, the change of name and some administrative reshuffling was no doubt a smart move. Whether dividing up of the research institute and the separation of the control responsibilities are similar smart moves remains to be seen.

While the Minister is the ultimate policy maker and is responsible for fixing the TACs and distributing the quotas, he has a Consultative Advisory Forum (CAF) to advise on such matters, including on the use and allocations of the Marine Living Resources Fund. The CAF has 17 members drawn from all sectors of the fishing industry and performs by and large the same duties as the previous Sea Fisheries Advisory Committee (SFAC). The Fisheries Transformation Council (FTC) was also established by the new Act and has six members appointed by the Minister to assist in development and capacity-building of the historically disadvantaged and small and medium-sized enterprises by leasing them fishing rights. To some extent the FTC has taken over some functions of the old Quota Board with the important difference that the FTC is politically responsible to the Minister and ultimately to the Parliament; further, the FTC is considered to be temporary and is to be dissolved when the transformation process is officially finished. At the moment there is considerable confusion over the two procedures for new entrants; they can apply directly to the Minister for new quotas or they can lease quotas from the FTC². While most of the management costs are covered by ordinary state budget allocations, research, monitoring and surveillance is partly covered by the Marine Living Resources Fund, which depends on payments made for permits, licences, levies, fines, etc. Fisheries management is at present in a dramatic financial squeeze because no direct resource fees are paid by users and demands in all sectors by far exceed the funds available.

² Due to legal uncertainties the Minister has stopped the practise of allocating FTC quotas for further leasing. Instead FTC members are used to discuss and recommend applications for ordinary fishing rights. By March 2000 the members of FTC have resigned, due to lack of payment and more generally, lack of direction.

The process of establishing a new fisheries policy was initiated by the Minister of Environmental Affairs and Tourism at a public launch on 27 October 1994. The immediate background was the unrest among fishermen and fish workers over the then policy, claimed to be corrupt and insensitive to the difficult situation of most coastal communities. By that time some ANC-aligned groups in the fishing industry had already worked out a preliminary programme as part of the electoral manifesto. In December 1994 a new meeting was held in Cape Town to discuss how a new fisheries policy could be developed. It was agreed to set up a Fisheries Policy Development Committee (FPDC), mandated to prepare a Green Paper on the fisheries policy. The Committee consisted of 5 representatives from each of the 13 different sectors of the fishing industry. In addition, one representative was appointed by each of the maritime provinces. With the representative from the Ministry the committee counted 70 members!

The first meeting in the plenary Committee soon found out that a Working Committee was needed to execute the task. This Working Committee originally consisted of 18 members drawn from the participating groups in the Plenary Committee. The Working Committee was headed by Mr. Mandla Gxanyana, General Secretary of the Food and Allied Workers Union, assisted by a small permanent secretariat, originally staffed by five assistants with special qualifications. The Working Committee soon encountered large problems, not only on policy matters, but also on the question of representation. Organised labour claimed to be under-represented, demanding five representatives in the Working Committee (and 20 in the Plenary). After a staged walkout, backed by “big business”, organised labour got their demand accepted, in order to get the process going again. By the same time it was agreed that all other sectors should be entitled to ten representatives each, increasing the plenary to 150 members.

FPDC requested all stakeholders to submit their ideas for a first integrated document. This document was discussed at subsequent meetings to identify areas of agreement. On issues where the FPDC was not able to find a common solution, technical teams were set up to provide possible solutions. Six technical or task teams were appointed of which the Technical Team on Access Rights played the most prominent role. Based on its unilateral recommendation of an individual transferable quota system (ITQ) for most South African fisheries, two workshops were held in order to find some common ground. In addition all meetings were opened to interested parties. Drafts were widely circulated for comments and the participants consulted extensively with their constituencies.

By May 1996 the Working Committee of the FPDC had finalised a draft which was endorsed in principle by the Plenary Committee, although with strong reservations from some sectors during a two-day meeting in Cape Town. By 4 June the final document was delivered to the Minister, who promised to proceed immediately with the drafting of a White Paper. Meanwhile, the transitional government ended and the ANC-controlled government took over. After some hesitation the process of drafting the White Paper started, with a Norwegian consultant hired as an “unbiased expert”. The issue of access-rights and transferability continued to be a contentious issue. The FPDC had proposed transferable-rights, granted for perpetuity, but without being very specific about how the nature of access rights and how the ITQ-system was supposed to bring redistribution in favour of disadvantaged groups. To advance the process the Minister nominated a special panel to review the access-right options. With all sorts of allegations floating concerning biased participants, the Minister chose to nominate four “outsiders”, i.e. persons with no vested interests in the fishing industry, to the Access Rights Panel. Two lawyers, a sociologist and an economist made up the panel. After four months they delivered their report to the Cabinet with clear recommendations as to the nature of the access-rights. They were to be real, long-term, transferable and inheritable property rights. According to the panel, “the stakeholders should be encouraged to behave as farmers and harvesters and not as predators” (Sea Fisheries 1996a). The panel had little understanding for the FPDC principle (introduced mainly by “big business”) that there should be no sudden removal of rights and quotas. On the contrary, it was considered in the interest of all parties that the changes to be made were implemented speedily.

With only slight editing, the recommendations of the Access Rights Panel were written into the White Paper, which was presented to Parliament by May 1997 (RSA 1997a). The White Paper was distributed widely to contribute further to the policy debate over the proposed changes. Contrary to the normal procedure, however, the writing of a Bill on the new fisheries policy did not await the responses to the White Paper. Because of the pressure to produce speedy results, the “Marine Living Resources Bill” (RSA 1997b) was prepared in a parallel process with the White Paper. As part of its internal deliberations the Department of Sea Fisheries had appointed a legal task team consisting of local as well as foreign experts to review the existing 1988 Law. The team soon found out that it would be impossible to implement the proposed policy through the existing law and advised the writing of a new bill, a work which was started immediately, with the assistance from the same team. During this process the team writing the White Paper provided the legal task team with steady inputs, “trying to keep one chapter ahead” as one of the participants described the internal process.

By the end of September 1997 the Bill was introduced, adhering strictly to most, if not all of the major recommendations in the White Paper. By then a new political process started, with the initiative squarely placed on the Portfolio Committee of Environmental Affairs and Tourism. The Committee was not happy with all the recommendations of the White Paper and the Bill, in particular with the idea of real, long-term and transferable property rights. After a lengthy process of hearings, with written as well as oral submissions from most stakeholders, the Portfolio Committee was able to reach a compromise on all contentious issues, including that of access-rights (RSA 1998). With this truly remarkable compromise the Bill was able to be tabled by the House of Representatives, ans waited for the final approval in the National Council of Provinces. The Bill was passed with only technical amendments and the Act became effective by June 1998.

In principle, the 1998/99 allocations could then be implemented according to the Marine Living Resources Act. In the meantime a large number of new potential entrants had filed applications. In the West Coast rock lobster fishery the allocation of 62 new quotas was challenged on legal and technical grounds. In the Supreme Court the old quota-holders won the case, suspending the utilisation of the new quotas, thereby creating a precedence for most other disgruntled established quota-holders. Even if the administration was able to work out a set of compromises regarding the 1998/99 season, with a certain percentage of the TAC to be set aside for the new entrants, there are signs of a growing administrative chaos. Thousands of quota applications are pouring in, to be handled by a minimal administration with little judicial expertise and even less capacity to control the extensive information required from the new applicants. At the time of writing the MCM administration has been accused of gross financial mismanagement, including corruption, leading to the replacement of the director and the suspension of several other key officials (Cape Argus, 8.12.99)³. Nevertheless, allocations according to the new law are now being made and from 1999 onwards one should be able to see the first results of the new fisheries policy.

³ As of February 2000 it was clear that the report from the internal audit is very critical as to the procedures followed by MCM regarding tendering and spending from the Marine Living Resources Fund, but none of the accused have been found to have enriched themselves personally. All suspended leaders have been reinstalled in their former positions, but MCM has been reinforced by a special programme manager to oversee that bureaucratic procedures are followed.

The choice of possible management regimes is difficult. The regime is determined by what is regulated (effort or catches), how rights are distributed (giving, selling or leasing), to whom (persons, vessels, communities or firms) and their status regarding transferability and duration. According to Matthiasson (1992) the possible options, which are shown in Table 2, yield some 240 possible regimes. If the impossible combinations (like delegating rights to persons, firms, etc. when the resources have already been given to a public enterprise) are excluded, there are still 204 possible outcomes. Some of them were constantly discussed during the policy process.

While there was agreement on regulating the catch in most fisheries (though effort in the case of the squid fishery), disagreement was frequent regarding the distribution principles, where actually all alternatives at some time were discussed. In the White Paper the selling of rights figured prominently (together with a public enterprise to take care of the new entrants), while the Parliament in the end chose to rent out fishing rights (not quotas!) without specifying how much and when the rights-holders should pay. Under the present regime rights can be distributed to persons as well as firms, while the community option was never seriously considered. According to the FPDC document and the White Paper, rights should be freely transferable, while the politicians chose more limited transferability, still to be dependent on ministerial approval. The main battle was over their durability. In the FPDC document the length of the rights-period was just estimated to be “long term”, while the White Paper prefered to see rights granted for perpetuity. Even within the Portfolio Committee the alternatives varied between 50 years (proposed by the National Party) and 10 years claimed by ANC. The compromise was 15 years, with even shorter duration for new entrants. In summary, the existing South African system is based on catch controls and the renting of rights (leasing) to persons and firms. The rights are only partially transferable while their duration is limited. Measured against what Matthiasson (1992) considered to be the ideal regime, that is the regime best suited to achieve efficiency, equity and reversibility (marked in bold in Table 2) the new South African regime does not fare badly. The contentious issue is the apparent lack of transferability, which is the trade mark of a market solution. At the same time communities are ruled out as receivers of rights and quotas. The next section sets out to explain why these two options, for simplicity called the market approach, and the community approach were ruled out.

Table 2
Possible contract regimes

Factor	Nature of allocation	Owning entity	Transferability	Duration
	Public enterprise
Effort	Handing out rights	Persons Vessels	Transferable rights	Limited time
Catch	Selling rights	Communities Firms	Non-transferable rights	Unlimited time
	Renting rights			Undefined time

6. WHY NOT A MARKET-SOLUTION OR COMMUNITY-MANAGEMENT?

When the status quo was definitely out of the question, there was a gradual movement towards more market-like solutions among the existing rights holders in the fishing industry with the important reservation that most participants were extremely reluctant to pay for their rights. After the special Access Rights Panel had delivered its recommendations the White Paper leaned even more heavily towards a market solution. Never-the-less, this solution lost out in the last instance. Rights were not granted in perpetuity and they were not freely transferable. How was it big business stumbled in the run-up?

First, there was in the ANC caucus a general fear of “business as usual”. The apartheid legacy, in terms of skewed ownership, lack of participation, etc. was so bleak it was felt that something had to be done (Hersoug 1998). The political activists familiar with the fishing industry realised that the possibilities of reallocation would be gone as soon as the initial allocation had been done. With rights granted in perpetuity, new entrants could be bought out relatively quickly and the industry would revert back to square one; an oligopolistic industry mainly dominated by white-owned companies. In addition it was totally unrealistic to expect people who had been discriminated against through all their lives to turn into professional businessmen within five years, which was the stipulated period of transformation. Thus, the playing field was extremely uneven, or as one ANC-activist formulated the problem: “Why should we get rid of the most important instrument for restructuring, having fought for 80 years to acquire state power. Our experience with apartheid was precisely the indiscriminate use of the state to reallocate resources” (pers. comm.).

Secondly, there was not only in the ANC, but in business circles as well, great scepticism regarding the possibility of windfall gains for the new entrants. With a short transformation period, a limited reallocation and then “business as usual”, it would be possible to sell the newly acquired quotas for substantial sums of money. “Paper quota holders” were considered a threat to the industry by nearly all participants in the Fisheries Policy Development Committee and they went to great lengths in order to limit the transferability of the rights pertaining to the new entrants (Hersoug 1996).

Finally, there was an acute lack of institutional credit among the small business and potential new entrants, which could impede the selling of rights to previously disadvantaged groups. The South African state has more pressing needs in housing, education and health and it would not be possible to obtain cheap institutional credit of any magnitude. So, existing businesses would be the nearest source of credit, which normally would mean a take-over within a short time, if not formally, then in practical terms. All in all, “business as usual” was not a very tempting option for the party in power, now finally having the possibility of rectifying some of the unjustices wrought by apartheid policy.

To argue why South African authorities did not choose to utilise the community option may for some look like breaking down open doors - it was simply not considered an option. Existing owners of rights and quotas had no intention of handing over even a small part of their assets in “some kind of roulette”, as one of our informants claimed in 1996. And they were wholeheartedly supported by the biological establishment in Sea Fisheries (now MCM), which preferred centralised solutions, and by organised labour who strongly resisted any kind of grand-scale social experiments in which their members might lose their jobs. Nevertheless, it is still of interest why this option was excluded right from the beginning, especially in a country where donors as well as NGOs have for years argued in favour of community management and community participation. Seen from the outside there seems to be three factors working against community management.

First, the coastal communities of South Africa and especially of Western Cape, are close knit fishing communities of the type found in a number of other countries. Due to historical circumstances, in particular the forced removals of coloureds and blacks starting back in the 1930s, but more systematically from 1961 onwards, several “communities” are simply a number of coincidentally assembled people with little or no interconnection, with a majority living from means other than fishing and fish processing. Add to this a systematic discrimination against Africans during the “40 lost years”, during which nearly all fishing rights and quotas were allocated to whites and the result was a rather distorted fishing community (O’Meara 1996). Even today, a large number of fishermen fishing from some of the typical Cape Town fishing communities are located in entirely different places, and must travel considerable distances to get to sea.

Second, whatever the justice of claims for participation and allocation of quotas, it is nevertheless a fact that capacity and competence to administer and distribute resources of this magnitude is seriously lacking in most coastal communities. As shown by an official inquiry in 1993, the social situation was rather bleak in most coastal communities (De Wet Schutte 1994). Poverty, lack of housing, alcoholism, unemployment and illiteracy were pertinent features of the coastal communities in the Western Cape, and were even worse in the Eastern Cape. With some notable exceptions the level of organisation was also low and consequently, the ability of taking on complicated administrative tasks was absent. Capacity building and training was never a priority task of the previous National Party government, and even in the new dispensation efforts soon stumbled for lack of money and human resources, in addition to new political cleavages, this time between blacks and coloureds.

Last, but not least, most participants in the original FPDC process had some special experiences with community management or, more precisely, with community quotas, allocated for hake in the period 1993-94 (De Wet Schutte [1994] records the history in detail). The dismal state of the coastal communities became problematic by the early 1990s, necessitating a political initiative. Following an inquiry into the socio-economic conditions of the fishing communities of the West Coast, the Minister requested the Quota Board to consider the allocation of hake quotas to specific areas. The idea was not completely new in South Africa since West Coast rock lobster had already been allocated to certain communities. It seems, however, that the impetus came from Alaska, where community quotas for hake were established in 1992 with considerable income generated for community purposes (Townsend 1997). As could be expected, a large number of communities organised as trusts, and although it took time to get them formally registered, it soon became clear that the original 3000t would be inadequate for creating any improvement in living conditions.

Based on the report the Quota Board proposed the set-up of Fishermen’s Community Trusts, to provide support for those members of communities who were dependent on fishing but not for the whole community. The original idea was to provide support to those areas where no support was available from the state or other established sources. Even though the Quota Board tried to provide standardised guidelines and conditions, the actual target group (the beneficiaries) were ill-defined and the mechanisms of support ill-conceived.

In the subsequent year the amount of quota set aside was increased, but to little avail. Financial mismanagement, corruption, cash payments to the alleged needy, all contributed to strife, local cleavages and political turmoil - effects that were exactly opposite of what the Quota Board had intended. By the end of 1994 a special committee was established to look into the working of the trusts and reported shortly afterwards that: “The possible total abrogation of the Community Quota system should be seriously considered.” (De Wet Schutte 1994:43). If the system was to continue, the investigation committee recommended a more coherent management framework, no cash payment, and the establishment of an umbrella (mother) trust for all the existing community trusts. Before political action could be taken, the Cape Supreme Court had ruled that this type of trust was not considered a legitimate receiver of quotas according to the Sea Fisheries Act of 1988 then in effect. Consequently, most trusts were dissolved, leaving both the disappointed fishermen and administrators experience-wise richer. Unfortunately, it also left a negative legacy, not only for community quota schemes, but for community management schemes in general.

7. REDISTRIBUTION - THE PRELIMINARY RECORD

The new Marine Living Resources Act was formally signed into law in May 1998. The 1998/99 allocations were then prepared according to the new law and its accompanying regulations. Not all the old quota holders accepted this situation and the case of West Coast rock lobster was brought to the Supreme Court. Due to legal technicalities (applications for the 1998/99 season had been done according to the old Sea Fisheries Law) the rights of the new entrants were suspended and the shares of the old participants restored. In other fisheries, e.g. hake and abalone, a negotiated settlement was reached, based on the fact that the Minister could force a stronger cut the next year, if the old rights holders did not accept the “new deal”.

By the end of 1999, after only one year with the new Act, is definitely too early to measure the extent of redistribution. It is clearly stated both in the White Paper and in the final MLR Act that the transformation process will take some time, although no specific time frame is indicated. Nevertheless, an assessment at this time can indicate something about the speed, the magnitude and the allocation criteria that are being used, thereby indicating to what extent “a more fair distribution” is taking place. Redistribution could also be seen in a broader perspective. In 1994 a new Quota Board was elected, with prominent members from the previously disadvantaged groups. Partly on its own initiative, and partly pressured by the new forces now coming to power, the new Quota Board started its own restructuring - a process which was highly disputed among the participants of the Fisheries Policy Development Committee. The Quota Board has made a heavy impact on the restructuring process, bringing in a large number of new entrants. For this reason the analysis of restructuring should start in 1994 and, eventually determine the extent to which the new redistribution (according to the 1998 MLR Act) differs from the more “private” initiative of the Quota Board.

We have on an earlier occasion been pessimistic as to the extent of possible redistribution (Hersoug and Holm 1998). Neither the FPDC document, the White Paper nor the MLR Act lay down any specific targets for redistribution. Only in the Access Committee’s report is there an indication of 5-10% of the TACs as a reasonable target, a figure which has never been politically confirmed. In contrast, the labour union (FAWU), which organises most of the processing workers, in its submission to the Select Committee claimed 70%!

Considering the number of new entrants there is no doubt that we have been too pessimistic. In the deep-sea hake sector the number of participants has increased from 31 in 1994 to 105 in 1999, mainly due to the new participants in longlining. In the West Coast rock lobster fishery the number of participants has increased from 93 to 192. In squid, abalone, line fishing and the pelagic sector there is also a considerable increase in the numbers of operators, although the reallocated share of the TACs is more modest. There is a clear tendency in the size of the new allocations in the hake fishery: the quotas become smaller and smaller every year. In 1993 the new entrants in the hake sector received on average a quota of 814t, while in 1998 the average quota was down to 215t. The opposite trend applies to West Coast rock lobster fishery, where new quotas in 1998/99 were on average double the size that were allocated in 1993/94. In 1999/00 they are again back to the 1993/94 level. The overall impression is nevertheless that the magnitude of redistribution has been less impressive than the sheer numbers of new participants being brought into the sector. So far 14% of the hake quantity has been reallocated (including all the new allocations done from 1993 to 99), while in West Coast rock lobster the similar figure is 31%. It is well worth noticing that most of the restructuring shown in the following tables took place under the previous Quota Board, while the present restructuring (after the MLR Act) has just started. Table 3 indicates the number of new quota-holders per year in the deep sea hake fisheries; Table 4 gives the similar figures for the West Coast rock lobster industry.

Table 3
Hake quota allocation 1993-2000

Year	Number of participants	New entrants	Exit	Average quota new (t)	New % entrants	Total TAC (t)
1993	33	5	0	814	2.77	147 000
1994	31	0	2	0	0	148 000
1995	31	1	1	372	0.25	148 000
1996	42	14	3	367	3.40	151 000
1997	57	16	1	265	2.76	153 702
1998	57	0	0	0	0	151 000
1999	105	52	4	215	7.66	146 120
2000	41*	1*	?*	750*	0.62*	121 210*

Figures based on Stuttaford (1994-99), compiled by D. Baron.

* Only the deep sea hake trawl has been allocated while hake longline has not yet been finalised.

Table 4
Rock lobster quota allocation 1993-2000

Year	Number of participants	New entrants	Exit	Average quota new (t)	% of TAC new entrants	Total TAC (kg)
1993-94	93	46	2	3 031	6.34	2 200 000
1994-95	99	7	0	3 761	1.32	2 000 000
1995-96	104	8	3	3 538	1.89	1 500 000
1996-97	145	43	2	3 720	9.41	1 700 000
1997-98	173	36	8	5 429	10.18	1 920 000
1998-99	192	22	3	7 537	9.32	1 780 000
1999-00	187	14	19	3 571	3.10	1 613 477

Figures based on Stuttaford (1994-98), compiled by D. Baron.

A large number of the new entrants have become “paper quota holders”, meaning that they receive valuable quotas which they immediately sell to established fishing companies, possibly as part of a “joint venture”. This is hardly surprising considering the small size of the new quotas, nevertheless, this is contrary to the ideals of the FPDC, the White Paper and the MLR Act. An interesting question will arise at the end of their term of tenure. Will they be refused a new lease because they do not fulfil the criteria set by the new regulations, or will they, as happened in Namibia, be given an extension, and hence longer time to acquire capital and eventually invest?

Even though the existing quota-owners in the deep-sea hake sector disgruntingly accepted a modest cut over the last five years and a new negotiated deal of 8.2% of the TAC for new entrants in 1999, the situation is not as simple as this (Hutton et al. 1999). In reality, a considerable part of the redistributed quotas are fished by the old established companies, with the difference that they now must pay the owners of the quotas. And the established companies are more than willing to buy quota, or to enter into joint ventures with the new entrants.

How is used the money paid for such fishing rights? Stories about new 4 wheel-drive cars, satellite TVs and extravagant lifestyles abound, but only careful research can uncover the local investment patterns. So far it seems that little new employment has been created, because the new quotas are being fished by existing vessels and processed by established companies. According to Isaacs and Normann (forthcoming) these new organisational entrepreneurs act as a “filter” between the fishers and the grass-roots level, filtering information from government down and initiatives from the fishers up. Information and support are hence the most important assets, besides for their own organisational capabilities. Among them there are unscrupulous opportunists, who have amassed a number of names to support their “firm” in applications for quotas, to the “true” community worker have organised co-operatives where income (and investments) are shared between participants. Unfortunately the former appears more frequent than the latter.

8. BRINGING THE STATE BACK IN!

Based on the South African case of establishing a new fisheries policy where redistribution of rights and quotas figure prominently, there is little doubt that the state is essential, i.e. redistribution takes place through a political/administrative process. For reasons that have been explained above, neither community nor market can perform the task of reallocation in the same manner. A community-based solution was early ruled out because of the lack of community management traditions. Even though the state could have divided the TACs (or part of the TACs) into community quotas, former experience and the highly diversified pattern of most South African coastal communities worked against such a solution. In addition, weak local competence, weak organisations and the general lack of trust, all contributed to the choice between only the two remaining alternatives; state or market. The market solution figured strongly all through the FPDC process and not least in the White Paper. In the special report from the Access Rights Panel it was consistently argued for a once-off selling process, a short transformation period and then “business as usual”. This alternative did not survive the Select Committee’s treatment of the proposed Act, as it was evident that a market-solution would have accommodated few new entrants and even fewer on a permanent basis. If a market-solution would have been preferred, it would have been necessary to introduce credit facilities, as well as capacity building and regulations pertaining to further sale of fishing rights for a certain period. If not, established companies would probably have quickly bought up most of the new entrants. This also applied to the auctioning of rights - an alternative which was seriously discussed in business circles at one point in the policy process.

Only the state, through its new political force (the ANC), now formally in charge of the administration, could enforce a true reallocation of rights and quotas. For this reason it was important that the political responsibility was invested in the Minister, after having been placed in an independent organisation, similar to the previous Quota Board. It should be remembered, however, that any reallocation takes place as part of a “negotiated revolution”, where former stakeholders still figure strongly in the policy process. Reallocations were also met with resistance within the new situation, not least by the workforce of the established companies. The reallocation process was therefore a careful balancing act, where too much change would create havoc in the existing industry and too little change threaten the legitimacy of the new fisheries policy. At the moment, however, the whole process seems to be threatened by lack of administrative capacity to handle all the applications (more than 5000!). Even more important is the lack of oversight to check if the information provided by the new applicants is correct. Finally the administration lacks some kind of watchdog to check how the new entrants are performing on the ground, that is, to what extent their bright business plans are being implemented. Stories of blatant fraud abound (Independent Newspapers 1997).

Although the negotiated revolution in 1994 was unique, South Africa is not a special case in terms of setting up new fisheries policies. A number of former autocratic countries must reorganise their fishing sectors in the future. Depending on the goals and the resource situation, they will have greater or lesser room to manoeuvre and will depend on a strong and committed state if the goal is to increase participation and obtain a more equitable distribution. Hence, it is much too early to write off the state as the main player in fisheries management. However, as the development in South Africa clearly shows; a new fisheries policy is not enough: the policy has to be implemented as well, putting mechanisms in place whereby the previously disadvantaged can work their way into the fishing industry. Finally it is a question of how the new entrants behave, in terms of creating new opportunities or just enriching themselves as “paper quota holders”. A strong state is clearly a necessary but not sufficient condition in order to create a more equitable fishing sector.

9. LITERATURE CITED

Apostle, R., G. Barrett, P. Holm, S. Jentoft, L. Mazany, B. McCay, and K. Mikalsen 1998. Community, State and Market at the North Atlantic Rim. Challenges to Modernity in the Fisheries. University of Toronto Press, Toronto.

Berkes, F. (Ed.) 1989. Common Property Resources, Ecology and Community Based Sustainable Development. Belhaven Press, London.

Cape Argus 1999. Moosa acts after audit reveals R24-m scams. December 8.

Christy, F. 1996. The Death Rattle of Open Access and the Advent of Property Rights Regimes in Fisheries. Marine Resource Economics. Vol 11.

Cochrane, K.L. 1995. Anticipated Impacts of Recent Political Changes on Fisheries Management in South Africa. NAGA, January, ICLARM, Manila.

Cochrane, K.L. and A.I.L. Payne 1998. People, purses and power: developing fisheries for the new South Africa, in Pitcher, T.J., P.B. Hart and D. Pauly (Eds.) 1998. Reinventing fisheries management, Kluwer Academic Publishers, Dordrecht, London.

Crean, K. and D. Symes (eds.) 1996. Fisheries Management in Crisis. Fishing News Books, Oxford.

De Wet Schutte 1994. Report of the committee of inquiry into fishermen’s community trusts. Ministry of Environment Affairs and Tourism, Cape Town.

Dyer, C.L. and J.R. McGoodwin (eds.) 1994. Folk Management in the World’s Fisheries: Lessons for Modern Fisheries Management. University Press of Colorado, Niwot.

Evans, P.B., D. Rueschmeyer and T. Skocpol. Bringing the state back in. Cambridge University Press, Cambridge.

Fisheries Policy Development Committee (FPDC) 1996. National Marine Fisheries Policy for South Africa. Report to the Minister from the Fisheries Policy Development Committee. Sea Fisheries, Cape Town.

Garcia, S. 1998. Resource management systems in development countries. Proceedings from the Soria Moria Conference, Research Council of Norway, Oslo.

Hannesson, R. 1996. Fisheries Mismanagement. The case of North Atlantic Cod. Fishing News Books, London.

Hersoug, B. 1996. Same procedure as last year? Same procedure as every year! - some reflections on South Africa’s new fisheries policy. Paper delivered at the international seminar on National Marine Fisheries Policy for South Africa. UWC, Cape Town.

Hersoug, B. 1998. Fishing in a sea of sharks: Reconstruction and development in the South African fishing industry. Transformation, University of Natal, Durban.

Hersoug, B. and P. Holm 1998. Change without Redistribution: An Intitutional Perspective on South Africa’s New Fisheries Policy. Paper delivered to the IIFET Conference inTromsoe, June 1998. Forthcoming in Marine Policy, Spring 2000.

Hersoug, B. and S.A. Raanes 1997. What is good for the fishermen, is good for the nation: co-management in the Norwegian fishing industry in the 1990s. Ocean & Coastal Management. Vol 35, Numbers 2-3.

Holden, M. 1994. The Common Fisheries Policy. Fishing News Books, London.

Hutton, T., J. Raakjaer Nielsen and M. Mayekiso 1999. Government-Industry Co-management Arrangements within the South African Deep-Sea Hake Fishery. Paper delivered on IMF’s conference on Co-management in Malaysia.

Independent Newspapers 1997. Crayfish quotas causing major conflict and fraud. http://archive.iol.co.za/Archives/1998/9801/30/tense.htn

Isaacs, M. And A.K. Normann 1999. Experiences from fishing communities in Western and Eastern Cape, South Africa. Is there a basis for co-management? Paper presented at the international workshop on fisheries co-management, August 1999 (forthcoming).

Jentoft, S. 1989. Fisheries Co-Management: Delegating Government Responsibility to Fishermen’s Organizations. Marine Policy 13: 137-154.

Manning, P.R. 1998. Managing Namibia’s marine fisheries: Optimal resource use and national development objectives. PhD thesis, London Schoool of Economics and Political Science, London.

Matthiasson, T. 1992. Principles for distribution of rent from a “commons”. Marine Policy. 16 (3) pp 210-231.

McGoodwin, J.R. 1990. Crisis in the World’s Fisheries: People, Problems, and Policies. Stanford University Press, Stanford.

O’Meara, D. 1996. Forty lost years. The apartheid state and the politics of the National party, 1948-94. Ohio University Press, Athens.

Republic of South Africa (RSA) 1997a. A Marine Fisheries Policy for South Africa. WhitePaper. Minister of Environmental Affairs and Tourism, Pretoria.

Republic of South Africa (RSA) 1997b, Marine Living Resources Bill (as introduced). Minister of Environmental Affairs and Tourism, Pretoria.

Republic of South Africa (RSA) 1998. Marine Living Resources Bill (as amended by the Portfolio Committee on Environmental Affairs and Tourism (National Assembly). Minister of Environmental Affairs and Tourism, Pretoria.

Sea Fisheries 1996a. Report of the Access Rights Panel. Sea Fisheries, Cape Town.

Sea Fisheries 1996b. Report of the Legal Task, Team. Sea Fisheries, Cape Town.

Streeck, W. and P.C. Schmitter 1988. Community, Market, State - and Associations? The Prospective Contribution of Interest Governance to Social Order. In W. Streeck and P.C. Schmitter (eds.) Private Interest Government: Beyond Market and State. Sage, London.

Stuttaford, M. 1994-98. Fishing Industry Handbook. Marine Information cc, Cape Town.

Townsend, R.E. 1997. Fisheries management implications of Alaskan communitydevelopment quotas, in G. Palsson and G. Petursdottir: Social Implications of Quota Systems in Fisheries. Tema Nord 1997:593. Nordic Council of Ministers, Copenhagen.

Weber, M. 1924/1978. Economy and Society. University of California Press, Berkeley.

Property Rights and Recreational Fishing: Never the Twain Shall Meet? - J. McMurran

J. McMurran
Ministry of Fisheries
ASB Bank House, 101 - 103 The Terrace, P.O. Box 1020, Wellington New Zealand
<[email protected]>

1. INTRODUCTION¹

¹ The views expressed in this paper are those of the author and do not necessarily represent the views of the Ministry of Fisheries.

This paper examines ongoing work to improve the management of marine recreational fishing in New Zealand using a property-rights approach.

2. HOW IS RECREATIONAL FISHING MANAGED IN NEW ZEALAND?

A simplified version of the way fisheries are managed can be described as follows. For each fish stock, the fisheries Minister sets a total allowable catch (TAC), based on scientific advice as to the sustainable level of harvest from the fishery. The TAC is then allocated to the recreational, customary and commercial sectors. Customary and recreational-take is provided for when setting the annual commercial catch limit. There is no specific guidance for the Minister in setting recreational-take. Essentially the Minister weighs up competing interests and decides what is a reasonable share.

In a collective sense then recreational fishers have a right to a share of TAC. Individually, recreational fishers also have rights. Anyone, including an overseas tourist, is free to fish in the sea, provided they do not sell their catch and they comply with the amateur fishing regulations. New Zealand has world-class recreational fishing. Not surprisingly fishing is a very popular pursuit. About one in five New Zealanders fish recreationally in the sea in any one year and many overseas tourists join them.

The amateur fishing regulations include controls such as daily bag-limits, minimum fish sizes, closed areas, closed seasons, and method and gear restrictions. The regulations serve a range of functions including:

i. managing recreational take so as the TAC is not overshot

ii. enabling all recreational fishers to have a “fair go” rather than having high individual limits which could result in the majority of the (collective) recreational share going to a relatively small proportion of recreational fishers and

iii. fisheries compliance purposes - the commercial compliance regime applies when a person is found in possession of fish at a specified level well above the amateur bag limits.

3. HOW DO RECREATIONAL FISHERS’ RIGHTS STACK UP WITH COMMERCIAL AND CUSTOMARY RIGHTS?

3.1 Status of rights

Underlying the brief description above about how recreational fishing is managed are some fundamental problems for the recreational sector, and indeed for fisheries management generally. The recreational fishing sector is in fact in a less-advantaged position in terms of how their rights stack up against the customary and commercial sectors. This is not a good position to be in as the fishery is a shared resource.

3.2 Commercial fishing rights

Over the past 15 years, commercial fishers have worked with government to implement clearly-defined, appropriately-specified and enforceable property-rights. In 1986 government introduced the quota management system (QMS) to manage commercial fishing in the marine environment, using individual transferable quota. The QMS has evolved over time, with a number of changes made to improve the system. The Fisheries Amendment Act 1999 heralded the most recent changes. Amongst other things, the Act:

i. allows responsibility for the operation of the quota registry to be devolved to the fishing industry, and

ii. enables research, compliance and other services required by government to be directly purchased by the fishing industry.

3.3 Customary fishing rights

The QMS provided private rights to harvest fisheries (shares of fishstocks) without first determining who owned the resource. Understandably the indigenous Maori population saw this as an affront to their rights under the Treaty of Waitangi signed with the Crown in 1840. The development of the QMS therefore triggered addressing customary fishing grievances.

The Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 split the commercial and non-commercial components of the customary fishing right and provided for each in a different way. The commercial part of the Settlement provided for quota, cash and other assets to be deeded to Maori.

The non-commercial component of the customary fishing right continues to place Treaty obligations on the Crown. The Settlement requires the Minister, acting in accordance with the principles of the Treaty of Waitangi, to consult with tangata whenua² and develop policies to help recognise the use and management practices of Maori in the exercise of their non-commercial fishing rights.

² This literally means people of the land and refers to the Maori population.

³ The Maori people local to the area.

Unfortunately for recreational fishers, their collective rights to a share of the fishery are not well defined, relative to customary and commercial fishers who share in the same resource.

When allocating the available catch, the Minister provides for customary and recreational take and then sets the annual commercial catch limit. Recreational fishers do not have any priority in law over commercial fishers, or vice versa. The fisheries Minister simply needs to make an allowance that he or she considers reasonable. If recreational fishers think the allowance the Minster sets for them is unfair, it is hard for them to take action for two reasons:

i. their right is loosely defined and decisions are hard to overturn unless the Minister acted unreasonably, and

ii. unlike commercial fishers, recreational fishers do not have ample funds to take legal action to defend their rights.

A related problem with recreational fishing rights is how the rights are managed. Recreational fishers largely rely on the government to give effect to, and manage, their rights. Until recently there has been little discussion about whether this is the best way to manage recreational fishing.

Management by the Ministry of Fisheries tends towards something of a “one size fits all” approach. For example, the amateur fishing regulations are similar in approach around the country. However, New Zealand’s coastline and coastal communities are diverse with different needs and local conditions. Many of the frustrations that recreational fishers have are local concerns. Commonly there are concerns expressed about the impact of commercial fishing on recreational fishing in particular areas. The Ministry does not have the detailed knowledge, and more importantly the resources, to become heavily involved in local disputes. The Ministry’s primary role is to ensure the sustainability of fishstocks, rather than advocating the cause of one sector (e.g. recreational) at the expense of another or mediating disputes. It is not surprising that recreational fishers sometimes express frustration about the lack of response when they have made the effort to influence fisheries management decisions. These factors, and a concern by many recreational fishers that the quality of fishing has declined, suggest it is unlikely that recreational fishers can rely on government to fully meet their needs and aspirations.

4. POLICY REFORM

Over the past year the Ministry of Fisheries has been working collaboratively with the New Zealand Recreational Fishing Council Inc. (NZRFC). The NZRFC is the main national body for recreational fishers, representing a range of individuals and clubs throughout the country. The joint Ministry/NZRFC working group is preparing a public consultation document on improving recreational fishing. The intention is for the consultation to be managed and undertaken jointly by the working group.

Two key areas being examined in order to better position the recreational sector are:

i. better defining the recreational right by introducing a proportional-share arrangement, and

ii. enhancing recreational fishers’ rights to directly manage their share.

Recreational shares in key fisheries would be set as an on-going proportion of the available catch, rather than being subject to the Minister’s discretion each time a stock is reviewed. The proportion would be set as a percentage of the available catch. For example, if the recreational share was set at 40% in a particular fishery and the available catch for the year was 100t, 40t would be allocated to the recreational sector. In subsequent years the proportion would remain in place, with the tonnage allocated varying in line with changes in the available catch.

A benefit of an on-going proportional share for the recreational sector is protection of their share from erosion. There is also the potential that in some fisheries, the recreational sector could make a case for a higher share than at present when shares are first set.

Perhaps more importantly however, having a share known in advance provides the recreational sector with greater status to sit around the table with customary and commercial fishers in the area and work out how they can manage the fishery so they all benefit. A proportional share would remove the current incentives for both the commercial and recreational sectors to lobby the Minister to increase their collective share. Such behaviour is time-consuming and not a productive use of resources - a good example of a zero-sum game because an increase for one sector results in a decrease for the others. And, position taking, or gaming, is encouraged which contributes to tensions between sector groups and diverts attention from opportunities to work together constructively.

However, a proportional-share arrangement would mean that the obvious way to improve fishing for all three harvest groups would be by working together to increase yields, or coming to agreements over use of particular areas within fisheries. The following sorts of agreements might be possible:

i. commercial fishers stay out of a particular area at particular times (e.g. a harbour over the summer holiday period) or cease to use particular methods in certain areas, in return for the recreational fishers supporting a commercial harvest strategy

ii. fewer fish be harvested in order to generate larger fish and better catch rates in the fishery, and

iii. different areas be set aside for commercial and non-commercial shellfish harvesting.

There are a number of issues to consider in better-defining the recreational right with a proportional share, including:

i. which stocks would be subject to the proportional option

ii. how the proportional shares would be set

iii. how recreational fishing would be managed within the share

iv. what response could be made if recreational demand significantly increased after shares were set

v. whether there are any circumstances when the level of the shares could be reviewed, and

vi. what if recreational shares were at a higher level than currently set - how would any costs be managed?

6. SHARED MANAGEMENT

The concept would see a legislative framework to enable mandated regionally-based recreational management groups (RMGs) to be established to:

i. manage recreational fishing with the Crown

ii. work with commercial and customary fishers to develop plans to manage harvesting.

In managing recreational fishing, an RMG would need to develop some form of a plan including the following sorts of matters:

i. the objectives for recreational fishing in the fishery or area

ii. fisheries management controls to give effect to those objectives

iii. governance rules for decision making by the RMG

iv. supporting services - compliance, research and education

v. specification of how the environmental obligations in the Fisheries Act would be met, and

vi. funding.

⁴ Controls would probably need to be gazetted by government so they can be effectively enforced.

i. make representations to local councils seeking more sustainable land-management practices if important fish nursery areas are being adversely affected by run-off and pollution, and

ii. investigate technologies to reduce mortality of undersized fish, reduce capture of unwanted bycatch, and improve detection of blackmarket shellfish.

i. How a mandate would be established

ii. Role and functions of RMGs

iii. How to ensuring the Crown continues to deliver on Treaty and sustainability obligations

iv. How RMGs should be funded, and

v. Whether trading (or leasing) of shares between sectors should be permitted.

7. CONCLUSION

There is a place for the use of property-rights approaches in the management of recreational fishing. In an ideal world, rights for all harvest groups would be better defined at the same time. However, New Zealand’s situation suggests there is potential for formalised recreational property-rights even when individual transferable quota already exists for commercial fishers and the rights of customary fishers are also well-defined.

Introducing a formalised property-rights regime for the recreational fishing is not a task for the faint hearted, and will be something that takes considerable time. There are some major challenges that need to be resolved in a calm way with a longer-term strategic perspective. However, within every challenge lie opportunities. The potential benefits of better defined recreational rights are not limited to protecting the recreational share from reduction. The benefits extend to better fisheries outcomes through more responsive management, more collaboration and much greater participation in fisheries management decisions. The potential benefits suggest that progress will be made in New Zealand and that the challenge of using property-rights to improve recreational fishing is one worth investigating.

Negotiating the Establishment and Management of Indigenous Coastal and Marine Resources - D. Campbell

D. Campbell
DCafe
P.O. Box 228, Kippax, ACT 2615 Australia
<[email protected]>

1. INTRODUCTION¹

¹ This project received funding from the Fish Resources Research Fund

Justice Olney in the Croker Island 1998 Federal Court ruled that communal native title exists in relation to the sea ‘which washes the shores of the relevant land masses’, and sea-bed within the claimed area. In making this decision, he found native title sea rights might exist co-jointly with non-indigenous rights, but only to the extent that native title rights yield to inconsistencies with other legal rights and interests. The possibility of exclusive native title, however, was extended from the landward side of the mean high-water mark to the landward side of the jurisdictional limits of the State or Territory - as set by the coastal baseline. In most cases this will be to the landward side of the mean low-water mark, although exclusive native title rights can also apply to enclosed waters, such as Mission Bay in the Northern Territory (Croker Island 1998 s.51).

The Croker Island native title claimants and the Commonwealth government have appealed the Croker Island decision to the Federal Court. It is expected that any decision by the Federal Court will eventually be appealed to the High Court, with the possibility of a ruling by 2001.

In addition, the High Court, on 7 October 1999 found Queensland’s State conservation laws did not extinguish the native title rights of Aborigines and Torres Strait Islanders to carry out traditional hunting. While the full implications of the decision are yet to be fully understood the decision is likely to impact on fisheries management and conservation law in all Australian government jurisdictions².

² The extent of this decision is still to be defined. The Canadian Supreme Court decision, Regina v Sparrow 1990, gave that customary rights to fish were only required to give way to conservation requirements. This is in line with the Law Reform Commission’s report (1986) on the recognition of Aboriginal customary laws, where it found (p. 200):

‘As a matter of general principle, Aboriginal traditional hunting and fishing should take priority over non-traditional activities, including commercial and recreational activities, where the traditional activities are carried on for subsistence purposes. Once this principle is established the precise allocation is a matter for the appropriate licensing and management authorities acting in consultation with Aboriginal and other user groups’.

Such uncertainty in defining coastal and marine native title rights works to the loss of indigenous and non-indigenous people and society as a whole. Those with an interest in marine and coastal resources can mitigate such losses by negotiating institutional structures to overcome poorly defined rights.

This paper, deals with the rights, issues and institutional structures by which local groups may set up and negotiate agreements. The nature of the problem, and how inadequate rights may lead to the demand for new institutional structures are reviewed in Section 2. Section 3 covers the nature of rights, including legal and economic rights, how different bundles of rights might affect what can be done with an asset and questions regarding private, community and government holding of rights. The nature of legal and economic rights are discussed in Section 3. In Section 4 some of the issues requiring consideration when developing new institutional structures are discussed. These include the costs in transacting an agreement, the importance of information and issues of compliance. In Section 5 a number of different possible compliance procedures, including Indigenous Land (Sea) Right Agreements and Indigenous Protected Areas, are reviewed. The conclusion and possible future directions are presented in Section 6.

2. THE NATURE OF THE PROBLEM: THE EBB AND FLOW OF CHANGING RIGHTS

2.1 Establishment of native title rights

With the passing of the Native Title Act 1993, Aboriginal and Torres Strait Islander peoples are establishing native title rights to land and coastal areas where they can show an ongoing indigenous connection to the area³. Such changes have altered the expectancies of non-indigenous as well as indigenous peoples over future resource access and the associated cultural and economic benefits. In addition, uses by non-indigenous users of marine and coastal resources can affect indigenous cultural and economic uses of coastal and marine resources.

³ By April 1998 the National Native Title Tribunal had received native title applications from Aborigines and Torres Strait Islander people to 140 locations that included areas of sea. Of these, 73 were in Queensland, 35 were in Western Australia, 5 were in South Australia, 11 in the Northern Territory, 11 in New South Wales, 3 in Victoria, 1 in Tasmania, and 1 (Jervis Bay) in the Commonwealth.

⁴ For example, plans for an aquaculture project in Darwin were withdrawn due to uncertainty with native title and the perceived inability of the Northern Territory government and Aboriginal representatives to be able to handle applications on land which may be subject to native title claims AIATSIS (1997 p. 11).

Except for infrastructure that had been constructed, there is no requirement under the Native Title Act 1993 to negotiate with native title holders concerning acts in the waters and seabed to the seaward side of the mean high-water mark. Such infrastructure includes the establishment of ports and jetties, but does not explicitly exclude aquaculture infrastructure, such as for oyster production. As a result, aquaculturalists may still need to negotiate access in those locations in which exclusive native title rights apply. If native title rights are found to apply to the sea, any diminution of rights or benefits from the sea estate is likely to require compensation to the native title holders. Whether compensation payment is the responsibility of the perpetuator of the act, or the Commonwealth government, depends on the nature of the act incurred.

A decision in support of s.51 of the Croker Island 1998 decision concerning the extension of exclusive native title rights to the mean low-water mark, will affect s.26 (3) of the Native Title Act 1993 - which restricts the seaward extension of exclusive native title to the mean high-water mark. As well as affecting on those wishing to construct coastal structures, such as aquaculture ponds, confirmation of the original Croker Island decision will also affect fishing operations in the intertidal zone, as for barramundi and mud crab. Also, questions exist on the differential effect native title decisions can have on different fishers operating in the same fishery, even when entitlements are the same (see Loveday 1998 pp. 2-3). A decision in favour of co-joint native title rights might remove some ambiguity, although the inadequacy of property rights to migratory resources, such as fish, will continue.

Reference is made in judicial decisions such as the 1999 Yorta Yorta case, and in the literature on native title rights, to a tide that washes over the rights of indigenous people. This tide, which changes the institutional nature of rights to the seas and coastal landscape, ebbs as well as flows. The problem is to manage these currents so that the foreshore is not eroded, the waters are not polluted and the potential benefits from marine and coastal resources are not washed away.

2.2 Social costs and the dissipation of benefits

Ambiguity and uncertain rights over marine and coastal resources places many of these assets in the public domain where there is little control over who has access to the benefits obtainable. This uncertainty over rights is likely to result in a race by resource users for the benefits obtainable from these assets; a situation common to fisheries management and marine resources in general.

The nature of the losses from poorly defined rights include the loss of customary indigenous benefits and resource rent⁵, through the effect on:

i. indigenous people, when they are not fully compensated for their losses⁶

ii. those responsible for payment of compensation for future acts and

iii. society at large when:

a) indigenous assets are not used for their highest valued use⁷

b) excess resources are used in the race to capture the benefits obtainable from poorly defined marine and coastal resources

c) there are costs of transacting new institutional structures, including obtaining information on the nature of assets and ensuring compliance under these new institutional structures; and

d) resources are lost to future use.

⁵ The application of resource rent to fisheries is discussed in Campbell and Haynes (1990).

⁶ For instance, the requirement in s.51A(1) of the Native Title Act 1993, for compensation to be constrained to an amount no greater than freehold value can result compensation for specific sites of high cultural value being a pittance.

⁷ In response to the High Court’s 1996 Wik decision, the Commonwealth government in 1998 amended the Native Title Act 1993 such that the Commonwealth would meet the compensation costs for some compensatable acts. Circumstances in which those committing and benefiting from acts resulting in the loss of native title rights do not pay compensation are likely to compound the social loss from such acts. That is, while losses exceed zero, beneficiaries may be better off by as little as zero, thus resulting in a net social loss.

Table 1
Conditions leading to establishing new institutional arrangements

The conditions leading to the demand for new institutional structures

_________

The conditions for local groups to successfully set up new institutional arrangements

_________

The structure of the institutional arrangement for the given conditions

2.3 The demand for new institutional structures

Barzel (1997), North (1990) and Ostrom (1990) discuss the entry of assets into the public arena as a result of poorly defined rights and the conditions for interested groups to address the loss of social benefits⁸. Formally, incentives for self-generated institutional change are likely to occur among groups with an interest in marine and coastal areas when:

i. groups are interested in minimizing cost

ii. choices are constrained by budget constraints

iii. interested parties can be separated into definable groups and

iv. market imperfections, such as inadequate property rights, exist (see Hayami and Rutlan 1985).

⁸ Using the prisoner’s dilemma paradigm, Baland and Plateau (1996), Campbell (1995) and Ostrom (1990), show that, in spite of an overwhelming social benefit, incentives exist for private individuals and different groups to not cooperate. These authors also discuss the conditions in which cooperation might be improved.

2.4 Requirements for self-generated negotiation

Ostrom (1990) suggests that the necessary factors to predict participation are poorly understood. In general, though, myopic behaviour, lack of mutual trust among probable participants, lack of communication, and a lack of the necessary institutional conditions to establish binding agreements, may need to be overcome. She concludes that successfully generated new institutional structures included:

i. a definition of those who will be authorised to use the resource

ii. the relating of the specific attributes of resources to the characteristics of identified resource users

iii. the need for new institutional structures to be at least partly designed by local resource users

iv. a need for the application and compliance with the new institutional requirements to be monitored by individuals who are accountable to local resource users and

v. the development of a schedule of graduated punishments for non-compliance which needs to be sanctioned (Ostrom 1990, pp. 185-6).

3. THE NATURE OF RIGHTS

3.1 Legal and economic rights

Legal rights involve what has been assigned to a person, group, organization or jurisdiction by the state, or marine and coastal land-owning group through legislation, custom, indigenous law or other means. Provision of legal rights occur as a result of formal arrangements, including constitutional, statutory, judicial rulings or as part of an organised system of indigenous law, and informal conventions and custom. The nature of property rights will affect the decisions made in regard to how resources are used, to the net social benefit enjoyed by indigenous and non-indigenous people and by society as a whole from fish and other marine and coastal resources.

Economic rights depend on the enforcement of legal rights and relate to the right-holder’s ability to enjoy benefits from a piece of property and the assets contained therein. That is, economic rights include the ability to enjoy benefits either directly through consumption and cultural appreciation, or indirectly through exchange, including barter, sale, rent, inheritance and gift-giving.

Realisation of the benefits of economic rights depends on the nature of the legal rights and, in this sense, legal rights provide a means to an end. However, the existence of legal rights is not enough as the ongoing enjoyment of benefits also depends on the effective power of an individual, group or community to assert control over the different attributes of their rights.

The ability to assert control over assets will be affected by knowledge on what the attributes of a resource are. Without this knowledge, control is likely to be incomplete, ‘unknown’ attributes are likely to fall into the public domain and the value or benefits of the attributes will be lost through the costly races for possession (Barzel 1997).

Granted and recognised rights will define the range of privileges and responsibilities of right holders to specific assets, such as possible parcels of water ‘as far as the eye can see’, intertidal zones, reefs, and fish. Although the legal basis of native title rights to coastal resources is known, the nature of sea-rights is not.

3.2 Different bundles of rights

Discussions in regard to rights in fisheries usually focus on privately held rights to fish and the use of input controls and individual transferable catch quota. The rights to fish and marine and coastal resources are more extensive and concern rights in addition to private rights to fish. For instance, rights of access, removal, management, exclusion and alienation (Table 2) need to be considered. The characteristics of each of these bundles of rights are important when considering who should hold these rights and whether they are held privately, by a defined group or community, by government, or be held co-jointly (Schlager and Ostrom 1992).

Table 2
The different types of rights to be considered

Type of right	Definition
Access	The right to enter a defined area or location
Removal	The right to obtain the products or a resource, such as taking fish
Management	The right to regulate internal use patterns and transform the resource by making improvements
Exclusion	The right to determine who will have an access right, and how that right may be transferred.
Alienation	The right to sell or lease either or both of the above collective choice rights

From Schlager and Ostrom (1992).

⁹ See, for instance, the Declaration of the National Indigenous Sea rights Conference (Anon. 1999).

¹⁰ Mr Caristopherson is a claimant in the Croker Island case and an executive member of the Northern Territory Northern Land Council.

What is shown in this paper is that negotiation and the development of new institutional structures can be used to:

i. remove the uncertainty and social loss due to poorly defined rights

ii. establish governance structures to shore up and maintain compliance to rights

iii. ensure those able to make the best use of the assets have access to them and

iv. ensure that right holders are able to achieve the greatest benefits obtainable from their rights.

4.1 Relevant factors

Optimal achievement of benefits from new institutional structures will depend upon consideration of a number of factors, including:

i. what the objective is in developing new institutional structures

ii. the amount of information on the nature and attributes of the assets involved

iii. the nature of the new property rights or institutional structures achieved as a result of negotiation

iv. the level of compliance with the negotiated agreement

v. the transaction costs incurred in negotiation and enforcing the new institutional structure and

vi. how well the negotiated agreement meets the objective.

4.2 Transaction costs

Transaction costs are those costs associated with the transfer, capture and protection of rights, or, ‘the costs of measuring and enforcing agreement’ (North 1990, p. 362). That is, transaction costs are the costs incurred identifying performance requirements or outcomes, obtaining necessary information, establishing and sustaining new property rights and ensuring compliance.

4.3 Information

Information on the nature of the assets held by native title rights is important in establishing and enforcing rights and in ensuring benefits are realised. For instance, because of limited knowledge, rights-holders may be ignorant of all the benefits from the use of their assets, the benefits obtainable from exchange, and the benefits from their joint-use with others. Poorly identified benefits can therefore result in inappropriate rights to the assets, poor governance structures and the loss of benefits.

The likely wide scope and complexity due to the large geographical area covered, variability in the number and nature of assets and the large number of interest groups will place a high demand for information. The veil of ignorance that overlies future events, including future judicial decisions and legislative acts, further compounds this potential loss of benefits¹¹.

¹¹ The implications of many of these judicial and legislative decisions have not been fully thought through. A case in point is the 1998 amendment to the Native Title Act 1993 limiting compensation to no more than a freehold value (The Native Title Amendment Bill 1997 Explanatory Memorandum (House of Representatives 1997) develops this discussion further (p. 248). It is questionable whether this meets the requirement of s51 of the Australian constitution. Aside from this, questions remain as to how to measure indigenous rights (Campbell 1999a). A methodology based on the choices made by indigenous people has been suggested by Campbell (1999b), although there are shortcomings with this approach that require further consideration.

¹² Jones (1999) discusses this approach in comparison with other options.

Compliance can be obtained through enforcement and by setting up institutional structures to provide incentives for compliance. With a simple model, the level of compliance can be described as a function of the probability of being found out in not complying, times the resulting penalties compared to the benefits of non-compliance. That is, compliance could be expected to occur when the expected penalty exceeds the benefits of non-compliance. The costs of monitoring, however, are likely to be so high that in many situations, socially unacceptably high penalties would be required.

Compliance can be improved through the integration of compliance and monitoring structures within an agreement. A more complex model of compliance includes social influence and moral obligation as factors in explaining compliance behaviour, where such factors can be enhanced through education, persuasion and the development of shared social links (Sutinen 1996). Persuasion and the development of such social links might be built into an agreement. The rules and requirements built into an agreement can be used to change the incentives faced by participants in the agreement through changes in the institutional governance structures so as to:

i. lower monitoring costs
ii. increase the probability of being found out and
iii. change the expected benefits of not complying.

¹³ Triggering events would be best defined according to generic characteristics, such as the type of judicial or legislative decision, rather than in regard to particular decisions. Other acts, such as changes in recreational participation, or changes in recreational or social; conditions might also be used as triggering events.

The preceding discussions on information needs and on compliance included the use of different approaches to circumvent information shortfalls and to obtain compliance. Consistent with these observations, Campbell (1995, pp. 221-233) shows non-compliance and opportunistic behaviour is likely to increase with short-term agreements and simple models involving “one-off” rather than ongoing negotiation and agreement. That is, simple agreements that have a brief time duration provide little or no incentive for ongoing cooperation and compliance. A complex hierarchical system, requiring ongoing review and assessment between the parties to an agreement, is more likely to ensure ongoing cooperation between the members of the agreement. This conclusion is supported by research carried out by Oxley (1997) in which she found conditions that led to poorly defined rights, increasing contractural risk and moral hazard led to an increasing reliance on hierarchic institutional structures. Consistent with this, she also found that the trade-off between transaction costs and moral hazard led to increasingly complex governance structures.

Complex hierarchical institutional structures may have the capacity to ensure that all parties to an agreement have an incentive to make the agreement work to their mutual advantage. Parties may, however, work against an agreement and towards its eventual breakdown if the agreement has disadvantaged them and they are better off outside the agreement.

5. USE OF INDIGENOUS LAND USE AND INDIGENOUS PROTECTED AREA AGREEMENTS

5.1 Requirements for agreement

A number of approaches can be taken to resolve poorly defined rights, including the use of costly judicial appeals. For instance, resolution of the Miriuwong-Gajerrong case in the Kimberly region cost approximately $A4.66 million, while, by comparison, the Cape York Heads of Agreement cost in the order of $A20 000 (McCann 1999)¹⁴. In addition, judicial decisions are inflexible while net gains can be increased if only those subsets and particular commodity attributes required by the other person are transferred. The courts have, and continue to play an important role in the recognition and resolution of questions relating to indigenous rights. In particular, they are important in the resolution of questions of law, in the enforcement of agreements and the provision of contract security. The courts, therefore, do provide an important basis of support to the establishment, settlement and maintenance of agreements, and, in the long term, the development of mutual trust and confidence¹⁵.

¹⁴ Justice Olney’s comments regarding use of adversarial litigation in the Yorta Yorta case are noteworthy: ‘The time and expense expended in the preparation and presentation of a large part of the evidence has proved to be unproductive, a circumstance which calls into question the suitability of the process of adversary litigation for the purpose of determining matters relating to native title (from Neate 1999, p. 9)

¹⁵ Decisions on the use of the courts relative to other options should be the same as choices made in regard to any other option., that is, by comparing the marginal transaction costs incurred to the marginal benefits obtained. The problem is that many court decisions will set legal precedents that are important to others who are not involved in the court case. As a result, because all costs and benefits are not accounted for, some cases that on a public good basis should have been taken to court are not.

5.2 Indigenous land use agreements

The 1998 amendments to the Native Title Act 1993 provided important institutional changes to the original Act in the provision of indigenous land use agreements to facilitate local and regional agreements (McCann 1999). In particular, the registration requirement for ILUA is important to monitoring and enforcement of agreements and the provision of security. In addition, the constraints on what can be agreed to under an ILUA protect other members of indigenous communities, including grounds by which removal of an ILUA from the National Native Title Tribunal (NNTT) register can be ordered by the Federal Court.

In an environment of uncertain rights, an Indigenous Land Use Agreement can help people who are unsure on how to proceed in an area where native title is held or is claimed. As a result, they provide an important framework in which much of the uncertainty over future rights can be removed and the ebb and flow of rights along the coast and seas can be managed. A critical characteristic of ILUA, highlighted by Smith (1998), is they are ‘instruments of consent’. While this can leave the process open to strategic behaviour, a ‘shared commitment to negotiated outcomes will arguably facilitate better post-agreement relations between indigenous people and the wider community than do judicial or arbitrated agreements’. There are several strengths of the ILUA process:

i. Its flexibility allows the inclusion of all interest groups and negotiation of agreements without final resolution of individual claimants within an area. Therefore:

a) in an environment in which parties to an agreement may be uncertain of their legal rights, ILUA offer an opportunity for interested parties to come to an understanding in those areas in which there is certainty, while withholding action in regard to those areas in which there are uncertain legal rights (Smith 1999, p. 10) and

b) it can provide a process that is sympathetic to indigenous norms and processes.

ii. Indigenous people can come to agreement with non-indigenous people over an area without necessarily resolving questions in regard to intra-group ownership or title over particular areas (see Jones 1999).

iii. They provide the legal certainty and security all parties require, as agreements are made binding on their being placed on the NNTT registrar.

i. Body corporate agreements, that involve
ii. Area agreements and
iii. Alternative procedure agreements.

Table 3
Indigenous land use agreements (ILUAs) and indigenous protected areas (IPAs)

Type of agreement	Primary characteristics
Indigenous land use agreementsa	The statutory basis of ILUA is the Native Title Act 1993, as amended in 1998. Agreements can be given by native title groups for any consideration and subject to any conditions; any person may request assistance from the National Native Title Tribunal (NNTT) in making agreements; an application for registration of each type can be made in writing by any of the parties to the registrar of ILUAs; ILUAs are registered with the NNTT and are legally binding.
Body corporate agreements	Can be made where there has been a determination/s on who holds native title over. Agreement covers the whole of the area; Can be made if there is a registered native title body/s corporate for the whole of the agreement area.
Area agreements	Can be made between persons who claim to hold native title over a particular area and other people or organizations about the use of land and waters in that area. Can be made if there is no registered native title body/s corporate for the whole of the agreement area.
Alternative procedures	Can be made between people who claim to hold native title over a particular area and other people or organizations about the use of land and waters in that area. Can be made if there is no registered body/s corporate for the whole of the agreement area, but requires a body/s corporate for part of the agreement area.
Indigenous protected areasb	These are an approach by which Aboriginal and Torres Strait Islander peoples can care for and protect lands and waters for present and future generations. It may include land over which Aboriginal and Torres Strait Islanders are custodians and which will be managed for cultural biodiversity and conservation, permitting customary sustainable resource use and sharing of benefits. IPAs are part of broader National Reserve System established and coordinated by Environment Australia.

^a Native Title Act 1993, Smith (1999), National Native Title Tribunal 1998 a, b, c, d.

^b Leitch (1999).

The Quandamooka Land Council, representing the three clans with traditional links to the area, and the Redlands Shire agreement, initiated in 1994 with the lodgement by the QLC to the National Native Title Tribunal, notice of an application for a determination of native title. The purpose of the agreement was to establish an understanding between the parties with an interest in the area in a process leading to an agreement on native title. The agreement is focused on North Stradbroke Island/Minjerribah, and its surrounding seas located southeast of the city of Brisbane. The project has eleven guiding principles including:

i. recognition of the interdependence between cultural and natural landscapes

ii. recognition of Quandamooka’s environmental systems in their local, regional, national and global context

iii. respect and incorporation of the custodial obligations of the traditional owners

iv. promotion of sustainable economic development opportunities for both indigenous and non-indigenous people recognising the relationship between economic sustainability, community development and cultural resource management initiatives and

v. the use of broad definitions of natural, built, economic resilience and sustainability as limits to human activity (Anon. 1997).

The Sea Forum is structured to address those elements common to all indigenous people within the region. The intention is to develop protocols that have procedural integrity as a basis for ongoing negotiations. The process is designed to accommodate those issues that relate to the region, while leaving local Aboriginal communities to speak to those issues that are specific to their own country.

Both organizations provide examples of local indigenous groups coming together to resolve questions of rights and future use of coastal and marine areas, although the nature of indigenous rights to marine areas remains uncertain. The process is advantageous to the indigenous and to the non-indigenous signatories to the respective agreements. The agreements appear to be hierarchical in nature, requiring ongoing consultation and cooperation over a number of years. At least, the process has saved participants from expensive court actions, and the availability of this option may help to ensure a commitment by all of the parties concerned. While the structure of the agreements provides incentives for ongoing compliance, it would be useful to know how monitoring of compliance is built into the procedures and institutional structures.

5.3 Indigenous protected areas

The indigenous protected area (IPA) programme, administered by Environment Australia, is part of the national reserve system (NRS) programme. The NRS was established as a means of coordinating the cooperation with the States, Territories and the wider community to develop a national system of protected¹⁶ areas. The incorporation of the IPA programme within the NRS is to include establishing and managing protected areas on indigenous estates and establishing cooperative or joint management with indigenous people over government owned protected areas.

¹⁶ A protected area is defined as ‘An area of land or sea specially dedicated to the protection and maintenance of biodiversity and associated cultural resources and management through legal and/or other effective means’ (Environment Australia 1998). It is important to note the place given to cultural resources in the context of conserving indigenous estate.

The traditional Yolngu owners gave the Parks and Wildlife Commission of the Northern Territory ‘in principal’ support for the establishment of an indigenous protected area in the vicinity of Nhulunby, in the northeast of the ‘top end’. The area proposed includes coastal areas currently managed by the Dhimurra Land Management Aboriginal Corporation. In giving this support, the Commission were advised of their wish that the area not be administered jointly, but be continued to be administered by the traditional owners. The initial informal response from the Commission was that this option is unlikely to be acceptable.

The nature of such agreements, might provide indigenous people an opportunity to place parts of their coastal estate in hold until more information is obtained on the nature of their estate and the nature of rights are further resolved. It also provides an option by which indigenous people can obtain financial and administrative support in managing their estate. The example highlights concern that can occur in regard to control of traditional estates. Again, questions of compliance and maintaining ongoing commitment exist. It may be interesting in the future to compare both approaches given that indigenous protected areas appear to have a shorter duration and do not necessarily require as complex a structure.

6. CONCLUSION

The ebb and flow in coastal and marine rights and the poor definition of these rights create uncertainty and the loss of benefits Aborigines, Torres Strait Islanders and non-indigenous people might enjoy. Those with an interest in marine and coastal resources can mitigate such losses by negotiating institutional structures to overcome poorly defined rights. This paper dealt with the necessary conditions, rights, issues and institutional structures by which local groups may set up and negotiate agreements. Indigenous land use agreements and indigenous protected areas are discussed as low transaction-cost options applicable to situations involving native title right.

A useful direction for future research would be to examine how different institutional structures might affect the decisions made on whether cooperation continues or whether there is failure in such cooperation. Such work should have possible effects of different performance or agreement compliance indicators as part of any new institutional structure.

7. LITERATURE CITED

AIATSIS 1997. Native Title Newsletter, no 1 Canberra (http:/www.aiatsis.gov.au/archive/ntru1-97.htm).

Anon. 1999. Declaration by the National Sea Rights Conference, Hobart, Tasmania, 28-30 September, ATSIC, Hobart.

Anon. 1997. Native Title Process Agreement: Quandamooka Land Council Aboriginal Corporation and Redland Shire Council (http./www.nntt.gov.au/).

Baland, J.M. and J-P. Platteau 1996. Halting Degradation of Natural Resources: Is there a Role for Rural Communities?, Food and Agricultural Organization of the United Nations, Rome, pp 1-439.

Barzel, Y. 1997. Economic Analysis of Property Rights, Cambridge University Press.

Campbell, D. 1999a. Valuation of indigenous fisheries, paper presented at the 43^rd Annual Conference Australian Agricultural and resource Economics Society, Inc. Christchurch, 20-22 January.

Campbell, D. 1999b. Economic valuation of indigenous rights, paper presented at the 1999 International Symposium Society and Resource Management: ‘Application of Social Sciences to resource management in the Asia-Pacific Region’, Brisbane July 7-10.

Campbell, D. and J. Haynes. 1990. Resource Rent in Fisheries, ABARE Discussion Paper 90.10, Australian Government Publishing Service, Canberra.

Campbell, D., A. Stokes and D. Brown 1996. Issues in monitoring fisheries management performance, ABARE paper no 96.2, VIII International Fisheries Economics and Trade Conference, Marrakech, Morocco, 1-4 July.

Campbell, D.E. 1995. Incentives: Motivation and the Economics of Information, Cambridge University Press, Cambridge, New York Oakleigh.

Coase, R.D. 1960. The problem of social cost, Journal of Law and Economics. 17(2), 357-76.

Environment Australia 1998. Indigenous Protected Area Programme: Advice to Applicants 1998/99, Biodiversity Group, Environment Australia, ACT 1960.

Godden, D. 1999. Attenuating indigenous property rights: Land policy after the Wik decision, The Australian Journal of Agricultural and Resource Economics, vol. 43(1), 1-33.

Hayami, Y. and V. Ruttan. 1985. Toward a theory of technical and institutional change, in Koppel, Bruce M. (ed) Agricultural Development: An International Perspective, The John Hopkins University Press, Baltimore.

Jones, C. 1999. Native title and natural resource management: A way forward, paper presented to The 1999 International Symposium, Society and resource Management, University of Queensland, Brisbane July 7-10, 1985.

Law Reform Commission 1986. The Recognition of Aboriginal Customary Laws, Report 31(2) Australian Government Publishing Service, Canberra.

Leitch, K. 1999. Traditional owners support establishment of an indigenous protected area, Waves: Newsheet of the Marine and Coastal Community Network, Environment Australia, 6(1), 2.

Libecap, G.D. 1990. Contracting for Property Rights, Cambridge University Press, Cambridge, New York and Melbourne.

Loveday, T.D. 1998. ‘Native title focuses on fisheries’, The Queensland Fisherman, 16(8), 2-3.

McCann, L. 1999. Induced institutional innovation in Response to Transaction Costs: The Case of the National Native Title Tribunal, paper presented at the 43^rd Annual Conference of the Australian Agricultural and Resource Economics Society, Christchurch, New Zealand, 20-22 January.

Muir, B. 1999. Sea Forum: A regional agreement process for Aboriginal traditional owner involvement in sea country management in the southern Great Barrier Reef, presentation notes for a talk given at the National Indigenous Sea Rights Conference: What the Sea Means to Indigenous People, Hobart Tasmania, 28-30 September.

National Native Title Tribunal 1998a. Indigenous Land Use Agreements (ILUAs): Short Guide to ILA Registration, (http://www.nntt.gov.au/nntt/publicatn.nsf/).

National Native Title Tribunal 1998b. Indigenous Land Use Agreements (ILUAs): Body Corporate Agreements, (http://www.nntt.gov.au/nntt/publicatn.nsf/).

National Native Title Tribunal 1998c. Indigenous Land Use Agreements (ILUAs): Area Agreements, (http://www.nntt.gov.au/nntt/publicatn.nsf/).

National Native Title Tribunal 1998d. Indigenous Land Use Agreements (ILUAs): Alternative Procedure Agreements, (http://www.nntt.gov.au/nntt/publicatn.nsf/).

Neate, G. 1999. Future directions in native title, a National Native Title Tribunal paper presented at a seminar organised by the Centre for Energy and Resource Law, University of Melbourne, March 1999.

North, D. 1990. A transaction cost theory of politics, Journal of Theoretical Politics, 2(4), 355-367.

Ostrom, E. 1990. Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, Cambridge, New York, Oakleigh.

Oxley, J.E. 1997. Appropriability hazards and governance in strategic alliances: A transaction cost approach, The Journal of Law, Economics, and Organization, 13(2), 387-409.

Schlager, E. and E. Ostrom 1992. Property-Rights Regimes and Natural Resources, Land Economics, 68(3), 249-262.

Shapley, L.S. and M. Shubik, 1969. On the Core of an Economic System with Externalities. American Economic Review 59(4) pp 678-684.

Smith, D.E. 1999. Indigenous Land Use Agreements: The Opportunities, Challenges and Policy Implications of the Amended Native Title Act. Centre for Aboriginal Economic Policy Research, Discussion Paper 163/1998, Australian National University, Canberra.

Smyth, D. 1997. Australia’s Ocean Policy: Socio-cultural Considerations, Issues paper no. 6. A report commissioned by Environment Australia.

Sutinen, J.G. 1996. Fisheries Compliance & Management: Assessing Performance, a report to the Australian Fisheries Management Authority, Canberra.

Whipple, R.T.M. 1997. Assessing Compensation Under the Provisions of the Native Title Act 1993, Working Paper Series, no. 97.10, Business School, Curtin University, Perth.

Appendix 1
A Coasian diversion

It has been suggested that a Coasian solution might be used to resolve questions regarding access to ‘land’ rights. Whipple (1997, p. 31) suggests that once native title rights and those entitled to them are defined, the Coase theorem may be applied. More recently, Godden (1999, p. 19), suggested that ‘[a]ll that is required is that the parties to the bargain feel that both have gained or, at worst, none has lost’. There is nothing particularly Coasian about the conditions given in either of the papers. A fundamental point in Coase’s (1960) paper is that the distribution of rights is irrelevant. This is not the case for indigenous people because their budget depends on the allocation of rights to their estate and because so much that is of value to a community location is specific. Indeed, reference is made in this paper to a Coasian solution because its use would likely work against the interests of Aboriginal and Torres Strait Islanders and against a fair and sustainable solution to the overcoming poorly defined rights.

According to the ‘Coase theorem’, “voluntary negotiation will lead to a fully efficient outcome, provided (a) rights are well defined, (b) transaction are costless, and (c) there are no income effects.” The outcomes of this, it is suggested, are ‘1. if markets are incomplete¹⁷, people will negotiate and the efficient outcome will result; 2. there is no need for government intervention; and 3. the outcome is independent of the initial assignment of rights. The question is whether these necessary conditions are met.’ (Farrell 1987, cited in Baland and Platteau 1996, p. 50).

¹⁷ An incomplete market exists when the social opportunity costs or social benefits derived from the supply of a good or service are not fully accounted for and the good or service is correspondingly over supplied or under supplied

Recognition of and Provision for Indigenous and Coastal Community Fishing Rights Using Property Rights Instruments - M. Hooper and T. Lynch

M. Hooper and T. Lynch
New Zealand Ministry of Fisheries
PO Box 1020, Wellington, New Zealand
<[email protected] <mailto:[email protected]>>

1. INTRODUCTION

Throughout the world, state management of fisheries using regulatory instruments has left indigenous and coastal communities subject to the changing national aspirations of governments. The recent recognition of indigenous rights in some Western post-colonial countries has occurred largely through the courts. Rather than embracing the indigenous communities’ interests as valid in their own right, governments have sought to protect the interests of the dominant culture from the disruption that could be caused by the recognition of indigenous rights.

Using regulatory mechanisms alone to attempt to recognise the broad range of cultural and economic interests of indigenous communities will, in our view, inevitably fail. Regulatory mechanisms devised and controlled by the state will largely reflect the values and aspirations of the dominant culture as represented by that government. No matter how liberal, democratic and egalitarian the state may be, the final result is likely to further erode the ability of indigenous communities to manage, harvest and use natural resources in ways that are consistent with their cultural needs.

The management of fisheries through the use of property-rights is often perceived as being anathema to both the recognition of indigenous fishing rights and provision for the interests of coastal fishing communities. We argue that the opposite is in fact the case. Not only are indigenous fishing rights, and the rights and interests of coastal communities, compatible with a property-rights approach to fisheries management, such an approach can be used to settle claims involving indigenous fishing rights, to preserve those rights for future generations, and to integrate such rights within a wider fisheries management framework. A property rights-based system provides a far more robust and flexible mechanism to ensure the sustainable utilisation of a fishery, while providing for indigenous and other users of a fishery to exercise their often divergent social and economic aspirations.

The creation of an artificial fisheries property-right and the allocation of that right, or a proportion of that right, to the indigenous or coastal community rights-holders provides the basis for a more equitable relationship between the state and the relevant community. Property-rights are difficult to extinguish and provide a strong disincentive for the coercive use of state authority. Equally they can create equity between the different users of the fisheries resource if all rights are derived from the same legal base. In this paper, the fisheries property-right referred to is essentially a share of the total allowable catch (TAC) in a fishery. The right to a fixed proportion of the resource negates the need to compete for that resource and can provide the catalyst for co-operative management.

Central to the ideas expressed in this paper is the argument that property-rights cannot exist in isolation from rules as to how that property is to be managed and rules governing interactions between property rights-holders. The creation and allocation of an artificial fisheries property-right is not an end in itself. Rather, it establishes an equitable basis for the application of management tools that can provide for the different social, cultural and economic aspirations of the various rights-holders within the fishery.

Indigenous and coastal fishing communities usually have their own internal regulatory mechanisms for management of their fishing activities. Such regulatory mechanisms are integral to the nature of their fishing-rights. Recognising and providing for indigenous and coastal community fishing-rights means empowering the communities concerned to use those mechanisms and integrating them within the wider fisheries management framework. Property-rights instruments enable this to occur.

This paper outlines a basic four-step process for recognition and provision for indigenous and coastal community fishing-rights through the use of property-rights instruments. The four steps are: (a) define the nature of the fisheries right to be provided for; (b) quantify the right; (c) provide instruments for exercising the right; and (d) create incentives for co-operative management of fisheries. Each of these steps is described in general terms and then illustrated by reference to recent events in New Zealand resulting from the settlement of Maori fishing-rights claims.

2. THEORETICAL FRAMEWORK

2.1 Define the right

Many countries recognise the existence of indigenous rights in some form. However, there is often conflict between different sections of society as to the nature and extent of those rights. Indigenous rights, based on legal tenets such as aboriginal title and customary common law often exist without being properly defined in statute and without any reference to their relationship with other more tangible rights that may exist under state law.

Before such rights can be recognised and provided for they must be clearly defined. If there is conflict as to the nature and extent of those rights the defining process may take place in the courts where the nature of customary rights is drawn from historical accounts of behaviour and practice. However, the defining of the right could be a more deliberate process carried out by the state in order to recognise and preserve the socio-economic characteristics of a particular community or sector of society.

There is an important distinction between indigenous rights that are recognised by the courts and the state, and the rights or interests of coastal communities which may have no legal basis in common law or aboriginal title. Indigenous rights will be defined in accordance with customary practices and, at least in theory, can not be attenuated without the agreement of the rights-holders. Coastal communities may have no inherent rights to fisheries, in which case the decision to recognise their interests and define rights relating to those interests will be a purely political one.

When defining the right it is necessary to identify the behaviours that are to be provided for and the outcome that is sought. Ideally, this should be a participatory process involving the communities concerned and the lawmakers. In simple terms, it is a matter of working out who goes fishing, where they fish, what methods and equipment they use, what management techniques they employ, and what impacts they have on both the fishery, and other users of the resource. The objectives of both the state and the community for participation in the fishery, now and in the future, are central to this process. The expectations of the rights-holders may well extend beyond their current practices. It should then be possible to define the exact nature of the right to be provided for, which may be a greater or a lesser right than the one currently being exercised, depending on the objectives for the future of both the fishery and the communities concerned.

2.2 Quantify the right

Having defined the nature of the indigenous or coastal community fishing rights that are to be recognised and provided for, the next step is to determine the quantity of fish that these rights represent. It is at this stage of the process that the pre-existing rights or interests are translated into the artificial fisheries property right. In a single-user fishery, sustainability may well be the only factor that limits the quantity of fish that can be removed from the fishery in accordance with these rights. If there is more than one gear sector in the fishery then the fishery will need to be allocated between the different rights-holders.

A unique feature of property rights systems of fisheries management is that the rights of each stakeholder can be quantified, relative to the rights of others, usually as a proportion of the TAC in a particular fishery. The fisheries property right is the share of the TAC. Systems can then be put in place to enable each sector to exercise and manage its rights within the wider framework.

In most indigenous societies the rights to use a resource are not absolute. They are limited by concerns of resource sustainability, the common nature of community rights to the resource that might lie with more than one group and cultural or spiritual prohibitions on fishing activity. A perpetual access right to a share of a TAC, set according to the sustainability of the resource, provides a better expression of the autonomous nature of aboriginal title than regulatory mechanisms that can be more easily amended or diluted by the state.

The property rights approach provides guaranteed access to a share of the fishery, the opportunity for autonomous or semi-autonomous management of that share, the potential for communal ownership and management, and the ability to participate in compliance monitoring. However, the introduction of a property rights system does not negate the need for voluntary, or enforceable rules, to regulate internal community use of their right or to manage interactions between the community and other users of the fishery.

Setting of a TAC for a set period, and the proportional allocation of that catch between users, will establish an environmental boundary for harvests from the fishery. In itself, this will not necessarily enable indigenous groups to manage the taking of fish according to traditional practices relating to where and when the fish are caught, how they are caught, and the size or sex of the fish that are caught. Many indigenous or traditional coastal communities have well developed internal regulatory systems governing whom may utilise a fishery and how they may fish. In a modern context, statutory mechanisms may be necessary to give legal expression to the use of such traditional regulatory systems.

2.3 Provide instruments for exercising the right

The sorts of instruments necessary to provide for indigenous or community rights-holders to exercise their rights fall into two categories. First, instruments to enable the communities themselves to manage their own fishing activity within the parameters of the right as defined and quantified above. Second, instruments for managing the interaction between the indigenous or community rights-holders and other users of the fishery.

Essential to the first set of instruments is information as to how many of a particular species are harvested in a particular area. Such instruments need to perform three key functions: (a) establish who has the mandate to manage the fishery on behalf of the community concerned; (b) generate information about removals from a fishery; and (c) enable removals from a fishery to be stopped once the share of the TAC has been caught and the property-right fulfilled.

Obtaining basic information about the harvest from a fishery requires catches to be reported (and monitored). While reporting may seem onerous, the alternative is to rely on enforcement of the property-right through blunter input controls such as bag-limits, closed-seasons and method-restrictions. The better the information that is reported, the lesser degree to which the state needs to be involved in the management of the fishery, and the greater the flexibility for management of the right. The information provided enables the TAC to be refined to protect the fishery as management uncertainty, and hence risk is reduced.

As stated above, indigenous and coastal fishing communities usually have their own internal regulatory mechanisms for management of their fishing activity. The setting of a TAC and the allocation of property-rights to that TAC provide a basis for fishers to use their share in ways that are culturally appropriate to them and to regulate their internal activities to achieve those goals. The allocation of property-rights can be used to empower communities to use their own mechanisms, and provide for their integration within the wider fisheries management framework, as long as the three key functions are incorporated - establishment of mandate, information on removals, and the ability to stop fishing when removals reach a certain point.

The second set of instruments relates to shared fisheries, where the state must play additional roles in allocating access between sector groups. The state has a number of roles. In consultation with sector groups the state has a duty to set the TAC so as to protect the fishery. It must allocate proportions of the fishery between sectors. It also must provide instruments for resolving disputes between the indigenous or community rights holders and other participants in the fishery, and tools to allow indigenous or community rights to be exercised within the wider framework, in terms of both taking fish and managing fisheries. This latter component may require the incorporation of a spatial element into the rights framework, where the activities of other sectors may need to be curtailed so that the indigenous or community fishing rights can be realised.

2.4 Incentives for co-operative decision-making

The management of fisheries by regulatory mechanisms controlled by the state leaves the regulation-making process vulnerable to capture by the sector groups that wield the most influence on the regulatory authority. These lobby-groups may vary from those with political power (the dominant cultural group or local governments), those with economic or organisational strength (recreational or commercial fishing organisations) or those who simply share the values of the government. It is often difficult for indigenous groups or artisanal coastal communities to successfully participate in such an environment.

In such situations, it is likely that regulatory systems will result that reflect the values and aspirations of the dominant parts of society, submerging the values of other groups. Forced to compete under a set of rules designed to reflect the goals of the dominant group, marginalised groups will have little commitment to compliance with those laws, especially if they do not address their own cultural or socio-economic aspirations.

In contrast, when a TAC is established and a proportional share of that TAC is allocated among fishery users, the ability to lobby the state for preferential benefit is removed. The rights of each group to participate in, and benefit from, the fishery are derived from the same legal source. The alteration by the state of any group’s rights becomes a threat to the rights of all users. From the point of allocation, there are strong incentives for sector groups to co-operate to maintain the integrity of the allocation mechanism and the property-rights of each group.

The tonnage of fish allocated becomes the principal limitation on deriving social or economic benefit from the fishery. This limitation provides strong incentives for commercial fishers to minimise costs of management, compliance and fishing as these expenses become the sole variables in the success of their fishing operations. In the case of indigenous and coastal communities, where cost and efficiency may not be the primary incentive for use of the resource, those groups have security of access to a share of the fishery, which they can catch without direct competition from other sector groups.

In many circumstances, indigenous and coastal communities are more limited to the area they fish than other users. The types and size of fish they require may also be different from those of other sector groups. The simple allocation of a proportional right to a quantum of fish will not resolve these qualitative issues. However, the allocation of a right to a share of a fishery enables the participants to set out operating rules and make trade-offs to reduce conflict and enable each sector-group to take the types of fish they need in the areas they fish. When the sector groups develop and agree to their own rules to achieve these goals, management and compliance costs are likely to be minimised.

There is equally a strong incentive for all sector groups to manage and enhance the fishery to increase the TAC in the knowledge that they will benefit from the fishery in proportion to the rights they have been allocated. The costs of enhancement can therefore be shared proportionally as well. Where a TAC is set for a specified period, there is an incentive for fishers to develop plans to re-build stocks and distribute the benefits in a manner that enables the specific concerns of each group to be addressed. Because each sector-group will benefit, the incentive in such long-term planning is to enable each group to modify its operations over time to achieve its own aspirations.

3. WHAT HAPPENED IN NEW ZEALAND?

3.1 Talking past each other - definition by the Courts

As the indigenous people of New Zealand, Maori held customary fishing rights under British common law. These rights were guaranteed by the Treaty of Waitangi in 1840, and were exempted from the rules and regulations in fisheries legislation made after the signing of the Treaty. While fisheries law in New Zealand always contained a clause that exempted Maori fishing rights from its ambit, the exact nature of these rights was never defined.

As a result these rights were negated by those same statutes through the application of the egalitarian principles of the dominant pakeha culture. The statutory provisions protecting Maori customary fishing-rights were worthless without the conjoint ability to self-define the nature of the right. Instead the right was left to be misinterpreted by faceless bureaucrats or a biased judiciary.

In New Zealand the task of defining the nature of Maori customary fishing-rights fell to the Courts and to the Waitangi Tribunal. The Waitangi Tribunal is a permanent commission of inquiry set up in 1975 to investigate claims regarding breaches of the Treaty of Waitangi. In an important test case in 1986 a Maori individual was found not guilty of taking undersized paua on the grounds that he was exercising a customary fishing-right. He had fished in accordance with customary practices by obtaining permission from the kaitiaki, or guardian, of the tangata whenua from the area where the fishing occurred, and acted in accordance with the instructions of the kaitiaki.

The concept of tangata whenua, or “people of the land”, is crucial to the definition of Maori customary fishing-rights. Tangata whenua in a particular area are the iwi (tribe) or hapu (sub-tribe) that hold customary authority over that area. Rather than being general Maori rights, customary rights belong to tangata whenua and can only be exercised within their area. So in New Zealand, customary fishing-rights are held by tangata whenua in relation to their area of traditional authority.

The full nature and extent of customary fishing-rights was elucidated by the Waitangi Tribunal as a result of extensive research into tribal claims to fisheries. Maori customary fishing rights were found to contain both a commercial and a non-commercial component (based on evidence that Maori were trading seafood widely prior to the signing of the Treaty of Waitangi); the fisheries they exploited were extensive; and the methods they used to catch fish were advanced compared to those of their European counterparts. There was also a developmental component to the customary right, which meant that Maori had a right to a share of the deep-sea fisheries off the coast of New Zealand, even if they were not being fished at the time the Treaty was signed.

Most importantly, Maori customary fishing-rights pertained not only to the use of fisheries, but also to the management of the resource. Rather than being Maori rights, customary fishing-rights belong to tangata whenua - the tribe or sub-tribe that hold traditional authority over a particular area. While fishing practices differed between the different tribes, customary fisheries were always actively managed by individuals known as kaitiaki or guardians. Fishing outside of the rules set by the kaitiaki could make the fisher subject to severe penalties.

In the mid-1980s, New Zealand was moving to introduce a quota management system based on individual transferable quota (ITQ) for major commercial fish stocks. At the time, the Waitangi Tribunal observed that the ITQ right was analogous to the nature of the rights guaranteed to Maori under the Treaty of Waitangi - it guaranteed access, it was perpetual, it was tradable, and it allowed for autonomous management. It was this move to create an artificial property right to take fish for commercial purposes, and then allocate that right to existing commercial fishers, that drove Maori to injunct the Crown on the basis that their customary fishing-rights had not been taken into account.

The introduction of a property-rights system for fisheries in New Zealand not only gave rise to the largest indigenous rights claim in New Zealand’s history, it also provided the means for that claim to be settled and for customary rights to be recognised and provided for within the wider legislative framework.

3.2 Quantifying Maori customary rights - the fisheries settlement

In New Zealand, the process of quantifying the indigenous fishing right occurred through the negotiated settlement of Maori claims in respect of their fishing-rights. In 1986 when the Crown was injuncted from proceeding with the introduction of the quota management system, the Courts advised the Ministry of Fisheries that they had no issue with the quota management system itself. The aims of the Crown in introducing the quota system were laudable. The problem was that indigenous rights had not been recognised or provided for in the allocation of commercial fishing quota.

An interim settlement of Maori fisheries claims was negotiated and legislated for in 1989 with a full and final settlement signed in 1992 and legislated for in the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992. The principal effect of the settlement on the customary fishing-rights of Maori was to effect a split between the commercial and non-commercial components of those rights.

The commercial component of the customary right was settled through the provision of ITQ. The 1989 interim settlement provided for 10% of all existing quota to be bought back from fishers and provided to Maori. The 1992 Settlement provided Maori with a half-share in Sealord Products Ltd which owned a further 23% of existing quota. The Settlement also provided for 20% of quota for new species to be transferred to Maori on the introduction of those species into the quota management system.

The non-commercial component of the customary right was provided for through provision for the making of regulations that recognise and provide for the use and management practices of Maori in respect of both the taking of fish for non-commercial purposes and the management of traditional fishing grounds. The non-commercial needs of Maori have a de facto priority in the process for allocation of the TAC - the needs of Maori are to be provided for first, to the extent that they are not commercial.

3.3 Instruments for exercising the right - ITQs and customary fishing regulations

As outlined above, the fisheries settlement split the customary fishing-rights of Maori into commercial and non-commercial components. The commercial component was provided for through ITQ, while the non-commercial component was provided for through regulations. The Settlement legislation creates instruments for Maori to exercise their fishing-rights within a framework that also provides for the rights of commercial and recreational fishers. The intervening years have seen Maori and the Crown both working to implement that framework in what has been an evolutionary process.

The quota that Maori received as a result of the fisheries settlement is held by a central Commission, Te Ohu Kai Moana, that manages that quota on behalf of Maori. The quota held by the Commission is no different from other ITQ generated under the Quota Management System and the State interacts with all commercial rights-holders (quota-owners) on the same basis. The Commission currently leases quota to tribes on an annual basis. In time, the quota will be allocated to tribes, giving them all the benefits and obligations associated with quota ownership.

The commercial interests and objectives of Maori in respect of fisheries may differ from tribe to tribe. They may also be different from the interests of other commercial fishers in their area. Property-rights instruments such as ITQ allow the different priorities and interests of different groups to be realised within the same framework, while minimising the opportunity or need for the state to interfere with those interests.

The fisheries settlement stated that the non-commercial fishing-rights of Maori were to be provided for through regulations which recognised and provided for customary food gathering by Maori, and the special relationship between tangata whenua and their traditional fishing grounds. A modern regulatory framework provides an effective way of recognising and providing for the traditional fisheries management practices of Maori. The defining and quantifying of the non-commercial customary right made it possible for such regulatory instruments to be developed within the constraints of that right. Most important is that the regulatory framework is highly flexible, with regard to the way tangata whenua manage their fishing activity, but prescriptive in terms of mandate’ issues - recording of catch and accountability mechanisms.

New Zealand’s customary fishing regulations are based on a number of key underlying principles. The first principle centres on mandate. Before tangata whenua can take responsibility for managing their non-commercial fishing activity, they must establish mandated representatives for their area. The first part of the customary fishing regulations provides for tangata whenua to appoint kaitiaki, or guardians, who will be responsible for managing customary fishing in their area with the full support of the law. Disputes over who should be kaitiaki over tribal boundaries must be resolved by tangata whenua themselves. There is no role for the state in this process.

The second key principle is the ability to manage fishing activity and fisheries. Kaitiaki manage customary fishing through an authorisation system which requires them to specify the exact nature of the fishing activity that is being authorised, including species, quantities, areas, size limits, methods, purpose for which the fish will be used and instructions for the disposal of any bycatch. Each of these factors is entirely at the discretion of the kaitiaki, who must act within the bounds of sustainability and with due regard for the environment. The regulations also provide for the establishment of areas known as “mataitai reserves” over traditional fishing grounds. There is no commercial fishing permitted within these reserves and all non-commercial fishers, including non-tangata whenua, must act in accordance with bylaws made by the kaitiaki when fishing within the reserve area.

The third principle relates to the recording of accurate information on catch by a fishery. Fishers must report their actual catches to the kaitiaki who record the information for fisheries management and compliance purposes. Kaitiaki must report quarterly to the Ministry of Fisheries on how many of each species were taken from each quota management area within their traditional boundaries. That information is then used in the setting of sustainability measures and allocating the TAC amongst sector groups.

There is no legislative ability for the state to cap customary non-commercial removals from a fishery. An allowance is made for customary fishing in the annual process of allocating the TAC and this allowance is designed to reflect the estimated removals from that fishery in the coming year. The allowance is based largely on customary removals in the previous year although other information may influence the final quantum. The customary allowance is often referred to as being “uncapped” but the use of this term is misleading. Customary fishing is restricted - but by kaitiaki, not by the State. In reality a number of factors combine to limit customary take including the restrictions placed by the kaitiaki, the balancing of their non-commercial and commercial interests, and the harvest capacity of the area over which they have management authority.

Customary non-commercial fishing-rights have a de facto priority in the allocation of TACs for New Zealand fisheries. The right equates to a share of the TAC but it is not a fixed or proportional share. Any move to a fixed proportional share of the TAC is unlikely as long as recreational fishing continues to be managed by the state through blunt input controls with no recording of catch. The benefits and security offered by a fixed share can not be realised until all non-commercial fishers are able to demonstrate the same levels of accountability and control over removals exhibited by customary fishers and commercial ITQ holders.

The fourth key principle, and perhaps the most important one, is accountability. Individual customary fishers are accountable to the kaitiaki who authorises their activity. Kaitiaki are primarily accountable to the tangata whenua who appoint them, and to the Ministry of Fisheries, for the sustainable management of fisheries and for the maintenance of effective records for both management and compliance purposes. The state is still ultimately responsible for the overall sustainability of fisheries and for the provision of necessary information and assistance to kaitiaki to enable the effective implementation of the regulations.

3.4 The Chatham islands - allocation of fishing rights to a coastal community

As an aside from our examination of the indigenous fisheries settlement, it is relevant to note that the New Zealand government has also allocated ITQ in recognition of the social and economic needs of an isolated community. The Chatham Islands lie far off the east coast of New Zealand. The population of approximately 750 people is largely dependent on fishing for its economy. While some members of the population have received fishing-rights through the settlement of indigenous fishing-rights claims, others did not share these rights. The population base is not sufficient to maintain the infrastructure of the Chatham Islands through local government taxation.

When allocating ITQ at the time the Quota Management System was introduced, the government acknowledged the specific socio-economic circumstances of the Chatham Islands. The government recognised that while the principal purpose of the ITQ system was to provide for the economic rationalisation of commercial fishing and the sustainability of fisheries, the socio-economic needs of the Chathams were a special circumstance and special issue. The government allocated 2000t of ITQ to an Islands’ Community Trust to enable it to generate income to fund social and infrastructural needs of the Islands.

3.5 Integration of fisheries rights - talking to each other

Maori, while often mistakenly considered a distinct stakeholder group, belong to all the key stakeholder groups in the New Zealand fisheries - commercial, recreational, customary and environmental. Their stake in both the commercial and non-commercial fishery means that Maori are well aware of the trade-offs that can be made to improve the returns to both commercial and non-commercial stakeholders. It is the clearly defined nature of the property-rights of each group that makes this possible.

In New Zealand, the government has tested a number of options for community participation in management. An example of how stakeholders can operate when presented with the incentives of a property-rights system is the joint management of the eel fishery in the South Island by Maori, commercial and recreational fishers, and the government. The eel fishery is of particular cultural importance to tangata whenua in the South Island. It is also a significant commercial fishery. The sustainability of the fishery itself is under threat from habitat degradation and erratic recruitment, which is exacerbated by commercial fishing.

The fishery required a change in management and, in particular, a cap on the harvest to ensure its future. The government offered participants in the fishery the opportunity to manage the fishery in conjunction with the Government. The broad terms of reference for management were that the fishery had to be managed sustainably, the customary fishing rights of tangata whenua had to be recognised and provided for in any management scheme, and the rights of commercial and recreational fishers had to be accommodated.

A Working Group of tangata whenua and commercial fishers considered all the management systems available and concluded that only a property-rights system would achieve the range of outcomes they sought. The property-rights system which has been developed includes a comprehensive planning process and regulatory supports to enable spatial allocation of fishing sites, and seasonal, size and method restrictions which reflect local realities and the biological complexities of the fishery.

The Working Group also recommended proportional allocation of the TAC. Twenty percent will be allocated to customary non-commercial fishing, a proportion to recreational interests to be held by the Crown pending reform of the recreational fishing-rights system, and 20% to Maori commercial interests via the Treaty of Waitangi Fisheries Commission. The balance will be allocated to existing commercial fishers.

The Working Group has established regional planning and management teams that develop and recommend rules for their area. Each group has been appointed as an advisory committee to the Minister of Fisheries with the authority to recommend management measures on all matters affecting the use and management of the fishery in their region. The management committees are now the primary source of advice to the Minister on the management of the eel fishery in the South Island. They have successfully developed complex rules to manage the Lake Waihora commercial eel fishery, which contains a large stock of migratory male eels, which do not grow to the normal legal size. Balanced with that is a customary fishery based on larger eels that migrate through the same area to spawn.

The local management focus has enabled the participants to set rules over the timing of fishing that enable most commercial activity to be focussed on male fish that will be lost to the fishery, while preserving larger eels for customary use. The end result has been an increase in the total allowable commercial catch in the fishery and the first successful customary harvests for decades.

4. CONCLUSION

The four steps outlined in this paper provide a framework for applying property-rights instruments to the task of recognising and providing for indigenous and coastal community fishing-rights. The four steps are to define the right, to quantify the right, to provide tools for exercising the right, and to create incentives for co-operative decision-making.

As the second half of the paper illustrates, this framework provides a context for examining recent events in New Zealand with regard to the recognition of Maori customary fishing-rights. In New Zealand, it was the introduction of ITQ property-rights for the commercial fishery that sparked the settlement of indigenous fisheries claims, not the other way around. The theoretical framework helps identify the progress made in providing for Maori customary fishing-rights, and where need go in the future.

There are several debates taking place in New Zealand about the implementation of the settlement of indigenous fishing-rights, including the allocation of commercial quota and assets among tribes and the acceptance of non-commercial customary fishing regulations. There are also a number of wider debates regarding the need to better define the rights and responsibilities of other sector groups, especially those of recreational fishers, to provide for the integration of all rights within a single framework. Again, the theoretical framework outlined in this paper provides a context in which those debates can be located.

The primary reason for introducing property-rights into fisheries management in New Zealand in the 1980s was the need to rationalise the fishing industry. For the then Government, the settlement of indigenous rights claims to fisheries was a necessary consequence of the introduction of property rights to the commercial sector, rather than an end in itself. It is only recently that the rights of non-commercial fishing sectors in New Zealand have been discussed in the context of property-rights instruments, and with social and cultural outcomes in mind rather than purely economic ones.

Many countries have not progressed down the property-rights track for management of their commercial fisheries, or taken steps to recognise and provide for the rights of their indigenous or coastal communities. To our minds, those countries have the luxury of a clean slate. We hope that the ideas expressed in this paper will aid in the consideration of property-rights instruments for achieving a range of outcomes beyond the economic and sustainability objectives often associated with fisheries property-rights.

The Implementation of an Italian Network of Marine Protected Areas: Rights-Based Strategies for Coastal Fisheries Management - F. Andaloro and L. Tunesi

F. Andaloro and L. Tunesi
Central Sea Research Institute (ICRAM)
Via di Casalotti 300 - 00166 Rome, Italy
<[email protected] >
<[email protected]>

1. A MEDITERRANEAN FISHERY OVERVIEW

The Mediterranean Sea represents only 0.8% of the planet’s sea surface but is currently exposed to the pressure exerted by the presence of approximately 300 million people living along its coasts. This figure is expected to increase rapidly in the near future and poses serious concerns for the strains that will be exerted on the Mediterranean-basin marine ecosystem. The Mediterranean Sea has been one of the oldest and most important sources of food for the Mediterranean people and currently supports the employment of half million people in fisheries and in related activities.

With a total catch of 8 million tonnes the European Union (EU) is the third largest “country” in fisheries production, after China and Peru, but only 1 million tonnes of fish are caught in the Mediterranean Sea by the EU fishing fleets. In total 1 330 470t of fish (FAO 1997) are caught in the whole Mediterranean Sea including the large pelagic fishes captured by the Japanese fleet.

During the last thirty years the governments of the EU’s coastal Mediterranean countries have provided incentives only for the industrial fishing fleets, excluding the small-scale fishery from any significant benefits. Thus, after the second world-war, the growing development of industrial fisheries caused a rapid over-exploitation of the main fish resources, a phenomenon that was largely tied to the characteristics of the basin of the semi-enclosed sea which exhibits high biodiversity, but lacks the large mono-specific fish stocks inhabiting the Atlantic Ocean. Today, despite modern fleets of small industrial vessels, the artisanal fishermen and their local communities still play a role in management and supply specialized fish-products to high-priced local outlets (Caddy 1999).

The main problems that limit the development of this artisanal activity are related to:

i. the power of the industrial fishery, representing a strong lobby, able to change the view of governments

ii. divisions within the artisanal category (fishermen are divided and sometimes also in contradiction between themselves)

iii. the greater interest that the EU/EEC fishery policy shows for the fisheries in the North Sea than the Mediterranean Sea

iv. the important effort exerted by the recreational fishery in Mediterranean coastal waters

v. the relevance of the tourist areas in the coastal zone and

vi. the relevance of environmental pollution in the coastal areas.

A common fishery-policy to solve this problem for the Mediterranean had been proposed in 1997 through the mandate given in this domain to the General Fisheries Council for the Mediterranean (GFCM-FAO). However, at the moment it appears that this authority is only theoretical. The only case of resource management in the wider Mediterranean was the introduction of a TAC in the tuna fishery in 1997, but the catch limit is valid only for the EEC fishing vessels for whom paradoxically, it is also difficult to determine a realistic, and verified, estimate of their catch.

2. A MEDITERRANEAN ENVIRONMENTAL PROFILE

The human impact on the marine environment is a function of the size of the surrounding population and of its level of socio-economic development. In the Mediterranean Sea the coastal zones currently support the bulk of the population and the growth of this human pressure results in increasing pollution of the Sea. Uncontrolled industrialisation of coastal areas, the discharge of industrial by-products in these areas, as well as the development of industrial-scale agriculture, have led to a great increase of adverse impacts on the Sea’s marine ecosystems. Other important sources of pollution in the Mediterranean Sea are the dumping of chemical waste, oil and gas extraction, coastal aquaculture and shipping. Thirty percent of the world’s marine oil and gas transportation occurs in the Mediterranean Sea and accounts for an estimated yearly spill in the sea of 600 000t of oil, catastrophes excluded.

Another important environmental problem is the deliberate, or accidental introduction, of exotic species. Some alien tropical species have immigrated from the Red Sea and Atlantic Ocean, as a probable consequence of global weather change, and are rapidly modifying Mediterranean biodiversity with unexpected consequences on the ecosystems.

3. THE ITALIAN FISHERY

The Italian fishery employs more than 45 000 fishermen and provides a total catch of 750 000t per year. The Italian fishing fleet is composed of:

1864 bottom trawlers
162 pelagic trawlers
285 small pelagic fish purse-seiners
850 dredges
9575 artisanal fishing vessels
3557 multigear fishing vessels
17 tuna purse-seiners
33 oceanic fishing vessels.

The existing overexploitation has resulted in rapidly-decreasing catches per unit effort (CPUE) and the trawlers, needing to increase their fishing effort to maintain the catches, sometimes now are also fishing in shallow water, thus conflicting with the artisanal fishery. From an economics point of view, the artisanal fishery has low costs, obtains high quality products and does not produce discards (since highly selective gears such as trammel nets, long-lines seines and pots are used).

The artisanal fishery, notwithstanding the high number of fishermen it employs, is rapidly losing its culture and tradition, which are the most important aspects of an activity requiring a fundamental knowledge of fish behaviour and of the environment. Only an Integrated Coastal Zone Management scheme can enable the recovery of the artisanal fishery in Italy by permitting the resolution of conflicts and a reduction of pollution. Italian Law, at present, does not permit the direct management of national marine waters for fisheries, where the resources can be exploited by professional and recreational fishermen everywhere but fishery associations or co-operatives cannot propose any self-management projects. Other problems for the Italian fishery to adopt-property rights management strategies are social issues and the power of the recreational-fishery groups. Moreover, artisanal fishermen are divided and often in conflict with each other, notwithstanding this they are often associated in co-operatives.

4. ITALIAN MARINE PROTECTED AREAS NETWORK AS A PROPERTY RIGHTS-INSTRUMENT

Marine Protected Areas (MPAs) have a strategic role in the framework of integrated coastal management (ICM). An effective ICM strategy cannot occur in the absence of a solid scientific basis and activities. Natural science is vital for understanding the functioning of ecosystems, while social sciences are essential for comprehending patterns of human behaviour that cause ecological damage and for finding effective solutions.

The Central Institute for Applied Marine Research (ICRAM), is the Italian government body charged with providing scientific support to the public administration on matters related to marine conservation and its management policy. In particular, ICRAM has legal obligations in terms of providing guidance on the institution of marine protected areas and was recently charged by the Minister of the Environment to co-ordinate all research and monitoring activities in Italian marine protected areas.

ICRAM activities in support of the national objective for Marine Protected Areas in Italy are:

i. to guarantee scientific support to the Italian Ministry of the Environment by providing standards for the institution of new Marine Protected Areas (MPAs) and management of all the MPAs

ii. to support the managing bodies established for MPAs by co-ordining monitoring activities and research activities

iii. to indicate modalities for the training of personnel

iv. to provide adequate documentation and information.

Approximately 3 years ago, an important relationship was begun between Italian fishermen’s associations and the environmental NGOs (previously in strong conflict among themselves). In this context the fishermen’s associations acknowledged the negative ecological role brought about by illegal fishing and began to address the issues proposed by The Code of Conduct for Responsible Fisheries (FAO 1995).

The Italian national approach to the management of MPAs specifies where artisanal fishing activities are allowed (zones B and C), and for local fishermen only. Consequently MPAs have become the principal means in Italy to: apply fishery management strategies that are environment-friendly, adopt property-rights models, study the sustainable development of marine living resource and, apply the precautionary approach in the fishery.

The creation of the network of 48 MPAs may provide the means to meet the challenge of conservation and fishery management in Italy and the possibility of obtaining regulations for these areas that can be used as an instrument of property-rights for resident fishermen.

5. LITERATURE CITED

Caddy, J.F. 1999. Fisheries management in the twenty-first century: will new paradigms apply? Reviews in Fish Biology and Fisheries, 9: 1-43.

FAO 1995. Code of Conduct for Responsible Fisheries. FAO. Rome, 41 pp.

FAO 1997. The State of the World Fisheries and Aquaculture 1996. FAO, Rome, 125 pp.

Tunesi, L. and G. Diviacco 1993. Environmental and socio-economic criteria for the establishment of marine coastal parks. Intern. J. Environmental Studies, 43: 253-259.

Estuaries in Western Australia - An Integrated Approach to Management - J. Borg

J. Borg
Fisheries Western Australia
168-170 St Georges Terrace Perth WA 6000, Australia
<[email protected]>

1. INTRODUCTION

While there are a large number of estuaries in Western Australia, only a few of these are open to commercial fishing. Those near Perth have among the oldest fisheries in the State and have been fished commercially and recreationally since the founding of Western Australia in 1829. Conflict between different sectors is recorded as far back as 1840.

Estuaries occur at the mouth of rivers where the saline water and tides of the ocean influence the riverine environment. The river brings with it sediment and nutrients which produce ideal nursery environments for many types of animals - prawns, crabs, fish, birds. Although productivity is generally high, there is not a wide range of species in these environments and their abundance varies greatly throughout the year. This productivity, and the easy accessibility of estuaries, has meant that man has traditionally used the estuaries as a food source. These same factors have also made them attractive for recreational purposes.

Estuaries therefore present a particular challenge to fisheries managers - there is a highly-variable natural environment independent of fishing activity; this is further influenced by man-made interference in the environment which is complicated further by extractive uses such as commercial and recreational fishing. In the absence of a rights-based management regime, it is even more difficult to maintain fishing levels so that sustainability is assured.

As the management of each estuarine and marine embayment fishery in the State has been based on the same philosophy, this paper concentrates on the estuaries of the lower west coast of Western Australia to illustrate what has happened, why, and where Western Australia hopes to go from here in terms of rights-based management of these fisheries.

2. DESCRIPTION OF FISHERIES

In the mid 1970s, the lower west coast estuarine fisheries (Figure 1) were grouped as follows for commercial fisheries management purposes: Hardy Inlet Estuarine Fishery; Leschenault Estuarine Fishery; Mandurah Estuarine Fishery (Peel Harvey estuary); and Swan-Canning Estuarine Fishery. Other estuaries in this region were closed to commercial fishing. Commercial netting in all the major estuaries provides a valuable source of fresh fish for local and metropolitan Perth consumption. These fisheries were once the key source of fish for the State but now have more significance as a supply of local fresh fish and a lifestyle for participants.

The West Coast estuaries are also a principal focus of the State’s recreational fishing and boating activity. This extends right across the range of fishing pursuits, including crabbing and prawning, as well as line fishing for species such as whiting, flathead, flounder, garfish, trevally, black bream, mulloway and tailor. In some estuaries such as the Peel Harvey and Leschenault, recreational netters also take mullet.

Much of the State’s coastal urban development has focused on these estuaries, particularly the major estuaries. They are all widely used for recreation, including fishing, and being close to metropolitan Perth and the major southern tourist destinations, pressure has been applied by recreational fishing groups to have commercial fishing removed, or substantially decreased, in these estuaries.

3. HISTORY OF MANAGEMENT

Western Australia’s estuaries have been fished for as long as there has been human habitation nearby. By the late 1840s there was already concern over the overexploitation of stocks in Western Australia’s estuarine fisheries and closed-waters regulations were introduced. There was also conflict between commercial fishermen and amateur fishermen and other recreational users with regard to commercial fishing in the Swan-Canning estuary.

By the 20^th century, a number of commercial estuarine fisheries had been established, however there were many problems, largely to do with marketing and competition for use of the estuaries. During the early 20^th century, the activities of amateur fishermen had become intense, particularly in the Peel-Harvey and Swan-Canning estuaries, where in some years the amateurs caught as much as the commercial fishermen. Amateur fishing also intensified in the Leschenault estuary, which at this time was totally closed to all forms of netting.

By the late 1920s and early 1930s commercial catches from estuaries in south Western Australia had begun to increase. Growth in estuarine fishing continued from the 1930s through to the 1960s when an export market developed for rock lobster and later prawns, scallops and abalone. This resulted in a move by fishermen away from finfish fisheries. Markets for the small estuarine fish shrank considerably and demand for high quality species such as whiting and cobbler exceeded supply from estuaries. These fish were not in sufficient quantities to support the large number of estuarine fishermen operating in the state.

Figure 1: Lower west coast estuarine fisheries

In 1969, the Government commissioned a study into the wholesale and retail marketing of wetfish in Western Australia (WD Scott & Co 1969). The study concluded that there were far more commercial fishermen than the estuaries could support and using economic indicators of the time, indicated estuarine fishing offered “full-time employment for only 20-30 fishermen.”. It also noted that the estuaries were becoming increasingly used for recreational purposes. It recommended that “estuarine fishermen be given no grounds to expect any improvement in their economic position and be encouraged to leave the industry”.

The then Department of Fisheries and Wildlife accepted the recommendations of the Scott report and put in management measures aimed at reducing the number of commercial fishermen to a level where each received a worthwhile economic return. The measures implemented were: no issue of any new estuarine licences and no renewal of estuarine fishing licences that had expired, either as a result of the death of the fisherman or the desire of the fisherman to leave the fishery.

These measures were not set within a strategic framework, nor legislated as management plans, rather they were managed through a series of Fisheries Notices and Ministerial Directions which restricted access, area of fishing and gear types and quantity. Such measures afforded fishermen no legal long-term rights; nor did they address the impact on the resource of fishing by recreational fishermen - it was not a multi-sectoral approach.

Lenanton (1984) noted two problems with the commercial fishing management arrangements for these fisheries: (a) management of the level of commercial take was not sufficient and (b) amateur fishermen were capable of fishing stocks to a low level as they were not concerned with the economic return from their efforts. He noted “sustained intensive amateur effort may seasonally reduce the abundance of certain species to levels which would make commercial exploitation unacceptable economically. Therefore it would be useful, and perhaps in the very near future necessary, from the point of view of responsible management of our estuarine fisheries, to determine the relative proportions of the estuarine fish resource taken annually by the licensed and unlicensed components of the amateur fishery”.

Despite 150 years of commercial and recreational fishing conflict and the scientific backing for a multi-sectoral approach to management, there was not the political will to address management of the ever-growing recreational sector. Management continued to concentrate, and restrict, the commercial sector.

3.1 Adjustment over time

Although there have been occasions in the past where management measures in the estuarine and marine embayment fisheries have been introduced for reasons of both resource-sustainability and resource-sharing, the majority of management issues in these fisheries now revolve around resource-sharing.

It has been recognised by both industry and government over the years that there are competing uses for the state’s estuaries. Various regulatory tools and adjustment mechanisms have been applied to the commercial fisheries in an attempt to further control the commercial take in the estuaries. Table 1 shows the reduction in commercial fishing licences in these estuaries over the last two decades. However, it is only in recent years that initial attempts have been made to quantify the recreational fishing effort in these estuaries and to start to identify the relative shares of the two fishing sectors.

Table 1
Number of commercial fishing units in the lower west coast estuaries

Fishery	Number of fishing units
	1979	1987	1/1998	10/1998
Hardy Inlet estuarine	6	6	4	2
Leschenault estuarine	18	14	7	6
Mandurah estuarine	45	41	24	14
Swan-Canning estuarine	32	17	8	6
Total	103	78	43	28

In the past, the Government has responded to the needs of user-groups by introducing controls on commercial fishing through regulatory mechanisms - particularly temporal and area closures and non-transferability of licences - and through buyback schemes. However, it has become increasingly obvious that controls on commercial fishing are not sufficient; management needs to integrate, and apply to, all users of the resource.

Regulatory mechanisms

Associated with each estuary or marine embayment is a series of management arrangements, initially made up of a combination of legislation and policies. Legislative tools are found in the Fish Resources Management Act 1994 (FRMA) and the Fish Resources Management Regulations 1995. The legislation and policies put in place restriction the number of participants, the time the fishery is open for commercial fishing, the areas which are closed to commercial fishing, the type and amount of gear that can be used, and in some cases, the species which can be taken or kept from these commercial operations. One of the most successful regulatory tools was the imposition of non-transferability, tempered in some fisheries by the ‘grandfather’ clause (i.e. allowing transfer to family members).

Fisheries WA is currently developing legislative options for repackaging the current management arrangements, along with any changes that may be negotiated with industry. Despite this, regulatory mechanisms have had little success in restructuring fisheries to meet management objectives unless they are supported by economic incentives.

3.2 Buyback strategies

Although a legislative solution, the Fisheries Adjustment Schemes Act 1987 (as amended) provides the means to reduce commercial fishing effort in open access fisheries, inshore/coastal fisheries and in estuarine and marine embayment fisheries through buyback of fishing licences. This scheme is to be closed in 1999.

The resource sharing initiative

In 1996 the Government committed $A8 million over four years for voluntary resource-sharing. The initiative had two facets: (a) the Resource Reallocation and (b), Licence Buyout Initiative and the Guidelines for Voluntary Resource Sharing. The Guidelines for Voluntary Resource Sharing initiative provided Fisheries WA with a process for addressing resource-sharing issues. The objective is to provide an administrative means for achieving defensible voluntary resource-sharing arrangements among interested sectors. To date, two rounds of this process have been initiated, with negotiated agreement reached on one fishery.

In relation to the Voluntary Fishery Adjustment Schemes targetted schemes for fisheries were nominated by the Voluntary Resource Reallocation and Buy-out Committee of Management or through the Guidelines for Voluntary Resource Sharing process. Between January and May 1998, Voluntary Fisheries Adjustment Schemes operated for each estuarine fishery. These schemes were successful in reducing the number of fishing units in estuaries on the lower west coast from 43 in January 1998 to 28 in October 1998.

3.3 Strengths and weaknesses of approach at the time

The management approach taken in these estuarine fisheries was consistent with fisheries management theory throughout the world - single sector management, commencing with the fishing activities that were quantifiable and controllable. Although in retrospect, a rights-based, integrated approach from day 1 may find us in a better position today, neither the concept of allocating rights, nor of integrating management was envisaged in the mid 20^th century when fisheries management commenced in Western Australia.

The following strengths and weaknesses of this approach have been identified:

Strengths

i. it dealt with an activity that was quantifiable - commercial fishing

ii. it reduced numbers with minimal pain to individual operators

iii. it was cost-effective in terms of the drafting and administering of formal management plans and

iv. it was politically acceptable and achievable.

i. it avoided the controversial activity of recreational fishing

ii. it did not impart responsibility in the minds of recreational fishermen

iii. it was not based on a strategic framework so there was always the debate about what rights each fisherman held to the fish resources

iv. it was expensive in that the lack of clearly-defined rights meant constant conflict, consultations negotiations and reworking of management arrangements and

v. in some instances, government had to buy out fishermen for far more than the licences were worth.

4.1 Long-term objectives

Fisheries management needs to take a long-term view and the question is: where do we want these estuarine fisheries to be in the next 20 years? Although the push from some sectors of the community is for the total removal of commercial fishing from estuarine and marine embayment fisheries, commercial fishing in these fisheries plays an important role. These fishermen:

i. collect data for research purposes - long-term data series on catches and variations in stocks is essential to the management of these systems (as it is for recreational fishermen)

ii. are custodians of the resource, the “eyes and ears” to report any potential problems and information on the environment and health of estuaries (as are recreational fishermen)

iii. supply fish to the local community, tourists and the metropolitan markets

iv. take a range of fish not exploited by recreational fishers, such as yelloweye mullet and Perth herring

v. collect fish and provide knowledge for aquaculture ventures.

vi. have the potential to participate in local tourism, not only through direct contact, but through ventures such as developing regional cuisine based on local fish.

4.2 The major management issues that affect rights-based management of estuarine fisheries

4.2.1 Fish stocks

Fisheries WA (1998) identified a number of finfish stocks that were fully over-exploited. They included some locally-depleted cobbler and black bream stocks in the temperate estuaries, however, for the most part, fish resources in West Australia’s estuarine fisheries are fished commercially at sustainable levels. Although, at present, sustainability of most fish stocks is not the main issue in the these fisheries, there is still a need to identify target catch and effort reference points and to establish the relative catch share between the commercial and recreational fishing sectors.

Given the current lack of recreational fishing data, the short-term objective is to identify commercial catch trends that may indicate the commercial fisheries are taking up catch that would have previously been taken by fishermen who had left the fisheries under the Voluntary Fisheries Adjustment Program. It is also important that fishing catch and effort for species that are of concern in terms of sustainability be monitored. Collecting long term catch and effort data is also one of the most cost-effective ways of amassing data for setting target effort levels.

4.2.2 Environmental factors and resource variability

There are a number of natural environmental factors which affect production in an estuary, salinity, temperature, oxygen levels, and turbidity. Those species that adapt to varying levels of these factors, especially salinity, will be those which appear regularly in the annual commercial catch (Lenanton 1984).

Human interference in this already highly-variable environment further influences commercial production in the estuarine and marine embayment fisheries. Such effects include clearing vegetation in the catchment, area, agricultural runoff of silt and pesticides, discharge from adjacent industrial developments, clearing of seagrass and dredging. Mining in the 1970s adjacent to the Blackwood River was brought to an end because of the consequences in the river; and pesticide runoff in the Swan River recently caused a massive kill of bream.

Eutrophication is another problem in nearly every estuarine and marine embayment fishery along the coast - elevated nutrient levels result from clearing catchments and applying fertilisers. It was so severe in the Peel-Harvey Inlet that the Dawesville cut had to be made to clear out the affected water. As population spreads, so does the urbanisation of the foreshores. The shallow-water feeding grounds for fish are probably the most vulnerable to degradation as vegetation is cleared and silt enters the estuarine systems.

Urbanisation has also made some positive contributions to the environment. Canal developments, although they alter the habitat and therefore contribute to environmental problems, have in some instances provided an increase in fish numbers. Cobbler, for example, burrow under the walls of the canal which provides a safe habitat for them when they breed.

Fishing also has an impact on the environment. The removal of fish from the estuarine fisheries not only affects the numbers of target fish-species but can affect the food chain of other marine animals and the bird life that feed on them.

4.2.3 Resource-sharing

Resource-sharing is the key factor in the restructuring of Western Australia’s estuarine fisheries. Historically, there has always been competition for the estuarine resources and their environment. As the population spreads from the city and major regional towns, the pressure to prevent or resolve conflict increases.

There are a large number of stakeholders in the estuarine and marine embayment fisheries along Western Australia’s extensive coastline commercial fishermen, recreational fishermen, Aboriginal communities, aquaculturalists, conservationists, aquatic charter and fishing tour operators, those involved in the tourism industry, and the many downstream businesses that support each of them. There is also the Australian public who gains satisfaction from knowing that the State’s estuarine and marine embayment fisheries are well managed and hence that the fish resources are sustainable.

4.2.4 Latent effort

Although various management tools have been successful in reducing the level of latent commercial fishing effort in the estuarine fisheries, there is still latent effort in some of the fisheries. This is largely because:

i. some participants are involved in diverse fishing operations - estuarine fishing is only part of their operations

ii. variation in market prices affect their profitability from time to time and, or

iii. low-level fishing activity by part-time operators, semi-retired operators or fishermen approaching retirement.

4.2.5 Target levels

The determination of an acceptable number of fishing units for each fishery is required to address concerns over the re-activation of latent effort, fishing sustainability and economic viability of the remaining operators.

Fisheries WA is about to commence negotiations with industry over appropriate target-levels for key species in each estuarine fishery. Preliminary target-levels have been developed by Fisheries WA as a starting point for these negotiations. The targets are based on qualitative judgments, past activity and catches in the fisheries, the size of the estuaries, the need for coverage in terms of collecting research data, and the demand for use of the estuaries by other stakeholders. They are also premised on no change to existing management arrangements. Any change to fishing habits, such as more intense fishing by new entrants if transferability is introduced, would affect target harvests.

Although there will be temptation to yield to community pressure wanting to severely restrict commercial fishing in these estuarine fisheries, consideration needs to be given to the affect target harvest-levels will have on the commercial viability of the fishery - will resource supply be sufficient for processors and service industries, and for the market so that demand for these fisheries can be maintained?

The harvest-levels will determine the resource shares in these fisheries and the intention would then be for minimal cost-effective management. The resource-shares would provide an upper limit on the commercial harvest from estuarine fisheries. This system is not without problems. In addition to the influences mentioned above, it also requires consideration of the total catch, recreational and commercial, as well as the catch composition in the relevant years. It must also recognise that the catch in any year is affected by factors such as the environment, market demand, and recreational fishing.

4.2.6 Transferability

As a result of the recommendations of the Scott report, transferability of licences to operate in most estuarine fisheries has been essentially prohibited. However, in some fisheries, and subject to certain conditions, direct descendants of licensees have been granted various types of licences as assistants and trainees, eventually resulting in full access on application when the father/grandfather left the estuarine fishery.

The current transfer policies in the south west estuarine fisheries are:

i. Swan-Canning - no transfers, even between family members

ii. Peel-Harvey - transfers permitted between family members after consideration of individual circumstances

iii. Leschenault - transfers permitted between family members after consideration of individual circumstances and

iv. Hardy Inlet - no transfers, even between family members.

Transferability is a major issue in the management of most of these fisheries. Its introduction is likely to be tied to a series of trade-offs, not only in terms of reaching fishing-effort target-numbers, but also recreational fishing concessions. It should also be noted that full transfer would have the potential to increase the number of active participants and release latent effort. To account for this, management would need to incorporate measures to reduce the commercial effort to agreed target-levels, and hence restore the resource-shares between the sectors. However, it may also be possible to use the market to restore resource-shares.

5. TOWARDS A STRATEGY

To a large extent, many resource-sharing issues have been settled for the estuarine fisheries on the west coast through the use of Voluntary Adjustment Schemes and the Guidelines for Voluntary Resource Sharing process. Some of the remaining resource-sharing issues could be resolved by moving commercial fishing effort on the species of interest to the recreational sector. The debate is now largely on the level of activity - are the target-levels proposed appropriate? In entering this debate, all parties are having to realise that reducing commercial fishing below the levels proposed raises questions as to the logic in managing the commercial fisheries at all. Their contribution to the total take from the fisheries will be small and the research data collected of little use - these fisheries may even cease to be commercially profitable. In addition, there would be the temptation for the market-demand for locally caught fresh fish to be filled by illegal sales of recreationally-caught fish. The debate must now consider how we reach these targets, how the fisheries are managed once the targets are attained, how we manage the overall sustainability of individual species in this scenario, and must take into account the large cost associated with complex management arrangements. Complex management is not required.

Licence numbers in these fisheries would be moved towards power levels and transferability introduced once these targets are reached. However, as transferability often results in an increase in fishing efficiency, an adjustment mechanism would be an essential part of any management arrangements. One option for adjustment is unitisation of effort. The system of individual transferable effort units (ITEs) involves allocating each fisherman a number of days each season/year in which particular amounts of gear can be used in a fishery. But, whatever tools are chosen for the future management of these fisheries, management must be simple and cost-effective.

A number of specific proposals have been posed and will be the basis of consultation with industry groups over the next few months, including:

i. possible removal of commercial fishing from one estuary

ii. retention of low-level commercial fishing in representative estuaries and perhaps further reduction in others, especially if commercial licences become transferable

iii. target fishing-levels set for each estuary

iv. transferability of licences, but only when effective controls on total commercial exploitation are in place, and fishing is subject to the provision of detailed research records and

v. commercial effort limited and managed, taking into account fishing and gear efficiency changes over time as a result of transferability and the capacity of each estuary.

Fisheries Western Australia has come to see the importance of developing management within a strategic framework that incorporates all user-groups into the management framework and consultative processes. Having the vision, however, does not guarantee success. The setting of long-term target levels and resource shares, and eventually the allocation of property-rights, requires political to accept the concept of integrated resource management, especially in estuaries where the conflict between commercial and recreational fishermen has been long-standing and public. There is still some work to achieve this political will in Western Australia, however, it is hoped that the extensive consultative process that commenced this month, will educate the community and turn the political tide.

7. LITERATURE CITED

Fisheries WA (Western Australia) 1998. State of the Fisheries Report 1997/1998.

Fisheries WA, 1999. Management Paper No 131 - Management Directions for Western Australia’s Estuarine and Marine Embayment Fisheries.

Lenanton, R.J.C. 1984. Report No 2: The Commercial Fisheries of Temperate Western Australian Estuaries: Early Settlement to 1975, Department of Fisheries and Wildlife, Western Australia.

W.D. Scott & Co Pty Ltd 1969. A Report to the Honourable, the Minister for Fisheries and Fauna on a Pilot Study into the Economic Future of the Wet Fish Industry in Western Australia.

United States’ Fishery Cooperatives: Rationalizing Fisheries through Privately Negotiated Contracts - J. Leblanc

J. Leblanc
National Fisheries Institute
1901 N. Fort Myer Drive, Suite 700 Arlington, VA 22209 USA
< [email protected]>

1. INTRODUCTION

In the Sustainable Fisheries Act 1996, a reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act, the United States’ Congress imposed a moratorium on new Individual Fishing Quota (IFQs) programs in federally-managed fisheries. This moratorium was imposed after considerable congressional debate over IFQs and their use as a fishery management tool to address two issues in particular, overcapacity and the “race for fish”. The focal point for this debate was the Pacific Northwest. United States’ Senators from Washington State were at loggerheads with the Senators from Alaska, the Washington State members supported the ability of fishery managers to use IFQs and the Alaska members wished to impose a moratorium. The Alaskan Senators won.

The Washington state constituencies supporting IFQs included the Seattle, Washington-based catcher-processor fleet of approximately 34 vessels engaged primarily in the harvest of North Pacific pollock. This fishery, under the jurisdiction of the North Pacific Fishery Management Council, was severely overcapitalized. Capital stuffing in both the offshore (catcher-processor) and onshore (catcher vessels delivering to shoreside plants) during the 1990s had added three times the capacity needed to harvest the annual pollock total allowable catch (TAC). As a result, the length of the fishery was reduced from 12 months in 1990 to 3 months in 1998.

The catcher-processor fleet, harvesting and processing approximately 55% of the two billion pound annual pollock harvest, sought IFQs as a means to rationalize their fishery and thereby reduce the number of vessels engaged in the fishery and lengthen the fishing season. However, in the face of the congressional moratorium on IFQs until 2000 (with the political climate making an extension of the moratorium probable), the North Pacific catcher-processor fleet sought an alternative solution.

2. THE PACIFIC WHITING FISHERY

Four of the companies engaged in the North Pacific pollock fishery also operate ten catcher-processor vessels in the considerably smaller Pacific whiting fishery off the coasts of Washington, Oregon, and California; these operations are under the jurisdiction of the Pacific Fishery Management Council (PFMC). They faced similar challenges in this fishery. The ten vessels represented significantly more capacity than necessary to harvest the allowable TAC and the companies were engaged in a race for fish against one another.

The annual whiting quota in recent years has been approximately 210 000t. Under the PFMC, this quota is divided among three sectors of the fishery; 42% of the harvest is reserved for vessels delivering their catch to shoreside processing facilities, 24% is reserved for catcher vessels delivering to at-sea processing vessels, and 34% reserved for catcher-processors. A sector-specific federal limited-entry licence must be purchased to operate in the fishery.

As with pollock, whiting is primarily processed into surimi. Whiting is harvested using mid-water trawls. It is one of the cleanest fisheries in the world, with a bycatch rate of approximately 1%. Nonetheless, the fishery does have an incidental take of particularly sensitive species, yellowtail rockfish and endangered Chinook salmon.

Halfway through the 1997 season, four companies operating the ten catcher-processors vessels in this fishery formed the Pacific Whiting Conservation Cooperative (PWCC) which is organized as a nonprofit corporation under the laws of the state of Washington. Its purposes are:

i. To promote, through mutual cooperation of its members, the intelligent and orderly harvest of whiting in the federal Pacific coast whiting fishery

ii. To reduce waste and improve resource utilization and

iii. To reduce incidental catch of nontarget species.

i. Elimination of the race for fish and removal of incentives to catch as much fish as possible, as fast as possible, and to substitute as the primary incentive increased efficiency, by allowing vessels to concentrate on product quality, recovery, and bycatch avoidance

ii. Cooperation to improve the efficiency of the harvest by using an independent monitoring service and sharing catch and bycatch information

iii. Conducting and funding research for resource conservation, including catch and bycatch monitoring, observers, stock assessment, and other scientific research.

It is important to point out that the PWCC is not involved in matters relating to pricing or marketing of whiting products. To ensure that the PWCC was not in violation of United States anti-trust laws, the PWCC requested that the U.S. Department of Justice’s Anti-Trust Division review the proposed cooperative agreement. The DOJ provided a ‘letter ruling’ on May 20, 1997 which stated:

“The Department of Justice has previously stated that reliance on an olympic (sic) race system to gather a fixed quota of fish ‘is both inefficient and wasteful’ because it is likely to generate ‘inefficient overinvestment in fishing and processing capacity’...To the extent that the proposed agreement allows for more efficient processing that increases the usable yield (output) of the processed Pacific whiting and/or reduces the inadvertent catching of other fish species whose preservation is also a matter of regulatory concern, it could have procompetitive effects.” - Acting Assistant Attorney General, Joel Klein.

Since the inception of the Cooperative, the number of catcher-processors engaged in the fishery has been reduced by 30% from ten to seven vessels. In addition, vessel operations have shifted from the harvesting rate controlling the plant processing rate to situations in which optimizing the processing process now defines the harvesting rate. The fishery has completely shifted from input-controlled to output-controlled.

In 1997, prior to the Cooperative, the catcher-processor fleet had a recovery rate for the production of surimi from whiting of 17.2%. After the implementation of the Cooperative, the recovery rate increased to 20.6% while motherships (processing-only vessels that take fish over the side from catcher vessels and remained in an open-access fishery) had an average recovery rate of 17% for the season. This dramatic increase in utilization of the resource resulted in the production of an additional 5 269 435lb of food from the same amount of fish!

In 1998, the Cooperative members increased the recovery rate to 24% while motherships remained at 17%. In addition, there was a significant shift by some members away from surimi production and into fillet and mince block production. The President of the PWCC, John Bundy of Glacier Fish Company, considers this shift to be an important benefit of the Cooperative as well. In the past, some catcher-processors had attempted to make a block product from whiting but because of the nature of the fish and adverse consequences to quality caused by the race for fish, such product was of poor quality and difficult to produce. The Cooperative, through slower fishing and processing, has allowed some catcher-processors to make a good, high quality block that has sold for significantly higher prices in the U.S. and Europe than if the whiting had been used for surimi for sales to Asian export markets.

In addition, by eliminating the race for fish, members of the Cooperative are able to take bycatch avoidance measures without suffering adverse competitive impacts. The certainty of a fixed percentage of the harvest allows vessels experiencing a relatively high encounter-rate with prohibited species to cease fishing operations and move to areas with a lower incidental catch rate without losing any competitive advantage. Before analyzing the bycatch rates experienced by the whiting catcher-processor fleet, it is important to point out that the baseline bycatch rates of this fishery are extremely low.

In 1997, prior to the Cooperative, catcher-processors caught 2.47kg of yellowtail rockfish and 0.009 individual Chinook salmon per tonne of whiting. After the implementation of the Cooperative, bycatch rates declined to 0.99kg of yellowtail and 0.008 individual Chinook salmon, compared with 3.43kg of yellowtail rockfish and 0.017 individual Chinook salmon per tonne for catcher vessels delivering to motherships.

In 1998, the catcher-processor fishery had bycatch rates of 0.96 kg of yellowtail rockfish and 0.008 individual Chinook salmon per tonne, while the catcher vessels delivering to motherships had rates of 6.51kg/t and 0.02/t, respectively.

In 1999, the Cooperative experienced somewhat higher bycatch rates of yellowtail rockfish resulting from a shift in fishing effort from south of the Columbia River to more northern waters with a higher abundance of yellowtail rockfish. Fishing patterns were altered because changes in environmental conditions (primarily higher ocean temperatures) affected the distribution of Pacific whiting stocks.

The PWCC has demonstrated that a cooperative approach to fishery operation can end the race for fish, reduce capacity, increase utilization, and decrease bycatch. It is also apparent that in order for a cooperative to be possible, certain prerequisites must be met. They include:

i. a defined harvest opportunity, or hard TAC
ii. a defined class of participants
iii. a closed system or limited access and
iv. strong, if not unanimous support among participants in the closed class.

As impressive an accomplishment as the Pacific Whiting Conservation Cooperative is, one must confess that coordinating agreement among 4 companies with ten vessels is relatively easy. How could a Cooperative work in the North Pacific pollock catcher-processor fishery with twice as many companies and three times as many vessels?

3. NORTH PACIFIC POLLOCK

3.1 Antecedents

In 1998, the U.S. Congress passed the American Fisheries Act (AFA) and paved the way for fishery cooperatives in the North Pacific pollock fishery by fulfilling the prerequisites necessary for a successful cooperative:

3.2 A defined harvest opportunity, or hard TAC

The only condition already in place without passage of the AFA was the establishment of defined total allowable catch. The pollock fishery, which occurs within the U.S. 200 mile Exclusive Economic Zone off Alaska, is the largest U.S. fishery by volume. Over two billion pounds of pollock are landed annually. The North Pacific pollock resource is healthy and the fishery is managed conservatively to promote sustainable use. The groundfish fisheries are healthy because federal fishery scientists and managers set an allowable harvest level each year and fishing stops when the quota is reached. The TAC is set at, or below, the allowable biological catch (ABC) level, which is the amount of pollock that fishery scientists and managers determine can be harvested on a sustainable level. Accurate catch measurement is assured by a comprehensive set of federal rules, which provide for extensive federal fishery observer coverage and strict catch reporting requirements. All fish caught counts against the annual quota.

The pollock resource is harvested using mid-water trawl nets. The United Nations’ Food and Agriculture Organization (FAO) identifies this pollock fishery as one of the “cleanest” fisheries in the world. Pollock swim in enormous, tightly packed schools and do not co-mingle with other fish species. In a typical tow, pollock comprise 98% of the catch. To further minimize incidental catch of non-pollock species, federal fishery regulations prohibit bottom trawling for pollock. Federal rules also require the retention of all pollock (and cod). Discards of those species are prohibited except in limited circumstances.

3.3 A defined class of participants

The AFA created a three-sector allocation system for the North Pacific pollock fishery. Federal fishery managers set the TAC of pollock annually. A certain percentage of the TAC is held in reserve to account for the anticipated bycatch of pollock by non-pollock fishermen. This “set aside” amounted to 6% of the TAC in 1999. Another 10% of the TAC is allocated to the Western Alaska CDQ program. The remainder of the TAC, which is referred to as the directed fishing allowance, is statutorily allocated among three user groups by the AFA. The inshore sector (catcher vessels delivering to shoreside processing plants) receives 50%. The catcher-processor sector is allocated 40%. The remaining 10% is available to the mothership sector.

3.4 A closed system or limited access

The AFA statutorily defines the eligible vessels in each sector. The legislation actually lists the vessels by name. Additional participants cannot enter the fishery in the absence of congressional action, which is considered highly unlikely, particularly in the catcher-processor sector. Twenty vessels are listed in the AFA in the catcher-processor sector. The act established a buy-back program for the remaining nine vessels, achieving a 31% reduction in capacity in this sector of the fishery.

3.5 Unanimous support among a manageable number of participants in the closed class

It is extremely important to state that in the absence of the ability to form a cooperative, the catcher-processor fleet would not have agreed to the capacity-reducing buy-back program or other requirements of the AFA. In the absence of a means to end the race for fish, the buy-back program would have eliminated the competitive advantage these firms had over one another, catching as much fish as quickly as possible. With the number of vessels in the catcher-processor sector reduced to 20, the companies felt it possible for an effective Cooperative to be negotiated, creating the political will to allow the AFA to become law.

In December 1998, the nine companies owning the 20 catcher-processors in the North Pacific pollock fishery formed the Pollock Conservation Cooperative (PCC). Similar to the PWCC, the PCC is a contractual agreement designed to apportion specified amounts of the catcher-processor sector allocation of the annual pollock quota among the parties to the agreement, with no consideration of pricing or marketing activities. Although the PCC is still awaiting a Business Review Letter from the U.S. Department of Justice, the previous letter ruling regarding the PWCC suggests the Department of Justice will approve the PCC as well.

Interestingly, there are actually two Cooperatives within the catcher-processor sector. The AFA reserved 8.5% of the catcher-processor pollock allocation for seven catcher vessels that traditionally delivered to the catcher-processors. These catcher vessels established the High Seas Catcher’s Cooperative (HSCC). The PCC agreement provides assurances that the catcher vessels will not be disadvantaged in marketing their allotted catch among the PCC members. HSCC members report that prices received by the catcher vessels were the highest in the fishery this year and were, in fact, the highest prices ever received by catcher vessels.

In addition to the capacity reduction from the AFA made possible by the ability to form a cooperative, the operation of the PCC has resulted in even further capacity reduction. During the winter season, only 16 of the 20 eligible catcher-processors fished. In the summer/fall season, only 14 vessels fished. On average, this equates to an additional 20% reduction in capacity.

Although data on utilization rates and bycatch avoidance has yet to be compiled, the fishery was certainly operated in a much slower fashion. In 1998 the winter season lasted 26 days and the summer/fall season, 49 days. In 1999, the winter season lasted 57 days, and the summer/fall season lasted 92 days. These shifts suggest that improved product-recovery and decreased incidental-catch can be anticipated.

4. CONCLUSION

In the absence of a regulatory framework to address the race for fish and overcapitalization, one segment of the U.S. industry took the initiative to rationalize its own operations through fishery cooperatives, privately-negotiated contractual agreements. While operated within existing federal fishery management rules and regulations, the cooperatives provide the framework for ownership- or IFQ-like behavior and ensure compliance through contractual penalties. Cooperatives can achieve the benefits of IFQ systems without government regulation at the quota-share level.

5. ACKNOWLEDGEMENTS

Special thanks to Jim Gilmore of the At-Sea Processors Association and John Bundy of the Glacier Fish Company for assistance in preparing this paper.